Quarterly Report • Jun 20, 2023
Quarterly Report
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As an investment company, the strategic focus of MPH Health Care AG's activities is on companies in the high-growth segments of the healthcare market and the real estate industry. The healthcare market includes both the segments fi nanced by health insurance companies ("fi rst healthcare market") and the privately fi nanced segments (so-called "second healthcare market"). Against the background of demographic developments in Germany and Europe, we expect the fi rst and second healthcare markets to continue to grow in the coming years. A society that is growing older due to increasing life expectancy needs a stable supply of medicines over a longer period of time. In addition, awareness of health and the body and the demand for medical and aesthetic services are increasing in old age.
MPH aims to exploit the resulting potential. The company works in partnership with its portfolio companies. The aim is to generate professional growth for the companies through active further development, thereby increasing not only the value of the portfolio company itself, but also the value of MPH Health Care AG. However, MPH Health Care AG is not exclusively focused on the healthcare and real estate market. There are also investment opportunities in other high-growth sectors, and we aim to exploit and expand their success.
| 1. Letter to the Shareholders 4 | |
|---|---|
| 2. Net Asset Value of MPH and Company Portfolio Overview 6 | |
| 3. MPH on the Capital Market 7 | |
| 4. Short profi le of Investments 8 | |
| M1 Kliniken AG 8 | |
| HAEMATO AG 10 | |
| CR Capital AG 12 | |
| 5. Report by the Supervisory Board 14 | |
| 6. Management Report 20 | |
| 1. Business Model 20 | |
| 2. Business Report 20 | |
| 3. Business Performance 27 | |
| 4. Supplementary Report and Forecast Report 29 | |
| 5. Risk Report 29 | |
| 6. Risk Report regarding the use of Financial Instruments 32 | |
| 7. Report on Branches 33 | |
| 8. Final declaration according to § 312 (3) AktG 33 | |
| 7. IFRS Financial Statements 35 | |
| 8. IFRS Annex 43 | |
| 9. Further Information 67 |
In the financial year 2022, MPH Health Care AG was able to benefit from the strong performance of its investments and achieved a net income according to IFRS of 29.11 million euros, compared to a net loss of 8.96 million euros in the previous year. The operating result (EBIT) rose from EUR -9.07 million to EUR 29.56 million and equity increased from EUR 192.3 million to EUR 221.4 million. The net asset value (NAV) per share increased to 51.72 euros as of 31 December 2022 (prev. year EUR 44.92). The equity ratio as of 31 December 2022, at 93.4%, remains well above 90% (prev. year 97.1%) and thus impressively demonstrates the Company's balance sheet strength.
The net income for the year results mainly from the fair value gain of the financial assets as of the balance sheet date 31 December 2022. MPH Health Care AG is an investment company whose investments are reported under the balance sheet item "Financial assets" and are measured at fair value through profit or loss as of the balance sheet date.
In particular, the investments M1 Kliniken AG and CR Capital AG were successful in the past financial year, which was reflected accordingly in the share prices at the balance sheet date.
In the past financial year 2022, M1 Kliniken AG was able to further expand its market position in the field of beauty medicine and opened eight new medical centers in Germany and abroad. The opening of the Budapest (Hungary) site marked the start of expansion in Eastern Europe, whose target markets are considered lucrative by the company. Sales in the Beauty segment rose by 14.1% to over 60.2 mn euros (prev. year 52.8 mn euros). The EBIT margin in this segment increased from 9.8% in the previous year to 11.7%.
As expected, consolidated sales of the M1-Group decreased by around 9% to EUR 285.3 mn in the financial year 2022 (prev. year EUR 314.6 mn). This is due to the 14.0% decline in sales in the "Trade" segment to EUR 225.0 mn (prev. year EUR 261.8 mn) as a result of a reduced business volume with COVID-19 diagnostics. The operating profit 2022 (EBIT) of the M1-Group amounts to EUR 9.3 mn (prev. year EUR 12.1 mn) and earnings before taxes amount to EUR 10.2 mn in the fiscal year 2022 (prev. year EUR 14.4 mn).
M1's equity increased by a further EUR 3.2 mn to EUR 143.1 mn as of 31 December 2022 (prev. year EUR 139.9 mn) and the equity ratio rose to 72.6% (prev. year 70.6%). The share price of M1 Kliniken AG increased by around 21% from 7.50 euros on 31 December 2021 to 9.06 euros on 31 December 2022.
CR Capital AG and its affiliates also remain on record track. Sales and earnings were again higher than in the previous year. They continue to benefit from the high popularity of their offerings in the markets for sustainable energy supply concepts, quality and cost-optimized living space, and capital investments for broad sections of the population. The company generated IFRS consolidated sales (reported as operating income) of EUR 79.4 mn (prev. year EUR 69.9 mn) and increased its earnings before interest, taxes, depreciation and amortization (EBITDA) by over 14% from EUR 66.5 mn in the previous year to around EUR 76.0 mn. Equity increased from EUR 240.8 mn to around EUR 314.0 mn as of 31 December 2022. The equity ratio remains at over 97%. CR Capital is increasingly involved in the areas of renewable energy supply and sustainable housing, whose markets have a volume of billions.
The share price of CR Capital AG decreased slightly from 33.40 euros on 31 December 2021 to 32.00 euros on 31 December 2022, after having been quoted at 40.60 euros at the end of May 2022, close to its old high from 2020.
We are confident about the development in 2023 despite the ongoing war situation in Ukraine and the increased energy costs. The approval of our own botulinum toxin for the M1/HAEMATO-Group's own brands continues to proceed according to plan. The application to conduct a clinical trial was submitted to the competent authorities at the end of January 2023. CR Capital AG is very well positioned with its vertically integrated investment portfolio in the areas of "sustainable energy supply concepts" and "quality- and cost-optimized housing". MPH can also systematically benefit from the positive developments of the investments in the coming years.
In order to have sufficient financial scope for the expansion of our investments, we will propose at the upcoming Annual General Meeting of MPH Health Care AG that the net profit for the financial year 2022 be carried forward in full to new account and that no dividend be distributed.
Finally, I would like to express my sincere thanks for the commitment of the employees of the MPH-Group and the trustful cooperation with the Supervisory Board.
Berlin, 8 May 2023
Patrick Brenske (Management Board)
| Net Asset Value | 2021 in EUR | 2022 in EUR |
|---|---|---|
| Equity | 192,306,749.24 | 221,421,647.89 |
| Equity per share | 44.92 | 51.72 |
| MPH | Number of | Price 1) | Market | Fair | |
|---|---|---|---|---|---|
| shares | 31.12.2022 | value | Value | ||
| as of 31.12.2022 | (pieces) | in EUR | in EUR | in EUR | |
| M1 Kliniken AG | 13,553,232 | 9.06 | 122,792,282 | ||
| HAEMATO AG | 2) | 15,218 | 17.20 | 261,750 | |
| CR Capital AG | 2,660,519 | 32.00 | 85,136,608 | ||
| TOTAL | |||||
| Market price of valued shares | 208,190,640 | 208,190,640 | |||
| Unlisted companies shareholdings |
24,819,621 | ||||
| TOTAL Fair Value | |||||
| valued shares | 233,010,261 | ||||
| Liquid assets | 1,668,692 | ||||
| Other assets | 2,313,155 | ||||
| Use of funds (assets) | 236,992,107 | ||||
| Equity | 221,421,648 | ||||
| Interest-bearing liabilities | 12,970,231 | ||||
| Other liabilities | 2,600,229 | ||||
| Source of funds (liabilities) | 236,992,107 | ||||
| 2021 in mn EUR | 2022 in mn EUR | |||
|---|---|---|---|---|
| Sales | EBIT | Sales | EBIT | |
| M1 Kliniken AG | 314.6 | 12.1 | 285.3 | 9.3 |
| CR Capital AG | 2) 69.9 |
66.4 | 2) 79.4 |
76.0 |
| Total | 384.5 | 78.5 | 364.7 | 85.3 |
1) Xetra closing price
2) Operating income
On the last trading day of 2022, the German share index (Dax) fell below the 14,000 point mark. With a loss of 12.3%, it was the worst stock market year in four years. In 2021, the Dax had still posted a gain of just under 16%. The MDax ended the last trading day 1.26% lower at 25,118 points, which means a drop of 28.5% for the mid-cap index for the year as a whole. The trigger for the signifi cant weakness in 2022 was Russia's war of aggression on Ukraine. Energy prices rose rapidly, adding to already high infl ation and necessitating central bank intervention. As a result, interest rates rose rapidly and signifi cantly.
The losses on the global stock markets were also huge: Dow Jones down 9%, Nasdaq Composite minus 34%, Nikkei down 11%, Euro Stoxx 50 down 11%. How did this happen? Jürgen Molnar, capital market strategist at Robo Markets, recalls the beginning of the year: "Bitcoin at all-time-high, stocks at all-time-high, real estate at all-time-high, it couldn't go on like this and then the Ukraine war intensifi ed the correction...". At some point, energy prices also became toxic. The cost of oil and gas seemed to explode. The result was a chain reaction of price increases with the consequence of infl ation in the U.S. peaking at 9.1% in June. The reaction was severe: the key interest rate in the USA was raised four times by 0.75 percentage points, i.e. 75 basis points, and again by 50 basis points at the end of the year. This hurt the stock markets. Jerome Powell, head of the U.S. Federal Reserve, is aware of the pain: "I wish there was a painless way, but there isn't." In Europe, his counterpart Christine Lagarde hesitated for a very long time. Only very cautiously, interest rates were and are being raised in the euro area. The professionals on the stock market don't like that. Oliver Roth, chief equity trader at ODDO BHF thinks the three interest rate steps in 2022 are not enough, more must come quickly. "The later it tackles this, the harder the impact on the stock market will be."1
The MPH share initially got off to a positive start in 2022, reaching its highest price for the year of 26.50 euros (Xetra closing price) at the end of January. There after, the share price gradually declined until the fall and briefl y fell below the 10 euro mark in October 2022. However, the MPH share then recovered quickly, rising by over 50% to 16.20 euros at the end of December, ending the year at a closing price of 15.30 euros (prev. year 21.30 euros). This corresponds to a share price loss of around 28% compared to the previous year.
We continue to assess the future prospects of MPH Health Care AG and its investments as positive. This is shown on the one hand by the net asset value, which at 51.72 euros (prev. year EUR 44.92) per share on 31 December 2022 was signifi cantly above the stock market price of 15.30 euros. On the other hand, the analysts accompanying MPH are positive. At the time of writing this Annual Report, the analysts recommend buying the MPH share. The target price from mid-January 2023 is 56.00 euros (First Berlin).
Since the acquisition of HAEMATO AG, the business model of M1 Kliniken AG has been based on two business areas ("segments"):
In the "Beauty" segment, M1 operates a specialist surgical clinic (private clinic in accordance with Section 30 of the German Commercial Code) for plastic and aesthetic surgery in Berlin, as well as a large number of specialist medical centers. 54 specialist centers (prev. year 46), 37 of which are located in Germany (prev. year 34). In these facilities, the doctors working there offer a focused range of beauty medical treatments of the highest quality and at attractive prices. Sales in the "Beauty" segment rose by 14.1% to over EUR 60.2 million (prev. year EUR 52.8 mn). The EBIT margin in this segment increased from 9.8% (EUR 5.15 mn) in the previous year to 11.7% (EUR 7.03 mn) in 2022.
Consolidated sales of the M1-Group decreased by around 9% to EUR 285.3 mn in the financial year 2022 (prev. year EUR 314.6 mn). This is due to the 14.0% decline in sales in the Trade segment (EUR 225.0 mn; prev. year EUR 261.8 mn) as a result of a reduced business volume with COVID-19 diagnostics due to the successive decline in pandemic-related test samples as well as continued portfolio optimization, in which certain products with too low a margin were adjusted. The 2022 operating profit (EBIT) of the M1-Group amounts to EUR 9.3 mn (prev. year EUR 12.1 mn). Earnings before taxes amount to EUR 10.2 mn in the fiscal year 2022 (prev. year EUR 14.4 mn). Equity increased by EUR 3.2 mn to EUR 143.1 mn as of 31 December 2022 (prev. year EUR 139.9 mn). The equity ratio increased to 72.6% (prev. year 70.6%).
| Consolidated profit and loss statement | 2022 | 2021 |
|---|---|---|
| Sales | 285,291 | 314,610 |
| EBITDA | 15,410 | 17,823 |
| EBIT | 9,348 | 12,135 |
| Net profit (before deduction of minority interests) |
7,070 | 10,880 |
| Net profit (after deduction of minority interests) |
4,317 | 8,905 |
| Group balance sheet | 31.12.2022 | 31.12.2021 |
|---|---|---|
| Short-term assets | 107,307 | 110,195 |
| Long-term assets | 89,718 | 87,916 |
| Equity | 143,051 | 139,902 |
| Liabilities | 53,974 | 58,208 |
| Balance sheet total | 197,025 | 198,111 |
| Equity ratio | 72.6% | 70.6% |
| Dividend distribution per share in EUR | 0 | 0 |
| Number of shares (pieces) as per 31.12.22 | 19,643,403 |
|---|---|
| Class of shares | Bearer share |
| WKN / ISIN | A0STSQ / DE000A0STSQ8 |
| Ticker symbol | M12 |
| Market places | Frankfurt, Xetra, Dusseldorf, Stuttgart, Berlin, Hanover, Hamburg, Munich, Tradegate |
| Market segment | Open Market - Frankfurt Stock Exchange |
| Designated Sponsor, Listing Partner | Kepler Chevreux, mwb fairtrade |
| Coverage | First Berlin, Warburg Research, Bankhaus Metzler |
| Market capitalization | 178.0 mn Euro (as per 31.12.2022 - Xetra) |
HAEMATO AG is a listed pharmaceutical company with a wholesale and manufacturing license. The company's business activities focus on the sale of off-patent and patent-protected drugs in the insurance-financed market and the sale of medical products. The focus is on the one hand on the growth markets and therapies for cancer, HIV, rheumatology and other chronic diseases ("Specialty Pharma" segment) and on the other hand on pharmaceuticals and medical devices for aesthetic treat ments ("Lifetyle & Aesthetics" segment). The company makes an active contribution to reducing costs in the German healthcare system. With direct access to around 7,200 pharmacies in Germany and Austria, HAEMATO helps to ensure that every patient benefits from the latest innovative therapies.
HAEMATO AG has been a subgroup of M1 Kliniken AG since the financial year 2020. As expected, consolidated sales decreased in 2022 to EUR 248.1 million (prev. year EUR 285.0 mn), a decline of 12.9%. The main reason for this is the significant reduction in the extensive Corona testing business due to the successive relaxation of pandemic-related testing obligations in the course of 2022, as well as further optimization of the product portfolio with a focus on high-margin products. Compared to the financial year 2020, which already includes sales from the Corona business, sales in 2022 increased by EUR 9.8 million or 4.1%. EBIT in the fiscal year 2022 amounted to EUR 8.3 million (prev. year EUR 11.2 mn) and EBT was EUR 10.5 million (prev. year EUR 9.4 mn).
| Consolidated profit and loss statement | 2022 | 2021 |
|---|---|---|
| Sales | 248,142 | 285,043 |
| EBITDA | 9,661 | 12,636 |
| EBIT | 8,295 | 11,161 |
| Net profit | 8,193 | 6,534 |
| Group balance sheet | 31.12.2022 | 31.12.2021 |
| Short-term assets | 69,268 | 81,070 |
| Long-term assets | 107,302 | 100,940 |
| Equity | 147,168 | 144,726 |
| Liabilities | 29,402 | 37,284 |
| Balance sheet total | 176,570 | 182,010 |
| Equity ratio | 83.3% | 79.5% |
| Dividend distribution per share in EUR* | 1.10 | 1.00 |
| Dividend distribution (for the prev. year) | 5,750 | 2,760 |
* per dividend-bearing share for the prev. year
| SHARE KEY FIGURES | |
|---|---|
| Number of shares (pieces) as per 31.12.2022 | 5,229,307 |
| Class of shares | Bearer share |
| WKN / ISIN | A289VV / DE000A289VV1 |
| Ticker symbol | HAEK |
| Market places | Xetra, Frankfurt, Stuttgart, Hamburg, Berlin, Tradegate, Dusseldorf, Munich |
| Market segment | Entry Standard (Open Market) |
| Designated Sponsor, Listing Partner | ICF Kursmakler AG |
| Coverage | GBC AG, Warburg Research, First Berlin Equity Research |
| Market capitalization | 89.9 mn Euro (as per 31.12.2022 - Xetra) |
CR Capital AG is an investment company with a strategic focus on the acquisition, establishment and development of companies as well as the holding and sale of investments in companies. The investment focus is on specialized companies in the field of sustainable technologies that save energy, reduce greenhouse gas emissions and conserve resources. As an integrated investment manager, CR invests in innovative companies along the real estate value chain and has developed into a real estate investment company in recent years. One focus of the business activities is the creation of high-quality residential properties in solid construction at affordable prices. CR Capital AG relies on ecological construction methods and benefits from just-in-time production, efficient construction costs, short property holding periods and the scalability of the business model. Due to the closed value chain, a high degree of market independence is also achieved.
TERRABAU GmbH is a focused and innovative project developer that has developed a technology for standardized production. This allows housing to be delivered quickly, affordably and at the best quality. TERRABAU is exclusively focused on the project planning and construction of real estate. Its customers include both owner-occupiers and institutional clients. In addition to terraced houses and semi-detached houses, TERRABAU's product range also includes social housing, for which demand continues to be high.
With the foundation of the new investments Solartec GmbH and Greentec GmbH at the end of 2021, CR Capital complements its portfolio with innovative technology companies and opens up further market potentials in the field of sustainable energy generation and storage as well as environmentally friendly building material production. In doing so, it is consistently pursuing its philosophy of developing products of the highest quality at the best price.
Sustainability: CR Capital's goal is to continuously improve the company's focus on sustainability and corporate and social responsibility. The two are inextricably linked. With this focus, CR Capital – together with its portfolio companies – is helping to find answers to the global challenges of our time: Climate and water protection, energy and resource scarcity, and ultimately quality of life for a growing world population.
| Consolidated profit and loss statement | 2022 | 2021 |
|---|---|---|
| Total Output | 79,400 * | 69,856 |
| EBITDA | 76,000 * | 66,488 |
| Net profit | no Data | 65,391 |
| Group balance sheet | 31.12.2022 | 31.12.2021 |
| Short-term assets | no Data | 2,306 |
| Long-term assets | no Data | 245,714 |
| Equity | 314,000 * | 240,784 |
| Liabilities | no Data | 7,236 |
| Balance sheet total | no Data | 248,020 |
| Equity ratio | 97.1% | 97.1% |
| Dividend distribution per share in EUR* | 2.50 | 1.50 |
* per dividend-bearing share for the prev. year
| SHARE KEY FIGURES | 2022 | 2021 |
|---|---|---|
| Classes of shares | Bearer share | Bearer share |
| Number of shares (pieces) as per 31.12. | 4,543,943 | 4,064,594 |
| WKN / ISIN | A2GS62 / DE000A2GS625 | |
| Ticker symbol | CRZK | |
| Market places | Xetra, Frankfurt, Tradegate, Dusseldorf, Stuttgart, Munich, Berlin |
|
| Market segment | Open Market - Frankfurt Stock Exchange | |
| Designated Sponsor, Listing Partner | ODDO BHF | |
| Coverage | Hauck & Aufhäuser, First Berlin, GBC | |
| Market capitalization | 122,0 mn Euro (as per 31.12.2022 - Xetra) |
In the fiscal year 2022, the Supervisory Board of MPH Health Care AG performed the duties incumbent upon it under the law and the Articles of Association with great care. The Supervisory Board regularly advised the Management Board on the management of the Company and continuously supported and monitored its management activities. The Supervisory Board was directly involved by the Management Board at an early stage in all decisions of fundamental importance to the company. The Management Board regularly informed the Supervisory Board verbally, by telephone and in writing, as well as promptly and comprehensively, about the course of business, the economic situation of the company, significant business transactions, corporate planning including questions of business policy and risk management, the development of costs and earnings, liquidity, and investment and divestment measures. The Supervisory Board was able to satisfy itself as to the proper conduct of business. No topic-related committees were formed within the Supervisory Board.
The Supervisory Board held a total of five ordinary meetings in the fiscal year 2022. The meetings focused on the following topics, among others:
• Preparation of the Annual General Meeting on 14 July 2022
In addition, current developments, strategic decisions and their operational implementation were discussed at the Supervisory Board meetings. Informal meetings and conference calls were also held between the Supervisory Board and the Board of Management to discuss significant new developments in business policy.
The Supervisory Board satisfied itself of the proper conduct of business by the Management Board. The annual financial statements, the consolidated financial statements and the Group management report of MPH Health Care AG for the fiscal year ended 31 December 2022, prepared by the Management Board, together with the bookkeeping system, were audited by the auditor elected by the Annual General Meeting, Harry Haseloff, Berlin, and received an unqualified audit opinion.
The prepared annual financial statements, the consolidated financial statements, the Group management report, the proposal for the appropriation of net income and the auditors' reports were distributed to each member of the Supervisory Board in good time before the financial statements meeting on 12 May 2023. At the Supervisory Board meetings on 02 and 12 May 2023, the auditors reported on the main results of their audit and were available to answer questions from Supervisory Board members. We have audited the annual financial statements and the consolidated financial statements prepared by the Management Board.
The annual financial statements prepared by the Management Board, the consolidated financial statements and the Group management report were discussed in detail at the financial statements meeting. The results of the auditor's review were noted with approval. No objections were raised to the annual financial statements, the consolidated financial statements, the Group management report or the proposal for the appropriation of net income. We also examined the proposal of the Management Board to carry forward the unappropriated profit in full. We consider this proposal to be appropriate and therefore endorse it.
The Supervisory Board approved the annual financial statements and consolidated financial statements prepared by the Management Board on the basis of its own audit. The annual financial statements are thus adopted.
MPH Health Care AG has prepared a dependency report for its the fiscal year ended 31 December, 2022 in accordance with Section 312 of the German Stock Corporation Act (AktG).
The dependent company report was audited by the auditor Harry Haseloff, Berlin, who was elected as auditor by the Annual General Meeting, in accordance with Section 313 (1) of the German Stock Corporation Act (AktG). The auditor Harry Haseloff, Berlin, submitted a separate written report on the results of the audit. As there were no objections to the report of the Board of Management, the auditor issued the following opinion in accordance with Section 313 (3) of the German Stock Corporation Act (AktG):
"Having duly examined and assessed the report in accordance with my professional duties, I confirm that
The dependent company report and the additional audit report prepared by the auditor of the financial statements and consolidated financial statements were brought to the attention of the Supervisory Board in good time and examined in detail at its meeting on 12 May 2023. Questions were answered in detail by the auditor.
After concluding its examination, the Supervisory Board approves the dependent company report and the audit report and has no objections to the declaration of the Board of Management at the end of the dependent company report on relations with affiliated companies.
In the period from 1 January to 31 December 2022, the Supervisory Board consisted unchanged of the following members: Andrea Grosse (Chairwoman), Prof. Dr. Dr. Sabine Meck (Member) and Uwe Zimdars (Deputy Chairman).
The Supervisory Board would like to thank the Management Board for its achievements and the pleasant, constructive and successful cooperation.
The Supervisory Board would like to thank all employees of the MPH-Group for their commitment and achievements.
Berlin, 12 May 2023
Andrea Grosse (Chairwoman)
| Management report 20 | |
|---|---|
| 1. Business model 20 | |
| 2. Business report 20 | |
| 2.1 Macroeconomic and sector-specific conditions 20 | |
| 2.2 Business development 26 | |
| 3. Business Performance 27 | |
| 3.1 Earnings position of the company 27 | |
| 3.2 Financial position of the company 28 | |
| 3.3 Net assets of the company 28 | |
| 4. Supplementary report and forecast 29 | |
| 5. Risk report 29 | |
| 5.1 Specific risks 30 | |
| 5.2 Opportunities report 31 | |
| 5.3 General statement 32 | |
| 6. Risk reporting regarding the use of financial instruments 32 | |
| 7. Report on branches 33 | |
MPH Health Care AG is a Berlin-based investment and holding company listed on the Frankfurt Stock Exchange (Basic Board). Its business activities consists of investing in companies with the aim of long-term asset growth.
The strategic focus of the company's activities is on the acquisition and development of companies and shares in companies, particularly in growth segments of the healthcare market and the pharmaceutical industry, including both insurance-financed ("first" healthcare market) and privately financed ("second" healthcare market) segments. However, MPH AG also exploits potential outside these markets in high-growth sectors such as the real estate industry. The aim is to generate profitable growth for the portfolio companies through active further development and thus to promote the enterprise value of MPH.
In the financial year 2022, MPH Health Care AG continued to invest mainly in two listed companies. These investments consisted of M1 Kliniken AG and CR Capital AG. As a result of acquisitions in the course of 2022, the shareholding of M1 Kliniken increased to 69% (prev. year 62%). The shares in CR Capital AG were increased in the course of the distributed share dividend. The shareholding increased accordingly and is now a good 58.5% (prev. year 57%).
Due to the ongoing Corona pandemic, no dividend was distributed at M1 Kliniken AG in the previous year in order to maintain liquidity on the company side and to use this for the ongoing expansion of business operations. At the Annual General Meeting of CR Capital AG in May 2022, a dividend of EUR 2.50 per share was resolved (prev. year EUR 1.50). This dividend was received by MPH as a result of the option as a stock dividend. A subscription ratio of 7:1 for new shares in CR Capital AG were thus booked to MPH. The issue price of these shares was EUR 17.50. Together with income from non-listed investments, MPH Health Care AG generated total income from investments of EUR 6.61 million (prev. year EUR 3.56 mn).
MPH Health Care AG itself did not distribute any dividends in the financial year 2022.
After global GDP (gross domestic product) fell by around 3.1% in 2020 due to the effects of the Corona pandemic and associated lockdown phases, global GDP was already able to record renewed growth of around 6.1% in the following year 2021.2
For 2022, the Kiel Institute for the World Economy (IfW) expects global production to grow by 3.2%. The increase in global production slowed again at the end of last year. Overall, global economic expansion weakened significantly in 2022, albeit at an unsteady pace. In the final quarter, global economic output again increased only slightly. This was slowed by higher energy prices, a significantly more restrictive monetary policy in response to high inflation, and further measures in China to contain a wave of Corona infections. For the year as a whole, global production increased by 3.2%, roughly in line with the medium-term trend, but in the final quarter it was only 1.8% higher than a year earlier. Although global economic sentiment has recently brightened somewhat, the indicator for the global economic climate calculated by IfW Kiel on the basis of sentiment indicators from 42 countries signals further only moderate expansion for the current quarter. This means that the phase of recovery of the global economy from the pandemic-related slump has come to an end for the time being.3
According to the German Federal Ministry of Economics and Climate Protection, economic development in Germany proved to be pleasingly resilient last year in the face of the energy crisis and supply chain problems. According to the first preliminary results of the Federal Statistical Office, price-adjusted gross domestic product increased by 1.9% for the year as a whole (prev. year plus 2.7%). The German economy thus grew despite the Ukraine war, supply chain bottlenecks and the energy price crisis. The reasons for the positive performance are catch-up effects following the Corona pandemic and easing supply bottlenecks. Private consumption expanded strongly, growing by 4.6%, as travel, restaurant visits, major cultural events, festivals and trade fairs became possible again. There are increasing signs that the economic slowdown in the winter half-year will be milder than previously expected. Nevertheless, the high price developments that are reaching consumers are likely to continue to weigh on economic development in Germany at the beginning of 2023. According to the ifo-Institute surveys, the mood in the German economy brightened noticeably in December. Almost all sectors of the economy were more confident than before. This is a further indication that a recession may not materialize in the winter half-year 2022/23. The inflation rate decreased by 1.4 percentage points in December to an expected 8.6%. Average consumer prices in 2023 were thus 7.9% higher than a year earlier. The December emergency aid for gas and heat probably played a key role in the decline in December. Inflation for energy sources was noticeably weaker than in previous months. The rise in food prices slowed slightly. The labor market remained resilient at the end of the year. Utilization of short-time working is likely to have increased again, but remains at a comparatively low level. However, the shortage of labor is increasingly acting as a brake on growth. The number of vacancies reported rose to a record level in 2022. In the service sector in particular, almost all industries are looking for new employees.4
Development of real gross domestic product (GDP) in Germany from 2007 to 2022 and forecast by the ifo Institute until 2024 (compared with the prev. year)
Source: https://de.statista.com/statistik/daten/studie/73760/umfrage/entwicklung-des-realen-bip-in-deutschland-bis-2011/
Our listed holdings are active in the healthcare and real estate sectors. M1 Kliniken AG serves the so-called "second healthcare market" with its aesthetic medical treatments aimed at the self-payer market, while CR Capital AG invests as an integrated investment manager in innovative companies along the real estate value chain. HAEMATO AG, as a subgroup of the M1-Group, is predominantly active in pharmaceutical trading in the so-called "first healthcare market".
The core market for business activities in the past financial year continued to be Germany. The health care sector (in which the investment M1 Kliniken AG operates) remains one of the most important markets of the future, which will continue to be shaped by global trends. These include, among other things, demographic developments (increasing life expectancy), rising demand for health products and health services, etc. In addition to rising incomes and medical advances, the aging of society is a major reason for the increase inhealthcare spending, which is boosting the health industry's share of gross domestic product. The health industry is made up of many sectors. The core area, also referred to as the first health care market, comprises the area of "traditional" health care, which is largely financed by statutory health insurance (SHI) and private health insurance (PHI), including long-term care insurance. The second healthcare market comprises all privately financed healthcare products and services, mainly over-the-counter medicines and individual healthcare services (including outpatient and inpatient medical procedures), fitness and wellness, health tourism and – in part – sports/leisure, nutrition and housing.5
As one of the largest German economic sectors, the healthcare industry is a leading market for the German economy. With the help of its services and products, people not only live longer, but also healthier and more self-determined lives.6
As reported by the Federal Statistical Office (Destatis) in April 2023, healthcare spending in Germany rose to a new high of 474.1 billion euros (prev. year 440.6 billion euros) in the second Corona year (more recent data were not yet available when this report was prepared). This was around 5,700 euros per inhabitant. Health care spending in 2021 was 33.1 billion euros or 7.5% higher than in 2020 (prev. year 6.5%). The share of healthcare expenditure in gross domestic product (GDP) was 13.2% in 2021, only 0.2 percentage points higher than in 2020.7
The pharmaceutical industry continues to be of great importance for growth, employment and innovation effects in Germany. In 2022, sales of pharmaceuticals in the overall pharmaceutical market (pharmacy and clinic), in which HAEMATO AG operates, increased by 5.4% to 56.5 billion euros (prev. year plus 7.3%). Growth in the sub-segments "Pharmacy Market" (volume 46.6 billion euros) and "Clinic Market" (volume 7.9 billion euros) was almost identical, at 5.5% and 4.9% respectively.8
The market for medical-aesthetic treatments (as part of the second healthcare market), in which our subsidiary M1 Kliniken AG is active, also continues to be a growth market, particularly due to the increased social desire to maintain the natural appearance and performance of the body into old age.
The global beauty market remained a growth market in 2021 (more recent data is not available), both for surgical and outpatient procedures. Based on 2021 figures from the global association of plastic surgeons (ISAPS), the number of total aesthetic surgical procedures increased by 18.5% and the number of non-surgical aesthetic cosmetic procedures increased by 19.9%. According to ISAPS, over the last four years, the number of surgical procedures increased by 33.3% and the number of non-surgical procedures increased by 54.4%.9
In the surgical field, the two most popular procedures, liposuction and breast augmentation, increased by 24.8% and 3.8% respectively. The third and fourth most popular aesthetic procedures are upper eyelid lifts and rhinoplasty, with growth rates of 18.1% and 16.7%, respectively. Among non-surgical procedures, the two most popular treatments, botulinum toxin and hyaluronic acid injections, increased by 17.7% and 30.3%, respectively. The change in working life in the context of more home office use and a stronger use of videoconferencing has intensified the focus on people's face and eye area, which has increased the demand for eyelid lifts and Botox treatments for the upper half of the face.10
In Germany, the treatment figures in 2021 developed in a somewhat more differentiated manner. If lip augmentation is added to minimally invasive treatments (as in previous years), there was an increase of 3.1% in surgical treatments. Due to more home office work and lockdowns under Corona restrictions, patients had more time to have longer scheduled surgical procedures. While breast augmentation was the most popular procedure in the previous period under review, liposuction was the frontrunner in 2021 with an increase of 3.3%, followed by eyelid correction (+12.6%), while breast augmentation is now the third most common surgery (-0.1%).
In the area of injectable treatments, a decline of 12% was recorded in Germany due to the disabilities caused by the Corona pandemic. The number of minimally invasive procedures fell from around 732,000 in 2020 to around 644,000 in 2021, with botulinum toxin accounting for around 306,000 treatments and hyaluronic acid (filler) for around 289,000.
The chemical-pharmaceutical industry is still the third largest industrial sector in Germany after automotive and mechanical engineering. In terms of sales, the German chemical-pharmaceutical industry ranks first in Europe and third worldwide behind China and the United States. The pharmaceutical industry is an important part of the chemical industry. Pharmaceuticals account for almost 24% of total chemical production. The industry is one of the most productive and research-intensive sectors in Germany. With its research and development expenditures, the chemical-pharmaceutical industry ranks third after the automotive and electrical industries.11
SHI drug spending from December 2021 to December 2022 shows revenue growth of 5.3% (to 50.0 billion euros) and sales growth of 4.5% (to 723.1 million packages). Manufacturers' mandatory discounts and rebates in 2022 in the SHI, PHI and hospital markets are consistently higher than in the previous year. In the SHI market, discounts increased by 17%, in the PHI market by 16% and in the hospital market by 8%. Mandatory discounts in all market segments totaled 8.69 billion euros (prev. year 7.49 billion euros).12
In 2022, sales in the main construction sector fell by 5.1% in real terms. The construction industry expects a further decline of 6% in 2023. Building permits for new buildings increased by 2.6% in nominal terms from 2022. In view of the construction price increases, this is a decline of around 14%. Real new orders in the main construction sector fell by 9.7% in 2022. The order backlog at the end of December 2022 was at a record level of EUR 68 billion at that time, oversubscribed by construction price developments. The range of order backlogs was still at a high level in December at 4.4 months (seasonally adjusted), but decreased further to 4.2 months by February 2023. New orders recorded a real decline of 19.1% in January 2023. One problem that will have a greater impact in 2023 is the development of interest rates on the capital market. In the past 10 years, record-low interest rates for mortgage loans have been a key driver of new housing construction because refinancing has been favorable. According to Bundesbank calculations, the interest rate for mortgage loans with a term of more than 10 years rose from 1.4% to 3.5% in new business between January and December. On the one hand, this is having a negative impact on yield expectations in the rental housing sector, while at the same time posing financing problems for potential home builders. In January 2023, the volume of new residential construction loans to private households was only EUR 12.7 billion, 49% less than in January 2022.13
After the abrupt price turnaround last year, real estate prices appear to be slowly leveling off. At least, that is the conclusion of the 9th Real Estate Compass published by the online platform "immowelt". While in the 4th quarter in all 14 examined German large cities the offer prices sank, then in the 1st quarter 2023 only four cities registered a negative trend with the price development of inventory dwellings. According to Felix Kusch, Country Managing Director of "immowelt", the real estate market is currently in a finding phase: "We assume that demand will continue to stabilize, as it has recently, and that prices will consequently move sideways with minor fluctuations up and down." According to the latest figures from Europace, Germany's leading transaction platform for real estate financing, the price situation on the German real estate market is mixed. In January 2023, for example, the in-house index EPX recorded a price increase of 1.31% for new buildings compared with the previous month.The average purchase price now stands at EUR 530,211 for new detached and semi-detached houses. In contrast, existing condominiums and houses continued to decline in price.14
As an investment company, the strategic focus of our activities is on companies in high-growth segments of the healthcare market. This includes both insurance-financed and privately financed segments.
MPH Health Care AG has the status of an investment company in accordance with IFRS 10. All investments are measured at fair value through profit or loss in accordance with IFRS 9.
The year 2022 was characterized on the one hand by the flattening of the Corona pandemic and successive easing and on the other hand by the ongoing war in Ukraine and the resulting restrictions and price increases in energy supply. Despite the general price increases, the demand for highquality and yet inexpensive beauty treatments continues unabated. M1 Kliniken AG has continued to expand its sites in Germany and Europe in 2022. Eight new specialist centers were opened last year and the number of medical-aesthetic treatment centers increased to 54. In the financial year 2023, the expansion is to be driven forward with the aim of operating a total of 60 specialist centers by the end of 2023. The M1-Group is active in the growing market of aesthetic medicine and plastic surgery and carries out aesthetic medical treatments in the self-payer segment ("Beauty" segment). In a second segment, "Trade," the Group sells its own generic drugs and European imported drugs through the subgroup HAEMATO AG as a pharmaceutical manufacturer. Likewise, drugs from other manufacturers that are approved in Germany are offered within the framework of the wholesale license.
In the financial year 2022, the M1-Group was able to increase sales in the "Beauty" segment by 14.1% to over EUR 60.2 million (prev. year EUR 52.8 mn). The EBIT margin in this segment increased from 9.8% (EUR 5.15 mn) in the previous year to now 11.7% (EUR 7.03 mn). In the financial year 2022, the consolidated sales revenue of the M1-Group decreased by a total of around 9% to EUR 285.3 million (prev. year EUR 314.6 mn). This was due to the 14.0% decline in sales in the Trade segment to EUR 225.0 million (prev. year EUR 261.8 mn) as a result of a reduced volume of business with COVID-19 diagnostics due to the successive decline in pandemic-related testing obligations, as well as continued portfolio optimization, in which certain products with too low a margin were adjusted.
The operating profit 2022 (EBIT) of the M1-Group amounts to EUR 9.3 million (prev. year EUR 12.1 mn).Earnings before taxes amount to EUR 10.2 million in the fiscal year 2022 (prev. year EUR 14.4 mn). Equity increased by EUR 3.2 million to EUR 143.1 mn as of 31 December 2022 (prev. year EUR 139.9 mn). The equity ratio increased to 72.6% (prev. year 70.6%).
The positive operating business was also reflected in the development of the share price. The price of this investment rose from 7.50 euros on 31 December 2021 to 9.06 euros on the reporting date of 31 December 2022, an increase of 21%.
Despite a deteriorating environment (rising material prices and higher financing costs for home buyers), CR Capital AG was able to continue on its successful path and grow profitably. According to the preliminary figures for the fiscal year 2022, EBIT increased from 66 million euros to 76 million euros. The equity ratio remains unchanged at 97%. CR Capital is increasingly active in the areas of renewable energy supply and sustainable housing, whose markets are worth billions.
With the investments in Solartec GmbH and Greentec GmbH as innovative technology companies, CR Capital AG opens up further market potentials in the field of sustainable energy generation and storage as well as environmentally friendly building material production. In doing so, it is consistently pursuing its philosophy of developing products of the highest quality at the best price. CR Capital has been ESG-certified since 2022 (rating "very good"). This is a clear competitive advantage in the B2B-business with institutional customers. Institutional investors are increasingly preferring investments that meet ESG-criteria.
The share price of CR Capital AG decreased slightly from 33.40 euros on 31 December 2021 to 32.00 euros on 31 December 2021.
The unlisted portfolio companies MPH Ventures GmbH and Pharmigon GmbH also continued their successful growth course. Pharmigon GmbH increased its sales by 45.5% to EUR 15.3 mn and its net income by 16.1% to EUR 2.3 mn in the financial year 2022. MPH Ventures GmbH mainly acts as an incubator and investment company for start-ups in the healthcare industry and generally does not generate any operating revenues of its own. In the past financial year, gross profit of EUR 3.36 mn was achieved (prev. year EUR 2.45 mn) and net income of EUR 0.85 mn (prev. year EUR -0.13 mn).
With the foundation of Direct Apotheke Venlo B.V. (Netherlands) in 2020, MPH Ventures GmbH took the first important steps into the strongly growing area of mail-order pharmacies. In the financial year 2022, the pharmacy's sales revenues increased by 81% to EUR 13.54 million and a positive profit after tax was achieved. The main focus is on the mail-order business for pharmaceuticals and medical products for aesthetic treatments.
The development of fair value gains and income from investments resulted in a net profit of EUR 29.1 mn for MPH Health Care AG (prev. year net loss of EUR 9.0 mn). This mainly includes the results from the valuation of investments (as of 31 December 2022) as of the reporting date in the amount of EUR 23.7 mn (prev. year EUR -12.1 mn), income from investments and the profit from the sale of investments (in the year as a whole) in the amount of EUR 6.8 mn (prev. year EUR 4.3 mn).
As a rule, an investment entity is not required to consolidate its subsidiaries or to apply IFRS 3 when it obtains control over another entity. Instead, an investment entity shall measure the investment in a subsidiary at fair value through profit or loss in accordance with IFRS 9.
Revenues and other income in the current financial year mainly result from gains on the sale of shares in the investments. A gain of kEUR 207 was realized on the sale of shares in the financial year 2022 (prev. year kEUR 766). In the financial year 2022, kEUR 18,415 was invested in the purchase of investments (prev. year kEUR 4,780). Proceeds of kEUR 2,860 were realized from the sale of shares in listed investments in 2022 (prev. year kEUR 6,225).
The Company's total capital increased by 19.7% to EUR 237.0 million in the financial year 2022. The equity ratio (equity / total capital * 100) decreased slightly from 97.1% in 2021 to 93.4% in 2022. The financial assets reflect the investments made. Compared to the fiscal year 2021, the value of these assets increased by 20.4% from kEUR 193,502 to kEUR 233,010 as of 31 December 2022.
Operating income, consisting of fair value gains on valuations of investments, income from investments and gains on sales of financial assets, increased significantly to kEUR 30,666 in the fiscal year 2022 (prev. year kEUR 13,547). Operating expenses, consisting of fair value losses on valuations of investments, losses on sales of financial assets and finance and administrative expenses, decreased significantly from kEUR 22,601 to kEUR 1,077 in the fiscal year 2022.
Our financial position can be described as very stable. Our financial management is geared to always settling liabilities within the payment period and collecting receivables within the payment targets.
Our capital structure is good. Nominal equity increased by EUR 29.1 million, and the equity ratio remains well above 90%.
Liabilities to banks increased by EUR 8.96 million to provide additional scope for investment purchases and account for 5.5% of total assets (prev. year 2.0%). MPH and the portfolio companies make use of the credit lines granted by various banks in order to promote business success. Trade payables can always be settled within the payment terms.
Non-current assets are 95.0% covered by our equity. Current receivables and bank balances exceed the sum of current trade accounts payable and other liabilities. The bank loans still reported under current financial liabilities as of 31 December 2022 were converted into non-current loans at the beginning of 2023.
The liquidity situation is also good with regard to the investments that are available at short notice and can be liquidated.
No major investments in property, plant and equipment have been made and are not planned in the short term. Liquidity for investments in financial assets was created through the partial utilization of available short-term credit lines and the sale of shares in investments. The financial development of the MPH investment company in the reporting period is shown in the cash flow statement with indirect calculation of cash flows from operating activities as follows:
| Cash flows from: | 2022 in kEUR | 2021 in kEUR |
|---|---|---|
| Ongoing business activities | 4 | -1,087 |
| Investment activities | -8,955 | 6,366 |
| Financial activities | -3,187 | -205 |
| Net cash flow | -12,138 | 5,074 |
| Change in liabilities due at any time | 11,964 | -3,600 |
| Change in cash and cash equivalents | -174 | 1,474 |
The financial position of MPH Health Care AG can still be described as good in the fiscal year 2022, characterized by a significant increase in financial assets (from EUR 193.5 mn in 2021 to EUR 233.0 mn in 2022), almost unchanged cash and cash equivalents (EUR 1.7 mn in 2022 compared to EUR 1.8 mn in the previous year) and an increase in current financial liabilities of 9.0 million euros, which mainly comprise loans from banks for the purchase of investments. Overall, our economic situation can be described as good.
An important role in the future development of MPH and its (direct and indirect) investments lies in the further effects of the Russian invasion in Ukraine as well as the further development of energy prices and inflationary tendencies. However, the further impact of the ongoing Ukraine crisis and rising inflation on the global economy and our portfolio companies cannot be foreseen in the short term and may repeatedly lead to high volatility on the stock markets, which also affects our investments (and MPH itself).
Our investment M1 Kliniken AG is currently not affected by any restrictions and is experiencing unabated high demand for beauty treatments. The CR Capital AG shareholding is also benefiting from the high popularity of its offerings in the markets for sustainable energy supply concepts, quality and cost-optimized housing, and capital investments for broad sections of the population. With the current projects, the strategy of connecting new and existing residential areas to decentralized and compact infrastructures with regenerative energy supply is being further implemented.
We continue to take a positive view of the medium-term development of MPH Health Care AG and its listed investments, especially as M1 Kliniken AG has already seen a recovery in its share price and further increases can be expected. The development of M1 Kliniken AG's earnings, which has already begun as a result of HAEMATO AG's activities in the direction of higher-margin products, will have an impact on earnings. We take a positive view of the growing product segment "Lifestyle & Aesthetics". The approval of our own botulinum toxin in the private label segment continues to proceed according to plan. The application to conduct a clinical trial was submitted to the relevant authorities at the end of January 2023. The expansion of these profitable products should be reflected in the results of M1 Kliniken AG in the coming years and thus also have a positive impact on the valuation of the investment.
The economic sectors of our investments continue to offer great growth potential in principle. The demand for off-patent and patent-protected drugs and the production of medications for therapies for cancer, HIV and other chronic diseases is steadily increasing. Beauty lifestyle services for private payers continue to be in vogue and are becoming increasingly popular. CR Capital AG and its subsidiaries offer a range of services to meet the continuing demand for affordable housing and property, which will bring further growth and opportunities.
Against the backdrop of the current crisis in Ukraine and rising inflation, the Management Board will continuously review the strategy and orientation of MPH and its portfolio companies.
There are no significant currency risks that could affect the Company's net assets, financial position and results of operations. However, as a result of the Company's business activities and the associated high proportion of financial assets in total assets, the Group is exposed to fluctuations in the financial markets.
The investments will continue to meet market competition through service, reliability and a high level of quality.
On the procurement side, the investments have access to a wide range of purchasing options. To minimize business risks, the investments diversify their sources of supply throughout Europe. The investments safeguard their high quality standards through careful supplier qualification and selection as well as active supplier management. For example, the implementation of Directive 2011/62/ EU with effect from 9 February 2019 will provide HAEMATOAG with additional security in the area of procurement and will form an even more stable business basis for the coming financial years.
In the field of beauty treatments, there is a risk that society's perception of beauty may change. If a different ideal of beauty were to develop that contradicted the services provided by M1, this could represent a significant entrepreneurial risk. Due to its market-leading position and the high number of customer contacts, M1 is in a position to identify new developments in the "beauty consciousness" of target customers at a very early stage and to derive conclusions from this with regard to the range of services required for optimum market coverage. Furthermore, new market participants could enter into competition with M1, whose concept is similarly oriented. If these new market participants develop their own unique selling propositions (USPs), this could also represent a business risk. M1 closely monitors the competitive environment in its own market segments and observes individual competitors or chains of companies in order to be able to react accordingly. Further increases in prices for energy, housing, transportation, etc., could lead to households having less free disposable income and reducing consumer spending in the future, which also includes the elective beauty treatments of the M1-Group. M1 counters this by keeping its prices for these beauty treatments stably low, thus securing a competitive advantage.
Constant statutory regulatory measures, strong pressure on margins in the pharmaceutical market, and the permanent change in the parallel import market due to exchange rate risks and price differences in the procurement of drugs can have a negative impact on the revenue and earnings situation of HAEMATO AG (and thus on the parent company M1 Kliniken AG). Legal risks arise primarily from the distribution of products and in particular from trademark and patent law issues. As an importer, HAEMATO is considered a pharmaceutical entrepreneur under drug law and therefore bears the risk of market withdrawals.
As a result of the SHI Financial Stabilization Act of 2022, the manufacturer's discount for reimbursable drugs will be raised from 7 to 12 percent by 31 December 2023, effective 1 January 2023. HAEMATO AG therefore expects expenses for the procurement of goods and for transport services to increase compared to previous years. This effect is to be compensated by the cost efficiency program that has been running since the end of 2021. The "Lifestyle & Aesthetics" segment is to be further expanded and thus support the focus on permanently higher margins.
CR Capital AG is exposed to risks arising from changes in the framework conditions imposed by the legislator or other regulations, which may affect, among other things, the procurement and contracting regulations for construction services. As the Company's activities are limited to Germany and such changes do not occur unexpectedly in most cases, there is generally sufficient time to respond adequately to any changes. Planned changes in legislation are also monitored very closely in advance. The companies also regularly undergo the statutory MaBV audit. In general, the business segments of the portfolio companies are also affected by the progress of the Ukraine war and further (energy) price developments. A worsening of existing crises or the emergence of new sources of conflict (e.g., if the war in Ukraine spreads to other countries) could result in macroeconomic risks that could lead to significant declines in economic growth worldwide. Risks for the portfolio companies may not only affect sales performance, but may also have a significant impact on production, the procurement market and the supply chain.
MPH Health Care AG participates to a considerable extent in the capital of its investments, and changes in the market prices of these investments have a direct impact on the Company's results of operations. The listed securities held by the Company are subject to daily trading.
Due to the stable equity situation of our company, there are currently no discernible liquidity risks.
There are no significant currency risks that could affect the net assets, financial position and results of operations of the Company.
The liquidity situation is satisfactory; no bottlenecks are expected.
MPH Health Care AG uses a risk management system to systematically identify significant risks and risks to the company as a going concern in order to assess their impact and develop suitable measures.
The aim of the risk management system is essentially to avoid financial losses, defaults or disruptions or to implement suitable countermeasures without delay. As part of this system, the Management Board and Supervisory Board are informed of risks at an early stage. Monitoring liquidity and earnings development are important mechanisms for early detection. The monitoring of operational development and the identification of timely deviations from plan is the task of Controlling. If necessary, the heads of the respective departments decide together with the Board of Management on the appropriate strategy and measures for managing risks.
The portfolio companies use established risk management systems in order to be able to respond at any time to changes in the risk profile of operating decisions at short notice. Comprehensive reporting in accounting and controlling as well as in all areas along the value chain enables them to reassess risks on a cyclical basis, prioritizing them according to their probability of occurrence.
The healthcare market is and will remain a growth market. We will participate in this growth through the specialization of our investments in plastic surgery and aesthetic medical beauty treatments (M1 Kliniken), pharmaceutical trading in the therapeutic areas of oncology, HIV and other chronic diseases, and the rapidly expanding field of aesthetic pharmaceuticals and medical devices in the new "Lifestyle & Aesthetics" segment (HAEMATO subgroup). Efficiency in the treatment of patients is promoted by a consistent focus on a limited range of indications. This is also supported by the high quality of the treating physicians, which in turn is supported by the high number of individual treatments performed.
In its real estate project business, CR Capital continues to focus on the areas surrounding Berlin and Leipzig as core regions and sees great potential there to catch up with the national average, e.g. in the home ownership rate. If the current home ownership rate of less than 20 percent is to catch up with the national average of around 50 percent, more than one million households in the Berlin-Brandenburg region alone have the potential to buy their own homes. With its holdings in Solartec GmbH and Greentec GmbH, CR Capital is adding innovative technology companies to its portfolio and increasingly transforming itself into a property developer and project developer focusing on new technologies for regenerative energy and heat supply and optimized new residential construction. CR Capital is increasingly involved in the billion euro markets for regenerative energy supply and sustainable living. The estimated market volume for energy transition investments in Germany is around 600 billion euros by 2030. The photovoltaic market alone is expected to require well over 100 billion euros in the coming years.
In addition to the current construction projects and developments of approx. 50,000 m² of residential space with partially integrated energy supply systems, a plant (agri-photovoltaics) is planned on more than 60,000 m² for the production of approx. 6 million kWh p.a. The investments of CR Capital are hardly affected by increased costs, as long-term contracts exist and flexible adjustments could be made in individual cases. All projects were completed and handed over on schedule.
We see risks to future development mainly in fluctuations on the financial and foreign exchange markets. Against the background of our financial stability, however, we believe we are well equipped to deal with future risks. There are currently no discernible risks that could jeopardize the continued existence of the Company.
The financial instruments held by the company mainly include securities, receivables, liabilities and bank balances.
The companies in which MPH holds direct or indirect interests have a solvent customer base. Bad debts are the absolute exception.
Liabilities are paid within the agreed payment periods.
In the short-term area, the company finances itself primarily by means of the profit contributions generated by the investments.
The company pursues a conservative risk policy in the management of its financial positions, and appropriate allowances are made for any default or credit risks identified in connection with financial assets. In order to minimize default risks, the company has a strategy for daily monitoring of the development of investments on the financial markets. In addition, we conduct due diligence to obtain comprehensive information on the overall situation of potential investments before making new investments.
The Company does not maintain any branches.
Pursuant to Section 312 of the German Stock Corporation Act (AktG), the Management Board has pre pared a report on relations with affiliated companies which contains the following concluding statement: "Our Company and the subsidiaries received appropriate consideration for each legal transaction in accordance with the circumstances known to us at the time at which legal transactions were conducted with the controlling company and other affiliated companies."
Berlin, 21 April 2023 MPH Health Care AG
Patrick Brenske (Management Board)
| IFRS - Balance Sheet - Assets 36 | |
|---|---|
| IFRS - Balance Sheet - Liabilities 37 | |
| IFRS - Profit and Loss Statement 38 | |
| IFRS - Cash Flow Statement 39 | |
| IFRS - Statement of Changes in Equity 40 |
From 1 January to 31 December 2022*
| e2022 | e2021 | |
|---|---|---|
| EUR | EUR | |
| Cash and cash equivalents | 1,668,692 | 1,843,029 |
| Other short-term financial assets | 2,147,824 | 2,598,698 |
| Other short-term assets | 143,399 | 10,892 |
| Income tax assets | 0 | 0 |
| Short-term assets | 3.959.915 | 4.452.618 |
| Intangible assets | 4 | 4 |
| Property, plant and equipment | 21,928 | 41,482 |
| Other long-term financial assets | 233,010,261 | 193,502,399 |
| Long-term assets | 233,032,192 | 193,543,884 |
| �TOTAL ASSETS | 236,992,107 | 197,996,502 |
From 1 January to 31 December 2022*
| e2022 | e2021 | |
|---|---|---|
| EUR | EUR | |
| Short-term accruals | 87,416 | 100,946 |
| Trade account payables | 48,762 | 50,922 |
| Short-term leasing liabilities | 14,467 | 17,443 |
| Other short-term financial liabilities | 12,970,231 | 4,011,053 |
| Other short-term liabilities | 618,957 | 19,758 |
| Short-term liabilities | 13,739,833 | 4,200,121 |
| Long-term leasing liabilities | 7,390 | 21,857 |
| Other long-term financial liabilities | 0 | 0 |
| Deferred tax liabilities | 1,823,236 | 1,467,775 |
| Long-term liabilities | 1,830,626 | 1,489.632 |
| Subscribed capital | 4,281,384 | 4,281,384 |
| Capital reserves | 41,220,633 | 41,220,633 |
| Retained earnings | 175,919,631 | 146,804,732 |
| Equity | 221,421,648 | 192,306,749 |
| �TOTAL LIABILITIES | 236,992,107 | 197,996,502 |
From 1 January to 31 December 2022*
| Profit and loss statement | e2022 EUR |
e2021 EUR |
|---|---|---|
| Operating revenues | 30,665,667 | 13,546,711 |
| Fair value gain financial assets | 23,815,838 | 9,185,181 |
| Net income from participations | 207,060 | 765,579 |
| Investment income | 6,605,420 | 3,561,105 |
| Other operating income | 37,349 | 34,846 |
| Operating expenses | -1,077,284 | -22.600.737 |
| Fair value loss financial assets | -70,038 | -21,349,508 |
| Financial expenses | -20,000 | -327,909 |
| Net loss from investments | 0 | 0 |
| Administrative expenses | -987,246 | -923,321 |
| Result from ordinary activities EBITDA | 29,588,383 | -9,054,026 |
| Depreciation | -25,169 | -20,077 |
| Operating result EBIT | 29,563,213 | -9,074,103 |
| Financial result | -89,454 | -114,600 |
| Other interest and similar income | 80,000 | 80,000 |
| Interest and similar expenses | -169,454 | -194,600 |
| Earnings before taxes EBT | 29,473,759 | -9,188,703 |
| Taxes on income and earnings | -358,860 | 232,651 |
| Net income | 29,114,899 | -8,956,052 |
From 1 January to 31 December 2022*
| e2022 | e2021 | |
|---|---|---|
| EUR | EUR | |
| Result for the period | 29,114,899 | -8,956,052 |
| Depreciation on fixed assets | 25,169 | 20,077 |
| Increase / decrease in short-term accruals | -13,529 | 27,403 |
| Increase / decrease due to fair value measurement | -23,745,799 | 12,164,327 |
| Decrease / increase in trade account receivables and other assets |
318,366 | 1,574,128 |
| Increase / decrease in trade account payables and other liabilities |
592,239 | 17,523 |
| Profit / loss from the disposal of fixed assets | -207,060 | -761,373 |
| Interest expense / income | 169,454 | 194,600 |
| Other investment income | -6,605,420 | -5,173,114 |
| Income tax expense / income | 358,860 | -232,651 |
| Income tax payments | -3,399 | 38,440 |
| Cash flow from operating activities | 3,780 | -1,086,693 |
| Payments received from disposals of property, plant and equipment | 0 | 23,109 |
| Payments for investments in property, plant and equipment | -5,615 | -2,270 |
| Payments received from disposals of financial assets | 2,860,366 | 6,224,575 |
| Payments for investments in financial assets | -18,415,369 | -4,779,564 |
| Interest income | 0 | 0 |
| Income from investments | 6,605,420 | 4,900,472 |
| Cash flow from investing activities | -8,955,198 | 6,366,322 |
| Change in liabilities to banks | -3,000,000 | 0 |
| Interest expenses | -168,573 | -193,880 |
| Amortisation of rights of use | -18,324 | -11,556 |
| Cash flow from financing activities | -3,186,897 | -205,436 |
| Net cash flow | -12,138,315 | 5,074,193 |
| Cash and cash equivalents at the beginning of the period | 845,762 | -4,228,431 |
| Liabilities due at any time at the beginning of the period | 997,267 | 4,597,089 |
| Cash and cash equivalents at the beginning of the period | 1,843,029 | 368,658 |
| Cash and cash equivalents at the end of the period | -11,292,554 | 845,762 |
| Liabilities due at any time at the end of the period | 12,961,246 | 997,267 |
| Cash and cash equivalents at the end of the period | 1,668,692 | 1,843,029 |
| Change in cash and cash equivalents | -174,337 | 1,474,371 |
* Accounting according to IFRS
IFRS - STATEMENT OF CHANGES IN EQUITY
From 1 January to 31 December 2022*
| Subscribed capital EUR |
Capital reserve EUR |
EUR Retained earnings |
Equity EUR |
|
|---|---|---|---|---|
| 1 January 2021 | 4,281,384 | 41,220,633 | 155,760,784 | 201,262.801 |
| Net income | 0 | 0 | -8,956,052 | -8,956,052 |
| Capital reduction | 0 | 0 | 0 | 0 |
| Transfer to reserves | 0 | 0 | 0 | 0 |
| 31. December 2021 | 4,281,384 | 41,220,633 | 146,804,732 | 192,306,749 |
| 192,306,749 | 29,114.899 | 221,421,648 |
|---|---|---|
| 146,804,732 | 29,114,899 | 175,919,630 |
| 41,220,633 | 0 | 41,220,633 |
| 4,281,384 | 0 | 4,281,384 |
| 1 January 2022 | Net income | 31 December 2022 |
* Accounting according to IFRS
40 IFRS Statement
| 1. | General information 44 | |
|---|---|---|
| 2. | Investments 46 | |
| 3. | Consolidation principles 46 | |
| 4. | Estimates and assumptions 46 | |
| 5. | Information on the IFRS balance sheet including accounting 47 and valuation methods |
|
| 6. | Contingent liabilities and other fi nancial commitments 52 | |
| 7. | Notes to the IFRS profi t and loss statement 52 | |
| 8. | Earnings per share 56 | |
| 9. | Information on members of the board 56 | |
| 10. Number of employees 56 | ||
| 11. Risk management 56 | ||
| 12. Auditor's fee 60 | ||
| 13. Related party disclosures 60 | ||
| 14. Events after the balance sheet date 60 | ||
| 15. Approval of the IFRS fi nancial statements 2022 by the Management Board 61 for publication with regards to IAS 10.17 |
||
| 16. Auditor's report 62 |
for the financial year from 1 January to 31 December 2022
MPH Health Care AG was founded in the fiscal year 2008 under the name MPH Mittelständische Pharma Holding AG and changed its name in 2017. The Company is registered in the Commercial Register of the Local Court of Berlin-Charlottenburg under HRB 116425 and has its registered office at Grünauer Straße 5, 12557 Berlin. MPH Health Care AG is an investment company within the meaning of IFRS 10.27. Its business activities consists of investing in companies with the aim of asset growth.
The IFRS financial statements of MPH Health Care AG, domiciled in Berlin, for the period from 1 January to 31 December 2022, have been prepared in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), as adop ted by the European Union. The figures for the financial year 2022 and for the previous year are stated in euros. Unless otherwise stated, the figures are rounded to the nearest euro. The new standards adopted by the IASB have been applied from the effective date.
The following standards and interpretations and amendments to existing standards are mandatory for reporting periods beginning on or after 1 January 2022:
In the future, the following standards and interpretations as well as amendments to existing standards are to be applied:
IFRS 9 introduces a uniform model for classifying financial assets, with which financial assets are classified into three categories: financial assets measured at amortized cost, financial assets measured at fair value through other comprehensive income, and financial assets measured at fair value through profit or loss.
Cash and cash equivalents are also measured at amortized cost in accordance with IFRS 9.
Trade receivables are non-derivative financial assets with fixed or determinable payments. All of these instruments are classified as measured at amortized cost under IFRS 9 and are subject to the effective interest method.
Overdrafts, bank loans and trade accounts payable are classified as other financial liabilities under both IAS 39 and IFRS 9.
In the consolidated financial statements, relief from the application of IFRS 16 was granted to leases classified as operating leases in accordance with IAS 17. In detail, the following were applied:
MPH Health Care AG reports the repayments of lease liabilities in the cash flow from financing activities. Lease payments for short-term leases are reported in cash flow from operating activities.
Accounting and valuation have been carried out on the assumption that the company is a going concern.
The balance sheet of MPH Health Care AG has been prepared on the basis of maturities, with assets and liabilities that are expected to be realized or settled within twelve months of the balance sheet date being classified as current in accordance with IAS 1. In accordance with IAS 1.56, deferred tax assets and deferred taxes are reported in full under non-current assets or non-current liabilities.
Gains and losses in the statement of comprehensive income are presented using the nature of expense method.
No investments were consolidated in the IFRS financial statements of MPH Health Care AG, Berlin, as of 31 December 2022, as MPH Health Care AG is an investment entity in accordance with IFRS 10.27. The investments listed below are therefore measured at fair value through profit or loss in accordance with IFRS 9. The controlled investments listed below are therefore measured at fair value through profit or loss in accordance with IFRS 10.31 and IFRS 9.
| Name of the company |
Location of the company |
Percentage of shares |
Date on which control was acquired |
|---|---|---|---|
| MPH Ventures GmbH | Schönefeld | 100% | 31 August 2011 |
| M1 Kliniken AG | Berlin | 69% | 7 May 2012 |
| Pharmigon GmbH | Berlin | 50% | 7 May 2012 |
| CR Capital AG | Berlin | 59% | 1 January 2015 |
In accordance with IFRS 10, IFRS 12 and IAS 28, investments are accounted for in accordance with the rules for investment entities.
In accordance with IFRS 9, investments are measured at fair value at the reporting date.
The preparation of financial statements in conformity with IFRS requires the use of estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The actual amounts may differ from these estimates and assumptions.
MPH Health Care AG is an investment entity in accordance with paragraph 27 of IFRS 10. An investment entity is an entity that
The determination of the fair values of assets and liabilities is based on management judgments.
The expected current income tax must be calculated for each taxable entity, and the temporary differences arising from the different treatment of certain balance sheet items between the IFRS financial statements and the tax accounts must be assessed. Where temporary differences exist, these differences generally result in the recognition of deferred tax assets and liabilities in the IFRS financial statements. Management must make judgments in the calculation of current and deferred taxes. Deferred tax assets are recognized to the extent that it is probable that they can be utilized. The utilization of deferred tax assets depends on the possibility of generating sufficient taxable income within the scope of the respective tax type. In assessing the likelihood that deferred tax assets will be utilized in the future, various factors have to be considered, such as past results of operations, operational planning and tax planning strategies. If actual results differ from these estimates or if these estimates have to be adjusted in future periods, this could have an adverse effect on the net assets, financial position and results of operations. If there is a change in the assessment of the recoverability of deferred tax assets, the recognized deferred tax assets must be written down through profit or loss.
In preparing the financial statements of the associated companies, transactions denominated in currencies other than the functional currency (euro) of the investment are translated at the exchange rates prevailing at the dates of the transactions. At the balance sheet date, all monetary items denominated in foreign currencies are translated at the closing rate. Non-monetary items denominated in foreign currencies that are measured at fair value are translated at the exchange rates prevailing at the date of the fair value measurement.
5.1 Cash and cash equivalents are measured at cost and comprise cash on hand and other current highly liquid financial assets with a maturity of three months or less at the time of acquisition.
5.2 Other current financial assets exclusively comprise loans, creditors with debit balances and receivables. Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are measured using the effective interest method at amortized cost less any impairment losses. They are recognized in the balance sheet when the investment entity becomes a party to the contractual provisions of the financial instrument. Financial instruments are initially recognized at fair value. For subsequent measurement, financial instruments are assigned to one of the measurement categories listed in IFRS 9 Financial Instruments (financial assets measured at amortized cost, financial assets measured at fair value through other comprehensive income, and financial assets measured at fair value through profit or loss).
5.3 Other current assets mainly comprise prepaid expenses and receivables from personnel.
5.4 Income tax receivables include overpaid income taxes on investment income.
5.5 In accordance with IAS16 and IAS 38, property, plant and equipment and intangible assets are carried at cost less accumulated depreciation in the case of finite-lived assets. Where necessary, impairment losses are recognized to reduce (amortized) cost. There was no revaluation of property, plant and equipment in accordance with the option under IAS16.
Depreciation is calculated using the straight-line method. Depreciation is calculated on the basis of the pattern of consumption of the future economic benefits embodied in the asset. Property, plant and equipment and intangible assets are depreciated on a straight-line basis over different useful lives (3 to 15 years).
If the carrying amount exceeds the expected recoverable amount, an impairment loss is recognized in accordance with IAS 36. The recoverable amount is determined from the net sales proceeds or – if higher – the present value of the estimated future cash flows from the use of the asset.
| Intangible assets in EUR |
Fixed assets in EUR |
|
|---|---|---|
| Acquisition and production costs | ||
| 1 January 2021 | 64,284 | 148,310 |
| Additions | 0 | 45,067 |
| Disposals | 0 | -44,696 |
| 31 December 2021 | 64,284 | 148,681 |
| 1 January 2022 | 64,284 | 148,681 |
| Additions | 0 | 5,615 |
| Disposals | 0 | -11,813 |
| 31 December 2022 | 64,284 | 142,483 |
| Depreciation / Write-ups | ||
| 1 January 2021 | -63,760 | -104,503 |
| Depreciation | 0 | -20,077 |
| Disposals | 0 | 17,381 |
| 31 December 2021 | -64,280 | -107,199 |
| 1 January 2022 | -64,280 | -107,199 |
| Depreciation | 0 | -25,169 |
| Disposals | 0 | 11,813 |
| 31 December 2022 | -64,280 | -120,556 |
| Book values | ||
| 31 December 2021 | 4 | 41,482 |
| 31 December 2022 | 4 | 21,928 |
5.6 Other non-current financial assets include equity instruments of listed companies. The shares have been allocated to the category "at fair value through profit or loss". Subsequent measurement of the equity instruments is at the closing price on the respective reporting date.
| 2021 | Change | 2022 | Closing price 31.12.2022 |
Fair value | |
|---|---|---|---|---|---|
| Listed company | pieces | pieces | pieces | EUR | EUR |
| HAEMATO AG | 11,718 | +3,500 | 15,218 | 17,20 | 261,750 |
| M1 Kliniken AG | 12,240,898 | +1,312,334 | 13,553,232 | 9,06 | 122,792,282 |
| CR Capital AG | 2,327,955 | +332,564 | 2,660,519 | 32,00 | 85,136,608 |
| Unlisted equity investment 1) |
24,819,621 | ||||
| Total financial assets | 233,010,261 |
1) Unlisted investments in the legal form of a GmbH are valued at IFRS equity. This is the equity which is recorded in the individual financial statements of the company in the IFRS balance sheet for this company.
| Shares in subsidiaries | |
|---|---|
| in EUR | |
| Acquisition and production costs | |
| 1 January 2021 | 99,727,980 |
| Accruals | 4,779,564 |
| Accruals | -2,152,893 |
| 31 December 2021 | 102,354,651 |
| 1 January 2022 | 102,354,651 |
| Accruals | 18,415,369 |
| Disposals | -2,397,468 |
| 31 December 2022 | 118,372,553 |
| Depreciation / Write-ups | |
| 1 January 2021 | 106,618,178 |
| Accruals | -21,349,508 |
| Write-ups | 9,185,181 |
| Disposals | -3,306,103 |
| 31 December 2021 | 91,147,748 |
| 1 January 2022 | 91,147,748 |
| Accruals | -70,038 |
| Write-ups | 23,815,838 |
| Disposals | -255,839 |
| 31 December 2022 | 114,637,708 |
| Book values | |
| 31 December 2021 | 193,502,399 |
| 31 December 2022 | 233,010,261 |
5.7 Current provisions are recognized when there is a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made of the amount of the provision.
The amount recognized as a provision is the best estimate of the expenditure required to settle the present obligation at the balance sheet date. The risks and uncertainties inherent in the obligation must be taken into account. If a provision is measured on the basis of the cash flows estimated to be required to settle the obligation, these cash flows must be discounted if the interest effect is material.
Current provisions mainly relate to financial statement and audit costs as well as other provisions.
| 01.01.2022 | Consumption | Release | Allocation | 31.12.2022 | |
|---|---|---|---|---|---|
| Accruals | kEUR | kEUR | kEUR | kEUR | kEUR |
| Audit and annual financial statement costs |
20 | 20 | 0 | 23 | 23 |
| Supervisory Board remunerations |
20 | 20 | 0 | 20 | 20 |
| Other | 61 | 44 | 2 | 29 | 44 |
| 101 | 84 | 2 | 52 | 87 |
5.9 Lease liabilities: In accordance with IFRS 16, MPH capitalizes leases from Operate Leasing as rights of use and amortizes them over the term of the contracts. The lease payments give rise to liabilities which, depending on the term, are classified as current or non-current and discounted. For further information, please refer to Note (1).
| 31.12.2022 | 31.12.2021 | |
|---|---|---|
| EUR | EUR | |
| Right of use | 21,399 | 38,946 |
| Prepaid expenses and accrued income | 0 | 0 |
| Ʃ Asset side | 21,399 | 38,946 |
| Liabilities | 21,857 | 39,300 |
| Short-term leasing liabilities | 14,467 | 17,443 |
| Long-term leasing liabilities | 7,390 | 21,857 |
| Accrued expenses and deferred income | 0 | 0 |
| Ʃ Liabilities side | 21,857 | 39,301 |
| Depreciation | -17,547 | -11,071 |
| Interest expense | -881 | -720 |
| Ʃ Profit and loss account | -18,428 | -11,791 |
| Leasing expenses | 18,324 | 11,556 |
| Ʃ Amendment leasing expenses | 18,324 | 11,556 |
5.10 Other current financial liabilities amount to kEUR 12,970 (prev. year kEUR 4,011). Other financial liabilities mainly relate to current liabilities to banks from loans and overdrafts, loans received, interest on promissory note loans received and credit balances due from customers. In the financial year 2022, MPH utilized the existing credit lines of the banks with a higher utilization rate than in the previous year in order to finance strategic acquisitions and thus the expansion of the existing investments in the short term.
5.11 Other current liabilities amount to kEUR 619 (prev. year kEUR 20) and relate to wage and value-added tax liabilities as well as acquisitions of shareholdings whose legal transfer to MPH took place in 2022, but which were not recognized by the custodian banks until 2023. These overlaps lead to a current liability as of 31 December 2022, which is recognized in cash and cash equivalents as of its value date.
5.12 There are no non-current liabilities to banks as of the reporting date of 31 December 2022.
5.13 Deferred tax liabilities: A deferred tax liability is recognized for all taxable temporary differences, except to the extent that the deferred tax liability arises from goodwill for which amortization is not deductible for tax purposes or from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
However, a deferred tax liability is recognized for taxable temporary differences associated with invest ments in subsidiaries, except where the timing of the reversal of the temporary difference cannot be controlled by the Company and it is probable that this will not occur in the foreseeable future. The deferred taxes recognized as of 31 December 2021 relate entirely to the temporary difference of financial assets measured at fair value. As of 31 December 2022, kEUR 355 was recognized in profit or loss - reducing earnings - and leading to an increased deferred tax liability of kEUR 1,823 (prev. year kEUR 1,468).
5.14 Shareholders' equity: The Company's share capital of EUR 4,281,384 is divided into 4,281,384 no-par value shares with a notional value of EUR 1.00 each.
In accordance with the resolution of the Annual General Meeting on 14 July 2022, the Management Board is authorized, with the approval of the Supervisory Board, to increase the Company's share capital by up to a total of EUR 2,140,692 by issuing new ordinary bearer shares and/or non-voting preference shares against cash contributions and/or contributions in kind on one or more occasions on or before 13 July 2027 (Authorized Capital 2022).
In accordance with the authorization granted by the Annual General Meeting on 14 July 2022, the conditional capital was increased until 13 July 2027 for the purpose of granting no-par value bearer shares upon exercise of option or conversion rights or upon fulfillment of corresponding option or conversion obligations or upon exercise of an option of the Company to grant no-par value shares of the Company in whole or in part instead of payment of the cash amount due. These shares will be issued at the option or conversion price to be determined. The conditional capital increase may only be carried out in the event of the issue of bonds in accordance with the authorization resolution of the Annual General Meeting of 14 July 2022 and only to the extent that option or conversion rights are exercised or ful filled for the exercise of options or conversion or to the extent that the Company exercises an option to deliver no-par value shares of the Company in whole or in part instead of payment of the cash amount due and to the extent that no cash settlement is granted or treasury shares are used for servicing.
For the development and composition of equity, please refer to the statement of changes in equity.
Contingent liabilities and other financial obligations are in the ordinary course of business.
Revenue is measured at the fair value of the consideration received or receivable and reduced by expected sales deductions.
IFRS 8 requires an entity to report financial and descriptive information about its reportable segments. Reportable segments are operating segments that meet certain criteria. Operating segments are components of an entity for which separate financial information is available. Segment reporting must therefore be based on the company's internal reporting system (management approach). The internal management of the company thus forms the basis for segment reporting. As an investment company, MPH Health Care AG operates mainly in a combined business segment of investments and mainly in a regional segment (Germany), which means that it is largely exempt from the segment reporting requirement.
However, IFRS 8.31 also requires single-segment groups to disclose certain disaggregated financial data. These are disclosure requirements that must be presented according to the following criteria:
Products and Services (IFRS 8.32): All products (investments) have been combined into one group of comparable products. All sales presented in the income statement essentially relate to the product group described above.
Geographical segments (IFRS 8.33): As described above, MPH Health Care AG operates mainly in one regional segment (Germany). As the preparation of information on geographical regions would involve increased costs, this has not been done.
Major customers (IFRS 8.34): Subsidiaries are not consolidated due to the fact that they are accounted for as investment entities in accordance with IFRS 10.31. No sales revenues were generated. MPH Health Care AG therefore does not have any major customers.
Expenses and income for the financial year are recognized when they are realized, irrespective of the date of payment. Revenues from the sale of assets and revenues from services are recognized when the significant risks and rewards have been transferred and the amount of the expected consideration can be reliably estimated.
The financial investments held under financial assets are measured at fair value through profit or loss as of the reporting date. Compared to the previous year, these investments were valued higher by a total of kEUR 23,746. In the previous year, there was a devaluation of kEUR 12,164, which relates to the unrealized gains/losses from the fair value measurement of the investments as of the reporting date.
All realized gains and losses (see 7.6) from the sale or write-down of investments are determined for each investment.
| Year | Sales revenue in EUR |
Book value in EUR |
Profit / loss in EUR |
|---|---|---|---|
| 2021 | 6,224,575 | 5,458,996 | 765,579 |
| 2022 | 2,860,367 | 2,653,307 | 207,060 |
Income from investments reflects the realized dividend and profit distributions of the investments. In the year under review, income increased by kEUR 3,044 to kEUR 6,605. This corresponds to an increase of 85.5% compared to the previous year.
| Shares | Investment income 2022 in EUR |
Investment income 2021 in EUR |
|---|---|---|
| CR Capital AG | 5,819,888 | 3,288,462 |
| HAEMATO AG | 12,890 | 0 |
| M1 Kliniken AG | 0 | 0 |
| Pharmigon (unlisted) | 500,000 | 0 |
| HC Grundbesitz GmbH (unlisted) | 272,643 | 272,643 |
| Total | 6,605,420 | 3,561,105 |
This mainly relates to other income from ordinary activities, insurance compensation and remuneration in kind.
Financial expenses include commissions for the brokerage of share sales.
All realized gains (see 7.2) and losses from the sale or write-down of investments are determined for each investment. There were no losses from the sale of investments in the reporting period.
Administrative expenses comprise a number of items totaling kEUR 987 in the fiscal year 2022 (prev. year kEUR 923). These include, for example, advertising and travel expenses, insurance premiums, external work, Supervisory Board remuneration, legal and consulting costs, non-deductible input taxes, personnel expenses, and the costs of preparing and auditing the annual financial statements.
Depreciation and amortization includes scheduled depreciation of property, plant and equipment and amortization of intangible assets in the amount of kEUR 25 (prev. year kEUR 20). Property, plant and equipment and intangible assets are depreciated on a straight-line basis over various useful lives (1 to 15 years).
This relates to interest income totaling kEUR 80 (prev. year also kEUR 80). The interest results from the granting of loans to affiliated companies and from the investment of cash and cash equivalents with German banks.
Interest, which totaled kEUR 169 (prev. year kEUR 195), mainly relates to interest on current accounts or interest charged for loans granted.
The net results from financial instruments according to the measurement categories under IAS 39 are as follows:
| Interest income + dividends 2022 kEUR |
Interest income + dividends 2021 kEUR |
Interest expenses 2022 kEUR |
Interest expenses 2021 kEUR |
Fair Value 2022 kEUR |
Fair Value 2021 kEUR |
|
|---|---|---|---|---|---|---|
| Loans and receivables (other financial assets) |
80 | 80 | 0 | 0 | 0 | 0 |
| Income from investments (other financial assets) |
6,605 | 3,561 | 0 | 0 | 0 | 0 |
| Equity instruments (Financial assets at fair value through profit or loss) |
0 | 0 | 0 | 0 | 23,746 | -12,164 |
| Liabilities recognized at amortized cost (other financial liabilities) |
0 | 0 | -169 | -195 | 0 | 0 |
| Total net income | 6,685 | 3,641 | -169 | -195 | 23,746 | -12,164 |
| Effective for income | 6,685 | 3,641 | -169 | -195 | 23,746 | -12,164 |
This item can be broken down as follows:
| 2022 | 2021 | |
|---|---|---|
| kEUR | kEUR | |
| Tax expense for the current period | 0 | 0 |
| Deferred tax expense from valuation differences | -359 | 0 |
| Deferred tax income from valuation differences | 0 | 233 |
| -359 | 233 |
As in the previous year, deferred taxes are calculated using the following effective tax rate with reference to IAS 12.81c:
| Statutory effective tax rate for companies located in | 2022 in % |
|---|---|
| Berlin | 30.175 |
The statutory effective tax rate includes corporate income tax and the solidarity tax (effective rate: 15.825%) as well as trade tax (effective rate: Berlin at 14.350%).
Earnings per share are calculated by dividing net income by the number of shares outstanding. In accordance with IAS 33.19, the weighted average number of ordinary shares outstanding during the period is used to calculate basic earnings per share. Dilutive effects are not to be taken into account.
| 2022 EUR |
2021 EUR |
|
|---|---|---|
| Attributable to equity holders of the parent company on net income for the year |
29,114,899 | -8,956,052 |
| Number of shares (weighted average) | 4,281,384 | 4,281,384 |
| Earnings per share | 6.80 | -2.09 |
| Management Board | |||
|---|---|---|---|
| First name | Profession | Power of representation | Title |
| Patrick | Merchant | Sole power of representation |
Master of Banking & Finance |
| First name Andrea |
Function Chairwoman |
Profession Lawyer |
|
| Uwe | Deputy Chairman | Business Consultant | |
The total remuneration of the Supervisory Board amounted to kEUR 46 in the fiscal year 2022 (prev. year kEUR 45). There are no receivables from members of the Supervisory Board.
MPH Health Care AG employed an average of 1 employee in the reporting period.
The risk management system of MPH Health Care AG aims to identify and record all significant risks and their causes at an early stage in order to avoid financial losses, defaults or disruptions.
This procedure ensures that suitable countermeasures can be implemented to avoid risks. This is essentially an early warning system for monitoring liquidity and the development of earnings.
The risk management policy is essentially covered by the Management Board of MPH Health Care AG. The Management Board decides on the appropriate strategy for managing risks.
As a result of the Company's business activities and the associated high proportion of financial assets in the balance sheet total, the Group is exposed to the fluctuations of the financial markets.
The investment company manages with the aim of using the funds from its investors for the purpose of achieving capital appreciation or generating investment income.
In doing so, it ensures that all investments can operate under the going concern assumption. Shareholders' equity at the respective reporting date amounts to:
| 31.12.2022 kEUR |
31.12.2021 kEUR |
|
|---|---|---|
| Equity | 221,422 | 192,307 |
| Balance sheet total | 236,992 | 197,997 |
| Equity ratio | 93.43% | 97.13% |
The Company has raised short-term debt capital for the operational implementation of its business model.
In the reporting period, liabilities to banks increased from kEUR 3,997 to kEUR 12,961 due to the utilization of existing short-term credit lines. The promissory note loan maturing in the amount of kEUR 3,000 was redeemed in full in the financial year 2022. The liabilities held as a current account line as of 31 December 2022 will be redeemed at the beginning of 2023 by conversion into a loan to be repaid in the long term.
MPH Health Care's current liabilities to banks are fully subject to fixed interest rates above a reference interest rate. If the reference interest rate were to increase by 1%, the current bank liability of kEUR 12,961 would be exposed to an interest rate risk of kEUR 130.
The other financial liabilities are not subject to any interest rate risk, as no interest is payable. These are current liabilities.
The total carrying amounts and fair values of the financial assets recognized in profit or loss amounted to kEUR 233,010 (prev. year kEUR 193,502) as of the reporting date.
For the instruments presented in the table above and below, the Management Board considers the carrying amounts in the statement of financial position to be a good approximation of their fair values.
The fair values of the financial instruments were determined on the basis of market information available at the balance sheet date. The following methods and assumptions were used.
| Financial assets | short-term | ||||
|---|---|---|---|---|---|
| 31.12.2022 in kEUR |
Trade account receivables |
Other short-term financial assets |
Liquid funds | Total book values |
Fair values to be attributed |
| Financial assets measured at amortized cost |
0 | 2,148 | 1,669 | 3,817 | 3,817 |
| Financial assets | short-term | ||||
| 31.12.2021 in kEUR |
Trade account receivables |
Other short-term financial assets |
Liquid funds | Total book values |
Fair values to be attributed |
| Financial assets measured at amortized cost |
0 | 2,599 | 1,843 | 4,442 | 4,442 |
Due to the short maturities of cash and cash equivalents and trade receivables, it is assumed that the fair values correspond to the carrying amounts.
Other current financial assets are measured at amortized cost. Due to the predominantly short maturities of these financial instruments, it is assumed that the fair values correspond to the carrying amounts.
Other financial liabilities are measured at amortized cost. Due to the predominantly short maturities of these financial instruments, it is also assumed that their fair values correspond to their carrying amounts.
| Liabilities | short-term | |||
|---|---|---|---|---|
| 31.12.2022 in kEUR |
Liabilities | Trade account | Leasing | Other financial |
| to banks | payables | liabilities | liabilities | |
| 12,961 | 49 | 14 | 9 | |
| long-term | ||||
| Financial liabilities | ||||
| measured at amortized cost |
Liabilities to banks |
Leasing liabilities |
Total book values |
Fair values to be attributed |
| 0 | 7 | 13,040 | 13,040 | |
| Liabilities | short-term | |||
| 31.12.2021 | Liabilities | Trade account | Leasing | Other financial |
| in kEUR | to banks | payables | liabilities | liabilities |
| 3,997 | 51 | 17 | 14 | |
| long-term | ||||
| Financial liabilities measured at |
Fair values | |||
| amortized cost | Liabilities to banks |
Leasing liabilities |
Total book values |
to be attributed |
| 0 | 22 | 4,101 | 4,101 |
MPH Health Care AG invests the majority of its assets in investments that are traded on active markets and that are easy to sell. MPH Health Care AG holds a small portion of its assets in investments that are not traded on an exchange and may be illiquid. As a result, investments in these investees may not be readily liquidated by the Company.
Furthermore, MPH Health Care AG manages liquidity risks by constantly monitoring projected and actual cash flows and reconciling the maturity profiles of financial assets and liabilities.
The following tables show the expected cash flows of financial liabilities (undiscounted amortization and interest payments) as of 31 December 2022 and 31 December 2021:
| Financial liabilities measured at amortized cost |
Book value 31.12.2022 kEUR |
Cash flow up to 1 year kEUR |
Cash flow > 1 year up to 5 years kEUR |
Cash flow > 5 years kEUR |
|---|---|---|---|---|
| Accruals | 87 | 87 | 0 | 0 |
| Interest-bearing financial liabilities | 12,961 | 12,961 | 0 | 0 |
| Non-interest-bearing financial liabilities | 698 | 691 | 7 | 0 |
| Financial liabilities measured at amortized cost |
Book value 31.12.2021 kEUR |
Cash flow up to 1 year kEUR |
Cash flow > 1 year up to 5 years kEUR |
Cash flow > 5 years kEUR |
|---|---|---|---|---|
| Accruals | 101 | 101 | 0 | 0 |
| Interest-bearing financial liabilities | 3,997 | 3,997 | 0 | 0 |
| Non-interest-bearing financial liabilities | 124 | 102 | 22 | 0 |
Of the non-interest-bearing financial liabilities, kEUR 49 (prev. year kEUR 51) relates to trade payables and kEUR 628 (prev. year kEUR 34) to other current liabilities and financial liabilities. In the reporting period, lease liabilities accounted for kEUR 22 (prev. year kEUR 39) of the accounting changes following the transition to IFRS 16.
The cash flow statement shows how the cash and cash equivalents of MPH Health Care AG have changed over the course of the reporting years as a result of cash inflows and outflows. In this cash flow statement, the cash flows are broken down into operating, investing and financing activities. Cash and cash equivalents include cash and cash equivalents of kEUR 1,669 available at short notice (prev. year kEUR 1,843). Liabilities due at any time consist of the utilization of overdraft facilities.
The shareholders of MPH Health Care AG elected the auditor Harry Haseloff as auditor at the Annual General Meeting on 14 July 2022.
The audit services relate to the audit of the IFRS financial statements and the annual financial statements as well as all services required for the audit of the financial statements, the audit of the accounting-related internal control system and the accounting-relatedIT and process audits accompanying the projects.
The auditor did not provide any tax advisory services.
Provisions totaling kEUR 20 were recognized for the anticipated fees of the auditor Harry Haseloff for audits relating to the financial year 2022 and the investment company.
Related parties within the meaning of IAS 24 "Related Party Disclosures" are generally members of the Management Board and Supervisory Board, their close family members and all companies belonging to the investment group of MPH Health Care AG. For information on the Management Board and Supervisory Board, please refer to section (9). These related parties were not involved in any transactions with companies of the investment group that were unusual in nature or character. All transactions between the related companies were concluded at arm's length.
Any assets or liabilities resulting from transactions with these companies are reported under other assets and other liabilities.
The following transactions were conducted with related parties:
| Transactions with related parties and persons | 31.12.2022 in kEUR |
31.12.2021 in kEUR |
|---|---|---|
| Deliveries and services rendered | 3 | 0 |
| Interest income | 80 | 80 |
| Deliveries and services received | 0 | 0 |
| Other operating expenses | 1 | 3 |
| Interest expenses | 0 | 0 |
No other significant events have occurred after the balance sheet date up to 9 May 2023.
These IFRS financial statements take into account all events known to the Management Board up to 9 May 2023.
Berlin, 9 May 2022
Patrick Brenske (Management Board)
Following the final results of his audit, the auditor Harry Haseloff issued the following unqualified audit opinion on the annual financial statements as of 31 December 2022 and the management report 2022 of MPH Health Care AG dated 12 May 2023:
To MPH Health Care AG (investment company), Berlin:
I have audited the annual financial statements of MPH Health Care AG prepared in accordance with IFRS, comprising the balance sheet as of 31 December 2022, the income statement for the period from 1 January to 31 December 2022, the cash flow statement for the period from 1 January to 31 December 2022, the statement of changes in equity for the period from 1 January to 31 December 2022, the statement of changes in non-current assets as of 31 December 2022 and the notes to the financial statements. We have audited the consolidated financial statements as of 31 December 2022, the statement of changes in equity for the period from 1 January to 31 December 2022, the statement of changes in non-current assets as of 31 December 2022, the notes to the consolidated financial statements for the period from 1 January to 31 December 2022 and the management report.
In my opinion, based on the findings of the audit, the following applies:
I conducted my audit of the annual financial statements and the management report in accordance with paragraph 317 HGB and German generally accepted standards for the audit of financial statements promulgated by the "Institut der Wirtschaftsprüfer" (IDW). My responsibility according to these regulations and principles is further described in the section "Auditor's Responsibility for the Audit of the Annual Financial Statements and Management Report" of my auditor's report. I am independent of the Company in accordance with German commercial law and professional regulations and have fulfilled my other German professional obligations in accordance with these requirements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion on the annual financial statements and the management report.
Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with IFRS and the requirements of German commercial law applicable to corporations in all material respects, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
Furthermore, management is responsible for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern. Furthermore, they are responsible for disclosing, as applicable, matters related to going concern. Furthermore, they are responsible for preparing the financial statements on the basis of the going concern principle, unless factual or legal circumstances prevent this.
Furthermore, management is responsible for the preparation of the management report, which as a whole provides a suitable view of the investment company's position, is consistent in all material respects with the annual financial statements, complies with IFRSs and the requirements of German law, and suitably presents the opportunities and risks of future development. Furthermore, management is responsible for the arrangements and measures (systems) that it determines are necessary to enable the preparation of a management report in accordance with IFRS and the applicable German legal requirements and to provide sufficient appropriate evidence for the statements made in the management report.
My objective is to obtain reasonable assurance about whether the annual financial statements as a whole are free from material misstatement, whether due to fraud or error, and whether the management report as a whole provides a suitable view of the Company's position and is consistent, in all material respects, with the annual financial statements and the audit findings, complies with German legal requirements, and suitably presents the opportunities and risks of future development, and to issue an auditor's report that includes my audit opinion on the annual financial statements and the management report.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with § 317 HGB and German generally accepted standards for the audit of financial statements promulgated by the "Institut der Wirtschaftsprüfer" (Institute of Public Auditors in Germany) will always detect a material misstatement.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements and management report.
During the audit, I exercise dutiful discretion and maintain my basic critical attitude.
I discuss with those charged with governance, among other matters, the planned scope and timing of the audit and significant audit findings, including any deficiencies in internal control that I identify during my audit.
Berlin, 12 May 2023
Dipl.-Kfm. Harry Haseloff Auditor
| 1. The Share 68 | |
|---|---|
| 2. Glossary69 | |
| 3. Sources | 70 |
| 4. Imprint 71 |
| Number of shares (pieces) as per 31.12. | 4,281,384 |
|---|---|
| WKN / ISIN | A289V0 / DE000A289V03 |
| Ticker symbol | 93M1 |
| Class of shares | Bearer share |
| Market places | Xetra, Frankfurt, Stuttgart, Dusseldorf, Berlin, Munich, Tradegate |
| Market segment | Open Market at the Stock Exchange Frankfurt (Entry Standard) |
| Designated Sponsor, Listing Partner | ODDO BHF |
| Coverage | First Berlin Equity Research, GBC Research |
| Market capitalization | 65.5 mn Euro (as of 31.12.2022 - Xetra) |
An economic measure that says something about a company's liquidity. Represents the inflow of liquid funds during a period.
Consolidation means the compilation of the net assets, financial position and results of operations of individual companies belonging to a group into consolidated financial statements.
The most important German stock index. The 30 largest and highest-volume German shares are listed in this stock exchange directory.
The profit per share of a stock corporation that is distributed to the shareholders.
Thorough examination by the potential buyer of a company up for sale. In the due diligence process, a company or person is carefully assessed for eco nomic, legal, tax and financial situation.
Earnings before interest and taxes. Says something about a company's operating profit over a certain period of time.
Earnings before interest, taxes, depreciation and amortization.
A method of accounting for certain long-term investments in the financial statements of a company that holds an interest in the voting capital of another company.
Earnings per share are calculated by dividing consolidated net income by the weighted average number of shares. This is calculated in accordance with IAS 33.
The amount for which knowledgeable and willing parties would be willing to exchange an asset or settle a liability under normal market conditions.
Measures taken by the state to steer economic development through public revenue and expenditure.
An official approval required to offer, distribute or supply an industrially manufactured, readyto-use drug.
'Makler- und Bauträgerverordnung' = Broker and Property Developer Regulation. A legal regulation derived from the German Trade Regulation Act, which in German trade law primarily provides specifications for the protection of the purchaser of real estate when drafting and concluding a property development contract.
Net asset value; the sum of all assets valued at market value less all liabilities of a company.
Balance of net income for the financial year, profit or loss carried forward and appropriation of earnings.
The nominal value or par value of a share is the value at which the share participates in the share capital. In the case of fixed-interest securities, the nominal value indicates the amount of debt to be interest-bearing.
Science that deals with cancer.
With respect to the pharmaceutical market: Industrial property right for a newly developed active pharmaceutical ingredient. In the EU, market exclusivity is limited to 20 years.
Patent free active ingredients are also called generics. A generic is a drug that is a copy of a drug already on the market under brand names with the same active ingredient. Generics are therapeutically equivalent to the original preparation.
Branded drugs, which are marketed by the patent holder on the one hand and which are purchased more cost-effectively within the EU member states as EU imported drugs based on the legal basis of import.
A systematic, qualitative assessment of economic entities or financial instruments with regard to their creditworthiness.
MPH Health Care AG Grünauer Straße 5 12557 Berlin
Telephone: +49 (0) 30 863 21 45 – 60
E-Mail: [email protected] Web: www.mph-ag.de
Patrick Brenske
Chairwoman: Andrea Grosse
Deputy Chairman: Uwe Zimdars
Member: Prof. Dr. Dr. Sabine Meck
Registry court: Amtsgericht Charlottenburg, Berlin Registry number: HRB 116425 B
Concept, design and realisation: MPH Health Care AG Investor Relations
Photos: MPH Health Care AG Getty Images Fotolia Adobe Stock
MPH Health Care AG Grünauer Str. 5 12557 Berlin
Telephone: +49 (0) 30 863 21 45 – 60
E-Mail: [email protected] Web: www.mph-ag.de
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