FALCK A/S

Falck employs around 25,000 highly skilled professionals, delivering more than 8 million emergency response and healthcare services every year. The Lundbeck Foundation owns 58% of Falck.

2022 was a solid year for Falck, when substantial progress was made on the strategy. Falck achieved broad-based organic growth, delivered more healthcare services, and prepared the organisation for major investments in digitalisation. Revenue growth was driven by increased contract volumes within ambulance and fire services. Likewise, the inflow of new healthcare subscription customers also contributed, and more pay-on-use healthcare services were provided than in the previous year. Yet, 2022 was also a year of significant challenges for Falck, due to higher costs resulting from staff shortages and surging energy prices, which Falck is still working to mitigate through a variety of measures.

In the Emergency Health and Safety business area, total revenue in 2022, excluding testing activities, increased to DKK 7,125m (DKK 6,524m). The increase was mainly driven by the addition of the San Diego contract, contributing DKK 508m, which more than outweighed the reduction of the contract volume in Ambulance Denmark. In addition, a net increase in contract volume in other ambulance and fire operations, as well as price increases, also contributed to revenue growth. Staff shortages remained a challenge for ambulance operations during 2022, especially in Denmark and the USA, and had a negative effect on Falck’s ability to accommodate demand for its services.

In the Healthcare business area, broad-based organic growth was achieved and total revenue in 2022 amounted to DKK 4,173m (DKK 3,591m). In Employee and Labour Market services, Falck experienced a higher demand for services compared to the previous year, and in Consumer and Technical services, Falck saw higher pay-on-use sales combined with growth in private healthcare subscriptions. In Community Health Services, the subscription base in Colombia for doctor-on-call services increased by approximately 23,000 subscribers during 2022.

Divestment Programme Almost Completed

Alongside the building of Falck’s core business with its ‘Care for more ’25’ strategy, Falck has extensively divested activities and business units which were not considered part of the core business. In March 2022, Falck completed the sale of the

Roadside Assistance businesses in Sweden, Norway, Finland, Estonia and Lithuania, which resulted in a gain of DKK 708m. Another divestment was effected in October 2022, when Falck divested its UK ambulance operations. Altogether, Falck progressed well on the multi-year divestment programme during 2022, which thereby came very close to full completion.

By the end of 2022, Falck decided to recategorise Falck Global Assistance as part of the core business. Thus, effective from 1 January 2023, the business unit has been organisationally transferred out of Portfolio (non-core business entities).

Rebranding Of Business Units

In the latter part of 2022, Falck undertook a rebranding process in Scandinavia and Latin America of business units

Falck has grouped its activities into two core business areas:

- Emergency Health and Safety comprises the segments Ambulance EU, Ambulance US and Fire Services

- Healthcare comprises the segments Employee and Labour Market Services, Consumer and Technical Services and Community Health Services

Revenue (DKKm)

12,647 Operating profit (DKKm)

493 Net profit (DKKm)

1,101 Number of employees (FTEs)

19,988 and sub-brands with names other than Falck. Following the rebranding of Frisk Gruppen in Norway and Previa in Sweden, Falck now has a clear brand for employee health solutions in Denmark, Sweden and Norway.

UNLEASH FALCK’S FULL COMMERCIAL POTENTIAL

In the second half of 2022, Falck started a project to explore the strategic opportunities available to further enhance the implementation of ‘Care for more ’25’ and to unleash Falck’s full commercial potential towards 2027. Falck plans to continue the current process of developing the core business within integrated healthcare solutions.

Also in 2022, Falck started an investment programme to ensure that it is ready to meet both present as well as future demand for new healthcare solutions. With this, Falck is now prepared as an organisation to embark on a significant investment programme which will further increase in 2023 to a level of DKK 250m. This will constitute a strong acceleration of digitalisation across Falck’s operations.

Financial Performance Sales

In 2022, revenue was DKK 12,647m compared to DKK 15,173m in 2021.

Excluding the COVID-19 antigen testing activities, revenue in 2022 was 12,030m (DKK 11,717m), and was positively impacted by higher contract volumes and increased pay-onuse activities in Emergency Health and Safety and by broadbased growth across the business units in Healthcare, driven by increased pay-on-use activity, a larger subscription portfolio, and the acquisition of Frisk Gruppen. In contrast, the divestments and discontinuation of operations as part of the strategy to exit business activities in the Portfolio segment had a negative impact on revenue for the year.

Operating Profit

Cost of services increased to DKK 9,660m (DKK 9,242m) despite the positive impact from divestments and discontinued operations in Portfolio. Around two-thirds of the increase was driven by the acquisition of Frisk Gruppen and by the San Diego contract. In addition, higher fuel and energy prices contributed to the increase, while staff shortages remained a challenge in Emergency Health and Safety, also contributing to the increase in costs.

Sales and administrative (SG&A) expenses increased to DKK 2,011m (DKK 1,969m), mainly driven by non-recurring costs related to the global rebranding and strategic initiatives to support the execution of ‘Care for more ’25’.

Operating profit decreased to DKK 293m (DKK 512m), corresponding to an operating profit margin of 2.4% (4.4%). The margin was negatively impacted by an impairment of goodwill of DKK 113m, related to Ambulance US.

Net Profit

Gains related to the divestments of businesses amounted to DKK 808m (loss of DKK 107m), and net financial expenses increased to DKK 74m (DKK 46m), due to higher interest rates and lower foreign exchange gains.

Income tax amounted to DKK 126m, corresponding to an effective tax rate of 12.0% (22.6%). Profit for the year was DKK 1,101m (DKK 1,229m).

All figures quoted in the financial performance commentary relating to the components of operating profit are stated excluding the impact from the COVID-19 antigen testing activities.

Figures for 2021 are shown in brackets