Interim Report Q1-Q3 2018

restore profitability and to deliver positive eco-nomic profit in 2019. Falck expects profitability and EBITA margins to improve in Q4 2018 as the eff...

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Interim Report Q1-Q3 2018 PEOPLE HELPING PEOPLE

Contents

Contents Management’s review Q3 highlights Key figures Financial results Operational results Performance by business units Management’s statement

3 4 5 6 8 12

Consolidated financial statements Primary statements Sections

13 19

Continuing and discontinued operations The Safety Services segment and Healthcare non-core activities are presented as assets classified as held for sale and as discontinued operations. The consolidated income statement and consolidated statement of cash flows will thus only comprise Falck’s continuing operations. Profit after tax from discontinued operations will be presented in a single line after the profit after tax from continuing operations. The same applies to the statement of cash flows.

Falck  Interim Report Q1- Q3 2018

2

Management's review

Q3 highlights Falck continued its turnaround – improved underlying profitability in Ambulance and Assistance. Financial highlights in Q3 2018

Key events in Q3 2018

3.3%

109m

EBITA margin was 3.3% (2.4% in Q3 2017)

Operating profit before other items (EBITA) was DKK 109 million (DKK 85 million in Q3 2017)

Flat revenue: 1.4% growth on adjusted basis • 1.8% growth in Ambulance off-set by lower revenue in Assistance.

Underlying profitability up by 2.1 percentage points to 5.5% • Reported EBITA DKK 109 million with an EBITA margin of 3.3%. • Profitability significantly impacted by changes in accounting estimates of DKK 73 million in connection with clean-up activities across business units.

3,288m

74m

• Underlying EBITA improved to 5.5% (Q3 2017: 3.4%), most notably in Assistance at 16.8% (Q3 2017: 11.7%).

Revenue was DKK 3,288 million (DKK 3,489 million in Q3 2017)

Free cash flow was DKK 74 million (negative at DKK 136 million in Q3 2017)

• Efficiency and cost optimisation programme contributed to improving EBITA performance in all business units. • Efficiency gains of DKK 80 million off-set by a continued negative performance in Healthcare.

Turnaround initiatives sustained momentum in Q3 “One year into Falck’s turnaround, we see improving underlying profitability. Our Assistance business is back in shape and financial performance improves quarter-by-quarter in Ambulance. Our turnaround in Healthcare was initiated later than in the other business units and had adverse impact on our financial improvements. Reported numbers are significantly impacted by the clean-up across business units and this will continue into the following quarters. We are regaining our strength but still have a long way to go. Despite being challenged we continue to deliver quality services. I am proud to be part of a company where employees care for our customers in times of need.” Jakob Riis President & CEO, Falck

Falck  Interim Report Q1- Q3 2018

• Efficiency and cost optimisation programme delivered DKK 80 million in Q3. • Global dispatch and fleet operational systems rolled out to additional countries within Ambulance. • First waves of outsourcing in Finance, IT and HR successfully implemented.

More steps taken to improve and focus Falck’s business platform • Divestment of Falck Safety Services as well as a number of minor businesses. • The divestment of discontinued and continued operations resulted in a total loss of DKK 523 million and impacted cash flow positively by DKK 409 million. • Several contract wins and renewals in Ambulance.

3

Management's review

Key figures Key figures and financial ratios

DKK million Income Statement Revenue Operating expenses Operating profit before other items (EBITA) Impairment of goodwill Restructuring costs Operating profit (EBIT) Net financial items Profit for the period from continuing operations Balance sheet Total assets Total equity Net operating assets Net interest-bearing debt Cash flows and investments Cash flows from operating activities Free cash flow Gross investments

Q3 2018

Q3 2017

Q1- Q3 2018

Q1- Q3 2017

3,288 (3,052)

3,489 (3,285)

10,021 (9,385)

10,723 (10,317)

14,381 (13,928)

109 56 (106)

85 (27) (2) (60)

254 (12) 77 (324)

(9) (60) (261) (175)

(42) (2,825) (100) (3,218) (292)

(64)

(27)

(234)

(279)

(3,603)

12,356 2,486 7,426 5,242

41 74 (43)

17,384 6,465 11,427 4,329

(161) (136) (63)

12,356 2,486 7,426 5,242

346 309 (258)

17,384 6,465 11,427 4,329

205 126 (304)

2017

DKK million Key ratios Economic profit EBITA margin (%) Cash conversion rate (%) Equity ratio (%) Return on equity, Falck A/S share (%) Net interest-bearing debt to EBITDA Number of full-time employees (FTEs) Number of employees at period end

Q3 2018

n/a 3.3 68 n/a n/a n/a 25,039 32,158

Q3 2017

Q1- Q3 2018

Q1- Q3 2017

2017

n/a 2.4 (159) n/a n/a n/a 27,799 36,326

(676) 2.5 122 20 (86.2) 3.12 25,039 32,158

(1,019) (0.1) (1,392) 37.1 (6.2) 4.62 27,799 36,326

(1,133) (0.3) (1,045) 21.9 (89.7) 3.32 26,969 36,153

In general, the financial and non-financial data are stated excluding discontinued operations. See definitions of ratios in Section 1.5 in the 2017 Annual Report.

14,295 3,130 7,925 5,533

450 441 (413)

The free cash flow is net of investment in property, plant and equipment as the Group invests in vehicles, infrastructure and similar assets as part of ordinary operations.

Falck  Interim Report Q1- Q3 2018

4

Management's review

Financial results 2018 is a turnaround year for Falck and the priority is entirely on restoring profitability. In Q3, underlying profitability further improved despite low revenue growth.

Net financial items

Revenue

Cash flows

Revenue amounted to DKK 3,288 million (Q3 2017: DKK 3,489 million). Reported numbers were significantly impacted by changes to revenue recognition requirements and interpretations under the IFRS 15 standard. IFRS 15 impacted revenue negatively by DKK 196 million, while exchange rate adjustments reduced revenue by DKK 54 million. Revenue was flat at 1.4% growth when adjusted for IFRS 15 and exchange rate. Ambulance increased its adjusted revenue by 1.8%, offset by a decline in Assistance due to contract pruning and the closing down of unprofitable activities such as damage control services.

Operating profit Operating profit before other items (EBITA) was DKK 109 million (Q3 2017: DKK 85 million) with a reported EBITA margin of 3.3% (Q3 2017: 2.4%). In Q3 2018, EBITA was adversely impacted by changes in accounting estimates (DKK 73 million). Q3 2017 was adversely impacted by write-downs of DKK 15 million in the Portfolio Businesses and non-recurring costs of DKK 20 million in Ambulance. Adjusted for non-recurring Falck  Interim Report Q1- Q3 2018

items, the underlying EBITA improved to DKK 182 million in 2018 (Q3 2017: DKK 120 million) for an EBITA margin of 5.5% (Q3 2017: 3.4%). The improvements were primarily driven by the implementation of Falck’s efficiency and cost optimisation programme, which delivered DKK 80 million. However, the positive effect was somewhat off-set by a negative development in Healthcare. Profitability increased in both Ambulance and Assistance, with underlying EBITA in Assistance increasing to a 16.8% margin.

Divestments The level of divestments in Q3 was exceptionally high. Divestment of discontinued operations (Falck Safety Services and Danish medical clinics) resulted in a total loss of DKK 480 million and impacted cash flow positively by DKK 404 million, reducing debt level further. In addition, the divestment of continuing operations (9Lives in Finland, First Ambulance Services in Malaysia and the Falck Fire Academy in Holland) resulted in a loss of DKK 43 million and impacted cash flow positively by DKK 5 million.

Net financial items were negative at DKK 106 million (Q3 2017: negative at DKK 60 million) and impacted by 10% interests on shareholder loans of DKK 2,000 million, provided in Q4 2017.

Free cash flow was DKK 74 million (Q3 2017: negative at DKK 136 million). The positive development was mainly attributable to higher cash collection from customers in Ambulance and improved earnings across the business units.

Equity and subordinated loans Equity attributable to shareholders of Falck A/S amounted to DKK 2,149 million at 30 September 2018 compared to DKK 6,054 million at 30 September 2017. At 30 September 2018, subordinated loans from shareholders amounted to DKK 2,164 million compared to DKK 0 million at 30 September 2017. Combined, equity and subordinated loans accounted for 35% of total equity and liabilities at 30 September 2018. The reduction of equity was mainly due to the impairment of goodwill in Q4 2017 of DKK 2,825 million.

Q1-Q3 2018 Year-to-date revenue was DKK 10,021 million (Q1-Q3 2017: 10,723 million), resulting in 2.7% revenue growth when adjusted for IFRS 15 and exchange rate. The new IFRS 15 standards impacted revenue negatively by DKK 674 million,

while exchange rate adjustments reduced revenue by DKK 322 million. Growth was primarily driven by a new contract in LA County in the US in Ambulance, but off-set by contract pruning and the closure of unprofitable business in Healthcare and Assistance. EBITA was DKK 254 million (Q1-Q3 2017: EBITA loss of DKK 9 million). Write-downs reduced EBITA negatively by DKK 208 million in 2018 and by DKK 330 million in Q1-Q3 2017. Adjusted for write-downs, the underlying EBITA margin was 4.6% (Q1-Q3 2017: 3.0%). Improvements to the underlying profitability were primarily driven by the implementation of Falck’s efficiency and cost optimisation programme, which improved perfomance by DKK 175 million in Q1-Q3 2018. Free cash flow amounted to DKK 309 million (Q1-Q3 2017: DKK 126 million), mainly driven by improved earnings in all business units except Healthcare.

Outlook 2018 Following several years of deteriorating earnings, Falck has initiated a turnaround plan to restore profitability and to deliver positive economic profit in 2019. Falck expects profitability and EBITA margins to improve in Q4 2018 as the effects of the DKK 500 million efficiency and cost optimisation programme continue to kick in. However, additional clean-up activities and write-downs are expected in Q4 2018. Revenue growth is expected to be muted. 5

Management's review

Operational results Falck to restore profitability by reducing complexity, improving efficiency and implementing global operating models for its businesses.

Furthermore, a new Code of Conduct was implemented globally, providing employees and business partners with common standards for governance, ethcis and compliance.

Cost savings and efficiency In Q3 2018, Falck progressed on its transformation journey towards global operating models, efficiency and cost optimisation and an increased focus on its core business.

Global operating models In Ambulance, the roll-out of core operational systems within dispatch and fleet management continued. The fleet management system has now been rolled out to 51% of the ambulance fleet, and the dispatch system has reached 42% of front-end employees. Rollout of the global planning system is yet to commence. In order to integrate the organisation and ensure synergies, the US Ambu-

lance entities were reorganised with regional managers and functional leaders across the organisation. In Finance, the outsourcing of transactional finance processes in Denmark was finalised, and the process is now being repeated in the rest of the Nordics. In addition, a new global single source of IT support through an external provider went live. The roll-out of a new global HR system, which was launched in Denmark, UK and Spain in Q2, continued in Q3 with preparation for rollout in Germany and addition of new modules.

Realised savings (DKK million)

Planned and realised 2018 run-rate cost potential 800

Run-rate effect   Planned

600 P500

  Realised

400 EBITA effect

200

 Realised

0 Q1 2018

Q2 2018

Falck  Interim Report Q1- Q3 2018

Q3 2018

Q4 2018

Falck’s efficiency and cost optimisation programme builds on three pillars: operational optimisation, reduction of overhead costs and procurement initiatives. The programme aims at reducing Falck’s cost base by DKK 500 million with full run-rate effect in 2019. The programme delivered DKK 80 million in Q3, and in the first three quarters of 2018, it impacted profitability positively by a total of DKK 175 million. However, the positive effect was off-set by a deteriorating performance in Healthcare. Initiatives were launched across business units, including contract portfolio pruning, elimination of redundant and non-value creating work and improved utilisation of call centres. In total, 1,549 of 2,371 identified improvement and cost-out initiatives have been completed. Falck announced that it will consolidate its Copenhagen offices at the Falck Centre Copenhagen by the end of 2018, and a review of the Danish building portfolio was initiated.

Improvement and cost-out initiatives (No. of initiatives)

MAST

822

1,150

399

  Completed H1 2018   Completed Q3 2018

 Identified, not completed

In the Capital Region of Denmark, Falck won a contract for patient transport services in 8 out of 11 areas, and in Germany and the US, a number of minor ambulance contracts were won or extended. Assistance renewed its municipal firefighting services contract with Sydvestjysk Brandvæsen in Denmark for the next ten years. Industrial Fire Services won two contracts in the nuclear and automotive industries in Spain, thereby cementing its position within industrial fire and rescue services in Spain.

Contract wins Ambulance continued to win new contracts around the world and prolong existing ones. 6

Management's review

Increased focus on the core business Since late 2017, Falck has been exploring strategic alternatives for Falck Safety Services. This process resulted in the sale of Safety Services to Danish private equity firm Polaris, which was announced in August and closed in September 2018. Safety Services is a leader in rescue and safety training, and the divestment is consistent with Falck’s overall strategy of focusing on its core business. The sale provides Safety Services with opportunity to leverage its strong market position and generate future growth in existing and new industries. In September 2018, Falck also divested the Danish medical clinics and associated busi-

Falck  Interim Report Q1- Q3 2018

nesses (Falck Lægehuse, Sirculus and VikTeam), as Healthcare continues to focus on its core business of healthcare for prevention and rapid examination and remediation of workplace-related diseases. Additional strategic reviews were initiated for two staffing businesses. The new owners of the Danish medical clinics, led by Thomas Helt, have considerable insights in the Danish healthcare market in general, and in the medical clinics in particular. Ambulance continued to streamline its business and focus on core markets. As a result, 9Lives in Finland as well as First Ambulance Services in Malaysia were divested.

7

Management's review

Performance by business units Revenue growth was driven by the full effect of an ambulance contract won in LA County in the US and an increase in activity in the pay-per-use business in Germany, and off-set by a contract loss in Sweden.

Ambulance

Ambulance offers ambulance operations, patient transport services and doctor’s home visits, primarily in Europe, the US and Latin America. Customers include hospitals and municipalities, on fixed-price or pay-per-use contracts, as well as private subscribers.

Financial and operational performance Profitability continued to improve. Revenue was DKK 1,985 million (Q3 2017: 2,011 million), resulting in 1.8% revenue growth when adjusted for IFRS 15 and exchange rate. The new IFRS 15 standards impacted revenue negatively by DKK 37 million, while exchange rate adjustments impacted negatively by DKK 25 million.

Key figures DKK million Revenue EBITA EBITA margin (%) Free cash flow Economic profit Number of full-time employees

Falck  Interim Report Q1- Q3 2018

Operating profit before other items (EBITA) was DKK 33 million (Q3 2017: 34 million). In Q3 2018, changes in accounting estimates reduced EBITA by DKK 61 million. In Q3 2017, write-downs and other non-recurring costs reduced EBITA by DKK 20 million. Adjusted for write-downs, the underlying EBITA margin in Q3 2018 improved to 4.7% (Q3 2017: 2.7%). The continuing improvement in profitability was due to efficiency and cost optimisation initiatives, notably in Denmark and the US. Free cash flow improved to DKK 143 million (Q3 2017: negative at DKK 99 million), mainly

Q3 2018

Q3 2017

1,985 33 1.7 143 n/a

2,011 34 1.7 (99) n/a

18,810

20,844

Q1- Q3 2018 5,812 174 3.0 379 (341) 18,810

Q1- Q3 2017 6,010 (121) (2.0) 118 (751) 20,844

2017 8,086 (214) (2.6) 280 (817) 20,305

driven by strong cash collection in the US and higher cash collection in Latin America. A number of efficiency and cost optimisation initiatives were launched across the Ambulance business in 2017 and 2018, including the implementation of three major IT systems within dispatch, planning and fleet management, which are being rolled out globally in 2018 and 2019. In the US, initiatives to reduce overhead costs and overcapacity have been initiated along with contract pruning, especially in the Eastern Seaboard region. In July, the US Ambulance entities were reorganised in order to integrate the organisation and ensure synergies. In the Capital Region of Denmark, Falck renewed its contract for patient transport services in 8 out of 11 areas, and in Germany and the US, a number of minor ambulance contracts were won or extended.

Revenue by geography Q3 2018 (Q3 2017) 7% (9%) 10% (10%)

3% (3%) 30% (28%)

23% (25%)

27% (24%)

  Denmark, 30%

  Latin America, 10%

  Europe, 27%

  Nordic Region, 7%

  North America, 23%

  Rest of world, 3%

new IFRS 15 standards impacted revenue negatively by DKK 216 million, while exchange rate adjustments reduced revenue by DKK 217 million.

Q1-Q3 2018

EBITA was DKK 174 million (Q1-Q3 2017: EBITA loss of DKK 121 million). Write-downs on trade receivables in the US ambulance business and changes in accounting estimates impacted EBITA negatively by DKK 93 million in 2018 and by DKK 252 million in Q1-Q3 2017. Adjusted for write-downs, the underlying EBITA was 4.6% (Q1-Q3 2017: 2.2%).

Year-to-date revenue amounted to DKK 5,812 million (Q1-Q3 2017: 6,010 million), resulting in revenue growth of 3.9% when adjusted for IFRS 15 and exchange rate. The

Free cash flow amounted to DKK 379 million (Q1-Q3 2017: DKK 118 million), mainly driven by improved earnings.

Ambulance continued to streamline its business and focus on core markets. As a result, 9Lives in Finland and First Ambulance Services in Malaysia were divested.

8

MAST

Management's review

Healthcare

Healthcare is the largest provider of employee healthcare programmes in the Nordics. Services include consultancy, visitation and guidance as well as physiological and psychological treatments on a pay-per-use or subscription basis. Customers include insurance companies, pension funds and private companies providing healthcare programmes to their employees.

Financial and operational performance Healthcare was influenced by seasonality in the pay-per-use business in Q3 as activity levels are lower during the summer months. Performance continued to deteriorate in the Danish part of Healthcare.

Revenue was DKK 347 million (Q3 2017: DKK 399 million). Revenue growth was slightly positive by 3.3% when adjusted for IFRS 15 and exchange rate. The new IFRS 15 standard impacted revenue adversely by DKK 49 million, while exchange rate adjustments reduced revenue by DKK 16 million. Healthcare incurred an operating loss before other items (EBITA) of DKK 15 million (Q3 2017: DKK 14 million loss) and the underlying EBITA margin was negative at 4.6% (Q3 2017: negative at 3.5%). Healthcare launched efficiency and cost optimisation initiatives in late spring 2018. Q3 efficiency gains of DKK 12 million were not enough to off-set the continuing negative developments in the Danish healthcare business.

Free cash flow was negative at DKK 83 million, which was in line with Q3 2017 (negative at DKK 84 million). Efficiency and cost optimisation initiatives launched across the Healthcare business in the first half of 2018 continued in the third quarter. Initiatives included contract portfolio pruning, elimination of redundant and non-value creating work and improved utilisation of call centres. In September 2018, the Danish medical clinics and associated businesses (Falck Lægehuse, Sirculus and VikTeam) were divested, as Healthcare continues to focus on its core business of healthcare for prevention and rapid examination and remediation of workplace related diseases. Additional strategic reviews were initiated for two minor staffing businesses.

Q1-Q3 2018

Key figures DKK million Revenue EBITA EBITA margin (%) Free cash flow Economic profit Number of full-time employees

Falck  Interim Report Q1- Q3 2018

Q3 2018 347 (15) (4.3) (83) n/a 1,553

Q3 2017 399 (14) (3.6) (84) n/a 1,785

Q1- Q3 2018

Q1- Q3 2017

2017

1,229 (116) (9.4) (140) (173)

1,438 21 1.5 (111) (67)

1,955 57 2.9 (6) (87)

1,553

1,785

1,661

Year-to-date revenue amounted to DKK 1,229 million (Q1-Q3 2017: DKK 1,438 million). Revenue growth was negative at 3.2% when adjusted for IFRS 15 and exchange rate. The new IFRS 15 standard impacted revenue adversely by DKK 115 million, while exchange rate adjustments reduced revenue by DKK 48 million.

Revenue by geography Q3 2018 (Q3 2017) 6% (5%)

37% (41%) 57% (53%)

  Sweden, 57%

  Norway, 6%

  Denmark, 37%

ware and trade receivables reduced EBITA by DKK 88 million. Adjusted for write-downs, the underlying EBITA was negative at 2.4% (Q1-Q3 2017: 1.5%). Free cash flow was negative at DKK 140 million (Q1-Q3 2017: negative at DKK 111 million), mainly caused by deteriorating earnings, partly compensated by lower investments in fixed assets.

Operating profit before other items (EBITA) was negative at DKK 116 million (Q1-Q3 2017: DKK 21 million). Write-downs on soft9

MAST

Management's review

primarily due to the closure of damage control services in Denmark but off-set by price increases.

Assistance

Assistance provides roadside assistance in the Nordics, run on a subscription or contract basis, as well as private healthcare subscriptions and public firefighting in Denmark. Customers include private individuals, insurance and automotive companies as well as Danish municipalities.

Financial and operational performance Profitability continued to improve significantly on flat revenue. Revenue was DKK 715 million, a slight decrease from Q3 2017 (DKK 736 million). Adjusted for exchange rate, revenue was DKK 722 million, for a 1.9% decrease that was

Key figures DKK million Revenue EBITA EBITA margin (%) Free cash flow Economic profit Number of full-time employees

Falck  Interim Report Q1- Q3 2018

Operating profit before other items (EBITA) was DKK 114 million (Q3 2017: DKK 86 million). In Q3 2018, changes in accounting estimates reduced EBITA by DKK 5 million. The underlying EBITA margin improved by 5.1 percentage points to 16.8% (Q3 2017: 11.7%). The continued improvement in reported EBITA and the underlying EBITA margin was driven by efficiency and cost optimisation initiatives. Free cash flow amounted to DKK 2 million (Q3 2017: DKK 65 million), caused by decrease in prepayments from customers, partly compensated by lower investments in fixed assets.

Q3 2018

Q3 2017

Q1- Q3 2018

715 114 15.9 2 n/a

736 86 11.7 65 n/a

2,270 318 14.0 212 34

2,294 96 4.2 209 (181)

3,043 188 6.2 256 (146)

1,872

2,357

1,872

2,357

2,117

Q1- Q3 2017

2017

Assistance continued the comprehensive efficiency and cost optimisation programme initiated in 2017. The programme includes the closing down of damage control services and several other unprofitable activities, pruning of the contract portfolio, a changed operating model allowing for the increased use of franchisees and sub-contractors, improved utilisation of call centres and optimisation of the network of Falck stations in Denmark.

Revenue by geography Q3 2018 (Q3 2017) 8% (9%)

7% (4%)

1% (1%)

12% (12%)

72% (74%)

In Q3 2018, Assistance renewed its municipal firefighting services contract with Sydvestjysk Brandvæsen in Denmark. It was announced that the roadside assistance centre in Denmark will be consolidated and relocated to new modern facilities in Vejle.

  Denmark, 72%

  Finland, 7%

  Norway, 12%

  Rest of the world, 1%

  Sweden, 8%

Free cash flow amounted to DKK 212 million, slightly above Q1-Q3 2017 (DKK 209 million).

Q1-Q3 2018 Year-to-date revenue was DKK 2,270 million, which was in line with the Q1-Q3 2017 figure (DKK 2,294 million). Adjusted for exchange rate, revenue growth was flat compared to Q1-Q3 2017. Operating profit before other items (EBITA) was DKK 318 million (Q1-Q3 2017: DKK 96 million). In 2017, write-downs on a customer management IT system reduced EBITA by DKK 63 million. Adjusted for write-downs, the underlying EBITA margin improved by 7.3 percentage points to 14.2% (Q1-Q3 2017: 6.9%). 10

MAST

Management's review

Financial and operational performance

Portfolio Businesses

Portfolio Businesses consist of two service areas: Global Assistance and Industrial Fire Services, which both operate globally. Industrial Fire Services is a leading international provider of industrial fire and rescue services for airports and high-risk industries including petrochemical plants, nuclear power plants, steel plants and automobile manufacturers. Global Assistance provides medical and security assistance to leading insurance companies and global multinational companies, supporting the safety and security of their employees and customers travelling or working abroad.

Key figures DKK million Revenue EBITA EBITA margin (%) Free cash flow Economic profit Number of full-time employees

Falck  Interim Report Q1- Q3 2018

Q3 2018 295 19 6.4 24 n/a 2,654

Profitability improved due to an increase in adjusted revenue. Revenue was DKK 295 million (Q3 2017: DKK 399 million) resulting in revenue growth of 3.0% when adjusted for IFRS 15 and exchange rate. The new IFRS 15 standards impacted revenue negatively by DKK 110 million in Q3 2018, while exchange rate adjustments reduced revenue by DKK 6 million. The revenue growth was primarily due to new contracts won by Industrial Fire Services. Operating profit before other items (EBITA) was DKK 19 million (Q3 2017: DKK 10 million loss). Changes in accounting estimates reduced the Q3 2018 EBITA by DKK 7 million (Q3 2017: negative impact of DKK 15 million). Adjusted for write-downs, the underlying EBITA margin in Q3 2018 was 8.8% (Q3 2017: 1.3%).

Q3 2017 399 (10) (2.4) (5) n/a 2,735

Q1- Q3 2018 884 46 5.2 (33) (43) 2,654

Q1- Q3 2017

2017

1,222 14 1.1 (66) (13)

1,611 (3) (0.2) (72) (54)

2,735

2,803

Free cash flow amounted to DKK 24 million (Q3 2017: negative at DKK 5 million), primarily driven by higher trade payables in Global Assistance. The restructuring of Global Assistance was completed in H1 2018 and a new management team was in place by the beginning of Q3. Further, cost-out initiatives and streamlining of administrative functions have been implemented and efforts are ongoing to improve profitability. Falck Industrial Fire Services is growing its business and won two contracts within the nuclear and automotive industries in Spain, thereby cementing its position within industrial fire and rescue services in Spain.

Q1-Q3 2018 Year-to-date revenue was DKK 884 million (Q1-Q3 2017: DKK 1.222 million) resulting in revenue growth of 3.1% when adjusted for IFRS 15 and exchange rate. The new IFRS 15 standards impacted Q1-Q3 2018 revenue negatively by DKK 343 million, while exchange rate adjustments reduced revenue by DKK 33 million.

Revenue by service area Q3 2018 (Q3 2017)

35% (53%)

65% (47%)

 Industrial Fire Services, 65%

  Global Assistance, 35%

Free cash flow was negative at DKK 33 million (Q1-Q3 2017: negative at DKK 66 million), mainly driven by higher cash collection in Global Assistance, partly off-set by higher investments in Industrial Fire Services.

Operating profit before other items (EBITA) was DKK 46 million (Q1-Q3 2017: DKK 14 million). Adjusted for write-downs, the underlying EBITA margin increased to 5.8% (Q1-Q3 2017: 2.4%).

11

MAST

Management's review

Management’s statement The Board of Directors and the Executive Manage­ment Board have today considered and approved the interim report of Falck A/S for the period 1 January 2018 – 30 September 2018. The interim report, which has not been audited or reviewed by the company’s independent auditors, has been prepared in accordance with IAS 34 ‘Interim Financial Reporting’ as adopted

by the EU and additional requirements of the Danish Financial Statements Act. Apart from the adoption of IFRS 9 and IFRS 15, the accounting policies are consistent with those applied in the 2017 Annual Report. In our opinion, the interim financial report gives a true and fair view of the Falck Group’s assets, liabilities and financial position at 30 September

2018 and of the results of the Group’s activities and cash flows for the period 1 January to 30 September 2018. Furthermore, in our opinion, Management’s Review includes a true and fair review of the development in the operations and financial position, of the results for the period and of the financial position of the Group.

Besides what has been disclosed in the interim report, no changes in the Group’s most significant risks and uncertainties have occurred relative to the disclosures made in the 2017 Annual Report.

Copenhagen, 16 November 2018

Executive Management Board:

Jakob Riis President and CEO

Tor Magne Lønnum CFO

Jakob Bomholt EVP, Ambulance

Peter Schütze Chairman

Lene Skole Deputy Chairman

Lars Frederiksen

Niels Smedegaard

Dorthe Mikkelsen

Søren Thorup Sørensen

Henrik Villsen Andersen

Allan Rensgaard

Board of Directors:

Employee representative:

Vagn Flink Møller Pedersen Falck  Interim Report Q1- Q3 2018

12

Financial statements

Income statement 1 January – 30 September

DKK million Revenue Other operating income and expenses, net Cost of sales and external assistance Other external costs Staff costs Depreciation, amortisation and impairment

Section 2

Q3 2018

Q3 2017

Q1- Q3 2018

Q1- Q3 2017

2017

3,288 9 (403) (701) (1,948) (136)

3,489 14 (407) (799) (2,079) (133)

10,021 51 (1,305) (2,056) (6,024) (433)

10,723 47 (1,303) (2,634) (6,380) (462)

14,381 72 (1,804) (3,592) (8,532) (567)

Operating profit before other items (EBITA) Restructuring costs Amortisation of customer contracts Impairment of goodwill

109 (53) -

85 (27) (60) -

254 (12) (165) -

(9) (60) (192) -

(42) (100) (251) (2,825)

Operating profit (EBIT) Gains/losses from divestments of enterprises

56 (43)

(2) 13

77 (51)

(261) 12

(3,218) (13)

(1)

3

Income after tax from associates and joint arrangements

(2)

5

(6)

Financial income Financial expenses

11 (117)

1 (61)

30 (354)

51 (226)

95 (387)

Profit before tax Income taxes

(94) 30

(46) 19

(300) 66

(419) 140

(3,529) (74)

Profit for the period from continuing operations

(64)

(27)

(234)

(279)

(3,603)

(465)

(6)

(418)

(2)

(79)

Profit for the period

(529)

(33)

(652)

(281)

(3,682)

Profit is attributable to: Shareholders in Falck A/S Non-controlling interests

(535) 6

(29) (4)

(662) 10

(278) (3)

(3,691) 9

TOTAL

(529)

(33)

(652)

(281)

(3,682)

Profit for the period from discontinued operations

Falck  Interim Report Q1- Q3 2018

3

13

Financial statements

Statement of comprehensive income 1 January – 30 September DKK million Profit for the period

Section

Q3 2018 (529)

Q3 2017 (33)

Q1- Q3 2018 (652)

Q1- Q3 2017 (281)

2017 (3,682)

Actuarial adjustment of pension provisions

-

-

1

2

2

Items that will not be reclassified to the income statement

-

-

1

2

2

Exchange rate adjustment Value adjustment of currency hedging instruments Value adjustment of interest hedging instruments Tax on other comprehensive income

17 (5) 12 (9)

(31) 14 3 10

38 (3) 21 (10)

(223) 17 24 37

(295) 11 29 45

Items that may be reclassified to the income statement

15

(4)

46

(145)

(210)

Other comprehensive income

15

(4)

47

(143)

(208)

Total comprehensive income

(514)

(37)

(605)

(424)

(3,890)

Total comprehensive income is attributable to: ­Shareholders in Falck A/S Non-controlling interests

(507) (7)

(33) (4)

(595) (10)

(421) (3)

(3,899) 9

TOTAL

(514)

(37)

(605)

(424)

(3,890)

Falck  Interim Report Q1- Q3 2018

14

Financial statements

Statement of cash flows 1 January – 30 September

DKK million

Section

Q3 2018

Q3 2017

Q1- Q3 2018

Q1- Q3 2017

2017

Operating profit (EBIT) Depreciation, amortisation and impairment Amortisation of customer contracts Impairment of goodwill

56 136 53 -

(2) 133 60 -

77 433 165 -

(261) 462 192 -

Profit before depreciation, amortisation and impairment (EBITDA)

245

191

675

393

425

Change in net working capital including operating provisions Transactions with associates Reversal of profit/(loss) from divestment of non-current assets, net Net interest paid Income tax paid

(120) (13) (4) (50) (17)

(256) (16) (3) (55) (22)

(128) 5 (15) (104) (87)

30 (12) (12) (113) (81)

392 (9) (25) (159) (174)

41

(161)

346

205

450

Purchase of property, plant and equipment Sale of property, plant and equipment Purchase of intangible assets Investments in subsidiaries, non-controlling interests and operations Divestment of subsidiaries, non-controlling interests and operations Cash flows from hedging of net investments Change in securities, net

(29) 10 (14) (6) 5 22 (1)

(36) 11 (27) (21) (5) -

(155) 30 (103) (42) 9 43 (4)

(209) 31 (95) (62) 6 7 50

(286) 71 (127) (409) 7 28 73

Cash flows from investing activities

(13)

(78)

(222)

(272)

(643)

Transactions with shareholders Transactions with non-controlling interests, net Interest-bearing debt raised Repayment of interest-bearing debt

(1) 116 (324)

(7) 232 (9)

(15) 130 (988)

26 (31) 471 (482)

2,026 (31) 108 (1,636)

Cash flows from financing activities

(209)

216

(873)

(16)

467

(181)

(23)

(749)

(83)

379

(10)

386

(12)

274 (4)

Change in cash and cash equivalents

198

(33)

(363)

(95)

270

Cash and cash equivalents at the beginning of the period Change in cash and cash equivalents Exchange gains/(losses) on cash and cash equivalents Cash and cash equivalents related to assets classified as held for sale

423 198 143

821 (33) (5) -

1,009 (363) (6) 124

900 (95) (22) -

900 270 (30) (131)

Cash and cash equivalents at the end of the period

764

783

764

783

Cash flows from operating activities

Cash flows from continuing operations Cash flows from discontinued operations

Falck  Interim Report Q1- Q3 2018

3

(3,218) 567 251 2,825

1,009 15

Financial statements

Balance sheet DKK million

Section

Q3 2018

Q3 2017

2017

Assets 6,031 1,135

9,750 1,444

6,486 1,363

Total intangible assets

7,166

11,194

7,849

364 118 750

547 173 1,083

401 140 904

1,232

1,803

1,445

Investments in associates and joint ventures Deferred tax assets Other receivables

54 220 81

66 450 84

56 178 43

Total financial assets

355

600

277

Total non-current assets

8,753

13,597

9,571

Inventories Contract assets Trade receivables Income tax receivable Other receivables Prepayments Securities Cash

35 593 1,315 29 167 144 72 764

87 2,418 29 221 158 91 783

82 2,111 20 176 159 68 1,009

Total current assets

3,119

3,787

3,625

484

-

1,099

12,356

17,384

14,295

Land and buildings Leasehold improvements Fixtures and fittings, tools and equipment Total property, plant and equipment

Total assets

Q3 2018

Q3 2017

2017

4

Share capital Hedging reserve Currency translation reserve Retained earnings

81 (13) (309) 2,390

81 (26) (379) 6,378

81 (27) (443) 3,091

Equity attributable to Falck A/S

2,149

6,054

2,702

337

411

428

Total equity

2,486

6,465

3,130

Subordinated shareholder loans Loans Deferred tax Provisions Contract liabilities Other payables

2,164 3,791 225 46 44 10

5,625 390 216 38

2,008 4,336 266 117 29

Total non-current liabilities

6,280

6,269

6,756

Loans Trade payables Income taxes Provisions Contract liabilities Other payables

124 741 81 266 1,294 981

526 718 110 692 2,604

257 731 135 260 2,699

Total current liabilities

3,487

4,650

4,082

Total current and non-current liabilities

9,767

10,919

10,838

103

-

327

12,356

17,384

14,295

Non-controlling interests

Liabilities relating to assets classified as held for sale Total equity and liabilities

Falck  Interim Report Q1- Q3 2018

Section

Equity and liabilities

Goodwill Other intangible assets

Assets classified as held for sale

DKK million

4

16

Financial statements

Statement of changes in equity 1 January – 30 September

2018 DKK million Equity at 1 January 2018 Change in accounting policies Adjusted equity at 1 January 2018

Share capital

Hedging reserve

Currency translation reserve

81 81

(27) (27)

(443) (443)

Exchange rate adjustment Value adjustment of currency hedging instruments Value adjustment of interest hedging instruments Actuarial adjustment of pension provisions Tax on other comprehensive income

-

(3) 21 (4)

38 (6)

Other comprehensive income Profit for the period

-

14 -

Total comprehensive income

-

Dividend Reclassification of exchange rate adjustment from divestment of discontinued operations Change in non-controlling interests’ ownership share Purchase and sale of treasury shares, warrants, etc. Adjustment of provision for acquisition of non-controlling interests relating to acquisitions after 1 January 2010

Retained earnings

Equity

2,702 (53) 2,649

428 428

3,130 (53) 3,077

1 -

38 (3) 21 1 (10)

-

38 (3) 21 1 (10)

32 -

1 (642)

47 (642)

(10)

47 (652)

14

32

(641)

(595)

(10)

(605)

-

-

-

-

-

(12)

(12)

-

-

102

-

102

-

-

-

20 (2)

20 (2)

-

-

-

(25)

(25)

Total transactions with owners

-

-

102

(7)

95

(81)

14

Total equity movements in the period

-

14

134

(648)

(500)

(91)

(591)

(13)

(309)

Total equity at 30 September 2018

Falck  Interim Report Q1- Q3 2018

81

3,091 (53) 3,038

Total

Noncontrolling interests

2,390

2,149

(69) -

-

337

Comments Change in accounting policies of DKK 53 million is due to the implementation of the new accounting standards IFRS 9 and IFRS 15. The effect from IFRS 9 is DKK 28 million and relates to an increase in write-downs of receivables. The effect from IFRS 15 including deferred tax is DKK 25 million and relates to stepped-pricing contracts in Denmark where the services are transferred to the customer over time and are recognised at the same average consideration over the period of the contract.

102 (49) (2)

(25)

2,486

17

Financial statements

Statement of changes in equity 1 January – 30 September

2017 DKK million Equity at 1 January 2017

Share capital

Hedging reserve

Currency translation reserve

Retained earnings

Total

Noncontrolling interests

Equity

5,527

406

5,933

67

(58)

(202)

5,720

Exchange rate adjustment Value adjustment of currency hedging instruments Value adjustment of interest hedging instruments Actuarial adjustment of pension provisions Tax on other comprehensive income

-

17 24 (9)

(223) 46

2 -

(223) 17 24 2 37

-

(223) 17 24 2 37

Other comprehensive income Profit for the period

-

32 -

(177) -

2 (278)

(143) (278)

(3)

(143) (281)

Total comprehensive income

-

32

(177)

(276)

(421)

(3)

(424)

Purchase and sale of treasury shares, warrants, etc. Capital increase Dividend Change in non-controlling interests’ ownership share Adjustment of provision for acquisition of non-controlling interests relating to acquisitions after 1 January 2010

14 -

-

-

(2) 995 -

(2) 1,009 -

(17)

(2) 1,009 (17)

-

-

-

-

-

-

(59)

(59)

-

(59)

Total transactions with owners

14

-

-

934

948

8

956

Total equity movements in the period

14

32

(177)

658

527

5

532

Total equity at 30 September 2017

81

(26)

(379)

6,378

6,054

411

6,465

Falck  Interim Report Q1- Q3 2018

-

-

25

25

18

Financial statements

Section 1

Accounting policies Falck A/S is a public limited liability company domiciled in Denmark. This interim report comprises Falck and its subsidiaries (the Group).

after tax adjusted for income and expenses of a non-recurring nature. Tax rate is set at 22% and WACC at 8%.

The interim report has been presented in accordance with IAS 34 ‘Interim Financial Reporting’ as adopted by the EU and additional requirements in accordance with the Danish Financial Statements Act.

Change in accounting estimates related to inventories From Q3 2018, changed accounting estimates implied that consumables were no longer recognised as inventories. As a consequence, consumables of DKK 39 million were recognised in the income statement.

The interim report does not contain all the information required for the annual report and should therefore be read in conjunction with the 2017 Annual Report. No interim report has been prepared for the parent company. Apart from the adoption of IFRS 9 and IFRS 15, the accounting policies are consistent with those applied in the 2017 Annual Report, to which reference is made. Definitions of financial highlights and key ratios can be found in Section 1.5 of the 2017 Annual Report. Key figures The definition of economic profit has been revised in 2018. Economic profit is calculated as adjusted operating profit after income tax less net operating assets * WACC. Adjusted operating profit after tax is calculated as operating profit

Falck  Interim Report Q1- Q3 2018

Change in accounting estimates related to property, plant and equipment In Q3 2018, Falck evaluated useful lives of small assets within property, plant and equipment and recognised write-downs of DKK 30 million in the income statement. Implementation of new accounting standards, amendments and interpretations The following accounting standards, amendments (IAS and IFRS) and interpretations have been implemented from 1 January 2018: • IFRS 9 “Financial Instruments” • IFRS 15 “Revenue from Contracts with Customers” including amendments and clarifications • IFRIC 22 “Foreign Currency Transactions and Advance Consideration” • Amendment to IFRS 2 “Share-based payments”

• Amendment to IAS 40 “Transfer of Investment Property” • Annual improvements to IFRS’s 2014-2016 cycle Apart from the impact from IFRS 9 and IFRS 15, the adoption of new standards, amendments and interpretations has not affected the interim financial report for 2018. IFRS 9 Financial Instruments Falck has applied the modified retrospective approach and comparative figures will thus not be restated. The most important changes resulting from IFRS 9, compared to IAS 36, are: • A loss allowance for expected credit losses must be recognised at initial recognition of receivables. Previously, a loss allowance could only be recognised if there was objective evidence of impairment. Thus, expected losses are recognised earlier. • The number of categories of financial assets is reduced to three; amortised cost, fair value or fair value through other comprehensive income. Previously, there were four categories.

implementation of the forward-looking expected credit loss model and has resulted in an impairment of DKK 28 million recognised in equity at 1 January 2018. The change in policy has not affected the Group’s cash flows or results over time. IFRS 15 Revenue from Contracts with Customers Falck has applied the modified retrospective approach and comparative figures will thus not be restated. The most important changes resulting from IFRS 15, compared to IAS 11 and IAS 18, are: • Recognition of revenue has been changed from being based on transfer of the risk and rewards of ownership to now being recognised as the transfer of control of goods or services to the customer. • More detailed guidelines have been introduced for how elements in a contract of sale are identified and how the individual components will be recognised and measured. • More detailed guidance have been introduced for the recognition of revenue over time.

In respect of hedge accounting, the new standard has not affected the financial statements. The impact of IFRS 9 The implementation of IFRS 9 has affected impairment of trade receivables through the

19

Section 1

Accounting policies (continued) The impact of IFRS 15 IFRS 15 has a significant impact on Falck’s recognition of revenue which can be summarised as follows:

provided. In cash accounting, revenue will be recognised when the customer pays for a service. In Q1-Q3 2018, EBITA was affected negatively by DKK 14 million.

Falck acts as agent in multiple contracts. Hence, the agent-principal assessment impacts the recognition of revenue in Healthcare, Assistance and Portfolio Businesses. This results in a decrease in revenue and costs of sales. EBITA is not affected.

Change in accounting from IFRS 15 In Q1-Q3 2018, the negative impact of IFRS 15 was DKK 674 million on revenue and cost of sales and DKK 32 million on equity before tax. The impact is primarily related to the agentprincipal assessment, where Falck acts as agent on behalf of the customers.

Ambulance has contracts with predetermined price reductions. The transaction price has been recalculated to an average price for the entire period. As the relevant contracts were entered into before 1 January 2018, equity was consequently adjusted at 1 January 2018. In Q1-Q3 2018, EBITA was affected negatively by DKK 12 million. Due to the probability that Falck will collect the consideration Falck is entitled to, Ambulance US has changed the accounting policy to “cash accounting” for patients without insurance or aid from Federal/State programmes, as they often are not the payers of the services

Falck  Interim Report Q1- Q3 2018

The change in policy does not affect the Group’s cash flows or results over the contract periods. However, the timing of when income and costs are recognised in the consolidated financial statements is affected, as are cash flows and results for individual years under a contract. The implementation of IFRS 15 has resulted in the following changes of presentation in the balance sheet in relation to contract assets and contract liabilities:

reporting date. Contract assets are transferred to trade receivables when the rights become unconditional. Contract liabilities show the recalculated transaction price from predetermined price reductions, where the service is transferred over time, and are recognised at the same average consideration over the term of the contract. Contract liabilities also show prepayments related to consideration from customers who have paid in advance for the subsequent period. As Falck has applied the modified retrospective approach, the comparatives for 2017 have not been restated. The IFRS 15 adjustments the opening balance at 1 January 2018 are summarised in the table.

Contract assets primarily relate to Falck’s right to consideration for the completed services which have not been invoiced at the

20

Financial statements

Section 1

Accounting policies (continued) Impact of implementation of IFRS 15

1 January 2018

30 September 2018

Previous accounting policy

IFRS 15 adjustment

New accounting policy

Income statement Revenue Other external cost

-

-

-

Operating profit before other items (EBITA)

-

-

-

280

(26)

254

185 484 1,627

213 1,922

7 593 (607)

220 593 1,315

14,302

12,363

(7)

12,356

DKK million

Assets Deferred tax Contract assets Trade receivables Total Assets

178 2,111 14,295

7 484 (484) 7

Previous accounting policy 10,695 (2,704)

IFRS 15 adjustment (674) 648

New accounting policy 10,021 (2,056)

Equity Share capital Hedging reserve Currency translation reserve Retained earnings - Change of accounting policies - Change of accounting policies, tax effect

81 (27) (443) 3,091 -

(32) 7

81 (27) (443) 3,066 -

81 (13) (309) 2,441 -

(26) (32) 7

81 (13) (309) 2,390 -

Equity attributable to Falck A/S

2,702

(25)

2,677

2,200

(51)

2,149

Liabilities Contract liabilities, non-current Contract liabilities, current Other payables, current

2,699

32 1,544 (1,544)

32 1,544 1,155

2,275

44 1,294 (1,294)

44 1,294 981

Total current and non-current liabilities

10,838

32

10,870

9,723

44

9,767

Total equity and liabilities

14,295

7

14,302

12,363

(7)

12,356

Falck  Interim Report Q1- Q3 2018

21

Financial statements

Section 2

Segment and revenue information DKK million Business units Q1-Q3 2018 KEY ratios EBITA margin (%) (1) Income statement Revenue (2) Staff costs Depreciation, amortisation and impairments Operating profit before other items (EBITA)

Ambulance

3.0

Healthcare

Assistance

(9.4)

Portfolio Businesses (3)

14.0

5.2

5,812 (3,837)

1,229 (677)

2,270 (806)

884 (580)

(231)

(98)

(86)

(18)

174

(116)

318

46

Restructuring costs Amortisation of customer contracts

(59)

(12) (17)

(90)

1

Operating profit (EBIT)

115

(145)

228

47

Holding and other activities/ eliminations

Total

2.5

(174) (124) (168) (168)

10,021 (6,024) (433) 254 (12) (165) 77

Financials, net

(377)

Profit before tax Income taxes

(300) 66

Profit for the period from continuing operations

(234)

Balance sheet Total assets Gross investments

4,999 154

1,423 32

4,033 13

1,175 58

Comments In 2018, no changes have been made to the corporate structure of ­Falck.

726 1

12,356 258

 See definitions of ratios in section 1.5 in the 2017 Annual Report.

(1)

 Revenue comprises rendering of services of DKK 9,842 million and sale of goods of DKK 179 million.

(2)

 Excluding discontinued operations. For further information see section 3.

(3)

Falck  Interim Report Q1- Q3 2018

22

Financial statements

Section 2

Segment and revenue information (continued) DKK million Business units Q1-Q3 2017 KEY ratios EBITA margin (%) (1) Income statement Revenue (2) Staff costs Depreciation, amortisation and impairments Operating profit before other items (EBITA) Restructuring costs Amortisation of customer contracts Operating profit (EBIT)

Ambulance

(2.0)

Healthcare

Assistance

1.5

4.2

Portfolio Businesses (3)

Holding and other activities/ eliminations

1.1

Total

(0.1)

6,010 (4,029)

1,438 (719)

2,294 (991)

1,222 (569)

(241) (72)

(205)

(31)

(190)

(36)

(121)

21

96

14

(19)

(14) (78)

(38) (22)

(27) (90)

(2) (2)

21 -

(60) (192)

(213)

(39)

(21)

10

2

(261)

-

10,723 (6,380) (462) (9)

Financials, net

(158)

Profit before tax Income taxes

(419) 140

Profit for the period from continuing operations

(279)

Balance sheet Total assets Gross investments

9,709 179

2,116 46

3,836 37

1,962 40

Comments On 1 January 2017, the Public Firefighting business and several Assistance-related activities were transferred from the Ambulance segment to the Assistance segment.

(239) 2

17,384 304

 See definitions of ratios in section 1.5 in the 2017 Annual Report.

(1)

 Revenue comprises rendering of services of DKK 10,548 million and sale of goods of DKK 175 million.

(2)

 Excluding discontinued operations. For further information see section 3.

(3)

Falck  Interim Report Q1- Q3 2018

23

Financial statements

Section 3

Discontinued operations Discontinued operations DKK million Revenue Other operating income and expenses, net Cost of sales and external assistance Other external costs Staff costs Depreciation, amortisation and impairment Operating profit before other items (EBITA) Restructuring costs Amortisation of customer contracts

Q3 2018

Q3 2017

Q1- Q3 2018

1,237 3 (133) (264) (737) (46)

2017

390 1 (45) (73) (248) -

402 (42) (82) (246) (15)

25

17

96

60

53

(1) (3)

(1)

(5) (10)

(43) (19)

-

1,240 2 (143) (230) (771) (2)

Q1- Q3 2017

1,630 14 (178) (358) (991) (64)

Operating profit (EBIT)

25

13

95

45

(9)

Financial income and expenses, net

(3)

(19)

(4)

(45)

(58)

Profit before tax

22

(6)

91

-

(67)

Income taxes

(7)

-

(29)

(2)

(12)

Profit for the period

15

(6)

62

(2)

(79)

Gain/loss on divestment of discontinued operations

(480)

-

(480)

-

Profit for the period from discontinued operations

(465)

(6)

(418)

(2)

Comments Discontinued operations include Safety Services and Healthcare non-core activities, for which Falck has initiated a strategic review. The profit for the period and cash flows from discontinued operations are disclosed separately in the income statement and in the statement of cash flows. The comparative figures for 2017 have been restated in both statements. The classification as discontinued operations entails that assets and liabilities are disclosed separately from other assets and liabilities in the balance sheet. See section 4.

(79)

Cash flows from discontinued operations DKK million

Q3 2018

Q3 2017

Q1- Q3 2018

Q1- Q3 2017

2017

Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities

67 299 13

1 (15) 4

56 260 70

9 (21) -

70 (28) (46)

Cash flows from discontinued operations

379

(10)

386

(12)

(4)

Falck  Interim Report Q1- Q3 2018

24

Financial statements

Section 3

Discontinued operations (continued) Discontinued operations Q3 2018

Q3 2017

Q1- Q3 2018

Q1- Q3 2017

2017

Gain/loss on divestment of discontinued operations Consideration paid Deferred payment

537 50

-

537 50

-

-

Sales price for discontinued operations

587

-

587

-

-

Net assets divested Reclassification of exchange rate adjustment from divestment of discontinued operations Transaction costs

(950) (102) (15)

-

(102) (15)

-

-

Gain/loss on divestment of discontinued operations

(480)

-

(480)

-

-

Assets Goodwill Other intangible assets Property plant and equipment Deferred tax assets Current assets Cash and cash equivalents

415 30 335 41 246 118

-

415 30 335 41 246 118

-

-

Liabilities Non-controlling interest Deferred tax Provisions Current liabilities

(49) (8) (28) (150)

-

(49) (8) (28) (150)

-

-

Net assets divested

950

-

950

-

-

Gain/loss on divestment of discontinued operations Sales price receivable Adjustment for cash and cash equivalents divested

(378) (50) (118)

-

(378) (50) (118)

-

-

404

-

404

-

-

DKK million

(950)

Net assets divested

Cash consideration from divestment of discontinued operations Falck  Interim Report Q1- Q3 2018

Comments Divestment of Safety Services On 20 September 2018, Falck divested Safety Services to the Danish private equity firm Polaris. The consideration paid consists of a cash payment of DKK 534 million and an interest-bearing deferred payment of DKK 50 million falling due in 2019. A loss on the divestment of DKK 456 million was recognised in profit for the period from discontinued operations. Cash flows from investing activities comprise the cash selling price partly off-set by cash and cash equivalents in the divested entities and considerations related to prior-year acquisitions in Malaysia and Thailand for a net amount of DKK 94 million. Divestment of Danish medical clinics On 25 September 2018, Falck divested its Danish medical clinics and associated business (Falck Lægehuse, Sirculus and Vikteam). The consideration consists of a cash payment of DKK 3 million. A loss on the divestment of DKK 24 million was recognised in profit for the period from discontinued operations.

25

Financial statements

Section 4

Section 5

Assets classified as held for sale

Subsequent events

Assets classified as held for sale Q3 2018

Q3 2017

2017

Intangible assets Property, plant and equipment Deferred tax assets Inventories Contract assets Trade receivables Other receivables Income tax Prepayments Cash

373 3 18 78 1 2 1 8

-

433 292 61 2 130 27 11 12 131

Assets classified as held for sale

484

-

1,099

4 15 15 69

-

32 29 57 10 119 80

Liabilities relating to assets classified as held for sale

103

-

327

Net assets classified as held for sale

381

-

772

(DKK million)

Deferred tax Loans Trade payables Income tax Provisions Contract liabilities Other payables

Comments Assets and liabilities classified as held for sale relate to Safety Services and Healthcare non-core activities, which are disclosed as discontinued operations.

Falck  Interim Report Q1- Q3 2018

No events have occurred after the balance sheet date affecting the Group’s financial position at 30 September 2018.

In Q3 2018, Falck divested Safety Services and its Danish medical clinics and associated businesses (Falck Lægehuse, Sirculus and Vikteam). See section 3.

26

Falck A/S Sydhavnsgade 18 2450 Copenhagen SV Denmark Tel.: +45 70 33 33 11 www.falck.com www.falck.dk CVR no. 33 59 70 45