• Healthcare services in Central and Eastern Europe and India
• 19% sales CAGR and 21% adj. EBITDAaL CAGR during '18-'26e
• Fair value range SEK 180-260 per share

Strong track record with a 20% sales CAGR between '06-'23

Medicover is an international provider of healthcare and diagnostic services, primarily in developing countries. The business is divided into two segments: Healthcare Services, 68% of sales in '23, and Diagnostic Services, with 32% of sales. Key markets include Poland (48% of sales), Germany (18%), Romania (12%) and India (11%). Benefiting from strong underlying growth, an established business model and selective M&A, Medicover has achieved a sales CAGR of 20% for '06-'23 and an EBITDA CAGR of 19% for '15-'23.

Exposure to strong underlying growth will pave the way

We expect Medicover to continue to benefit from strong underlying trends in the coming years. The business model, with both a privately funded model and some public revenue streams creates a stable flow of recurring revenues while also driving fee-for-service growth. In addition, the underlying markets, excluding Germany, are set to grow at high single-digit or double-digit rates, and we believe that Medicover will be able to continue to grow its market share due to the market's fragmented nature. Given this set-up, we expect the company to deliver a sales CAGR of 19% and an adj. EBITDAaL CAGR of 21% during '18-'26e.

Fair value range SEK 180-260 per share

To benchmark Medicover, we create two peer groups. One with healthcare providers in developing countries and one in developed countries. In most cases Medicover lies between these two groups on forward-looking operational metrics, but closer to the sales and EBITDA growth of the developing countries. Based on the trading multiples of these two groups and a DCF, we construct a fair value range of SEK 180-260, corresponding to a '25e EV/EBITDA of 10x-13x. In our view, long-term risks include increased local competition and changes to reimbursement mo