Annual Report 2010 - Falck

32 Falck Annual Report 2010 | Management review
Performance by business area
Assistance
Revenue from the Assistance business increased 13.2% to DKK
2,470 million (2009: DKK 2,183 million) and accounted for
29.5% of consolidated revenue. The organic growth rate was
8.0% (2009: 4.2%).
Performance in 2010 was affected by the severe winter weather
in the Nordic region, and the number of responses increased
12% year on year. In Denmark and Sweden, the many extra
responses had an adverse impact on profit as a large number of
the customers are subscription customers, whereas earnings in
Norway, Finland and Estonia increased as responses there are
provided on a pay-per-use basis.
In home services, more Falck subscribers needed assistance
in 2010 when a number of heavy rainfalls in August flooded
basements and caused other water damage.
The good performance in the alarm market continued in 2010
and Falck began selling alarms in Sweden. The establishment
of Falck Travelcare in 2009 and the acquisition of S Reg in 2010
increased the product portfolio in the fields of travel assistance
and safety and security services for the home and contributed
to the revenue growth generated in 2010.
The severe winter weather and the heavy rainfalls during the
summer caused EBITA to fall by DKK 58 million to DKK 269
million.
Emergency
Revenue from the Emergency business, which accounted for
57.8% of consolidated revenue, rose to DKK 4,834 million in
2010, equivalent to a growth rate of 13.2%. The rate of organic
growth was 7.6% (2009: 11.4%) as a result of high growth rates
in several markets.
The emergency business in Denmark generated satisfactory
revenue growth in 2010 as a result of a high level of activity
in the ambulance business where Falck provides ambulance
services to about 85% of the Danish population. Emergency also
increased its sales of response services to the Assistance business
in 2010 as a consequence of the severe winter weather.
The five Danish regions increasingly use paramedics, and Falck
won a number of contracts for paramedic units and doctors’
emergency cars in 2010.
Emergency in Sweden also generated satisfactory growth in
revenue, especially as a consequence of the breakthrough in
fire fighting where Falck now has contracts for fire services at
airports and a nuclear power plant.
The ambulance contracts in Norway won in 2009 were successfully
put into operation in 2010.
Activities in Slovakia grew in 2010 as Falck won an additional 17
ambulance stations and now operates 91 stations, equivalent to
a third of Slovakia’s total ambulance service.
With the acquisitions of ambulance companies Toesa in Brazil in
October 2010, Care Ambulance in the United States in December
2010 and LifeStar in the United States in early 2011, Falck
has obtained a significant and important foothold on the North
and South American markets where the companies provide
both emergency and non-emergency ambulance services. In
2010, only Toesa contributed to revenue growth.
The growth in activity in the Emergency business in 2010
resulted in a satisfactory EBITA of DKK 329 million, equivalent
to a year-on-year increase of 48.9%. The profit was favourably
affected by an increase in the use of the response services
provided by Emergency Denmark to the Assistance business. In
addition, the acquisitions of Toesa and Resource Protection International
contributed to the year-on-year increase in earnings.
Healthcare
Healthcare’s share of consolidated revenue fell to 14.3% in
2010 (2009: 15.1%). Revenue rose by 4.9% to DKK 1,196 million
(2009: DKK 1,139 million). The rate of organic growth was
minus 4.2% (2009: minus 11.0%).
Healthcare in Denmark saw a drop in revenue from sales of
staffing services for the healthcare sector as a number of Danish
regions have increasingly decided to insource staffing services.
This was to some extent offset by higher revenue in Falck Jobservice,
which assists the job centres of Danish municipalities in
their efforts to help people get back to work after a period on
sickness benefit.