Yesterday, LIMES published its H1'25 report, showing continued top-line expansion thanks to the new clinics as well as strong profitability despite the ramp-up of those. In detail:
H1 sales grew 29.2% yoy to € 29.7m, carried by 31,552 billed patient days (+17.5% yoy) and a 10% rise in revenue per day to € 942. New clinics Abtsee and Bergisches Land contributed € 7.4m, and management expects the largest incremental growth from these two sites going forward. PRC Zurich grew 25% yoy with demand into H2 unchanged and a standing waiting list. Mind you, Zurich is the ultra-premium offering, carrying both the highest rate per day and the least cyclicality. Fürstenhof and Mecklenburgische Schweiz ran below last year's occupancy, with a return to good utilisation expected by mid-year.
EBITDA of € 7.0m (+12%) implies a 23.6% margin, down from 27.1%. The dilution is almost purely ramp-up related with personnel expenses up 29% to € 13.5m as headcount went from 237 to 314, and rent climbing 84% to € 3.5m as six sites carried a full period of fixed costs against occupancy still building at two of them. Marketing of € 2.4m (+36%) reflects launch spend that should taper. What matters more is that Abtsee is already positive at the pre-tax line and Bergisches Land positive on EBITDA, both within six months of operation. Against a portfolio where earlier openings took materially longer to break even, this is the clearest validation yet: when LIMES opens new locations, they fill quickly. With the cost base now largely in place for all six clinics, incremental occupancy should drop through at high marginal margins from here.
Cash generation inflected sharply. Operating cash flow rose 73% to € 5.5m, while capex fell to € 0.7m from € 4.0m, depicting a normalization after the build-out. FCF of € 4.8m compares to € -0.7m in H1'25, implying a strong conversion of 69% of EBITDA. This fully confirms our case, that a mature LIMES portfolio converts a large chunk it earns into cash. The asset-light model carries no property, maintenance capex runs at roughly € 100k per clinic, and working capital needs are minimal. Every clinic that finishes ramping therefore adds cash, not just revenue, exactly what makes the Italian, and possible further, expansion affordable without touching the balance sheet.
Looking at H2, a failure at the pool technology of the Mecklenburg clinic is set to keep that site below potential until reinstallation is finalized by YE. This aside, the setup remains strong. Fürstenhof is back to good utilisation, Zurich enters H2 with unchanged demand and a waiting list, and both new clinics are ready to scale. Adding to this is Boccella, which remains on track, with final documents expected by year-end and the licence application to follow over the winter, adding € 15m post ramp-up sales with the opening expected for Summer 2027. With a proven clinic blueprint and a structurally undersupplied market, we would not rule out further European sites thereafter. At 5.1x FY27e EV/EBITDA, the shares still do not price in that potential, in our view.
Reiterate BUY with an unchanged € 810 PT based on DCF.
ISIN: DE000A0JDBC7
