Clariane Se · EURONEXT:CLARI
Clariane — Investor Day (May 2024)
69 slides from Clariane's investor day presentation, May 21, 2024
Slide 1: Capital Market Day 2023-2026 plan
Capital Market Day 2023 - 2026 plan May 21, 2024
Slide 2: Disclaimer
This press release does not constitute, and shall not be deemed to constitute, an offer to the public or an offer to purchase or the solicitation of public interest in a transaction by way of public offer, nor shall there be any sale of securities in any state or jurisdiction in which such offer, so
Slide 3: Agenda
Agenda ■ 01 Unprecedented growth in care needs ■ 04 A robust mid-term trajectory ■ 02 ■ 05 Clariane, a leading player Refinancing to focus in Europe on profitable growth ■ 03 At your side : sustainable performance through a solid CSR backbone Page 3 2024 Mid-term plan
Slide 4: Clariane: a purpose-driven care company with an integrated approach
Clariane : a purpose-driven care company with an integrated approach to maximise impact on communities OUR CORPORATE PROJECT “Take CARE of each person’s HUMANITY in times of VULNERABILITY” “At your side” Building Values a bedrock Trust - Responsibility – Initiative of trust Commitments Considerati
Slide 5: Clariane, a leading European operator for care in times of vulnerability
Clariane, a leading European operator Markets expected to see sustained for care in times of vulnerability and regular growth, providing good visibility for the 2 next decades ▪ A balanced footprint ▪ Three complementary care segments ▪ Recognized medical expertise ▪ Population ageing set to accel
Slide 6: Clariane plans to reinforce its capital structure, in line with its purpose
Clariane plans to reinforce its capital structure, in line with its purpose Leima Valeurs Page 6 2024 Mid-term plan
Slide 7: Unprecedented growth in care needs
01 Unprecedented growth in care needs 20 24
Slide 8: An aging population
An aging population ■ Positive long-term demand drivers with aging and increasingly fragile populations ■ In this context, the whole elderly care sector (e.g. In total, in the six countries where Clariane nursing homes, assisted living and homecare) as well as operates, population aged 75 or over wi
Slide 9: Non communicable diseases: the major challenge for care organizations
Non communicable diseases: the major challenge for care organizations in all countries Growing demand for non-acute care Non communicable disease (NCD) development Focus on mental health segment Prevalence of NCD expected to grow by more than +15% by 2030, causing 75% of deaths among the 65y+ popula
Slide 10: Long term care and ambulatory care grow together
Long term care and ambulatory care grow together A preference to age at home Most organizations rely on a mixed care offering Share of survey respondents preferring to age at home (%) Germany Nursing care recipients 100% 90% 86% (in M people) 82% 5.1 5.3 5.5 80% 6 4.5 4.7 4.9 3.8 4.1 4.3 3.1 3.4 60%
Slide 11: An upcoming supply gap in the elderly inpatient care segment
An upcoming supply gap in the elderly inpatient care segment Number of elderly care nursing homes/beds (in thousands) (source : Sources: McKinsey, Knight Franck, European Nursing Home Report, Statista, CBRE, European Commission, OECD ) 77% 47% 95% 70% 85% 75% 77% Proportion of private- sector beds
Slide 12: Market developments require at-scale and diversified care operators
Market developments require at-scale and diversified care operators 1. TAILORING CARE OFFERINGS TO ADDRESS PERSONALIZED NEEDS ▪ Addressing new social patterns: supporting relatives and family members acting as care givers ▪ Premium care services: the “boomer” generation wants choice and privacy ▪ T
Slide 13: Clariane, a leading care player in Europe
02 Clariane, a leading care player in Europe
Slide 14: Clariane: a pan-European leader with critical size
Clariane: a pan-European leader with critical size Serving a catchment area of over 30 million people aged over 75 +800 local communities served through a wide local network A SCALABLE FRANCE GERMANY ITALY SPAIN BELGIUM NL PLATFORM LONG TERM CARE Medicalised AMSTERDAM BERLIN Acting as a nursing home
Slide 15: Clariane: a combination of segments with strong synergies
Clariane: a combination of 3 segments with strong synergies Three complementary Long-Term Care Specialty Care Community Care segments 674 care homes 276 facilities 377 facilities 97,000 patients 700,000 patients 80,000 patients 62% of 2023 revenue 26% of 2023 revenue >100,000 12% of 2023 revenue 90
Slide 16: The 'At your side' corporate project: 3 pillars
The “At your side” corporate project: 3 pillars built on key common capabilities Accelerating the shift Strengthening Building a bedrock to personalized care the core of trust Quality & Patient centered experience Medical Training & Digitalization Real expertise Clariane’s Better Support Estate
Slide 17: Strengthening the core – Quality
Strengthening the core – Quality aim for best quality and patient-centered experience Wanted Quality Clariane Standard, regulations, strategic orientations … Expected Quality Expectations : collective & Delivered Quality individual. implicit & explicit The KPI patient Perceived Quality Experience Ac
Slide 18: Strengthening the core - People Strategy
Strengthening the core - People Strategy Attract, train & retain Strengthen our training systems, Clariane Management Culture and Employee Value STRATEGIC Proposition as a source of attractiveness, development and retention of our employees and future OBJECTIVE employees Action plan KPIs 2023 2026 ▪
Slide 19: Our Employee Value Proposition (EVP) Roadmap 2024
Our Employee Value Proposition (EVP) Roadmap 2024 THE THREE PILLARS OF OUR EVP: A difference in your A difference in your A difference in your 1 daily work 2 professional evolution 3 local community ▪ Ensure team members are healthy and ▪ Welcome and integrate new team ▪ Be recognised as a pace-sett
Slide 20: Medical expertise lever #1: Positive care
Strengthening the core: medical expertise lever #1: Positive care – “+C”, respecting wishes, increasing personalization Our patient-centered approach to care tangible in the field and measurable through KPIs: STRATEGIC ▪ We care for people with an ethical approach - respecting their wishes and envir
Slide 21: Medical expertise lever #2: leveraging the network effect
Strengthening the core: medical expertise lever #2 = leveraging the network effect A strong integrated community of specialists at European level ▪ Be part of a network of recognized experts : shared knowledge → specialized committees ▪ Develop access to high level applied research: Ambitious projec
Slide 22: Medical expertise lever #3: robust ethical governance
Strengthening the core : medical expertise lever #3 : driving robust ethical governance across all functions and networks Promote the Group's values and ensure their proper application by all our stakeholders We are committed to embedding our values at every level of our company, from top management
Slide 23: Strengthening the core: Technology and digitalisation
Strengthening the core: Technology and digitalisation Employee Patient Operational Revenue Care quality experience Experience performance Generation Care quality Employees provided All facilities providing More efficient Digitize patient improvements with a mobile a patient app process and a journey
Slide 24: From data production to data management
Strengthening the core: From data production to data management AMBITION Operationalise our data to better serve our patients and residents, our employees, our stakeholders. Data infrastructure & Operating Data Ethics governance model Use cases “privacy by design” Build a state-of-the-art Business f
Slide 25: Real estate management and financing
Strengthening the core: Real estate management and financing A high-quality, well-renovated network 45% of Group facilities built/renovated since 2016 100% of greenfields have HQE or equivalent certification since 2020 Modern and digitalized Long-term facilities, fully adapted to 44% of network Care
Slide 26: Real estate management and financing: ownership structure
Strengthening the core: Real estate management and financing An optimized ownership structure to serve operations ▪ Move to shorter lease term to improve flexibility 74% 74% leased leased ▪ Inflation protection and capex sharing included in rental agreements Clariane operated 1 054 facilities ▪ Cont
Slide 27: Reducing real estate weight on operations
Strengthening the core: Clariane real estate: reducing real estate weight on operations Opco rents* in % of revenue 6.0 Opco rents in % of revenue 18.0% ▪ Active rent contracts 5.0 5.0 17.0% management 4.5 4.3 ▪ Limited rents inflation versus 4.0 3.9 16.0% 3.6 revenue increase 3.0 14.8% 15.0% 14.7%
Slide 28: Real estate portfolio monetized when cap rates decreased
Strengthening the core: Real estate management and financing A portfolio monetized when cap rates decreased, to finance network development Group and minority share value (€m) 4,000 5.4% 5.3% 3455 5.9% 3,500 3154 5.5% 3007 3,000 2668 1,030 2752 5.6% 881 2,500 1,175 5.8% 625 2034 1085 2,000 5.7% 1649
Slide 29: Optimized ownership structure through dedicated vehicles
Strengthening the core: Real estate management and financing Optimized ownership structure through dedicated vehicles with opened capital Clariane real estate portfolio · 100% control Value(1): €2.8bn 74% €2.0bn 26% €0,7bn Shared capital real estate vehicles · Asset smart strategy Locally owned port
Slide 30: Selective pipeline of pre-financed projects
Strengthening the core: Real estate management and financing Selective pipeline including only pre-financed projects, with trusted partners 2 dedicated Real estate development vehicles New capacities 2023 Pipeline 2024-2028 New New # of beds capacities # of beds capacities # of beds Est. End Est. En
Slide 31: At your side: sustainable performance through a solid CSR backbone
03 At your side: sustainable performance through a solid CSR backbone
Slide 32: 2019-2023: building the first CSR layers
2019-2023: building the first CSR layers to ensure sustainable performance Grow and protect Offer the best care to Be sustainable our employees our residents & patients Training 7,171 (11,7%) Positive Care 100% Energy -13% employees in a deployment in all nursing energy consumption & - qualifying co
Slide 33: 2024-2026: a comprehensive CSR roadmap
2024-2026 : a comprehensive CSR roadmap fully aligned with our mission and our new corporate project « At your side » Consideration Fairness Sustainability Locality Innovation INCLUSIVE GOVERNANCE Empowered stakeholders' councils ▪ Active social dialogue Care quality Integrity Climate Local economy
Slide 34: Inclusive governance
Designed to deliver results on performance… CSR commitments Positive impact on Financial performance CONSIDERATION Patient loyalty Higher average and occupancy rates Lower recruitment costs FAIRNESS Employee satisfaction Lower salary/replacement costs INCLUSIVE GOVERNANCE SUSTAINABILITY Business mod
Slide 35: Tangible initiatives with measurable outputs set for 2026
…And embodied in tangible initiatives with measurable outputs set for 2026 Train, protect & Ensure highest Positively impact retain employees Quality of Care our local ecosystems Grow our own workforce Extend Positive Care, our Energy decarbonisation • > 7,000 qualifying paths personalised care traj
Slide 36: A robust mid-term trajectory
04 A robust mid-term trajectory
Slide 37: 3 levers to contribute to operational performance
3 levers to contribute to operational performance Leveraging existing Adjusted Synergies capacities to drive Pricing and economies volumes of scale ▪ Post-Covid recovery driven by ▪ Out of pocket revenue: drive ▪ Adapting and developing quality and brand reputation value through : integrated purchas
Slide 38: France: a comprehensive positioning in the 3 core activities
France : Share of Clariane 2023 revenue a comprehensive positioning in the 3 core activities, supported by trusted brands 45% A rapidly increasing demographic transition ▪ The number of people aged over 95 is expected to rise from 115,000 in 2013 to 415,000 in 2040. (Source IGAS) ▪ We live older in
Slide 39: France: Elderly Care - unique positioning & diversified offering
France: Elderly Care - a unique positioning & diversified offering (Korian, Ages & Vie et Petits-fils) to leverage the plurality of demand A dense network of services to cater to the elderly market via 3 brands Today's policy on "ageing well" is mainly geared towards "home care": ▪ A mantra: "90% of
Slide 40: France - Specialty Care Rehabilitation: strategic priorities
France - focus Specialty Care Rehabilitation: strategic priorities 1. PURSUE STRUCTURING OF OFFER 2. OUTPATIENT CARE ROADMAP 3. ENHANCE PARTNERSHIPS AROUND PROMISING SPECIALITIES Evolution in days billed in Day Hospital ▪ To cater to growing needs ▪ To accelerate 700,000 integration of ▪ To Improve
Slide 41: France - Specialty Care Mental Health: strategic priorities
France - focus Specialty Care Mental Health: strategic priorities 1. EMERGING PSYCHIATRIC 2. A PIONEERING MODEL 3. INICEA INCORPORATES DISORDERS AT THE HEART OF OF 10 AUTONOMOUS INNOVATIVE THERAPIES AND THE PATHOLOGIES TREATED PSYCHIATRIC OUTPATIENT TECHNOLOGIES INTO ITS CARE CENTRES PACKAGES Projec
Slide 42: France – 2023-2026 outlook
France – 2023-2026 outlook: back to normalized levels and well-armed to support acceleration of the demand with fair pricing Long-term care : recovery roadmap ▪ Increase in occupancy rate to c.93% in 2028 ▪ Development of short stays in our nursing homes: 45% of entries for short stays and a 20% con
Slide 43: Germany: a solid position geared to benefit from recovery
Germany: a solid position geared to fully benefit from the recovery of the sector Share of Clariane 2023 revenue Gross value added in Care Germany (€bn) Population growth Germany (source : Statista 2023) (source : Destatis 2022, assuming a constant definition of “care”) 23% 52 49 46 44 (%) 83,2 Mio.
Slide 44: Germany - Korian DE: path to recovery
Germany - Korian DE: an outstanding asset with strong fundamentals, on the path to recovery from exceptional challenges faced in 2022 and 2023 2023, a compound of structural shocks A clear roadmap for recovery “Trafo”, with a comprehensive 360° plan to jumpstart the recovery and fast-track increase
Slide 45: Germany - Mid-term outlook
Germany - Mid-term outlook: margins restored to normative levels Grow the profitable revenue … ▪ Increase in occupancy to meet growing demand ▪ Exit of c.10% of sites (low performing) ▪ Catch up on pricing (care rate and real-estate indexed costs) mainly in 2024 with FY effect in 2025 2023 - 2026 Re
Slide 46: Belgium and the Netherlands: well positioned and trusted operator
Belgium and the Netherlands : well positioned and trusted operator to sustain solid growth potential Sustained growth of Strong and continued focus Commercial operators set Share of Clariane 2023 revenue to gain market share over population aged 80+ on long-term care spend traditional operators Evol
Slide 47: Belgium and Netherlands: cross-fertilisation and synergies
Belgium and Netherlands: cross-fertilisation and increasing synergies Growth in levels of care supported by entrepreneurial support Belgium Netherlands ▪ Fine-tuned Care Campuses combining ▪ Very advanced in its positive care - different types of living/care : assisted living, personalised and indiv
Slide 48: Belgium and Netherlands – Mid-term outlook
Belgium and Netherlands – Mid-term outlook: consolidation of stable cash flows in Belgium to support the growth potential in the Netherlands Belgium ▪ Organic growth : OR to around 97% by 2027 (increase of 5%) ▪ Secured greenfield development (4) + awaiting new licensing calendar 2026+ ▪ Global port
Slide 49: Italy: best-in-class, diversified network
Italy: Share of Clariane 2023 revenue a best-in-class, diversified and well positioned network to capture evolving growth opportunities 12% Forecast of % over-75 / Italian population Population suffering from chronic disease (,000) 8 7.6 Korian Italy key figures 7.3 7.4 Type of pathology 2017 2028 V
Slide 50: Italy: leveraging the growing private health opportunity
Italy: leveraging the growing private health opportunity Insurance agreements, a growing network For private health expenditure, the outlook 2023-2026 shows a faster increase than GDP growth Agreement under 15 framework 38 Local agreements negotiation agreements Private health expenditure (€bn) sour
Slide 51: Italy – Mid-term outlook
Italy – Mid-term outlook: profitable organic growth through diversification Network consolidation from prevention to end of life Ranging from prevention, home care, outpatient, NH & Mental Health to post-acute care Long-term care : growth through incremental volumes, pricing and additional services
Slide 52: Spain: a fast-growing platform
Spain: a fast-growing platform combining long term care and specialty care (mental health and rehabilitation) Mental healthcare market volume, EURm Supply – demand gap in the Long-term care market Share of Clariane 2023 revenue (number of beds , 000) +20% CAGR% (2020-30) 4% c. 3,500 3,600 450 Total
Slide 53: Spain: growing with public-private partnerships
Spain: growing with public-private partnerships Grupo5 participates in public tenders for management of public social care facilities and had strong reputation and credentials with public administration Spain breakdown by activity 2023 new public tender Total % provisions revenue 6% Severe Mental He
Slide 54: Spain – Mid-term outlook: asset-light strategy
Spain – Mid-term outlook: growing with an asset-light strategy Owned Managed Complementary growth model that enables organic growth without centers Centers intensive capital requirements and strengthen relationships with private+concerted (public) Public Administrations Capex Benefits of development
Slide 55: Medium Term outlook: refinancing to focus on profitable growth
05 Medium Term outlook: refinancing to focus on profitable growth 20 24
Slide 56: Plan to strengthen the Group's financial structure
Plan to strengthen the Group’s financial structure Refinancing plan designed with the strong support of Crédit Agricole Group and Predica, Clariane’s largest shareholder, with 4 key initiatives aiming to: ▪ Strengthen Clariane’s liquidity and financial structure ▪ Enabling the Group to successfully
Slide 57: Fully underwritten capital increases of €328m
Fully underwritten capital increases of €328m In 2 steps, approved by the Board, and to be proposed to the General Meeting of Shareholders, June 10th: 1. €92m of Reserved Capital Increase to be 2. €236m capital increase with preferential proposed to the General Assembly on 10th June subscription rig
Slide 58: Refinancing process: 1bn of targeted disposals
Refinancing process: 1bn of targeted disposals, c.40% already committed In line with the Group's strategy focus on deleveraging ■ Adapted to the Group's strategy: ▪ 4 key geographies ▪ 3 complementary segments : Long term Care, Specialty Care, Community Care ■ Ensure focus on scaled platforms to cap
Slide 59: Main 2023-2026 KPIs of medium-term plan
Main 2023-2026 KPIs of medium-term plan KPI OBJECTIVES VALID IN ALL STUDIED SCENARII OF DISPOSALS The KPIs are presented for 2026 including the following impacts. ▪ €1bn of disposal even if remaining scope (business and geographies) not precisely known ▪ €328m capital increase All KPI elements in th
Slide 60: 2023-2026 revenue growth outlook, post disposals
2023-2026 revenue growth outlook, post disposals : strong organic growth momentum benefiting from previous investments Long-Term Care Specialty Care Community Care Capturing Room for at least 3 Continued outpatient Huge demand for ppts occupancy strong growth in existing home care and co-living incr
Slide 61: Multiple drivers to improve margins
Multiple drivers to improve margins Occupancy ▪ Significant upside for Long-Term care in almost all geographies Margin accretive volumes Outpatient Development ▪ Direct margin benefit from increase in outpatient revenues Sustained organic +100-150bps margin EBITDA margin improvement by 2026 ▪ German
Slide 62: Improving bottom line profitability
Improving bottom line profitability ▪ Back to normalized level in the new market environment EBITDA ▪ Margin up 100 bps to 150 bps in 2026 Non-recurrent ▪ Expected to decrease post refinancing plan execution expenses ▪ Restructuring costs, notably Germany portfolio optimisation ▪ Stabilisation due t
Slide 63: Operational discipline supporting balance sheet improvement
Operational discipline supporting balance sheet improvement FROM 2024 Operating EBITDA conversion rate back to c.40% or above free cash flow Including c.€100m maintenance capex Operational ▪ High value investments to pursue development c. €100-150m digitalization and network modernization Selective
Slide 64: Debt metrics post refinancing plan
Debt metrics post refinancing plan 2023 2026 BEFORE PLAN Reduced LTV to 55% 1.8bn c.1.4bn On the basis of significantly lower Real Estate debt estimated real estate valuation LTV 61% LTV 55% - c.6.7% capitalization rate in 2026 Opco net debt 2.2bn c.1.3bn – c.1.6bn <3x GBP hybrid call to be determin
Slide 65: Outlook for 2024 and 2023-2026
Outlook for 2024 and 2023-2026 2024 2023-2026 ORGANIC REVENUE GROWTH >5% CAGR c.+5% Margin up 100 bps to 150 bps in EBITDA Margin pre IFRS 16 Stable in amount on a pro forma basis 2026 < x3 at end of 2025 < x3 at end of 2025 LEVERAGE pre IFRS 16 LTV at 55% LTV at 55% Maintain NPS of at least 40 Qual
Slide 66: Conclusion
Conclusion
Slide 67: Investment case
Investment case Clariane, a leading European Markets expected to see sustained operator for care in times of and regular growth, providing good vulnerability visibility for the 2 next decades A € 1,5 billion plan to strengthen Self-financed profitable the Group’s financial structure growth for 2023
Slide 68: clariane
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Slide 69: Debt maturities at December 31, 2023
Debt maturities at December 31, 2023 1,400 1,200 1,000 505 800 191 600 230 50 16 400 108 361 119 493 300 152 542 200 8 41 328 60 275 206 191 173 75 121 - 2024 2025 2026 2027 2028 2029 2030 >2030 Syndicated Term Loan OCEANE EURO PP Public Bond SSD/NSV Other Corp. Debts Syndicated RCF Real Estate 31/1