Emeis · EURONEXT:EMEIS
Emeis — Orpea — H1 2019 Earnings Presentation
53 slides from Emeis's earnings presentation, Sep 25, 2019
Slide 1: 2019 Half-Year Results
2019 Half-Year Results 25 September 2019
Slide 2: Agenda
Agenda 1. Responsible Innovation 2. Network and development 3. 2019 Half-Year results 4. 2019 openings and projects 5. Acquisition of Sinoué 6. Strategy and outlook Appendix 2
Slide 3: Comprehensive offering of mid-term and long-term care for physical and mental conditions
Comprehensive offering of mid-term and long-term care for physical and mental conditions Core businesses ORPEA dependency care offering Complementary businesses POST-ACUTE AND MEDICALISED PSYCHIATRIC NURSING HOMES HOSPITALS ASSISTED LIVING FACILITIES HOMECARE AND HOME SERVICES Alzheimer units Sp
Slide 4: Responsible Innovation
Responsible Innovation
Slide 5: Innovating to prepare for the healthcare businesses of the future
Innovating to prepare for the healthcare businesses of the future A fast-growing innovation unit Three areas of needs identified RESIDENTS’/PATIENTS’ SAFETY & WELL BEING 90 projects studied in 2019 STAFF WORKING in our 3 areas of needs CONDITIONS 39 9 OTHER ARTIFICIAL PROJECTS INTELLIGENCE 6 7 61pro
Slide 6: Investment in and roll-out of a comprehensive, ground-breaking Telemedicine solution
Investment in and roll-out of a comprehensive, ground-breaking Telemedicine solution ORPEA has invested in Exelus, creator of the innovative telemedicine solution Nomadeec – Exelus: Bordeaux e-health start-up founded in 2015 by an emergency doctor and an engineer – Acquisition of a 28% stake throu
Slide 7: NOMADEEC, the most comprehensive and innovative telemedicine solution
NOMADEEC, the most comprehensive and innovative telemedicine solution The most comprehensive platform A solution recognised connected to the patient’s A solution which is already used by the Early Metrics agency care pathway by the emergency services Touchscreen Bag 78/100 tablet 200+ Nomadeec units
Slide 8: Three major uses dedicated to healthcare businesses
Three major uses dedicated to healthcare businesses 1 Reduce overcrowding in A&E 2 Streamline the care pathway REMOTE CONTROL TELECONSULTATION TELECONSULTATION APPOINTMENT EMERGENCY LIAISON RECORD A&E TELE-EXPERTISE 3 Provide medical expertise at the patient’s bedside NETSoins PATIENT RECORD 8
Slide 9: MY MENTOR: an innovative HR programme to share feedback and expertise
MY MENTOR: an innovative HR programme to share feedback and expertise A DIGITAL PLATFORM WHERE MANAGERS WHO? can exchange their expertise and experiences Facility Managers, Regional Managers, Experts, Doctors easily and in total confidentiality 400 managers and experts in France ahead of the int
Slide 10: Network and development
Zürich(Suisse) Network and development
Slide 11: 2014 – 2019: strong acceleration in the network internationalisation with 8 new countries
2014 – 2019: strong acceleration in the network internationalisation with 8 new countries Total network (number of beds) Pipeline (number of beds) 17,388 17,388 +78% 96,677 +108% 86,650 13,599 67,781 77,094 8,746 9,115 8,321 54,098 2014 2015 2016 2017 2019 2014 2015 2016 2017 2019 International netw
Slide 12: An operational network of 951 facilities / 96,677 beds in 16 countries
An operational network of 951 facilities / 96,677 beds* in 16 countries European network Network outside Europe LATIN EUROPE 19 facilities 2,852 beds 931 facilities 93,685 beds AMERICA BRAZIL Brazil 12 countries CHILE Netherlands Germany Chile Belgium 67 fac. 180 fac. 61 fac. 1,380 beds 19,075 beds
Slide 13: Number of beds and pipeline by cluster
Number of beds and pipeline by cluster Nb. of Nb. of % Opened Beds under Pipeline by cluster countries Nb. of facilities beds of total beds construction 6,000 5,668 France Benelux 4 484 42,625 44% 38,111 4,514 26% 5,000 4,514 4,389 Central Europe 3 238 25,419 26% 21,030 4,389 25% 4,000 Eastern Europ
Slide 14: A fully secured growth pipeline of 17,388 beds under construction
A fully secured growth pipeline of 17,388 beds under construction Pipeline = Pipeline Countries Opened beds Beds under (% beds under devt) construction Germany 16,228 2,847 15% Geographical breakdown of the pipeline Austria 7,088 386 5% Belgium 6,275 1,162 16% International Brazil 471 2,281 83% 14,8
Slide 15: Russia: a growth opportunity with recognised partners
Russia: a growth opportunity with recognised partners Russia — significant needs in post-acute and rehabilitation hospitals and nursing homes Regulated market: requires authorisation from the Ministry of Health or Labour Lack of post-acute and rehabilitation hospitals, keenly awaited by the Auth
Slide 16: A long-term process initiated more than 2 years ago
A long-term process initiated more than 2 years ago AGREEMENT ORPEA-CDC (BPI) -RDIF AGREEMENT ORPEA-RZD AGREEMENT ORPEA-RUSSIAN RUSSIAN in the presence of the French and Russian Presidents President of the Russian railway company LABOR MINISTER Meeting with President Poutine Skolkovo clinic agreemen
Slide 17: Creation of the 1st post-acute and rehabilitation hospital at Moscow's medical excellence cluster
Creation of the 1st post-acute and rehabilitation hospital at Moscow’s medical excellence cluster Skolkovo: The Russian Silicon Valley located in Moscow, a hub of medical and scientific excellence The Skolkovo cluster, launched by the government in 2009, brings together 50 key players from the glo
Slide 18: A project of 250 beds post-acute clinic in Skolkovo
A project of 250 beds post-acute clinic in Skolkovo 18
Slide 19: 2019 Half-Year Results
2019 Half-Year Results
Slide 20: 10 years of profitable growth
10 years of profitable growth Development, growth and profitability over 2009-2019 (base 100 at H1 2009) 500 EBITDAR1 +18% / year 400 Pre-tax profit on +16% / year ordinary activities 300 Revenue +16% / year 200 Number +14% / year 100 of beds H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 2009 2010 2011 2012 2013
Slide 21: Acceleration of international development since 2016 and increase in profitability
Acceleration of international development since 2016 and increase in profitability Over 3 years (H1 16 – H1 19) Revenue +10% / year H1 2019: €1,841m In 3 years EBITDA* (excl. IFRS 16) +13% / year H1 2019: €318m +25,605 beds +7 countries Net profit, group share (excl. IFRS 16) +17% / year H1 2019: €1
Slide 22: H1 2019: comfortable with annual targets
H1 2019: comfortable with annual targets 2019 TARGETS ACHIEVEMENTS IN H1 2019 1 Revenue growth: +8.2% (€3,700m) +9.6% €1,841m 2 Strong organic growth* +4.7% €78m 3 Sound EBITDA margin +10bps 17.3% (excl. IFRS 16) Cost of debt = -10bps at 2.8% 4 Debt optimisation Diversification with issue of OCEANE
Slide 23: Strong growth of HY 2019 revenue: +9.6% to €1,841m
Strong growth of HY 2019 revenue: +9.6% to €1,841m €m H1 2019 H1 2018 Chg. France / Benelux 1,093.2 1,009.3 +8.3% Revenue growth per semester (€m) Central Europe 473.9 429.9 +10.2% 1,841 Eastern Europe 175.7 163.0 +7.8% +7.9% per semester for 10 years Iberian Peninsula and Latam 96.5 75.9 +27.1% Oth
Slide 24: Invest to secure future growth: example of Allerzorg acquisition in the Netherlands
Invest to secure future growth: example of Allerzorg acquisition in the Netherlands EBITDAR margin1 (% of revenue) -20bps Homecare in the Netherlands More than 600 qualified nurses 26.3% 26.1% 26.2% In €m H1 19 % of sales Revenue 20.1 Staff costs -17.8 89% Procurement costs -1.2 6% EBITDAR 1.1 5
Slide 25: EBITDAR geographical breakdown
EBITDAR* geographical breakdown H1 20191 H1 2018 Comments In €m Revenue EBITDAR* % rev. Revenue EBITDAR* % rev. France / Benelux 1,093.2 310.8 28.4% 1,009.3 289.7 28.7% +20bps excl. Allerzorg acquisition in the Netherlands France / Benelux excl. Allerzorg 28.9% Central Europe 473.9 115.7 24.4% 429.9
Slide 26: EBITDA up +10%
EBITDA* up +10% In €m 1 H1 2019 H1 2018 Chg. Revenue 1,840.6 1,679.0 +9.6% 2 Staff costs -986.5 -886.6 +11.3% Procurement -322.7 -296.4 +8.9% Taxes and duties -61.7 -64.5 -4.3% Other income and expenses 10.0 8.8 N.A. Recurring EBITDAR* (before rent) 479.7 440.2 +9.0% % of revenue 26.1% 26.2% Rents -
Slide 27: Strong increase in net profitability
Strong increase in net profitability In €m 1 H1 2019 H1 2018 Chg. Recurring EBITDA* 317.6 289.6 +9.7% Depreciation, amortisation and provisions -98.8 -87.7 +12.6% Recurring operating profit 218.8 201.9 +8.4% Net financial cost -73.7 -65.2 +13.1% Pre-tax profit on ordinary activities* 145.1 136.7 +6.
Slide 28: Cash flow statement
Cash flow statement In €m H1 20191 H1 2018 EBITDA 318 290 Net cash from operating activities 211 189 Investments in construction projects -206 -219 Acquisition of real-estate -174 -175 Disposals of real-estate 0 19 Net real-estate investments -380 -375 Net investments in operating assets and equity
Slide 29: Sound financial structure
Sound financial structure Simplified balance sheet1 at 30.06.19 (in €m)2 Not allocated* 1,251 Intangible 3,072 Equity and quasi-equity: Equity 3,788 M€ €3,525m Allocated 2,537 453 Indefinitely deffered taxes +394 +105 5,372 Net financial debt +248 Real-estate 5,961 +350 589 Other deferred taxes Othe
Slide 30: Long-term financial net debt at attractive rate
Long-term financial net debt at attractive rate Indicators 30.06.19 31.12.18 30.06.18 Covenants comfortably met Net financiel debt* (€m) 5,372 5,022 4,819 Restated financial leverage1 Maximum % Real-estate debt 85% 85% 85% 5.5 6 authorized Restated financial leverage1 2.4 2.3 2.3 4 Restated gearing
Slide 31: Increased diversification and optimisation of financial debt
Increased diversification and optimisation of financial debt Issue of €500m OCEANE with a 8-year maturity – Very attractive conditions: interest rate of 0.375% and conversion premium of 47.5% Diversified financial net debt – Oversubscription: 3x – Aim: extend duration of debt at an attractive cost
Slide 32: Real-estate portfolio: €6bn (+12% in 1 year)
Real-estate portfolio: €6bn (+12% in 1 year) A high quality real-estate Patrimoine portfolio immobilier Real-estate portfolio and ownership rate 5,961 50% Quality assets built 6,000 48% 50% by ORPEA 5,000 Leases secured by a 40% 4,000 32% unique tenant: ORPEA 3,000 2,217 30% Localisation in 2,000 ci
Slide 33: IFRS 16: P&L impacts
IFRS 16: P&L impacts Assumptions: 20-year lease and annual rent of €1m Acquired company’s leases are recognised as new leases starting at the acquisition date 1,300,000 1,300,000 Acquisition 1,200,000 1,200,000 1,100,000 1,100,000 1,000,000 1,000,000 900,000 900,000 800,000 800,000 700,000 700,000 6
Slide 34: IFRS 16: impacts on ORPEA profit and loss statement
IFRS 16: impacts on ORPEA profit and loss statement H1 2019 H1 2019 In €m IFRS 16 adj. pre IFRS 16 IFRS 16 Revenue 1,841 0 1,841 Staff costs -987 0 -987 Items IFRS 16 impacts Procurement costs -323 0 -323 Taxes and duties -62 0 -62 Rental expenses Elimination of lease costs Other income and expe
Slide 35: IFRS 16: impact on ORPEA balance sheet
IFRS 16: impact on ORPEA balance sheet H1 2019 H1 2019 In €m IFRS 16 adj. pre IFRS 16 post IFRS 16 Non-current assets 9,997 +2,311 12,308 Goodwill 1,251 - 1,251 Intangible assets 2,537 - 2,537 Property, plant & equipment and property under development 5,961 - 5,961 ASSETS Right of use assets - +2,27
Slide 36: 2019 new openings and projects
2019 new openings and projects
Slide 37: 2019 openings: 2,500 beds
2019 openings: 2,500 beds Zürich (Switzerland) – 99 beds Telc (Czech rep.) – 130 beds Liberec (Czech rep.) – 148 beds Marseille (France) – 115 beds Suresnes (France) – 96 beds Pau (France) – 101 beds Warsow (Poland) – 135 beds Marbella (Spain) – 140 beds Berlin (Germany) – 163 beds 37
Slide 38: Acquisition of Sinoué group
Acquisition of Sinoué group
Slide 39: Building on our premium positioning in psychiatric care
Building on our premium positioning in psychiatric care THE NETWORK A network of renowned facilities, all located in areas with very high purchasing power – 7 facilities (592 beds), recently built or renovated The Sinoué group was founded in 1998 – Strategic locations: Western Paris, Grenoble, Lon
Slide 40: Renowned facilities (1/4)
Renowned facilities (1/4) Clinic Bellevue in Meudon (92) Specialisations: addictions, bipolar and anxio-depressive disorders, eating disorders, psychotic disorders and sleeping disorders Built over 150 years ago and recently renovated A benchmark facility in the Paris region, within the grounds
Slide 41: Renowned facilities (2/4)
Renowned facilities (2/4) Clinic du Château in Garches (92) Specialisations: addictions, bipolar and anxio-depressive disorders, eating disorders, memory and psychotic disorders and sleeping disorders The Clinique du Château was founded in 1930 and is located in 5 hectares of wooded grounds. 41
Slide 42: Renowned facilities (3/4)
Renowned facilities (3/4) Nightingale Hospital in London Specialisations: addictions, anxio-depressive disorders, eating disorders London-based private psychiatric facility, opened more than 30 years ago and with an outstanding reputation. The hospital is located in the heart of London in the Mary
Slide 43: Renowned facilities (4/4)
Renowned facilities (4/4) Geriatric psychiatry Clinic Rochebrune in Garches (92) Clinic du Dauphiné in Seyssins (Grenoble) Specialisations: patient-focused geriatric psychiatry, self-care player Specialisations: addictions, mood disorders, anxiety disorders This pioneering facility was opened in 2
Slide 44: An acquisition in line with ORPEA's premiumisation and highly value-creating strategy
An acquisition in line with ORPEA’s premiumisation and highly value-creating strategy Renowned psychiatric facilities, which are either recent or very well-maintained, strategically located in areas of considerable purchasing power A wide range of psychiatric care with renowned cutting-edge expertis
Slide 45: Strategy and outlook
Strategy and outlook
Slide 46: Reiterated 2019 targets
Reiterated 2019 targets > €3,700m€ REVENUE > +8.2% PROFITABILITY Strong DEVELOPMENT Greenfields and acquisitions REAL-ESTATE Disposal of €250m Disposal of non-strategic facilities ARBITRAGE in Germany Ongoing « premiumisation strategy » of the network 46
Slide 47: A global strategy focused on value-creation and Corporate Social Responsibility
A global strategy focused on value-creation and Corporate Social Responsability PREMIUMISATION INTERNATIONAL BALANCED RESPONSIBLE AND ENGAGED OF THE OFFER AND DEVELOPMENT OWNERSHIP / LEASE COMPANY NETWORK REAL-ESTATE STRATEGY Creation of new facilities in high Acquisitions and creations in all
Slide 48: ORPEA is now a global player operating in 3 continents / 23 countries
ORPEA is now a global player operating in 3 continents / 23 countries in all businesses LATIN AMERICA EUROPE 3 COUNTRIES + 2 UNDER ASIA 12 COUNTRIES + 5 UNDER DEVELOPMENT 1 COUNTRY DEVELOPMENT Mexico China Netherlands Czech rep. Poland Belgium Russia Brazil Germany Colombia Luxembourg France Slovaki
Slide 49: Appendix
Appendix
Slide 50: Glossary
Glossary Organic growth reflects the following factors: 1. The year-on-year change in the revenue of existing facilities as a result of changes in their occupancy rates and per diem rates Organic growth 2. The year-on-year change in the revenue of redeveloped facilities or those where capacity has b
Slide 51: Consolidated balance-sheet
Consolidated balance-sheet 1 In €m 30-juin-19 31-Dec-18 Non-current assets 9,997 9,304 Goodwill 1,251 1,137 Intangible assets 2,537 2,257 PPE and property under development 5,961 5,713 ASSETS Other non-current assets 247 197 Current assets 1,912 1,634 Of which cash, cash equivalents and marketable s
Slide 52: Long-term shareholders, dedicated to value creation
Long-term shareholders, dedicated to value creation Shareholding structure (% of share capital) An 11-member Board with complementary skills CPPIB Board members: – Philippe Charrier – Non-executive Chairman 14.2% – Yves Le Masne – CEO Dr Marian – Jean Patrick Fortlacroix 6.4% – FFP Invest (Thierry
Slide 53: Stock market data
Stock market data Market data (12 months) Indices Average trading volume: 235,000 shares per day (=€25m) all platforms combined Compartment A of Euronext Paris Share price: €108.50 Component of the MSCI Small Cap Europe, STOXX Europe 600, CAC Mid 60 and SBF 120 indices 12-month high: €117.