Emeis · EURONEXT:EMEIS
Emeis — Orpea — H1 2021 Earnings Presentation
51 slides from Emeis's earnings presentation, Sep 22, 2021
Slide 1: 2021 Half-Year Results
2021 Half-Year Results 22 September 2021 Rio de Janeiro, Brésil
Slide 2: Speakers
Speakers Yves Le Masne Sébastien Mesnard Laure Frères Steve Grobet Chief Executive Officer EVP Finance - EVP Well-Being EVP Investor Relations & Group CFO (Medical, Quality & CSR) Communication 2
Slide 3: Agenda
Agenda 1 2 3 COVID-19 DEVELOPMENT HY 2021 AND VACCINATION NETWORK RESULTS 4 5 CSR STRATEGY AND STRATEGY OUTLOOK APPENDIX 3
Slide 4: Comprehensive offering
We develop, everywhere in the world, care services for vulnerable people Homecare and home services For autonomous or semi-autonomous elderly people Rehabilitation and mental health hospitals Comprehensive offering of mid-term and long-term Nursing homes Long stays – Short stays Alzheimer units – Da
Slide 5: Covid-19 and vaccination
Covid-19 and vaccination 5
Slide 6: Success of the deployment of the anti-Covid vaccine
VACCINATION RATE OF RESIDENTS AND EMPLOYEES PER COUNTRY Vaccination rate Vaccination rate Residents 91% Employees 85% 99% 99% 99% 98% 91% Success of the 100% 100% 99% 98% 97% 91% 85% deployment of 92% 92% 91% 89% 86% 80% 88% the anti-Covid 80% 79% 71% 70% 65% vaccine 50% 50% >90% of residents vaccin
Slide 7: Sanitary situation under control as of 20.09.21
NUMBER OF COVID+ RESIDENTS NUMBER OF COVID+ EMPLOYEES Start of the 1,500 4,000 vaccination 3,000 0.2% 1,000 < 0.2% 2,000 500 1,000 Sanitary 0 Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-21 Sep-21 0 Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-21 Sep-21 situation under
Slide 8: Network and development
Network and development Acceleration of acquisitions Cannes, France Warsaw, Poland 8
Slide 9: 6 value-creating acquisitions
6 acquisitions in 3 countries (Ireland, Switzerland, Spain) Diversified businesses: nursing homes, post-acute and rehab, mental health 42 facilities / 4,700 additional beds €210m in future additional revenue Medium-sized groups: A good reputation in revenues of €30-40 million terms of care quality G
Slide 10: Ireland: 3 complementary acquisitions
Ireland: 3 complementary acquisitions › 8 facilities (857 beds) including 2 under construction (306 beds) FirstCare: Possibilities of › First-class reputation, more than 90% of single rooms, excellent 4th largest locations mainly in Dublin extensions and operator in specialisations in post- › 2020 r
Slide 11: Belmont House
Belmont House the most prestigious facility in Dublin 11
Slide 12: ORPEA becomes no. 1 in Ireland
A network of 25 facilities, 2,284 beds with future revenue of over €135m Donegal Dublin Mayo Galway Kildare ORPEA Laois Tipperary Wicklow becomes no. 1 FirstCare facilities in Ireland Brindley facilities TLC facilities Belmont House A solid development base in a growing market (> 10,000 beds to be b
Slide 13: Switzerland: acquisition of Sensato AG, 4th operator
Switzerland: acquisition of Sensato AG, 4th operator › Founded in 2008, 4th Swiss operator offering a mix of assisted-living facilities and nursing homes A very-high- › 7 facilities (443 beds) a third of which opened recently, in ramp-up phase Strong geographic quality complementarities and › Excell
Slide 14: Spain: strategic acquisition of Hestia
Spain: strategic acquisition* of Hestia, no. 1 group in post- acute care and rehabilitation and in psychiatry › Founded in 1992, the Hestia Group is the leader in the post-acute and rehabilitation and the psychiatry › 14 facilities (2,131 beds) with a wide range of services: rehabilitation, palliati
Slide 15: Sanitas
+ + Sanitas + 1 DEV. PROJECT CANTABRIA + 1 DEV. PROJECT GALICIA 1 5 1 0 + 1 DEV. PROJECT BASQUE COUNTRY 2 3 + 1 DEV. PROJECT CASTILE 1 4 1 0 10 1 4 0 3 7 1 0 + 4 DEV. PROJECTS BARCELONA + 9 DEV. PROJECTS MADRID 26 2 24 2 0 2 1 2 Improved 1 0 2 0 geographical 1 1 0 + 1 DEV. PROJECT MURCIA 10 coverage
Slide 16: An improved global network
EUROPEAN NETWORK OUTSIDE EUROPE LATIN Latvia AMERICA Poland Mexico C z ech R e p. Germany Colombia Netherlands Russia Brazil Ireland Chile Uruguay An improved Belgium Luxemburg global network France Spain 34 4,744 fac. beds 23 countries Austria Portugal 1,156 facilities Slovenia Croatia CHINA 116,51
Slide 17: Breakdown of beds and pipeline
Nb. Nb. Opened Pipeline Total beds countries facilities beds France Benelux 5 586 43,535 5,672 49,207 Central Europe 3 268 22,591 5,828 28,419 Eastern Europe 7 142 11,154 4,101 15,255 Iberia + Latam 7 158 12,735 10,373 23,108 New Countries 1 2 140 385 525 Breakdown Total 23 1,156 90,155 26,359 116,5
Slide 18: The most important pipeline within the industry
Nb. of facilities Opened beds Pipeline France Benelux 586 43,535 5,672 France Netherlands 372 116 32,673 1,676 3,543 1,168 Growth pipeline Belgium Luxemburg 71 2 7,230 - 268 365 doubled in 3 years Ireland 25 1,956 328 Beds under construction Central Europe Germany 268 191 22,591 17,105 5,828 3,452 2
Slide 19: Acceleration in 2021 openings: 4,055 beds
Warsaw (Poland) Villach (Austria) Turin (Italy) 270 beds 168 beds 150 beds Bern (Switzerland) Cluses (France) Bilbao (Spain) Acceleration in 94 beds 128 beds 104 beds 2021 openings: 4,055 beds Dortmund (Germany) Rio de Janeiro (Brazil) Humpolec (Czech Republic) 220 beds 182 beds 204 beds 19
Slide 20: H1 2021 Results
H1 2021 Results Solid recovery Algeciras, Spain 20
Slide 21: Sharp recovery of activity in H1 2021
STRONG ACCELERATION IN REVENUE GROWTH Revenue: €2,070m | +8.7% STRONG REBOUND IN EBITDAR margin:24.9% +110 bps PROFITABILITY Net Profit: €102m +40% STRENGTHENED Cash:€949m Sharp recovery FINANCIAL CAPACITY > €1bn in new non-bank financing of activity in H1 2021 FURTHER REINFORCEMENT Real estate valu
Slide 22: Strong acceleration in revenue growth: +8.7% at €2,070m
in €m H1 2021 H1 2020 Change France / Benelux 1,277.8 1,136.6 +12.4% Organic groth H1 2021: +5.2% Central Europe 516.4 499.6 +3.3% Eastern Europe 192.7 170.3 +13.1% Iberia + Latam 81.1 96.4 -16.0% Main acquisitions Other Countries 1.5 1.5 NA • Nursing homes in Ireland (Brindley) Total 2,069.5 1,904.
Slide 23: Covid-19 impact in H1 2021
Net Impact in €m Gross Impact Compensation Net impact H1 2020 Impact on EBITDAR of the drop in activity -87 69 -18 -26 Additional cost of protective equipment -26 16 -10 -7 Additional staff costs and bonuses -20 13 -7 -20 TOTAL -133 98 -35 -53 Pre Covid Covid -90 bps Covid-19 impact -50 bps in H1 20
Slide 24: EBITDAR margin
H1 2021 H1 2020 in €m Revenue EBITDAR* % Revenue Revenue EBITDAR* % Revenue France / Benelux 1,278 333 26.0% 1,137 306 27.0% Central Europe 516 137 26.6% 500 119 23.9% Eastern Europe 193 29 15.2% 170 18 10.7% Iberia + Latam 81 16 19.8% 96 10 10.1% Other countries 1 -1 N.A. 2 0 N.A. TOTAL 2,070 515 2
Slide 25: Strong progression of EBITDAR margin
Restated from IFRS 16 in €m H1 2021 H1 2020 Change H1 2021 H1 2020 Revenue 2,069.5 1,904.2 +8.7% 2,069.5 1,904.2 Staff costs -1177.2 -1,080.0 +9.0% -1177.2 -1,080.0 Procurement -373.8 -342.7 +9.1% -377.1 -342.7 Taxes and duties -83.8 -72.3 +15.8% -83.8 -72.3 Other income and expenses 80.1 44.3 N.A.
Slide 26: Net profit Group share: strong increase
Retraité IFRS 16 in €m H1 2021 H1 2020 Change H1 2021 H1 2020 Recurring EBITDA* 499.4 439.0 +13.8% 325.5 283.9 Depreciation, amortisation and provisions -268.7 -242.3 +10.9% -123.5 -112.6 Recurring operating profit 230.7 196.7 +17.3% 202.0 171.3 Net financial cost -109.2 -113.3 -3.7% -70.0 -79.8 Net
Slide 27: Cash flow statement
in €m H1 2021 H1 2020 Net cash from operating activities 213 245 Investments in construction projects -296 -168 Acquisitions of real estate -158 -194 Disposals of real estate 29 1 Net real estate investments -426 -361 Net investments in operating assets and equity investments -378 -293 Cash flow Net
Slide 28: Sound financial structure
SIMPLIFIED BALANCE SHEET AT 30.06.21 (IN €M) AND 6-MONTH CHANGE +222 Not allocated 1 1,653 +90 3,569 Equity Equity and quasi- Intangibles equity: €4,597m Allocated 2,944 €4,161m 592 Indefinitely deferred taxes Sound financial structure 6,841 +685 Net Financial debt last 6 months +463 7,432 Net Finan
Slide 29: Long term financial debt at attractive rate
REAL ESTATE DEBT AT 86% COVENANTS LARGELY MET 30.06.21 31.12.20 Restated financial leverage1 restated IFRS restated IFRS Maximum Indicators 30.06.21 16 16 authorized 5.5 Net Financial Debt* (€m) 6,841 6,841 6,156 % real-estate debt 86% 86% 87% 3.8 1 Restated financial leverage 1.7 3.8 3.4 2 Restated
Slide 30: Highly successful debt issues for ORPEA in 2021
1st Sustainable, €500m 7-year bond (March DIVERSIFIED NET FINANCIAL DEBT 2021) › Coupon: 2.00 % › Transaction 2x oversubscribed (order book in excess of €1bn) › ORPEA’s first sustainable bond (“Green & Social”), UoP to selected Green and / or Social assets / projects › Respect to United Nations SDGs
Slide 31: Healthcare real estate: a very dynamic market in Europe
YEARLY INVESTMENTS IN EUROPE (€BN) SUB-SECTOR ALLOCATION (%) 13.0 12.2 90% H1 11.3 11.3 11.1 2021 80% Other 11.0 9.1 9.0 64% 70% Assisted living 11% 6.9 60% 11% 7.0 50% 5.0 3.9 40% 15% 63% Clinics (MSO, post- 3.0 33% 30% acute, Psychiatry) Healthcare real 1.0 2015 2016 2017 2018 2018 2020 H1 2021 20
Slide 32: Strong decrease in yields for healthcare assets across Europe
NURSING HOMES PRIME YIELDS BETWEEN YIELDS IN EUROPE AS OF JUNE 2021 2015 AND 2020 6.50% 6.00% FRANCE 4.00% - 4.50% 5.50% Italy -100 bps 5.00% GERMANY 4.00% - 5.00% 4.50% Belgium -100 bps 4.00% Germany -225 bps SPAIN 4.75% - 5.25% Strong decrease 3.50% France -125 bps in yields for 2015 2016 2017 201
Slide 33: Real estate: a €7.4bn portfolio
30.06.21 31.12.20 Change Real estate ownership rate 47% 47% = Surface (in million sqm) 2.31 2.22 +4.2% Total value1 (€m) 7,432 6,969 +6.6% Average yield (valuation by Cushman & Wakefield and JLL) 5.3% 5.3% = EVOLUTION OF REAL ESTATE PORTFOLIO (€M) AND OWNERSHIP RATE 7,432 8,000 Portfolio x3.4 50% 50
Slide 34: A high-quality portfolio concentrated in Europe
GEOGRAPHICAL SPLIT OF THE REAL ESTATE REAL ESTATE OWNSERSHIP RATE PORTFOLIO (IN VALUE) BY GEOGRAPHICAL AREA 30.06.21 31.12.20 Change Iberia + Latam Total Group 47% 47% = Eastern 7% France / Benelux 51% 51% = Europe 12% Central Europe 19% 21% -2 pts Eastern Europe 70% 69% +1 pt 12% 69% Central Iberia
Slide 35: Inflation effect on ORPEA
Increase in inflation IMPACT ON REAL- IMPACT ON IMPACT ON RESULTS ESTATE VALUATION DEVELOPMENT Revenue: organic growth Conservative rate Higher Per diem rates indexed to of return used interest rates inflation at 5.3% Rent: capped Healthcare real estate very sought Decrease in the price of More than
Slide 36: CSR Strategy: 2023 Roadmap
CSR Strategy 2023 Roadmap 36
Slide 37: CSR positioning and approach
CSR positioning and approach Identifying the markers of ORPEA’s CSR TANGIBLE MARKERS uniqueness Human-centric A CORE VALUE ORPEA is at the heart of a human- centric ecosystem A « GLOCAL » CSR designed hand-in-hand with APPROACH FOCUSED Operations ON OPERATIONS Think global, Act local Addressing all
Slide 38: Markers for our plural CSR
9 markers for our plural CSR
Slide 39: CSR is fully integrated into the Group's management bodies
Board of Directors: Group Executive CSR & Innovation Committee Committee Discussing and validating Definition of strategic internal policies orientations Monitoring the progress of Monitoring the progress of policies and action plans the CSR approach CSR is fully integrated into Geographical Zones t
Slide 40: An ambitious 2023 CSR roadmap
1. 100% of facilities certified by an outside body (ISO-level standards or above) 2. One trained Ethics referent advisor per facility. RESIDENTS, PATIENTS, FAMILIES 3. Deployment of 3 innovative programs aiming at well-being of patients and residents. 4. Implementing a mechanism for enhanced dialogu
Slide 41: Numerous initiatives to accelerate the implementation of the CSR strategy
A NEW ENVIRONMENTAL INCLUSION STRATEGY PARTICIPATION IN THE DEI INDEX (Disability Equality Index) › Completing a full (scopes 1,2 & 3) GHG › Pilot participation in the Global DEI Index, emissions assessment in 2021 so far only for US companies › Set a reduction target with respect to GHG › Elaborati
Slide 42: ORPEA joins the Convention des Entreprises pour le Climat
ORPEA joins the Convention des Entreprises pour le Climat (Corporate Convention for the Climate) › Mission: foster initiatives among Companies in order to address issues linked to climate change, in line with objectives set by the Citizens’ Convention in 2019 and by the European authorities in 2020:
Slide 43: Strong improvement in extra-financial agencies' ratings
Strong improvement in extra-financial agencies’ ratings SUSTAINALYTICS ISS ESG VIGEO EIRIS Rating (risk level) Ranking within the sector Rating Distribution of ratings Rating Ranking within the sector 100 High 5 100 risk 103 companies in the sector 4 80 /113 19 80 /47 60 /110 49 60 41 11 40 34 40 14
Slide 44: Strategy and outlook
Strategy and outlook Growth and Social Responsibility Austria 44
Slide 45: Continuation of the strategy focused on quality and value creation
PREMIUMISATION › Creation of new facilities in high purchasing power locations OF THE OFFER AND › Selective acquisitions and arbitrage NETWORK › Upgrading of the existing network Continuation of INTERNATIONAL › Targeted acquisitions and creation of new facilities in the 5 geographic zones the strate
Slide 46: Confirmation of 2021 objectives
Confirmation of 2021 objectives At least +7,5% REVENUE > €4,215m EBITDAR MARGIN PROFITABILITY H2 2021 > H1 2021 REAL ESTATE Disposals of €400m 46
Slide 47: Appendix
Appendix 47
Slide 48: Long-term shareholders, dedicated to value creation
SHAREHOLDING STRUCTURE BOARD OF DIRECTORS (% OF SHARE CAPITAL) Board members: Philippe Charrier – Non-executive chairman Yves Le Masne – CEO Jean Patrick Fortlacroix Public 80.5% FFP Invest (Thierry Mabille de Poncheville) CPPIB Joy Verlé (appointed on proposal by CPPIB) 14.5% Moritz Krautkraemer (a
Slide 49: Consolidated balance sheet
in €m 30.06.2021 31.12.2020 Non-current assets 15,238 14,556 Goodwill 1,653 1,494 Intangible assets 2,944 2,881 PPE and property under development 7,432 6,969 ASSETS Right of use assets 2,832 2,817 Other non-current assets 377 394 Current Assets 2,033 1,860 of which cash, cash equivalents and market
Slide 50: 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 been incr
Slide 51: Market data
MARKET DATA* (12 MONTHS) € Average volume: 128 140,000 shares/day (=€15m) all platforms combined 118 Price: €102.55 12-month high: €119.80 108 12-month low: €83.30 98 Turnover: 58% in 12 months 88 Market Cap: €6,626m Nb.of shares outstanding: 64,631,325 78 68 Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-2