Emeis · EURONEXT:EMEIS
Emeis — Orpea — FY2014 Earnings Presentation
57 slides from Emeis's earnings presentation, March 2015
Slide 1: Full-year 2014 results
Full-year 2014 results Mars 2014
Slide 2: Agenda
Agenda 1. Introduction 2. The ORPEA network 3. Full-year 2014 results 4. Development plans in China and Europe 5. New openings in 2014 and 2015 6. Acquisition of SeneCura 7. Conclusion 2
Slide 3: Introduction
Introduction Dr Jean-Claude Marian M.D. – Chairman
Slide 4: European leader in long-term care
European leader in long-term care ORPEA’s offer The ORPEA group Nursing homes Founded in 1989 by Dr Marian M.D. IPO in 2002 at €6 per share Network of 58,334 beds in 8 countries Post-acute care 38,000 employees In-home and rehabilitation facilities services Real estate portfolio worth €2.7bn Mission
Slide 5: Quality, innovation and jobs at the heart of development
Quality, innovation and jobs at the heart of development France, Italy, Belgium, Spain: 90.6% of residents and families told the annual independent satisfaction survey they were satisfied or very satisfied (25,000 questionnaires sent out with a 56% response rate) Results of the Quality Switzerland:
Slide 6: 2014: a year of international expansion, growth and profitability
2014: a year that combined international expansion, growth and profitability 3 strategic acquisitions: Senevita in Switzerland + Silver Care in Germany in 3 new platforms for 2014 + SeneCura in Austria in early 2015 development 30% expansion in the network: 12,492 beds (137 facilities), or €510 mill
Slide 7: Growth drivers
Growth drivers Population ageing accelerating in Europe Private sector’s market share limited Number of people aged 80 and over to double right across Europe FRANCE 20% 27% 53% Number of those aged 90 and over to triple from 3.8m to 13m by 2050 BELGIUM 33% 37% 30% Population ITALY 20% 35% 45% (in mi
Slide 8: ORPEA Network
ORPEA Network Steve Grobet – Investor Relations Officer
Slide 9: 2010 – 2015: outstanding growth momentum
2010 – 2015: outstanding growth momentum Total network (number of beds) 60,000 58,334 +77% 50,000 40,000 30,000 32,939 20,000 2010 2011 2012 2013 2014 2015 International network Network maturity (Number of beds and % of the total network) (Number of mature beds and % of the total network) 44% x2 83%
Slide 10: Record network growth since early 2014
Record network growth since early 2014 Total network: up 36% (+15,331 new beds) International network: up 129% (+14,410 beds) 58,334 +2,839 beds +4,236 beds +5,963 beds 43,003 +2,293 beds Network at Acquisition in Acquisition in Acquisition in Selective Network at beg. Switzerland Germany Austria de
Slide 11: High-quality international network
High-quality international network Key figures for the international network Breakdown of beds by country 7 countries each representing a platform for German-speaking Europe development 52% 246 facilities Austria 15% Germany 25,542 beds 25% Switzerland Czech Rep. 11% 1% 15,200 employees Spain 14% Be
Slide 12: A European network of 58,334 beds in facilities
A European network of 58,334 beds in 600 facilities Germany Belgium 66 facilities 6,372 beds 61 facilities 7,217 beds Czech Republic 3 facilities 300 beds France 354 facilities Austria 32,792 beds 52 facilities 3,936 beds Spain Switzerland 22 facilities 27 facilities 3,468 beds Italy 2,696 beds 15 f
Slide 13: European growth pipeline of 9,101 beds
European growth pipeline of 9,101 beds Beds Pipeline Breakdown Open being Beds under (% of beds of the pipeline by type beds restruct construction under ured development) Construction 6,869 beds FRANCE 28,861 1,572 2,359 12% 75% BELGIUM 4,421 600 2,196 39% 25%25% Restructuring SPAIN 3,468 0 0 0% 2,2
Slide 14: Full-year 2014 results
Full-year 2014 results Yves Le Masne – Chief Executive Officer
Slide 15: Long-term strategy geared to delivering growth and profitability
Long-term strategy geared to delivering growth and profitability Business performance over 12 years: Share price performance since IPO growth rates > 20% Rebased 100 at date of ORPEA’s IPO CAGR* in Profit Period: from 16/4/02 to 20/3/15 1600 +25% before tax 1000 +910% ORPEA CAGR* in Mkt +24% cap. 12
Slide 16: 2014 full-year targets exceeded
2014 full-year targets exceeded 2014 TARGETS 2014 ACHIEVEMENTS Revenue: €1,770m (+10%) €1,949m 1 Upwarded to €1,930m (+20%) +21,2% +6.0% 2 Solid organic growth ~ €100m EBITDAR margin: 27.6% 3 Strong operating profitability +70 bp Average cost of debt: 4.00% 4 Decrease in average cost of debt - 30 bp
Slide 17: 2011 – 2014: strong momentum in profitability growth
2011 – 2014: strong momentum in profitability growth Revenues (€m) EBITDAR, Rents and EBITDA (€m) 2014/2011: +58% EBITDAR: +73% Rents: +102% EBITDA: +60% CAGR 1900 +16% 1,949 1700 538 60000% EBITDAR 1500 27.6% (€m and % Rev.) 55000% 1300 50000% 433 1,608 26.9% 1,429 1100 45000% 1,234 370 188 Rents 9
Slide 18: Strong growth in 2014 revenues: +21.2%
Strong growth in 2014 revenues: +21.2% at €1,948.6m FY 2014 revenues outstripping guidance (€1,930m) in €m 2014 2013 % France 1,499.8 1,342.3 +11.7% 77% 83% International 448.8 265.6 +69.0% 23% 17% Sound organic growth: Belgium 165.0 158.0 Spain 55.6 49.6 +6% Italy 41.6 38.4 Switzerland 84.4 19.5 Ge
Slide 19: Solid growth of all indicators
Solid growth of all indicators In €m 2014 2013 % Revenue 1,948.6 1,607.9 +21.2% EBITDAR (Recurring EBITDA before rent) 537.8 433.2 +24.1% Recurring EBITDA 350.1 298.0 +17.5% Recurring EBIT 271.2 227.3 +19.3% EBIT (Operating profit) 308.9 268.4 +15.1% Net financial cost * -99.2 -90.6 (+9.5%) Profit b
Slide 20: Strong operating performance
Strong operating performance In €m 2014 2013 % Revenues 1948.6 1607.9 +21.2% Staff costs -968.6 -798.5 +21.3% Expenses -361.2 -296.0 +22.0% Taxes and duties -81.2 -77.7 +4.6% Other income and expenses 0.3 -2.6 NA EBITDAR (Recurring EBITDA before rents) 537.8 433.2 +24.1% % of revenues 27.6% 26.9% Re
Slide 21: Change in rents
Change in rents Rents in €m +€40.7m +€6.3m +€4.0m +€1.5m 187.7 135.2 Rents Increase in Rents from Rents from Rents from Rents 2013 rents sold opened acquisitions 2014 buildings building (incl. €34.2m for Senevita and Silver Care) Average increase in rents in 2014: +1.2% Currently being audited 21
Slide 22: Profitability geographical breakdown
Profitability geographical breakdown 2014 2013 2014/ 2013 In €m Revenues EBITDAR % Rev. Revenues EBITDAR % Rev. Ch. in margin France 1,499.8 427.3 28.5% 1,342.3 374.9 27.9% +60 bp Belgium 165.0 35.3 21.4% 158.1 35.1 22.2% -80 bp Spain 55.6 12.5 22.4% 49.6 11.6 23.4% -100 bp Italy 41.6 6.4 15.4% 38.5
Slide 23: Solid financial structure
Solid financial structure (after OCEANE conversion)* Goodwill 680 Shareholders equity Equity and 1,477 quasi equity: Net intangible 2,109 assets 1,614 Permanent deffered tax liability 452 OCEANE reimbursment 180 1,995 Net financial debt* Net property, plant & equipment and properties under construct
Slide 24: A long-term, diversified and real-estate related net debt
A long-term, diversified and real-estate related net debt Wide respect to the covenants* Net debt* mostly real estate-related Restated leverage1 Maximums allowed 5.5 6 levems 5 Real estate 4 debt 65% 35% 2.63 Operating 2 debt 1 0 Restated gearing2 0 0.5 1.0 1 1.5 2.02 1 2 Net Financial Debt – Real E
Slide 25: Financial structure trend
Financial structure trend Trend EBITDA / Net debt* (Rebased 100 at 31/12/09) Set-up of new financing 250 Diversification of banking partners to secure loans at attractive rates EBITDA 225 up 131% Issue of a €203 million Schuldschein Diverse range of investors for private placements: family offices,
Slide 26: €2.7 billion real estate portfolio
€2.7 billion real estate portfolio Continued pursuit of a real estate strategy combining ownership and rentals: €255m sale on attractive rental and indexation terms €123m net increase in the asset portfolio No change in the core portfolio’s appraisal values Overview of the portfolio at 31/12/14
Slide 27: Cash flow statement
Cash flow statement In €m 2014 2013 Recurring EBITDA 350 298 Net cash flow from operating activities 290 247 Investment in construction -207 -179 Property sale 255 230 Total internal cash flow 338 298 Acquisition of property -197 -188 Acquisition of operating assets (intangible assets) -151 -98 Acqu
Slide 28: Dividend
Dividend Proposed dividend to the 2014 General shareholder meeting: €0,80 / share 0.80 Increase in the dividend 0,70 per share 44.4 +14% 0.60 38.8 0.50 31.8 Share yield*: 26.5 1.3% 0.23 * Based on the closing price of the share at 27/03/15 18 years without any dividend 0.15 0.10 9.7 Payout ratio of
Slide 29: A track record of value creation
A track record of value creation High value creation since the IPO (in €m) 2,874 3,600 -161 180 100 200 230 114 63 IPO market cap. Capital increase Mediter Right issue Capital increase OCEANE Value creation Cumulative Market cap. Acquisition conversion dividend since IPO April 2002 Oct. 2009 Dec. 20
Slide 30: Development in China and Europe
Development in China and Europe Jean-Claude Brdenk – Chief Operating Officer
Slide 31: China: nursing home project in Nanjing
China: nursing home project in Nanjing Ongoing work to install equipment and fittings Ongoing work Selection of high-end décor Model room approved Senior managers hired for the facility Recruitment and Recruitment campaign for all the teams, focusing on local personnel, with training ahead of firm r
Slide 32: Nanjing: a high-end project
Nanjing: a high-end project 32
Slide 33: Nanjing: model room
Nanjing: model room 33
Slide 34: China: creation of diploma certificate in geriatrics
China: creation of diploma certificate in geriatrics Creation of training certificate in geriatrics in conjunction with the Peking Union Medical College Hospital (Xiehe Hospital), one of the oldest and most prestigious hospitals in China Objective: train care-giving staff for nursing homes First dip
Slide 35: Construction of a nursing home in Dortmund
Selective development in Germany Construction of a nursing home in Dortmund Plan to build a lakeside 88-bed nursing home in Dortmund 100% private rooms (51 sqm/bed) High-calibre services Prestige location in Dortmund: known as the Phoenix district, entirely redeveloped around a 24- hectare lake
Slide 36: Restructuring of an office building in Berlin
Selective development in Germany Restructuring of an office building in Berlin Plan to build a 180-bed nursing home 100% private rooms (50 sqm/bed) 25 suites Strategic location: in Berlin, in close proximity to public transport, a hospital and residential area Origins of the project: Acquisiti
Slide 37: Construction of a rehabilitation facility in Veyrier
Selective development in Switzerland: Construction of a rehabilitation facility in Veyrier Plan to build a 43-bed post-acute care and rehabilitation facility Strategic location: Veyrier (Canton of Geneva) Origins of the project: In 2013, the La Colline clinic launched its own project to build a re
Slide 38: Openings 2014 / 2015
Openings 2014 / 2015 Yves Le Masne – Chief Executive Officer
Slide 39: New openings in 2014: 2,350 beds
New openings in 2014: 2,350 beds Dortmund (Germany), Nursing home – 92 beds Ixelles – Brussels (Belgium) – 116 beds Uccle - Brussels (Belgium) – 145 beds Parmain (95), Nursing home – 81 beds Cormontreuil (51), Post-acute Rehab– 91 beds Zürich (Switzerland) – 168 beds Canton d’Argovie (Switzerland) –
Slide 40: New openings in 2015: 2,500 beds
New openings in 2015: 2,500 beds Schoten – Antwerp (Belgium) – 130 beds Ostende (Belgium) – 156 beds Zürich (Switzerland), Nursing home– 126 beds Basel (Switzerland), Nursing home – 93 beds Ötigheim (Germany) – 84 beds Berlin (Germany) –180 beds Paris (75), Nursing home – 125 beds Paris (75), Nursin
Slide 41: Presentation of SeneCura
Presentation of SeneCura Yves Le Masne – Chief Executive Officer
Slide 42: SeneCura: Austria's leading private-sector provider of long-term care
SeneCura: Austria’s leading private-sector provider of long-term care Austrian leader in the private sector with 3,936 beds/52 facilities 3,456 beds open/46 facilities 480 beds under construction or to be built/6 facilities Expansion drive launched in the Czech Republic with 300 beds under const
Slide 43: Network of facilities and 4,236 beds
Network of 55 facilities and 4,236 beds Network in Austria: 46 facilities and 6 projects Czech Republic 3 facilities (300 beds) under construction (due to open in 2015 and 2016) Other projects identified VORARLBERG TYROL SALZBURGER LOWER LAND AUSTRIA 5 nursing homes 6 nursing homes 4 nursing homes 9
Slide 44: High-quality facilities
High-quality facilities 44
Slide 45: SeneCura: offering and policy similar to ORPEA's
SeneCura: offering and policy similar to ORPEA’s Integrated range of care services 1 Nursing homes, day centres, Post-acute care and Award-winning quality temporary stays, Alzheimer’s rehabilitation of care and services units In-home care and services Several regional awards (e.g. Vorarlberg seal of
Slide 46: Barriers to entering the Austrian long-term care sector
Barriers to entering the Austrian long-term care sector Complex and strong regulatory framework Setting the daily rate Paid by the Region Complex regulations with regional differences, creating where the resident’s 9 distinct regulatory environments: income is not sufficient – Mandatory permit syste
Slide 47: Austria: solid fundamentals
Austria: solid fundamentals An affluent and stable country Growth in the population of over-80s (in millions) Austria: Ranks 13th worldwide in terms of GDP per capita at $49,050 +172% (40% above the EU average) CAGR: +2.5% Health expenditure: 11.5% of GDP (vs. 10.2% for the EU) 1.1 Stable social sec
Slide 48: SeneCura: leadership position
SeneCura: leadership position Breakdown of the beds by type of Large majority of public sector and non-profit operator organisations Large majority Private Strong development potential for private-sector commercial of public sector groups owing to public budget constraints Public 10% and non-profit
Slide 49: Development prospects in Austria and the Czech Republic
Development prospects in Austria and the Czech Republic Strong growth already secured ❶ 2014 network: 3,456 beds open in Austria Growth = 23% ⇨ 2018 network: 4,236 beds in Austria and the Czech Republic CAGR: 5% p.a. ❷ 2014 revenues: €125 million Growth = 44% ⇨ 2018 revenues: €180 million CAGR: 10%
Slide 50: Conclusion
Conclusion Dr. Jean-Claude Marian M.D. – Chairman
Slide 51: Execution of the strategy to create value in every country
Execution of the strategy to create value in every country ORGANIC DEVELOPMENT 1 Creation and construction of facilities in strategic locations in all its sectors of activity GROWTH THROUGH ACQUISITIONS 2 Selective acquisitions of independent facilities + seize any opportunities REAL ESTATE 3 Pursue
Slide 52: Appendix
LIFE GOES ON wiTH Us
Slide 53: Consolidated balance sheet
Consolidated balance sheet In €m 31-Dec-2014 31-Dec-2013 Non-current assets 5,103 4,503 Goodwill 680 398 Intangible assets 1,614 1,440 Property, plant & equipment and property under development 2,685 2,562 ASSETS Other non-current assets 124 103 Current assets 857 738 Of which cash, cash equivalent
Slide 54: Shareholding structure and Board
Shareholding structure and Board Shareholders A diversifed board with complementary skills % of share capital Board members: − Dr Jean-Claude Marian – Chairman CPPIB Dr Marian − Yves Le Masne – CEO 14.6% & Family − Alexandre Malbasa 7.0% − Jean Patrick Fortlacroix − FFP Invest (Thierry Mabille de Po
Slide 55: Ageing population: a challenge for Europe
Ageing population: a challenge for Europe 80+ between 90+ between Number of Bed ratio (in % of Estimated beds 2013 and 2050 2013 and 2050 existing beds 80+ population) to be created 25,000-30,000 +110% FRANCE x 3.2 590,000 16% by 2025 7.7m in 2050 + 116.000 to be rebuilt* +117% BELGIUM x 3.5 137,000
Slide 56: Determination of daily prices
Determination of daily prices (care, accommodation, services) FRANCE BELGIUM SPAIN Dep.* 10% Dep. Care Health Care + Dep. Health 20% Region 20% Insurance 40% Insurance Acc. / Services Acc. / Services Care / Acc. / Services 70% 60% 80% Resident Resident Resident (pricing freedom for (pricing freedom
Slide 57: Stock market information
Stock market information Market data (last 12 months) Indices Average daily volume: 108,000 shares/day (=€5.5m) Compartment A of Euronext Paris Price: €61.37 MSCI Small Cap Europe, STOXX Europe 600, CAC Mid High (12-month): €61.46 60, SBF 120, Low (12-month): €42.82 Member of SRD Turnover: 46% in 12