Clariane Se · EURONEXT:CLARI
Clariane — Korian — Investor Day (June 2021)
48 slides from Clariane's investor day presentation, Jun 28, 2021
Slide 1: Korian Capital Markets Day
vy marKers LAY CY KORIAN
Slide 2: Introduction
0. INTRODUCTION Mrs Sophie Boissard Chief Executive Officer 2
Slide 3: Overcoming Covid, client recognition, committed team, pioneering digital care
OVERCOMING COVID CLIENT RECOGNITION HIGHLY COMMITTED TEAM PIONEERING DIGITAL CARE "Provide care and support to ageing and fragile people and their loved ones, respecting their dignity and contributing to their quality of life." 3
Slide 4: A Compelling Investment Case
A COMPELLING INVESTMENT CASE European market leadership in a sector with secular supporting trends 1 outperforming GDP growth 2 Scaled healthcare and care infrastructure poised for growth Leveraging existing platform to drive margin improvement 3 by expanding reach & services 4 Track record of selec
Slide 5: Market Trends Support Long-Term Secular Growth
MARKET TRENDS SUPPORT LONG-TERM SECULAR GROWTH DEMOGRAPHICS EPIDEMIOLOGICS TECHNOLOGICAL ACCELERATION Europe’s population Global burden of Advances leading to improved is rapidly ageing chronic diseases quality of life for patients 65+ to grow by 20% by 2030 30 million elderly people Healthcare spen
Slide 6: A Vital Care and Healthcare Service Provider in Key Markets
A VITAL CARE AND HEALTHCARE SERVICE PROVIDER IN KEY MARKETS FRANCE #1 STRONG PRESENCE IN MOST DENSLY POPULATION AREAS GERMANY 70% OF 65+ IN EUROPE #1 Long-term care Healthcare Community care BELGIUM 675 LOCAL #1 COMMUNITIES SERVED ACROSS ITALY #1 6
Slide 7: Korian's Growth Strategy Has Delivered Leadership Positions
KORIAN’S GROWTH STRATEGY HAS DELIVERED LEADERSHIP POSITIONS ACROSS HIGH GROWTH VERTICALS & KEY MARKETS Long Term Care 721 facilities Healthcare 130 facilities 20% 3 KEY GROWTH Community Care €3.9bn 12% BUSINESS SEGMENTS Home Care network 68% 188 facilities Providing a continuum of care for an ageing
Slide 8: Korian's Strategy Addressing Market Trends and Care Pathways
KORIAN’S STRATEGY ADDRESSING MARKET TRENDS AND BUILDING CARE PATHWAYS TO COVER EVOLVING NEEDS KORIAN BEST POSITIONED BEST-IN CLASS FACILITIES TO BENEFIT FROM THE GROWTH THROUGH 3 BUSINESS SEGMENTS MOMENTUM OF CARE MARKETS #1 #1 #1 #1 2019 2020 2021 UNITED FRANCE GERMANY BELGIUM ITALY SPAIN NETHERLAN
Slide 9: Healthcare Platform Primed for Scalable Growth
HEALTHCARE PLATFORM PRIMED FOR SCALABLE GROWTH ON THE BACK OF SOME TRANSFORMATIONAL TRANSACTIONS CHRONIC DISEASES MENTAL HEALTH #1 in COPD #3 French Private Healthcare segment to be Psychiatric care key growth driver 6 19 clinics specialised clinics in the next 5 years 1,220 beds c.13k outpatient 60
Slide 10: Confirmation of 2022 Guidance
CONFIRMATION OF 2022 GUIDANCE GROWTH ACCELERATION AND MARGIN UPLIFT REVENUE EBITDA margin FCF* > €4.5 Bn 15.5% c. €300m excl. IFRS 16 FINANCIAL DISCIPLINE: Operational Leverage ≤ 3.5x * Levered FCF post taxes and financial interests and Operating Capex, and before growth capex 10
Slide 11: Roadmap: Ambitions Beyond 2022
ROADMAP: AMBITIONS BEYOND 2022 Embedded “PropCo” to grow to € 4 billion by 2023 Commitment to delivering on 15 ESG commitments with focus on Sustained growth People & Quality Regular delivery of c.10% 3,000 greenfield mainly organic beds p.a. Network expansion based on increased services and high re
Slide 12: ESG
1. ESG Sophie BOISSARD Rémi BOYER 12
Slide 13: People at the Heart of Our ESG Strategy
PEOPLE AT THE HEART OF OUR ESG STRATEGY THE 5 PILLARS FULLY CONSISTENT OF KORIAN’S ESG ROADMAP WITH OUR CORPORATE PROJECT EXCELLENCE PIONEER SPIRIT Provide CARE EXCELLENCE whilst ensuring 1 DIGNITY and CHOICE for all BE THE EMPLOYER AGILE GROWTH OF CHOICE 2 Be the EMPLOYER of choice Contribute to fi
Slide 14: 15 Commitments to Build Our ESG Strategy
15 COMMITMENTS TO BUILD OUR ESG STRATEGY 100% of facilities deploying 100% of facilities ISO 1 Mediator per country & determine Provide CARE EXCELLENCE Positive Care approach by 2023 certified by 2023 a customer charter by 2023 1 whilst ensuring DIGNITY and CHOICE for all 2019 2020* 2019 2020* 2019
Slide 15: Listening to Our Key Stakeholders
LISTENING TO OUR KEY STAKEHOLDERS Training, Talent 1 Provide CARE EXCELLENCE whilst Development & Retention Personalised Care & Services Quality of life ensuring DIGNITY and CHOICE for all & Human Dignity Safety & Ethical Culture Quality of Care 2 Be the EMPLOYER of choice Family, relatives and stak
Slide 16: ISO 9001 Certification
ISO 9001 CERTIFICATION Under 12.1% of site OBJECTIVE 2021 study ISO 9001 certified (June 2021) 15% 3 18 Sites Sites and 2 certified 3 Sites CERTIFICATION NATIONAL HEALTH AUTHORITIES* BY 2023 100% 99% OF THE NETWORK NETWORK ISO 9001 CERTIFIED 100% A/B ISO 9001 certification SCORE Sites under certific
Slide 17: Listening to Our Key Stakeholders
LISTENING TO OUR KEY STAKEHOLDERS Training, Talent 1 Provide CARE EXCELLENCE whilst Development & Retention Personalised Care & Services Quality of life ensuring DIGNITY and CHOICE for all & Human Dignity Safety & Ethical Culture Quality of Care 2 Be the EMPLOYER of choice Family, relatives and stak
Slide 18: ESG Aligned with UN Sustainable Development Goals
ESG ALIGNED WITH UN SUSTAINABLE DEVELOPMENT GOALS (SDGs) MAIN PILLARS OF OUR ESG STRATEGY Provide CARE EXCELLENCE 1 whilst ensuring DIGNITY and CHOICE Be the EMPLOYER 2 of choice Contribute to finding 3 INNOVATIVE SOLUTIONS for a more INCLUSIVE SOCIETY Be a COMMITTED 4 and RESPONSIBLE LOCAL PARTNER
Slide 19: ESG Aligned with UN Sustainable Development Goals
ESG ALIGNED WITH UN SUSTAINABLE DEVELOPMENT GOALS (SDGs) MAIN PILLARS OF OUR ESG STRATEGY Provide CARE EXCELLENCE 1 whilst ensuring DIGNITY and CHOICE Be the EMPLOYER 2 of choice Contribute to finding 3 INNOVATIVE SOLUTIONS for a more INCLUSIVE SOCIETY Be a COMMITTED 4 and RESPONSIBLE LOCAL PARTNER
Slide 20: Growth and Margin Drivers
GROWTH AND MARGIN 2. DRIVERS Mr. Philippe Garin Chief Financial Officer 20
Slide 21: A Strong Visibility on Revenue Growth in 2022
A STRONG VISIBILITY ON REVENUE GROWTH IN 2022 €m EXTERNAL GROWTH Ambition post 2022 Expected Portfolio streamlining Sustainable growth M&A >4,500 Secured ORGANIC GROWTH M&A Greenfield 4% Patient turnover EXTERNAL Price mix GROWTH Occupancy normalisation FOCUS ON HEALTHCARE 3,874 6% ORGANIC GROWTH 20
Slide 22: Sustainable Growth with Clear Drivers
SUSTAINABLE GROWTH WITH CLEAR DRIVERS ANNUAL GROWTH POTENTIAL Moving from 2,000 to 3,000 beds p.a. Greenfield Alternative Housing concept roll-out ~3,000 beds p.a. ORGANIC GROWTH Volume increase +4% Objective: 100% of clinics with outpatient capacity +50% in capacity Ambulatory care Openings
Slide 23: A Clear Pathway to Our 2022 Margin Guidance
A CLEAR PATHWAY TO OUR 2022 MARGIN GUIDANCE Excl. IFRS16 Incl. IFRS16 2020-2022 POST-RENT MARGIN UPLIFT Rents 24.7% OCCUPANCY NORMALISATION +190 Absorption of fixed costs bps 15.5% BUSINESS MIX 14.8% Ambulatory: Leverage existing infrastructure / 13.6% 50bps cost base 120bps Selective M&A: Adding ma
Slide 24: Growth at Scale
GROWTH AT SCALE 12,3) 24 KORIAN
Slide 25: One of Few Scaled Providers Positioned to Capture Market Growth
KORIAN ONE OF FEW SCALED PROVIDERS UNIQUELY POSITIONED TO CAPTURE MARKET GROWTH MARKET DEMAND 27m c.+30% 38m (EU 80+ POPULATION) (2015) (2030) 100 000 DEPENDENCY RATIO* 29% 39% (EUROPE) (2015) (2030) TOP 20 EUROPEAN LONG Highly fragmented market 75 000 TERM CARE PRIVATE FRAGMENTED MARKET <35% of EU
Slide 26: Decentralised Teams Rolling Out Growth at Scale
DECENTRALISED TEAMS ROLLING OUT GROWTH AT SCALE Well protected in a changing environment Sophie Boissard Country headquarters Group CEO Country CEOs Andrew Winstanley CEO MANAGEMENT # REGIONAL TEAM DIRECTORS by country by country Dominiek Beelen CFO 21 CEO COO Arno Schwalie CEO CHRO 7 Medical Nicola
Slide 27: Case Study - Germany Long-Term Care Platform
CASE STUDY - GERMANY LONG-TERM CARE PLATFORM #1 network in the largest European market Increasing demand on the back of demographic pressure 21.5% of 65+ from 18m (2020) to 21m (2030) Successful Buy & Build approach: 3 major acquisitions strong greenfield pipeline offering enrichment (
Slide 28: Long-Term Care Network Transforming to Meet Markets' Needs
KORIAN LONG-TERM CARE NETWORK TRANSFORMING TO MEET OUR MARKETS’ NEEDS ACTIVELY STREAMLINING OUR NURSING HOMES PORTFOLIO TO BETTER FIT THE NEEDS OF PATIENTS AND RELATIVES TRANSFORMATION INVESTMENTS FOCUS WELL UNDERWAY People and training 40% of the network to be reshuffled until 2024 Medical expe
Slide 29: Case Study - France Healthcare Network
CASE STUDY - FRANCE HEALTHCARE NETWORK OPTIMISATION OF THE NETWORK PROGRESSING RAPIDLY, WITH A FOCUS ON SPECIALISATION AND OUTPATIENT DEVELOPMENT SPECIALTY OUTPATIENT & PRIMARY AND POST-ACUTE CARE DEVELOPMENT IDENTITY To address increasingly To extend our patient 101 Incl. 30 specialised needs reach
Slide 30: Korian Group Healthcare Business Segment
KORIAN GROUP HEALTHCARE BUSINESS SEGMENT 101 Clinics 28 Clinics 39 Clinics Outpatient: Outpatient: Outpatient: 70% 100% 50% of our clinics equipped of our clinics equipped of our clinics equipped Rehabilitation Rehabilitation Mental Health network: Ita Salud Mental Specialty care: Specialty care: Si
Slide 31: Real Estate
REAL ESTATE KORIAN
Slide 32: Real Estate Key to Scaling Capacity and Growth
REAL ESTATE KEY TO SCALING CAPACITY & GROWTH INDUSTRIALISING OUR CONCEPTS STEERING OUR DEVELOPMENT 1 2 GERIATRIC PLATFORM SPECIALISED CLINICS Develop Korian concepts Roll out Korian concepts at scale Accompany significant market shifts and needs for medicalisation & adapted environments Snoeze
Slide 33: Korian Real Estate Ownership Structure Today
KORIAN REAL ESTATE OWNERSHIP STRUCTURE TODAY Landlords: 76% leased 50% private investors 69k beds 40% institutional investors 10% other Korian operated Implied ~€150m internal rents 24% owned network 20k beds Assets with potential 89k beds GROSS ASSET VALUE LOAN TO VALUE NET ASSET VALUE
Slide 34: Real Estate Serving Our Operational Growth Ambitions
REAL ESTATE SERVING OUR OPERATIONAL GROWTH AMBITIONS Leveraging on the c.€1bn equity already invested in our portfolio CURRENT PORTFOLIO POTENTIAL WITH NO NEW CAPITAL STRUCTURE EQUITY FROM KORIAN Korian own equity €1bn Korian own equity €1bn Value creation €250 m+ Real estate Leveraging Korian’s €2.
Slide 35: Korian PropCo - High Quality Portfolio Comparable to European Peers
KORIAN PROPCO – A HIGH QUALITY PORTFOLIO COMPARABLE TO EUROPEAN HEALTHCARE REAL ESTATE PLAYERS SELECTED HIGH QUALITY ASSETS Key positions in “prime locations”, including major urban areas (Paris, Lyon, Toulouse, Marseille, Bordeaux, Düsseldorf, Bremen, Roma, Firenze) New buildings exclusively on
Slide 36: A Cash Generative and Self-Funded Model
A CASH GENERATIVE 4. AND SELF-FUNDED MODEL Philippe GARIN 36
Slide 37: High Cash Flow Generation
HIGH CASH FLOW GENERATION 37
Slide 38: A Strong and Regular Cash Flow Generation
A STRONG AND REGULAR CASH FLOW GENERATION >4.5BN REVENUE FCF* 15.5% EBITDA MARGIN €300M POST RENT 2022 GUIDANCE AN INCREASING CASH CONVERSION, RESILIENT IN 2020 APPROACHING CASH FLOW €m €m (excluding IFRS 16) 2019 2020 250 231 60,00% EBITDA 535 525 223 204 Non cash, non current & tax paid (98) (113)
Slide 39: FCF Funding Our High Growth
FCF FUNDING OUR HIGH GROWTH FCF WITH LEVERAGE INVESTMENT c.40% EBITDA IMPACT CAPACITY FROM FCF INVESTMENTS >€300m* c.€350m** Bolt-on M&A 10% FCF GROWTH Platform acquisitions €300m - €30/40m paid €100/150m Development dividend €260/270m Network capex 4% Inv. multiple of 10x expansion €200/250
Slide 40: M&A Value Creation
M&A VALUE CREATION KORIAN
Slide 41: M&A Policy - Stringent Investment Criteria
M&A POLICY – STRINGENT INVESTMENT CRITERIA A HIGH NUMBER OF OPPORTUNITIES EACH YEAR STRINGENT SELECTION 200 Acquisition opportunities naturally shared with Korian 1 STRATEGIC CRITERIA Care quality and CSR Reinforcement of clusters 90 Diversification Potential projects studied 40 2 FINANCIAL CR
Slide 42: Selective Bolt-On M&A Creating Value
SELECTIVE BOLT-ON M&A CREATING VALUE M&A criteria and policy driven by returns BOLT-ON ACQUISITIONS WITH A PROVEN CAPACITY TO DELIVER LOW OPCO EBITDA MULTIPLES VALUE ON BOLT-ONS 2016 – 2019 ACQUISITIONS 8.0% 2020* 7.1% 7.0% 5.8% 8.4x 2016-2019* 2019 acq. 2018 acq. 2017 acq. 2016 acq. 8.1x ROCE N+1 N
Slide 43: Proven Capacity to Deliver on Synergies
PROVEN CAPACITY TO DELIVER ON SYNERGIES VERY LOW LEVEL OF UNCERTAINTY ON SYNERGIES TYPICAL CASE % REVENUE FEB 2020 DEC 2020 JUNE 2021 PURCHASE Pre-negotiated 1-2% Completed Completed conditions in 2021 in 2021 STRUCTURE Reorganisation, incl. HQ 2-3% HQ closed HQ closed Ongoing and business units in
Slide 44: Track Record of Scaling New Countries Through Bolt-On and Greenfield
TRACK RECORD OF SCALING NEW COUNTRIES THROUGH BOLT ON & GREENFIELD RECENT ENTRIES FOLLOWING BELGIUM EXAMPLE Revenue Revenue Revenue 2019 2014 Entry with regional €15m* €15m* Entry with specific €208m Entry through Senior platform care concept Living Group Bolt-on Greenfield 2016 2020 €259m Acquisiti
Slide 45: Fortress Balance Sheet
FORTRESS BALANCE SHEET 45
Slide 46: A Solid Financial Structure
A SOLID FINANCIAL STRUCTURE LEVERAGE RATIO (excluding real estate debt) COVENANT LOW OPCO 3.2x 4.5x OBJECTIVE LEVERAGE 3.1x 3.0x ≤ 3.5x FY2018 FY2019 FY2020 €2,668m Portfolio value c.€1.2bn 55% PRUDENT LTV NET VALUE €1,471m LTV Real estate debt 500 RCF* HIGH LIQUIDITY Cash > €1.6Bn 500 1159 LIQUIDIT
Slide 47: Well Protected in a Changing Environment
WELL PROTECTED IN A CHANGING ENVIRONMENT WELL INSULATED FROM INFLATION INTEREST RATE WELL MANAGED Structural salary increases passed into tarifs 72% of net debt is fixed rate Rent agreements include protection Net debt 100% hedged mechanisms Average debt maturities 2022-25 = c.€450m Rent
Slide 48: faarcers [LAY
faarcers [LAY o KORIAN