Emeis · EURONEXT:EMEIS
Emeis — Orpea — FY2016 Earnings Presentation
50 slides from Emeis's earnings presentation, Mar 29, 2017
Slide 1: Full-year 2016 results
Full-year 2016 results 29 March 2017
Slide 2: Agenda
Agenda 1. Governance 2. ORPEA’s business activities 3. Network and development 4. Full-year 2016 results 5. New openings in 2016 and 2017 6. Strategy and outlook Appendices 2
Slide 3: Governance
Knokke Le Zoute (Belgium) Governance Dr. Jean-Claude Marian M.D., Philippe Charrier and Yves Le Masne
Slide 4: ORPEA since the IPO: years of development and profitable growth
ORPEA since the IPO: 15 years of development and profitable growth 77,094 beds x11 in10 countries NETWORK +17% / year 6,922 beds in 1 country x22 €2,841m REVENUES +23% / year €127m x20 €475m EBITDA +22% / year €24m x13 50,000 EMPLOYEES +18% / year 10,000 4
Slide 5: Group's existing strengths helping to maintain this momentum
Group’s existing strengths helping to maintain this momentum A team of long-serving managers and an ownership structure of long-term investors An international Solid finances network thanks to its real estate of high quality portfolio Processes Expertise IT and pre-requisites in quality overseen by
Slide 6: Dr Marian named Honorary Chairman, Philippe Charrier appointed Non-Executive Chairman
Dr Marian named Honorary Chairman, Philippe Charrier appointed as Non-Executive Chairman Philippe Charrier, an entrepreneur with solid experience in healthcare and of rolling out a business model internationally Procter & Gamble: where he began his career and became Chairman and CEO for France in 19
Slide 7: Strategic, management and organisational continuity
Strategic, management and organisational continuity EXECUTIVE MANAGEMENT Yves Le Masne Chief Executive Officer BOARD OF DIRECTORS Reappointed in advance of original schedule 40 years 12 members of service between them Jean Claude Brdenk Philippe Charrier Chief Operating Officer Non-executive Chairma
Slide 8: ORPEA's business activities
Knokke-Le-Zoute (Belgium) ORPEA’s business activities Jean-Claude Brdenk
Slide 9: 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 Day Day hospitals and centres night hospitals Nursing Post-acute, rehabilitation homes and psychiatric hospitals Short stays Specialisations: musculoskeletal, Alzheimer’s units geriatric, addiction treatme
Slide 10: Integrated offering spanning the entire care and dependency spectrum
ORPEA is building an integrated offering that spans the entire care and dependency spectrum Greater Low Moderate dependency dependency, High dependency and need for security appearance of dependency neurodegenerative illnesses Independent living Care at home or in Short stays in nursing facilities:
Slide 11: Objectives for non-core activities
Objectives for non-core activities PROVIDE an offering geared to individuals’ needs at every stage of their later life and for every degree of dependency MEET demand in society and from the supervisory authorities for more in-home care GROW the network of referral partners and the core busines
Slide 12: Acquisition of Spitex Ville et Campagne, leading Swiss private homecare provider
Acquisition of Spitex Ville et Campagne, the leading Swiss private provider of homecare services Spitex Ville et Campagne Footprint in Switzerland Leading private provider of homecare services – Core business: homecare and related services for the elderly – 1,500 employees, €40m in revenue in 2016
Slide 13: Acquisition with strategic benefits for Senevita's development in Switzerland
An acquisition with strategic benefits for Senevita’s development in Switzerland Expand the service offering Speed up development of Senevita’s network From homecare to nursing homes Independent living facilities are a priority area Spitex and Senevita will develop Independent Living facilities pr
Slide 14: Network and development
Zürich (Switzerland) Network and development Steve Grobet
Slide 15: 2011 – 2016: rapid acceleration in the international network
2011 – 2016: rapid acceleration in the international network Total network (number of beds) 77,094 +110% 67 781 54 098 40 374 43 003 36 714 2011 2012 2013 2014 2015 2016 International network Network maturity (Number of beds and % of the total network) (Number of mature beds and % of the total netwo
Slide 16: 50% network growth through strategic acquisitions and selective development
50% network growth in 2 years through strategic acquisitions and selective development Total network: +50% = +22,996 new beds 2015 2016 +9,313 beds +13,683 beds Selective development 77,094 Selective +2,822 beds development +3,300 beds +704 beds Creation in +2,487 beds Germany +2,232 beds +3,006 bed
Slide 17: Selective developments in 2016 creating substantial value
Selective developments in 2016 creating substantial value 2,822 additional beds in 12 months Extensions to existing facilities: New permits to open new facilities: Selective acquisitions of independent facilities: In most countries Switzerland, Poland, Czechia and Day/night hospitals Belgium
Slide 18: Examples of selective developments
Examples of selective developments Acquisition (real estate and business) of 2 luxury nursing homes in Vienna Located in Döbling, Vienna’s 2nd most expensive district after the city centre itself 289 beds Creation of a (post-acute/rehabilitation and nursing home) complex in Poznań (Poland) Locat
Slide 19: A network of 751 facilities in countries
A network of 751 facilities in 10 countries 77,094 beds 751 facilities Germany 165 facilities China Belgium 16,824 beds Poland 1 facility 60 facilities 10 facilities 140 beds 7,389 beds 1,174 beds France Czech Republic 357 facilities 6 facilities 33,122 beds 784 beds Austria Spain 59 facilities 45 f
Slide 20: A network delivering consistent quality tailored to each country's culture
A network delivering consistent quality and tailored to each country’s culture A model common to all the countries in which Adaptation to the local culture it operates Catering Asset quality: Events and entertainment recent or renovated buildings, developments, etc. Care arrangements Implement
Slide 21: European growth pipeline of 9,115 beds
European growth pipeline of 9,115 beds Pipeline Breakdown Open Beds being Beds under (% of beds under beds restructured construction development) of the pipeline by type FRANCE 30,713 1,030 1,379 7% Construction 7,786 beds GERMANY 14,518 0 2,306 14% 85% AUSTRIA 4,776 0 219 4% 25% 15% BELGIUM 5,412 2
Slide 22: China: recognition of ORPEA's expertise and development projects
China: recognition of ORPEA’s expertise and development projects ORPEA China Ramp-up in the Launched in 2016, now gradually building Nanjing facility momentum Flagship for the Chinese market, generating strong interest from families, investors and public-sector bodies: recognised as an exemplary
Slide 23: Full-year 2016 results
Bern (Switzerland) Full-year 2016 results Yves Le Masne and Sébastien Mesnard
Slide 24: ORPEA's trend over the past years: development, growth and profitability
ORPEA’ trend over the past 5 years: development, growth and profitability Financial illustration of ORPEA’s business model focused on value creation Pre-tax profit +141% 250 on ordin. activities1 +19% p.a. +€138m Revenues +130% +€1,607m +18% p.a. No. of beds +110% 200 +40,380 +16% p.a. 150 100 Dec.-
Slide 25: 3-year analysis (2014 – 2016): sound management of rapid expansion
3-year analysis (2014 – 2016): sound management of a phase of rapid expansion (+34,149 beds) Tight integration of predominantly “asset-light” acquisitions (Base index 100 as at 31.12.13) 240 220 Rents +118% 200 Revenues 180 +77% Pre-tax profit on ordinary 160 activities1 2 +73% 140 Financial expense
Slide 26: 2016: record financial year, ahead of expectations
2016: record financial year, ahead of expectations 2016 TARGETS 2016 ACHIEVMENTS 1 Initial revenue: €2,720m (+14%) +18.8% Updated to €2,810m (+17.5%) €2,841m 2 Solid organic growth* +6.0% €140m Flat (16.7%) 3 Firm EBITDA* margin Excl. acquisitions: +90 bp (17.6%) 4 Reduction in cost of debt -60 bp 3
Slide 27: 2016 revenue ahead of guidance: €2,841m (+18.8% on 2015)
2016 revenue ahead of guidance: €2,841m (+18.8% on 2015) €m 2016 2015 Change France 1,695.4 1,596.6 +6.2% Annual revenues growth since IPO 60% 67% International 1,145.8 795.0 +44.1% 40% 33% 3 000 2,841 Germany 501.0 287.5 2016 = Austria 176.3 109.8 +€449m Belgium 162.1 157.8 2 500 2 392 China 0.4 Sp
Slide 28: Impact of main acquisitions consolidated in 2016
Impact of main acquisitions consolidated in 2016 Company Country 2016 consolidation period SeneCura Austria 3 months Celenus Kliniken Germany 6 months €273m of revenues in 2016 Residenz Gruppe Bremen Germany 9 months Vitalis Germany 12 months Medi-System Poland 12 months Sanyres Spain 6 months Stron
Slide 29: Strong increase in Recurring EBITDA up 18.5%
Strong increase in Recurring EBITDA* up 18,5% In m 2016 2015 Change Revenues 2841.2 2391.6 +18.8% Staff costs -1467.3 -1216.7 +20.6% Purchases -522.6 -446.5 +17.0% Tax expenses -96.6 -90.7 +6.4% Other income and expenses 14.5 14.8 N.A. EBITDAR* (Recurring EBITDA before rent) 769.3 652.4 +17.9% % of
Slide 30: Geographical breakdown of EBITDAR margin
Geographical breakdown of EBITDAR* margin 2016 2015 Comments In €m Rev. EBITDAR* % of rev. Rev. EBITDAR* % of rev. France 1695.4 495.6 29.2% 1596.6 451.2 28.3% +90 bp as result of network's maturity Germany 501.0 133.5 26.7% 287.5 76.6 26.6% +10 bp despite acquisitions of Vitalis and RGB Austria 176
Slide 31: Attributable net profit up 15.8%
Attributable net profit1 up 15.8% In €m 2016 2015 Change Recurring EBITDA* 474.5 400.5 +18.5% Depreciation, amortisation and provisions -126.5 -96.9 +30.5% Recurring operating profit 348.1 303.6 +14.7% Net financial expense 1 -111.6 -96.8 +15.2% Pre-tax profit on ordinary activities* 1 236.5 206.7 +
Slide 32: Cash flows
Cash flows In €m 2016 2015 EBITDA 475 401 Net cash generated by operating activities 346 314 Construction Capex -250 -256 Acquisition of real estate -545 -690 Disposal of real estate 140 210 Net real-estate investment -655 -736 Net investment in operating assets -131 -278 Net cash from financing act
Slide 33: Solid financial structure
Solid financial structure Simplified balance sheet1 as at 31.12.16 (in €m) Goodwill 934 Equity 2 076 Equity and quasi- equity: Intangible assets 1 933 €2,519m 443 Perpetual deferred taxes Property, plant and equipment 3 680 Net financial debt and real estate 4 089 under development Other deferred ta
Slide 34: Diversified and long-term real-estate debt
Diversified and long-term real-estate debt Indicators 31 Dec. 2016 31 Dec. 2015 Covenants comfortably met Net financial debt* (€m) 3,680 3,014 Restated financial leverage 1 Maximum % real-estate debt 84% 78% 5.5 6 authorized 5 Restated financial leverage 1 2.3 2.9 4 3 Restated gearing 2 1.5 1.4 2.32
Slide 35: Protection and optimisation of the cost of debt
Protection and optimisation of the cost of debt Floating-rate net debt 100% hedged Fall in the cost of debt 2 500 1,40% 4,5% 1,17% 4,5% 4,4% 1,20% 2 000 4,3% 1,00% 4,0% 4,0% 1 500 0,80% 3,8% 0.60% 0,60% 3,5% 1 000 3.2% 0,40% 2.9% 500 3,0% 0,20% 0 0,00% 2,5% 2017 2018 2019 2020 2021 2022 2023 2011 20
Slide 36: ORPEA's uniqueness and strength: a dedicated real-estate portfolio
ORPEA’s uniqueness and strength: a dedicated real-estate portfolio Operating business Real-estate 77,094 beds portfolio (including 9,115 under development) 1,525,000 sqm Total value of the portfolio1 €4,089m 2016 annual revenues €2,841m - In service €3,646m - Under construction €443m EBITDA = 2016 E
Slide 37: Real-estate portfolio: €4.1Bn (+19% in 12 months)
Real-estate portfolio: €4.1Bn (+19% in 12 months) 31 Dec. 2016 31 Dec. 2015 Change Ownership rate on buildings in service Ownership rate 39% 36% +3 pts TOTAL Group 39% Constructed area (sqm) 1,525,000 1,155,500 +32% France 50% Total value1 (€m) 4,089 3,444 +19% Germany 9% Average yield on properties
Slide 38: Key strengths of ORPEA's portfolio
Key strengths of ORPEA’s portfolio Real-estate holdings far less cyclical than commercial property owing to the low level of the two principal risks Resilient real estate Very low risk of tenant default: tenant = ORPEA. Low vacancy risk because activity is not very cyclical (demographics and d
Slide 39: Dividend
Dividend Proposed dividend to the 2016 General shareholder meeting: €1.00 / share 1.00 Increase in dividend per share: 61 +11% 0,90 0,80 54 0,70 44 0,60 Yield*: 39 0,50 1.1% 32 * Based on the closing price of the share as at 27.03.17 27 18 years without any dividend 0,23 0,15 Payout ratio of the net
Slide 40: New openings in 2016 and 2017
Lake Maggiore (Italy) New openings in 2016 and 2017 Yves Le Masne
Slide 41: Openings in 2016 represent 2,700 beds
Openings in 2016 represent 2,700 beds and include: Paris 17th (France) – 125 beds Cannes (France) – 86 beds Brussels (Belgium) – 112 beds Basel (Switzerland) – 93 beds Berlin (Germany) – 180 beds Knokke-le-Zoute (Belgium) – 130 beds Prague (Czech Republic) – 115 beds Wildbad (Austria) – 103 beds Ven
Slide 42: Openings in 2017 represent more than 2,000 beds
Openings in 2017 represent more than 2,000 beds and include: Brussels Overijse (Belgium) – 80 beds Paris 16th (France) – 87 beds Callian (France) – 80 beds Bern (Switzerland) – 226 beds Zürich (Switzerland) – 80 beds Lake Magiorre (Italy) – 80 beds Kolin (Czech Republic) – 131 beds Sitzenberg (Austr
Slide 43: Strategy and outlook
Kolin (Czech Rep.) Strategy and outlook Yves Le Masne
Slide 44: Further selective expansion creating value
Further selective expansion creating value —1— —2— —3— Creation of new Selective Network facilities acquisitions optimization in locations with strong of independent facilities or small through extensions of existing purchasing power groups on attractive terms facilities, specialisation and developm
Slide 45: Outlook for 2017
Outlook for 2017 Revenue target +10% €3,125m Operating profitability Solid Real-estate ownership rate Increasing Development Brisk 45
Slide 46: Appendices
Callian (France) Appendices
Slide 47: Consolidated balance sheet
Consolidated balance sheet In €m 31-Dec-16 31-Dec-15 Non-current assets 7,091 6,169 Goodwill 934 842 Intangible assets 1,933 1,751 Property, plant & equipment and property under development 4,089 3,445 ASSETS Other non-current assets 135 132 Current assets 1,102 1,002 Of which cash, cash equivalents
Slide 48: Long-term shareholders, dedicated to value creation
Long-term shareholders, dedicated to value creation Shareholding structure A 12 members Board with complementary % of share capital as at 31.12.16 skills Dr Marian, Honorary Chairman Board members: CPPIB – Philippe Charrier – Non-executive Chairman 14,6% – Yves Le Masne – CEO – Alexandre Malbasa
Slide 49: Glossary
Glossary The Group's organic revenue growth reflects: 1. The year-on-year change in the revenues of existing facilities as a result of changes in their occupancy rates and daily rates; Organic growth 2. The year-on-year change in the revenue of redeveloped facilities or those where capacity has been
Slide 50: Stock market information
Stock market information Market data (12 months) Indices Average daily volume: 200,000 shares (=€14m) across all platforms Compartment A of Euronext Paris Share price: €86.00 MSCI Small Cap Europe, STOXX Europe 600, CAC Mid 60, SBF 120, High (12-months): €86.00 Member of SRD Low (12-mo