Emeis · EURONEXT:EMEIS
Emeis — FY2023 Earnings Presentation
50 slides from Emeis's earnings presentation, Apr 17, 2024
Slide 1: 2023 Full-Year Results
2023 FULL-YEAR RESULTS ORPEA S.A. 17 APRIL 2024
Slide 2: Disclaimer
DISCLAIMER This document and the information it contains relate exclusively to ORPEA S.A. (SIRET no.: 401 251 566 / ISIN code: FR001400NLM4) (the "Company") and its subsidiaries. On 20 March 2024, the Company announced a new stage in its history: a new corporate identity (emeis) and purpose ("Togeth
Slide 3: Agenda and Speakers
AGENDA AND SPEAKERS 1 HIGHLIGHTS Laurent Guillot Chief Executive Officer 2 Laurent Lemaire 2023 CONSOLIDATED RESULTS Chief Financial Officer ORPEA S.A. 3 Laurent Guillot CONCLUSION AND Chief Executive Officer OUTLOOK 3
Slide 4: Highlights
Highlights Laurent Guillot Chief Executive Officer
Slide 5: Highlights
Actions in favour of employees and residents: non-financial indicators already HIGHLIGHTS 1 improving Financial restructuring completed, leading to a new governance ; a reduced 2 level of indebtedness and real estate disposals at end-2023 in line with plan 3 A new identity, emeis, supporting an ambi
Slide 6: Actions in favour of employees and residents: non-financial indicators already improving
1 Actions in favour of employees and residents: non-financial indicators already improving 2023 FULL-YEAR RESULTS 6
Slide 7: Decisive actions in favour of employees (1/2)
Decisive actions in favour of employees (1/2) to empower them to carry out their mission while ensuring their health and safety 1. HEALTH & SAFETY 3. DIVERSIFICATION OF RECRUITMENT 4. TEAM STABILITY SOURCES -8 pts -3 pts Work-related accidents frequency rate vs. 2021 309 Turnover in France (25.2%) R
Slide 8: Decisive actions in favour of employees (2/2)
Decisive actions in favour of employees (2/2) to empower them to carry out their mission while ensuring their health and safety In France, renewed representative bodies and normalised labour relations 354 EMPLOYEE REPRESENTATIVES VS. 123 10 LOCAL SOCIAL AND ECONOMIC 3 REPRESENTATIVE UNIONS IN 2021 C
Slide 9: A unique training programme for managers in France
A unique training programme for managers in France First sector-specific management school OBJECTIVE « IMPACT » PROGRAM 1,200 DEDICATED TO MANAGERS IN FRANCE Trained staff members in 2024 • Transformation-driven managerial and leadership programme for healthcare professionals • In partnership with E
Slide 10: Decisive actions in favour of patients and residents
Decisive actions in favour of patients and residents Quality indicators already showing significant progress 1. QUALITY OF CARE 3. SATISFACTION INDICATORS 4. ETHICS AND POSITIVE TREATMENT 2,177 92.4% 72% SAE(*) declared (France) of facilities (Group-wide) vs. 45% in 2022 Satisfaction rate (Group-wid
Slide 11: Ongoing transformation in healthcare and nursing
Ongoing transformation in healthcare and nursing QUALITY AND SECURITY EFFICIENCY • Mechanism established to monitor SAE with specific and cross-cutting action plans: 80% completed in 3 months • 126 new medical projects for psychiatric hospitals and post-acute rehabilitation hospitals (France) • Inte
Slide 12: Financial restructuring completed, new governance, reduced indebtedness
Financial restructuring completed, 2 leading to a new governance ; a reduced level of indebtedness and real estate disposals at end-2023 in line with plan 2023 FULL-YEAR RESULTS 12
Slide 13: A financial restructuring completed
A financial restructuring completed Annual General Meeting- renewal Rights Issue – cash injection Reverse share split Equitisation of ORPEA S.A. Groupement Capital Increase – unsecured debt cash injection of the Board of Directors €0.4 bn €3.9 bn €1,2 bn 12/4/2023 12/19/2023 12/22/2023 02/15/2024 03
Slide 14: Real estate disposals in line with commitments
Real estate disposals in line with commitments despite a difficult real estate environment in 2023 and ongoing financial restructuring 2022+23 disposals: ~€300m (*) • Vs. a €250m trajectory ~€350m closed at year-end 2023 (main countries : Netherlands, Austria, Germany) ~€100 binding offers signed an
Slide 15: A new identity, emeis, supporting an ambitious strategic project
3 A new identity, emeis, supporting an ambitious strategic project 2023 FULL-YEAR RESULTS 15
Slide 16: emeis, a key step forward in the refoundation
emeis, a key step forward in the refoundation May 2023 March 2024 AGM 2025 4 new values Brand, visual identity and Towards mission corporate purpose (*) led status A COMMITMENT TO HUMANITY A TASTE FOR LIFE A THIRST TO LEARN « Together, let’s stand as a strength for the vulnerable among us » A SPIRIT
Slide 17: CREATE: a program to step up the pace of transformation
4 CREATE: a program designed to step up the pace of the Company's transformation 2023 FULL-YEAR RESULTS 17
Slide 18: The Refoundation Plan has entered the operational phase: CREATE
The Refoundation Plan has entered the operational phase as a transformation program: CREATE 4 STRATEGIC PRIORITIES … … OPERATIONALIZED OUR EMPLOYEES → To BECOME A GROUP bound by a sense of belonging, protocols, processes and to foster the conditions allowing them to carry out their tools mission, wh
Slide 19: CREATE, a program structured around core principles
CREATE, a program structured around core principles C R E A T E Commitment Respect Empowerment Accountability Trust Excellence 48 cross-functional projects co-constructed with the countries and business divisions 2023 FULL-YEAR RESULTS 19
Slide 20: CREATE program underpinned by a strong and balanced governance model
CREATE program underpinned by a strong and balanced governance model Central governance Monthly review by Corporate Executive Management Quarterly review by the Group Executive Committee Quarterly review of the local roadmaps together with each country Transformation Department to coordinate our act
Slide 21: The CREATE programme includes a commitment to strengthen operational performance
The CREATE programme includes a commitment to strengthen operational performance 1 2 3 Implementation of a methodology to Deployment of practices to support and Systematic pricing segmentation in identify sites with performance optimize the ramp-up of opening all our facilities - e.g. France challen
Slide 22: 2024 outlook significantly improved on 2023
5 2024 outlook significantly improved on 2023 2023 FULL-YEAR RESULTS 22
Slide 23: 2023 key financial indicators
2023 key financial indicators €5,198m €696m €1,355m Revenue EBITDAR Attributable net profit up 11.0%, of which 9.5% organic 13.4% EBITDAR margin incl. +€2,850m financial income linked to the Equitisation growth Capital Increase (no cash/tax impacts) • Solid growth in international sales and in Frenc
Slide 24: 2024 outlook
2024 outlook ANTICIPATED EBITDAR GROWTH IN 2024: +15%-20% VS. 2023 (€800M-€835M) • International business broadly in line with expected trajectory (average Group occupancy rate in Q1 2024: 85.1%, i.e +2.0 pts vs. 2023). • Structural measures to kick-start recovery in French nursing homes (average oc
Slide 25: ORPEA 2023 consolidated results
ORPEA 2023 consolidated results Laurent Lemaire Chief Financial Officer
Slide 26: 2023 financial results
2023 financial results 1 FROM REVENUE TO EBITDAR 2 FROM EBITDAR TO NET PROFIT 3 REAL ESTATE, DEBT AND BALANCE SHEET 2023 FULL-YEAR RESULTS 26
Slide 27: Change in revenue by geographic area
Change in revenue by geographic area Organic Growth €m FY 2022 Revenue FY 2023 Revenue Growth (%) (%)* France Benelux UK Ireland 2,802 3,037 +8,4% +6,2% Central Europe 1,197 1,352 +12,9% +12,2% Eastern Europe 435 515 +18,4% +18,8% Iberian Peninsula and Latam 242 286 +18,2% +18,3% Other Countries 4 7
Slide 28: Change in operated facilities and beds
Change in operated facilities and beds No. of facilities No. of beds FY No. of facilities No. of beds FY End of period data (*) FY 2022 2022 FY 2023 2023 France Benelux UK Ireland 551 44,170 574 45,431 Central Europe 237 23,765 247 24,316 Eastern Europe 124 12,764 124 12,754 Iberian Peninsula and La
Slide 29: Change in occupancy rate in 2023
Change in occupancy rate in 2023 Average occupancy rate FY 2022 FY 2023 Var. H1 2023 H2 2023 Var. France Benelux UK Ireland 83,6 % 83,4 % (0,2) bps 83,1 % 84,0 % +0,9 bps Central Europe 79,1 % 81,9 % +2,7 bps 81,8 % 82,4 % +0,6 bps Eastern Europe 81,9 % 85,6 % +3,8 bps 84,6 % 86,9 % +2,3 bps Iberian
Slide 30: Change in EBITDAR margin by geographic area
Change in EBITDAR margin by geographic area • Broad recovery in occupancy rates in 2023 (excluding nursing homes in France) • Inflationary environment (excluding energy) continued to weigh on operating margins • Delayed price increases not sufficient to offset cost inflation FY 2022 FY 2023 Var. % v
Slide 31: Change in EBITDAR margin
Change in EBITDAR margin Var. vs FY €m FY 2022 FY 2023 H1 2023 H2 2023 2022 Revenue 4,681 5,198 +11,0% 2,539 2,658 Staff costs (3,028) (3,469) +14,6% (1,697) (1,772) As a % of revenue (64,7)% (66,7)% (206) bps (66,8)% (66,6)% Other expenses (873) (1,032) +18,2% (506) (526) As a % of revenue (18,7)%
Slide 32: 2023 financial results
2023 financial results 1 FROM REVENUE TO EBITDAR 2 FROM EBITDAR TO NET PROFIT 3 REAL ESTATE, DEBT AND BALANCE SHEET 2023 FULL-YEAR RESULTS 32
Slide 33: Impairment tests on tangible, intangible assets and right-of-use assets (IAS 36)
Impairment tests on tangible, intangible assets and right-of-use assets (IAS 36) - For impairment tests under IAS 36, the Group uses pre-IFRS 16 cash flow projections, which are then adjusted to adopt a post-IFRS 16 approach. Impairment losses recognised in 2023 totalled €830m, of which €438m relate
Slide 34: Non-recurring items
Non-recurring items Incl. €(438)m on IFRS 16 right-of-use assets Non-recurring items FY 2023 €m Depreciations IAS 36 (before tax) (830) Crisis management expenses (refinancing, HR, others) (74) Most of the expenses relating to the financial Others 1 restructuring were deducted from additional paid-i
Slide 35: 2023 net financial income
2023 net financial income (in million euros) 31/12/2022 31/12/2023 Interest on bank debt and other financial liabilities (228) (440) Interest on items held under finance leases (15) (29) Financial expenses on lease liabilities (98) (121) Interest income 0 10 Cost of net debt (341) (579) Financial in
Slide 36: Net Profit
Net Profit Var. vs €m FY 2022 FY 2023 Retraité EBITDAR 780 696 (10,7)% EBITDAR % 16,7 % 13,4 % (326) bps EBITDA 756 652 (13,8)% EBITDA % 16,2 % 12,5 % (362) bps D&A and provisions (805) (667) -17,1% Recurring operating profit/(loss) (49) (16) (67,5)% Net profit for 2023 includes extraordinary financ
Slide 37: 2023 financial results
2023 financial results 1 FROM REVENUE TO EBITDAR 2 FROM EBITDAR TO NET PROFIT 3 REAL ESTATE, DEBT AND BALANCE SHEET 2023 FULL-YEAR RESULTS 37
Slide 38: Real Estate (1/2)
Real Estate (1/2) 1 • As a reminder, the Company changed its accounting method after the publication of the 2022 financial statements • The historical approach of remeasuring real estate assets at their annual appraised value has been discontinued • Instead, each year the Company publishes the value
Slide 39: Change in real estate value (2/2)
Change in real estate value (2/2) 2022 2023 €6.5bn €4.9bn (incl. IFRS 5 Assets) (incl. IFRS 5 Assets) €4.8bn €6.3bn in €bn (incl. IFRS 5 Assets) (incl. IFRS 5 Assets) 2 different values as a result of IAS 16 exit Unappraised + 1,5 assets Unappraised assets 1,6 + 0,4 1,0 + 0,2 - 1,5 - 0,2 Diff. balan
Slide 40: 2023 financing table
2023 financing table in million euros 31/12/2022 31/12/2023 Of which: - maintenance : €(105)m EBITDA pre IFRS 16 342 204 - IT : €(36)m Maintenance & IT Capex (136) (141) Other operating cash flows (incl.change in working capital) (85) (149) Net Operating Cash Flow 122 (87) Real Estate Development ca
Slide 41: Structure of net debt at 31 Dec. 2023 (excl. IFRS 16)
Structure of net debt at 31 Dec. 2023 (excl. IFRS 16) NET FINANCIAL DEBT AT 31 DEC. 2023 (€M) BREAKDOWN OF FINANCIAL DEBT BY CATEGORY (%) June 2022 financing (G6) 3,027 Mortgage loans, financial leases, other secured Ot her d eb t 1,707 debt 11% Other debt 587 Mo rt g ag e Gross financial debt (excl
Slide 42: Debt maturity profile (excl. IFRS)
Debt maturity profile (excl. IFRS) 2,5 12 14 5 0 ,9 2,327 0 ,8 0 ,7 0 ,5 40 0 29 30 9 35 20 6 16 2 0 ,2 789 236 167 30 0 35 20 0 20 0 132 - - 20 24 20 25 20 26 20 27 20 28 > 20 28 June-22 secured financing ( G6 ) Mo rt g ag es and financial leases Ot her d eb t s RCF ( G6) To t al ( € bn) 2023 FULL-
Slide 43: Consolidated balance sheet (assets)
Consolidated balance sheet (assets) (in billion euros) 31/12/2022 31/12/2023 ASSETS 1. Impairment of IFRS 16 right-of-use assets Goodwill 1,4 1,4 €(438)m Intangible assets, net 1,6 1,5 Property, plant and equipment, net 4,4 4,4 Assets in progress 0,6 0,4 Right-of-use assets 3,5 3,1 Investments in as
Slide 44: Consolidated balance sheet (liabilities)
Consolidated balance sheet (liabilities) (in billion euros) 31/12/2022 31/12/2023 1. Reconstituted shareholders' equity following capital increases EQUITY AND LIABILITIES #1 and #2 in December 2023 (3rd capital increase completed on Total consolidated equity (1,5) 1,9 February 15, 2024) Long-term fi
Slide 45: Conclusion and outlook
Conclusion and outlook Laurent Guillot Chief Executive Officer
Slide 46: Preliminary stabilisation and foundation phase successfully delivered
Preliminary stabilisation and foundation phase successfully delivered Solid foundation to prepare for the future Decisive progress for employees and quality of care, backed up by new values and a new identity Financial restructuring completed and real estate disposals in line with commitments Signif
Slide 47: Solid fundamentals to underpin the future of our business
Solid fundamentals to underpin the future of our business NURSING HOMES REHABILITATION HOSPITALS MENTAL HEALTH HOSPITALS Prevalence of mobility and neurological disorders and sensory impairments in the 70 and over age group (EU) Prevalence* of depressive disorders in OECD (millions of people) countr
Slide 48: Staged recovery to a sustainable and high-performance business model
Staged recovery to a sustainable and high-performance business model 1 Favourable mega- which emeis should benefit fully from: trends • solid positions in key geographies in Europe • value-added expertise (mental health, old age, etc.) • ability to play a major role in an integrated care approach 2
Slide 49: Disclaimer
This document contains forward-looking statements that involve risks and uncertainties, including information incorporated by reference, regarding the Group’s expected growth and profitability in the future that may significantly impact the expected performance indicated in the forward-looking state
Slide 50: Thank you
THANK YOU! www.emeis-group.com