Emeis · EURONEXT:EMEIS
Emeis — Orpea — H1 2012 Earnings Presentation
44 slides from Emeis's earnings presentation, September 2012
Slide 1: 2012 Half-year results
2012 Half-year results Dr Jean-Claude Marian – Chairman Yves Le Masne – Chief Executive Officer Jean-Claude Brdenk – Deputy Chief Executive Officer September 2012 Steve Grobet – Investor Relations Officer
Slide 2: Content
Content 1. Overview 2. Review of sector fundamentals 3. Latest news from ORPEA’s network 4. 2012 half-year results 5. Strategy and outlook 2
Slide 3: Overview
Overview European leader in Dependency care
Slide 4: ORPEA: European leader in global Dependency care
ORPEA European leader in global Dependency care BUSINESS ACTIVITIES MISSION STATEMENT Nursing homes and post-acute care Provide high quality care through Long-term care facilities (nursing homes) Continuous training policy for employees Post-acute and rehabilitation facilities Individualised care so
Slide 5: H1 2012: execution of the group's stated strategy
H1 2012: execution of the group’s stated strategy Controlled and selective Acquisition of 534 beds (excluding 1,162 beds from Artevida and acquisition policy 1,100 beds from Medibelge as at 01.07.12) % of beds under redevelopment/ Open beds 47% 50% 12 facilities opened (Approx. 1,000 beds) 40% Ramp-
Slide 6: Review of sector fundamentals
Review of sector fundamentals Long-term growth and visibility
Slide 7: Several major M&A transactions in the Healthcare sector
Several major M&A transactions in the Healthcare sector Rhoen Klinikum: leading healthcare provider in Germany with 16,000 beds (Revenues1: €2.6bn/ EBITDA margin: 12.8%) Germany – Acute care Fresnius’ offer: €3.1bn (premium of 52%2) FRESNIUS’ OFFER FOR RHOEN Offer countered by two of Rhoen’s rivals
Slide 8: Sector fundamentals underpinning long-term growth
Sector fundamentals underpinning long-term growth Trend in nbr of people aged over 85 +170% People aged over 85: up 500,000 by 2015 5.4 +33% Strong increase in Increase in neuro-degenerative diseases: 225,000 +15% the population of new cases p.a. 2.0 1.5 the very elderly 1.3 Need for facilities of
Slide 9: Public policies and future prospects for the sector in France
Public policies and future prospects for the sector in France Background: budget cutbacks and priority on reform Stable regulatory Continuity of the system of authorisations (licences) and current financing arrangements environment Launch of calls for projects in progress Daily cost per bed to the F
Slide 10: A partnership in home care
A partnership in home care DOMIDOM 10-year track record and a network of over 60 branches Leading player in helping Efforts to support independence through home services dependent individuals to live at Quality-driven: first network to gain SGS-Qualicert service accreditation home Existing cooperati
Slide 11: Latest news from ORPEA's network
Latest news from ORPEA’s network Integration of acquisitions and opening of new facilities
Slide 12: Spain: ramp-up in Artevida
Spain: ramp-up in Artevida Successful integration of Strengths of ORPEA’s network Artevida over 6 months 80% of private beds Operations centralised at the Spanish headquarters More than 50% of the beds located in Madrid ORPEA’s quality process introduced Recognition of ORPEA’s know-how New employees
Slide 13: Belgium: sector fundamentals similar to those in France
Belgium: sector fundamentals similar to those in France Trend in nbr of people aged over 85 (in 000s) People aged over 85: up 52% between 2010 and 2030 Ageing of the (up 123,000) +110% population Doubling of the population aged over 90: 117,000 people in 2030 +52% 750 358 235 2010 2030 2060 Source:
Slide 14: Belgium: integration of Medibelge
Belgium: integration of Medibelge ORPEA’s network in Belgium Network: 2,156 beds (incl. 239 under redevelopment) Integration of Belgium Nbr of beds Operational integration process already started in July Medibelge 2012 Open beds 3,393 Ongoing network optimisation Beds under refurbishment 724 Beds un
Slide 15: Integration of Mediter completed and development of synergies
Integration of Mediter completed and development of synergies Integration of Mediter/Mieux Vivre completed successfully: Facilities now operating under the ORPEA banner and fully integrated within the Group’s network Teams reorganised ORPEA Quality Standards adopted Efforts to harness network
Slide 16: France: strong pace of new openings
France: strong pace of new openings New openings since start of 2012: New developments since start of 2012: 12 facilities (1,000 beds) 229 new beds Licence for 1 facility of 84 beds Core market locations: 66% in Ile-de-France (Paris area) Value-added acquisitions Nursing Homes / Post-acute clinics /
Slide 17: European leader: 38,348 beds
European leader : 38,348 beds at over 410 facilities Belgium Europe Nbr of beds 41 facilities Open beds 30,267 5,204 beds Beds under refurbishment 3,050 Switzerland 2 facilities Beds under construction 5,031 165 beds France Total 38,348 333 facilities 28,819 beds Geographical breakdown of the networ
Slide 18: A secure pipeline of 8,081 beds
A secure pipeline of 8,081 beds Network development over 10 years 38,348 36,714 8 081 9 517 9 542 8 490 7 648 Open beds 5 986 30 267 4 622 27 197 23 397 Beds under refurbishment 2 821 3 750 2 517 16 008 18 036 1 926 13 752 or construction 11 381 6 208 6 789 7 785 8 264 2002 2003 2004 2005 2006 2007
Slide 19: 2012 half-year results
2012 half-year results Growth and profitability
Slide 20: H1 2012: increase in profitability
H1 2012: increase in profitability 2012 INITIAL TARGET H1 2012 ACHIEVEMENTS €684.7m 1 Revenues: €1,425m +15.2% 2 Strong organic growth +8.6% Recurring EBIT margin: 13.5% 3 Higher profitability +40 bp Further property sales 4 on attractive terms €159m A limited review by auditors is currently in prog
Slide 21: Buoyant revenue growth
Buoyant revenue Strong growth growth: of sales 15.2% in 2011 In €m H1 2012 H1 2011 % France 601.5 525.7 +14.4% 88% 88% International 83.2 68.5 +21.4% H1 organic growth 12% 12% +8.6% Belgium 36.2 33.6 Spain 24.8 15.1 Italy 14.5 12.0 Switzerland 7.6 7.8 Total 684.7 594.2 +15.2% Half-year revenues (€m)
Slide 22: Further increase in profitability
Further increase in profitability EBITDAR (€m and % of revenues) Recurring EBIT (€m and % of revenues) 2012/2009 : +83% 2012/2009 : +76% 26% 25.5% 14% 25.2% 190 110 25% 24.2% 170 13.5% 23.6% 175 13.3% 24% 150 13.1% 92 90 150 23% 130 13% 13.0% 78 70 110 22% 113 90 63 95 50 21% 53 70 20% 50 12% 30 H1
Slide 23: Increase in all profitability indicators
Increase in all profitability indicators In €m H1 2012 H1 2011 % Revenues 684.7 594.2 +15.2% EBITDAR (Recurring EBITDA before rents) 174.6 150.0 +16.4% Recurring EBITDA 121.9 105.6 +15.4% Recurring EBIT (Rec. Operating Profit) 92.4 78.1 +18.4% EBIT (Operating profit) 110.0 90.8 +21.1% Net financial
Slide 24: Sustained profitability
Sustained profitability In €m H1 2012 H1 2011 % Revenues 684.7 594.2 +15.2% Staff costs -341.1 -297.8 +14.5% Expenses -134.1 -117.5 +14.1% Taxes and duties -33.9 -26.8 +26.4% Other income and expenses -1.1 -2.2 -50.0% EBITDAR (Recurring EBITDA before rents) 174.6 150.0 +16.4% % of revenues 25.5% 25.
Slide 25: Trend in rents
Trend in rents Rents in €m +2.9 +2.5 +2.1 +0.8 52,7 44.4 H1 2011 Average Rents from Rents from Rents from H1 2012 rents increase in opening buildings sold acquisitions rents rents Average annualised increase in rents: +1.7% A limited review by auditors is currently in progress. 25
Slide 26: Geographical breakdown of profitability
Geographical breakdown of profitability H1 2012 H1 2011 Change in margin In €m Recurring % of Recurring % of H1 2012 / H1 2011 Rev. Rev. EBITDA revenues EBITDA revenues France 601.5 111.6 18.6% 525.7 97.7 18.6% = Belgium 36.2 4.7 13.0% 33.6 4.0 11.8% +120 bp Spain 24.8 2.3 9.1% 15.1 0.9 5.6% + 350 b
Slide 27: Solid financial structure
Solid financial structure In €m 30-June-12 31-Dec-12 Non-current assets 3,910 3,757 Goodwill 343 323 Intangible assets 1,157 1,129 Property, plant & equipment and property under development 2,305 2,217 ASSETS Other non-current assets 105 88 Current assets 541 604 Of which cash, cash equivalents and
Slide 28: Flexible financial structure
Flexible financial structure 30 June 31 Dec. 30 June Metrics 2012 2011 2011 Banking covenants met comfortably Restated financial leverage Net debt* 1,756 1,619 1,724 5.506 Maximum authorised 5 Restated financial leverage 1 2.08 2.15 3.59 4 Restated gearing 2 1.25 1.17 1.56 3 2.08 2 * Excluding €127m
Slide 29: Debt structure
Debt structure Debt maturity profile (excl. bridge loans) Bridge loans = financing for property 600 under construction 500 – €230m over 4 years Convertible Loans and property leases 400 bond – Converted into: Convertible bonds • Property lease if ORPEA remains owner 300 • Cash if the asset is sold t
Slide 30: Operations: securing future growth
Operations: securing future growth ASSETS LIABILITIES Network of 38,348 beds Financed by medium-term 5- to 7- – 30,267 open beds in operation year loans – 3,050 open beds under refurbishment No significant installments ahead: – 5,031 beds under construction amortising loans Hedged by derivatives: fi
Slide 31: Real estate portfolio value: €2.3bn
Real estate portfolio value*: €2.3bn 30 June 12 31 Dec. 11 Change Number of buildings 235 230 +5 build. FEATURES Of which fully owned 141 141 Average age < 10 years Built surface area (in sqm) 809,000 756,000 7% Strategic locations Total value (€m) 2,305 2,217 4% Of which assets in operation 1,955 1
Slide 32: Long-term real estate financing secured
Long-term real estate financing secured TOTAL PROPERTY ASSETS* NET PROPERTY DEBT* €2,305m €1,595m Long-term financing secured Owned property assets in operation: – Property leases and long-term loans (12-15 years) – Amortising loans €1,955m €1,245m + + Diversified sources of financing – Property lea
Slide 33: Cash flow
Cash flow In €m H1 2012 H1 2011 Recurring EBITDA 122 106 Cash flow from operating activities Net cash flow from operating activities 78 66 +18% Net cash flow from internal investment 1 -32 -121 Building investment -191 -161 Property sales 159 40 2 Total internal cash flow 46 -55 Net cash flow from e
Slide 34: Strategy and outlook
Onra LIFE GOES ON WITH Us Strategy and outlook
Slide 35: New openings since beginning of 2012: 12 facilities (1,000 beds)
New openings since beginning of 2012: 12 facilities (1,000 beds) Sainte Maxime (83), Nursing home – 80 beds Osny (95), Post-acute facility – 60 beds Boussy St. Antoine (91), Nursing home – 80 beds Villepinte (93), Psy. Facility – 100 beds Toulon (83), Psy. Facility – 160 beds St .Maur des Fossés (94
Slide 36: New openings by end of 2012: more than 1,000 beds
New openings by end of 2012: more than 1,000 beds Guérande (44), Nursing home – 80 beds Berlaimont (59), Nursing home– 75 beds Cateau Cambresis (59), Nursing home– 94 beds Roquebrune (06), Nursing home – 110 beds Batz sur Mer (44), Nursing home – 48 beds Meyzieu (69), Post-acute facility – 104 beds
Slide 37: Other value-added developments
Other value-added developments Paris Batignolles (75), Nursing home – 125 beds La Garenne Colombes (92), Nursing home – 103 beds Joinville Le Pont (94), Nursing home – 89 beds Lyon Champvert (69), Psy. Facility – 184 beds Cannes Montfleury (06), Nursing home – 95 beds Chamalières (63), Post-acute fa
Slide 38: Strategy: growth and cash flow
Strategy: growth and cash flow STRATEGY OUTLOOK Controlled and selective growth Strong increase in revenue and solid organic growth + Ramp-up in the number of mature facilities 2012 target: €1,425m (+15.5%) 73% 65% 59% 30 267 53% 27 197 Higher profitability and operating cash flow 23 397 18 036 = 31
Slide 39: Appendices
ORE LIFE GOES ON WITH Us Appendices
Slide 40: Shareholding structure and Governance
Shareholding structure and Governance Shareholding structure (% of capital) Board of Directors – Dr Jean-Claude Marian – Chairman – Yves Le Masne – CEO Dr. Marian & Family – Brigitte Michel 23.1% – Alexandre Malbasa – Jean Patrick Fortlacroix Free float – FFP Invest (Thierry Mabille de Poncheville)
Slide 41: Daily rate in France
Daily rate in France Nursing Homes Post-acute and Psychiatric facilities DEPENDENCY: 10% Direct CARE & ACCOMMODATION Paid for by Local Authority reimbursement of (in a double bedroom) : 70% (PAA) and resident costs: Directly paid for by the National Health Insurance NO MARGIN CARE: 20% Directly paid
Slide 42: Ranking of French private nursing home groups
Ranking of French private nursing home groups 35,000 Number of nursing home beds in the private commercial sector in France – January 2012 16,659 * 14,387 11,099 10,838 2,714 2,694 2,670 2,665 1,962 1,760 1,380 1,355 1,272 1,208 1,188 Orpea DVD Korian Medica Le Noble Emera Colisée Groupe Domidep SGM
Slide 43: Strong solvency position of people aged 85+
Strong solvency position of people aged 85+ Comparison of nursing home cost vs. wealth €46,200 €135,000 Average cost of Average wealth of nursing home Assumptions: people aged 85+ for a resident Average cost: €2,200 per month Average length of stay: 21 months Source: IGAS 2010 report: €110,000 to €1
Slide 44: Stock market information
Stock market information € 35 Market data (last 12 months): – Average daily volume: 85,389 shares (= €2.2m) 30 – Price: €30.53 – High (12-month): €31.65 – Low (12-month): €23.66 25 – Turnover: 42% in 12 months – Market cap.: €1,601m 20 – Number of shares: 52,998,062 sept.-11 nov.-11 janv.-12 mars-12