Emeis · EURONEXT:EMEIS
Emeis — Orpea — FY2018 Earnings Presentation
61 slides from Emeis's earnings presentation, Mar 27, 2019
Slide 1: Full-year 2018 Results
Davos, Switzerland Full-year 2018 Results 27 March 2019
Slide 2: Agenda
Agenda 1. Quality, innovation and well-being 2. Network and development 3. A new organization to secure a new phase of growth 4. 2018 Full-Year Results 5. 2018 and 2019 openings 6. Leader in Latin America 7. Strategy and outlook Appendix 2
Slide 3: 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 Core businesses ORPEA dependency care offering Complementary businesses POST-ACUTE AND MEDICALISED PSYCHIATRIC NURSING HOMES HOSPITALS ASSISTED LIVING FACILITIES HOMECARE AND SERVICES Alzheimer units Special
Slide 4: Quality, innovation and well-being
Quality, innovation and well-being
Slide 5: Quality: the DNA of ORPEA businesses
Quality: the DNA of ORPEA businesses Quality according Continuous improvement of quality of care for patients / residents to ORPEA Professional development and well-being of employees Innovation Training ORPEA key levers to improve quality Well-being and Diversity quality at work 92% 93% 94% 94%
Slide 6: A dynamic innovation policy
A dynamic innovation policy Aims: Improve the well-being of residents / patients AND employees Few examples: STRENGTHEN Coping with disorientation issues: – Evit’Errance: anti-wandering system detecting disorientated residents and used to the safety of residents / avoid residents to run away patie
Slide 7: Tailored training and personalised career management
Tailored training and personalised career management Lifelong Training modules specially Major efforts to develop Innovative training training initiative designed to meet the qualifications, training for managers needs of employees leading to qualifications, and ORPEA’s constantly with everyone give
Slide 8: Well-being and quality of life at work
Well-being and quality of life at work For the benefit of the Group’s 59,500 employees CHILDCARE FACILITIES FOR EMPLOYEES In France, partnership with Babilou group to facilitate access to childcare facilities “MACRON” BONUS 20,000 beneficiaries in France Amount: €4 million RECOGNITION AND REWARDS FO
Slide 9: CSR: Promoting diversity and equal opportunities
Promoting diversity and equal opportunities Gender diversity Disability 83% of employees Over 600 employees and are female company-level agreements in 66% of management positions are France and Spain held by women (77% in Spain) AGEFI 2018 Award for Diversity in Management ORPEA’s 2018 mal
Slide 10: Network and development
Zurich (Switzerland) Network and development
Slide 11: 2014–2019: strong acceleration of ORPEA international expansion with 7 new countries
2014–2019: strong acceleration of ORPEA international expansion with 7 new countries Total network (number of beds) Pipeline (number of beds) +78% 96,577 +108% 17,388 86,650 77,094 13,599 67,781 54,098 8,321 8,746 9,115 2014 2015 2016 2017 2019 2014 2015 2016 2017 2019 International network Maturity
Slide 12: Network growth: +10,000 beds in one year
Network growth: +10,000 beds in one year Total network +11% +10,000 new beds of which 63% Greenfields Greenfields 96,577 Bolt-on Dagelijks-Leven acquisitions Woonzorgnet 86,650 Disposal of 11 September Axion +6,331 beds facilities +2,379 beds +985 beds +1,087 beds - 855 beds Network Network 31.12.17
Slide 13: Network of 950 facilities / 96,577 beds in 14 countries
Network of 950 facilities / 96,577 beds in 14 countries Europe 931 facilities 93,685 beds 12 countries Brazil Netherlands Germany 18 facilities Belgium 67 facilities 180 facilities 61 facilities 1,380 beds 19,075 beds 7,437 beds 2,752 beds Poland Luxembourg 22 facilities 2 facilities 2,745 beds 365
Slide 14: Growth pipeline of 17,388 beds under construction
Growth pipeline of 17,388 beds under construction: +30% in 12 months Pipeline = Pipeline Beds Ch.of pipeline Country Beds under (% of beds open in 12 months construction under const.) Germany 16,228 2,847 +272 15% Austria 7,088 386 +202 5% Belgium 6,275 1,162 -606 16% Geographical breakdown Brazil 4
Slide 15: Beds and pipeline breakdown by cluster
Beds and pipeline breakdown by cluster Beds breakdown by cluster Pipeline breakdown by cluster 6,000 5,668 5,000 Central 4,514 France 4,389 Europe Benelux 4,000 26% 44% 2,817 3,000 Eastern 13% Europe 2,000 37% 16% 1,000 22% Iberian peninsula, 17% Latam 11% 0 France Iberian Eastern Central New Benelu
Slide 16: Example of selective acquisition: clinica Holistica in Switzerland
Example of selective acquisition: clinica Holistica in Switzerland Psychiatric clinic focusing exclusively on stress-related diseases using various psychiatric and therapeutic approaches (physiotherapeutic, art, quigong, music etc) Created in 2010 and recently renovated to high standards with an
Slide 17: Example of Greenfield in Luxembourg
Example of Greenfield in Luxembourg Creation of a premium facility: 125 beds of nursing home + 80 flats of assisted living Strategic location in Strassen, very closed to the historical center (4 km to Boulevard Royal) Project developed internally by ORPEA 17
Slide 18: Acquisition of Axion in Germany
Acquisition of Axion in Germany: strengthening of ORPEA premium nursing home positioning Premium segment under-developed in Germany with 25 facilities only (0.2% of the sector) Acquisition of Axion: 7 facilities with 985 beds, including 2 high-end nursing homes (275 beds) in Hamburg and 5 in goo
Slide 19: Premium facility in Hamburg
Premium facility in Hamburg ER-Elbchausee (Hamburg) 19
Slide 20: Selective acquisition in Spain: Ecoplar
Selective acquisition in Spain: Ecoplar Family group founded in 1998, with 5 facilities (936 beds) mixing 2 activities: - Nursing home - Highly-reputed rehabilitation center in Madrid Excellent locations, recent buildings: Madrid, center of Granada and Santander High-standard quality buildings
Slide 21: New organization to secure a new phase of growth
Geneva (Switzerland) New organization to secure a new phase of growth
Slide 22: 30 years of development
30 years of development Start of European expansion Internationalization Structuration +4 countries in 10 years +8 countries in 5 years 96,577 beds Strong growth, essentially through larger acquisitions Beginning of international expansion Entry of a new long- term shareholder International Beginnin
Slide 23: ORPEA, worldwide player
ORPEA, worlwide player ENTERING A NEW ERA IN ORPEA’S HISTORY 23
Slide 24: New organizational structure fitting for global growth
New organizational structure fitting for global growth A simpler, more secured and more efficient structure consistent with global development: – Creation of clusters: multi-country entity with a management team and a headquarter managing one or more Business Units – Business Units require limited
Slide 25: Clusters' organizational structure
Clusters’ organizational structure CORPORATE INTERNAL AUDIT, RISKS & INTERNAL CONTROL OFFICER CLUSTER CEO CLUSTER CLUSTER COO CFO CLUSTER INTERNAL CONTROLLER 25
Slide 26: ORPEA new potential with geographic expansion and cluster organization
ORPEA new potential with geographic expansion and cluster organization 9 countries 35 countries Total population 335 million 951 million X2.8 Elderly (over 80) 20 million 34 million +70% Nbr of beds to be created by 2030 600,000 beds X2.7 1,600,000 beds EUROPE | 2017 2050 LATAM | 2017 2050 Elder
Slide 27: 2018 Full-Year Results
Warsaw (Poland) 2018 Full-Year Results
Slide 28: A successful and profitable development strategy: +42,000 beds in 4 years
A successful and profitable development strategy: +42,000 beds in 4 years Revenue (€m) EBITDAR* (€m) +76% +70% 3,420 912 3,138 846 2,841 769 2,392 652 1,949 538 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Ordinary profit before tax* (M€) Real-estate portfolio1 (€bn) +69% +102% 292 5.6 5.0 259
Slide 29: 2018: above guidance
2018: above guidance 2018 OBJECTIVES 2018 ACHIEVEMENTS 1 Revenue growth: +8.3% (€3,400m) +9.0% €3,420m 2 Strong organic growth* +5.0% €155m 3 EBITDA* margin at least = 2017 +20 bps 17.7% Cost of debt = - 20 bps at 2.9% 4 Debt optimisation Average maturity = +1 year at 6.2 years +€586m 5 Strengthenin
Slide 30: Strong growth of FY2018 revenue: +9.0% to €3,420m
Strong growth of FY2018 revenue: +9.0% to €3,420m €m 2018 2017 Ch. Revenue annual growth since ORPEA IPO France / Benelux 2,040.3 1,942.7 +5.0% 3,500 2018 = 3,420 +€282m Central Europe 875.1 782.5 +11.8% 3,138 3,000 2,842 Eastern Europe 335.0 268.8 +24.6% 2,500 CAGR = +21.3% 2,392 Iberian Peninsula
Slide 31: Strong increase in EBITDAR margin for historical network
Strong increase in EBITDAR margin for historical network Non-mature countries: China, Acquisitions: Inoges, Czech Rep., Poland EBITDAR margin: -1% CICE (-€6m) Historical Anavita, Dr. Dr. Wagner, + network Netherlands, Ecoplar, … Macron Bonus EBITDAR margin : 17% (-€4m) -30 bps -40 bps +70 bps -30 bp
Slide 32: Profitability geographical breakdown
Profitability geographical breakdown 2018 2017 Comments In €m Sales EBITDAR* Margin Sales EBITDAR* Margin France / Benelux 2040.3 591.2 29.0% 1942.7 563.8 29.0% +50bps excl. CICE cut and M acron bonus France / Benelux excl. CICE and Macron bonus 29.5% Central Europe 875.1 225.9 25.8% 782.5 211.4 27.
Slide 33: EBITDA up 10.2%
EBITDA* up 10.2% €m 2018 2017 Change Revenue 3419.8 3138.2 +9.0% Staff costs -1802.3 -1639.5 +9.9% Procurement -607.5 -563.0 +7.9% Taxes and duties -119.3 -104.4 +14.2% Other income and expenses 21.0 14.8 N.A. EBITDAR* (before rent) 911.8 846.2 +7.8% % of revenue 26.7% 27.0% Rents -308.1 -298.5 +3.2
Slide 34: Strong increase in net profitability
Strong increase in net profitability1 In €m 2018 2017 1 Change EBITDA* 603.7 547.7 +10.2% Depreciation, amortisation and provisions -175.9 -153.3 +14.7% Recurring operating profit 427.7 394.4 +8.4% Net financial cost -136.2 -135.4 +0.6% Pre-tax profit on ordinary activities* 291.5 259.0 +12.6% Non-r
Slide 35: Cash flow statement
Cash flow statement In €m 2018 2017 EBITDA 604 548 Net cash from operating activities 415 398 Investments in construction projects -382 -303 Acquisitions of real-estate -336 -631 Disposals of real-estate 23 31 Net real estate investments -695 -903 Net investments in operating assets -264 -165 Net ca
Slide 36: Sound financial structure
Sound financial structure Simplified balance sheet1 at 31.12.18 (€m) Not 1,155 Intangible allocated* Equity and quasi- Equity €3,430m 2,976 equity: Allocated €3,427m 2,275 +285 Indefinitely Deferred Taxes +335 451 +609 +586 Real-estate 5,022 Net financial debt 5,628 481 Other deferred taxes Others 1
Slide 37: Diversified, long-term and real-estate related net debt
Diversified, long-term and real-estate related net debt Indicators 31.12.18 30.06.18 31.12.17 Covenants comfortably met Net financial debt* (€m) 5,022 4,819 4,413 Restated financial leverage1 Maximum % real estate debt 85% 85% 85% 5.5 6 authorized 5 Restated financial leverage1 2.3 2.3 2.1 4 3 Resta
Slide 38: Continuity of debt diversification and optimisation
Continuity of debt diversification and optimisation Non-rated public bond Diversified net debt – Inaugural issue in 2018: €400m with a 7-year maturity and 2.625% fixed rate Non-bank – Diversification of credit investors debt 46% 19% Bank debt 46% Schuldschein: ORPEA is the 1st French issuer 54%
Slide 39: Real-estate portfolio: €5.6bn (+11.6% in a year)
Real-estate portfolio: €5.6bn (+11.6% in a year) 31.12.18 31.12.17 Chg. Real-estate ownership rate 47% 45% +2 pts Surface area (sqm) 2,004,000 1,842,000 +8.8% Total value1 (€m) 5,628 5,042 +11.6% Average yield (properties valued by Cushman & Wakefield and JLL) 5.8% 6.0% -20 bps Growth in portfolio (
Slide 40: IFRS 16: impact of the new accounting method for leases
IFRS 16: impact of the new accounting method for leases Principles Recognition of all leases in the balance sheet (no more distinction between finance leases and operating leases): – the lease liability is measured at the present value of future lease payments over the length of the lease contract
Slide 41: Dividend growth of 9%
Dividend growth of 9% Proposed dividend to the 2018 General Shareholder meeting: €1.20 / share Increase in dividend per share: 1.2 1.1 +9% 1 78 0.9 71 0.8 61 0.7 Yield* : 54 0.6 1.2% 0.5 44 39 * Based on the closing price of the share at 25.03.19 32 18 years with no dividend 0.23 27 0.15 0.1 Pay-out
Slide 42: New openings 2018 / 2019
Marseille (France) New openings 2018 / 2019
Slide 43: 2018: opening of 2,300 beds
2018: opening of 2,300 beds Ostend (Belgium) – 157 beds Paris 16th (France) – 87 beds Callian (France) – 80 beds Brussels (Belgium) – 223 beds Bern (Switzerland) – 226 beds Milan (Italy) – 120 beds Praha (Czech Rep.) – 224 beds Hamburg (Germany) – 111 beds Genoa (Italy) – 141 beds 43
Slide 44: 2019: opening of 2,500 beds
2019: opening of 2,500 beds Warsaw (Poland) – 135 beds Zürich (Switzerland) – 99 beds Telc (Czech Rep.) – 130 beds Marbella (Spain) – 140 beds Berlin (Germany) – 169 beds Liberec (Czech Rep.) – 149 beds Flanders (Belgium) – 112 beds Marseille (France) – 115 beds Pau (France) – 101 beds 44
Slide 45: Leader in Latin America
Rio de Janeiro (Brazil) Leader in Latin America
Slide 46: Strategic development to become the leader in LATAM
Strategic development to become the leader in LATAM BRAZIL Acquisition of a 20% stake in the first Brazilian group: Brasil Senior Living (Cora) CHILE 22 facilities located in São Paulo: Acquisition of a 50% stake in Senior 9 opened/ 13 under construction or project Suites, leader in Chile Ca
Slide 47: Chile: acquisition of a 50% stake in Senior Suites
Chile: acquisition of a 50% stake in Senior Suites, Chile’s leading group Solid country in Latin America GDP growth per capita: 6.4% p.a. between 2000 and 2017 Private healthcare spending (% of total health expenditure): 31.5% (one of the highest levels in the world) Need for authorisation to
Slide 48: Chile: Senior Suites, the quality reference in Chile
Chile: Senior Suites Suites, the quality reference in Chile 1st Chilean nursing home group 48
Slide 49: Brazil: healthy fundamentals and strong development potential
Brazil: healthy fundamentals and strong development potential Evolution of over 80s (m)1 Rapid Strong increase in life expectancy: 75 years (+12 years over 30 years) population 16 ageing Growth rate in population of over 80s one of the highest in the world: x4.4 Set to increase by 12m out to 205
Slide 50: Brazil: acquisition of a 20% stake in Brasil Senior Living
Brazil: acquisition of a 20% stake in Brasil Senior Living, the Brazilian market leader No. 1 operator of long-term care facilities for the dependent elderly, which was founded in 2012. BSL is owned by a fund managed by Patria Investments, a leading alternative investment manager in Latin America
Slide 51: BSL: a high-quality network in São Paulo
BSL: a high-quality network in São Paulo (29m inhabitants) BSL A recently built network with high-quality standards 51
Slide 52: ORPEA LATAM: construction of a leadership position in dependency care
ORPEA LATAM: construction of a leadership position in dependency care IN 5-YEAR TIME, Implantation ORPEA WITH THE SECURED PIPELINE: Cluster HQ BRAZIL Fortaleza 5,900 beds 48 facilities Brasilia Belo Horizonte Rio de Janeiro 7,000 beds Valparaíso São Paulo CHILE Santiago 1,000 beds de Chile €200m rev
Slide 53: Strategy and outlook
Berne Callian (Suisse) (France) Strategy and outlook
Slide 54: 2019 outlook
2019 outlook REVENUES PROFITABILITY DEVELOPMENT REAL-ESTATE ARBITRAGE €3,700m Greenfields and €200m to €250m Disposal Strong acquisitions of sale-and-lease of non strategic +8.2% back* facilities Pursue the strategy of upgrading the network 54 * Sale-and-lease back over the next 12 months
Slide 55: Continue the longstanding value-creation strategy
Continue the longstanding value-creation strategy Real-estate strategy: Ongoing Development 50/50 mix between lease organizational in prime locations Internationalisation and ownership change Creation of new facilities New developments in the Ownership of real-estate Strengthening of (locati
Slide 56: 1989 – 2019: ORPEA is celebrating its 30th birthday
1989 – 2019: ORPEA is celebrating its 30th birthday 30 years of shared values that have now gained an international dimension Positive attitude Loyaly Professionalism Humility Residents and patients Employees Staying true to its culture and values, ORPEA has decided to celebrate its 30th birthday
Slide 57: Appendix
Appendix
Slide 58: Glossary
Glossary Organic growth reflects the following factors: 1. The year-on-year change in the revenue of existing facilities as a result of changes in their occupancy rates and per diem rates Organic growth 2. The year-on-year change in the revenue of redeveloped facilities or those where capacity has b
Slide 59: Consolidated balance-sheet
Consolidated balance-sheet In €m 31-dec-18 31-dec-17 Non-current assets 9,303 8,324 Goodwill 1,155 1,013 Intangible assets 2,275 2,082 Property, plant & equipment and property under development 5,628 5,042 ACTIF Other non-current assets 244 187 Current assets 1,526 1,308 Of which cash, cash equivale
Slide 60: Long-term shareholders, dedicated to value creation
Long-term shareholders, dedicated to value creation An 11-member Board with Shareholding structure (% of share capital) complementary skills Board members: – Philippe Charrier – Non-executive Chairman CPPIB – Yves Le Masne – CEO 14.2% – Jean Patrick Fortlacroix – FFP Invest (Thierry Mabille de Pon
Slide 61: Stock market data
Stock market data Market data (12 months) Indices Average trading volume: 192,000 shares per day Compartment A of Euronext Paris (= €20m ) all platforms combined Share price: €103.25 Component of the MSCI Small Cap Europe, Stoxx Europe 600, CAC Mid 60 and SBF 120 indices 12-month high: €12