Emeis · EURONEXT:EMEIS
Emeis — Orpea — Debt Investor Presentation (March 2021)
54 slides from Emeis's debt investor presentation, March 2021
Slide 1: Investor Presentation March 2021
Investor Presentation March 2021
Slide 2: Agenda
Agenda 1. Introduction 2. Covid-19 and vaccination 3. Network and development 4. Financials 5. Strategy and Outlook 6. CSR strategy 7. Sustainable Financing Framework 8. Transaction overview 2
Slide 3: Introduction
Introduction Vichy, France 3
Slide 4: Comprehensive offering
Global dependency care offering Homecare and home services Comprehensive Medicalised nursing homes 4 Complementary Post-acute and psychiatric hospitals Specialisations in post-acute: Alzheimer units – High activities musculoskeletal, geriatric, addiction offering dependency units – Day care treatmen
Slide 5: 30 years of development
STRUCTURATION START OF EUROPEAN EXPANSION INTERNATIONALIZATION +4 COUNTRIES IN 10 YEARS +18 COUNTRIES IN 7 YEARS 111,801 beds Strong growth, essentially thr ough lar ger acquisitions Entry of a new long-term shareholder 30 years Beginning Beginning of International of development of clinic activitie
Slide 6: Growth drivers
AGEING POPULATION ACCELERATING PRIVATE SECTOR’S MARKET SHARE LIMITED IN THE WORLD AUSTRIA 10% 35% 55% BELGIUM 33% 37% 30% BRAZIL 28% 65% 7% Surge in the number of over-80s worldwide: CZECH REP. 15% 6% 79% up 230% by 2050 (+290 million) FRANCE 20% 27% 53% GERMANY 41% 54% 5% ITALY 20% 35% 45% World He
Slide 7: Ageing population
Population 80+ between Var Existing Equipment Beds to be Country (m) 2017 and 2050 2017/2050 beds 2017 rate 2017 created by 2030 Germany 83 +4,979,717 +96% 900,000 17% 100,000 Austria 9 +671,965 +145% 70,000 15% 30,000 Belgium 11 +647,485 +100% 137,000 21% 45,000 Spain 47 +3,438,449 +118% 375,000 13
Slide 8: Covid-19 and vaccination
Covid-19 and vaccination Troyes, France 8
Slide 9: Management of Covid-19
KEEPING On all of the Group's sites, robust barrier measures are being kept in place: mask BARRIER wearing (staff and visitors), systematic temperature measurements, physical distancing, MEASURES reinforced hygiene measures, training in symptom detection, daily monitoring of stocks of IN PLACE PPE,
Slide 10: A strong commitment to our teams
Créteil, France A strong commitment to our teams PROTECTION › Distribution and permanent availability of Personal Protective Equipment (right from day one) › Regular serological, PCR and antigen testing SPECIFIC TRAINING for all employees › New Health, Safety and Security protocols as of March 2020
Slide 11: Success of the deployment of the anti-Covid vaccine
Start of the Consent rate Vaccination rate* Residents 80% vaccination Resident campaign: nursing home end of December 2020 with an acceleration Vaccination rate* Employees 44% not all employees are yet eligible, since mid-January > 90% depending on the country VACCINATION RATE* OF RESIDENTS PER COUN
Slide 12: Strong improvement in the sanitary situation
NUMBER OF COVID+ RESIDENTS NUMBER OF COVID+ EMPLOYEES Start of the 4 000 vaccination 1 500 3 000 < 1% 0.5% 1 000 2 000 500 1 000 Strong improvement in 0 Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 0 Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 the sanitary situation Less than 1% More than 9
Slide 13: Network and development
Network and development Montevideo, Uruguay 13
Slide 14: Strong acceleration of development
TOTAL NETWORK (NUMBER OF BEDS) +65% PIPELINE (NUMBER OF BEDS) +190% 25,403 111,801 103,032 20,932 95,187 2015 – 2020 77,094 86,650 13,379 17,108 strong acceleration 67,781 8,746 9,115 of development 2015 2016 2017 2018 2019 2020 2015 2016 2017 2018 2019 2020 Almost 44,000 additional beds in 5 years
Slide 15: +8,769 new beds
Total network +8,769 new beds +8% of which 66% by greenfield Greenfield +5,808 Bolt-on Clinipsy acquisitions TLC Group 55% Sinoué 50% Brindley 111,801 +797 +1,203 +961 2020 sustained network growth of +8,769 beds 103,032 Network 31.12.19 Acquis. Ireland Acquis. Psy. France Selective acquis. Greenfie
Slide 16: A global Group
EUROPEAN NETWORK NETWORK OUTSIDE EUROPE LATAM La tv ia Po la n d M e xic o Cze c h. Re p . Ge r ma n y C o lu m b ia Ne th e r la n d s Russia B r a z il Ir e la n d Chile Ur u g ua y B e lg iu m Lu x e mb u r g A global Group Fr a n c e 34 4,744 fac. beds S p a in 23 countries, A u s tr ia 1,114 fa
Slide 17: The most important pipeline
Nb. of facilities Opened beds Pipeline France Benelux 572 42,540 5,366 France Netherlands 372 116 32,673 1,676 3,543 1,168 Growth pipeline Belgium Luxemburg 71 2 7,230 - 268 365 doubled in 3 years Ireland 11 961 22 Beds under construction Central Europe Germany 261 191 22,148 17,105 5,828 3,452 25,4
Slide 18: Financials
Financials France 18
Slide 19: 10 years of profitable growth
DEVELOPMENT, GROWTH AND PROFITABILITY OVER 2010/2020 (BASE 100 AT 31.12.2010) EBITDAR* x4.1 400 +15% pa REVENUE x4.1 300 +15% pa NUMBER OF BEDS x3.4 200 +13% pa 10 years 100 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 of profitable growth IN 10 YEARS Network Revenue EBITDAR +79,000 beds +
Slide 20: Revenue +5% to €3,922m
In €m 2020 2019 Change Solid recovery in H2 with France / Benelux 2,364 2,218 +6.6% organic growth of +1% compared to -1% in H1 Central Europe 1,011 962 +5.1% Eastern Europe 366 359 +1.9% Main acquisitions Iberia + Latam 179 198 -9.8% • Nursing homes in Ireland (TLC) • Psychiatric clinics in France
Slide 21: Covid-19 impact
In €m Gross impact Compensation Net impact Impact on EBITDAR of the drop in activity -133 85 -48 Additional cost of protective equipment -52 28 -24 Additional staff costs and bonuses -74 45 -29 TOTAL -259 158 -101 -120 bp -60 bp Covid-19 impact -70 bp on the EBITDAR margin* 26.3% 24.6% 2019 2020 exc
Slide 22: EBITDAR margin
2020 2019 In €m % % Revenue EBITDAR* Revenue EBITDAR* Revenue Revenue France / Benelux 2,364 634 26.8% 2,218 640 28.9% Central Europe 1,011 268 26.5% 962 232 24.1% Eastern Europe 366 53 14.4% 359 64 17.8% Iberia + Latam 179 10 5.3% 198 48 24.1% Other countries 3 -1 N.S. 3 -1 N.S. TOTAL 3,922 963 24.
Slide 23: Net profit, Group share €160m
Restated from IFRS 16 In €m 2020 2019 Change 2020 2019 Revenue 3922.4 3740.2 +4.9% 3922.4 3740.2 Staff costs -2210.3 -1,978.10 11.70% -2210.3 -1,978.10 Procurement -712.3 -685.6 3.90% -718.4 -685.6 Taxes and duties -135.5 -129.2 4.90% -135.5 -129.2 Otehr income and expenses 98.8 35.1 N.A. 98.8 35.1
Slide 24: Cash flow statement
In €m 2020 2019 Net cash from operating activities 440 487 Investments in construction projects -427 -375 Acquisition of real estate -324 -343 Disposals of real estate 232 16 Net real-estate investments -519 -702 Net investments in operating assets and equity investments -488 -276 Net cash from fina
Slide 25: Sound financial structure
SIMPLIFIED BALANCE SHEET1 AT 31 DEC. 20 (IN €M) AND CHANGE 2020 VS 2019 1,489 +437 +602 Not allocated* Intangibles 3,374 Equity Equity and €4,370m Allocated quasi equity: 2,881 €3,950m 576 Indefinitely deferred taxes Sound financial structure 6,103 +568 Net financial debt +789 6,806 Net financial de
Slide 26: Long term financial net debt
REAL-ESTATE DEBT AT 87% COVENANTS LARGELY MET 31.12.20 31.12.19 Restated financial leverage 1 restated IFRS restated Maximum Indicators 31.12.20 16 IFRS 16 5.5 authorized Net financial debt* (€m) 6,103 6,103 5,535 % real-etate debt 87% 87% 85% 3.4 1 Restated financial leverage 1.5 3.4 2.3 Restated g
Slide 27: 2020 real-estate transactions
2020 REAL-ESTATE TRANSACTIONS VALUATION OF EXISTING NEW RECENT PROPERTY REAL ESTATE DEVELOPMENTS DISPOSALS Valorisation of the entire portfolio Acquisitions of buildings in the Sales and lease back of portfolios by Cushman & Wakefield and JLL framework of M&A to real-estate investors (Icade, Cofinim
Slide 28: 100% focused healthcare real estate
31.12.20 31.12.19 Change Real-estate ownership rate 47% 49% -2 pts Surface (in million sqm) 2.22 2.16 +3.0% Total value1 (€m) 6,806 6,017 +13.1% Average yield (valorisation by Cushman & Wakefield and JLL) 5.3% 5.7% -40 bp EVOLUTION OF REAL-ESTATE PORTFOLIO (€M) REAL-ESTATE OWNERSHIP RATE AND OWNERSH
Slide 29: First phase of property disposals
REAL-ESTATE DISPOSALS HEALTHCARE REAL-ESTATE STRATEGIC OBJECTIVE 2020 DISPOSALS GROWING INTEREST Mid- and long-term strategic €145m to Icade in healthcare real-estate due to objective : 50% of real estate 9 recent buildings the resilience of occupancy rates owned and 50% rented 8 of them in Germany
Slide 30: Strategy and outlook
Strategy and outlook 30
Slide 31: Continuation of the strategy
› Targeted acquisitions and creation of new facilities in the 5 geographic zones INTERNATIONAL › Development of all the Group's activities and areas of expertise in its 5 geographic DEVELOPMENT zones Continuation of the strategy REAL-ESTATE › Own real estate in the best locations focused on DISPOSAL
Slide 32: 2021 targets
2021 targets 2023 targets for the 5 stakeholders: ROLL-OUT OF THE Resident, Patients and Families, Employees, CSR ROADMAP Partners, Environment, Society & Community REVENUE AT LEAST +6% > €4,155m REAL-ESTATE SALES €400m to €500m real-estate disposal AND LEASE-BACK 32
Slide 33: CSR strategy
CSR strategy France 33
Slide 34: Key figures
68,000 83% 79% Fixed-term 21% employees women on permanent Permanent contracts 79% More than 250,000 residents and patients cared for per year in... more than 1,114 facilities across 23 countries FTE PER PATIENT Key figures AND PER RESIDENT 95.1% (+1.2 pt vs. 2019) for a better Recommendation rate u
Slide 35: ORPEA's CSR strategy
A « GLOCAL » approach: Think global, Act local Contribution to the United Nations Sustainable Development Goals (UN SDGs) INVESTORS MEDIA Reassuring investors with evidence GUARDIANS Structuring Ensuring a relations permanent dialogue FAMILIES AUTHORITIES ORPEA’s CSR Including them in the care pathw
Slide 36: Nurturing Human Capital
Taking care of fragile people requires to actively promote Health, Safety and PATIENTS, RESIDENTS, Well-being in the workplace (Quality procedures, strong focus towards diet and FAMILIES nutrition). Satisfaction surveys are conducted on an annual basis and regular assessments to ensure compliance wi
Slide 37: Sustainable Financing Framework
Sustainable Financing Framework 37
Slide 38: A broad and robust sustainable financing framework
A STRONG • Support ORPEA’s Group CSR strategy implementation by promoting ORPEA’s responsible role in society RATIONALE FOR THE and support future investments generating positive environmental and/or social impacts • Allow ORPEA to issue various Sustainable Financing instruments ESTABLISHMENT OF • C
Slide 39: Use of Proceeds
Eligible green or social assets or 1) Eligible Expenditures criteria 3) Technical eligibility criteria projects must meet 4 sets of criteria: 2) Geographical criteria 4) Exclusion criteria (for Social Assets and Projects) ELIGIBLE EXPENDITURE CRITERIA GEOGRAPHICAL CRITERIA Eligible Green or Social A
Slide 40: Use of Proceeds
ELIGIBLE LOW-CARBON ENERGY EFFICIENCY CATERORY BUILDINGS • Buildings with a level of • Specific refurbishments to dedicated energy efficiency works energy performance such as HVAC systems renovation and improvement, Geothermal corresponding to the top energy systems roll-out, insulation retrofitting
Slide 41: Use of Proceeds
ELIGIBLE CATERORY ACCESS TO ESSENTIAL SERVICES Nursing homes specialized in Post-acute and Technical long-term or Psychiatric Rehabilitation short-term care Hospitals Eligibility Criteria for dependent Hospitals elderly people Description of Eligible Assets and Projects Use of TARGET People in need
Slide 42: Process for Evaluation and Selection
SUSTAINABLE A 3-STEP FINANCE COMMITTEE SELECTION PROCESS • Responsible for the Construction and overall governance of Committee Maintenance Corporate IDENTIFICATION the Sustainable Financing composition Team Framework and related The Construction & Maintenance corporate team is issuances responsible
Slide 43: Example 1 of Eligible Assets
Green & Social Asset Example #1 Example 1 of Eligible • Location: Thionville, France • Activity: Psychiatric Hospital Assets: • • Status: Opened in October 2020 Number of beds: 85 + 15 ambulatory places Mental health in • Surface (sqm): 4,700 • Targeted energy efficiency: 84 kWh/sqm/year Thionville
Slide 44: Example 2 of Eligible Assets
Green & Social Asset Example #2 Example 2 of Eligible • Location : Bad Driburg, Germany • Activity: Nursing home for dependent elderly people Assets: • • Status: Under Construction Expected number of beds: 78 Nursing home in Bad • Surface (sqm): 8,851 • Expected delivery date: April 2022 Driburg (Ge
Slide 45: Management of Proceeds & Reporting
MANAGEMENT OF PROCEEDS REPORTING ORPEA will report annually, at least until full allocation MANAGEMENT OF PROCEEDS BY ORPEA’S TREASURY DEPARTMENT Reporting on: Quality and Medical • Managed by ORPEA’s Treasury Department Department through its general account ALLOCATION REPORTING • Dedicated Sustain
Slide 46: External Review
SECOND PARY EXTERNAL OPINION VERIFICATION • ISS-ESG was commissioned by ORPEA to opine on • ORPEA’s annual reporting will be subject to the Sustainable Financing Framework and verification by an external auditor until full confirmed its transparency and governance as allocation and in case of any ma
Slide 47: Transaction overview
Transaction overview Belgium 47
Slide 48: Indicative Terms & Conditions of the Sustainability Bond issue
Issuer ORPEA S.A. Issuer & Notes rating Unrated Notional amount 300 M€ expected Issue Type Fixed rate Status of the Notes Senior Unsecured Form of the Notes Bearer Dematerialised Maturity 7 years expected Documentation RegS / Standalone Negative pledge / Change of Control, Specific clauses Make-Whol
Slide 49: Appendix
Appendix 49
Slide 50: Long-term shareholders, dedicated to value creation
SHAREHOLDING STRUCTURE BOARD OF DIRECTORS (% OF SHARE CAPITAL) Board members: Philippe Charrier – Non-executive chairman Yves Le Masne – CEO Jean Patrick Fortlacroix Free Float FFP Invest (Thierry Mabille de Poncheville) 80.5% CPPIB Joy Verlé (appointed on proposal by CPPIB) 14.5% Moritz Krautkraeme
Slide 51: Consolidated balance sheet
In €m 31.12.2020 31.12.2019 Non-current assets 14,398 12,440 Goodwill 1,489 1,299 Intangible assets 2,881 2,469 PPE and property under development 6,806 6,017 ASSETS Right of use assets 2,817 2,334 Other non-current assets 405 321 Current assets 1,944 1,699 Of which cash, cash equivalents and market
Slide 52: Dividend
Proposed dividend to the 2020 General Shareholder meeting: €0.90 / share Payment resumes after Pay out an exceptional Yield*: ratio of shareholder 0.9% * Based on the closing price of the share at 10.03.21 the net profit: 36% contribution in 2020 1,2 1.1 1 78 0.9 0.90 71 0.8 0.7 61 58 54 0.6 Dividen
Slide 53: 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 been incr
Slide 54: Market data
MARKET DATA* (12 MONTHS) € Average volume: 128 267,000 shares / day (=€28m) all plateforms combined 118 Price: €99.70 12-month high: €119.80 108 12-month low: €69.10 98 Turnover: 105% in 12 moths 88 Market cap.: €6,444m Nb. of shares outstanding: 64,615,837 78 68 Mar-20 May-20 Jul-20 Sep-20 Nov-20 J