- REVENUE UP 21.2% TO
€1,949 MILLION
- EBITDAR MARGIN UP 70 BASIS POINTS TO
27.6%
- NET PROFIT1 UP 16.6%
TO €136 MILLION
RECORD NETWORK GROWTH SINCE BEGINNING OF
2014: +36% (+15,331 BEDS ADDED)
- EUROPEAN NETWORK OF 58,334 BEDS AND
600 FACILITIES
- INTERNATIONAL NETWORK DOUBLED TO
25,542 BEDS (44% OF THE TOTAL NETWORK)
FURTHER STRONG MOMENTUM ANTICIPATED IN
2015
- REVENUE TARGET OF
€2,310 MILLION (GROWTH OF 18.6%) + SOUND PROFITABILITY +
EXPANSION
Regulatory News:
ORPEA (Paris:ORP), a leading European player in Long-Term Care
(nursing homes), Post-Acute Care and Psychiatric Care, today
announced its consolidated results2 for the financial year ending
31 December 2014.
In €m
(IFRS)
2014 2013
▲% Revenues
1,948.6 1,607.9 +21.2% EBITDAR (Recurring
EBITDA before rent)
537.8 433.2 +24.1% Recurring EBITDA
350.1 298.0 +17.5% Recurring operating profit
271.2
227.3 +19.3% Operating profit
308.9 268.4 +15.1% Profit
before tax1
209.8 177.8 +18.0% Attributable net profit1
136.3 116.9 +16.6%
Commenting on these figures, Yves Le Masne, ORPEA’s Chief
Executive Officer, said: “2014 was an outstanding year, as we
managed to combine the strongest development momentum in our
history, the international expansion of our network and strong
earnings growth, while maintaining a high level of financial
flexibility:
- very brisk top-line increase of
21.2%;
- record network growth of 36%, with
15,331 beds added since the beginning of 2014;
- further improvement in operating
performance, with the EBIDTAR margin growing by 70 basis points and
our net profit moving up 16.6% to €136.3 million3;
- optimisation of our capital structure,
through the arrangement of new diversified financing at an all-time
record level of low cost.
Building on these successful accomplishments, we will achieve
even stronger profitable growth and visibility for 2015 and the
following years, with:
- strengthening of the equity base by
€180 million in early 2015 thanks to early conversion of the
OCEANE bond;
- organic growth secured by the
high-quality pipeline of 9,101 beds under construction or being
restructured;
- scope for even stronger development,
yielded by both organic and external growth, building on our
powerful platforms in eight European countries.
For 2015, we forecast revenues of €2,310 million (i.e.
growth of 18.6%), not including any other potential developments,
plus sound profitability and a debt firmly under control with a
lower average cost of debt.”
Further healthy improvements in
profitability
Full-year 2014 revenues rose by 21.2% to
€1,949 million on the back of brisk organic growth4 (6.0%) and
the contributions made by acquisitions, especially Senevita in
Switzerland effective 1 April and Silver Care in Germany effective
1 July. International revenues surged 69% to reach
€449 million.
EBITDAR (Recurring EBITDA before rent) advanced by 24.1%
to €537.8 million and accounted for 27.6% of revenues – a 70
basis point improvement on its 2013 level. With mature facilities
accounting for a larger proportion of the network, the EBITDAR
margin has improved by 240 basis points since 2011. The EBITDAR
margin of international activities registered strong growth of
290 basis points in 2014 to reach 24.7%, even though 20% of
beds were not yet operational and were thus a drag on
profitability.
Rental expenses rose 38.8% to €187.7 million due chiefly to
the impact of acquisitions in Germany and Switzerland, which
accounted for 65% of the increase, as the properties operated by
both groups are all rented. At comparable structure, rental
expenses edged up 1.2%.
Recurring EBITDA grew by 17.5% to €350.1 million.
This represented a margin of 18.0% of revenues, down 50 basis
points on 2013, demonstrating the Group’s ability to absorb a
higher volume of rental expenses.
Recurring operating profit rose by 19.3% to
€271.2 million. This represented 13.9% of revenues, almost
stable compared with the 2013 level – a solid performance
especially given the losses generated by the gradual ramp-up of
over 2,000 beds that entered into service during the year and the
2,232 beds being restructured.
Operating profit advanced 15.1% to €308.9 million.
As every year, it reflected a non-recurring gain after tax of
€37.7 million, compared with €41.1 million in 2013 owing
in particular to real estate disposals.
Despite a brisk pace of investments, the cost of debt
picked up moderately, rising by 9.5% to €99.2 million5. This
small increase reflected optimisation of the capital structure put
in place by the Group since 2011.
Profit before tax stood at €209.8 million5, or a
brisk growth of 18.0%.
After €75.3 million5 in income tax expense (up 19.7%),
attributable net profit for 2014 grew 16.6% to
€136.3 million5.
Dividend of a €0.80 per share
proposed
At the Annual General Meeting on 23 June 2015, the Board of
Directors will propose a dividend of €0.80 per share in respect of
the 2014 financial year, compared with €0.70 for the previous
financial year.
ORPEA intends to secure the loyalty of its shareholders, who
have supported the Group’s development in recent years, by paying
out one-third of its net profit and retaining two-thirds to invest
in its network.
A €2.7 billion real estate
portfolio
In 2014, ORPEA achieved €255 million in real estate
disposals (€230 million in 2013) on rental and indexation
terms that were even more favourable than in 2013.
Adjusted for these sales and the addition of new properties,
ORPEA’s real estate portfolio grew by €123 million. As at 31
December 2014, its portfolio represented a developed area of
890,000 sqm consisting of 267 buildings (138 wholly-owned) with an
aggregate value of €2,685 million6.
Over the past five years, the Group’s asset portfolio has
increased by 41%, reflecting ORPEA’s unique real estate policy,
which consists in retaining ownership of a part of this strategic
asset guaranteeing healthy long-term returns, while bolstering the
Group’s flexibility and value.
Financial flexibility
Taking into account the €180 million impact of conversion
of the OCEANE7 bond subject to an early redemption option from 22
December 2014 that was exercised on 4 February 2015, ORPEA’s net
debt totalled €1,995 million8. This debt is highly secure and
flexible, since 65% of it is property-related.
ORPEA very heavily invested in its international expansion
during 2014, particularly in Switzerland, Germany and Spain, yet
its debt ratios9 remain moderate and are well below its maximum
authorised limits:
- financial leverage restated for real
estate assets = 2.6x (authorised level of 5.5x);
- adjusted gearing = 1.0x (authorised
level of 2.0x).
The new hedges put in place and new financing arranged will
automatically drive down the cost of debt over the next few years,
from an average of 4.0% in 2014 to 3.3% by 2019.
Owing to the quality of its business model, the property-backed
profile of its debt and the visibility in its sector of activity,
ORPEA is able to tap abundant liquidity from the credit market on
unprecedented low terms from banks and investors alike in Europe,
Asia and North America.
Record network growth since the
beginning of 2014: 15,331 beds added
Since the beginning of 2014, the Group has significantly stepped
up the pace of its development, expanding its network by 36%, or
15,331 additional beds, 95% of which outside France:
- Acquisition of three strategic
platforms representing 12,492 beds: Senevita in Switzerland, Silver
Care in Germany and SeneCura in Austria and the Czech Republic (as
at 1 April 2015);
- Further operating permits, extensions
and bolt-on acquisitions, leading to the addition of 2,839 beds,
68% of which outside France. Throughout 2014, ORPEA continued to
make bolt-on purchases in addition to strategic acquisitions.
To date, its network comprises 58,334 beds in 600 facilities
across eight countries, breaking down as follows:
Number offacilities
Total number of beds
Open beds
Of which beds being restructured
Beds underconstruction
France 354 32,792
30,433 1,572 2,359
Belgium 61 7,217
5,021 600 2,196
Spain 22 3,468
3,468 0 0
Italy
15 1,553
1,221 60 332
Switzerland
27 2,696 2,021
0 675
Germany
66 6,372 5,845
0 527
Austria 52
3,936 3,456 0
480
Czech Republic 3
300 0 0
300
TOTAL 600 58,334 51,465
2,232 6,869
Accordingly, following the opening of over 2,000 beds in 2014,
ORPEA still boasts a very substantial growth pipeline, with 9,101
beds being restructured or under construction. Of this growth
pipeline, 75% of beds are under construction and due to open over
the next three to four years, to a great extent in strategic
locations such as Paris, Berlin, Dortmund, Geneva, Zurich and
Prague.
The international network now accounts for 44% of the total.
With 25,542 beds, it has doubled in size since the beginning of
2014.
Another year of strong development in
2015
Leveraging its new platforms for development in German-speaking
Europe, the expertise of its teams and significant financial
flexibility, the Group will actively pursue its expansion in 2015
by means of:
- Organic growth with the construction of
new facilities, with a particular emphasis on Germany, Switzerland,
Austria and the Czech Republic. The Group intends to replicate its
real estate model in these countries, by handling itself the
construction of these facilities and retaining ownership of a
portion of the buildings.
- Bolt-on acquisitions throughout the
long-term care sector, and in all the countries where ORPEA is
established and where the private sector harbours numerous
opportunities as consolidation continues.
In all its development transactions, ORPEA continues to focus
first and foremost on the quality of projects and their location in
regions with strong purchasing power, with a constant quest to
create value.
In China, the planned nursing home in Nanjing is making
progress, with the launch of a recruitment and training programme
for its teams ahead of its opening. To this end, the Group has
created a training certificate in geriatrics in conjunction with
the Peking Union Medical College Hospital, one of the oldest and
most prestigious hospital in China. The first diploma course of 30
students was completed in February 2015.
The Franco-Chinese management team is now in place. The Group
intends to open the facility by the end of the year which will
offer a high-end living environment, perfectly attuned to the local
culture, and a range of very high-calibre services and care.
Ethics, innovation and job creation
underpin ORPEA’s development
In 2014, ORPEA continued to pursue its Quality and innovation
policy to ensure the well-being and satisfaction of its patients
and residents.
To provide solutions geared to every stage of the long-term care
chain, the Group has introduced special tailored activity and care
units at several of its nursing homes. Throughout the day, these
specially equipped, dedicated living areas look after residents
suffering from moderate neurodegenerative disorders. A slate of
social and therapeutic activities intended to prevent or slow the
progress of such conditions is organised by a multi-disciplinary
team.
Secondly, ethics and respect are among ORPEA’s founding values.
ORPEA has created a Scientific and Ethical Advisory Board,
consisting, among others, of leading European professors of
medicine from outside the Group. Its role is to enrich and enhance
the Group’s responsibility-based professional culture, common to
all the Group’s professionals, in the fields of business ethics,
research and training.
Lastly, to guarantee the quality of care it provides, the Group
remains a major creator of new jobs despite the uncertain economic
climate. In 2014, the Group created 1,300 direct jobs (sustainable
positions that cannot be relocated), while continuing to pursue its
ambitious training policy, with close to 275,000 hours of training
delivered to its teams in 2014.
Doctor Jean-Claude Marian, the ORPEA’s Chairman, summed up these
results: “While the sector benefits from demographic trends driving
a surge in demand for long-term care and providing exceptionally
high visibility, ORPEA demonstrated again in 2014 its remarkable
ability to outperform.
Thanks to the hard work of its operational and development
teams, ORPEA will pursue exciting expansion opportunities in 2015
while continuing the process of improving its financial performance
outside France, placing special emphasis on:
- its policy of organic growth combined
with selective acquisitions;
- its ability to replicate in
international markets its approach to real estate development and
its standards of quality.”
Next press release: Q1 2015 revenues5
May 2015 before market opens
About ORPEA (www.orpea-corp.com)
Founded in 1989, and listed on Euronext Paris since April 2002,
ORPEA is a European leader in integrated Long-Term Care and
Post-Acute Care. The Group has a unique network of 600 healthcare
facilities, with 58,334 beds (9,101 of them under refurbishment or
construction), including:
- 32,792 beds in France at (3,931 beds
under refurbishment or construction) at 354 facilities
- 25,542 beds in the rest of Europe
(Germany, Austria, Belgium, Spain, Italy, Czech Republic and
Switzerland) at 246 facilities (5,170 beds under refurbishment or
construction)
Listed in Euronext Paris Compartment
A, a Euronext Group market
Member of the SBF 120, STOXX
Europe 600, MSCI Small Cap Europe and CAC Mid 60
indices - Member of the SRD
ISIN: FR0000184798- Reuters: ORP.PA
- Bloomberg: ORP FP
1
Excluding changes in the fair value of the
right to the grant of shares embedded in the ORNANE, the net
(non-cash) impact of which was negative €15.6 million.
2
The financial statements are currently
being audited.
3
Excluding changes in the fair value of the
right to the grant of shares embedded in the ORNANE
4
Organic growth reflects the following
factors: 1. the growth in revenues (in period n vs. period n-1) of
existing facilities as a result of changes in their occupancy rates
and daily rates, 2. the growth in revenues (in period n vs. period
n-1) of restructured facilities or those with capacity increased
during period n or n-1, and 3. Revenues generated in period n by
facilities set up in period n or n-1. Organic growth includes the
improvement in revenues recorded at recently-acquired facilities by
comparison with the previous equivalent period.
5
Excluding impact of changes in the fair
value of the right to the grant of shares embedded in the
ORNANE
6
Excluding the €200 million in assets held
for sale
7
Conversion of the OCEANE subject to an
early redemption option from 22 December 2014 that was exercised on
4 February 2015
8
Excluding €200 million in debt associated
with assets held for sale
9
Taking into account the €180 million
impact of conversion of the OCEANE bond subject to an early
redemption option from 22 December 2014 that was exercised on 4
February 2015
Investor Relations:ORPEAYves Le MasneCEOorSteve
GrobetInvestor RelationsTel.: +33 (0)1 47 75 74 66Email:
s.grobet@orpea.netorNewCap.Dusan Oresansky / Emmanuel
HuynhTel.: +33 (0)1 44 71 94 94orpea@newcap.frorMedia
Relations:NewCap.Dusan Oresansky / Nicolas MerigeauTel.:
+33 (0)1 44 71 94 94orpea@newcap.fr
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