- Revenue: +8.7% to €2,070 million
- EBITDAR margin: +110 bps to 24.9%
- Net profit: +40% to €102 million (€110
million excl. IFRS 16)
ORPEA, leading European healthcare
real-estate company
- Real estate portfolio: +€463 million to
€7.4 Billion
CSR: an ambitious 2023 roadmap
- 16 key performance indicators
2021 guidance reiterated
- Revenue > €4,215 million
(+7.5%)
- EBITDAR margin: H2 2021 > H1
2021
- Real estate disposals of €400
million
Regulatory News:
The ORPEA Group
(Paris:ORP), a world leader in
long-term care (nursing homes, post-acute and rehabilitation
hospitals, psychiatric hospitals, home care services), today
announces its consolidated results for H1 20211
(six months to 30 June), as
approved by the Board of Directors on 21 September 2021.
Yves Le Masne, Chief Executive Officer
of ORPEA, commented:
“ORPEA posted a significant
improvement in results during H1 2021. Net profit was up more than
40% and our real estate portfolio increased by €463 million,
positioning the Group as the leading European healthcare real
estate company with assets totalling €7.4 billion.
At the same time, we also
pursued our development strategy with the creation of new
facilities and sustained external growth, with six acquisitions
representing almost 5,000 beds and €210 million in future revenue,
as well as a significant boost to profitability. In terms of
organic growth, ORPEA enjoys a record growth pipeline of more than
26,000 beds under construction, of which more than 4,000 will have
opened in 2021. These new facilities, in prime locations, will
drive future organic growth.
This strategy draws on highly
ambitious 2023 CSR objectives that focus on the Group’s five
stakeholders – our residents, patients and families, employees,
partners, local communities and the environment. At ORPEA, we
believe that our sustainability commitments and financial
performance are inextricably linked: creating the conditions for
our employees to fulfil their career ambitions, building facilities
that are authentic living spaces, constantly improving quality, and
our resolute environmental commitment will together ensure the
Group’s long-term operational performance.”
Covid-19: sanitary situation under
control
Thanks to the vaccination
campaign launched at the beginning of the year and constant
vigilance as new variants appear, the sanitary situation has
further improved and remains under control. The percentage of
residents and employees who tested positive was less than 0.2% at
20 September 2021 (and for the last several months). 98% of our
facilities now have no cases of Covid-19. This is down to the
successful vaccination campaign, with more than 90% of residents
and 85% of employees fully vaccinated (99% of them in France).
These results underline, yet again, the professionalism of the
Group’s teams, who have demonstrated unwavering dedication over the
past 18 months.
Strong improvement in results during H1
2021 2
Half-year results for 2021 are
presented in line with IFRS, including IFRS 16, and in accordance
with current regulations and recommendations.
In €m
(IFRS)
H1 2021
H1 2020
Chg.
Revenue
2,069.5
1,904.2
+8.7%
EBITDAR
(EBITDA before rental expenses)
514.9
453.4
+13.6%
EBITDA
499.4
439.0
+13.8%
Recurring operating profit
230.7
196.7
+17.3%
Net
interest expense
-109.2
-113.3
-3.7%
Profit
before tax
133.1
98.7
+34.9%
Net
profit attributable to ORPEA’s shareholders
102.4
73.0
+40.3%
At €2,069.5 million, H1
2021 revenue rose
+8.7%, of which +5.2% was organic growth. Growth accelerated
significantly in Q2 as the vaccination campaign was successfully
rolled out, leading to a sustained recovery in nursing home
admissions as of March 2021. Organic growth was therefore markedly
stronger during Q2 2021 at +9.8% (versus +1% over Q1
2021).
EBITDAR (EBITDA before
rental expenses) was up +13.6% to €514.9 million, representing a
margin of 24.9%, mainly owing to strong growth in Central Europe,
where margins topped pre-pandemic levels (26.6%). Moreover, the
Iberian Peninsula and Latam region stood out, thanks to a significant increase in
profitability (EBITDAR margin of 19.8%, +970 bps), despite a
decline in activity levels.
The effects of coronavirus
persisted across the half as a whole, with a gross Covid-19 impact
of €133 million (drop in activity, additional costs for personal
protective equipment and additional staff costs). Taking into
account compensations received, net costs stood at €35 million, a
decrease of 34% compared with H1 2020. These compensations are
recognised in recurring operating profit, whether as an income in
“other products” for those related to loss of business or as a
reduction in costs for those related to additional
costs.
EBITDA was up +13.8% at
€499.4 million, giving a margin of 24.1% of revenue, representing a
100 bp increase compared with H1 2020.
Recurring operating profit came out at €230.7 million (+17.3%) after
depreciation, amortisation and provisions of €268.7 million
(+10.9%), reflecting the growth in our real estate
portfolio.
Net non-recurring gains were
€11.6 million, compared with €15.3 million in H1 2020.
Net interest expense was down
3.7% at €109.2 million– a decline that confirms the attractiveness
of the financing conditions obtained in recent quarters.
After accounting for an income
tax expense of €30.9 million, net profit attributable to
ORPEA’s shareholders was up
an impressive +40.3%, at €102.4 million. Excluding IFRS 16 impacts,
consolidated net profit attributable to ORPEA’s shareholders was
€110.1 million.
Strengthening of the financial
structure and continued diversification
Net debt stood at €6,841
million3 at 30 June
2021, compared with €6,156 million at 31 December 2020. This
increase reflects the high level of investments made by ORPEA
during the first half of the year, which resulted in an equivalent
increase in operating assets (intangible assets and real estate) of
€685 million.
Real estate assets accounted
for 86% of debt, stable compared with end-2020. Financial ratios
governing debt remained below their ceilings, with financial
leverage restated for real estate assets at 3.8 (5.5 authorised)
and a restated gearing of 1.7 (2.0 authorised).
As part of its policy of
diversifying financing, ORPEA has completed almost €1 billion in
transactions since the beginning of the year:
- first sustainable bonds
issue for €500 million over 7 years, completed in March
2021;
- issue of a Schuldschein
worth €395 million in July 2021, 40% of which will be used to
refinance 2022 maturities and 60% to finance further
expansion.
Over the past 5 years, the
Group has therefore significantly strengthened its financial
structure to be more robust and flexible: duration has increased by
1.2 years (6.2 years at 30 June 2021), disintermediation is up 32%
(53% of non-bank debt) and cost is down 120 bps (2.20% at 30 June
2021).
ORPEA, the leading European healthcare
real estate company, with total assets of €7.4
billion
At 30 June 2021, ORPEA’s real
estate portfolio stood at €7,432 million4, representing growth of +€463 million over
the period, with new facilities notably in Ireland, Austria and
France. ORPEA now owns 47% of its facilities.
With current healthcare real
estate investment momentum strong (€7 billion in transactions in
Europe in H1 2021 compared with €11 billion for 2020 as a
whole5), ORPEA is
also the leading healthcare real estate company in Europe, with 95%
of its assets located in major Western European countries. The real
estate capitalisation rate was stable at 5.3%, still cautious
compared with recent market transactions on the same type of
assets, with returns of between 4% and 5%5.
ORPEA has continued its
strategy of real estate disposals. To date, almost €300 million in
disposals are already underway, with a target of €400 million for
the year.
Continued and accelerated
expansion
Since the beginning of 2021,
ORPEA has continued its strategy of positioning the network at the
premium end of the market by creating new facilities centrally
located in large cities. The Group has confirmed the planned
opening of 4,055 new beds over the 2021 financial year.
In the same time, since the
beginning of the year, ORPEA has completed six selective
acquisitions (in Ireland, Spain and Switzerland) representing 4,700
beds and more than €210 million in revenue at maturity. These
developments underline the unique nature of ORPEA’s external growth
model: medium-sized, high-quality groups that are easy to integrate
and offer major revenue and profitability growth
potential.
ORPEA is thus consolidating
its position as world leader in long-term care, with 1,156
facilities, representing 116,514 beds, of which 90,155 are open,
and a record growth pipeline of 26,359 beds under
construction.
Faced with the demographic
challenges of the years ahead and thanks to its innovative,
high-quality and highly diversified care offering for all
vulnerabilities at various stages of life – ranging from children
and teenagers in mental health, to independent seniors in
assisted-living facilities and at home, and highly dependent
elderly persons in nursing homes – the Group is well positioned to
continue its assertive and value-creating growth
strategy.
CSR strategy: an ambitious and scalable
2023 roadmap
Our success is built around
our people who look after the well-being of the men and women in
our facilities every day. It is intrinsically linked to our social
and environmental responsibility. CSR is therefore native for ORPEA
and has always guided its actions and projects. Protecting the
well-being and safety of patients and residents, supporting
families and loved ones, fostering our employees’ professional
fulfilment, including through training and internal promotion, and
building sustainable facilities that are great places to live are
all key commitments made to the Group’s stakeholders and key
drivers of value creation.
Based on a proposal by
Executive Management, the Board of Directors created a CSR and
Innovation Committee in January 2021. Our CSR commitment is
therefore present at each level of corporate governance: Board of
Directors, Executive Committee, Executive management of
geographical regions and Facility managers.
The Group has drawn up a CSR
roadmap for 2023 that includes 16 ambitious objectives, coupled
with key performance indicators (KPI) focused on the Group’s five
stakeholders:
- Residents,
patients and their loved ones, with four objectives, including: 100% of
facilities quality-certified by an external body (ISO or higher), a
trained ethics officer for each facility, roll-out of three
innovative well-being programmes;
-
Employees, with five
objectives, including: a 15% reduction in work-related accidents,
50% internal promotion, 50% of women in ORPEA’s Top
Management;
-
Partners, with two
objectives, including 100% of regional, national and international
suppliers signed up to the Responsible Procurement
Charter;
- The
environment, with two
objectives, including HQE certification for all new buildings and a
5% reduction in energy consumption;
- Local
communities, with two
objectives, including, 100% of facilities implementing a local
solidarity action.
This roadmap was drawn up with
the teams and is intended to take into account any changes to
stakeholders’ expectations: it is therefore scalable and firmly
rooted in considerations on the ground so that each employee can
feel truly involved in its implementation. Between now and the end
of the year, ORPEA will build on the roadmap to finalise its global
environmental strategy. This strategy will include a carbon
footprint reduction target in order to contribute to the fight
against global warming and ensure that biodiversity is taken into
account at our facilities.
Several programmes and
initiatives have already been launched to help accelerate the
achievement of these 2023 objectives:
- The “Be Well” programme
based on the creation of a Nutrition, Health & Wellness Charter
to promote the Group’s know-how in catering and the prevention of
undernutrition and its commitment to food waste;
- The “Female success”
programme with the signature of the United Nations’ “Women
Empowerment Principles” charter, the creation of a specific female
leadership training course in partnership with HEC, learning and
mentoring communities, and more;
- Participation in the French
Corporate Climate Convention (Convention des Entreprises sur le
Climat), alongside 150 other companies, to design a new greener
business model;
- Participation in the
“Disability Equality Index”, the US benchmark for the integration
of disabled employees.
ORPEA’s extra-financial performance
recognised by rating agencies
ORPEA’s CSR commitments have
gained recognition from the leading extra-financial rating
agencies, with the Group’s performance improving:
- ISS
ESG: ORPEA is labelled Prime
with a C+ rating in 2021, up from C previously, positioning the
Group in the best performing 10% of the sector’s 103
companies;
- Vigeo
Eiris: rating improved
significantly to 49, from 41 previously, placing ORPEA in 4th place
in the sector compared with 14th 2 years ago;
-
Sustainalytics: ORPEA is
ranked “medium risk” with a strong improvement within its sector of
113 companies. ORPEA is ranked 5th in 2021 compared with 34th 3
years ago.
Reiterated 2021 targets
Driven by its excellent H1
performance, the Group has confidently reiterated its revenue
growth target of more than +7.5% for the current financial year
(> €4,215 million), coupled with further EBITDAR margin growth
in H2 2021.
Next press
release: Q3 21 revenue
3 November
2021 after market close
About ORPEA (www.orpea-corp.com)
Founded in 1989, ORPEA is one
of the major world leaders in comprehensive long-term care, with a
network of 1,156 facilities comprising 116,514 beds (26,359 of
which are under construction) across 23 countries, which are
divided into five geographical regions:
- France Benelux: 586
facilities/49,207 beds (5,672 of which are under
construction)
- Central Europe: 268
facilities/28,419 beds (5,828 of which are under
construction)
- Eastern Europe: 142
facilities/15,255 beds (4,101 of which are under
construction)
- Iberian Peninsula/Latin
America: 158 facilities/23,108 beds (10,373 of which are under
construction)
- Rest of the world: 2
facilities/525 beds (385 of which are under
construction)
ORPEA is listed on Euronext
Paris (ISIN code: FR0000184798) and is a member of the SBF 120,
STOXX 600 Europe, MSCI Small Cap Europe and CAC Mid 60
indices.
Glossary:
Organic
growth
Organic
growth of Group revenue reflects the following factors:
- The year-on-year change in the revenue of existing facilities
as a result of changes in their occupancy rates and per diem
rates;
- The year-on-year change in the revenue of redeveloped
facilities or those where capacity has been increased in the
current or year-earlier period;
- Revenue generated in the current period by facilities created
during the year or year-earlier period, and the change in revenue
of recently acquired facilities by comparison with the previous
equivalent period.
EBITDAR
EBITDA
before rental expenses, including provisions related to external
charges and staff costs
EBITDA
Recurring operating profit before net
additions to depreciation and amortisation, including provisions
related to external charges and staff costs
Net
debt
Non-current borrowings + current borrowings -
cash and short-term investments
Financial leverage restated for real estate
assets
(Net
debt - real estate debt)/(EBITDA - (6% x real estate
debt))
Restated
gearing
Net
debt/(Equity + Deferred taxes available indefinitely on intangible
assets)
Capitalisation rate
The real
estate capitalisation rate or the rate of return is the ratio
between the rental amount and the building’s value
Consolidated income statement (Auditors’ review in
progress)
In
€m
H1 2021
H1 2020
H1 2021
Restated for IFRS 16
H1 2020
Restated for IFRS 16
Revenue
2,069.5
1,904.2
2,069.5
1,904.2
Purchases used and other external
expenses
-373.8
-342.7
-377.1
-512.2
Staff
costs
-1,177.2
-1,080.0
-1,177.8
-1,080.0
Taxes
other than on income
-83.8
-72.3
-83.8
-72.3
Depreciation, amortisation and charges to
provisions
-268.7
-242.3
-123.5
-112.6
Other
recurring operating income and expense
80.1
44.3
80.1
44.3
Rental
expenses
-15.5
-14.4
-186.2
-169.5
Recurring operating profit
230.7
196.7
202.0
171.3
Other
non-recurring operating income and expense
11.6
15.3
11.2
15.3
Operating profit
242.3
212.0
213.2
186.6
Net
interest expense
-109.2
-113.3
70
-79.8
Profit before tax
133.1
98.7
143.2
106.8
Income
tax expense
-30.9
-28.3
-33.2
-30.2
Share in
profit/(loss) of associates and joint ventures
0.1
1.8
0.1
1.8
Net profit attributable to ORPEA’s
shareholders
102.4
73.0
110.1
79.1
Consolidated balance sheet (Auditors’ review in
progress)
In
€m
30 June 2021
31 December 2020
Non-current assets
15,238
14,556
Goodwill
1,653
1,494
Intangible assets
2,944
2,881
Property, plant and equipment and properties
under development
7,432
6,969
Right of
use of assets
2,832
2,817
Other
non-current assets
377
394
Current assets
2,033
1,860
Cash and
short-term investments
949
889
Assets held for sale
475
550
TOTAL ASSETS
17,746
16,967
Equity attributable to ORPEA’s
shareholders and deferred taxes available indefinitely
4,161
4,071
Equity
attributable to ORPEA’s shareholders
3,569
3,495
Deferred
taxes available indefinitely on operating intangible
assets
592
576
Non-controlling interest
-4
-5
Non-current liabilities
10,506
10,268
Other
deferred tax liabilities and other non-current
liabilities
842
870
Provisions for liabilities and
charges
182
191
Non-current financial liabilities
6,291
6,037
Long-term bridging loans
449
450
Long-term lease commitments
2,743
2,720
Current liabilities
3,084
2,633
Of which
short-term debt
1,458
1,008
Short-term bridging loan debt
66
48
TOTAL EQUITY AND LIABILITIES
17,746
16,967
Cash flows excluding IFRS 16 (Auditors’ review in
progress)
In
€m
H1 2021
H1 2020
Net cash
generated by/(used in) operating activities
213
245
Investments in construction
projects
-296
-168
Acquisitions of real estate
-158
-194
Disposals of real estate
29
1
Net
investments in operating assets and equity investments
-378
-293
Net cash
generated by/(used in) investing activities
-803
-654
Net cash
generated by/(used in) financing activities
652
472
Change
in cash over the period
60
63
Cash at end of period
949
902
1 Auditor’s review in progress. 2 Limited review in progress 3
Excluding €475 million in bridging loans relating to assets held
for sale at 30 June 2021, which will be repaid using the proceeds
from the disposal of assets held for sale. 4 Excluding the impact
of €475 million in real estate assets held for sale as of 30 June
2021. 5 JLL: Survey: “European Healthcare” (July 2021)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210921005943/en/
Investor Relations ORPEA Steve Grobet EVP Communication and Investor
Relations s.grobet@orpea.net
Benoit Lesieur Investor Relations Director
b.lesieur@orpea.net
Investor Relations NewCap Dusan Oresansky Tel.: +33 (0)1 44 71 94 94
orpea@newcap.eu
Media Relations Image 7 Laurence Heilbronn Tel.: +33 (0)6 89 87 61 37
lheibronn@image7.fr
Charlotte Le Barbier Tel.: +33 (0)6 78 37 27 60
clebarbier@image7.fr
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