Orpea: Strong Earnings Growth in 2016
- REVENUES UP 18.8% TO €2,841M
- RECURRING EBITDA UP 18.5% TO €475M
- REAL-ESTATE PORTFOLIO UP 18.7% TO €4.1BN
NETWORK OF 77,094 BEDS AT 751 FACILITIES IN 10 COUNTRIES
- 9,313 BEDS ADDED OVER THE PAST YEAR
AFTER 28 YEARS AS CHAIRMAN, DR MARIAN HAS DECIDED TO HAND OVER THE REINS
- PHILIPPE CHARRIER HAS BEEN APPOINTED NON-EXECUTIVE CHAIRMAN
- DR JEAN-CLAUDE MARIAN HAS BEEN APPOINTED HONORARY CHAIRMAN
PUTEAUX,
The
“After significantly accelerating the pace of our international expansion, we recorded another record performance in 2016 at every level:
- 9,313 additional beds were added to our network, an increase of 14.4%;
- our revenues grew by €450m, a rise of 18.8%;
- our recurring EBITDA increased by 18.5%, with the margin adjusted for units consolidated for the first time in 2016 improving by 90 basis points;
- our real-estate portfolio grew by €644m to over €4.1 billion.
With solid finances and a stronger organisation,
Given our key strengths, we can now aspire to becoming a world-class player in long-term care. That said, our focus will resolutely remain on providing high-quality care and creating value.”
Full-year 2016 results: growth, profitability and solid finances
In €m
(IFRS) |
FY 2016 | FY 2015 | % change | |||
Revenues | 2,841.2 | 2,391.6 | +18.8% | |||
EBITDAR (Recurring EBITDA before rents) | 769.3 | 652.4 | +17.9% | |||
Recurring EBITDA | 474.5 | 400.5 | +18.5% | |||
Recurring operating profit | 348.1 | 303.6 | +14.7% | |||
Net financial result 2 |
-111.6 | -96.8 | +15.2% | |||
Pre-tax profit on ordinary activities 2 | 236.5 | 206.7 | +14.4% | |||
Attributable net profit excluding the |
177.6 | 153.3 | +15.8% | |||
Attributable net profit 2 | 257.6 | 153.3 | N/A |
Another year of strong profitable growth
2016 revenues posted a strong increase of 18.8% to €2,841.2m. Organic growth3 ahead of our target (6.0%, excluding the positive effect of the
EBITDAR (recurring EBITDA before rent) advanced by 17.9% to €769.3m and accounted for 27.1% of revenues – a clear improvement on its level of 26.7% in the first half of 2016. The EBITDAR margin excluding the principal acquisitions4 consolidated for the first time in 2016 came to 27.6%, up 30 basis points (bp) compared with 2015.
Rental expenses came to €294.8m, compared with €252.0m in 2015. This increase was primarily attributable to the first-time consolidation of certain companies acquired during the period (Celenus, Vitalis and Residenz Gruppe in
Recurring EBITDA rose 18.5% to €474.5m, accounting for 16.7% of revenues, stable compared with 2015. The EBITDA margin excluding acquisitions4 was 17.6%. This strong improvement of 90bp on 2015 demonstrated the effectiveness of ORPEA’s real estate strategy of securing ownership of a larger proportion of its facilities.
The cost of debt2 rose 15.2% to €111.6m against the backdrop of major real estate investments and acquisitions of businesses over the past 12 months. This tight grip on interest expenses was achieved through a 60bp reduction in the average cost of debt compared with 2015.
Non-recurring items totalled €22.9m, compared with €19.5m in 2015.
After €85.6m in income tax expense5 (up 12.2%), attributable net profit5 for 2016 came to €177.6m, excluding the positive impact of discounting deferred taxes at the last known rate. This represented a strong increase of 15.8%.
Taking into account the positive impact of €80m from discounting deferred taxes at the last known rate of 28.92% in
Dividend payment of €1.0 per share proposed
At the Annual General Meeting on
A high-quality real-estate portfolio worth €4.1bn
In keeping with its strategic goal of lifting its real-estate ownership rate,
At
Its valuation by independent appraisers showed an average capitalisation rate of 6.1%, compared with 6.3% at year-end 2015.
This real estate strategy gives
Flexible financial structure
At
ORPEA’s debt ratios at
- lower financial leverage restated for real estate assets = 2.3x (authorised level of 5.5x);
- adjusted gearing = 1.5x (authorised level of 2.0x).
Thanks to the optimised hedging of its floating-rate debt and additional financing raised at an attractive cost, the average cost of debt has continued to decline, falling to 3.2% in 2016, down from 3.8% in 2015.
The debt is now entirely fixed-rate, and its cost will continue to decline gradually to 2.9% by 2022, irrespective of the direction of interest rates.
Network of 77,094 beds in 10 countries
Further strong network expansion in 2016: 9,313 additional beds
During 2016,
- strategic acquisitions with 6,491 beds added by deals for Medi-System in
Poland , Vitalis inGermany and Sanyres inSpain ; - selective developments through the creation of new facilities, extensions and acquisitions, accounting for 2,822 additional beds, mostly in attractive locations such as
Prague ,Vienna andBarcelona .
European network with strong growth potential
ORPEA’s network now comprises 77,094 beds at 751 facilities in 10 countries. The number of beds outside
Following the opening of around 2,500 beds in 2016, ORPEA’s growth pipeline remains solid, with 9,115 beds being restructured or under construction, 75% of these outside
Total number |
Total number |
Beds in |
Including beds under |
Beds under |
||||||
|
357 | 33 122 | 31 743 | 1 030 | 1 379 | |||||
|
165 | 16 824 | 14 518 | - | 2 306 | |||||
|
59 | 4 995 | 4 776 | - | 219 | |||||
|
60 | 7 389 | 5 651 | 239 | 1 738 | |||||
|
1 | 140 | 140 | - | - | |||||
|
45 | 7 857 | 7 697 | - | 160 | |||||
|
16 | 1 738 | 1 331 | 60 | 407 | |||||
|
10 | 1 174 | 704 | - | 470 | |||||
Czech Rep. | 6 | 784 | 210 | - | 574 | |||||
|
32 | 3 071 | 2 538 | - | 533 | |||||
TOTAL | 751 | 77 094 | 69 308 | 1 329 | 7 786 |
In
Unwavering ethical commitment to continuous improvement
Every year, the ORPEA Group’s International Ethical and Scientific Board holds the ORPEA Excellence Awards. The event aims to promote a professional and pragmatic culture of clinical ethics and to encourage teams from all its countries to innovate and make constant improvements to the care they provide to residents and patients. This year, 24 projects led by Group subsidiaries in 8 countries made the cut. The projects include:
- Cine-Ethics, which consists in organising an evening film screening for patients and their friends and family followed by a debate, to start a dialogue between professionals and service users
- a research programme into chronic pain and post-traumatic stress
This integrated programme of improvements is paying off:
- It has earned recognition from industry professionals, with
ORPEA receiving prizes at the TrophéesSilver Eco and Trophées de la Fédération de l’Hospitalisation Privée awards - It is appreciated by residents and their families: the end-of-year satisfaction survey of residents and families revealed a recommendation rate of over 91.6% in each country (
France ,Belgium ,Italy ,Spain ,Germany ,Switzerland andAustria ).
Strategy and outlook for 2017
In 2017 and beyond,
- building new facilities to a high standard of quality in prime locations in every country in which it has a presence;
- making selective acquisitions to complement its existing network, while strictly observing the Group’s profitability criteria;
- steadily raising its real-estate ownership rate by retaining and/or acquiring assets in the most attractive locations;
- expanding to new geographical territories where there is substantial demand for long-term care, and especially to regions with strong purchasing power;
- developing the complementary nature of ORPEA’s offering with homecare and services, independent living facilities and outpatient treatment to broaden the spectrum of care it provides.
For 2017,
Dr
Dr
Now 78 years old,
In 2011, the roles of Chairman and Chief Executive Officer were split, with the appointment of
Over the past three years, I have taken tremendous satisfaction from ORPEA’s spectacular transformation. It has gone from being a French company with several European subsidiaries to a truly multinational group. Together with their teams,
It became clear that we needed to look for a suitable Non-Executive Chairman. We have chosen to appoint
Dr
To display its full confidence in the senior management team, the Board of Directors has also decided to renew Yves Le Masne’s term in office as Chief Executive Officer and Jean-Claude Brdenk’s term as Chief Operating Officer.
He is currently Executive Chairman of Ponroy Santé (natural health products).
We have always shared his strategic decisions, such as, for example, in 1990, to secure a high level of real-estate ownership and, from 2004, to export the model outside
This decision was anticipated, and plans were in place for it a long time ago, and we are very confident that we will able to maintain ORPEA’s growth momentum with a view to making a world leader.”
Next press release: Q1 2017 revenues
About
Founded in 1989,
- 33,122 beds in
France at 357 facilities (2,409 beds under refurbishment or construction); - 43,972 beds in the rest of
Europe (Germany ,Austria ,Belgium ,China ,Spain ,Italy ,Czech Republic ,Poland andSwitzerland ) at 394 facilities (6,706 beds under refurbishment or construction).
Glossary:
Organic growth |
Organic growth reflects the following factors: 3. Revenues generated in the current period by facilities created in |
|
EBITDAR |
EBITDA before rent, including provisions related to “external charges” |
|
Recurring EBITDA |
Recurring operating profit before net additions to depreciation and |
|
Pre-tax profit on ordinary |
Recurring operating profit - Net financial expense | |
Net financial debt |
Long-term financial debt + short-term financial debt - cash and |
|
Financial leverage restated |
(Net financial debt - Real-estate debt)/(EBITDA - (6% x Real-estate |
|
Restated gearing |
Net financial debt/(Equity + Perpetual deferred taxes on intangible |
1 The financial statements are currently being audited.
2 Excluding change in the fair value of share allotment entitlements embedded in ORNANE bonds equal to -€1.8m in 2016 (gross) and -€43.0m (gross) in 2015
3 See Glossary
4 Chiefly SeneCura for 3 months, Celenus Kliniken and Sanyres for 6 months, Residenz Gruppe Bremen for 9 months, and Vitalis and Medi-System for 12 months.
5 Excluding change in the fair value of the share allotment entitlements embedded in ORNANE bonds equal to a gross amount of -€1.8m in 2016 and -€43.0m in 2015
6 Excluding the €67m in real estate assets held for sale
7 Excluding €140m in debt associated with assets held for sale
View source version on businesswire.com: http://www.businesswire.com/news/home/20170328006194/en/
Investor Relations:
Investor Relations Officer
[email protected]
or
Investor and Media Relations:
NewCap
Dusan Oresansky / Nicolas Merigeau, Tel: +33 (0)1 44 71 94 94
[email protected]
Source:
Research and Markets Has Announced the Launch of their Allianz Insurance Market Research Portal
Legislature sends Medicaid expansion to Brownback
Advisor News
Annuity News
Health/Employee Benefits News
Life Insurance News