ORPEA: Strong Growth in 2018 Half-Year Results
- REVENUE UP 10.0% TO €1,679M
- EBITDA UP 11.9% TO €290M
- €302M INCREASE IN REAL ESTATE PORTFOLIO TO €5.3BN
POSITION STRENGTHENED IN
- ACQUISITION OF ALLERZORG AND SEPTEMBER
2018 GUIDANCE REITERATED
- REVENUES OF OVER €3,400M
- EBITDA MARGIN HIGHER OR EQUAL TO ITS 2017 LEVEL
PUTEAUX,
The
“ORPEA continued to deliver a strong and profitable growth in the first half of the year while accelerating its international expansion.
All key indicators were up:
- revenue rose 10%
- EBITDA margin improved by 20bp to 17.2%
- real estate portfolio grew by €302m to over €5.3bn, representing an ownership rate of 47%
This constant performance, maintained for over 25 years now, is underpinned by the strict Quality policy ensured by
During the first half,
This profitable growth will carry on for the next few years as a large part of it has already been secured by our growth pipeline of more than 13,000 beds under construction and by the selective acquisition opportunities that have opened up for us.”
High-quality care still the cornerstone of ORPEA’s offering
Each year,
Healthy growth in half-year 2018 results
(€ m)
(IFRS) |
H1 2018 | H1 2017 | Chg. | |||
Revenue | 1,679.0 | 1,525.7 | +10.0% | |||
EBITDAR (EBITDA before rents) | 440.2 | 406.6 | +8.3% | |||
EBITDA | 289.6 | 258.8 | +11.9% | |||
Recurring operating profit | 201.9 | 188.0 | +7.4% | |||
Net financial cost | -65.2 | -66.7 | -2.4% | |||
Profit before tax | 152.8 | 135.0 | +13.1% | |||
Net profit attributable to ORPEA’s shareholders | 107.6 | 96.1 | +11.9% |
ORPEA’s half-year 2018 revenue grew by 10.0% to €1,679m. That increase was supported by a strong organic growth of 5.2% and by selective acquisitions, including in
EBITDAR (EBITDA before rents) rose 8.3% to €440.2m, accounting for 26.2% of revenue. That margin reflected a 40bps improvement in margins of existing operations and the short-term impact of expansion into new territories and of acquisitions.
Rental costs edged up just 2% to €150.7m as
EBITDA increased by 11.9% to €289.6m, or 17.2% of revenue – a 20 basis points improvement on its H1 2017 level. That performance illustrates the Group’s ability to raise its profitability while stepping up the pace of its expansion.
After €87.7m in depreciation, amortisation and charges to provisions (up 23.9%) owing to a higher real estate ownership rate, recurring operating profit came to €201.9m (up 7.4%).
Net non-recurring gains totalled €16.1m, compared with €13.8m in the first half of 2017, including capital gains on the disposal of French facilities.
Net financial costs came to €65.2m, down 2.4% as a result of improvements to ORPEA’s balance sheet structure.
Pre-tax profit on ordinary activities rose 12.7% to €136.7m, growing at a more rapid pace than revenue.
After €49m in tax expenses, net profit group share was up 11.9% at €107.6m.
Another increase in the real estate portfolio to €5.3bn1
During the first half,
At
Strong financial structure
In the first half,
ORPEA’s net debt rose €406m to €4,819m2 at
Its cost of borrowing declined further to 3%, while the maturity of its debt has been extended significantly (6 years at
Position in
Following the acquisitions of Dagelijks Leven and Woonzorgnet in the first half of 2018,
Founded in 2006, Allerzorg is a specialist provider of homecare services with a nationwide coverage. Allerzorg’s addition will broaden ORPEA’s offering in the Dutch market and bring on board a high-calibre workforce of qualified employees (94% of employees are qualified nurses).
At the same time,
ORPEA’s diversified offering now covers the full span of the Dutch long-term care sector in
Further expansion in
Development has ramped up in
1 Excluding the €28m in real estate assets held for sale
2 Excluding €28m in liabilities associated with assets held for sale
Strategy and outlook
To execute its strategy of international expansion effectively, the Group is also reshaping its organisation, tightening up its controls and rolling out its expert teams across all the geographical territories where it operates.
Next press release: Q3 2018 revenue
About
Founded in 1989,
- 32,582 beds in
France (2,223 beds under construction or redevelopment) at 346 facilities - 54,175 beds outside
France (Austria ,Belgium ,Brazil ,China ,Czech Republic ,Germany ,Italy ,Netherlands ,Poland ,Portugal ,Spain andSwitzerland ) at 508 facilities (11,376 beds under construction or redevelopment)
Glossary:
Organic growth | 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 2. 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 3. Revenue generated in the current period by facilities created in the current or year-earlier period, and the change in revenue at recently acquired facilities by comparison with the previous equivalent period |
|
EBITDAR |
EBITDA before rents, including provisions related to external charges and staff costs |
|
Recurring EBITDA | Recurring operating profit before net additions to depreciation and amortisation, including provisions related to external charges and staff costs | |
Pre-tax profit on ordinary activities | Recurring operating profit - Net financial expense | |
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) |
Consolidated income statement (Audit in progress) |
||||
In €m | |
|
||
Revenue | 1,679.0 | 1,525.7 | ||
Purchases used and other external expenses | -447.1 | -414.1 | ||
Staff costs | -886.7 | -804.3 | ||
Taxes other than on income | -64.5 | -57.7 | ||
Depreciation, amortisation and charges to provisions | -87.7 | -70.8 | ||
Other recurring operating income and expense | 8.8 | 9.2 | ||
Recurring operating profit | 201.9 | 188.0 | ||
Other non-recurring operating income and expense | 16.1 | 13.8 | ||
Operating profit | 218 | 201.8 | ||
Net interest expense | -65.2 | -66.7 | ||
Profit before tax1 | 152.8 | 135.0 | ||
Income tax expense1 | -49 | -41.0 | ||
Share in profit/(loss) of associates and joint ventures | 4,3 | 2.1 | ||
Impact of early redemption and fair-value of ORNANE bond | - | -142.7 | ||
Consolidated net profit Group share | 107.6 | -41.8 | ||
Net profit Group share excluding impact of ORNANE and discounting deferred taxes 1 | 107.6 | 96.1 | ||
Consolidated balance sheet (Audit in progress) |
||||
In €m |
|
|
||
Non-current assets | 8,865 | 8,324 | ||
|
930 | 1,013 | ||
Intangible assets | 2,407 | 2,082 | ||
Property, plant and equipment and properties under development | 5,344 | 5,042 | ||
Other non-current assets | 184 | 187 | ||
Current assets | 1,603 | 1,308 | ||
Cash and short-term investments | 822 | 614 | ||
Assets held for sale | 28 | 64 | ||
Total assets | 10,496 | 9,696 | ||
Equity attributable to ORPEA’s shareholders and deferred taxes available indefinitely | 3,240 | 3,142 | ||
Equity attributable to ORPEA’s shareholders | 2,749 | 2,715 | ||
Deferred taxes available indefinitely on operating intangible assets | 491 | 427 | ||
Non-controlling interest | 0 | 0 | ||
Non-current liabilities | 5,640 | 5,248 | ||
Other deferred tax liabilities | 438 | 431 | ||
Provisions for liabilities and charges | 200 | 194 | ||
Non-current financial liabilities | 5,002 | 4,622 | ||
Current liabilities | 1,588 | 1,242 | ||
o/w current financial liabilities (bridge loans and real estate porting) | 639 | 405 | ||
Liabilities associated with assets held for sale | 28 | 64 | ||
Total equity and liabilities | 10,496 | 9,696 | ||
Cash flows (Audit in progress) |
||||
In €m |
|
|
||
Net cash generated/(used) by operating activities | 189 | 167 | ||
Investments in construction projects | -219 | -155 | ||
Acquisitions of real estate | -175 | -483 | ||
Disposals of real estate | 19 | 16 | ||
Net investments in operating assets | -122 | -98 | ||
Net cash generated/(used) by investing activities | -497 | -720 | ||
Net cash generated/(used) by financing activities | 516 | 568 | ||
Change in cash over the period | 208 | 15 | ||
Cash at end of period | 822 | 614 |
1 Excluding the cost (non-cash impact) of the early redemption of the ORNANE bonds, for €142.7m in H1 2018
View source version on businesswire.com: https://www.businesswire.com/news/home/20180925006018/en/
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