Korian 2012 full-year earnings. 28 March 2013

Transcription

1 Korian 28 March 2013

2 Speakers Yann Coléou Chief Executive Officer Louis Guyot VP Finance Philippe Denormandie Vice President 2

3 1 2 New company project 3 Curanum 4 Outlook in figures 3

4 1 4

5 Significant growth in earnings In M In M Increase in current net income (group share) (2) Margin rate % of rev +9.2% +11.7% 1, , % 23.8% 25.0% 23.8% +13.4% % 12.5% +9.5% x 3.9x x Restated leverage (3) Revenues EBITDAR (1) EBITDA Net income (group share) Net debt Significant reduction in debt (1) EBITDAR is the Korian Group's preferred interim management balance for monitoring the performance of its facilities. It is based on the gross operating surplus for the operating segments before leasing expenses. (2) Current net income (group share) is defined as net income (group share) (other income and expenses for the operating segments +income / acquisition and sale of consolidated equity interests) * (1 standard corporation tax at 35%), i.e. net income (group share) restated for non-current items (3) (Net debt - Real estate debt) / (EBITDA - 7%* Real estate debt) 5

6 Highly dynamic European subsidiaries Solid organic growth In M 1, Growth: +9.2% Organic growth: +4.6% +6.9% 1, Of which, organic growth +4.6% FRANCE: +6.9% Strong organic growth: +4.6% > Linked for 2/3 to a price effect, highlighting our optimised tariff management > And 1/3 to a volume effect thanks to the still high occupancy rate on mature facilities, with 95.8% +16.0% ITALY: +16.0% % % High average occupancy rate in mature facilities: 96.4% Strong ability to generate new projects % GERMANY: +13.2% France Italy Germany Ramp-up finalised: Organic growth of 6.7% with the achievement of full occupancy in facilities opened in 2011 Average occupancy rate of 91% on the mature scope 6

7 EBITDA growth thanks to optimised cost management In M 31 Dec Dec 2011 Change Revenues 1, , % Personnel expenses % of revenues Other external purchases and expenses Tax (531.2) 47.9% (256.2) (44.2) (480.3) 47.3% (246.4) (40.2) 10.6% 3.9% 10.0% Effective cost management EBITDAR % External rents % of revenues 25.0% % % Like for like, increase in rents limited to 1.8% EBITDA % % of revenues 12.5% 12.1% 7

8 Improvement in profitability across all countries In M Consolidated FRANCE ITALY GERMANY Revenues 1, , EBITDAR % of revenues 25.0% 24.4% 24.7% 24.6% 23.6% 22.2% 28% 26.1% Change in margin +60 bp +10 bp +140 bp +190 bp 8

9 Improvement in net income 31 Dec Dec 2011 Change In M EBITDA % Depreciation and provisons (44.7) (37.1) 20.6% EBIT % Non-current items (1) (7.7) (6.2) 23.3% Operating income % Financial income / loss Income before taxes Corporate income tax % of Income before taxes Net income (group share) Current net income (group share) (2) (34.1) (33.2) 3.0% % (26.8) (20.5) 30.7% 51.0% 44.3% % % (1) Non-current items primarily include reorganisation costs ( 4.7M) and restructuring costs ( 2.7M) (2) Current net income (group share) is defined as net income (group share) (other income and expenses for the operating segments +income / acquisition and sale of consolidated equity interests) * (1 standard corporation tax at 35%), i.e. net income (group share) restated for non-current items 9

10 Significant reduction in debt Cash flow analysis In M (5) (93) (5) Net debt Dec 2011 Cash flow from operations Asset disposals Dividend paid in cash Growth investments Acquisition of Curanum shares Net debt Dec 2012 Solid recurrent cash flow First disposals carried out at end

11 Financial leeway Change in net debt x 3.9x 3.1x Significant reduction in leverage Net debt - real estate debt EBITDA - 7% real estate debt = 3.1x Net debt ( M) December 2010 December 2011 December 2012 For a default covenant of 5.0x 158 M of cash to finance the acquisition of Curanum and 350 M of available lines Syndicated loan Other debt Cash (43) (34) (158) Ongoing work to diversify sources of financing Average cost of debt at end-2012: 4.4% 11

12 2 New company project 12

13 Market undergoing major transformations Outstanding opportunities OLOSSAL POTENTIAL X 2 X 4 13

14 Market undergoing major transformations Far-reaching market changes Increasingly older residents Increasingly dependent residents Increasingly medicalised nursing homes Standardised / commonplace offer Expectations for personalisation 14

15 In this market subject to major transformations There will be a premium for the player that successfully establishes transformation at the heart of its model, to meet these new expectations and anticipate new developments 15

16 Korian has major assets to drive this transformation Expertise in its business Its European scale Its brand 16

17 New company project To pull ahead again and become tomorrow's market leader 17

18 Project guided by 4 driving forces Performance Development Innovation People 18

19 1st driving force: Performance Improving performance to free up financial leeway > Achieving the best performance levels in each country > Reducing debt and financing development Positioning the facility at the heart of Korian s model in order to: > Improve quality of service > Further strengthen commercial efficiency and effectiveness > Realign the teams around their core business > Enable the regional structures to perform their role more effectively Good results in 2012 (margins up and debt down) Profitability expected to increase in 2013 and

20 1st driving force: Performance Examples of key strategic initiatives in France Nursing home initiatives > Optimisation of the occupancy rate and pricing thanks to a dedicated team and a centralised pricing process Follow-up care and rehabilitation clinic initiatives > Optimisation of revenues on individual rooms with an adapted sales policy (impact on the occupancy rate) and a strengthening of the services offered (impact on price rises) Management of organisations > Optimisation of personnel management paving the way for reductions in HR costs 20

21 2nd driving force: Development Achieve the critical mass of a market leader through our ongoing strategy for acquisitions and international development Germany: market leader since the acquisition of Curanum, positioned to capitalise on future opportunities > Opportunities for organic growth (200,000 bed openings forecast for the German market) > Opportunities for consolidation France and Italy: already the joint market leader > Strengthening of our strong regional positions > Through creations, acquisitions, concessions, etc. First major step forward with the acquisition of Curanum 21

22 2nd driving force: Development 1,000 new beds in 2012 GERMANY FRANCE New 81-bed nursing home opened in Nice Korian Château des Ollières 30-bed extension of hospital care at home in Les Yvelines, and 25 beds added to a follow-up care and rehabilitation clinic in Thyez Acquisition of 3 facilities with a total of 231 beds Korian Reine Mathilde Korian Sorgentino Korian l'agora +371 beds +497 beds +100 beds 134-bed facility opened in Sassenburg Acquisition of 4 facilities with a total of 363 beds ITALY Public-private partnership set up with hospitals in Monza for post-acute rehabilitation 22

23 2nd driving force: Development From 2013, creation of the joint European market leader GERMANY FRANCE 14,739 beds 171 facilities 15,709 beds 125 facilities ITALY 4,349 beds 31 facilities With Curanum, close to 35,000 beds in operation, with 58% outside of France Scope at 26 March

24 Korian First 3rd driving force: Innovation Devising the leading offers for tomorrow s market with more individualised offers Exploring different business models > Development of initiatives with public and charity-owned facilities Exploring tomorrow s professions in the sector for healthy ageing 24

25 Korian First 3rd driving force: Innovation Creation of the Korian institute for healthy ageing to drive business innovation and explore new possibilities 3 key areas: > Societal research to anticipate issues for society and move the boundaries (e.g. What are seniors expectations for healthy ageing? ) > Applied research based on our European data (e.g. academic or industrial partnerships on matters relating to public health, epidemiology, etc.) > Korian s scientific sharing and research (with the production of informative content e.g. medication handbook) 25

26 Korian First 4th driving force: People, teams Deployment of a new managerial project to: > Support this transformation and sustainably engage all staff around Korian First: Executive management commitment in the field to convey the project s rationale Rollout of training Provision of tools for presenting and sharing the project > Attracting, training and retaining the best 26

27 3 Curanum 27

28 Curanum key facts at 31 December 2012 Number of beds 10,150 Number of employees 7,124 Schleswig- Holstein Holstein Mecklenburg- Vorpommern Vorpommern Revenues M EBITDAR 88.1 M EBITDAR margin 30.5% North-Rhine Westphalia Lower Saxony Saxony Anhalt Berlin EBITDA Debt 32.2 M 147 M Hessen Thuringia ü rigen Saxony O/w, real estate debt 138 M Rheinland- Rheinland Pfalz CEO: Walther Wever since 1 October 2010 Baden- W Württemberg ü rtenberg Bavaria Curanum nursing homes Korian nursing homes 28

29 Germany: a buoyant market Largest market in Europe > 2.34 M dependent people at end-2009 > 717,000 people in nursing homes > 200,000 new dependent people in institutions by 2025 Sustainable financing structure > Social Security surplus > 5 th risk funding for long-term care in place since 1995 Fragmented market > The top 3 players represent only 14% of the private market and 5% of the total German market Large, funded and fragmented market +200,000 dependent people by

30 Integration plan H > Preparation for the integration of Curanum Phönix > Identification of synergies H2 2013: transfer of Phönix to Curanum and immediate integration > Joint management team taken from both groups > Joint headquarters > New regional division > Centralisation of procurement => Integration finalized by end-2013 H1 2014: full integration within Korian => First impacts of synergies 30

31 4 Outlook in figures 31

32 Outlook Revenues 1.0 bn 1.1 bn 1.3 bn 1.4 bn EBITDAR 24% 25% 26% Increasing Restated debt ratio 4x 3x 3x < 3x 32

33 Appendices

34 Breakdown of national markets for nursing homes FRANCE (EHPAD) ITALY (RSA) GERMANY (PFLEGEHEIME) Public 49% 10 leading private operators 15% Other private operators 7% Public 47% 6 leading private operators 5% Other private operators 13% Public 6% 10 leading private operators 11% Other private operators 26% Charities 29% Charities 35% Charities 57% Available beds 684, , ,000 Beds / 1,000 peopled aged Korian market share 1.5% 1% 1.5% The 10 leading operators represent two-thirds of the private sector. Source: DREES, Istat, Pflegestatistik The 6 leading operators still represent only 4.6% of the market and 26% of the private sector. Between 1999 and 2007, 71% of beds were created by private operators. Their overall market share has therefore increased considerably. The 10 leading operators represent 30% of beds in the private sector. 34

35 Creation of Germany s joint market leader Number of beds in Germany 17,000 15,709 11,298 10,150 9,236 8,028 8,014 6,920 5,559 4,371 4,000 Pro Seniore Phönix + Curanum Kursana Curanum Casa Reha Marseille Kliniken Vitanas Maternus & Cura Phönix Azurit Alloheim * ,709 beds in operation in 125 facilities * Excluding beds from the acquisition of Poli.care Source: companies, 2011 annual report for Curanum and 2012 half-year report for Korian 35

36 Structure of the daily tariff for the nursing home business Typical structure of the daily tariff FRANCE Average Korian tariff: 129 ITALY 123 GERMANY 91 Social Security Care 25% Breakdown of tariff Breakdown of payment Residents and APA* Dependency 10% Regional Social Security Care 50% Care 60% Pflegekasse ~50% Residents Free tariffs on entry Accommodation +services 65% Residents Free tariffs Accommodation +services 50% Services 25% Residents or welfare ~50% Real estate 15% * Personalised Autonomy Allowance Source: Korian 36

37 Pricing structure in France Typical financing of the daily rate in France Nursing homes Average Korian tariff 129 Healthcare 202 Social Security Residents and APA* Care 25% Dependency 10% Care and accommodation Social Security 80% ** Residents Free tariffs on entry Accommodation +services 65% Hotel supplement 20% Patients (supplements billed for optional services - e.g. individual room) * Personalised Autonomy Allowance ** Of which, approximately 70% corresponds to the daily price Source: Korian 37

38 Growth with almost 6,000 more beds Type of beds Number of beds France Germany Italy Type of impacts Beds to be built and being acquired 1,981 1, Increase in revenues +increase in total facilities Beds built currently being filled 316* 47* 208* 61* Increase in revenues Beds to be redeveloped 3,540 2, ,034 Primarily improvement in margins Total 5,837 3,377 1,037 1,423 Major potential for growth ensuring strong organic growth * For facilities being ramped up: beds built * (standard occupancy rate average occupancy rate) for year 38

39 Change in real estate indexes Inflation (excl. tobacco and rents) CCI Nursing home improvement index 39

40 Korian's consolidated balance sheet at 31 December 2012 In M NON-CURRENT ASSETS 31 Dec Dec 2011 INTANGIBLE FIXED ASSETS 1, ,371.6 Of which, goodwill Of which, other intangible fixed assets TANGIBLE FIXED ASSETS LONG-TERM FINANCIAL ASSETS SHAREHOLDERS' EQUITY (Group share) 31 Dec Dec 2011 Share capital Premiums Consolidated earnings and reserves Total shareholders' equity (Group share) Minority interests Total shareholders' equity Deferred tax assets NON-CURRENT LIABILITIES Total non-current assets 1, ,830.8 Pension provisions Deferred tax CURRENT ASSETS Other provisions Borrowings and financial debt Inventories Trade receivables and related Total non-current liabilities CURRENT LIABILITIES Other receivables and current assets Provisions for less than one year Trade payables and related Financial instrument assets Other liabilities and adjustment accounts Borrowings < 1 year and bank overdrafts Cash and cash equivalents Other debt Total current assets Total current liabilities Assets held for sale Liabilities held for sale TOTAL ASSETS 2, ,089.0 TOTAL LIABILITIES 2, ,

41 Curanum's consolidated balance sheet at 31 December 2012 In M 31 Dec Dec Dec Dec 2011 NON-CURRENT ASSETS SHAREHOLDERS' EQUITY (Group share) INTANGIBLE FIXED ASSETS Of which, goodwill Of which, other intangible fixed assets TANGIBLE FIXED ASSETS OTHER FIXED ASSETS Share capital Consolidated earnings and reserves (24.4) (28.5) Total shareholders' equity (Group share) Minority interests Total shareholders' equity Deferred tax assets Total non-current assets CURRENT ASSETS Inventories Trade receivables and related Other receivables and current assets Cash and cash equivalents Total current assets NON-CURRENT LIABILITIES Pension provisions Deferred tax Borrowings and financial debt Total non-current liabilities CURRENT LIABILITIES Provisions for less than one year Trade payables and related Other liabilities and adjustment accounts Borrowings < 1 year and bank overdrafts Other debt Total current liabilities TOTAL ASSETS TOTAL LIABILITIES

42 Korian's cash-flow statement at 31 December 2012 In M 31 Dec Dec 2011 Cash flow from operations before cost of net financial debt Change in working capital requirement Net cash from operating activities Net cash from investment activities (30.9) (107.9) Net cash flow 95.4 (9.4) Net cash from financing activities Change in cash flow (7.5) Cash

43 Income statement at 31 December 2012 FRANCE In M 31 Dec Dec 2011 Change Revenues % Personnel expenses % of revenues Other external purchases and expenses Tax % % % 0.9% 10.1% EBITDAR % External rents % of revenues 24.7% % % EBITDA % % of revenues 13.6% 13.7% 43

44 Income statement at 31 December 2012 ITALY In M 31 Dec Dec 2011 Change Revenues % Personnel expenses % of revenues Other external purchases and expenses Tax % % % 8.2% 22.5% EBITDAR % External rents % of revenues % % % EBITDA % % of revenues 12.2% 10.2% 44

45 Income statement at 31 December 2012 GERMANY In M 31 Dec Dec 2011 Change Revenues % Personnel expenses % of revenues Other external purchases and expenses Tax % % % 4.0% EBITDAR % External rents % of revenues % % 27.9 NS 14.34% EBITDA % % of revenues 7.7% 6.0% 45

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