Results at 30 June 2013

Transcription

1 Results at 30 June September half-year earnings

2 INTERVENANTS Yann Coléou Directeur général Louis Guyot Directeur général finances Philippe Denormandie Directeur général adjoint half-year earnings

3 SPEAKERS Yann Coléou CEO Louis Guyot CFO Philippe Denormandie Deputy CEO half-year earnings

4 Key events EVENTS OBJECTIVES Successful friendly takeover of Curanum Leader in 3 countries Sale of psychiatric division on good terms Refocusing on our core businesses Strong improvement in performance and reinforced financial structure Now among the best in the sector half-year earnings

5 The Korian corporate project To take the lead and become the No.1 player in the Healthy Ageing market A corporate project based on four pillars half-year earnings

6 1 PERFORMANCE 2 DEVELOPMENT 3 INNOVATION 4 OUR PEOPLE, OUR TEAMS half-year earnings

7 1 PERFORMANCE half-year earnings 2013 half-year earnings 7

8 Significant increase in earnings % In millions +21.0% +32.6% In millions Current net income (Grp share) (2) up +65.9% Margin rate % of revenues % 26.1 % %12.2 % x x3.0 x Restated leverage (3) June 2012 June 2013 June 2012 June 2013 June 2012 June 2013 June 2012 June 2013 Dec 2011 Dec 2012 June 2013 Revenues EBITDAR (1) EBITDA Net income (Group share) Net debt 21% growth Margin up by 230 bp (1) EBITDAR is the interim management balance sheet measurement preferred by the Korian Group to monitor the operational performance of its facilities. It consists of gross operating surplus of the operating sectors before leasing expenses. (2) Current net income (Group share) represents net income (Group share) - (other operating income and expenses + gains and losses on acquisitions and disposals of subsidiaries) x (1 - standard corporate income tax of 35%), or restated net income (Group share) for non-recurring items. (3) (Net debt Real estate debt) / (EBITDA 7%* Real estate debt) half-year earnings

9 Strong dynamic in Germany Solid organic growth France: +3.2% In millions Growth: +21.0% Organic growth: + 3.5% , June 2012 France + 3.2% % Germany % June 2013 Italy Of which organic growth + 4.2% + 6.4% - 1.6% Robust organic growth +4.2% - Good occupancy rate: 95.8% in mature facilities - Improved management of pricing, especially in follow-up care and rehabilitation (SSR) Two nursing homes sold in late 2012 Germany: % Curanum consolidated since 1 March 2013 Organic growth increases to 6.4% with the achievement of full occupancy in 2011 / 2012 Average occupancy rate 93.0% in the mature segment Italy: -1.6% High average occupancy in the mature segment: 96.9% Acceleration of restructuring, and base effect half-year earnings

10 INTERVENANTS Yann Coléou Directeur général Louis Guyot Directeur général finances Philippe Denormandie Directeur général adjoint half-year earnings

11 Strong growth in margins in all countries In millions Consolidated France Germany Italy June 2013 / June 2012 June 2013 / June 2012 June 2013 / June 2012 June 2013 / June 2012 Revenue EBITDAR % of revenue 26.1% 23.8% 25.9% 24.1% 28.1% 24.3% 22.9% 22.2% Change in margins +230 bp +180 bp +380 bp +70 bp half-year earnings

12 EBITDA up as a result of optimum cost control In millions 30/06/ /06/2012 Change Revenue % Staff costs % of revenue Other external purchases and expenses Taxes (319.4) 48.2% (148.3) (22.6) (265.0) 48.4% (131.6) (21.0) 20.5% 12.7% 7.4% EBITDAR % External rents % of revenue 26.1% % % Strong cost control Like-for-like growth in rents limited to 2% EBITDA % % of revenue 12.2% 11.4% half-year earnings

13 Improvement in net earnings 30/06/ /06/2012 Change In millions EBITDA (1) % Depreciation and provisions (28.0) (22.8) EBIT Non-recurring items (2) Operating income (4.3) (2.0) % 33.7% 120.6% 29.2% Financial income Income before taxes Income tax % income before taxes Net income (Group share) Net current inc (Group share) (3) (21.1) (16.7) 26.5% % (9.6) (9.5) 0.6% 34.6% 45.2% % % (1) EBITDA is equivalent to EBITDAR as defined above, less rental expenses. (2) Non-recurring items mainly consist of Curanum acquisition costs ( 4 million). (3) Current net income (Group share) represents net income (Group share) - (other operating income and expenses + gains and losses on acquisitions and disposals of subsidiaries) x (1 - standard corporate income tax of 35%), or restated net income (Group share) for non-recurring items half-year earnings

14 Significant financial room for manoeuvre Net debt trends Leverage unchanged x 3.1x 3.0x Net debt - Real estate debt EBITDA - 7% Real estate debt Default covenant at 5.0x = 3.0x Net debt in million December 2011 December 2012 June Continuing diversification of debt with the issue of a private placement of 67.5 million in August million in available credit lines Average cost of debt: 4.4% Syndicated credit Bonds Other debts Cash (34) (158) (44) half-year earnings

15 2 DEVELOPMENT half-year earnings 2013 half-year earnings 15

16 INTERVENANTS Yann Coléou Directeur général Louis Guyot Directeur général finances Philippe Denormandie Directeur général adjoint half-year earnings

17 KORIAN, EUROPEAN LEADER IN HEALTHY AGEING 321 facilities in Europe 15,709 beds 270 nursing homes (EHPAD) 51 specialised clinics (follow-up care and rehabilitation / SSR) Beds for over 2,200 people in assisted living facilities Homecare services for 9,000 people f r a n c e 14,095 beds 4,389 beds Geographical extent at 12 September 2013 Including Curanum, nearly 34,000 beds in use 59% of which outside France half-year earnings

18 Curanum consolidation timeline MARCH 2013 Successful takeover of Curanum Korian owns 78% of Curanum Phönix and Curanum are operationally two separate companies Identification of the new organisation 1 September 2013 Contribution of Phönix to Curanum Phönix: wholly-owned subsidiary of Curanum Start of consolidation Single Executive Board Appointments: - Regional Directors - Department Heads Reorganisation of procurement and service providers 2014 Consolidation completed half-year earnings

19 CONFIRMATION OF CURANUM'S BUSINESS PLAN The Phönix contribution to Curanum is key to the success of the business plan. Immediate implementation of synergies - Single management and head office - Revamped regional organisation and tighter local networks: sales, local supervision, recruitment, etc. - Unification of management and IT systems - Centralised single purchasing desk: with rapid gains such as energy-price negotiations. - Resource sharing: use of Curanum's in-house laundry service by all facilities. Expected synergies: 1% of revenues when fully realised, ramping up in half-year earnings

20 Seizing the best development opportunities in Europe Germany Neumarkt opens (133 beds) Hamm opens in late 2013 (80 beds + 18 homecare services beds) Special Care unit opened in Bayreuth (better pricing structure) Agreement signed for creation of an 80-bed nursing home (EHPAD) in Meschede In the medium term, development of a platform for organic growth: The long-term objective is to create 1,000 beds a year half-year earnings

21 Seizing the best development opportunities in Europe France Nursing homes opened in Alençon, relocated in Chapelle Saint Mesmin and reopened in Pouliguen (three in total) Authorisation obtained for 70 follow-up care and rehabilitation (SSR) beds in Troyes Italy Budget clawed back for the (closed) Pergolino clinic in Florence Acquisition of the Munari clinic in Florence: restructuring launched for the four clinics in Tuscany (grouped on two sites) New pricing structure secured for nursing homes in Pouilles and Latium half-year earnings

22 Secure growth of more than 5,000 beds Type of beds Number of beds France Germany Italy Impact type Beds to be constructed and in the process of acquisition 1, Increase in revenue + increase in total facilities Beds constructed and in the process of being filled 349* 86* 199* 64* Increase in revenue Beds to be restructured 3,258 2, ,074 Primarily improved margins Total 5,412 2,958 1,028 1,426 * For facilities that have been ramped up: annual beds constructed * (regulated occupancy rate average occupancy rate) Major inherent potential for strong organic growth A development platform in Germany to deliver 1,000 beds a year half-year earnings

23 3 INNOVATION half-year earnings 2013 half-year earnings 23

24 INTERVENANTS Yann Coléou Directeur général Louis Guyot Directeur général finances Philippe Denormandie Directeur général adjoint half-year earnings

25 Innovation is at the heart of Korian's strategy Two facets to innovation: social and forecasting, with Korian's Institut du Bien Vieillir operational, to boost performance half-year earnings

26 KORIAN FIRST - INNOVATION Driving business innovation: Social research to pre-empt social issues and change attitudes (eg: "What are seniors expectations of Healthy Ageing?") Applied research using our data: academic and industrial partnerships on topics related to public health, epidemiology, etc. Korian research and scientific sharing via the production of educational content (eg: Drug leaflets) half-year earnings

27 KORIAN FIRST - INNOVATION In practice 1 st Committee meeting in July Actions 2013: - Project publications: "The Basics" drugs leaflet - Three scientific articles from work submitted for peer review: training tools, pain medications, changes between 2007 and 2011 in the populations catered for - Partnership research programmes: eg. The effect of play on Alzheimers Next Committee meeting in October: formalisation of the social vector half-year earnings

28 Operational innovation Change in biocleaning technology, achieving four objectives: -Better working conditions: fewer musculoskeletal disorders -Productivity: time saving (4 minutes per room) -Reduction in water and chemicals: 50% saving -Residents safety: floors dry faster, chemicals are not accessible half-year earnings

29 Operational innovation Sharing Best Practices: Guide published with 20 case studies of actual workshop operations, issued at the annual convention and circulated to all directors. Examples of applications: - rapid, cost-effective renovation: 25% saving on small-scale renovations - better adaptation of scheduling patterns: building loyalty among employees - individual care in clinics: personalised follow-up from pre-admission right up to discharge half-year earnings

30 Operational innovation Maximization of returns from special follow-up and rehabilitation (SSR) rooms: sales process development of accommodation in line with rates Gains in 2013 are exceeding our expectations half-year earnings

31 4 OUR PEOPLE, OUR TEAMS half-year earnings 2013 half-year earnings 31

32 Deploying the business plan on the ground Management's commitment to communicating the meaning of Korian First on the ground Organisational models to support change Tools to present and share Korian First half-year earnings

33 A new approach to management Promote employee development: promotion from within Build loyalty Mentoring system Induction pathway fully reviewed and standardised Satisfaction indicators monitored: Kommunity employee opinion survey launched in France with an excellent response rate half-year earnings

34 A new approach to management Improving the response to performance challenges Annual interview focused on all aspects of performance Alignment of objectives Exceptional performance bonus where appropriate Recognising success Ten "K d Or Awards" presented at the annual managers' meeting half-year earnings

35 CONCLUSION 2013 GUIDANCE half-year earnings 2013 half-year earnings 35

36 Revised outlook for SFAF March 2013 SFAF Sept Revenue billion billion 1.3 billion 1.35 billion EBITDAR 24% 25% 26% 27% Restated debt ratio 4x 3x 3x 3x To support the Group's rapid growth: Management strengthened Consistency of governance across all countries half-year earnings

37 Results at 30 June September half-year earnings

38 half-year earnings NOTES

39 Distribution of national markets for nursing homes Public 49 % FRANCE (nursing homes / EHPAD) Top 10 private operators 15% Other private 7% Public 47% ITALY (RSA) Top 6 private operators 5% Other private 13% Germany (Pflegeheime) Public 6% Top 10 private operators 11% Other private 26% NGO 29% NGO 35% NGO 57% Available beds 684, , ,000 Beds/ 1,000 persons aged Korian market share 1.5% 1% 1.5% - The Top 10 operators represent 2/3 of the private sector Source: DREES, Istat, Pflegestatistik - The Top 6 operators 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 Top 10 operators represent 30% of beds in the private sector half-year earnings

40 Structure of daily rates in the nursing homes sector FRANCE Average Korian rate: 129 ITALY 123 GERMANY 91 Social security Medical care 25% Breakdown of rates Breakdown of payments Residents and APA* Dependency 10% Regional Social Security Medical care 50% Medical care 60% Pflegekasse ~50% Residents Individual pricing at entry Accommodation + services 65% Residents Individual pricing Accommodation + services 50% Services 25% Real estate 15% Residents or Social Welfare ~50% Personalised Autonomy Allowance Source: Korian half-year earnings

41 Structure of rates in France Typical financing of the daily rate in France Retirement homes Average Korian rate 129 Healthcare 202 Social Security Residents and APA* Medical care 25% Dependency 10% Care and accommodation Social Security 80%** Residents Individual pricing at entry Accommodation + services 65% Lodging supplement 20 % Patients (supplements billed for additional comforts, e.g. private room) * Personalised Autonomy Allowance * * of which approximately 70% corresponds to the daily price Source: Korian half-year earnings

42 Real estate index trends IRL (housing property reference index): inflation excluding tobacco and rents CCI (Construction Cost Index) Nursing home improvement index half-year earnings

43 Income Statement at 30 June 2013 (including Curanum proforma) In M % Curanum Proforma Revenues % EBTIDAR % % Rev., net of tax 26.1% 23.8% 155.2% 26.2% External rents (91.6) (67.7) 35.4% (100.9) EBTIDA % 85.1 % Rev., net of tax 12.2% 11.4% 7.1% 12.0% Amortisation and depreciation (28.0) (22.8) 22.5% (30.1) EBIT % 55.0 % Rev., net of tax 8.0% 7.3% 10.5% 7.7% Non-recurring items (4.3) (2.0) 120.6% (4.6) Operating income % 50.4 % Rev., net of tax 7.4% 6.9% 6.8% 7.1% Financial income (21.1) (16.7) 26.5% (23.0) Income before taxes % 27.4 Income tax (9.6) (9.5) 0.6% (9.3) % of income before tax 35% 45% -23.4% 34% Net income (Group share) % 16.5 Curr net inc (grp share) % 19.5 (1) EBITDAR is the interim management balance sheet measurement preferred by the Korian Group to monitor the operational performance of its facilities. It consists of gross operating surplus of the operating sectors before leasing expenses. (2) EBITDA is equivalent to EBITDAR as defined above, less rental expenses. (3) EBIT is EBITDA as defined above less depreciation, provisions and impairment. (4) Current net income (Group share) represents net income (Group share) - (other operating income and expenses + gains and losses on acquisitions and disposals of subsidiaries) x (1 - standard corporate income tax of 35%), or restated net income (Group share) for non-recurring items half-year earnings

44 Korian consolidated balance sheet at 30 June 2013 In millions NON-CURRENT ASSETS 30/06/ /12/2012 INTANGIBLE FIXED ASSETS 1, ,324.7 Including Goodwill Including Other intangible fixed assets PROPERTY, PLANT AND EQUIPMENT LONG-TERM FINANCIAL ASSETS SHAREHOLDERS' EQUITY (Group share) 30/06/ /12/2012 Share capital Premiums Reserves and consolidated results Total Shareholders' equity (Group share) Minority interests Total Shareholders' Equity Deferred asset taxes Total non-current assets 2, ,774.5 CURRENT ASSETS Inventory Trade receivables and related accounts Other receivables and current assets Financial asset instruments Cash and cash equivalents Total current assets NON-CURRENT LIABILITIES Provision for retirement Deferred taxes Other provisions Borrowings and financial debts Total non-current liabilities CURRENT LIABILITIES Provisions for less than one year Trade payables and related accounts Other liabilities and adjustment accounts Borrowings for < one year & bank overdrafts Other receivables Total current liabilities , , , Assets held for sale Liabilities held for sale TOTAL ASSETS 2, ,231.9 TOTAL LIABILITIES 2, , half-year earnings

45 Korian Cash Flow Statement at 30 June 2013 In millions 30/06/ /06/2012 Cash flow before cost of net financial debt Change in working capital requirement (37.5) (8.1) Net cash flow generated by the activity Net cash flow from investment activities (69.6) (51.7) Net cash flow (33.8) (7.8) Net cash flow from financing activities (79.8) (4.8) Change in cash (113.5) (12.5) Cash half-year earnings

46 Income Statement at 30 June 2013 FRANCE In millions 30/06/ /06/2012 Change Revenue % Staff costs % of revenue Other external purchases and expenses Taxes % % % (2.4)% 7.2% EBITDAR % External rents % of revenue 25.9 % % % EBITDA % % of revenue 14.4% 12.9% half-year earnings

47 Income Statement at 30 June 2013 GERMANY In millions 30/06/ /06/2012 Change Revenue Staff costs % of revenue Other external purchases and expenses Taxes EBITDAR External rents EBITDA % of revenue % % % % % of revenue 8.1% 3.9% 138.6% 130.5% 117.6% 6.7% 175.7% 133.3% 398.0% half-year earnings

48 Income Statement at 30 June 2013 ITALY In millions 30/06/ /06/2012 Change Revenue % Staff costs % of revenue Other external purchases and expenses Taxes % % % 0.0% 17.6% EBITDAR External rents EBITDA % of revenue % % % of revenue 11.3% 11.4% 1.2% 5.6% -2.9% half-year earnings

49 half-year earnings