2017 Year End Results Conference Call

Transcription

1 2017 Year End Results Conference Call

2 Forward Looking Statements This presentation contains forward-looking statements, based on our best judgements, which reflect risks and uncertainties. Actual results could vary from expectations. EBITDA, Adjusted EBITDA, net operating income (NOI), funds from operations (FFO), and adjusted funds from operations (AFFO) are non-gaap measures and do not have standardized meanings prescribed by GAAP. Further information can be found in the disclosure documents filed by Extendicare.

3 Our Continuum of Care Brands LONG-TERM CARE RETIREMENT LIVING HOME HEALTH CARE MANAGEMENT AND CONSULTING SERVICES GROUP PURCHASING SERVICES 58 Long-term care centres owned 50 Extendicare Assist centres under management 8 Retirement living communities owned 45K SGP third-party residents served 11.3M Home Health Care hours delivered 3

4 Financial Highlights Canadian Operations Q YR 2017 REVENUE* $279.1M 1.4% from $275.3M REVENUE* $1, % from $1,057.1M NET OPERATING INCOME* $33.3M 3.4% from $32.2M NOI margin 11.9% vs 11.7% NET OPERATING INCOME* $130.6M 3.3% from $126.4M NOI margin 12.0% vs 12.0% ADJUSTED FUNDS FROM OPERATIONS* $15.7M 34.2% from $11.7M ADJUSTED FUNDS FROM OPERATIONS* $58.4M 0.5% from $58.6M 4

5 Retirement Living Q4 Year ($ millions unless otherwise noted) Revenue $ 6.1 $ 4.4 $ 20.7 $ 15.5 Net Operating Income Same-store Non same-store (0.2) (0.7) (1.3) (2.4) As at December 31 As at Occupancy Stabilized (Empire/Stonebridge/Riverbend) 95.9% 93.9% Lease up 68.6% 41.5% Steady progress in occupancy 5

6 Esprit Lifestyle Communities Growth Douglas Crossing 103 suites opened Oct. 30/17 56% occupied at Dec. 31/17 71% occupied at Feb. 28/18 47-suite expansion Target open Q $40.3M estimated Adj. Dev. Cost 8.6% Expected NOI Yield Douglas Crossing Retirement Community, Uxbridge, Ontario Welcomed first resident October 30,

7 Esprit Lifestyle Communities Growth Barrie Retirement Project Rendering Projects in Development 112 suites Bolton, ON Target open Q $31.5M estimated Adj. Dev. Cost 7.6% expected NOI Yield 124 suites Barrie, ON Target open Q $39.7M estimated Adj. Dev. Cost 8% expected NOI Yield 7

8 Esprit Lifestyle Communities Acquisition The Manor 93 suites The Village 113 townhomes Lynde Creek Retirement Community, Whitby, ON Closing anticipated Q $34.5M cash purchase price 6.3% implied cap rate, excluding excess land 100% occupied 3.7 acres of excess land for expansion 8

9 Long-term Care Q4 QoQ Year YoY ($ millions unless otherwise noted) (%) (%) Revenue $ $ % $ $ % Net operating income $ 18.3 $ % $ 73.9 $ % NOI margin 12.0% 12.4% Total average occupancy 97.7% 98.0% average occupancy 97.2% 97.9% ON Private-New ON Private-C 98.8% 98.7% 98.1% 96.8% 97.9% 98.4% Q Q YR 2016 YR

10 Long-term Care Redevelopment Extendicare Eaux Claires 24 LTC bed addition opened February 2018 expected to stable occupancy in Q ~$3.5M cost, incremental NOI of ~$600k Extendicare Eaux Claires, Edmonton, AB 204 LTC beds Ontario LTC Redevelopment Plan to redevelop 21 Ontario centres (3,287 beds) over 10 years Applications submitted for 16 projects involving 7 greenfields and 9 renovations over the next 5 years Plan to spend ~$400M over next 5 years on redevelopment ON Government 5,000 new LTC beds by 2022 applying for new beds Leadership role in sector redevelopment 10

11 Home Health Care Q4 QoQ Year YoY ($ millions unless otherwise noted) (%) (%) Revenue $ $ % $ $ % Net operating income $ 11.0 $ % $ 43.8 $ % NOI margin 10.1% 9.7% Service volumes (daily hours) 31,032 29, % Service Volumes (hours / day) 30,932 30,634 29,807 31,032 Q Q YR 2016 YR 2017 YoY continued growth in service volumes 11

12 Other Canadian Operations Q4 QoQ Year YoY ($ millions unless otherwise noted) (%) (%) Revenue $ 5.1 $ % $ 18.8 $ % Net operating income $ 3.0 $ % $ 10.4 $ % NOI margin 57.8% 51.9% 55.4% 53.5% ASSIST BEDS UNDER MANAGEMENT SGP THIRD-PARTY RESIDENTS SERVED 6,332 5,693 6,036 6,040 6,216 40,900 40,700 44,700 44,900 45,200 YE 2016 Mar. 31/17 Jun. 30/17 Sept. 30/17 YE 2017 YE 2016 Mar. 31/17 Jun. 30/17 Sept. 30/17 YE 2017 Continued growth contracts to manage three additional centres (416 beds) beginning March 12

13 2017 YEAR FINANCIAL REVIEW

14 Q and Year 2017 Consolidated Financial Summary Q4 QoQ ($ millions unless otherwise (%) noted) Revenue $ $ % Net operating income $ 35.6 $ % NOI margin 12.7% 12.2% Year YoY ($ millions unless otherwise (%) noted) Revenue $ 1,097.3 $ 1, % Net operating income $ $ % NOI margin 12.4% 12.3% YR 2017 NOI up 4.4% NOI margin increased to 12.4% 14

15 Q and Year 2017 AFFO and Payout Ratio ( $ per basic share) AFFO continuing operations Cdn Ops U.S. Ops ($ in millions, except per share amounts) Q Q YR 2016 YR 2017 AFFO (Cdn continuing ops) $ 11.7 $ 15.7 $ 58.6 $ 58.4 Payout ratio (Cdn Ops) 91% 68% 72% 73% AFFO (continuing operations) $ 13.5 $ 15.7 $ 66.7 $ 58.5 Payout ratio (total AFFO) 80% 68% 65% 73% 15

16 Year 2017 Strong Financial Position CASH $128M TOTAL LTD (1) $543M from $102M from $513M WEIGHTED AVERAGE MATURITY 7 Years WEIGHTED AVERAGE RATE 5.0% from 5.2% EBITDA interest coverage 3.3x Debt to GBV 47% (1) Includes current portion, reflects convertible debt at face and excludes financing costs 16

17 CONCLUSION

18 Our Strategy REBALANCE revenue across operating segments GROW across the continuum of care INCREASE proportion of revenue and operating profit from private-pay services DEMONSTRATE leadership in quality and innovation Create shareholder value through growth in all segments 18

19 2017 Year End Results Conference Call