Revenues up 10.9% and EBITDAR margin down to
18.5%
Regulatory News:
ORPEA (Paris:ORP) :
Activity in the first half of the year and during the summer
months remained sustained by the pace of new bed openings and a
gradual improvement in the level of activity.
At the same time, operating profitability for the first half of
the year, as well as for full-year 2022, has been affected by the
reduction in compensation mechanisms relating to Covid-19, which
the increase in the Group's occupancy rate was not sufficient to
counterbalance, as well as by a sizeable amount of non-recurring
income specific to 2021, an inflationary context in purchases
(particularly energy) and also by a more active recruitment policy,
particularly in France, in a job market under pressure.
Laurent Guillot, Chief Executive Officer, said: "A little over
two months after taking office, I am convinced that ORPEA benefits
from solid assets to be a leading player at the heart of the
societal challenges associated with the care of elderly persons.
Its 72,000 employees caring for residents, patients and their
families are the most important of these. I would like to extend my
warmest thanks to all our teams, both in France and abroad, for
their unwavering commitment, particularly during this very hot
summer.
We have taken a first step with concrete measures that were
decided this summer as part of the implementation of our three
short-term priorities: safety and working conditions for our
employees; quality of care and support for our residents, patients
and their families; and the ethical and responsibility principles
that are attached to our mission.
With the support of a largely renewed Board of Directors, ORPEA
is fully engaged in its transformation plan and into restoring
sustainable practices, in a spirit of dialogue and transparency
with all our stakeholders. I will present the main orientations of
this plan in the autumn.”
* *
*
The Board of Directors meeting on 10 September 2022 reviewed the
preliminary financial indicators for the first half of 2022,
unaudited as of today, and the economic environment for the second
half of 2022.
The indicators for the first half of 2022 are as follows:
(€m)
FY2020
FY2021
H1 2021
H1 2022
(unaudited figures)
Revenue
3,922
4,299
2,070
2,295 (1) + 10.9%
EBITDAR
963
1,070
515
Margin
24.6%
24.9%
24.9%
18.5%
EBITDA
927
1,041
499
Margin
23.6%
24.2%
24.1%
17.9%
Recurring operating profit
423
396
231
Margin
10.8%
9.2%
11.1%
3.6%
Gross financial debt
7,542
8,863
8,264
9,475
Cash
889
952
938
1,130
Net financial debt (2)
6,653
7,910
7,326
8,345
Rental expense (3)
354
382
186
212
(1)
This amount is €17 million lower than the
figure published on 20 July 2022 due to a change in the accounting
approach for an entity that is no longer included in the scope of
consolidation.
(2)
As of June 30, 2022, the Company had a
syndicated facility of 1,729 million euros, of which 900 million
euros had been drawn.
(3)
It should be noted that rental expenses
are not deducted from EBITDA in accordance with IFRS 16
Certain income statement items (financial income and expense,
non-current items and income tax expense) are still the subject of
internal and external works. With regard to the determination of
non-current items, impairment tests are currently being carried
out, mainly on certain intangible assets. Based on the information
in its possession, the Company estimates that the resulting
impairment losses could range between €170 million and €220
million.
Change in EBITDAR margin between H1 2021 and H1 2022 is
explained by:
- the substantial reduction in compensation for Covid-19 received
in the various countries concerned, which the increase in the
Group's occupancy rate between the two periods was not sufficient
to counterbalance, as well as by the recording of sizeable specific
income in the first half of 2021 that did not recur in 2022. These
two items account for about two-thirds of the change in the margin
rate between the two periods;
- the other third comes from an increase in other costs which is
in line with a highly inflationary environment impacting purchases,
while the tariffs charged to patients and residents remained almost
stable in the short term. The most significant inflationary effects
concerned foodstuffs and especially energy. As a result of the
hedging policy decisions made in 2021, the company’s energy
purchases for 2022 are only partially hedged, and there is no
hedging on electricity in France in particular. As a result, the
Group's energy costs as a percentage of revenue in the first half
of 2022 stood at 2.9%, compared with 1.9% in the first half of
2021.
During the first half of 2022, despite the crisis, the Group
continued its development with the opening of 1,547 additional
beds, corresponding to new facilities and extensions in all its
geographical areas. These achievements respond to the need to
develop a care offer in line with the expectations of families,
residents and authorities in the different countries.
Expected operational performance in the
second half of the year
The Group's average occupancy rate since the beginning of 2022
remains above the average level for the same period in 2021. This
trend was confirmed in July and August. As a result, ORPEA confirms
its confidence in its ability to maintain robust revenue growth
momentum throughout 2022.
ORPEA expects the decline in the financial performance of its
activities experienced in H1 2022 compared with H1 2021 to continue
into the second half of the year and considers it may be amplified
by additional volatility observed recently in energy markets. In
this context, and depending on the recovery of the occupancy rate,
EBITDAR margin in H2 2022 could be lower than the level seen in H1
2022.
Transformation has started, for the
benefit of residents, patients, families and
employees
Three priorities have already been set for the short term:
safety and working conditions, quality of care and support, and
unconditional respect for ethical principles. Immediate steps in
this direction were taken during the summer. For example, in
France, payment of an attendance bonus for those who completed 10
weeks of work out of the 13 weeks that constitute the critical
summer period. Reporting of undesirable events is now
systematically escalated to Executive Management in order to speed
up the implementation of action plans designed to improve the
quality of care. Greater autonomy has been given to facility
Directors to recruit or decide on improvements to their
facilities.
These priorities will enhance the transformation plan currently
being drawn up, which will be presented in the autumn.
==============
Financial calendar
ORPEA will announce its consolidated financial results for the
first half of 2022 on 28 September 2022 after market close.
About ORPEA
ORPEA is a leading global player, expert in the care of all
types of frailty. The Group operates in 22 countries and covers
three core businesses: care for the elderly (nursing homes,
assisted living, home care), post-acute and rehabilitation care and
mental health care (specialized clinics). It has more than 72,000
employees and welcomes more than 255,000 patients and residents
each year.
https://www.orpea-group.com/
ORPEA is listed on Euronext Paris (ISIN: FR0000184798) and is a
member of the SBF 120, STOXX 600 Europe, MSCI Small Cap Europe and
CAC Mid 60 indices.
DISCLAIMER
This document contains forward-looking statements that involve
risks and uncertainties, including references, concerning the
Group's expected growth and profitability in the future which may
significantly impact the expected performance indicated in the
forward-looking statements. These risks and uncertainties are
linked to factors out of the control of the Company and not
precisely estimated, such as market conditions. Any forward-looking
statements made in this document are statements about the Company’s
beliefs and expectations and should be evaluated as such. Actual
events or results may differ from those described in this document
due to a number of risks and uncertainties that are described
within the Company’s Universal Registration Document.
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version on businesswire.com: https://www.businesswire.com/news/home/20220911005079/en/
Investor Relations ORPEA Benoit Lesieur Investor
Relations Director b.lesieur@orpea.net
Investor Relations NewCap Dusan Oresansky Tel.:
+33 (0)1 44 71 94 94 ORPEA@newcap.eu
Media Relations ORPEA Isabelle Herrier-Naufle
Media Relations Director Tel.: +33 (0)7 70 29 53 74
i.herrier-naufle@orpea.net
Image 7 Laurence Heilbronn Tel.: +33 (0)6 89 87 61 37
lheilbronn@image7.fr
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