2020 Half-Year Results Presentation Ko… · 30/07/2020 · #1 #1 #2 Ongoing KEY FIGURES 470,000...

2020 Half-Year ResultsPresentation

30 July 2020

2

Agenda

Covid-19 update1.

2. H1 2020 financials

3. Outlook

5

10

22

3

A PRESENCE IN 600 LIVING AREAS THROUGHOUT EUROPETo offer diversified and accessible solutions

2020 HALF-YEAR RESULTS - JULY 30th, 2020

RANGE OF SERVICES

56,000EMPLOYEESBEDS

86,046RESIDENTS/PATIENTS

949

6 countries representing nearly 55% of the EU population over 75 years old

FACILITIES

Number of facilities

Medical Care and Clinics

Assisted Living facilities

and shared housing for seniors

Home Care services

Nursing Homes

2019

SPAINBELGIUM ITALYGERMANYFRANCE NETHERLANDS

#1 #2#1 #1

Ongoing

KEY FIGURES

470,000

455 33,114

250 29,893122 13,111

33 935

73 6,876

16 2,117

Number of beds

4

H1 2020: RESILIENCE THROUGH THE COVID-19 CRISISWITH INCREASED INVESTMENTS IN LOCAL CARE PATHWAYS


Adapting the network to operate in a safe Covid-19 environment over the long term

Sustained level of activity over the period despite lockdown measures

H1 2020: Revenue up 6.2% bolstered by acquisitions

and Restated EBITDA down to 13.2% (-140bps) due to Covid-19 impact (not incl. one-off Covid-19 costs)

High level of investment €516m allocated

to continuous development and transformation of the network

Korian remains fully mobilised to deliver on its 15 ESG commitments

Care continuity ensured by fully committed teams

5

Covid-19 update

1.


6

COVID-19 IMPACT (JULY, 2020)


Nursing Homes

Concentration of the epidemic in specific geographical areasSpecialised clinics

Assisted living and Shared housing

Home Care and at home hospitalisation

80% network affected by entry / activity restrictions:

Nursing Homes :

Entry freeze across the network due to lockdown

Lasting from March to end June

Healthcare:

Full interruption of ambulatory care

Significant drop of inpatient care – due to surgery lockdown

Partially compensated in France no compensation in Italy

Home Care

No specific restrictions - Increased activity (+27%)

Korian exposed to the virus through the location of its Nursing Homes: in Northern Italy, Belgium and France:

33% of the network affected by the virus at the peak

10% of residents were infected across the network

Over mortality rate vs. 2019 is 27% mid July can be extrapolated to 14% for 2020

7

COVID-19: SIGNIFICANT IMPROVEMENT IN THE SITUATION SINCE BEGINNING OF MAYTesting campaigns and distancing measures demonstrated efficiency


BEGINNING OF JUNE:SLOWDOWN CONFIRMED

LAST WEEK OF APRIL:CRISIS PEAK

No Covid-19 case

1 or 2 Covid-19 cases

≥ 3 Covid-19 cases

Caption

24 JULY 2020:97% OF THE NETWORK IS COVID FREE*

* 24 facilities with Covid cases mainly asymptomatic

8

VIGI-COVID: ADAPTED NETWORK


• Specific hygiene rules

• On site training

• E-leaning tools

• Information campaigns

• Specific heatwave protocol

• Based on and updated with latest

scientic research

• 70 days of PPE stocks to cover epidemic

levels

• Of which 10 days in each facility

• Specific investments in individual air

conditionning units

• Investment in reusable and sustainable

protection

• Testing campaign rolled out in May/

June covering the majority of the

network

• Targeted campaigns in the vicinity of

local clusters

• All new residents and staff members

tested

• All symptoms tested

NEW EUROPEAN

STANDARD DEFINED

LARGE STOCK

OF PPE

TESTING PROTOCOL

DEFINED

Audit supported by Bureau Veritas already ongoing

100% of sites covered by 30th September 2020

9

LEARN FROM THE CRISIS TO IMPROVE OUR QUALITY OF SERVICE:COMPLETE FEEDBACK PROCESS ONGOING WITH INTERNAL AND EXTERNAL STAKEHOLDERS


1,000 interviews with our main stakeholders

5 Different categories*

Commitment and mobilization

of Korian’s teams in France

Residents and patients

Families

TargetedGeneral public

(50+)

1Prescriptors

2

Employees**

3Commercial

Prospects

4

** Opinion Way survey

Residents’ families

5

92%

""

Ifop survey for Korian carried out in 82% of Korian

Nursing homes network in France with 612 families

between 8th and 12th June 2020

Korian Employees

* IFOP studies between 5 to 26 June 2020 covering a sample of each category from 82% of French nursing home network. Similar studies to be undertaken across Europe.

General PublicPrescriptors

Commercial prospects

10

H1 2020 financials

2.


11

TIMELINE OF COVID IMPACTSProlonged period of restrictions on activities


February 2020 March 2020 April 2020 May 2020

22.02

First measuresto limit visits

June 2020 July 2020

Peak of the Pandemic

09.03 Lombardy is confined Red Zone

Period affected by direct entry freeze and limited healthcare activity

11.05

End of generallockdown

16.06 End ofconfinement to rooms in NH

End June

Easing of entry freeze for Nursing Home in Europe

with the exception of Lombardy

12.03 Outpatient activity suspended in Puglia

07.03 Belgium NH limit visits(11.03 government order)

18.05 reopening ofoutpatients activityin Puglia

17.03 Lockdown

12

COVID IMPACTS OVER H1 2020Pandemic impacting revenue and engendering specific one-off costs


IMPACT ON ACTIVITY ONE OFF

€m Covid Loss Compensation Net

Bonus (52) 40 (12)

Other (31) 23 (8)

ONE OFF(83) 63 (20)

IMPACT

€m Covid Loss Compensation Net

Revenue (100) 38 (62)

Variable costs 24 24

EBITDAR(76) 38 (38)

IMPACT

TOTAL EBITDAR IMPACT ON H1 2020

€(58)m

13

COVID IMPACTS OVER H1 2020Pandemic impacting margins


€m Actual One OffActual restated

from One OffUnder activity

ActualRestated

from Covid-19

Revenue 1,877 1,877 (62) 1,938

EBITDAR 443 (20) 463 (38) 501

EBITDAR margin (%) 23.6% 24.7% 25.9%

EBITDA 227 (20) 247 (38) 285

EBITDA margin (%) 12.1% 13.2% 14.7%

14

871.6 941.6

895.7934.9

2019 2020

Q1 Q2

H1 2020 REVENUE DRIVEN BY EXTERNAL GROWTH

Nursing Homes entry freeze and Healthcare interruption in Italy and France


REVENUE

Reported growth Organic growth

€1,876.5mvs €1,767.3m in H1 2019 +6.2% +1.0%

+3.7%+8.0%

-1.6%+4.4%

Organic Growth +1.0% impacted by €62m Covid-19 losses

Affected by entry freeze across Europe

Differentiated impacts: Sharp decrease in inpatient healthcare activities

Interruption of outpatient ambulatory healthcare activities

Various compensation policies

Healthcare activities by country represent c. 50% of lost revenue

Over representation of healthcare activities in Italy withno compensation: Italy represented c. 50% of lost revenue

Reported Growth +6.2%

Supported by 32 acquisitions over 2019 & 2020

In line with initial expectations

15

12acquisitions

4Greenfields delivered

31 1

1

1

1

1

3 2

1

1

LOCAL CARE PATHWAYS DEVELOPMENT


H1 2020 ACHIEVEMENTS

Medical Care and

Clinics

Assisted Living facilities

and shared housing for

seniors

Home Care services

Nursing Homes

SPAIN

1

BELGIUM ITALY

1

1

GERMANYFRANCE

1

1

1

NETHERLANDS

Greenfields delivered

3

3

Estimated

run rate

c. €200m

Strengthening our local services network in Europe

Germany: Integrated care networks

Italy: Local medical services presence

Netherlands: Development of small-size care communities

France: Strengthening medical capabilities and continueddevelopment of alternative, inclusive accomodations

Integrating facilities within digital ecosystems trough partnershipswith start-ups and building innovative care pathways outside the walls

Digital platforms

Qualivita acquisition covering several activities

16

DIFFERENTIATED REGIONAL IMPACT IN Q2 OF COVID-19 Related to lockdown measures

Strong revenue growth in France driven by acquisitions, offsetting Covid

impact on healthcare and nursing home entries until June


FRANCE*

Strong contribution of acquisitions in Netherlands, offsetting entry

freeze in Belgium

BENELUX**

Limited slowdown of revenue growth in a lockdown context

Resilient performance thanks to strict management of cost structure

GERMANY

Strong impact of Covid-19 on existing perimeter, not compensated

shutdown of medical activities and entry ban in nursing homes for

3 months, partially offset by acquisitions

ITALY

€m (excluding IFRS 16) H1 2020 H1 2019

REVENUE 917.1 864.7

REPORTED GROWTH 6.1% 6.4%

ORGANIC GROWTH 1.8% 3.1%

EBITDAR MARGIN 26.2% 27.3%∆ EBITDAR MARGIN -1.1 pt


REVENUE 496.8 473.0





REVENUE 283.6 248.3





REVENUE 179.0 181.2

REPORTED GROWTH -1.2% 8.1%

ORGANIC GROWTH -16.1% 1.7%

EBITDAR MARGIN 18.8% 24.0%∆ EBITDAR MARGIN -5.2 pts

* Included Spain for €16.9m in H1 2020 VS €8.2m in H1 2019** Included Netherlands for €24.3m in H1 2020

17

DECREASE IN EBITDA MARGIN REFLECTING COVID-19 IMPACT ON EBITDAR


€m(excluding IFRS 16)

H1 2020 H1 2019 ∆%

Revenue 1,876.5 1,767.1 6.2%

Staff costs (1,096.4) (983.2) 11.5%

Other costs (337.3) (323.9) 4.1%

EBITDAR 442.9 460.0 -3.7%

% of revenue 23.6% 26.0% -240 bps

External rents (215.5) (201.7) 6.8%

% of revenue 11.5% 11.4% +10 bps

EBITDA 227.4 258.3 -12.0%

% of revenue 12.1% 14.6% -250 bps

One Off (20)

EBITDA restated from One Off 247.5 258.3

% of revenue 13.2% 14.6% -140 bps

Covid-19 impact (38)

EBITDA restated from Covid-19 285.5 258.3

% of revenue 14.7%* 14.6% -10 bps

Restated EBITDA from Covid: €285.5m

Margin 14.7%

EBITDA MARGIN: 12.1%-250 bps vs H1 2019

Personnel costs maintained up +11.5%

Staff costs represent 58% of Revenue – up 280 bps

Recruitments maintained

To ensure care continuity and swift restart

Fixed external rent costs

No rent renegotiation over the period

Trend maintained over the period

Lower real estate ownership in bolt on operations

* EBITDA restated from Covid-19 calculated on revenue, restated

from €(62)m net compensation on revenue loss, i.e €1,938m

18

GROUP INCOME STATEMENT

€m (excluding IFRS 16) H1 2020 H1 2019 ∆ %

Revenue 1,876.5 1,767.1 6.2%

EBITDAR 442.9 460,0 -3.7%

EBITDA 227.4 258.3 -12.0%

Amt.Dep and Provisions (106.2) (95.6) 11.1%

EBIT 121.2 162.7 -25.5%

Non current expenses (20.8) (6.1) n.a

Operating income 100.3 156.6 -36.0%

Financial result (64.6) (60.8) 6.3%

Net income before tax 35.7 95.8 -62.7%

Income tax (14.1) (33.5) -57.9%

% tax rate 39.5% 35.0% + 450 bps

Minority interests (1.3) (2.2) -41.8%

Net profit - Group share 20.3 60.1 -66.2%


1

2

3

1

2

3

€(20.8)m non current expenses mainly due to

€(12.7)m M&A costs related to H1 2020 acquisitions

€(7.3)m restructuring, mainly in Germany following closing of Casa Reha HQ

€(64.6)m financial result

Increase in net debt

But reduced average interest rate costfrom 2.4% to 2.2% (cash impact of 1.7%)

€20.3m positive net profit (Group share)

Temporary increase of tax rate to 39.5% notablydue to change in country mix and effects in Belgium

19

CONTINUED HIGH INVESTMENT LEVEL IN A CONSOLIDATING ENVIRONMENT

€m (excluding IFRS 16) H1 2020 H1 2019 ∆

EBITDA 227.4 258.3 -12.0%

Non cash & others (22.6) (29.6)

Change in WCR (33.0) (11.4)

Operating Capex (48.2) (44.0)

Operating Cash Flow 123.6 173.3 -28.7%

Income tax paid (32.2) (28.1)

Financial expenses paid (47.7) (58.6)

Operating Free Cash Flow (OFCF) 43.6 86.6 -49.7%

Development capex (52.7) (38.1)

Financial investments (bolt-on acquisitions) (225.8) (167.4)

Net Free cash flow (FCF) (234.8) (119.0)

Odirnane interest (5.7) (4.5)

Real estate investments / divestments (238.0) (172.6)

Net debt variation (534.7) (297.1)

1

2

3

1

2

3


OFCF significantly impacted by Covid-19

€43.6m Covid-19 impacts in EBITDA and delayed cash-in for compensation

Sustained real estate investments combining

Acceleration of Greenfields and investment in new builds

Some opportunistic buy back operations

Real estate acquisition from Bolt-on deals

Bolt on acquisitions momentum increased

Strengthening local presence in the countries

Diversification of activities

Development capex increased to transform the network

Renovation programs

Investment in health care network

Digital & IT investments

20

STRONG PIPELINE TO ENHANCE GROWTH POTENTIAL

H1 2020 Pipeline H2 2020-2023

# of beds New capacities # of beds New capacities # of beds

December 2019 H1 2020 June 2020Estimated

End 2023

Estimated

End 2023

France (including Spain) 33,690 1,541 35,231 8,037 43,268

Germany 29,418 475 29,893 2,022 31,915

Benelux (Belgium+Netherlands) 13,015 1,031 14,046 3,082 17,128

Italy 6,552 324 6,876 1,338 8,214

Total 82,675 3,371 86,046 14,479 100,525


150 new agencies targetedfor end 2020

Ahead of development roadmap

14,479 new capacitiesestimated by end 2023 75% greenfields 25% bolt-on acquisitions

Outpatient capacityto double in France From 450 in 2019

to nearly 900 by 2022

Petits fils accelerated development

Real Estate ongoing projects

vs 200 in June 2019 249

21

3.2x3.1x

3.7x

2,5

3,5

4,5

H1 2019 FY2019 H12020

A RESILIENT FINANCIAL STRUCTURE


1,454 1,711

1,062 1,290

640 694

FY 2019 H1 2020

NET DEBT BREAKDOWN (€m) (excluding IFRS 16)

RE debt IAS 17

3,156 3,695

+54

+201

+257

RE debtowned assets

Net Financial debt excl. RE

LEVERAGE RATIO (excluding real estate debt)

Portfolio value

€2,329m

€1,290m55% LTVvs 52% as of 31.12.2019

Real estate debt

+ 28% vs 30.06.19+14% vs 31.12.2019

LOAN TO VALUE 55%DEBT MATURITY PROFILE

-

100

200

300

400

500

600

700

800

900

1 000

2020 2021 2022 2023 2024 2025 2026 2027 >2027

Syndicated Loan OCEANE SSD/NSV EURO PP Other Corporate Debts Real Estate

Net value

> 1bn> 1 bn

liquidityAverage interest rate reduced

from 2,4% to 2,2%

Covenant 4.5x

22

Outlook

4.

2019 ANNUAL RESULTS - FEBRUARY 28th, 2020

23

OUTLOOK H2 2020

All guidance remains suspended

2020 HALF-YEAR RESULTS – 30 JULY 2020

Vigilant and resilient network using specific Vigi-Covid Standard

Sustained restart of entries from June in Nursing Homes and ClinicsIn Nursing Homes: +1 point after a low of -5 points on the average occupancy rate in Europe

In Clinics (full hospitalization and outpatients): +10 points in 1 month on the occupancy rate (>90%)

Fully mobilised to deliver on our 15 ESG commitments

Supporting positive development activity in H2Both organic and inorganic

Confidence in the relevance of our multi-local and diversified care model

Committed to deliver on roll out in Europe

SAVE THE DATES:Q3 Sales & Updated 2020 Guidance – 28 October 2020

INVESTOR DAY – 10 November 2020

2020 Half-Year Results Presentation Ko… · 30/07/2020 · #1 #1 #2 Ongoing KEY FIGURES 470,000...

Documents

Transcript of 2020 Half-Year Results Presentation Ko… · 30/07/2020 · #1 #1 #2 Ongoing KEY FIGURES 470,000...