PARIS--(BUSINESS WIRE)--Regulatory News:
Korian (Paris:KORI):
“The excellent results of the Group in 2019 demonstrate the success of the accelerated transformation of the company: thanks to our ‘Buy and build’ strategy, we have been able to diversify our offering in order to provide personalized care for a growing number of fragile and elderly people and their families and to enlarge our European footprint through our entry into Spain and the Netherlands.” stated Sophie Boissard. "The launch of our new corporate project ‘In Caring Hands’ in 2019 aims to consolidate our commitment to our clients, their families and to our employees and to society. We are happy to be the first care company to materialise this commitment with 15 comprehensive ESG targets.”
The consolidated audited financial statements for 2019 were approved by the Board of Directors at its meeting of 27th February 2020. The Statutory Auditors are in the process of issuing a report with an unqualified opinion.
The consolidated financial statements were prepared in accordance with the new IFRS 16 standard. For purposes of comparability, the financial information below is presented excluding the application of IFRS 16.
_____________________
1 The figures in this press release are presented excluding IFR16. The financial statements for FY 2019, which are published in accordance with IFRS 16, are included in the full-year financial report available on the Company’s website, in the Finance section from 28 February 2020. The income statement, balance sheet and statement of cash flows appended to this press release include the impacts of IFRS 16.
Q4 revenue and full year revenue and results
Strong growth momentum fuelled by accelerating organic growth, enabling dynamic transformation of the Group
Revenue in Q4 2019 increased 8.3% to €934.9 million, This reflects the Group’s strong development momentum, both through organic growth, at 3.8% and bolt on acquisitions.
In 2019, revenue totalled €3,612 million, up 8.3%. Organic growth, which was up +3.8% compared to +3% a year earlier, reflected the solid contribution of the historic activities of the Group and the success of the transformation to being a complete service provider offering a range of services and care solutions for the fragile and elderly.
All geographies of the Group showed significant growth and the medical segment in particular has shown significant growth in 2019, around 10% across the Group, capitalising on the transformation of the network in France and an active bolt on strategy, notably in Italy.
The acceleration of the medical activities, supporting the diversification of services to provide more outpatient and ambulatory care, is, together with the dynamic ramp up of the home care activities, behind the Group’s capacity to provide services to around 470,000 clients in 2019, twice as many as 3 years ago.
The Group has added 4,528 beds to its portfolio in 2019 and 90 new facilities, reaching narly 83,000 beds and 900 facilities at the end of the year. Korian’s multi-local and strategy aims to be able to provide a diversified care pathway, at a local level in the 600 living areas where the Group is implanted.
In 2019 the Group entered 2 new geographies with the aim to build the same level of density and diversified care as is being built in its existing countries. The Group has now over 15 facilities (with nursing homes and clinics) 2,000 beds in Spain and is building a diversified platform in the Netherlands with 4 lines of service: specialised Alzheimer care, palliative care, assisted living apartments and geriatric rehabilitation centres. By2021 these will represent 1,300 beds and 22 facilities.
In total the Group has completed 20 acquisitions in 2019, representing €353m of investment. The acquisitions have been focused on diversifying the offering, solidifying our local presence and innovative, digital solutions for our clients.
The build part of our strategy has been particularly active in 2019, with 28 greenfield or transformation projects delivered in all of the Group’s geographies and a pipeline of over 142 projects:
- ‘New Korian House’ projects for care platforms with nursing home care, day care and assisted living: 45 projects
- Clinics and medical platforms: 22 projects
- Co-living and small sized care communities: 200 projects of which 30 Ages & Vie projects to be opened in 2021
- Service residences : more than 20 projects
The Group’s EBITDAR in 2019 is €948m and the EBITDAR margin is stable at 26.2%. In order to ensure long term continued growth Korian has been investing in its teams, to support the quality at work of its employees. Therefore staff costs have risen faster than revenue, compensated by the efficient management of operating expenses, particularly in France and Germany.
By country:
- In France2, strong revenue growth of +7.1% (versus +3.9% in 2018) including Spain, was fuelled by increased organic growth of 3.2% up +50 basis points against 2018. The acceleration of the revenue growth is the result of the dynamic activity of the Healthcare division in France; the contribution of new activities (such as home care and co-living) and upgrade of the existing facilities, notably through the Boost renovation programme of over 2,000 rooms by the end of 2019 and the ramping up of the newly acquired portfolio in Spain. The EBITDAR margin remained stable at 27.1%.
- In Germany, revenue also increased significantly by +5.3% versus 3.5% in 2018. This solid growth was driven essentially by the acceleration in organic growth to +4.5% (versus +3.7% in 2018), following a focus on revenue management and an increased care mix. Investment in staff continues to be a priority in Germany, more than offset by efficient management of other costs and resulting in an increased EBITDAR margin of 26.2% up 50 basis points since 2018.
- In the Benelux3 region the reported growth remained high at 18.2% (versus 20.3% in 2018) following the Senior Assist acquisitions, the organic growth is strong with +5.7% in 2019 up 200 basis points versus 2018 resulting from the continued ramp up of some facilities. The EBITDAR margin decreased to 25.2% (versus 25.9% in 2018) following the integration of the Netherlands portfolio with a number of facilities ramping up and a pipeline of development.
- In Italy, revenue was up by +9.3 % driven by a dynamic acquisition strategy with a focus on healthcare services and a local cluster approach in key regions. This has allowed the number of clients that Korian Italy provides services to increase by over 150% in 3 years and the strategy of specialisation has fuelled an increase of 50 basis points in organic growth to 2.2%. The EBITDAR margin remains stable at 23.7% (versus 23.6% in 2018) in a context of rapid growth.
Korian’s EBITDA totalled €535.1 million in 2019, up 12.2% on 2018. As a result, the EBITDA margin increased by 50 basis points to 14.8%. The EBITDA margin improvement has been driven by the business mix: higher levels of outpatient care, home care and diversified services have contributed for 20 basis points of this improvement. A significant contribution of 30 basis points is linked to the Asset Smart strategy
Korian now owns 184 facilities representing over €2 billion in value. These facilities are in all of the Group’s geographies and now represent 22% of the value of the real estate assets operated by the Group. In 2019 the Group invested €279m in real estate.
Earnings before interest and taxes (EBIT) amounted to €337.7 million, i.e. 9.3% of revenue (versus 9.4% in 2018).
Net profit (Group share) totalled €136 million, an increase of 10.4% versus 2018 after income tax expense of €64.7 million and a tax rate of 32%.
Stong financial structure maintained
The Group has generated € 231m of operating free cash flow4 in 2019 representing an increase of 13%, fuelled by the increased EBITDA and improved working capital management. The cash conversion ratio of the EBITDA is 43%. Maintenance capex, included here, represent 2.7% of revenue having increased in 2019.
Korian’s balance sheet remains strong in a context of high growth and investment, with an adjusted leverage of x3.1. The Group’s net financial liabilities increased to €3,157 million from €2,724 million at 31 December 2018, around half of this increase comes from an increase in real estate debt. The real estate debt represents € 1,062 million compared to a real estate portfolio value of € 2,035 million and therefore a Loan-to-value ratio of 52%, versus 51% in 2018.
________________________
2 Included Spain (€ 25.5m)
3 Included Netherlands (€ 12.4m)
4 The change is calculated on the basis of operating free cash flow as restated in 2018
2019 and 2020 Human Resources initatives
In 2019 the Group recruited more than 11,000 new permanent staff members, contributing to reinforcing the organisation of the staff across the network, and expects recruite 12,000 permanent staff in 2020, bringing the net recruitment to 2,500 people between 2019 and 2020.
The Group has significantly invested in training, with notably more than 4% of staff integrated into qualifying training paths, up 20% mainly France and Germany. New apprenticeship schemes have been launched in France and Germany, for chefs and care staff.
In 2020 Korian will launch a proprietary apprentice training centre in France dedicated to nursing staff and create a learning hub located in Lyon with selected digital partners, in order to produce digital and on site learning materials for the Group.
The Group has developed in partnership with IFG Executive Education Group the first European 3 year qualifying training course specifically designed for Korian care site managers, to be rolled out across the entire Group in 2020.
Korian is committed in 2020 to continuing its investment in its staff and is proud of its high level of engagement of its teams at 75%5 in 2019.
___________________
5 IPSOS survey with 25,000 participants
Environment and Social responability
Given the role and responsabilities of the Group towards its clients and their families, towards its employees, towards our local communities and towards society at large, Korian has decided to take 15 measurable ESG commitments covering the 5 key dimensions of the Group’s environment and social responsabilities. These objectives aim to impact positively:
- providing the best quality care to our clients and the best support to their loved ones;
- improving the quality of work and ensuring attractive career paths for our employees;
- contributing to ‘ageing well’ in a society facing the challenge of longevity;
- participating in local communities; and
- combatting climate change through the Group’s actions to reduce its carbon footprint.
All these commitments have specific related action plans and will be measured and reported on a regular basis starting from 2020.
Outlook
With a pipeline of over 15,000 beds, the acquisitions announced so far in 2020, including the expansion in the Netherlands, the acquisition of 5 Santé clinic group and the strong results of 2019, the Group anticipates an acceleration in 2020 to reach a revenue growth of c. 9% and an EBITDA margin above 15%.
The Group therefore confirms with a strong confidence its objectives for 2021: revenue above € 4.2bn, EBITDA margin above 15.5% and operating free cash flow generation of € 300m.
Dividend Proposition & Annual Shareholder Meeting
The Board of Directors will submit to the next Annual Shareholders’ Meeting to be held on May 28, 2020, the distribution of a dividend of € 0.66 euros per share (compared to €0.60 per share for the previous years) with an option for payment in new shares.
The Board, acting on the recommandation of the Compensation and Appointment Committee, will also propose the following renewals in the Board’s membership to the shareholders at Annual Meeting:
- to re-appoint Christian Chautard as a Director for a three year term. It also decided that if Christian Chautard is re-appointed as a Director, the Board will re-appoint him as their Chairman following the Annual General Meeting for the same duration as his term of office as Director,
- to re-appoint Dr. Markus Muschenich for a three year term.
Moreover, the Board has noted the departure of Jerôme Grivet after 8 years as part of Korian’s Board of Directors and Chairman of the Investment committee. The Board thanks him for his insight, continuous support and remarkable contribution to the development of the Group. The Board will therefore propose to the Annual Shareholder Meeting to appoint Philippe Dumont, Crédit Agricole SA Deputy General Manager, Head of Insurance and CEO of CAA and Predica, as Director for a three year term.
Finally the Board will propose to the shareholders to appoint Mrs. Sophie Boissard, Chief Executive Officer, as Director for a three year term.
The Board of Directors has taken note that the term of office of PSP Investments will expire at the close of the 2020 General Meeting and thanked their representatives warmly for their participation to the Board and the Committees to which they contributed.
At the close of the General Meeting on May 28, 2020, the Board of Directors would thus have 50%/50% split between female and male Directors and 50% Independant Directors.
Presentation of 2019 results – Analyst meeting
The presentation of 2019 results will be held on Friday,28 February 2020 at 10:00 a.m. at Le Cercle d’Aumale, 22, rue d'Aumale, 75009 Paris (admission starting at 9:30 a.m.).
This presentation will be broadcast live at the www.korian.com website (investors section) or via the following link: https://channel.royalcast.com/korianen/#!/korianen/20200228_1
A deferred version will be available online during the day
The presentation document will be available before the presentation.
Next communication
29 april 2020 : Revenue 1st quarter 2020 (after close of market)
About Korian
Korian is the leading European Care and Support Services Group for elderly and fragile people.
Korian has been listed on Euronext Paris Section A since November 2006 and is included in the following indices: SBF 120, CAC Health Care, CAC Mid 60, CAC Mid & Small and MSCI Global Small Cap
Euronext Ticker: KORI - ISIN: FR0010386334 – Reuters: KORI.PA – Bloomberg: KORI.FP
APPENDICES
REVENUE
In €m |
1st Quarter |
% Change |
% Revenue |
||
Revenue |
2019 |
2018 |
Reported |
Organic |
|
France* |
424.8 |
400.4 |
+6.1% |
+3.0% |
48.7% |
Germany |
233.6 |
223.7 |
+4.4% |
+4.4% |
26.8% |
Belgium |
123.7 |
100.8 |
+22.6% |
+6.7% |
14.2% |
Italy |
89.5 |
81.1 |
+10.4% |
+2.5% |
10.3% |
Total revenue |
871.6 |
806.1 |
+8.1% |
+3.8% |
100.0% |
* Including Spain €3.9m |
|
|
|
|
|
In €m |
2nd Quarter |
% Change |
% Revenue |
||
Revenue |
2019 |
2018 |
Reported |
Organic |
|
France |
440.0 |
412.1 |
+6.8% |
+3.2% |
49.1% |
Germany |
239.4 |
226.0 |
+5.9% |
+5.0% |
26.7% |
Belgium |
124.6 |
103.3 |
+20.6% |
+5.6% |
13.9% |
Italy |
91.7 |
86.5 |
+6.0% |
+1.0% |
10.2% |
Total revenue |
895.7 |
827.8 |
+8.2% |
+3.8% |
100.0% |
* Including Spain €4.3m |
|
|
|
|
|
In €m |
1st Half-Year |
% Change |
% Revenue |
||
Revenue |
2019 |
2018 |
Reported |
Organic |
|
France |
864.9 |
812.5 |
+6.4% |
+3.1% |
48.9% |
Germany |
473.0 |
449.7 |
+5.2% |
+4.7% |
26.8% |
Belgium |
248.3 |
204.1 |
+21.6% |
+6.1% |
14.0% |
Italy |
181.2 |
167.6 |
+8.1% |
+1.7% |
10.3% |
Total revenue |
1,767.30 |
1,633.90 |
+8.2% |
+3.8% |
100.0% |
* Including Spain €8.2m |
|
|
|
|
|
In €m |
3rd Quarter |
% Change |
% |
||
Revenue |
2019 |
2018 |
Reported |
Organic |
Revenue |
France* |
442.2 |
415.3 |
+6.5% |
+2.8% |
48.6% |
Germany |
243.2 |
230.6 |
+5.5% |
+4.7% |
26.7% |
Belgium |
133.1 |
108.8 |
+22.3% |
+6.9% |
14.6% |
Italy |
91.9 |
84.9 |
+8.2% |
+2.7% |
10.1% |
Total Revenue |
910.3 |
839.6 |
+8.4% |
+3.8% |
100.0% |
* Including Spain €4.3m |
|
|
|
|
|
** Including Belgium and Netherlands (€6.9m) |
|||||
In €m |
9 month |
% Change |
% |
||
Revenue |
2019 |
2018 |
Reported |
Organic |
Revenue |
France* |
1 307,00 |
1 227,90 |
+6.4% |
+3.0% |
48.8% |
Germany |
716.2 |
680.3 |
+5.3% |
+4.7% |
26.7% |
Belgium |
381.3 |
312.9 |
+21.9% |
+6.4% |
14.2% |
Italy |
273.1 |
252.4 |
+8.2% |
+2.0% |
10.2% |
Total Revenue |
2,677.6 |
2,473.5 |
+8.2% |
+3.8% |
100.0% |
* Including Spain €16.3m |
|
|
|
|
|
** Including Belgium and Netherlands (€6.9m) |
|||||
In €m |
4th Quarter |
% Change |
% |
||
Revenue |
2019 |
2018 |
Reported |
Organic |
Revenue |
France* |
453,9 |
416,50 |
+9.0% |
+4.0% |
48,5% |
Germany |
244,9 |
232,5 |
+5.3% |
+3.9% |
26,2% |
Belgium |
134,2 |
123,2 |
+8.9% |
+3.8% |
14,4% |
Italy |
102,0 |
90,8 |
+12.3% |
+2.5% |
10,9% |
Total Revenue |
934.9 |
863.0 |
+8.3% |
+3.8% |
100.0% |
* Including Spain( €9.1m) |
|
|
|
|
|
** Including Belgium and Netherlands (€5.5m) |
|||||
In €m |
Full year 2019 |
% Change |
% |
||
Revenue |
2019 |
2018 |
Reported |
Organic |
Revenue |
France* |
1,760.9 |
1,644.40 |
+7.1% |
+3.2% |
48,7% |
Germany |
961.1 |
912.7 |
+5.3% |
+4.5% |
26,6% |
Benelux** |
515.5 |
436.2 |
+18.2% |
+5.7% |
14,3% |
Italy |
375.0 |
343.2 |
+9.3% |
+2.2% |
10,4% |
Total Revenue |
3,612.50 |
3,336.50 |
+8.3% |
+3.8% |
100.0% |
* Including Spain( €25.5m) |
|
|
|
|
|
** Including Belgium and Netherlands (€12.4m) |
|||||
INCOME STATEMENT
€m |
FY 2019 |
IFRS 16 |
FY 2019 |
|
Excluding IFRS 16 |
Adjusted |
Including IFRS 16 |
Revenue |
3,612,5 |
- |
3,612.5 |
Staff costs |
(2,005.3) |
- |
(2,005.3) |
% of revenue |
55.5% |
- |
55.5% |
Other costs |
(659.1) |
(3.6) |
(662.7) |
% of revenue |
18.2% |
- |
18.3% |
EBITDAR |
948.1 |
(3.6) |
944.6 |
% of revenue |
26.2% |
- |
26.1% |
External rents |
(413.0) |
353.3 |
(59.7) |
% of revenue |
11.4% |
- |
1.7% |
EBITDA |
535.1 |
349.8 |
884.9 |
% of revenue |
14.8% |
- |
24.5% |
Amortisations, Depreciations and Provisions |
(197.4) |
(313.2) |
(510.6) |
EBIT |
337.7 |
36.5 |
374.3 |
% of revenue |
9.3% |
- |
10.4% |
Non current expenses |
(15.7) |
- |
(15.7) |
Operating income |
322.1 |
36.5 |
358.6 |
% of revenue |
8.9% |
- |
9,9% |
Financial result |
119.9 |
(63.2) |
(183.1) |
Net income before tax |
202.2 |
(26.6) |
175.5 |
Income tax |
(64.7) |
5.4 |
(59.3) |
% tax rate |
32.0% |
20.2% |
33.8% |
Minority interests |
(1.5) |
- |
(1.5) |
Net profit - Group share |
136.0 |
(21.3) |
114.7 |
BALANCE SHEET
Assets |
||
In thousands of euros |
31.12.2019 |
31.12.2018 |
Goodwills |
2,504,154 |
2,311,822 |
Intangible fixed assets |
1,943,860 |
1,822,819 |
Property, plant and equipment |
2,031,514 |
2,292,431 |
Rifht of use |
3,441,069 |
- |
Financial assets |
38,152 |
57,296 |
Deferred tax assets |
76,259 |
140,132 |
Non-current assets |
10,035,008 |
6,624,501 |
Inventory |
33,909 |
17,113 |
Trade receivables and related accounts |
284,047 |
235,611 |
Other receivables and current assets |
235,870 |
192,666 |
Financial instruments - assets |
4,619 |
3,213 |
Cash and cash equivalents |
344 786 |
550,361 |
Current assets |
903,232 |
998,964 |
Total assets |
10,938,240 |
7,623,465 |
Liabilities |
||
In thousands of euros |
31.12.2019 |
31.12.2018 |
Share capital |
413,641 |
409,882 |
Premiums |
902,503 |
881,765 |
Reserves and consolidated results |
1,242,043 |
1,264,538 |
Shareholders’ equity (Group share) |
2,558,187 |
2,556,185 |
Non-controlling interests |
11,449 |
11,814 |
Total shareholder’s equity |
2,569,637 |
2,567,999 |
Provision for pensions |
85,454 |
70,769 |
Deferred tax liabilities |
534,627 |
583,287 |
Other provisions |
57,028 |
115,982 |
Borrowings and financial debt |
2,408,004 |
2,861,096 |
Lease liabilities |
3,315,424 |
- |
Other non-current financial liabilitiess |
38,544 |
32,132 |
Total non-current liabilities |
6,439,082 |
3,663,266 |
Provisions for less than one year |
12,607 |
12,482 |
Trade payables and related accounts |
369,942 |
315,111 |
Other liabilities and accruals |
733,205 |
635,523 |
Borrowings due within 1 year and bank overdrafts |
453,481 |
412,948 |
Lease liabilities below 1 year |
331,270 |
- |
Derivative financial instruments |
29,016 |
16,136 |
Total liabilities |
1,929,522 |
1,392,200 |
Total liabilities |
10,938,240 |
7,623,465 |
CASH FLOW STATEMENT
€m |
FY 2019 |
IFR 16 |
FY 2019 |
|
Excluding IFRS 16 |
Adjusted |
Including IFRS 16 |
EBITDA |
535,1 |
349,8 |
884,9 |
Non cash & others |
(38.8) |
12,2 |
(26.7) |
Change in WCR |
6,5 |
0 |
6,5 |
Operating Capex |
(99.0) |
- |
(99.0) |
Operating Cash Flow |
403,8 |
362,0 |
765,8 |
Income tax paid |
(58.9) |
- |
(58.9) |
Financial expenses paid |
(114.3) |
(63.2) |
(177.5) |
Operating Free Cash Flow (OFCF) |
230,6 |
298,8 |
529,4 |
Development capex |
(99.4) |
- |
(99.4) |
Financial investments (bolt-on acquisitions) |
(254.3) |
- |
(254.3) |
Net Free cash flow (FCF) |
(123.2) |
298.8 |
175.6 |
Dividends paid |
(33.4) |
- |
(33.4) |
Real estate investments / divestments |
(278.8) |
- |
(278.8) |
Non-cash adjustments to net debt & other |
2.2 |
(393.4) |
(391.2) |
Net debt variation |
(433.2) |
(94.6) |
(527.8) |
