ORPEA: Strong growth in 2019 revenue: Up +9.4% to €3,740 million

Regulatory News:

The ORPEA Group (Paris:ORP), a world leader in long-term care (nursing homes, post-acute and rehabilitation hospitals, psychiatric hospitals, and home care services), today announces its revenue for the 2019 financial year ended on 31 December.

Consolidation dates: Axion in Germany, September and Allerzorg in the Netherlands were consolidated since 1 January 2019; SIS Brazil and SIS Portugal were consolidated since 1 October 2019.

Clusters’ composition:
- France Benelux: France, Belgium, Netherlands
- Central Europe: Germany, Italy, Switzerland
- Eastern Europe: Austria, Poland, Czech Republic
- Iberian Peninsula and Latam: Spain, Portugal, Brazil and Uruguay
- Other country: China

¹ Organic growth of Group revenue includes: 1. the year-on-year change in the revenue of existing facilities as a result of changes in their occupancy rates and per diem rates; 2. the year-on-year change in the revenue of redeveloped facilities or those where capacity has been increased in the current or year-earlier period; 3. revenue generated in the current period by facilities created during the year or year-earlier period, and the change in revenue of recently acquired facilities by comparison with the previous equivalent period.[1] Organic growth reflects the following factors: 1. The year-on-year change in revenues of existing facilities as a result of changes in their occupancy rates and daily rates; 2. The year-on-year change in revenue of redeveloped facilities or those where capacity has been increased during the year or a year earlier; 3. Revenue generated in the current period by facilities created during the year or a year earlier, and the change in revenue of recently acquired facilities by comparison with the previous equivalent period.

2019 revenue of €3.74 billion, better than the initially-announced target

Revenue for 2019 reached €3,740 million, higher than the initially-announced target of €3,700 million and representing a strong growth of +9.4% or €320 million in additional revenue.

This improvement, as in previous years, was the result of an equal combination of the Group’s two growth drivers:

- selective acquisitions, such as that of Axion (the German premium nursing homes specialist), September and Allerzorg (present in nursing homes and home care in the Netherlands), as well as several independent facilities in France, Spain, Italy and others;

- very strong organic growth of +4.7%, driven by the first-class performance of mature facilities, the ramp-up in facilities established over the past two years and the opening of 1,850 new beds (through new builds) during the year. All geographical regions enjoyed a sustained organic growth.

This revenue growth will be coupled with solid profitability.

2020: step-up in openings (3,000 new beds) and in job creation

In 2020, ORPEA will open 3,000 beds, i.e., approximately thirty new facilities and extensions of existing facilities. This step-up in openings (+62% vs 2019) is driven by the Group’s internationalisation, which allows it to increase creation opportunities. In line with the strategy of ORPEA, 85% of these new facilities will be located outside France, in around ten countries, in areas with high purchasing power.

An active recruitment policy will continue to support this growth. More than 2,500 jobs will be created across all countries in which ORPEA is present and in all professions (medical staff, carers, hotel staff, as well as support functions at the various head offices).

Training and internal promotion remain a priority in human resources policy and provide Group employees with excellent career prospects.

Outlook for 2020: secured revenue of €4,040 million (+8%)

The contribution of the announced acquisitions, coupled with a strong organic growth, allows ORPEA to be confident in announcing already secured revenue of €4,040 million for 2020 (+8% vs 2019). The Group will continue to develop its growth pipeline and consider acquisition-led growth opportunities both in countries where it is already present and in new countries, with a view to pursuing its growth momentum.

Yves Le Masne, Chief Executive Officer of ORPEA, commented:

“In only three years, the Group’s revenue has grown by close to €1 billion, of which more than 50% is through organic growth. This performance is due to the Group’s long-term strategy which is focused on upscaling its network as well as selective internal and external growth opportunities.

Thanks to already completed external developments and excellent visibility on its organic growth, ORPEA is already in a position to announce secured growth of +8% for 2020, i.e., revenue of €4,040 million.

Of course, the Group will pursue its development to reinforce its current position as a global player, by continuing to expand its geographic presence, but also by strengthening its corporate social responsibility.”

Financial schedule for 2020

The following dates can be subject to change. Press releases will be published after market close.

About ORPEA (www.orpea-corp.com)

Founded in 1989, ORPEA is one of the major world leaders in long-term care, with a network of 951 facilities comprising 96,677 beds (17,388 of which are under construction) across 16 countries, which are divided into five clusters:

- France Benelux: 484 facilities/42,625 beds (of which 4,514 are under construction)

- Central Europe: 238 facilities/25,419 beds (of which 4,389 are under construction)

- Eastern Europe: 125 facilities/12,917 beds (of which 2,817 are under construction)

- Iberian Peninsula/Latin America: 103 facilities/15,576 beds (of which 5,668 are under construction)

- Rest of the world: 1 facility/140 beds

ORPEA is listed on Euronext Paris (ISIN code: FR0000184798) and a constituent of the SBF 120, STOXX 600 Europe, MSCI Small Cap Europe and CAC Mid 60 indices.

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