Regulatory News:

ORPEA (Paris:ORP), a leading European player in Long-Term Care (nursing
homes), Post-Acute Care and Psychiatric Care, today announced its
consolidated results2 for the financial year ending 31
December 2014.

In ?m


2014 2013 ?%
Revenues 1,948.6 1,607.9 +21.2%
EBITDAR (Recurring EBITDA before rent) 537.8 433.2 +24.1%
Recurring EBITDA 350.1 298.0 +17.5%
Recurring operating profit 271.2 227.3 +19.3%
Operating profit 308.9 268.4 +15.1%
Profit before tax1 209.8 177.8 +18.0%
Attributable net profit1 136.3 116.9 +16.6%

Commenting on these figures, Yves Le Masne, ORPEA?s Chief Executive
Officer, said: ?2014 was an outstanding year, as we managed to
combine the strongest development momentum in our history, the
international expansion of our network and strong earnings growth, while
maintaining a high level of financial flexibility:

  • very brisk top-line increase of 21.2%;
  • record network growth of 36%, with 15,331 beds added since the
    beginning of 2014;
  • further improvement in operating performance, with the EBIDTAR
    margin growing by 70 basis points and our net profit moving up 16.6%
    to ?136.3 million
  • optimisation of our capital structure, through the arrangement of
    new diversified financing at an all-time record level of low cost.

Building on these successful accomplishments, we will achieve even
stronger profitable growth and visibility for 2015 and the following
years, with:

  • strengthening of the equity base by ?180 million in early 2015
    thanks to early conversion of the OCEANE bond;
  • organic growth secured by the high-quality pipeline of 9,101 beds
    under construction or being restructured;
  • scope for even stronger development, yielded by both organic and
    external growth, building on our powerful platforms in eight European

For 2015, we forecast revenues of ?2,310 million (i.e. growth of
18.6%), not including any other potential developments, plus sound
profitability and a debt firmly under control with a lower average cost
of debt.?

Further healthy improvements in profitability

Full-year 2014 revenues rose by 21.2% to ?1,949 million on the
back of brisk organic growth4 (6.0%) and the contributions
made by acquisitions, especially Senevita in Switzerland effective 1
April and Silver Care in Germany effective 1 July. International
revenues surged 69% to reach ?449 million.

EBITDAR (Recurring EBITDA before rent) advanced by 24.1% to
?537.8 million and accounted for 27.6% of revenues ? a 70 basis point
improvement on its 2013 level. With mature facilities accounting for a
larger proportion of the network, the EBITDAR margin has improved by 240
basis points since 2011. The EBITDAR margin of international activities
registered strong growth of 290 basis points in 2014 to reach 24.7%,
even though 20% of beds were not yet operational and were thus a drag on

Rental expenses rose 38.8% to ?187.7 million due chiefly to the impact
of acquisitions in Germany and Switzerland, which accounted for 65% of
the increase, as the properties operated by both groups are all rented.
At comparable structure, rental expenses edged up 1.2%.

Recurring EBITDA grew by 17.5% to ?350.1 million. This
represented a margin of 18.0% of revenues, down 50 basis points on 2013,
demonstrating the Group?s ability to absorb a higher volume of rental

Recurring operating profit rose by 19.3% to ?271.2 million. This
represented 13.9% of revenues, almost stable compared with the 2013
level ? a solid performance especially given the losses generated by the
gradual ramp-up of over 2,000 beds that entered into service during the
year and the 2,232 beds being restructured.

Operating profit advanced 15.1% to ?308.9 million. As every year,
it reflected a non-recurring gain after tax of ?37.7 million, compared
with ?41.1 million in 2013 owing in particular to real estate disposals.

Despite a brisk pace of investments, the cost of debt picked up
moderately, rising by 9.5% to ?99.2 million5. This small
increase reflected optimisation of the capital structure put in place by
the Group since 2011.

Profit before tax stood at ?209.8 million5, or a
brisk growth of 18.0%.

After ?75.3 million5 in income tax expense (up 19.7%), attributable
net profit for 2014 grew 16.6% to ?136.3 million5.

Dividend of a ?0.80 per share proposed

At the Annual General Meeting on 23 June 2015, the Board of Directors
will propose a dividend of ?0.80 per share in respect of the 2014
financial year, compared with ?0.70 for the previous financial year.

ORPEA intends to secure the loyalty of its shareholders, who have
supported the Group?s development in recent years, by paying out
one-third of its net profit and retaining two-thirds to invest in its

A ?2.7 billion real estate portfolio

In 2014, ORPEA achieved ?255 million in real estate disposals
(?230 million in 2013) on rental and indexation terms that were even
more favourable than in 2013.

Adjusted for these sales and the addition of new properties, ORPEA?s
real estate portfolio grew by ?123 million. As at 31 December 2014, its
portfolio represented a developed area of 890,000 sqm consisting of 267
buildings (138 wholly-owned) with an aggregate value of ?2,685 million6.

Over the past five years, the Group?s asset portfolio has increased by
41%, reflecting ORPEA?s unique real estate policy, which consists in
retaining ownership of a part of this strategic asset guaranteeing
healthy long-term returns, while bolstering the Group?s flexibility and

Financial flexibility

Taking into account the ?180 million impact of conversion of the OCEANE7
bond subject to an early redemption option from 22 December 2014 that
was exercised on 4 February 2015, ORPEA?s net debt totalled
?1,995 million8. This debt is highly secure and
flexible, since 65% of it is property-related.

ORPEA very heavily invested in its international expansion during 2014,
particularly in Switzerland, Germany and Spain, yet its debt ratios9
remain moderate and are well below its maximum authorised limits:

  • financial leverage restated for real estate assets = 2.6x (authorised
    level of 5.5x);
  • adjusted gearing = 1.0x (authorised level of 2.0x).

The new hedges put in place and new financing arranged will
automatically drive down the cost of debt over the next few years, from
an average of 4.0% in 2014 to 3.3% by 2019.

Owing to the quality of its business model, the property-backed profile
of its debt and the visibility in its sector of activity, ORPEA is able
to tap abundant liquidity from the credit market on unprecedented low
terms from banks and investors alike in Europe, Asia and North America.

Record network growth since the beginning of
2014: 15,331 beds added

Since the beginning of 2014, the Group has significantly stepped up the
pace of its development, expanding its network by 36%, or 15,331
additional beds, 95% of which outside France:

  • Acquisition of three strategic platforms representing 12,492 beds:
    Senevita in Switzerland, Silver Care in Germany and SeneCura in
    Austria and the Czech Republic (as at 1 April 2015);
  • Further operating permits, extensions and bolt-on acquisitions,
    leading to the addition of 2,839 beds, 68% of which outside France.
    Throughout 2014, ORPEA continued to make bolt-on purchases in addition
    to strategic acquisitions.

To date, its network comprises 58,334 beds in 600 facilities across
eight countries, breaking down as follows:

Number of

Total number
of beds

Open beds

Of which beds being

Beds under

France 354 32,792 30,433 1,572 2,359
Belgium 61 7,217 5,021 600 2,196
Spain 22 3,468 3,468 0 0
Italy 15 1,553 1,221 60 332
Switzerland 27 2,696 2,021 0 675
Germany 66 6,372 5,845 0 527
Austria 52 3,936 3,456 0 480
Czech Republic 3 300 0 0 300
TOTAL 600 58,334 51,465 2,232 6,869

Accordingly, following the opening of over 2,000 beds in 2014, ORPEA
still boasts a very substantial growth pipeline, with 9,101 beds being
restructured or under construction. Of this growth pipeline, 75% of beds
are under construction and due to open over the next three to four
years, to a great extent in strategic locations such as Paris, Berlin,
Dortmund, Geneva, Zurich and Prague.

The international network now accounts for 44% of the total. With 25,542
beds, it has doubled in size since the beginning of 2014.

Another year of strong development in 2015

Leveraging its new platforms for development in German-speaking Europe,
the expertise of its teams and significant financial flexibility, the
Group will actively pursue its expansion in 2015 by means of:

  • Organic growth with the construction of new facilities, with a
    particular emphasis on Germany, Switzerland, Austria and the Czech
    Republic. The Group intends to replicate its real estate model in
    these countries, by handling itself the construction of these
    facilities and retaining ownership of a portion of the buildings.
  • Bolt-on acquisitions throughout the long-term care sector, and in all
    the countries where ORPEA is established and where the private sector
    harbours numerous opportunities as consolidation continues.

In all its development transactions, ORPEA continues to focus first and
foremost on the quality of projects and their location in regions with
strong purchasing power, with a constant quest to create value.

In China, the planned nursing home in Nanjing is making progress, with
the launch of a recruitment and training programme for its teams ahead
of its opening. To this end, the Group has created a training
certificate in geriatrics in conjunction with the Peking Union Medical
College Hospital, one of the oldest and most prestigious hospital in
China. The first diploma course of 30 students was completed in February

The Franco-Chinese management team is now in place. The Group intends to
open the facility by the end of the year which will offer a high-end
living environment, perfectly attuned to the local culture, and a range
of very high-calibre services and care.

Ethics, innovation and job creation underpin
ORPEA?s development

In 2014, ORPEA continued to pursue its Quality and innovation policy to
ensure the well-being and satisfaction of its patients and residents.

To provide solutions geared to every stage of the long-term care chain,
the Group has introduced special tailored activity and care units at
several of its nursing homes. Throughout the day, these specially
equipped, dedicated living areas look after residents suffering from
moderate neurodegenerative disorders. A slate of social and therapeutic
activities intended to prevent or slow the progress of such conditions
is organised by a multi-disciplinary team.

Secondly, ethics and respect are among ORPEA?s founding values. ORPEA
has created a Scientific and Ethical Advisory Board, consisting, among
others, of leading European professors of medicine from outside the
Group. Its role is to enrich and enhance the Group?s
responsibility-based professional culture, common to all the Group?s
professionals, in the fields of business ethics, research and training.

Lastly, to guarantee the quality of care it provides, the Group remains
a major creator of new jobs despite the uncertain economic climate. In
2014, the Group created 1,300 direct jobs (sustainable positions that
cannot be relocated), while continuing to pursue its ambitious training
policy, with close to 275,000 hours of training delivered to its teams
in 2014.

Doctor Jean-Claude Marian, the ORPEA?s Chairman, summed up these
results: ?While the sector benefits from demographic trends driving a
surge in demand for long-term care and providing exceptionally high
visibility, ORPEA demonstrated again in 2014 its remarkable ability to

Thanks to the hard work of its operational and development teams,
ORPEA will pursue exciting expansion opportunities in 2015 while
continuing the process of improving its financial performance outside
France, placing special emphasis on:

  • its policy of organic growth combined with selective acquisitions;
  • its ability to replicate in international markets its approach to
    real estate development and its standards of quality.?

Next press release: Q1 2015 revenues
5 May 2015 before
market opens

About ORPEA (

Founded in 1989, and listed on Euronext Paris since April 2002, ORPEA is
a European leader in integrated Long-Term Care and Post-Acute Care. The
Group has a unique network of 600 healthcare facilities, with 58,334
beds (9,101 of them under refurbishment or construction), including:

  • 32,792 beds in France at (3,931 beds under refurbishment or
    construction) at 354 facilities
  • 25,542 beds in the rest of Europe (Germany, Austria, Belgium, Spain,
    Italy, Czech Republic and Switzerland) at 246 facilities (5,170 beds
    under refurbishment or construction)

Listed in Euronext Paris Compartment A, a Euronext Group

Member of the SBF 120, STOXX Europe 600, MSCI
Small Cap Europe
and CAC Mid 60 indices – Member of the SRD

ISIN: FR0000184798- Reuters: ORP.PA – Bloomberg: ORP FP


Excluding changes in the fair value of the right to the grant of
shares embedded in the ORNANE, the net (non-cash) impact of which
was negative ?15.6 million.


The financial statements are currently being audited.


Excluding changes in the fair value of the right to the grant of
shares embedded in the ORNANE


Organic growth reflects the following factors: 1. the growth in
revenues (in period n vs. period n-1) of existing facilities as a
result of changes in their occupancy rates and daily rates, 2. the
growth in revenues (in period n vs. period n-1) of restructured
facilities or those with capacity increased during period n or
n-1, and 3. Revenues generated in period n by facilities set up in
period n or n-1. Organic growth includes the improvement in
revenues recorded at recently-acquired facilities by comparison
with the previous equivalent period.


Excluding impact of changes in the fair value of the right to the
grant of shares embedded in the ORNANE


Excluding the ?200 million in assets held for sale


Conversion of the OCEANE subject to an early redemption option
from 22 December 2014 that was exercised on 4 February 2015


Excluding ?200 million in debt associated with assets held for sale


Taking into account the ?180 million impact of conversion of the
OCEANE bond subject to an early redemption option from 22 December
2014 that was exercised on 4 February 2015

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ORPEA: Another Year of Strong Profitable Growth in 2014