PARIS--(BUSINESS WIRE)--Regulatory News:
Korian (Paris:KORI), the European leader in Ageing Well, is reporting today on its full-year consolidated results for the year ended 31 December 2016.
Sophie Boissard, Chief Executive Officer of the Korian group, commented, “We did very well in 2016, achieving our objective for revenue and exceeding our target for operating margin. This performance was largely made possible by the benefits we are starting to reap from the structural actions we undertook in 2016, which will put us on track to achieve the objectives of the Korian 2020 Plan. These actions include the strengthening of our management team, significantly improving our control and performance monitoring processes, a new real estate policy and a major programme to boost our organic growth, which is central to our business model. Given the success we have achieved in stabilizing and developing our operations in 2016, our group’s key strengths and our highly committed employees, I am very confident that we will be able to accelerate our profitable growth in Europe’s fast-growing market for accompaniment and healthcare services for the elderly.”
| In € millions | 2015 | 2016 | change | |||
|
Revenue1 |
2,579 | 2,987 | 15.8% | |||
| EBITDAR | 680 | 797 | 17.2% | |||
| as a % of revenue | 26.4% | 26.7% | ||||
| EBITDA | 342 | 422 | 23.5% | |||
| as a % of revenue | 13.3% | 14.1% | ||||
| EBIT | 218 | 266 | 22.0% | |||
| as a % of revenue | 8.5% | 8.9% | ||||
| Net Profit Group share | 59 | 131 | 123.7% | |||
_______________________
1 Revenue and other income
2016 Annual Results
Consolidated annual revenue grew 15.8% overall in 2016, to almost €3 billion (€2,987 million), with 3.8% organic growth.
Revenue growth in France is 2.4% overall and 1.9% organically.
The 35.5% surge in growth internationally was driven by the acquisition of Casa Reha and robust organic growth of 6.7%, with 8.4% organic growth in Germany and 9.1% in Belgium. Business outside of France accounted for a considerably larger share of the Group’s revenue in 2016, totaling 47%.
The number of beds operated by Korian grew by 2,744 units over the year, not including the 10,182 beds gained from the acquisition of Casa Reha. This brought the total number of beds operated at 31 December 2016 close to 72,000. The number of facilities rose from 621 to 715 over the year.
The Group’s EBITDAR2 (EBITDA before rental income) was €797 million, for a margin of 26.7%, up 30 basis points compared to 2015.
In France, EBITDAR grew by €18 million and the EBITDAR margin rose 50 basis points to 27.2%. This is largely attributable to synergy gains from the Korian-Medica merger and robust activity.
In Germany, the acquisition of Casa Reha resulted in a 59.7% surge in EBITDAR, from €144 million to €230 million, representing a margin of 27.0% in 2016. Although the EBITDAR margin fell 80 basis points over the year, it rose in the second half, benefiting from the first effects of the Success 2020 action plan.
In Italy, the EBITDAR margin was 23%, a level comparable to 2015.
In Belgium, the EBITDAR margin rose 140 basis points to 26.8%, as a result of the ramp up of newly opened facilities and cost-cutting measures.
Excluding Germany, the EBITDAR margin rose 50 basis points.
_____________________
2 EBITDAR is the interim performance indicator selected by the Korian group to monitor the operating performance of its facilities. EBITDAR represents earnings from operations (EBITDA) before rental expense.
EBITDAR by country
| In € millions | 2015 | 2016 | Change | |||
| France | 410 | 428 | 4.4% | |||
| as % of revenue | 26.7% | 27.2% | ||||
| International | 270 | 369 | 36.7% | |||
| as % of revenue | 25.9% | 26.1% | ||||
| Germany | 144 | 230 | 59.7% | |||
| as % of revenue | 27.8% | 27.0% | ||||
| Italy | 71 | 69 | -1.5% | |||
| as % of revenue | 23.1% | 23.0% | ||||
| Belgium | 55 | 70 | 25.5% | |||
| as % of revenue | 25.4% | 26.8% | ||||
| Group | 680 | 797 | 17.2% | |||
| as % of revenue | 26.4% | 26.7% |
EBITDA grew 23.5% in 2016, to €422 million. The EBITDA margin stood at 14.1%, noticeably higher than the level of 2015 (13.3%). EBITDA includes approximately €12 million in non-recurring income. Restated from this positive effect the underlying EBITDA margin in 2016 is 13.7%.
The current operating profit (EBIT) was €266 million, or 8.9% of annual revenue (compared to 8.5% in 2015).
Other operating income and expenses resulted in a net expense of €25 million in 2016, which is significantly less than in 2015. This includes expenses related to restructuring, divestitures and various contingencies.
The income tax line includes a one-time extraordinary net income of €72 million in 2016, which is attributable to the positive impact on deferred taxes of the decrease in the French corporate income tax rate to 28.92% that is expected in 2020.
The increase in the financial expense is mainly the consequence of the acquisition of Casa Reha and reflects both the cost of financing this acquisition and the impact of the application of the IAS 17 standard on the real estate portfolio.
Net Profit Group share was €131 million in 2016, compared to €59 million the previous year. Restated from the one-time extraordinary tax income, the Net Profit Group share is €59 million.
Financial position
Net debt stood at €2,315 million on 31 December 2016, an increase of €670 million compared to 31 December 2015. This is mainly the consequence of the acquisition of Casa Reha early in 2016.
Excluding real estate liabilities, net financial debt totaled €1,477 million on 31 December 2016, resulting in a restated debt ratio3 of 3.9 times EBITDA.
In July 2016, Korian renegotiated its syndicated loan, increasing its amount to €1.3 billion and extending its maturity to July 2021. This increased the average maturity of debt to about five years.
At the end of 2016, the Group had significant borrowing capacity, with €650 million remaining to be drawn on the revolving tranche of this syndicated loan.
In early June 2016, Korian also launched a programme to issue up to €300 million in short-term commercial paper (formerly known as billets de trésorerie). By 31 December 2016, €50 million had been issued under this programme.
A stable dividend of €0.60 per share will be proposed
At its next annual general meeting, on 22 June 2017, Korian will propose a stable dividend of €0.60 per share, with a share payment option.
Targets for 2017 are in line with the Korian 2020 Plan road map
Korian confirms its above 5% revenue growth objective for 2017. This growth will be driven by the favorable pricing environment in the Senior business, boosted by the deployment of the Group’s strategy to provide new services throughout the network, the ongoing ramp-up of the facilities opened in 2016, and the anticipated increase in the number of beds. The Korian group confirms its objective of 2,500 new bed openings. Most of the new facilities (“greenfield”) will be opened in the second part of the fiscal year. Growth momentum is expected to be more dynamic in the second half.
The Group is expecting an operating margin (EBITDA/CA) of about 13.7%, stable compared to 2016 underlying margin and in line with the Korian 2020 Plan road map.
_______________________
3 Restated debt ratio = (Net financial liabilities – real estate debt) / adjusted EBITDA - (6.5% * real estate debt)
Presentation of 2016 financial results
A live webcast of the presentation of the 2016 Annual Results will take place at 8:30 a.m. (Paris time) on Thursday 16 March on www.korian.com in the Investors section. The presentation slides will be made available before the presentation.
A recorded version will be available on line during the day.
The presentation of results is also accessible by telephone at:
In French: +33 (0) 1 70 77 09 33
In English: +33 1 70 77 09 44
ABOUT KORIAN
Korian, European leader in Ageing Well, founded in 2003, has the capacity to accommodate close to 72,000 residents and patients in Europe (France, Germany, Italy and Belgium) and employs around 45,000 staff member. The Group manages almost 700 facilities in four business lines: nursing homes, post-acute and rehabilitation clinics, assisted living facilities and home-care services.
For more information, please visit our website at www.korian.com
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
2016 CONSOLIDATED REVENUE4
| In € millions | 2015 | 2016 | Reported | Organic | ||||
| growth |
growth5 |
|||||||
| France | 1,536 | 1,572 | 2.4% | 1.9% | ||||
| as % of revenue | 59.5% | 52.6% | ||||||
| International | 1,043 | 1,414 | 35.5% | 6.7% | ||||
| as % of revenue | 40.5% | 47.4% | ||||||
| Germany | 519 | 852 | 64.2% | 8.4% | ||||
| Italy | 306 | 303 | -1.1% | 1.8% | ||||
| Belgium | 218 | 259 | 18.8% | 9.1% | ||||
| Group total | 2579 | 2987 | 15.8% | 3.8% |
____________________
4 Revenue and other income
5 Organic revenue
growth includes: a) the change in the revenue between year Y and year
Y-1 of facilities already in operation; b) the revenue generated in year
Y by facilities created in year Y or Y-1 ; c) the change in the revenue
between year Y and year Y-1 of facilities that were restructured or the
capacity of which was increased in year Y or Y-1; d) the change in the
revenue of recently acquired facilities observed in year Y relative to
the equivalent period in year Y-1.
CONSOLIDATED INCOME STATEMENT
| In € milllions | 2015 | 2016 | Change | |||
| Revenue | 2,579 | 2,987 | 15.8% | |||
| Personnel expenses | -1,320 | -1,561 | 18.3% | |||
| Other purchases, external costs and taxes | -579 | -629 | 8.5% | |||
| EBITDAR | 680 | 797 | 17.2% | |||
| As % of revenue | 26.4% | 26.7% | ||||
| External rents | -338 | -375 | 10.9% | |||
| EBITDA | 342 | 422 | 23.5% | |||
| As % of revenue | 13.3% | 14.1% | ||||
| Depreciation and amortisation | -124 | -156 | 26.0% | |||
| Ordinary operating income | 218 | 266 | 22.0% | |||
| As % of revenue | 8.5% | 8.9% | ||||
| Other operating expenses and income | -39 | -25 | -35.4% | |||
| Operating income | 179 | 241 | 34.6% | |||
| Net financial income | -65 | -123 | 89.9% | |||
| Income tax | -53 | 16 | -129.4% | |||
| Share of profit of equity affiliates | -2 | -2 | -18.2% | |||
| Net Profit Group share | 59 | 131 | 123.7% | |||
CONSOLIDATED BALANCE SHEET
| in € millions | 31/12/2015 | 31/12/2016 | ||
| Non-current Assets | 4,884 | 5,865 | ||
| Intangible fixed assets | 3,408 | 3,893 | ||
| incl. Goodwills | 1,707 | 2,175 | ||
| incl. Other intangible fixed assets | 1,701 | 1,718 | ||
| Property, plant and equipment | 1,296 | 1,670 | ||
| Long-term financial assets | 31 | 33 | ||
| Deferred tax assets | 149 | 269 | ||
| Current Assets | 881 | 714 | ||
| Inventories | 8 | 10 | ||
| Trade receivables and related accounts | 154 | 168 | ||
| Other receivables and currents assets | 200 | 225 | ||
| Derivative financial assets | 0 | 2 | ||
| Cash and cash equivalents | 519 | 310 | ||
| Assets held for sale | 0 | 2 | ||
| Total assets | 5,765 | 6,581 | ||
| Shareholder's Equity (group share) | 1,923 | 2,023 | ||
| Share capital | 397 | 401 | ||
| Premiums | 927 | 842 | ||
| Reserves & consolidated results | 598 | 781 | ||
| Minority interests | 11 | 14 | ||
| Total shareholder's equity | 1,934 | 2,037 | ||
| Non-Current Liabilities | 2,878 | 3,401 | ||
| Provisions for pensions | 50 | 59 | ||
| Deferred taxes | 691 | 760 | ||
| Other provisions | 69 | 140 | ||
| Borrowings and financial debt | 2,069 | 2,442 | ||
| Current Liabilities | 953 | 1,143 | ||
| Provisions for less than one year | 13 | 14 | ||
| Trade payables and related accounts | 228 | 250 | ||
| Other payables and accruals | 597 | 678 | ||
| Borrowings less than one year and overdrafts | 95 | 183 | ||
| Derivatives financial liabilities | 20 | 18 | ||
| Liabilities held for sale | 0 | 0 | ||
| Total Liabilities | 5,765 | 6,581 | ||
| Net financial debt | 1,645 | 2,315 | ||
CONSOLIDATED CASH FLOW STATEMENT
| In € millions | 2015 | 2016 | ||
| Net profit/(loss) | 61 | 133 | ||
| Net depreciation, amortisation and provisions | 146 | 160 | ||
| Other income and non-cash expenses | 2 | -79 | ||
| Elimination of acquisition costs of securities | 5 | 1 | ||
| Elimination of net interest paid | 52 | 88 | ||
| Cash flow before cost of net debt | 266 | 303 | ||
| Change in the working capital requirement | -21 | 4 | ||
| Net cash flow from/(used in) operating activities | 245 | 307 | ||
| Impact of changes in scope (acquisitions) | -75 | -392 | ||
| Impact of changes in scope (disposals) | 4 | 3 | ||
| Payment for property, plant and equipment and intangible assets | -140 | -160 | ||
| Payment for other financial investments | 3 | 1 | ||
| Proceeds from disposals of non-current assets (excluding securities) | 15 | 40 | ||
| Net cash from/(used in) investing activities | -193 | -509 | ||
| Net cash flow | 51 | -201 | ||
| Treasury shares charged to equity | 0 | 0 | ||
| Increase in financial liabliities | 503 | 200 | ||
| Repayment of financial liabilities | -184 | -89 | ||
| Net interest paid | -52 | -97 | ||
| Dividends paid to shareholders of the parent | -35 | -29 | ||
| Dividends paid to non-controlling interests in consolidated companies | -2 | 0 | ||
| Dividends payable | 0 | 0 | ||
| Net cash from/(used in) financing activities | 230 | -14 | ||
| Change in cash position | 281 | -216 | ||
| Cash and cash equivalents at start of period | 229 | 510 | ||
| Cash and cash equivalents at end of period | 510 | 294 | ||
| Marketable securities | 10 | 92 | ||
| Cash | 509 | 218 | ||
| Bank overdrafts and advances | -9 | -16 | ||
| Change in cash position | 510 | 294 | ||
