ORPEA: Fresh Acceleration in Top-Line Growth During Q3: Revenue up 29% to €524.5 Million

Regulatory News:

ORPEA (Paris:ORP), a leading European player in Long-Term Care (nursing homes), Post-Acute Care and Psychiatric Care, has today announced its revenue for the third quarter of 2014 to 30^th September.

Fresh acceleration in top-line growth during the third quarter of 2014

* For information, 3 facilities were closed in Spain.

Senevita in Switzerland has been consolidated as of 1 April 2014 and Silver Care in Germany as of 1 July 2014.

¹Organic growth reflects the following factors: 1. the growth in sales (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 sales (in period n vs. period n-1) of restructured facilities or those with capacity increased during period n or n-1, and 3. sales generated in period n by facilities set up in period n or n-1. Organic growth includes the improvement in sales recorded at recently-acquired facilities by comparison with the previous equivalent period.

650 new beds opened during Q3

During the third quarter, ORPEA kept up its brisk pace of new facility openings, with close to 650 new beds entering service, consisting of:

• 5 facilities and extensions in France strengthening ORPEA’s presence right across the long-term and temporary care chain;
• 2 facilities in Germany, which ramped up to full speed more rapidly than expected, reflecting the very strong demand in that country.

During the first nine months of the year, the Group added more than 2,000 new beds in France, Belgium, Italy, Switzerland and Germany.

Thanks to this continuing expansion, ORPEA is fully engaged in local economies, creating new jobs and providing training.

Progress update on the Group’s first facility in China located in Nanjing

The fitting and decoration works at ORPEA’s first nursing home in Nanjing are continuing. They are on track to meet the original schedule and are being overseen by a Project team from ORPEA. Its planned opening date in the second quarter of 2015 has been confirmed.

It will be a high-end, 240-bed facility providing care for dependent older adults.

At the same time, ORPEA continues to make preparations for the opening of the facility by putting in place various operating processes, quality procedures, recruiting staff and delivering training, and pursuing a highly selective marketing plan.

Integration and development of Silver Care in Germany

Silver Care has been consolidated by the ORPEA Group with effect from 1 July 2014. The integration process has been facilitated by Silver Care’s organisation around eight powerful regional clusters, which is very closely geared to the specific features of the German market.

Cross-fertilisation of expertise between the two groups is gradually being introduced. With the support of ORPEA’s international managers, Silver Care’s Quality, Purchasing and Information Systems processes will be optimised and aligned with ORPEA’s. And certain projects developed by Silver Care will be rolled out across ORPEA’s network.

Furthermore, a number of expansion plans involving new facilities or selective acquisitions are currently being considered and are likely to go ahead shortly.

As regards new facilities, Senevita and Silver Care previously leased complexes built by property developers to house their new facilities. In line with ORPEA’s property strategy, the Group will now build the new projects and retain ownership of some of them, thereby harnessing its construction expertise and its value-creating business model.

Commenting on these figures, Yves Le Masne, ORPEA’s Chief Executive Officer, said: "Revenue growth continued to pick up pace during the third quarter of 2014, reaching 29% after 11% in the first and 16% in the second quarter. This strong acceleration reflected the impact of further solid organic growth of 6.0%, and, the contribution from the Group’s international acquisitions. Revenue outside France more than doubled on the back of the first-time contribution made by the business in Germany and the ramp-up in Switzerland.

All the Group’s geographical regions recorded organic and acquisition-led growth. Over the first nine months of 2014, revenue grew by 19% to €1,415 million on the back of consistently brisk organic growth of 6.2% with strong momentum provided by new facilities opened since the beginning of the year (2,000 beds). This performance was particularly impressive given the current gloomy and volatile economic and financial environment, demonstrating the very weak correlation between ORPEA’s performance and general business conditions.

ORPEA continues to invest and to take initiatives in pursuit of profitable growth in all countries where it has a presence, particularly in Germany and Switzerland where the Group has significant expansion plans for the coming years.

ORPEA is confidently reiterating its target of revenue growth of 20% to €1,930 million combined with solid margins for 2014 as a whole.

Given the exceptional visibility inherent in its sector of activity and its growth pipeline of around 8,000 beds under construction and restructuring, ORPEA is already very confident about its ability to achieve further profitable growth in 2015 and beyond.”

Next press release: revenue for 2014 full-year
11 February 2015 before the market opens

About ORPEA (www.orpea-corp.com)

Listed on Euronext Paris since April 2002 and a member of the Stoxx 600 index, ORPEA is a European leader in integrated Long-Term Care and Post-Acute Care. The Group has a unique network of 524 healthcare facilities, with 52,078 beds (45,785 of them operational), including:

• 31,871 beds in France (3,979 under refurbishment or construction) across 345 facilities
• 20,207 beds in Europe – in Germany, Spain, Belgium, Italy and Switzerland – (4,650 under refurbishment or construction) across 179 facilities