(AOF) – Following the scandal that has shaken Orpea for two weeks, Mirova had to come out of the woodwork. The one who presents himself as a committed shareholder of sustainable finance, and held 3.9% of the capital of the operator of Ehpad at the end of December 2021, made public a letter addressed to the chairman of the board of directors of Orpea. Mirova asks for a redesign of the model and the adoption of the status of “company with a mission”.
“As a committed and long-term shareholder, we are used to talking individually with the companies in which we are invested, in order to support them constructively in their transformation”, explains Mirova.
“But in view of the scale of the scandal which questions the elements that you have provided to us in recent years, we have decided to make public our questions and our desire for change concerning you”, adds Mirova.
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Key points
– European number 1 in reception and care for the elderly, with 91,387 beds and more than 1,000 establishments, diversified in medical and home help;
– Turnover of €3.9 billion achieved in 3 businesses: long-term care for 68%, health for 20% and care and home help for 12%;
– Revenues drawn from France for 49%, Germany for 27%, Italy for 11% and Belgium for 14%, the group being the leader in each of these markets;
– Multi-local and partnership business model, with a diversified care offer in 600 living areas in Europe and, at the same time, the desire to be a real estate developer-manager (Propco), the real estate ownership rate being in constant increase, at 24% for a value of €2.7 billion;
– Capital controlled by mutuals (Prédica with 24.32%, Malakoff Humanis with 7.66% and PSP with 6.51%), Jean-Pierre Duprieu chairing the 11-member board of directors and Sophie Boissard being at the head general;
– Financial position under control with a debt leverage of 3 times, an LTV ratio of 55%, strong generation of self-financing and €1.8 billion in cash compared to €3.67 billion.
Challenges
– 2024 strategy: annual growth of 10% in turnover excluding acquisitions / ramp-up of the healthcare business (target of 30% of revenues) / opening of 3,000 beds per year / by 2023, increase in value of the property portfolio at €4 billion;
– Innovation strategy led by the internal digital agency “Korian Solutions”: industrialization of buildings with the BIM system / operational efficiency and exchanges of residents with their entourage / at the service of residents: multifunction, robotic or virtual equipment designed by start-ups -up, partnerships with universities or CEA, Foundation for Aging Well, innovation laboratory endowed with 2 M€…;
– Environmental strategy based on 15 ESG objectives: 40% reduction in CO2 emissions by 2030 (vs 2018) / 5% reduction in waste by 2023 / ESG commitment charter with 12 suppliers involved in renovation / launch of several “green” or “social” loans;
– History of profitable integration of acquisitions – Inicea, Berkley Care and Ita in 2021;
– High barriers to entry: real estate investments, wage costs and growing regulatory constraints.
Challenges
– Delivery of 11,500 new beds by 2025;
– At the end of September 2021, 12.6% increase in revenue;
– 2022 objective of turnover above €4.5 billion, an operating margin of 15.5% and free cash flow of €300 million.
Boost for French pharmacy
At the end of a recent CSIS, the French authorities announced an amount of credits (7 billion euros) never reached: 1.5 billion for university hospital research, 2 billion for investment in health via bpi france , 1.5 billion in aid for the relocation of industrial projects, and 2 billion to strengthen investment in three sectors of the future (bioproduction, digital medicine, and pandemic preparedness). In addition, the annual growth in drug expenditure reimbursed by Medicare will be 2.4%, which should generate growth of at least 0.5% in the turnover of laboratories,
Above all, the normal drug marketing procedure will be accelerated (up to 500 days saved) if the medical benefit rendered is sufficient.