To be continued today… Orpea
(AOF) – Orpea has announced two new draws of up to 205 million euros at the end of December 2022 as part of a 3.2 billion euro financing agreement signed last June with its main banking partners. The addiction care group also recalls that it is engaged in financial restructuring negotiations aimed at funding its restructuring plan and providing the liquidity necessary to continue operations.
Negotiations with financial creditors and third-party investors are ongoing in the context of amicable settlement proceedings opened by the Specialized Commercial Court of Nanterre on October 25.
AOF – DETAILS
Key points
– Europe’s number 1 in the field of comprehensive dependent care with more than 120,000 beds and nearly 2,000 facilities in 23 countries, established in 1989;
– 4.3 billion euro turnover, France-Benelux 60%, Central Europe 26%, Eastern Europe 9%, Iberian Peninsula and Latin America (Brazil, Chile and Uruguay) 5%, then China;
– A value creation model based on an organization adapted to international development in locations with high purchasing power, 50% ownership of real estate (46% in 2021, worth 8.2 billion euros);
– Divided capital (14.5% for the Canadian pension fund CPPIB and 5% for the Peugeot family’s FFP) and renewed management in July with Guillaume Pepy as the new chairman of the board of 14 directors, Laurent Guillot retained as managing director;
– A strained balance sheet with €8.3bn of debt against €1.1bn of cash at the end of June, the group has signed a loan agreement accompanied by a €3bn real estate asset disposal program by the end of 2025.
Challenges
– Development of a transformation plan consisting of 4 points: quality of support and well-being of residents, strengthening dialogue with stakeholders, ambitious human resources policy and updated management practices;
– Anticipation of innovation strategy and human vulnerability management:
– Open innovation with 108 projects around health and care, catering and hospitality, construction and processes,
– University research with about 30 innovative projects;
– 2023 ecological road map:
– 100% of tenders including CSR assessment,
– 100% of suppliers who signed the responsible procurement charter,
– HQE certificate of 100% new buildings,
– initiation of green credit;
– A 26,000-bed growth warehouse under construction (3,000 beds to open in 2022);
– Continued growth in the employment rate and disengagement from recruitment and training efforts.
Challenges
– The strong impact of inflation on food and energy consumption, the purchase of electricity in France is not covered;
– Current strategic review, which does not include accounting results in semi-annual accounts;
– Asset quality questions following the impairments in Brazil and Belgium as part of the asset disposal program;
– Lack of financial visibility: after a 10.9% increase in revenues and a net loss in the 1st half, expectations of a risk of operating margin deterioration for 2022 will lead to a renegotiation of financial terms.
Learn more about the “Pharmaceutical” sector
Loss of momentum in European studies
European studies are losing ground to American and Chinese studies. In twenty years, Europe’s share in global R&D has fallen from 41% to 31%. China’s share increased from 1% to 8%. As for the USA, which oppresses Europe, in 2001 it allocated only 2 billion euros per year from Europe to research and development, but now this gap has reached 25 billion! Some experts accuse the European authorities of not implementing an effective policy. Therefore, pharmaceutical research funding should be better targeted through the Horizon 2020 programme. Despite the quality of French research, it is only eighteenth in European funding. In contrast, the United States concentrates funding in Boston and a few centers of excellence.
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