2023-2024 annual results : Solid growth in revenue and recurring operating margin of 8.5%, exceeding the target / improved profitability and a focus on reducing debt in 2024-25

Caissargues, October 23, 2024 - Groupe Bastide, leading European provider of home healthcare services, announces its earnings for the 2023-2024 financial year ended 30 June 2024. The full-year consolidated financial statements were approved by the Board of Directors on October 21, 2024. The statutory auditors have audited the financial statements and the annual financial report will be available on the website www.bastide-groupe.fr by October 31, 2024.

Organic growth of 7.4% for the 2023-2024 fiscal year

Revenue amounted to €529.8 million, with organic growth[1] of 7.4% for the 2023-2024 fiscal year, driven by an excellent performance in home healthcare services and a return to growth in Homecare.

With revenue of €328.9 million, the more technical business activities such as Respiratory, Nutrition-Perfusion-Stomatherapy, now represent 62% of the Group's activities. Momentum remains very strong, particularly in the Respiratory and Diabetes businesses, driven by Groupe Bastide's market share gains and structural growth within the sector. On a like?for?like basis, Respiratory revenue was up 13.1% and Nutrition-Perfusion-Stomatherapy revenue up 10.6%.

Homecare revenue was up 1.4% (1.6% on a like-for-like basis) to €200.8 million, benefiting from the continued development of local authorities and in-store rental activities, and a return to growth in equipment sales in the final quarter of the year.

The scope effect of acquisitions was €4.6 million over the period. International business accounted for 16.6% of revenue.

Recurring operating margin of 8.5%, exceeding the announced annual target

In an inflationary context, gross margin[2] improved by 120 basis points over the year to 66.9%, reflecting the Group's strategy of strengthening its more technical business activities.

EBITDA² was up 5.9%, outstripping revenue growth, to €107.6 million, corresponding to a margin of 20.3% which represents an improvement of 30 basis points.

Recurring operating profit² was up 5.0%, amounting to €44.9 million. Recurring operating margin amounted to 8.5%, up 10 basis points and above the announced 8.4% target. This performance reflects good management of external expenses (positive 10-basis point impact on margin), the amortized cost of assets (negative 20-basis point impact) and a controlled increase in payroll costs resulting from salary inflation and the development of home healthcare services (negative 100-basis point impact on margin).

Operating profit increased by 6.0% to €38.9 million. Non-recurring expenses amounted to €6.0 million, including restructuring and acquisition costs of €1.2 million and litigation costs of €2.2 million.

Financial expense came to €22.4 million (versus €13.9 million in the 2022-2023 fiscal year), including €2.1 million in interest paid on lease obligations (IFRS 16) and the impact of the increase in interest rates.

Net profit from continuing operations stood at €9.5 million, after taking into account a €7.0 million tax expense.

Discontinued operations generated a net loss of €8.3 million for the year, mainly due to the ongoing disposal of our business in Switzerland (€4.5 million in impairment of goodwill with no cash impact and a net loss of €2.4 million).

This resulted in a net profit of €1.2 million for the year.

Financial structure: operating free cash flow of almost €20 million

Cash flow from operations came to €92.7 million, with working capital virtually unchanged. This more than offset net operating investments of €51.3 million, or 9.7% of revenue, compared with 10.4% for the 2022-2023 fiscal year. This tight control over net operating investments is all the more satisfactory in that it has been achieved against a backdrop of strong growth in the more capital?intensive rental business. Some 90% of these investments involve the purchase or repair of medical devices, which are then leased to the customer.

Operating free cash flow (cash flow from operations after cash flows related to acquisitions of property, plant & equipment and intangible assets and after repayment of lease liabilities), came to a positive €20.8 million. The second half saw a clear improvement, with operating free cash flow of €23.0 million compared with negative €2.2 million in the first half.

The Group also collected €9.7 million net in connection with the management of its business portfolio, including the proceeds from the sale of Distrimed in December 2023 (€14.2 million), outflows linked to the acquisitions of Oxigo and Occit'Perf (€1.5 million), earn-outs paid on previous years' acquisitions and minority interest buyouts (€2 million).

Including lease liabilities of €69.8 million, net debt amounted to €385 million at June 30, 2024 compared with €390.7 million (including €76.1 million in lease liabilities) at June 30, 2023 for shareholders' equity of €80.7 million, i.e., a €5.7 million reduction in debt. Available cash stood at €23.6 million.

Improvement in the Group's leverage

In July 2024, Groupe Bastide secured its medium-term financing and extended the maturity of its debt by setting up a new financing contract for €375 million, more than 90% of which is repayable at maturity, i.e., as from the 2029-2030 fiscal year. The repayment in the current year is therefore limited to €7.8 million.

The new debt is subject to compliance with a leverage ratio (IFRS16 Financial net debt / EBITDA ³), of 4.5 at December 31, 2024, 4.25 from December 31, 2025 and 4.00 from June 30, 2027. At June 30, 2024, post IFRS 16 leverage stood at 3.6x, well below the authorized threshold and a marked improvement on the leverage of 3.9x at June 30, 2023 and 4.2x at June 30, 2022.

2024-2025 outlook

Given the excellent momentum of home healthcare services, Groupe Bastide is confident it will achieve its revenue target of over €560 million (based on its current scope) for the 2024-2025 fiscal year.

Cost control associated with the higher share of revenue from higher value-added businesses in the Group's revenue, and a stable pricing environment expected for the current year, enable Groupe Bastide to aim for a 20 to 25-basis point improvement in recurring operating margin to reach a minimum of 8.7% in the 2024-2025 fiscal year.

Reducing debt and improving debt ratios, particularly the Group's leverage, are also among its top priorities.

To achieve this, Groupe Bastide plans to continue optimizing its operating free cash flow generation, resulting from the expected growth in profitability, strict management of working capital and controlled operating investments.

At the same time, the Group intends to accelerate its debt reduction by pursuing its strategy of targeted asset disposals, including the sale of its businesses in Switzerland, which should be completed before the end of 2024

NEXT PUBLICATION:

First-quarter 2024-2025 revenue on Thursday, November 14, 2024 after the close of trading.

About Groupe Bastide Le Confort Médical

Created in 1977 by Guy Bastide, Groupe Bastide is a leading European provider of home healthcare services. Present in eight countries, Bastide develops a permanent quality approach and is committed to providing medical devices and associated services that best meet patients' needs in key health areas: diabetes, nutrition, infusion, respiratory care, stomatherapy and urology. Bastide is listed on Euronext Paris (ISIN: FR0000035370, Reuters BATD.PA, - Bloomberg BLC: FP).

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[1] Organic growth calculated at constant exchange rates and on a like-for-like basis, with 2023-2024 figures restated for the contribution of companies acquired within the last 12 months and 2022-2023 figures restated for the contribution of assets sold within the last 12 months and assets classified as assets held for sale.

[2] See definition in appendices.