Orpea is changing management and hopes to open a new page, instructions and AG reports

It’s time to open a new page in the history of Orpea “, – said at the beginning of the general meeting, the president of the managing board of Ehpad, Philippe Charrier. He who was replaced at the end of that meeting by the former leader of the SNCF, Guillaume Pepy, said he was leaving with ” a sense of accomplishment “. And yet he leaves the ship on the edge of the abyss, because ” extremely deep crisis experienced after the publication of the book Graveyards”, last January. This book, which is the result of a three-year investigation and written by Victor Castane, condemns the living conditions of some residents, as well as the mistreatment they suffer in Orpea nursing homes.

The group then entrenched controversies and continued its descent into hell, including an insider trading investigation against former CEO Yves le Masne, who has since been replaced by Laurent Guillot, in charge of leveling the company. Then Mediapart discovered the financial embezzlement of a holding company based in Luxembourg and owned by the former leader of the group in Italy. So many factors prompted the state to get involved in the case, in particular by conducting investigations to control the working methods of the head of “Ekhpad”.

Controversial issues…

Faced with this avalanche of difficulties, the president wished to protect his future former company by noting ” three main topics: quality of medical care, use of public funds and financial embezzlement “. Regarding the first point, Philippe Charrier confirmed, based on the findings of the evaluation mission carried out by independent firms, ” that there was no organized system of abuse or rationing of food ”, even if he acknowledges the dysfunctions. An important point, he said, because this topic is at the heart of criticism of the book Graveyards. The President even relies on the report of the Accounting Chamber, which raised ” industry difficulties that affect not only Orpea “. As the families filed many complaints, some shareholders were interested in possible new provisions to fund potential compensation. The group responded that it had already allocated funds (83 million euros for the 2021 financial year), but not considering new ones for specific complaints.

On the second point, he admits unreliable workforce reporting processes and an undesirable procurement process ”, even if he qualifies by saying that the amounts incriminated remain insignificant on the scale of Orpea. Finally, on the last point of embezzlement, he wanted to insist on the promptness of the group’s management, which launched an investigation as soon as it became aware that certain executives at the head office had arranged ” system of concealing these financial embezzlements.” And if the passivity of the board of directors challenged the shareholder, the president defended himself by saying that ” no system of internal control, even if it exists, made it possible to detect this practice to the board “. The group has not filed any named complaints against the fired people and does not intend to, instead filing a complaint against X.

… For three recovery axes

After the crisis, the group is overhauled, focusing on three elements: operational management and human resource management, as well as business ethics. With regard to the first direction, the president highlighted the actions already taken to strengthen the dialogue with residents and families (platform for listening, States General of the elderly), as well as to simplify the processes related to care (systematize the reporting of adverse events, promote the autonomy of facility managers for greater efficiency).

In terms of human resources, Orpea wants to improve the social dialogue with its employees and increase its attractiveness (paying overtime, promoting training). Finally, the group intends to strengthen internal controls (conflict of interest declarations) at the same time as ethics, in particular by promoting its new CSR code of conduct among its employees. Priorities shared by new CEO Laurent Guillot, who emphasized: a giant construction site waiting for him The manager placed special emphasis on the safety and working conditions of employees, as well as on the quality of service and treatment of patients, and the shareholders were concerned about the low budget funds allocated for each resident’s meals.

3 billion in sales within three years

While no financial targets were revealed, Orpea’s encouraging half-year results were recalled. The European leader in the field of homes for the elderly recorded a turnover of 2.31 billion euros at the end of June, which represents an organic growth of 6.4% over the year. The momentum was generally good in international clinics, while activity in France’s nursing homes has been picking up since June.

Responding to several questions from shareholders about the disposals envisaged by the group, the CEO emphasized that he wants to refocus ” Actions of Orpea in care professions “. Therefore, many real estate sales will be made mainly to institutional investors (large portfolios), with a target of 3 billion euros by 2025. Regarding the group’s development model, Laurent Guillot confirmed: ” want to use more of the group’s own resources, since the debt financing carried out in recent years is unsustainable and, moreover, led to the refinancing of banks “.

A place for voting results that are currently being announced. No dividends will be distributed for the last financial year. The appointment of Laurent Guillaume to the board of directors was approved by 99.7% and Guillaume Pepy by 99.3%. Former managing director Yves Le Masne’s remuneration for 2021 and 2022 was rejected by more than 98%. Philippe Charrier’s award for the 2021 and 2022 periods was voted in with low results of 75% and 72% of the vote respectively. The preliminary awards for 2022 for the newcomers, the Chairman and the Chief Executive Officer, have been adopted.