LNA Santé (AO) | Buy | M&A, Home Hospitalisation and Heatwave

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LNA Santé (AO) | Buy | M&A, Home Hospitalisation and Heatwave

LNA Santé Buy | Target Price: EUR42.00

We continue to expect 15-20% LFL growth over the coming years, supported by several structural drivers: continued expansion

into new territories; new operating licences, capacity extensions and targeted acquisitions of existing HAD activities; favourable

demographic trends and increasing patient demand; the ongoing substitution of inpatient care by lower-cost home-based care,

which remains a strategic priority for French healthcare authorities.

Heatwave: operational vigilance but no change to the investment case

The current heatwave has again put French nursing homes under media scrutiny, recalling the 2003 heatwave that resulted in an

estimated 15,000 excess deaths in France and led to a profound strengthening of regulations governing elderly care facilities.

By comparison, the current episode is estimated to have caused around 6,000 excess deaths, although health authorities stress

that it remains too early to assess the final impact and determine whether nursing homes have experienced any meaningful

excess mortality. The sector is nevertheless significantly better prepared today, with mandatory air-conditioned areas, activation

of the Plan Bleu, reinforced hydration protocols, daily monitoring of vulnerable residents and crisis reporting procedures.

At this stage, we see limited financial risk for LNA. Additional cooling, energy or staffing costs should remain manageable, while

the main risk remains reputational in the event of operational failures. Importantly, the greatest health risk continues to concern

elderly people living at home rather than residents in nursing homes benefiting from continuous medical supervision. Unless