• Revenue: EUR5.3 billion, up 6.6% on an organic basis.
• EBITDA pre-IFRS 16: EUR605 million, an increase of 1.2%.
• Operating Margin: Improved by 30 basis points.
• Operating Cash Flow: Above EUR100 million increase.
• Net Profit from Continuing Operations pre-IFRS 16: EUR5 million, compared to a loss of EUR49 million in '23.
• Net Profit Group Share pre-IFRS 16: Loss of EUR20 million, compared to a loss of EUR63 million in '23.
• Operating Cash Flow Generation: EUR400 million, compared to EUR288 million in '23.
• Net Financial Debt: Reduced by EUR409 million to EUR3.5 billion.
• OPCO Leverage Ratio: Reduced from 6.2x in '23 to 5.8x in '24.
• Real Estate Portfolio Value: EUR2.6 billion.
• Occupancy Rate in Elderly Care: Over 90%, with 91.4% in December 2024.
• Volume Effect on Revenue: EUR122 million, a 2.5% increase.
• Price & Mix Effect on Revenue: EUR204 million, a 4.1% increase.
• EBITDAR Margin: 21.8%, down 50 basis points.
• Wholeco Leverage: Decreased from 6.2x to 5.8x.
• Loan-to-Value Ratio: Dropped from 61% in 2023 to 57% in 2024.

• Warning! GuruFocus has detected 7 Warning Signs with FRA:KO2.

Release Date: February 25, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Clariane SE (FRA:KO2) reported a 6.6% increase in revenue on an organic basis, reaching EUR5.3 billion, demonstrating the strength of its diversified business model.
• The company achieved a 30 basis points improvement in its operating margin, reflecting a recovery in financial performance.
• Operating cash flow generation rose sharply to over EUR100 million, indicating strong cash management.
• Clariane SE successfully executed the first three steps of its two-year financial restructuring plan, including a significant disposal plan, with over EUR500 million already achieved.
• The company extended its syndicated loan to 2029 and set up a new real estate credit line, enhancing its financial stability and access to financing.

Negative Points

• Despite improvements, Clariane SE reported a net profit group share pre-IFRS 16 loss of EUR20 million, primarily due to a capital loss on the disposal of Les Essentielles.
• The EBITDA margin declined by 70 basis points to 11.5% due to cost inflation and lower real estate development activity.
• The company's net financial debt remains high at EUR3.5 billion, although it has been reduced by EUR409 million.
• Clariane SE's EBITDAR margin decreased by 50 basis points due to disposals and real estate arbitrage.
• The company faces challenges in maintaining occupancy rates and managing cost inflation, particularly in France and Germany.

Q & A Highlights

Q: Could you give an update on the disposal process? Can we expect large or smaller operations over the year to come? A: Sophie Boissard, CEO: We are currently driving several transaction processes of various sizes in parallel, covering all geographies and encompassing both operating and real estate assets. We aim to be opportunistic, ensuring they contribute to deleveraging. We are confident in completing the program under good terms.

Q: Does Clariane intend to obtain a credit rating or call a hybrid bond this year? A: Gregory Lovichi, CFO: After extending maturities with our banking partners, we may consider obtaining a credit rating as part of extending our debt maturity. The sterling hybrid bond was not called last year, and the next call date is June 2025. We have no new announcements on this instrument at this stage.

Q: How do you expect price increases to affect your EBITDA margin, given the offset of input cost increases? A: Sophie Boissard, CEO: We have covered cost evolution through pricing catch-up, mainly covering inflation in Germany and France. We expect the 2025 price increases to contribute more to margin recovery, especially with anticipated index increases in France.

Q: What is the expected occupancy rate in the Netherlands, considering new facility openings? A: Sophie Boissard, CEO: For mature facilities in the Netherlands, we expect occupancy rates between 85% and 90%. This growth is expected within two years from the opening of new facilities.

Q: With EUR600 million of maturities this year, is there an opportunity for Schuldschein holders to swap into something resembling the syndicated loan facility? A: Gregory Lovichi, CFO: For 2025, part of the maturities is linked to factoring, which we will extend. Real estate debt will also be rolled over for longer terms. 2025 is a low year for maturities, and we don't have significant reimbursements this year.

Q: Could you explain the bridge mechanism within the real estate partnership, given the cash inflow and outflow figures? A: Gregory Lovichi, CFO: We received a cash inflow of EUR300 million from the capital increase and made a EUR90 million reimbursement following the UK sale. The net figure reflects these transactions.

Q: What are the main drivers of the 6% to 9% EBITDA growth guidance for 2025? A: Sophie Boissard, CEO: Growth will be driven by new capacities in Spain, the Netherlands, and France, along with a 2-point occupancy increase in France and Germany. Pricing adjustments, especially in Germany, and a performance plan managing operating costs will also support margin recovery.

Q: Can you elaborate on the SMR clinic reform and its impact on French Specialized Care margins? A: Sophie Boissard, CEO: The reform led to a EUR15-20 million EBITDA impact due to tariff framework confusion. French authorities have acknowledged mistakes, and we expect a catch-up in 2025. We anticipate margin recovery and growth in outpatient services, contributing to improved margins.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.