Hello and welcome to the Clariane 2023 full year results. My name is Caroline, and I'll be your coordinator for today's event. Please note this call is being recorded, and for the duration of the call, your lines will be on listen-only mode. However, you'll have an opportunity to ask questions at the end of the call. This can be done by pressing star one on your telephone keypad to register your questions. If you require assistance at any point, please press star zero, and you'll be connected to an operator. Today, we have Sophie Boissard, the CEO, and Philippe Garin, the CFO. I will now hand over the call to your host, Sophie Boissard, the CEO, to begin today's conference. Thank you.
Thank you very much. Ladies and gentlemen, dear investors, good afternoon. Welcome to our Clariane Group's 2023 Annual Results Presentation. I am Sophie Boissard, Chief Executive Officer of the Clariane Group. With me today is Philippe Garin, Group Chief Financial Officer. I would like to start this presentation by highlighting the key events of 2023. In order to sum up 2023, and I'm on slide number four, I would like you to remember three main figures. The first figure is 89.4%. The second figure is EUR 1.5 billion. And the last and the third figure is +44. What does it mean? The 89.4% is actually the level of occupancy rate we have now reached on our main segment, which is nursing home.
This 89.4% means that we are now back to a kind of normal state after COVID, 2020, and of course, this is a major event of the year. EUR 1.5 billion is actually the amount of the refinancing plan we have launched in mid-November in order to unlock the financing constraints created on the back of Orpea restructuring. Of course, this is a major plan for Clariane's future. I will elaborate much more on this in a few minutes. The +44 is actually the high Net Promoter Score we reached over the year. This is the highest ever NPS for Clariane and probably the highest ever in our segment of activities. This shows that we have been able, thanks to a continuous improvement effort, to reach recognized high quality of care. This is probably one of the greatest achievements of 2023.
Let us move now to slide number 6 and have a look at the main indicators. 2023, I think it's pretty clear in my introduction speech, is really about a solid performance despite a difficult environment. Solid performance, which is reflected in the top-line evolution. Revenue went up 11.4% on a reported basis, which includes Grupo 5, the social and psychiatric care platform we acquired in Spain early 2023. We have reached, in 2023, more than EUR 5 billion revenue. Organic growth was 8.4%, totally in line with our guidance, with a well-balanced contribution of both volume and pricing coming from all geographies and segments, and especially, as I mentioned, a strong contribution from elderly care segment, which is nearly back to normal.
As announced, EBITDA rose very slightly to EUR 614 million, which, in an environment where inflation on external costs reached almost 10% and where more than 80% of our revenues are regulated, is a good performance. As a matter of fact, we have been able to offset two-thirds of the inflation effect coming from external charges. EBITDA margin at 12.2% fell only by 120 basis points, mainly due to Germany as a temporary consequence of the new financing reform that has been deployed over 2022 and 2023, as Philippe will explain in detail later in the presentation. Operating free cash generation was solid at EUR 191 million, yet with a transformation rate from EBITDA to cash around 30%, below the average of previous years, which was above 40%. This is due to higher working capital requirements, particularly in Germany, again, in relation with the new regulatory framework I just mentioned.
We are confident to recover in the forthcoming 18 months and to come back to normalize operating free cash flow generation. Net profit is at break-even, including the impact of provisions related to 24 disposal programs, which is a major part of our refinancing plan, as just alluded to. Financial leverage is 3.8 times, which is in line with the restated guidance we gave in October. Finally, the market value of our real estate portfolio stands at EUR 3 billion, gross value down by approximately 8% compared with the value at the end of 2022. This is the very mechanical effect of the decompression of capitalization rates, which remains indeed limited for healthcare asset class despite the strong increase in interest rates, which have been tripling over the last two years.
The increase in the loan-to-value to 61% from 57% last year is strictly the result of changes in cap rates on the gross value of the real estate portfolio since the real estate debt is stable in amount. Let us now move to slide number 7. As a second highlight of the year, I would like to focus on the plan to strengthen our financial structure we announced on the 14th of November last year. This plan was intended to loosen the stranglehold on the lenders and stock markets after the major crisis caused by Orpea's default, which has been resulting in completely blocking Clariane's access from the third quarter onwards to financing or to refinancing. So to get out of this bind, we have designed a comprehensive EUR 1.5 billion plan to be executed into two stages.
The first very shortened phase, which is reflected on the right side of the slide, has been finalized at the end of the 2023 financial year. It involves both the finalization of two real estate partnerships for a total of EUR 214 million in equity capital and the establishment of a real estate financing bridge with banks of the Crédit Agricole Group for a total amount of EUR 200 million. So those two are done.
The second stage is much more structural and is ongoing. On one hand, it involves the implementation of an asset disposal program with an expected gross disposal value of EUR 1 billion. On the other side, it involves the completion of a capital increase with preferential subscription rights for a total amount of EUR 300 million. We are currently doing good progress on both these points, as you will see in more details later in the presentation.
The aim of the plan is very clear. It is about reducing our net debt and returning to a leverage level of less than 3x by 2025 at the latest, with LTV for real estate debt reduced to below 55% within the same time frame. Finally, and this brings me to slide number eight, I would like to take the opportunity to outline our achievements on extra financials and on ESG. And this thanks to the remarkable work carried out by our teams to execute on the comprehensive roadmap that we defined in 2019 before the COVID crisis. Indeed, in 2019, we designed a five-year plan whose targets and visions were strengthened when we adopted the status of mission-driven company one year ago.
Actually, by 2023, Clariane will have met or even exceeded all its commitments, first and foremost in terms of human resources policy, second in terms of quality of care and dialogue with the community of patients, families, and residents, and last but not least, in terms of environmental impact. Let me comment here on the main achievements, starting, of course, with HR and human capital policy. The first achievement is definitely on the education and career development. Today, as you see on the slide, 12% of the company's employees are involved in a qualifying path course to be compared with 4% when we started 2019. As a result, and this is the main figures, in France today, we can fill 80% of the assistant nurse positions through our own internal training programs.
So this education path is good both for our employees, who can progress through training, and for the company in terms of recruitment in a labor market that remains very tight and will remain very tight for the long run. The second achievement is about employee health and safety at work. We have been able to reduce work-related accident frequency rates from 57 in 2020 to 37 today. Loyalty has also been very much improved with an increase in seniority to 7.5 years on our fronts to be compared with 6.7 years in 2019 before COVID when we launched the plan and an engagement rate that has been regularly measured, which reached this year 79%, which is indeed a very high score to be compared with the other peers of our sector.
Thanks to all these efforts, we have been able to be awarded top employer as the first company in the care sector. The second dimension of our ESG policy is about quality of care, of course, and it is very much related to the quality of our HR policy. And in this area too, a great deal of work has been carried out since 2020 with the deployment of best-in-class quality standards in all the group's geographies for elderly care and healthcare activities, with a certification granted by independent third-party bodies such as AFNOR in France or DEKRA in Germany. We have been also working a lot in deploying and strengthening governance and mediation bodies in all our facilities. And we have now 97% of our facility, which indeed has such a body.
It helps a lot to support and to avoid any misunderstanding or to support improvement of quality and dialogue on the long run. All these have enabled us to reap the benefits in terms of perceived quality of care with a net recommendation score that has reached, as I said before, an unprecedented and particularly high level of +44. This is 20 points more than in 2020, and this is 10 points more than the period measured by the independent third-party organization we asked to support us in those inquiries and surveys. Let me say lastly a few words on the third pillar, which is about environmental dimension. Clariane, last year, made a commitment to comply with the SBTi trajectory. We have already been able to reduce by 36% our carbon intensity footprint per square meter in comparison with 2019.
And of course, we have been committing to do a further -30% by 2030, mixing different levels, reducing energy consumption, changing energy mix, pushing on waste management, and also working together with our main suppliers. So once again, a very solid year in which all the hard work we have been doing for the past five years is very fruitful, both in terms of operational and economic resilience and in terms of the recognized quality of care. I now hand over to Philippe Garin to give you a very detailed presentation of what this means for our income statement and balance sheet. Philippe, the floor is yours.
Hello, everyone. Let's move to slide 10. I'd like to move on the income statement with the first slide confirming the relevance of our growth model.
The first observation, in line with what we saw in June, is strong organic growth in each of our three businesses. This growth was driven, in particular, by a rise of almost 2 points in our occupancy rate. Finally, it is also worth noting the very dynamic growth in the healthcare division. It grew by 17% and now accounts for just a quarter of our group sales. Let's move to slide 11. If we look at this growth a little differently by breaking it down into its volume, price, and scope impacts, we see that price alone had a strong boost to growth, accounting for more than 5%. This effect was not the only one, as the group achieved volume growth of 3% over the year despite the end of the [uncertain] as part of the COVID crisis.
Lastly, the acquisition of Grupo 5, accounting for 3% of growth, giving Clariane overall growth of over 11%. Slide 12. This growth is largely the result of our improved occupancy rates. In fact, we have seen an average increase of almost 2 points over this year, which is very solid performance. If in December 2023, we were at 89.4, today, we are at 89.8, which means that we are almost back to where we were before COVID. Slide 13. I think the first focus is clearly the impact of the inflation that reached a record level, but whose effect has been largely absorbed thanks to good management of our cost structure. Indeed, opposite from salary increase of 5.5% and other costs that were up by almost 10% and which represent 30% of our total cost base, our price increase averaged only to 5.4%.
Again, since backstop, the decline in margin was limited to 120 basis points, a very good performance. Slide 14. Once again, we can look at this in a different way by looking at the variation in the component of EBITDA from one financial year to the next. Volume contributed EUR 30 million. Price had a negative impact of EUR 23 million, changing the scope of consolidation with Grupo 5 in Spain had a positive impact of EUR 9 million. And real estate business linked to the development of our network was down by EUR 7 million. Let's turn now to the rest of the income statement and, in particular, in slide 15, sorry, to the net profit. Overall, the net result from continuing operation fell by around EUR 115 million over the year.
This change can be explained by a fairly standard item, this increase in our depreciation and amortization charge, which represents around EUR 15 million. This figure is explained by the very significant investment we made in previous year. On the other hand, there are two more recent developments: EUR 90 million increase in non-current expense, EUR 12 million increase in financial results. Non-current expenses comprise an asset impairment of around EUR 60 million, many relating to disposals that have been or are in the process of being completed: EUR 30 million in restructuring costs, particularly in Belgium and Germany. The increase in interest expense is due to the change in our interest rate spread, which, as you know, can be hedged. Finally, the point of explanation about tax.
As our pre-tax profit is negative by around EUR 15 million, we should have had tax gain of around EUR 5 million, which is not the case given the impairment of over EUR 15 million of our different tax assets in Germany. In fact, we have a significant tax loss carried forward in Germany that can be absorbed by future profit. However, recognition of this benefit has been kept for this year. The future economic benefit is retained, but its accounting translation is restricted. Slide 16. Net income from continuing operation in 2023 takes into account impairment losses on assets of EUR 60 million. As stated for this item, net income from continuing operation is breakeven.
With regard to this asset impairment, it is very important to bear in mind that this asset write-down is largely related to disposal carried out as part of our refinancing plan, namely the UK and real estate assets in Netherlands. If we had not sold these assets, they would not have been impaired. We are therefore moving from a value we use to a market value, which, given the evolution of the real estate market, leads up to depreciate this asset. I would therefore draw your attention that our annual impairment test carried out in 2023 amounted to only EUR 6 million. I will remind you that on real estate assets, they have always been recognized at their historical value and therefore most on our portfolio have not impacted their value in our balance sheet. Let's look to our business by region.
As we have seen with our sales by businesses, we have also seen strong growth in each of our countries with France and Italy, our most mature countries, growing by more than 6%. Regions such as Germany and Benelux benefited from both price and volume effects. Lastly, Spain doubled in size over the year with the acquisition of Grupo 5 in January 2023. Slide 19. France delivered a remarkable performance with organic growth of almost 7% and an increase of 8% on a reported basis. All the group activity in this region contributed to this good performance. In particular, there was strong growth in the healthcare and community care businesses. In the nursing home business, the occupancy rate continued to recover, reaching 88% in this year and around 88.6% today. This growth in business is not fully reflected in EBITDA given the high inflation, but EBITDA is still up.
In terms of satisfaction, the NPS was up sharply to 45. Slide 20. Let's move on to Germany, which, as you know, is experiencing difficulties in the nursing home sector, which is our main business in that country. We have seen particularly strong sales growth of around 10%, sorry, mainly as a result of price increase. Since 2022, we have had two successive and very significant increases in salaries, which have been passed on all tariffs. However, inflation in Germany on other costs has been particularly high and has not been offset by change in tariffs in either 2022 or 2023. The necessary adjustment is taking place, sorry, with 2023 likely to be a low point for Germany in terms of margin.
We are starting to see the fruits of our efforts take shape, and we believe that we will be able to benefit from an improvement in the situation as early as 2024. Nevertheless, our EBITDA margin fell from 23.5% in 2022 to 18.9% in 2023. In this complex environment, the platform has shown exceptional operational resilience with a particularly strong performance in terms of quality and a sharp rise in NPS to 43. Slide 21. The Benelux area, including Belgium and Netherlands, performed very well with strong growth in both countries, 9% for Belgium and 25% for Holland. An increase in their margin rate, Belgium EBITDA margin rose from 21.9% to 22.6% and the Netherlands from 18.2%, sorry, to 21.5%. This is a region with a remarkable track record. Slide 22. Let's move to Italy, where I will make the same observation.
Italy is still enjoying a very strong growth at almost 9%, of which 6% is organic. EBITDA grew by 10%, generating a slight improvement in the margin rate. This impressive growth was achieved while maintaining a high NPS of 59. Slide 23. Finally, in Spain, which is our last geography, we have a margin dilution that has absolutely nothing to do with inflation problems. The decrease in the margin rate in Spain is mainly due to the acquisition of Grupo 5, which, as you will recall, has an extremely strong ambulatory business and therefore a particularly low level, low real estate cost. Despite the fall in the EBITDA margin rate, the Spanish performance was particularly good with the EBITDA doubling in value over the period. Slide 25. I would like now to move on the item of the cash flow statement.
2022 had seen a degree of stabilization in investment compared with 2021. 2023 corresponds to a significant reduction in all our investments with real estate investment over the period divided by two. These investments remain high, representing a further EUR 500 million over the 2023 financial year and were financed mainly by setting up partnerships in our real estate vehicles. Since this year, we had EUR 300 million through three real estate partnerships during the financial year. Cash flow was down slightly at EUR 191 million. These two factors combined enabled us to reduce our variation in debt to EUR 60 million after two years in which a very significant proportion of our growth was financed by debt. Slide 26. So I suggest we move on the free cash flow section and focus on working capital in particular.
If we look at the series of operating free cash flow since 2019, it has been around EUR 215 million. The cash conversion of EBITDA was around 40%. 2022 was clearly a year above this average, marked by a very high level of real estate activity. 2023 is significantly lower than in 2022 and slightly lower than the previous year. This change is mainly due to a negative impact on working capital of around EUR 80 million compared to 2022. This is primarily due to a change in financing framework in Germany. The successive financing arrangement put in place continued to generate significant administrative delays. As a result, we are continuing to build an overvalued working capital requirement in Germany, which is quite significant and which will have to be reversed in four to two years.
In addition, our ability to put in place factoring solutions to improve working capital requirement has been reduced in most of our regions. Slide 27. Turning now to the investment cycle, as you can see on this chart, we were at EUR 1.2 billion in 2020. Over the next two years, this level of investment has fallen to around EUR 800 million. We then reduced this amount to EUR 533 million in 2023, taking into account the drastic reduction of real estate investments. This amount of gross investment, of which we have control, will be reduced to an average of EUR 200 million over 2024 and 2025. The need to renovate our network makes it extremely difficult to go below this level on investments. Slide 28. As a result of this very significant investment cycle, we now have a network of excellent quality.
This effort contributes directly to our CSR performance, as Sophie explained earlier. Let's move to slide 30 on the balance sheet. Let's start with our real estate portfolio. We have had a year in which cap rates have risen to an average of 5.94% for our portfolio. This represents an increase of cap rates in more than 10%, with an impact of EUR 330 million in our opening portfolio value of EUR 3.2 billion after variation of scope. These cap rates were partially weighed by the rise in indexes, which represents EUR 86 million. When these two amounts are added together, we record a reduction in our real estate value of around 8%. We therefore believe that we are accounting for a significant portion of the decline that has been underway since 2022.
This decline has generated a mechanical increase in the group LTV, which has risen from 57% to 61% of the value in real estate, while real estate debt is stable in value. Slide 31. As you can see from Sophie's introduction, we are back to 3.8 leverage. This is a significant improvement on the leverage of 4.1% at 30th of June. Our real estate debt of EUR 1.8 billion, representing a LTV of 61%, which is a high point since our objective is to return to a LTV of 55% gradually. Finally, in terms of debt trend, I believe that 2023, despite being a particularly difficult year in terms of debt management, will have resulted in a favorable factor, namely the stabilization of debt. Slide 32. Moving to our liquidity and maturities. Our liquidity end of December stands at almost EUR 700 million.
The maturity you see for 2024 includes EUR 100 million for factoring, EUR 200 million for real estate, and around EUR 100 million for Schuldschein. So we have enough to meet this maturity, mainly real estate and Schuldschein, factoring being renewed. Slide 25 is also a year with a reasonable maturity. On the other hand, slide 26 includes significant maturity amounts. Their renewal will be addressed with the smooth running of our plan. I now hand over to Sophie on the refinancing plan.
Thank you very much, Philippe. I would now like to conclude this review of the 2023 financial year by taking a closer look at our plan to strengthen our financial structure and, in particular, at the stage that lies ahead. So let's move on to slide 30. As I mentioned, the two first stages are already done and closed, and we are now working very intensively on what is reflected here under the number 3 and 4, the rights issue on one hand and the disposal program on the other hand. So let's start on slide 35 to describe what the capital increase is about. It will be put to a vote at the general meeting of shareholders on the 26th of March. The aim is to raise EUR 300 million in order to strengthen the company's equity capital and to accelerate the reduction of leverage and debt.
The capital increase is being proposed with preferential subscription rights, which will enable all shareholders to either take part or to transfer their preferential rights to new shareholders wishing to take up a position. Crédit Agricole Assurances, so I'm sorry, I'm on slide number 35. I hope it's clear for today. Yeah, thank you. So Crédit Agricole Assurances, through its subsidiary Predica, has already indicated that it will provide a EUR 200 million guarantee to ensure the successful completion of this capital increase. The remaining EUR 100 million will be raised with the support of the main members of our banking pool. In terms of the timetable, as I said in my introduction, we had a number of conditions to meet before we can decide upon the capital increase.
One of the most important of these preconditions was to obtain an exemption from the obligation to launch a takeover bid from the Autorité des Marchés Financiers in the event that Crédit Agricole would cross the 30% threshold. This exemption was obtained on the 6th of February and is now definitive, so it will enable us to move forward on this basis. Second precondition, if Crédit Agricole were to exceed the 40% control threshold by virtue of the guarantee, it would also be necessary for them to obtain prior approval from the French Competition Authority. As agreed with Crédit Agricole, we have decided to submit an application to the French Competition Authority in order to preempt that issue, and we do not anticipate any particular difficulties on it, but we have to wait until the authority can pronounce their position based on antitrust assessment.
As you see on slide number 36, once the authorization has been obtained, we can proceed with the capital increase subject to, of course, and this is, of course, the major precondition, to the authorization to be given by the general meeting of shareholders, which has been convened for the 26th of March. You can find on our website, so clariane.com, all documentation relating to the meeting and, in particular, the resolutions and the brochure that will serve as a basis for shareholders' views and help to support their vote. It should be noted that both Crédit Agricole and Malakoff Humanis, who are members of the company's board of directors, have already indicated their support for the capital increase. On the request of the Autorité des Marchés Financiers, Crédit Agricole has committed to cap its voting rights up to one-third of the express votes.
Based on all those elements, the capital increase is underway to intervene either just before the summer or in June or just after the summer, meaning it's September, depending on the timing of the expected authorization from the competition authority. Let's now move on slide number 37 to review the second part of the plan, which will obviously also have a major impact on the future and reshape the Clariane Group in the forthcoming months. I mean the disposal program. As I said, we expect from the program to generate EUR 1 billion in gross proceeds from disposals. In a new market environment with higher cost of money, we aim to focus the group on a smaller number of geographies offering sufficient market and business depth and scale effects and enabling us to take full advantage of skills and cost synergies.
This is why, after asset strategic review, we decided to withdraw from the UK market, where we have built a small platform, and to arbitrate Berkley Care. We have been able to manage the deal under excellent conditions. Just as a reminder, our Berkley Care platform is a recent one that we have been developing since 2020 with 12 care homes positioned in a premium or access premium segment. This is definitely a high-quality platform with a very strong and committed management, and therefore, we were able to sell it on very good terms at the end of a very short and well-managed competitive process. It enabled us to raise a total sale price of nearly EUR 250 million, corresponding to a multiple for the entire platform of around it is 17x, sorry. 2023 EBITDA. It encompasses definitely also the embedded growth of the platform.
After repayment of the EUR 90 million in capital that Crédit Agricole had invested in the platform at our Side, we will be able to reduce our debt, both corporate and real estate, by a first EUR 145 million. In addition to this first transaction, a few days ago, we sold our 50% stake in a real estate development fund we had founded in the Netherlands with our partner Aedifica. And this is a transaction on EUR 25 million. So, in total, in the last two months, we have been completing more than a quarter of the divestment program, and we are, of course, working now intensively on additional divestment with various processes underway, including in the Benelux country.
All of these, as I said, with a very clear and simple aim, which is to refocus on probably 4 major geographical areas with sufficient diversity and complementarity of activities to support the group's effective, efficient, and value-creating growth trajectory in the years ahead. Let us move now to slide number 39 and to the outlook for 2024. First, in terms of top line, as you have understood, we are expecting more favorable developments in all our business segments and in all our geographies. The traditional retirement home segment can still bring an additional 2-3 points of occupancy before being totally back to recovery pre-COVID in the mature network. This will definitely fuel the organic growth in 2024, especially in the two main geographies representing two-thirds of the network, which are France and Germany.
In the healthcare segment, we expect the growth to be fueled by the strong development of outpatient care, and this is true for France, for Italy, and also for Spain. We have a strong embedded growth in the small segment, the smallest segment of home care and shared housing segment with strong pipelines both under the Petits-fils brand, so this is pure home care, and under the Âges&Vie brand, and this is shared housing mainly in France. On this basis and with a strong organic part of this, probably around 3% at least, we expect to achieve organic sales growth of over 5% this year with, of course, also a contribution of repricing, mainly coming from the nursing home segment in Germany with a second jump into the repricing after the very significant inflation in wages and costs and to a lower extent in France.
Turning now to EBITDA pre-IFRS 16, this is, of course, a little bit more difficult to guide because of the change in scope to come, but what we can say is that on a pro forma basis, after disposals, we expect to be stable in value compared with 2023 because we expect this year to have a very low or pretty low EBITDA contribution from real estate development activity in contrast with previous years, where it represented between 5% and 8% of the total EBITDA amount. And this is why, taking this factor into account, the stable value of EBITDA forecast for 2024 will, in fact, correspond to an increase in operating EBITDA in a context of steady growth in volumes and prices.
In terms of leverage, this is the third part of the guidance, we expect to achieve less than 3x financial leverage by the end of 2025 at the latest with a loan-to-value on real estate debt back to less than 55%. This debt reduction trajectory that is going to materialize in 2024 will clearly be underpinned by two levers. First, the speed of the implementation of the plan to strengthen the group's financial structure and, in particular, the impact of proceeds from disposals and the timing of the capital increase, but also a more robust generation of operating free cash flow taking into account the back-to-normal of working capital requirements over 2024 and probably 2025 and given the significant reduction down to EUR 200 million in the level of development investment at the end of the high cycle of CapEx described by Philippe.
In terms of guidance, last but not least, I would like to give some perspective on our four core extra-financial targets, which you will have understood are the major foundation for our sustainable and efficient performance. We have set four targets. The first one is to maintain the level of recommendation and, therefore, the NPS significantly above that of our peers and, therefore, stable after deducting the effect of change in scope in the disposals. Second target, we are going to continue our efforts in the area of qualifying path and education with a target of at least 10% of our employees on the new scope enroll in this cycle of training for qualification. Third, we strive to improve our policies and results in terms of health and safety at work, and we target a further reduction in the frequency of lost-time accidents of at least -5%.
Fourth, all of this, of course, is without prejudice to our efforts to reduce further our carbon footprint according with our SBTi commitment. Finally, as we indicated already on the 14th of November, given our current leverage of over 3.5 times, we won't be able to propose to the annual general meeting of shareholders to pay a dividend this year. This is in line with the conditions of the terms of the syndicated loan to mobilize all our resources to reduce the group debt until we are back below 3.5 times, and we hope that we can do that next year. Let me finish on slide 40 by outlining the group's operational and strategic roadmap.
Definitely, you understand 2024 will be actually twofold, with definitely further deploying our At Your Side corporate project and, in the meantime, executing the refinancing plan and driving free cash flow generation with the various levels I just alluded to. In 2023, in an adverse environment, we were able to demonstrate our resilience and our ability to adapt. We were also able to validate the full relevance of our strategy, diversified and complementary service offering to best address growing demand for personalized care in all our markets, and investing in quality and promoting a culture of trust to ensure sound and sustainable fundamentals. The recent years have shown just how essential this dimension is. In 2024, we will be building further along those lines, deploying our corporate project to best serve and care for our communities while executing our plan to strengthen our financial structure.
I can assure you that the entire Clariane team is fully committed in succeeding in those two challenges for the sake of all shareholders and stakeholders, local communities, employees, shareholders, and suppliers. Thank you very much for your attention. We are now ready to answer your questions.
Thank you, Sophie. There's quite a large number of questions on the forum already. Maybe we could start with this question, which is, can you comment on the normative occupancy levels in the nursing home sector? Is there further improvement, or have we reached a plateau at the end of 2023?
Thank you very much for the question. So, as we said earlier, we are now back to a small 90% occupancy, and we have always said that we expect on a normative level to have at least 93%.
So, there is another 3% of occupancy to come on the mature network without prejudice of further development or opening of new homes. We expect, actually, to be back at that level probably by 2025 with a significant further step in 2024 fueling the growth. We have seen in the recent years that the business or the activity structure in elderly care has changed with, actually, patients coming later and requiring higher intensity of care and staying, actually, for shorter stays or for respite stays. So, it is more and more about a little bit more inflows, outflows, and this drives, actually, of course, a little bit lower occupancy but definitely also a higher contribution of the pricing and care rates based on this care intensity.
This is also a trigger for players that can demonstrate a strong medical expertise and a strong care quality and, definitely, on this Clariane, is very well positioned. Sophie, there's some questions around the German market. The situation seems to have deteriorated, particularly in Germany across the sector. There's also some specific questions on whether you can comment on the margin levels that you can expect in Germany in the future. Yeah, definitely. This is probably one of the main facts of 2023. Actually, the full German regulation on elderly care in Germany has been changed over 2022 and 2023 with, actually, the combination of three reforms that haven't been very well combined by the German authorities. First reform has been to pass a very significant wage increase of +30% without due compensation.
So, this plus 30% had to be negotiated the compensation had to be negotiated locally, which is each and every care insurance. That's the first thing. The second has been to increase the requirements in order to get the diploma of nurse, which has actually created a bottleneck for the recruitment of such nurses. And last but not least, there has been also a change in the way the staff ratio are to be implemented in the homes. So, the combination of the three has created a lot of pressure in order to renegotiate the pricing scheme for each and every home, and there has been definitely a time lag at care insurance level with a significant delay in the offset of these various costs.
I think that with a drop of close to 400 basis points in EBITDA margin, we have reached, actually, the bottom, and we are now starting to see a normalization. We have a complete repricing scheme ahead of us with renegotiation of the rates for 100 of our homes, and I expect to be back at the level of margin we were in 2022 by 2025 at the latest with the first significant step to be done this year. Last but not least, and I think this is probably something very new on the German market, it's also about deal of management and private pay.
We were not used at Clariane to completely implement the levels in terms of private pay on this segment, and we have, naturally, started very actively last year to work on this, and I think we have significant upside coming from private pay and additional services to be factored in the resident contribution. So, based on that, I expect, again, to be back to a normative margin level in 18 months with probably some upsides to come there given the very strong and sustainable quality of operation.
Thank you. There's a question in the chat around the price of the UK and, in particular, the price of the real estate in the UK that we have sold in the absence.
Yes. The deal is based on the multiple of EBITDA, and as you know, in the UK, those multiples are whole cost, so full of cost plus of cost.
So, we have the basis of this deal, which is 17x the whole cost EBITDA, which represents a loss of EUR 40 million. If you want to have we have not all the rest is just brainstorming, but we can brainstorm together, and if you see that the level of loss or decrease of value in real estate is around 8% this year. Last year, we have 2%, so at least it's on average 10% for the full company, and we know that in the UK, it was a bit higher than this amount. So, you may have an idea of a decrease in the real estate value around between 10%-12%, and the remaining is of cost.
Sophie, there's some questions around the debt. One of these questions, if you don't mind, I'll maybe clarify straight away, is around an OCN maturity in 2024. This, I think, is simply the graph of the maturity is simply a very similar color in blue. In 2024, the EUR 152 is actually a corporate debt, which is attributed to our factoring scheme. But apart from that, there are some questions around how advanced the waiver process is on the convertible bonds and whether we expect to pay down the RCF in 2024.
The convertible bond, we are talking of course, but we were in a blackout period since one month, so we have to wait during this period, and it's always easier to talk after delivering a set of accounts for the financial year. So, we are working with them. It's a bit too early to give you details, but everything is going, I would say, the right way.
On the other topic, which is RCF, we will have to reimburse first the term loan, and after the RCF, it is organized like that regarding the disposal. So, RCF will be reimbursed either by the remaining part of the disposal of assets or by a significant part, probably, by the capital increase. And there's some questions around the non-cash EBITDA and the other items, the total EUR 140 million in the cash flow statement. Could you comment, please? Yes. We are, in fact, a specific situation with a very significant amount of negative value in the bridge between EBITDA and cash flow. We had a quite normal non-cash item around EUR 40 million in the EBITDA. We have the non-current impact, meaning the non-current item translated in cash are in this bridge.
They represent this year EUR 71 million, an amount which is increasing due to the increase of the restructuring mainly. And last but not the least, real estate. We had a sudden spike last year, which brought around EUR 30 million of positive impact in this bridge. The overall impact was so is 40 + 30 + 70, EUR 170 million of negative impact, where last year, we were at the same level of non-cash, slightly down regarding non-current because the amount was less significant and an amount very different regarding sudden spike. It was a positive one, and most of the difference is coming with this topic.
A specific question on the German environment. On slide 20, we have different figures. In particular, there is a pricing impact of EUR 126 million. However, a bit further down the slide, you talk about a repricing of 6.8%. Is there a leakage between the two, and what explains the difference between the two amounts?
We have some volume impact. If I take the 10%, I need to reconcile and to ensure that there is no small issue, but we have a 12% or 10% of increase in organic. This organic is split between overall 6% of price and near 7% in price and 3% in growth, in volume, when we have a much higher impact on the cost side. I hope it's answering your question, but if it is not clear, we can work together. Slide 13, maybe? Yes. Come up, which is the impact of the CapEx and the bottom in the GAV. This makes a total increase in the GAV of EUR 115 million in 2023.
However, this seems low as we look at the amounts of development CapEx of last year, of EUR 154 million and EUR 218 million of real estate CapEx. Can you clarify this?
The bridge you have in real estate is after Agili. So, you have a significant part of acquisition, the CapEx, for Agili during the first period. This is the first point. It's not the main one because you're right. Moving from EUR 218 million to EUR 115 million is a big gap, so a significant part of it is Agili. The other part of it is the way the Cushman is taking into account the value of CapEx is not linked to the cash out but linked to some step we are moving out on the greenfield.
So, the way the increase of the value of the greenfield through Cushman work is not the same than the cash out we have, which is the base to book CapEx. I hope it's clear, but it's the remaining part of the difference.
Yeah. A technical question on how is the financial leverage calculated, and what are the metrics within this indicator facility? It's for you or it's not? So, we have two financial leverages that are now followed within this indicator facility. The first is the loan-to-value, and this is capped at 65%. This is based at the end of the year on a Cushman & Wakefield valuation, as Philippe was just referring to. And the other one is the financial leverage on the OpCo.
So, this is taking the financial debt without the debt of the real estate of the real estate portfolio, and this is compared to the EBITDA pre-IFRS 16 but impacted by a sort of normative rent calculated on the real estate debt. Therefore, a cap rate of 5.8% that is applied to the real estate debt. There are some other changes within the bridge to come to an adjusted EBITDA. This can include, for example, the impact of acquisitions on a 12-month rolling basis, but those are the main elements that lead us to the calculation in this case, in the closing of 3.8x. And the next question is around what drives the increase in other costs of around EUR 172 million. This is including sort of the elements around rent. Is this mainly driven by food, is the question. It's else
There is no rent in this line. We were used to book the COVID compensation on cost. We have two kinds of COVID compensation. We add two kinds. We will not speak anymore about COVID compensation next year, and it's a very good year, a very good thing because it's always difficult to explain. So, we add last time that in 2022, we had to book COVID compensation in revenue regarding level of activity. So, compensation of level of activity has been booked as a revenue, and compensation of costs were booked as compensation of costs in cost. So, last year, we had still some significant amount which has been right up, and I have to say that our compensation of costs were very often booked one year after, part of it about the cost. So, the increase of 172 is first due to inflation.
We have more than 10% inflation, which is the main topic, and after, we have the impact of this COVID steps. We have another precise question, Philippe, on what is the outstanding amount of the term loan at the moment? So, the term loan outstanding amount is EUR 555 million. We have to reimburse EUR 550 million in May 2024, and the remaining would be reimbursed, meaning EUR 505 million would be reimbursed in May 2026. This is the current maturity, but you may know that we will have when we will receive the cash from UK disposal next month, we will have to reimburse part of this term loan from the proceeds.
We have overall for starting with EUR 240 million of sales of disposal value, EUR 90 million of equity which has to be reimbursed to the co-assurance, EUR 40 million of local real estate debt, the remaining part of EUR 110 million, which will be switched. Following the agreement on term loan, part of it will reimburse the term loan.
Thank you. We have a question here that is around the growth CapEx and seeing a lot of investment over the last 2, 3 years in growth CapEx. Can you provide any guidance on incremental capacity and what we should expect in the coming years? Yes, of course. Currently, so we have been, of course, looking at our pipeline under the new financing conditions with higher interest rates, and we have only kept short-term the project that are already fully financed or delivered.
So, there is an additional 3,400 new beds to come in terms of greenfield projects. This is actually mainly coming from France and Spain to serve up these, and there is also a small 1,000 located in the Benelux and some contribution of Italy too. So, that's where the additional capacities to come short-term, meaning to be delivered 2024, 2025, and it will fuel the growth there. There is, of course, all the contribution coming from the delivered projects that are in the ramp-up phase, and so this is reflected in the 2024 guidance.
When it comes to midterm guidance, because I think the underlying question here is about midterm guidance in growth potential, I would like to invite you to discuss this at our investor day, which will take place on the 15th of May, where we actually intend to be much more precise on the forecast beyond 2024 based on the execution of our refinancing and financial strengthening plan. Thank you, Philippe. We have covered, I think, most of the themes in all of the different questions in the forum, and of course, we remain available with Stéphane for any further questions after this call. Well, thank you very much for having attended the call. As I said as an introduction, I think 2023 has been really very much about a paradoxical year for Clariane, very strong and resilient operational performance with strong top-line growth and resilient margin in an inflationary environment.
And the second dimension is, of course, the impact on our ability to finance and refinance of pay-as-you-go and the sectoral crisis. So, I'm very confident that based on the very strong and resilient and qualitative recognized qualitative platform we have, we will deliver further on the back of our At Your Side corporate project in all the three segments of business we have built, keeping a high level of quality in all dimensions, and that we will manage the execution of our refinancing plan. And I would like to highlight that the fact that we have been able to deliver more than one quarter of the disposal program in two months is, as such, a very strong achievement, and the next milestones are to come. So, thank you very much for your presence today, and we are, of course, totally available for further questions. Thank you very much. Bye-bye.
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