Hello and welcome to the Clariane 2024 full year results. My name is Laura, and I will 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 will have the 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 question. If you require assistance at any point, please press star zero, and you will be connected to an operator. Today, we have Sophie Boissard, CEO, and Grégory Lovichi, CFO, as our presenters. I will now hand you over to your host, Sophie Boissard, to begin today's conference. Thank you.
Thank you very much. Ladies and gentlemen, investors, good afternoon, everyone. Welcome to the Clariane Group's 2024 annual result presentation. I'm Sophie Boissard, CEO of the Clariane Group, and together with Grégory Lovichi, the group's new Chief Financial Officer since October 1st, I would like to present Clariane's results for the 2024 financial year. Let's start on slide number five with the four main achievements of the financial year that had crucial stakes for Clariane. First achievement, we have maintained a very solid operating performance, validating the relevance of our strategy and the relevance of our diversified business model. Second achievement, our financial performance is starting to recover, as reflected in a 30 bp s improvement in our operating margin, together with a sharp rise in our operating cash flow generation of above EUR 100 million.
Third achievement, and despite a rather turbulent environment, we have successfully executed the first three steps of our two-year plan designed to strengthen our financial structure and to restore a normal access to financing that was at stake at the end of 2023. And we are making significant progress with the ongoing disposal plan, which is the fourth and last part of this plan, a disposal plan of around EUR 1 billion to be completed by December 2025. Currently, 50%, more than EUR 500 million, has already been achieved, and the second half of the disposal plan is undergoing and will be finalized by the end of 2025. Finally, and this is the fourth achievement, we have recently agreed with our banking partners to amend and to extend to 2029 our syndicated loan and to set up a new real estate credit line.
I will come back to this major agreement in a few minutes. All these four achievements give us a solid platform for 2025 in order to continue to improve our margin, actively pursue our deleveraging, and to install the company on a sustainable and profitable growth path. On slide number six, let me now give you a look at the key figures of 2024 financial results. Revenue at EUR 5.3 billion was up 6.6% on an organic basis, confirming the strength of our diversified business model. EBITDA pre-IFRS 16, and excluding the scope of consolidation sold, was EUR 605 million, an increase of 1.2%. It is slightly higher than the guidance we had provided to the market of stable EBITDA in amount. Excluding the contribution from real estate development activities, which was very strong in 2023, growth was 9.2%.
On the same basis, EBITDA margin was up 30 bp s at 11.3%. This result is attributable to organic growth in revenue and to efficient cost management all along the year. Our net profit from continuing operations pre-IFRS 16 turned back to profit at +EUR 5 million to be compared with a loss of EUR 49 million in 2023. Net profit group share pre-IFRS 16 again was a loss of EUR 20 million compared with a loss of EUR 63 million in 2023. This loss is entirely due to the capital loss on the disposal of Les Essentiels, which is a service residence business in France, which was sold at the end of June 2024. Now, let's look at the cash flow statement on the right-hand side of the slide. Generation of operating cash flow reached EUR 400 million in 2024 to be compared with the EUR 288 million in 2023.
And this is due to a significant improvement in working capital of EUR 84 million. The net financial debt, excluding debt related to rent, was reduced by EUR 409 million to EUR 3.5 billion at the end of December. As a direct consequence of this debt reduction, the WholeCo leverage ratio has fallen from 6.2 times in 2023 to 5.8 times in 2024, which is an improvement of 40 bp s. Please note that in line with the agreement reached with our banks on the syndicated loan, we will be guiding on this ratio from now on, which takes all debt compartments into account and which brings clarity in the readings of our balance sheet. Grégory will come back, of course, in detail to this. Last but not least, the value of our real estate portfolio stands at EUR 2.6 billion against the backdrop where the downturn in capitalization rates has stabilized.
This result testifies to the success of the measures we have taken in 2024 to strengthen the group's financial structure and to put it back on a path of controlled growth and value creation. On slide seven, I would like now to highlight the progress we've made in terms of extra financial performance and ESG policy, which in our business is, of course, of critical importance. Let us start with the social performance indicators. First of all, when it comes to our patients, our net promoter score again this year reached + 44, by far the best score in the sector in our various countries and activities. Let us now turn to our employees. Clariane has been awarded Top Employer Europe certification for the second year running.
We are actually the only company in the sector of care to receive this recognition for the quality of our HR policies, which are core. We are continuing to strengthen our training policies with a record 13% of employees enrolled on the training course, leading to a qualification this year, mainly nursing qualification, and these initiatives have a dual benefit for the company. On the one hand, they enable us to meet our needs for skilled labor in the shortage market through our own training programs for nurse and assistant nurses, mainly, and on the other hand, they enable us to guarantee our loyal employees' prospects for promotion and development in all our geographies marked by strong labor shortage. As a result, half of our managers are promoted from within, and we aim to reach 75% by 2026.
Indicators related to occupational health and safety are also developing very well, with a frequency rate of workplace accidents falling to 31 in 2024 to be compared with 41 in 2022. And we, of course, mean to go down further. In terms of gender diversity in a company where actually more than 80% of the workforce is a female workforce, we have exceeded our 2024 target with 53% of women in top management and 38% on group and country management boards. In terms of environmental performance, we reached key milestones with a validation in June of our greenhouse gas emission reduction target by the SBTi initiative, science-based target. And by the end of 2024, our energy-related CO2 emission has decreased by 15% compared with 2021, along with the trajectory set of minus 30% for 2026.
Finally, and this is the G of ESG with regard to governance, which is an essential condition for our performance, especially in an activity as sensitive and exposed as ours, I would like to highlight two important developments that took place last year. Firstly, the changes that have taken place within the board of directors following the reorganization of the shareholding structure last July with the arrival of three new directors representing the new shareholders, a board which nevertheless remains composed of a majority of independent directors. Secondly, I would like to mention the growing role of our advisory board, which itself includes representatives of the stakeholders' committee in each country. Through its regular exchanges with management and with the board of directors, the advisory board makes an essential contribution to defining our priorities and accurately measuring our performance.
Once again this year, our advisory board will present its work and conclusion at the annual general meeting. Through our ESG policy, which are applied in the same way in each of the group's countries, we strive to be faithful and to be consistent with our purpose, which is taking care of each person's humanity in times of vulnerability. We strive to fully respect our commitments to consideration, fairness, innovation, proximity, and sustainability. Let's now move on slide eight to the plan we issued end of 2023 in order to strengthen our financial structure. As you know, on the 15th of November, 2023, against the backdrop of shuttered access to debt markets, we announced the launch of a four-part plan to strengthen the group's financial structure.
These four-part plans to reduce the group's indebtedness include action to strengthen equity and a disposal program of around EUR 1 billion in non-core assets. The main aim of the plan, scheduled for completion by the end of 2025 at the latest, was to enable the company to regain normal access to credit. So one year on, where do we stand? The plan is proceeding according to the schedule we defined. All the actions designed to strengthen the company's equity were fully completed in 2024, including a successful capital increase carried out last July for EUR 329 million and EUR 230 million via real estate partnerships. That leaves the final component, the asset disposal program, which is already well advanced with EUR 504 million realized by 2024 out of a total target of around EUR 1 billion of gross proceeds. On slide number nine, you see a little bit more of the disposal program.
Through the program of disposal of non-strategic assets, we aim to refocus the group on its core geographies where we have the most growth perspective and its three core businesses. We aim to accelerate the debt reduction and the reduction of the WholeCo leverage with the objective of bringing it to below five times at the end of 2026. In 2024, we successfully completed the sale of our U.K. operation and real estate assets and the hospital-at-home activities in France. We also carried out various real estate assets or portfolio disposal in other geographies such as Italy, Spain, and to a certain extent France. These transactions were carried out at good valuation in the market context that we know is not so easy, based on EBITDA multiples between 11x and 13x 2024 values.
As in 2024, we are currently making progress on several transaction processes in parallel. These transaction streams involve assets of varying size, both real estate and operating assets. By doing so, we are maximizing our chances of completing this program under good value conditions and reducing our leverage. On slide number 10, I would like now to say a few words on the major agreement found with our banks. So in parallel with the disposal plan, we arranged and extended our syndicated loan, which was due to mature in May 2026. The aim of the negotiation that we started in Q3 2024 was twofold. Firstly, we wanted to rebalance the early repayment condition applicable in the event of asset disposal. And second, we wanted to extend our maturity in order to regain visibility and to normalize access to the debt markets.
Actually, we've been able to reach both targets with the negotiation. First of all, we have adjusted the early repayment condition. Our new syndicated loan stipulated that our old syndicated loan, sorry, stipulated that 75% of the proceeds from the sale had to be allocated to repayment of term loan maturities. This provision had been redefined before the sale process was announced, and it was necessary, of course, to rebalance them and to adjust them to the magnitude of the disposal program. And that's exactly what we did through the agreement reached with our banks by reducing the clause from 75% to 40%. In return, we are committed to gradually repaying our RCF, which is fully drawn down, and reducing the total amount of the facility to EUR 625 million. And we have added in parallel a EUR 150 million real estate credit line.
According to the agreement found with our bank partners, the group will now use WholeCo leverage instead of OpCo leverage plus LTV leverage. With the WholeCo leverage, we aggregate corporate and real estate debts, and we are going to communicate from now on only on WholeCo leverage the guidance to the markets. Finally, the syndicated loan negotiated at market rates is now indexed to ESG objectives, reinforcing the alignment with the good CSR commitments I spoke of previously. The restructuring and extension to 2029 is significant because it allows us to regain normal access to the debt market. It was a major ambition that we set ourselves for 2023, and I consider its success a key achievement for 2024. In this respect, I would like to thank our 22 banking partners for their renewed confidence. Let us move now on the income statement that I will comment together with Grégory.
Firstly, you see on the slide number 12 the performance of each of our geographies, and the slide shows the extent to which growth is balanced across all regions, illustrating both the strengths and the diversification of the group's business model. France delivered a 5.5% organic growth, and it reflects three slightly different dynamics. For elderly care, retirement homes, that represent half of our activities in France, they deliver a very strong growth momentum driven by a recovery of two points in occupancy rate and a good price momentum. We are also seeing very strong activity in the home care segment, whether for a Petits-fils franchise or for shared housing in Ages & Vie in rural areas, and however, growth was a little bit more moderate in the healthcare specialty care sector due to the impact of a change in the pricing framework for rehabilitation and mental health.
But the new framework is now in place in 2025 and 2026 will be clearer in terms of further growth. Germany posted one of the group's strongest growth rates thanks to a twofold effect of volume and price recovery following the very heavy penalty related to inflation we suffered in terms of operating cost, which was compounded by a time lag in adjusting regulated prices. We are now well on the way to turning to normal profitability, and Grégory will comment later on the margin. And we are well positioned for the future in this major geography for us. Benelux region, meaning Belgium and the Netherlands, continue to enjoy strong growth momentum underpinned by growth in all segments, notably with the opening and ramp-up of new capacity in the Netherlands.
Italy's top-line growth is more moderate, actually due to full capacity in full beds in the medical and social sector. Today, in Italy, growth is mainly driven by health services and outpatient care, financed by supplementary health insurance, which is where growth will come from in the future. Lastly, Spain posted the strongest organic growth. The -5% decline in reported revenue in this region was only due to the disposal of activities of the United Kingdom that were reported together with the Spain revenue. Let me give you a few explanations by segments. So you see here on the slide number 13 that the revenue growth in 2024 reflects a balanced momentum across all the group's businesses with organic growth averaged at 6.6%.
If you look first at the nursing home segment, which accounts for 62% of revenue, recorded organic growth of 7.2%, so more than the average of the company. The growth was very evenly balanced between volume, with a + 2 occupancy rate improvement on average, and price. That is actually reflecting the thorough impact of growing specialization, greater medical intensity in geriatric care, and a supportive price regulation that takes better into account the complexity of care delivered. The second segment is specialty care, encompassing both post-acute and mental health in France, in Italy, and in Spain, and it accounts for just over a quarter of revenue. It posted slightly more modest organic growth of 3.9%, driven by the rise in volume in outpatient care.
And the final segment is home services and shared housing, which accounts for 12% of our business volume and recorded the strongest organic growth with an increase of 9.4%. This growth was driven by the year-after-year success of our prestigious network franchise in France. On slide number 14, let me give you a few comments on the occupancy rate in elderly care.
That is, of course, a critical metric for this segment of activity. As you can see here on the slide, we are starting from the low point of 2022, which marked the end of the acute phase of COVID pandemic. By 2024, the average occupancy rate has risen to well over 90% with continuous growth across all geographies. This trend accelerated at the end of the year with an average rate of 91.4% in December 2024, an improvement of two points compared with December 2023. I will now hand over to Grégory for the rest of the income statement. Grégory, the floor is yours.
Thank you, Sophie. Ladies and gentlemen, good afternoon. So let's start by looking at the revenue bridge on slide 15. So Clariane's revenue growth in 2024 was driven by three complementary factors. First, the volume effect contributed EUR 122 million, representing a 2.5% increase, mainly supported by higher occupancy rates in nursing homes, then the positive dynamics of healthcare activities in France and Spain, and last but not least, the growth of home care services in France. Second, the price and mix effect had a positive impact of EUR 204 million, a + 4.1%, reflecting strong tariff adjustment across all regions, particularly in nursing homes, with a notable contribution from Germany.
Third, this positive effect largely offset the negative perimeter impact of minus EUR 91 million, resulting from asset disposals across all our geographies, as well as the decline in real estate development activity at Ages & Vie. Overall, this growth dynamic demonstrates the resilience of the group's model, which effectively combines volume expansion, price adjustments, and a strategic refocus on priority markets. On slide 16, the EBITDA performance in 2024 varied across geographies, illustrating the group's adaptability to different market conditions. In France, EBITDA was marginalized by 770 bp s, excluding real estate, due to a lower contribution for this real estate development activities and the impact of the reform in specialized healthcare services. Conversely, Germany recorded a spectacular over 21% increase in EBITDA, driven by tariff catch-up, improved occupancy rates, and efficiency initiatives, resulting in a 240 bp s rebound in margin.
Benelux, EBITDA remained solid with a 7.2% increase, although margins contracted slightly. Italy posted a 30 bp margin improvement supported by a high occupancy rate. Spain saw a strong improvement, reflecting better operational performance in that region. At group level, the EBITDA margin reached 21.8%, down 50 bp s due to disposals and real estate arbitrage. But this margin improved 30 bp s when excluding the real estate development contribution supported by business growth, cycle controls, and the ongoing recovery in Germany. On Slide 17, looking at EBITDA evolution in 2024, the results reflect a mixed positive drivers and external pressures impacting profitability. Higher volumes contributed positively, with a +EUR 30 million impact. The price effect generated an additional EUR 204 million, supported by tariff adjustments across all geographies.
But this was offset by cost inflation of EUR 171 million, particularly due to rising consumption costs in France, Germany, and Benelux, as well as by the end of COVID subsidies in Germany. The net impact of this factor on EBITDA was EUR 21 million, with no effect on margin. Change in scope, driven by asset disposal, had a negative impact of minus EUR 17 million. Additionally, lower real estate development activity reduced EBITDA by EUR 53 million. As a result, group EBITDA reached EUR 605 million, with a margin of 11.5%, representing a 70 bp decline from 2023. However, when adjusting for real estate and disposals, the margin increased by 30 bp s, confirming the resilience of our model and our ability to mitigate inflationary pressures. Let's now move on to cash flow and Slide 19.
In 2024, the strong cash flow generation enabled a significant reduction in net debt, which decreased by EUR 435 million, or EUR 409 million, excluding IFRS 16. Operating cash flow was up by EUR 112 million over the period, helped by a significant improvement in working capital requirements and disciplined investment in maintenance. This was a key factor in the reduction in net debt. This improvement was also driven by the successful execution of the financial restructuring plan, which proceeded from the capital increase in the summer of 2024 and asset disposals completed during the year. Lower development and M&A CapEx also contributed, with spending reduced to EUR 184 million from EUR 315 million in 2023. Overall, excluding maintenance investments, the group invested around EUR 240 million. Net of sales and disposals, this amount is slightly below EUR 200 million, in line with our expectations. Net profit from disposal contributed EUR 391 million, further strengthening the group's delivery capacity.
Certain factors partially offset this positive impact. First, dividend payments and others also increased, notably due to the deconsolidation of Ages & Vie. Then, financial charges rose significantly, whereas 2023 had benefited from the hedge unwinding. Lastly, the contribution from real estate partnership was lower, and the repayment of the EUR 90 million ORA linked to the U.K. disposal also weighed on other available cash flows. Overall, the strengthening of the financial structure allowed the group to reduce debt while maintaining investment at a level aligned with its development needs and delivering objectives. Let's now turn to the balance sheet. On Slide 21, the gross real estate portfolio value stood at EUR 2.6 billion at the end of 2024, down EUR 395 million year-on-year. This decrease was mainly due to a EUR 309 million perimeter impact following asset disposal in the U.K., Netherlands, Spain, France, and Belgium.
Market effects also had a negative impact of EUR 150 million, combining a EUR 59 million positive indexation effect and a EUR 203 million negative impact from an increased cap rate, which reached 6.4% versus 5.94% at the end of 2023. Investment totaled EUR 58 million, supporting the maintenance and modernization of the real estate portfolio. This evolution aligns with the group's strategy of portfolio optimization and financial discipline, ensuring a prudent approach to investment and asset management. Slide 22. The group's financial structure significantly improved in 2024, with a substantial reduction in WholeCo leverage, which decreased from 6.2 times at the end of 2023 to 5.8 times at the end of 2024. This improvement was driven by the positive impact of capital increases and asset disposal completed during the year, together with improvements in operating cash flow.
Upward leverage remained stable at 3.8 times, while the loan-to-value ratio dropped from 61% in 2023 to 57% in 2024, reflecting the reduction in outstandings. This trajectory confirms the group's ability to reinforce its financial position and secure its refinancing commitments in an increasingly demanding environment. Then, on Slide 23, the debt maturity profile was strengthened through extending maturities, providing the group with greater visibility over its financial structure. The maturity of the syndicated loan and the new real estate financing was extended until May 29, subject to the repayment for financing or extension of EUR 300 million in debt before February 2027, as well as EUR 480 million in maturities scheduled for 2028 before May 2028. This proactive approach allows the group to extend the average maturities of its debt and secure its financing sources.
I will now hand it back to Sophie to conclude on our outlook for the current fiscal year and the 2023-2026 period. Thank you very much, Grégory.
Turning to our outlook for 2025 and for the period 2023-2026, we are confirming the group's trajectory of growth and improved financial performance. To be more specific, in 2025, we expect organic sales growth of around 5%, underpinned by strong momentum both in price and in volume, particularly in France, Germany, and by ramp-up effects in the Netherlands and in Spain. This growth momentum, combined with tight control of our operating costs in the context of lower inflation of around 2%, will underpin growth in IFRS 16 EBITDA of between 6% and 9%, enhanced and increased in our margin.
In terms of our financial structure, we are aiming to reduce our WholeCo leverage to below 5.5 times, thanks both to the improvement in financial performance and to the effects of the remaining part of our disposal plan. These financial objectives are, of course, accompanied by non-financial objectives. We aim to maintain the net promoter score (NPS) at the same high level that we delivered until now. We aim to maintain the number of degree courses at over 7,000, and we aim to pursue the reduction in the frequency of work-related accidents and in our carbon footprint according to our SBTi trajectory. In terms of our midterm objective for the period 2023-2026 as a whole, we are confirmed with the target we gave one year ago at our capital market day of an average annual growth rate in revenue of around 5%.
We are also confirming the improvement in margins with a target increase of 100 bps to 150 bp s by 2026, pro forma for disposal and 2023-2026 scope effects. And we expect the WholeCo leverage to be below five times at the end of 2026, consolidating the group's financial structure and the recovery in operating performance. Our ESG commitment remains also unchanged on those we communicated one year ago. The achievements of our refinancing plan, the strong business momentum, and the strong fundamentals of our business portfolio mean that we can look forward to 2025 with a great deal of focus and confidence. In 2025, more than ever, we will remain focused on our purpose, taking care of each person's humanity in times of vulnerability. Thank you very much for your attention, and we remain with Grégory together, ready to answer your questions.
Thank you, Sophie. By the way , we have a first question on the disposal process. Could you give an update on the disposal process? You mentioned that there are several transactions that are ongoing. Can we expect large or smaller operations over the years to come?
So, we take actually from the 2024 experience that we come out with good outcomes if we are able to drive in parallel several transaction processes of various size. And this is exactly what we are doing currently. We have several disposal streams ongoing, covering all our geographies and actually encompassing both operating assets and real estate assets or the combination of the two. And we are going to be, I would say, very opportunistic in the one we will push to the end, provided that they contribute to the delivery team. This is where we are, and we are pretty confident to complete the program in good terms and conditions and to contribute to the delivery process.
Thank you. We have another question here on the web chat, which is regarding the credit rating. A double question. Do you intend to, as Clariane intends to obtain credit rating, does the company intend to call its existing hybrid bond this year?
Yeah, thanks for the question. So, as we are mentioning, after the extension of maturities with our banking partners, the Group intends to consider any and all opportunities to extend the maturity of its debt. And in that program, we may as well review to have credit rating or credit rating could be an option. That was the first point. Yes, the existing hybrid was not called last year. Therefore, the cap has been now in effect, and the next call date is in June 2025. And I think we have not any new announcement to make on this instrument. At this stage.
So, we are really focusing on executing the last point of the plan to consolidate our financial structure. And so, we are going step by step, as Grégory said.
Sophie, Grégory, we have two questions from the live webcast. So, please, would you hand the mic to Alex and Ethan, please?
Thank you. As a reminder, ladies and gentlemen, if you would like to ask a question, please press star one on your telephone keypad. We'll now proceed to take our first question from Alex Pearce of Bernstein. The line is open. Please go ahead.
Yes, good morning. Good afternoon. Thank you for taking my question. I just have a quick one. If you could explain a little bit how you expect the dropdown of price increases into your EBITDA margin, how is that going to evolve? Because we had a big offset of input cost increases that have basically offset the price hikes in the just reported year. So, should we expect a little bit more operating leverage coming through in the coming years? Thank you. Yeah, thank you very much for the question.
Yes, I think that we have actually been able to cover more than cover the cost evolution thanks to the catch-up we've done in the pricing, but it was actually mainly covering price inflation, especially in Germany and to a certain extent also in France. The next price increase, and we do not have a complete knowledge of how the price increase is going to look like in France.
We are still waiting for the final index to come, and hopefully, since the bill passed a few days ago, it is actually guiding on a + 4% increase of the index, both for elderly care and post-acute. So, actually, we expect that the rate increase for 2025 are going to contribute to a little bit more than what we have anticipated to the margin recovery.
Thank you very much. Very clear. Very clear. Thank you very much. And then just a quick detail on the Netherlands occupancy rate. I know that we're coming from a lower point now because you have new facility openings there, and that was dilutive to your occupancy rates. What should we expect on that front in the Netherlands in the next couple of years? Should it go up to above 80% and towards 90%?
Yeah, I'm expecting initially on mature facilities in the Netherlands. Of course, it's smaller size. So, smaller size means, of course, if you miss one resident, you see it on the occupancy percentage. But one can expect something in run rates between 85% and 90%. So, there is still a significant growth contribution in the Netherlands with actually a pretty good contribution from a price point of view. So, it's a growing and contributive geography for sure.
And what's the timeline to get to that 85% and 90% next two years?
From the first day of opening in two years.
Okay, excellent. Very clear. Thank you very much.
Thank you. And we will now take our next question from Ethan Garber of Imperial Capital. The line is open. Please go ahead.
Hi, thanks for taking my call. Just seeing that you've got a little under EUR 600 million in maturities this year, is it still an open opportunity as it had been in the past for Schuldschein holders to swap into something resembling the syndicated loan facility? And you already answered another person's question about the hybrid GBP perp that could be callable this year. Is that the same answer that you may not plan action on the other hybrid as well that's coming due next year or that rather is callable next year, the seven-eighths perp? And that's my question. Thank you.
Thank you.
Ethan? Yeah, I think on the maturities for 2025, you need to have that part of it. It's linked to the factoring that we will roll forward for an extension for a longer year. Yeah, yeah, on this one. And then the real estate data as well. We will roll it for a longer year as well on maturities. So, what we need to have in mind for 2025, it's a low year in terms of maturities. We don't have a lot of reimbursement of maturities this year. And this is the first point that we have in terms of the debt, and this is the way you need to read the maturity date.
Thank y ou.
Thank you. If we go back to some of the questions in the webcast, we have a question on the real estate partnerships. Could you kindly explain the bridge mechanism within the real estate partnership? I seem to see that you have had EUR 230 million of cash in. However, this is to be a cash out of EUR 134 million.
So, yeah, yeah. So, if you refer to page 19 and your question refers to page 19, you see that you have capital increase of + EUR 172 million. So, this is a net. Around, we get a cash in of EUR 300 million from the capital increase. And then we made a reimbursement of EUR 90 million in terms of IFRS following the UK sale with the real estate partnership after the sale of the platform. So, it's a net between + 300 - 90. And this is the way you need to read this capital or real estate partnership on the line on page 19.
We have some questions around the EBITDA and the EBITDA guidance.
What would be the 2024 EBITDA pro forma for the disposed EBITDA to date? Is the 2024 guidance for the EBITDA net of disposals? That's the same question that applies to the leverage guidance as well. Is it net of disposals or not?
Okay, so the first question on 2024 EBITDA, the perimeter or the scope effect on 2024 EBITDA was EUR 17 million, mainly UK and some activity in France. So, that EBITDA would be lower EUR 17 million compared to what we have shown due to the scope effect. Second question, the guidance. The guidance on EBITDA is a proforma guidance, meaning that it will always need to be treated from the disposal and scope effect. And last but not least, on the leverage guidance, it is an absolute guidance taking into account disposal program. So, that was for the third question.
Thank you very much, Grégory. We have a question on the refinancing, which is similar to the one we had earlier. Is there any opportunity to refinance the Schuldschein or other bonds going forward? And is there any financial financing pressure still around?
So, like we are mentioning, 2025, and we can say as well 2026 are low year, if I may say, in terms of amount to be reimbursed. So, we have two years. The next big moment will be 2027 with the extension of the financing of the OpCo. And meaning that from now on, we will continue to work and look for any opportunity we have on the market to access new instruments on new financing for the next two years.
And so, we are going to work in a very pragmatic and opportunistic way in order to best use the two years to come.
Thank you very much. We have a question on the net financial debt of EUR 3.445 billion and the EUR 650 million of the EBITDA. I think there's some questions on how exactly the leverage ratio is and how low it is.
So, the calculation, so the basis of the WholeCo leverage, that is the leverage ratio you are mentioning, is the debt of EUR 3 billion 374 million, meaning that it is net debt after the eligible receivable deduction. And on the EBITDA side, there are still some contractual adjustments to have on your EBITDA, but you need to retain the EUR 605 million EBITDA as a kind of a basis before the adjustment we have contractually negotiated with the bank.
Thank you, Grégory. The next question is around the investments, i.e., the development CapEx, the M&A CapEx, sorry, and real estate. What do we think that this would look like as we go into 2025 and for 2026?
So, on the CapEx side, we remain for the maintenance around 2% of the total turnover that will be allocated to maintenance CapEx. And we confirmed approximately EUR 200 million for development and other M&A CapEx for the year to come. So, we confirmed what we have mentioned already and what we have delivered this year.
And maybe we have another question here on the growth range to come in 2025 of the EBITDA. We see this as being guided between 6% and 9%. Can you tell us the main drivers of that EBITDA growth?
Yes, the growth of the EBITDA growth will be very much about the contribution of the recently opened capacities in Spain, in the Netherlands, and to a certain extent also in France with the outpatient care on the specialty care. There will be the new additional volume contributing, plus the regaining of roughly 2.4% occupancy in volume. Both France and Germany are the only geographies where we have a significant upside in volume to come in existing network in elderly care.
That's for the volume part. This volume is, of course, contributing to the margin because it's actually a better usage of existing operating cost in place. There is only a marginal additional cost to be allocated here. Most of the top-line growth is going to come from the repricing. The repricing also expected further repricing in Germany. The second part of the offset of the timeline we had. We suffer in 2023, and that we started to recover in 2024. There is this pricing contribution, as I said before, that is going to be to offset more of the operating cost.
That's the second part. We have launched mid-2024 a performance plan called Better Support, where we are actually actively managing the operating cost, be it the staff cost and the cost of labor in general, or the supplier and the procurement part, plus SG&A. This is also going to support very significantly the margin recovery. We have several levers to make sure that we do not only deliver growth, additional revenue, but this is more than transformed into EBITDA and into cash.
Thank you, Sophie. The next question is specifically on the SMR activity. Can you tell us more about the SMR clinic reform and quantify the effects on the top line and the margin for French specialized care? How would you see furthermore going forward the margin for the SMR clinics? Can we see this improving going forward?
Yes, actually, SMR is representing EUR 600 million of revenue. So, it's a significant part of the specialty care in France, and it's significant at group level. Last year, we had actually to swallow a complete change in the regulation there coming from a payment per day, pretty easy based on the index on the rate that was actually defined per specialty clinic by clinic. And so, the authorities decided to come for global budget per clinic design based on an index that is supposed to reflect the level of specialty and the local environment. So, this has been a complete reshuffling of the pricing environment for this activity.
There has been a lot of mistakes or uncertainty in the tariff framework that has been actually costing us some percentage points in terms of margin and representing roughly something around EUR 15 to EUR 20 million of EBITDA missed last year, very much because of this confusion created by the new tariff scheme. In the meantime, the French authorities have actually acknowledged that they've done some mistakes, and there will be a catch-up delivered in the rate framework and allocation for 2025. This being, I would say, corrected, I think, and globally, we are going to have a lot of upsides for this scope, for two reasons, actually, because we have 80 post-acute clinics in France located in various regions.
We are more and more seen as a critical partner for hospitals that are pushed to reduce the average duration of stay and also have to rely on the post-acute facilities to do post-acute parts. And second, there is a growing demand on the outpatient. And we have been able to open, thanks to the large CapEx plan we delivered in the previous year, we have been able to open outpatient units in all the facilities. So, going forward, I see actually a lot of opportunities in terms of further volume growth, especially on the outpatient. And now that we have a stabilized price environment, we can, of course, also better use the case mix in this post-acute segment. So, my vision here is that it is going to contribute again to a margin recovery in France.
The 2024 was kind of about 70 bp s of margin downwards for France related to this new SMR tariff scheme. We target not only to recover the 70 bp s of margin, EBITDA margin, EBITDA margin gap, but to actually, I would say, in the next two to three years, to see significant upsides coming from the outpatient development in all our facilities. We are targeting an outpatient growth, just to explain. It's representing currently something as a 13% to 14% of revenue, and we expect at least 15% to 20% growth in the next two years on this specific part of the activity. So, this will be for sure relative in terms of margin.
Thank you, Sophie, Grégory. Next question is coming live from François Perrin, Groupe HLD.
Good afternoon, and thank you for the presentation. Maybe for the first question, I'll follow up on the conversation you just had. Could you elaborate in terms of the new pricing regime? It sounds like it's fixed for each clinic. So, how are you going to benefit from the volume increase that you mentioned, in particular in outpatient care?
Very good question. Actually, half of the regime is fixed. So, I mean, each clinic gets a fixed budget that is related to the specialties that are provided in the clinic, and half, the remaining part, is related to the activity. So, I would say on the inpatient part, actually, we are capped by the capacities that are authorized. On the outpatient part, it's actually much more flexible, where the more we deliver outpatient care, of course, the patients need there, the better we benefit from it with a limited amount of capital to be deployed. I hope it's clear enough.
Yes. Yes. Thank you. A few questions for me, mainly on the cash flow statement. So, maybe with disposals first. So, two questions there. One is, you mentioned that you've realized EUR 504 million of disposals in 2024. Now, when I look at the cash flow statement, I see two numbers in there. In the presentation, I see EUR 391 million inflow, and in another cash flow statement, I see EUR 286 million inflow. So, I just wanted to clarify the difference between these numbers and maybe understand what the leakage is, or maybe there's some sort of timing difference that is not being captured there.
Exactly.
Very good question. On what we say that we secure EUR 500 million of disposal, when you see the cash flow statement of EUR 391 million, part of it will be cashed in in 2025.
You have a kind of a cut-off effect between what we have secured and what has been cashed in. That's the point. And with the other net, you have some net of calculation of reimbursement of debt. This is how you bridge the gap between the secured cash flow statement and the last position.
Okay. On the AGV receivable, the EUR 71 million, could you please clarify what is the expected collection schedule for that or timing?
I will say this one, we mentioned it. It's more for a calculation of the loan-to-value. I think it's something that we need to see at the calculation for the ratio that we have in agreement with the bank. This is why we mentioned it.
Is this something that you're expecting to collect or no?
Yeah, this is exactly fitting an external gap that you have on the balance sheet, and that is being put back to back with Ages & Vie, which, as you know, was consolidated before and is no longer consolidated. So, it's really just, I would say, an accounting effect of the consolidation that is then obviously canceled through this treatment.
Okay. Then, on the CapEx, could you please comment on the development CapEx in particular? So, as you spend this EUR 200 million per annum, can you give a bit more color as to where you're seeing the most accretive opportunities? How many incremental rooms is the EUR 200 million equivalent to, and sort of what ROIs do you target for this spend?
Actually, we have a pipeline to be executed in the years to come, mainly the remaining part of the outpatient development in the clinic. It's less rooms than actually additional capacities that are going to support further growth in that segment. And we actually aim to increase the capacities roughly of 1% on the elderly care year on year in the next three years. So, that's basically what the development CapEx, sorry, is about. And of course, there are some, but very limited ones because we've done the most of it, some upgrading programs that are not reflected into additional capacities, but into better pricing of the service we offer for better yield, especially for France. And basically, that's the core of this program. So, 1% capacity plus outpatient in the specialty care.
Gotcha. And I know that you have, at least in some of the previous reporting, you had sort of untapped real estate equity partnership lines with a couple of institutions. Are you using those facilities as well to finance these developments?
Yes, you're right. We have one major partnership with the Banque des Territoires in France that is going to be the key vehicle to develop these additional outpatient capacities for specialty care, for post-acute care in France. There are currently five projects ongoing there. So, this vehicle is co-owned, but de-consolidated. And actually, we are doing the development for the—so we are actually the ones that are delivering the project for this vehicle.
Okay. And lastly, if I may, three quick financial questions. So, on the non-recurring items, you had EUR 100 million last year. Seems a little bit high, so maybe just understand what drives it and what we should expect for next year. Two is, with the recap and the capital structure, what's the total estimated interest spend in 2025? Third question, more of a technical one, but what is the methodology to calculate this EBITDA excluding real estate development, which is, I think, a new metric?
On the first one, the non-current expenses decreased compared to last year. 2024 is lower than 2023. Mainly, what you have is EUR 67 million linked to gain and loss of disposal of assets, part of the disposal plan. Then we have EUR 50 million impairment of assets, totally non-cash. Remaining are linked to reorganization as well, mainly linked to the disposal program. On the second point, on the financial expenses, and we mentioned it as well on the TP, we have an increase of EUR 20 million this year linked to the usage of the revolving line plus increasing margin. Then we have as well some effect in 2023 coming from the unwinding of the hedging.
This was one up in 2023. We don't have it anymore in 2024, and certainly in 2024, if we continue to deleverage, we'll not fully use the revolving line. So, it can help you as well to see where we go, and last but not least, your last question was on the EBITDA before development of real estate. We just took over in 2023 an extraordinary item with a peak of gain on this real estate development. We did the same in 2024, and the net of the two gives you the like-for-like performance.
But we are not creating a specific EBITDA. It's just to reflect actually the fact that the company is actually improving its operating performance on the core business, which is actually operating nursing home and specialty care facilities. And we have, and this is, of course, more volatile, a complementary activity which is related to the development activity when we are producing new buildings. And this is, of course, very cyclical and volatile. So, what we just wanted to show here is that 2023 has been very much fueled by the last part of this development activity since we have reduced very sharply the level of investment and will continue to do so. The contribution of real estate development activity will remain very limited. And like-for-like, I think the right vision of our operating performance needs to be focused on the core of what we do, which is actually operating care and specialty care facilities.
Understood. Thank you very much. Best of luck.
Thank you.
Thank you. We have another question on the webcast. Are the assets that you are selling being leased back? And if so, could you provide guidance on the leases in terms of balance sheet and P&L and price? What is the cap rate on the assets that are being sold and leased back?
So, yes, we've done around EUR 50 million, EUR 50 million of leased back transactions in 2024, which means that in the continuing treatment, we enter into a rental agreement, and we register IFRS 16 debt in front of the duration of the lease. And these transactions were done at cap rate close to the cap rate we use to value our assets.
So, definitely, yes, the rent can be calculated by using the cap rate we are communicating geographic by geographic. So, there are no extraordinary rent efforts. We make it according to market condition and making sure that the effort rate is below 50% of the EBITDA generated on these assets. That's our, I would say, common practice here.
Sophie, Grégory, there's a number of questions on both the debt maturity schedule and the refinancing strategy. So, I hope you don't mind. I'm going to sort of list them here, and hopefully, we can cover them as soon as asked. Yes. So, there is a question on the maturity schedule on the term loan and the RCF. Has this already been reduced, and how can we look at that? Does the RCF have to be undrawn for the SFA to be extended in February 2027 and May 2028? So, those I think are the main questions on the SFA. On the debt maturity schedule, we also have another question about the other debt. I think you mentioned this earlier, but it's worth maybe going over. What is the EUR 189 million of other debt that's in 2025?
What's the strategy to refinance the public debt, and are you concerned about the cost of debt? I appreciate there was a lot of questions there. Let me know if you want me to come back to them.
Maybe on the first one, not the first one. I will reply on what we have into the other corporate debts. It bridges a gap with why we see we have a low amount of maturity in 2025. EUR 190 million out of the EUR 199 million are factoring, meaning that we expect to roll it over. This is the point. This is why we need to reduce it. It's mainly then the Schuldschein and real estate debt that we have in 2025.
Then the second question about the maturity and the term loan, yes, in this maturity schedule, it's pro forma of the new agreement and therefore shows a reduction of the term loan and the RCF in 2026, which is the latest possible date for investment. Then, on the RCF, yeah, we have a plan of disposal and cash generation. So, the plan, and according to our plan, we expect to replace the revolving line notably on that line. And on the financing, Sophie mentioned it as well, we have on the step-by-step, what we say, the extension of the SFA with the bank for the first step, it allows us then to ensure we have the best access to the market for the next two years to come.
So, the idea is to say the first step was to extend this maturity with our bank so that we have two years plus the best access to the market for the two years to come. And I guess.
And when it comes to the cost of debt, actually, we are significantly reducing the leverage thanks to the plan. And so, I would say we are going to, if you compare to where we stand, where we stood 2023, we are going to compensate the increased interest rate by a significant deleveraging and reduction of the amount of debt by 1.5 billion EUR at the end of the plan.
And we expect as well credit spread to contract.
Sophie, we have no more questions, so if you want to continue.
Yes. So, thank you very much for your participation. I just want to wrap up and say again that 2024 has been a pretty intense year where we were not only able to recover in terms of operating performance with the first recovery in the operating margin of 30 bp s, but mainly to execute on the plan to strengthen our financial structure. So, this is definitely why we look forward with confidence. We have the chance to operate on a segment and on market where actually the fundamentals are very well oriented. We see that the needs are there, the demand is there, and we tend to be a major element on the public health answer to demographics and chronic patient challenges. So, that's why, actually, based on the quality of the portfolio and very strong commitment of the team, we are after, I would say, the challenging 2023, the recovery 2024, looking at 2025 with great confidence. Thank you very much for your attention.
Thank you. This concludes today's call. Thank you for your participation. You may now disconnect.