Ladies and gentlemen, hello and welcome to the emeis Group's 2024 Revenue and Business Update Web Conference. Please note that this conference is being recorded. The presentation will be given by the management team, represented by Mr. Laurent Guillot, CEO, and Mr. Jean-Marc Boursier, CFO, and also by Mr. Samuel Henry-Diesbach, Head of IR. After the presentation, you will have the opportunity to ask questions in oral form by tapping star one on your telephone keypad. I now give the floor to Mr. Laurent Guillot to begin this conference. Sir, the floor is yours.
Thank you, and good morning to all of you, and thank you for attending this conference related to the presentation of our sales figures, but also on business update at the end of 2024. I hope it may sound clear to you along this presentation that we are particularly happy to deliver a set of figures which provide evidence of the turnaround now underway in our operating performances. A few months ago, you may remember while we were publishing our H1 earnings figures, we told you that the resumption of our sales growth and the rise in occupancy rates seen then were signs of a future recovery in our operating margins, and in fact, operating margins have now also entered in the second half of 2024 a phase of growth bottoming out from transitory lows in H1.
While we believe that performance is still below our potential, the turnaround trajectory is now becoming increasingly clear, fueling our confidence for the years ahead. We are indeed following the right path. Occupancy rates have improved further everywhere in every country and for every business we do operate. Price effect capture in 2024, and that we've already discussed in H1, is proving that occupancy rate recovery is achieved along with positive pricing power. With a good grip on operating costs, this positive momentum on top line is mechanically feeding our operating margins. With a notably far stronger EBITDA in H2 than in H1, we can already expect a pace of recovery that will prolong into 2025. So let's go quickly on a few key figures that Jean-Marc Boursier will comment a little bit later.
Top line is up 8.3% on organic basis, driven up in all locations and all businesses, but particularly strong for nursing homes. Occupancy rates have continued to improve ahead of levels reached in H1. At the end of 2024, average occupancy rate is almost at 86%, up 2.7 points versus end of 2023, with it partly penalized by recent opening. Otherwise, these figures could be around two points above. EBITDA beat guidance 2024 thanks to a strong H2. We are confident that EBITDA should be up in 2025 by +15% to +18% at constant perimeter. On top of that, we've been able to secure already more than EUR 900 million of disposals since mid-2022, including more than EUR 620 million of real estate and operational assets sold in 2024 or under firm agreement at the end of the year.
These disposals contributed to keep our balance sheet in a good position, including our cash position of EUR 524 million at the end of 2024. So let's go back a little bit from the top line to the bottom line in terms of really operations. As I told you before, our transformation is based on our employees, our residents, and our operational efficiency is bearing fruit. I wanted today to focus on two clients, residents, or patients, key indicators that we do consider as prerequisites for a sustainable recovery of our business in terms of occupancy rate. First, our Net Promoter Score is now back to decent level exceeding the trough seen in 2022. Customer satisfaction has also improved notably in the same period of time, now reaching 93%. We need to continue to work, but these are already good improvements.
This is a good reward of the hard work done by our team these past two years to restore emeis reputation at the best standards, and it's a very good start also for the new brand emeis that has been put in place in 2024. Quality is key, but marketing efficiency is also a necessity. The few figures shown on these slides are related to the French perimeter only, being illustrative of what we are doing on a wider base and an illustrative case of a wider trend we are seeing in our markets. In 2024, emeis has been able to grow by almost 10% the number of prospects, what can be largely attributable to the implementation of a digital marketing strategy.
It's also attributable to the group rebranding that has been proved to be highly efficient while contributing to the normalization of the group's perception, promoting the results of our staff team's hard work on quality. In 2024 as well, we've been able to improve the transformation ratio from visitor to residents. Here again, data suggests the group rebranding that occurred in H1 has been impacting favorably this key ratio, as well as the hard work done by our marketing and sales team, which already started in 2023, continuing in 2024. Consequently, the number of new entrants recorded in 2024 has been up 10% versus last year. The consequence of what I just said is that occupancy rates are being positively oriented everywhere and for all our businesses. During 2024, average occupancy rate improved on average by 2.7%, marking a continuing and accelerating trend ahead of a regular improvement since 2021.
This is particularly true for nursing homes. If occupancy rates have increased by 4.7 percentage points since 2021, please note that more than half of these improvements have been booked in 2024 only, proving the solid recovery trends we are seeing on that business. I just told you about the positive momentum on, let's say, volume effect. But our teams have been working hard as well on the pricing effect. This is key, that we are not growing volume at the expense of prices. We are progressively deploying over our portfolio a segmented approach of our offer, mostly so far in France, Germany, Switzerland, Italy. Doing so, we intend to be in a situation where we can provide different answers to different residents, matching at the best their needs, their purchasing power, feeding at the same time our houses, growing the occupancy rate, and having optimized prices.
And this has contributed to our capacity to progressively book price effects that boosted the top line growth in 2024 of close to 4.8%, which is a very positive price versus cost evolution. Clearly, given this volume improvement, this price improvement, and with a strong control on cost on the second half, as anticipated and as discussed with you for the result of H1, we are happy to share you that these encouraging achievements lead to our figure to beat our guidance in 2024. The EBITDA came at EUR 740 million, up 6%, and this is EUR 10 million to 30 million above our guidance. The EBITDA, including IFRS 16, came at EUR 245 million, up 20%, also beating largely our guidance by EUR 35 million.
It's now fair to say that this set of figures is a good milestone on the road to an embedded recovery that reinforces our confidence to our 2025 and beyond. Because clearly, these figures are below our benchmark and below what we want to achieve on the long term. There is still a huge potential for improvement in these numbers. We do indeed see this positive momentum to be continued, with EBITDA expected to grow at a constant perimeter by 15% to 18% in 2025 versus 2024. I would now like to hand over to Jean-Marc Boursier, our CFO, who will present in greater detail the main financial achievements of the 2024 financial year. Jean-Marc?
Thank you, Laurent, and thank you to all of you for attending this call this morning. We are very happy with Laurent to be able to present to you our preliminary key figures today. By way of introduction, I should point out that those figures are unedited at this stage and may be potentially marginally modified between now and the publication of our annual accounts mid-April. That said, they are in line with the economic reality that we see emerging. The publication today highlights three main elements, which I will come back in greater detail to this presentation. First, a solid sales growth of over 8% on both current and organic basis, benefiting from both favorable occupancy increases and a positive price effect.
Second, a strong rebound in our EBITDA and EBITDA margin in the second half, leading us to beat our 2024 guidance, thanks to better-than-expected revenue growth, but also to encouraging operating expenses, which have been kept under control. And third, our net debt, excluding IFRS 16, is almost stable at EUR 4.78 billion, with a cash position at year-end of EUR 524 million. If I start with our sales, sales posted substantial organic growth of 8.4%, driven by a combination of three factors, which all of them have a positive effect. First, a price effect of + 4.8%, an occupancy rate effect of + 1.8%, and finally, the effect of the ramp-up of recently opened locations for 1.6%. As you can see on this slide, the favorable growth trend can also be observed in our two core businesses, but particularly on nursing homes, + 10.8% year-on-year.
As far as clinic is concerned, the growth is 4%, notably given changing regulation that recently occurred in France, making 2024 a transition year for that segment. Without going too much into detail here, it is worth noting that all geographical sectors recorded growth, and this is extremely important and good news for us. All businesses in all regions contributed to the group organic growth, except for France, which posted organic growth of only 3.9%, but which is already very encouraging, particularly in terms of occupancy rate, and I will come back to that later. All other regions posted remarkable double-digit growth rates. In Austria, in Belgium, in Germany, in the Netherlands, price effect contributed to like-for-like growth between 4% to 10%, and these are the markets where segmentation has been particularly efficient.
Occupancy contributed to sales growth everywhere, but notably in Spain, in Switzerland, and to a lesser extent in Germany. Please note also that the ramp-up facilities fed the growth primarily in the Netherlands and in Iberia. We have been showing these slides several times to you since the publication of our H1 earnings, and today, we can confirm that the momentum is still going on, with occupancy ratio continuing to improve everywhere. These figures show the progressive ongoing recovery in occupancy rates, which, on average, as explained by Laurent, rose 2.7% in 2024, reaching now an average of 85.8%. In Central and Southern Europe, as you can see, the level achieved are now above or close to 90%, back to pre-COVID level, especially if we remove from those calculations the ramp-up sites whose occupancy rates are naturally lower than those of mature sites.
Excluding ramp-up facilities, occupancy rates for the group would have been close to 88%, which is even two points higher than the average occupancy rate that we are posting for the entire perimeter. The rise in occupancy rate is even more remarkable in that it has been accompanied by an average price increase of almost 5%, as previously mentioned. If I give you a few words about our two largest markets, Germany on one hand and the French nursing homes on the other hand. In France, it is interesting to note that the improvement in occupancy rates for nursing homes is gradually confirmed quarter after quarter and is more marked each quarter than the previous quarter. In H1 2024, occupancy rates were roughly in line with H1 2023, but the second part of the year showed a clear momentum of improvement that will be continued.
This acceleration clearly illustrates, as you can see on the top right part of the slide, that the recovery in France is well underway since 2024, which provides confidence for the coming quarters. This trend should indeed continue. In Germany, however, the recovery is following a steady and constant pace, outperforming 2023 by three points from Q1 to Q4. And here again, the momentum doesn't seem to fade out, thus fueling full confidence for 2025 on this market as well. If I look now at the profitability, in my view, the most instructive illustration of this improvement is the comparison of margin between H1 and H2. And as you can see, H2 indeed came well above H1.
At the end of June, we indeed told you that the recovery rates, which had already been started, but the impact was muted at EBITDA level because of the increase of staff cost that we decided to operate in 2023 and in H1 2024. But we also told you at that point in time that the recovery of operating margin was about to start, and this is exactly what happened in H2. We have now entered a new phase in the second half of 2024, driven not only by positive dynamic insights, but also by staff costs that remain fully under control and even flat, as you can see, in H2 versus H1. In H2, EBITDA was up EUR 63 million versus H1, reaching 14% of sales versus 12.2% in H1.
We are not yet where we think we should be ahead, but we have gained a lot of momentum in a strong trend. In percentage terms, it is indeed interesting to note in H2 that while our sales are only up 3% versus H1, our EBITDA was up 19%, and our EBITDA grew by 60.7%. This positive momentum will clearly continue in 2025 and beyond, suggesting an encouraging trend for recovery in the coming quarters. More of the same on the next slide, as you can see. This chart illustrates that operating margins are starting their way towards normalization. In euro terms, please note that the positive upside in sales, +EUR 92 million in H2 versus H1, has largely been transferred into EBITDA, +EUR 63 million, and EBITDA, sorry, to EUR 63 million, and EBITDA, +EUR 61 million.
We could consider that in H2, the marginal EBITDA transformation was close to 70%, an evidence again that the operating leverage to the upside can be strong and should be strong again ahead. Before leaving the floor to Laurent for concluding this presentation with our perspectives, I would like to comment on our cash position at year-end. In H2, our cash position decreased by EUR 130 million to 524 million at year-end. This is the result of different factors that play in the second half of the year, as you can see on the slide. Disposals in H2 were more than offset by the residual put options that were against the emeis. You remember that we have communicated for those put options during the summer. EUR 407 million of debt were reimbursed, while we drew EUR 400 million of new liquidity.
Non-recurring items and development CapEx represented EUR 126 million, but this is significantly better versus H1 because those two components represented EUR 190 million, sorry, in H1. And other free cash flow components that can be considered as recurring: EBITDA, financial expenses, working capital variation, maintenance CapEx, and taxes, altogether represented only - EUR 49 million. Although still negative for the time being, this is a massive improvement versus the first half of the year, where it amounted to EUR 130 million. So clearly, this fueled also our confidence for 2025 and beyond. A few words about our real estate portfolio. It reached a fair value of around EUR 6.1 billion at the end of 2024, reflecting a market adjustment of - 4.8% versus the end of 2023 on a like-for-like basis. This slight decrease is largely attributable to c ap rate increase. Cap rates were up 35 basis points in 2024 at 6.25%.
Please note also that this revised real estate portfolio valuation will not imply new net impairment at year-end. It is interesting to note, however, that fair values have started upturn in some markets, such as Central Europe, while still pricing residual adjustment downwards in other markets, mostly in France and in Northern Europe. But now that risk premiums have been largely reconstituted, and while interest rates have started to decrease, we are confident that this could signal valuations have now reached a trough, especially since observing operating performance from operators have started to recover. I will end my presentation this morning with an update on our disposal achievements. As a reminder, our ambition for disposal was raised in October from EUR 1.25 billion to EUR 1.5 billion, if we express it, between the mid- 2022 and the end of 2025.
In 2024 only, our teams have been very active since EUR 624 million of assets have been sold or are today under firm agreements. A significant milestone made of first real estate disposal, on average at 5.6% yield, which has generated EUR 29 million of capital gains, though those disposals were done in very good condition, mainly in the Netherlands, in Portugal, and in Ireland. And second, with two operational disposals in Chile and in the Czech Republic. To date, more than EUR 900 million, therefore 60% of our total ambition, has already been reached: EUR 579 million of real estate disposals already cashed in by the group, EUR 166 million of real estate assets which are under firm agreement to date, plus EUR 171 million of operating assets under SPA signed or even closed. Clearly, 2024 marked a significant acceleration on this matter.
Today, as you have understood, the remaining disposals that still need to be achieved by year-end amount to approximately EUR 600 million. But with numerous discussions for a potential disposal ongoing, representing in total more than EUR 2 billion of gross asset value for Propco disposal or firm value for Opco disposal, we are, with Laurent, very confident that our year-end ambition will be met. The appetite from investors seems relatively strong if I look at the number of potential acquirers on those different processes. With talks ongoing for EUR 2 billion of potential disposals, much more than our plan, we can therefore be very selective and opportunistic. Thank you very much for your attention, and Laurent, I give you back the floor to conclude this presentation.
Thank you, Jean-Marc. Thank you for the great level of detail that you give to everybody and to us. As you may have understood from this presentation, the momentum we've achieved, firstly in terms of sales in the first half of 2024, and then in terms of operating margin in the second half by transforming these sales into profit, is obviously fueling our confidence for 2025 and beyond. But on a longer term, our confidence is particularly strengthened by the very visible perspective emerging on our various markets. We can indeed forecast very supportive occupancy and pricing momentum to be progressively put ahead. For retirement homes, for instance, the high demographic intensity of the post-war period will materialize in the elderly population, which is expected to grow by almost 30% in 10 years. This represents 17 million more people aged over 75 years in 10 years from now. So huge. Mental disorder prevalence is expected to grow also by 20% within 10 years in Europe.
We are talking about potentially 20 million people more than today, and for rehab, the trend is being extremely supportive as well. We do estimate that 40% of the population of our five largest European markets may need in the future the care we do provide in our facilities, so if I focus one moment on nursing homes, as you're representing almost 65% of our total revenues, we do estimate a shortfall of beds to reach 550,000 beds by 2030 and around 80,000 beds by 2035 on the five largest markets we do operate in: France, Germany, Spain, Austria, and Netherlands. The sharp increase of needs set to materialize progressively will not be met as supply is constrained by the absence of new authorization or absence of new investment, and the time between authorization deliveries or beginning of the work and the opening of the facilities is around five years.
As an illustration of this shortfall of around 800,000 beds in 2035, keep in mind the current German and French market sizes are respectively close to 900,000 and 650,000 beds. Such a shortfall clearly provides visibility for private groups like ours over the midterm, both on occupancy rate but also on pricing power. Midterm is this appealing opportunity for our group. Short-term, our priority is to maintain the recovery trend dynamic following the positive signals sent in the past months during the second half of the year of 2024. So for 2025, we expect the momentum observed in the second half of 2024 to keep going with the well-tailored action plan we are following. Occupancy rates will continue to increase. Positive price effect will also continue to support growth and profitability, and we will ensure that operating expenses remain under strict control.
As a result, we expect EBITDA to rise between 15% and 18% on the constant perimeter in 2025, and we reiterate our ambitions to complete with comfort a EUR 1.5 billion real estate asset disposal program between mid-2022 and the end of 2025, so if I summarize very, very sharply and briefly this presentation before answering to your question, I would name four key takeaways. First, we've seen a positive trend in H1 on top line occupancy rate. It is continuing, and it is providing good outlook for the coming quarters. Second, the solid rebound of performance and profitability booked in H2 on operating margins drove full-year EBITDA and EBITDA in 2024, significantly ahead of our guidance. Third, the positive trend that we have seen in H2 is to be continued, and we expect EBITDA in 2025 to grow between 15% and 18% on constant perimeter.
And finally, the disposals are perfectly in line with our expectations. We've done more than EUR 900 million of the EUR 1.5 billion ambition that we have explained. And with EUR 600 million remaining disposals, could thus be expected before year-end. And we are currently having discussions for potential operations representing more than EUR 2 billion, giving us very good confidence that we will be able to achieve the 1.5 target. And so thank you for your attention. And now, obviously, we are available with Jean-Marc to answer your question.
Ladies and gentlemen, as a reminder, if you would like to ask a question or make a contribution on today's call, please press star one now on your telephone keypad, and to withdraw your question, it's star two. The first question comes from the line of Aleksander Peterc from Bernstein. Please go ahead.
Yes, good morning, and thank you for taking my questions. I just have a few. So the first one is on the pricing effect that was very positive over the past year. Do you expect similar positive effects continuing into 2026, 2025, or given that inflation is now lower, that should start abating a bit? Secondly, if you could tell me on the other costs, excluding personnel costs, that are up 4% year-on-year, is this upward trend continuing in the current year? And what's driving that? Those would be my two questions. I have a quick follow-up. Thank you.
Okay. Thank you. Thank you for your question. Well, clearly, we've experienced in 2020, as you have mentioned, we've experienced between 2022, 2023, and 2024, the impact of the inflation that was a consequence of the war in Ukraine. And we have seen this decreasing progressively, decreasing in cost.
The consequence of that, clearly, our ability to pass price increase or necessity and ability to pass price increase is progressively fading a little bit. Nevertheless, you see the quite good performance we've done on 4.8% price increase in 2024 is also the result of our marketing and strategy, very aggressively differentiating our offer that we were not doing before. This has a very positive impact on our P&L. We will continue this strategy, which means that we will continue to be ahead of inflation in terms of pricing. Clearly, compared to 2024, I'm expecting some kind of lower, progressively lower pricing in our facility given the less inflationary environment. It will be very different by geographies. In some countries where we have regulations, like in France, some of our pricing is capped by regulation.
In that case, we will increase a little bit less, except for newcomers. In other countries like Germany, where at the same time we have high salary increases imposed by the government for caregivers, and at the same time where we have no cap in terms of pricing, definitely we will have higher price increases. But the target is always to continue to post a positive spread between price and cost, cost being all included, salaries and other costs. On other costs, there are two things to mention. First, inflation is decreasing, as you are mentioning.
And second, with the team and with Jean-Marc, we've launched and we continue to work on our purchasing policy, and we launched a program to be sure that we can, in fact, put these other costs under strong control, both in terms of prices, obviously, and we've started that some time ago, one year ago, but also in terms of volume to be sure that we have the right quantity needed in every facility, what's needed, but not more than what's needed. And this is really something that normally should have a positive impact on our other costs in 2025. Jean-Marc, as you are leading this program, do you want to add something? What I wanted to highlight, sir, is that on the proportion of sales, they have been kept constant between H1 and H2 at 19.4%.
As explained by Laurent, we expect it to be reduced in 2025 thanks to the specific initiative that we launched in France. So that will lead to a slight reorganization of the way we handle our duties in France. But we have some hopes to do much better next year.
Thank you very much. And just a quick follow-up. How should we think about the cost of debt in the current year? How should we model it? Thank you.
The vast majority of our debt that was given to us by the six largest French banks, EUR 3 billion in November 2023, is priced at a five-year Euribor plus 200 basis points. So you have to take your own view on the Euribor evolution going forward.
That's great. Thank you very much.
We currently have no question coming through. So as a final reminder, if you'd like to ask a question, please press star one now. The second question comes from the line of Constantin Gumenita calling from Caius Capital. Please go ahead.
Hi. Good morning. Good morning, Laurent and Jean-Marc, thank you for the presentation. A few questions from my side. One, on staff costs, could you please comment on labor cost inflation for 2025 and your target staff ratios? Secondly, on disposals, could you confirm whether the 166 and the 171 that haven't been closed yet, when those will come? And maybe if you can give a bit more color on the 600 to go, perhaps on your confidence level or what assets you're looking to sort of dispose of. And then lastly, in terms of 2025, if you could expand a little bit more on the guidance for occupancy, CapEx, as well as non-recurring costs, please?
Okay. I take the one on the staff cost and the staff cost ratio. On inflation, as you may know and understand, it's really country-related. We are very strict on the negotiations. But some countries, for example, like Germany, have salary increases that are discussed outside of our company. And in that case, we take the salary increase. But we have discussions with our employees to know how we implement them and the timing of implementation that would lead us to continue to keep the pricing of the staff well under control. In France, clearly, there will be no short-term discussions of salary increase. The last discussion has been concluding positively for us in October last year.
On the staff ratio, clearly, as Jean-Marc said a little bit earlier, we continue to keep our costs well under control, meaning we've made the investment in 2023, largely in the second half of 2023, concerning the restaffing of our facilities in France. And the reason why that is to continue to, I mean, boost the reputation of the company and go back to a level of quality that gives confidence to our residents and patients. And clearly, we do not anticipate any increase of headcount in France, meaning that all the occupancy rate improvement will be absorbed with the current staffing. And that is basically what has started to happen in the second half of the year, and that we expect that to continue in the second half of the year. Jean-Marc, you want to comment on disposals? Yes.
So your first question was on timing for cashing in the one that we are not cashed in at the end of December. So for real estate, most of that will be cashed in H1 2025. And for asset disposal, we cannot disclose the split precisely between Chile and Czech Republic. But keep in mind that Chile was roughly one-fourth of it and has been cashed in in December. And Czech Republic, the deal has been closed. But cash in depends on the go-ahead from the antitrust authority in the Czech Republic because the acquirer, Penta, has already a nursing home activity in the country. And we expect the go-ahead from the Czech antitrust authority to be obtained in March, so next month. Concerning occupancy rate, we don't give guidance for occupancy rate for 2025. But clearly, we anticipate a further improvement.
As you know, in France, in particular, we are not at all at the level where we should be. The dynamic that we've experienced, and that was explained by Jean-Marc a little bit earlier on occupancy rate in France, with the progressive opening of the gap between 2023 performance and 2024 performance, should continue normally in 2025. In a lot of other countries, we continue to see the same dynamic that we've seen in 2024. Yeah, I would say with minor exceptions that we are at such a good level of occupancy rate in Spain, for example, or in Italy, for example, that there is less potential for improvement. But when you look at the overall and average occupancy rate that we have in 2024, there is huge potential for improvement in the next year. So this should continue.
But clearly, we don't give a guidance on that one. On the CapEx, we should continue to see a decrease, but that will be a lower decrease than before. You remember then there were, when I arrived in 2022, there were many, many projects that were still ongoing that were already significantly engaged. And it was in interest of the company to finish this project. Well, it's less and less and less and less the case. So progressively, our CapEx are more focused on two things: maintenance of our facilities, which is critical to continue to achieve good pricing power. And second, I would say modernization of our IT and facilities with a main target to gain productivity and to focus on efficiency of our work to reduce the time spent to do bureaucracy in our facilities and be able to continue to work on our staff ratio.
There was a question, Jean-Marc, on non-recurring cost target for 2025, or guidance for 2025.
We don't provide precise numbers, but we are, as we said to you at the end of June, we are coming progressively towards a number which has nothing to do with what has been expensed in 2022 and 2023. That was notably related to the heavy debt restructuring that we had to go through. So that would be a few tens of millions of euros, but not more than that.
Understood. Thank you very much.
Thank you, Constantin.
We have another question coming from Aleksander Peterc from Bernstein. Please go ahead.
Yes, thank you. I just thought I'd jump in. Just to clarify, you say you have 2 billion of further deals in the pipeline. Now, I realize that not all of that will be achieved. But does this mean that you may overshoot your EUR 1.5 billion total disposal target, given that you only have EUR 600 million to go there? So is that a realistic prospect? Thank you.
That's a fair question, Aleksander. What we are saying is that given this, we are very confident that we will achieve our 1.5, and that we'll be able to select the operations that are the most attractive to us. And if, I would say, a larger number of operations is attractive in terms of pricing, then maybe we may be better than this target. The main target remains 1.5. If the deals are very attractive, then we may overshoot this number.
But the consequence is, as we have done in the past, and you remember that we gave you numbers in the past on real estate disposals that were done at a good price, we continue to be very selective on the prices because we don't want to have a negative impact on the valuation of the assets. We have fantastic assets in the company. Either the businesses or the real estate is of good quality. And this is something that has a huge value for the company. And we don't want to be sure that we sell them at a very good value for the company and for our shareholders.
Very clear. Thank you very much.
The next question comes from the line of Beltran Palazuelo calling from DLTV. Please go ahead.
Hello. Good morning. Thank you for the clear presentation. I have one question regarding the divestments. If you could go into detail on the divestments, for example, of course, you were talking about divestments and a good price, but if there's a good price, maybe if you keep operating, the asset is high rent, and maybe if it's a low price, it's a low rent, so just in the economics, and to put that example, for every, let's say, EUR 1 billion of divestments, you're saying you're divesting at a 5.6% yield. It would be EUR 56 million of rents. What would be, let's say, apart from the EUR 56 million of rents that you would have to pay to the financial asset, what would be the EBIT of those assets if you were to operate it? So what is the spread? If you divest EUR 1 billion, you pay EUR 56 million of rents. What would be, let's say, the EBIT over the rents you should pay to the real estate investor?
What we say, a good price is not a high rent. This is not the way we compute. A good price is a good cap rate. And the cap rate we've been able to achieve in the last year is, on average, around 5.6%, which in the current environment is a good cap rate. And what we see is a good appetite coming back on our market of healthcare real estate. And we will benefit from that, and we will do all the potential at these good prices. As you may imagine, these deals are not made at the same pricing depending on the locations, the market, the geography, but also if it's under construction or if it's already constructed. So we will not go into the details operations by operations because the reality is that we've done a fairly large number of deals last year.
These are not deals that are very big per se individually. That's the reason why we are able to get good pricing because we work hard, and the team is doing a fantastic job in selecting the right location, the right investors to get the best price. You want to add a comment on the good value? Yeah. Maybe I will add if we put Slide 23 on screen for everyone. I would like to add a couple of information to what Laurent has said. So we have sold assets in very good condition in 2024 because the premium over book value, the profit on disposal was during this year, EUR 29 million. Laurent reminded you that for those who were done under sale- and- leaseback, which is only half of those because we've sold assets without having to rent them back for the other 50%.
But for those who have been made under sale- and- leaseback, the average cap rate has been 5.6%. So you can easily compute the additional rent that we will have to pay for next year.
Perfect. Maybe I did not explain myself clearly. What I'm saying is, once you divest the asset, of course, there's a necessity for disposals. But if there is a positive spread between the rents you have to pay the real estate investor and, let's say, the positive EBITDA after rents that emeis does. So the thing is, if you divest whatever you want to divest, will that be accretive on EBITDA after rents, not only reducing the gross debt, but also that at some point, it would be accretive EBITDA after rents?
Yeah. Well, the way we discuss that. I understand your question now. Sorry to miss your point. The way we discuss that with our investors that are buying the assets usually is that to define the rent, you take approximately between 50% and 60% of the EBITDA made, either very short term or the one of the following years, to be sure that you will be able to pay. Thus, it's positive at the EBITDA level because it's half of it. By the way, in 2025, we have the capacity to choose between Opco and Propco disposal. All of that would be taken into consideration while deciding which route we go.
Understood. So in an ideal world, if, let's say, interest rates keep coming down and appetite for healthcare assets keeps there, in an ideal world, if you say that you cover more or less double, you would divest all your or the majority of your real estate assets and operate them with a coverage of two times. That can be a fair assumption or no?
Well, first, we have still EUR 6.1 billion real estate assets on our balance sheet. Well, I doubt that in 2025, the market will be able to swallow all this real estate given the market. And I think we will be very selective in the operation that we will make. So no, we will not go to zero.
And second, I gave a guidance two years ago on where we need to land and where I think should be the strategy in terms of real estate strategy of the company. Well, the idea is not to go to asset less. The idea is to go to asset light and asset right, which is go to 20% to 25% real estate ownership. Well, knowing that we are coming from around 40%, and today we are slightly below 40%, still give us time to achieve and to go between this bracket of 20% to 25% that will keep us busy during the next years.
Great. Thank you very much for the detailed answers.
All the support you gave. You're welcome.
There's another question coming from Constantin Gumenita from Caius Capital. Please go ahead.
Hi. Two quick follow-up questions from my side, please. On page 16, you helpfully outlined the occupancy rates for Germany. Could you perhaps give a little bit more color? I think we have a good picture for France, but for Germany, what is driving the recovery in occupancy? One. And two, what sort of target levels do you have in mind? Perhaps what occupancy levels did that business have pre-COVID? And the second question is, are you able to provide the EBITDA split for France and Germany?
On the first question, clearly, what's driving? Well, 85% occupancy rate in Germany is quite a low level. It's not standard, and it's not the level at which we should land over time. It's a combination of two factors. First factor, in the past, we've been investing a lot in Germany. So we have still a lot of new facilities that are opening that are waiting on the average occupancy rate.
And second, we are still partly in post-COVID recovery where the occupancy rate after 2020 went down significantly. And so the dynamic is because we have a good marketing policy, a good dynamic. The teams in the different regions of Germany are working very hard to improve these numbers. I have no doubt that this will continue in 2025. Pace may be slightly different, but the trend is definitely good. And because we are slowing down progressively also the new openings in Germany, this number will go positively as soon as we load the new facilities. So good trend in the last year with a very dynamic team and commercial and regional team in Germany. And I expect that to continue. We have not communicated this time. And in this communication, the numbers region by country by country. We will do it for our final communication of the final numbers in April, if I'm not wrong.
Thank you.
There are no further questions. I will hand you back to the floor to take questions from the webcast.
Okay. Let's look at the question. I'll ask the question and maybe give you the floor. To understand well, you just have a question of Donovan Lentian. To understand well, you just have EUR 171 million of operational disposal, the rest being real estate. To date, yes. That's a good interpretation to date. What are the rent percentages you have signed upon the sale- and- lease back operations? I think I answered to that question. The average is 5.6% cap rate. What do you consider now as your peripheral operating assets, the ones you want to sell in priority?
Clearly, what we said openly is that we will refocus in Europe. All what is outside Europe, you can consider that as very peripheral. And clearly, we are working on other disposals and opportunities within Europe. We will communicate on that topic in due time if the operations go through and the negotiations go well. Can you figure out the evolution of staff costs in France between H1 and H2? Jean-Marc, I'll give you the floor just so that I'm not alone to speak.
I mean, we don't give it country by country, but the general message that we've passed on to you with regard to strict control of staff costs applies in France also. At what horizon? When will we have the profit level before COVID?
You remember that when we shared with you the recovery plan of then Orpea, now emeis, we sent targets of profitability even midterm that were below the profit level of pre-COVID level. I think this is part of the change of business models that has appeared. Compared to where we are today, we have huge improvement potential. We've demonstrated that we start to recover our profit level in the second half of 2024. We will also recover in 2025, and this will continue for some time. The level of profitability pre-COVID probably will be difficult over the long run, but let's see the improvement year after year. What is the price impact of yield management, and what is the price impact of regulations? Regulations, I suppose this is a very French question because it was asked by Christophe-Raphaël Ganet first.
Second, the regulation country by country is so different that I cannot answer except by picking one. As it's a French question, I will answer for the French part. The price increase on the part that is funded by the government last year was between 0% and 2%. The average price increase for France overall is around 4%. It means all the rest 1% is for half of the price, approximately a little bit more. The rest is what we've done, either in price increases of the newcomers or in the price that we've increased for the part that is, I would say, a free market. Clearly, it has been a very, very, very decisive part of our price increase. It is linked to our own self-help actions. Which geographies are you targeting for the asset disposals that I've answered?
Operating asset, I think I answered we will communicate outside of Europe. I mean, basically, we are looking at all opportunities because we will refocus our footprint on Europe. And within Europe, we will communicate in due time. For the real estate assets, we are picking everywhere we can the best, I mean, opportunities at the best price with the best buyers. So it is really a little bit of everywhere, a little bit in Spain, a little bit in Germany, Netherlands. I would say we are very opportunistic, and we are looking for the good pricing. What is the EBITDA multiple paid for operational assets sold in Chile and Czech Republic? Who were the buyers of those assets? In Chile, we were in a partnership, so it was to our partners. And in Czech Republic, it was to. We gave the EBITDA on Slide 23.
So the price that we obtained for Opco disposal at EUR 171 million was for an equivalent of an EBITDA of EUR 12 million. So you can easily compute the EBITDA multiple. Are there any other questions? There was one question on capital and lease obligation. I guess that this relates, Andreas, to the IFRS adjustment on lease potentially. So that will be disclosed in greater detail in April. But you know what were the IFRS adjustment to the debt. And you need to add to that the amount of sale- and- lease back that we have done, which is 47% of EUR 287 million of disposal. So that will increase everything else being equal by something like EUR 150 million, if I were to give you a rough indication. But all of that will be precisely disclosed in two months from now. What are you targeting? Last question.
What are you targeting for 2025 for the contribution of prices? I think I answered that a little bit earlier. Clearly, it will be less dynamic than in 2024. But at the same time, our inflation of costs, whether staff costs or other costs, will be less than in 2024. So our targets for us to continue to benefit from a positive spread. Okay. Well, thanks a lot for your participation to this discussion. Just in three sentences, I'm sure that you've or four sentences, I'm sure that you've all kept in mind our main message for this communication. Positive trend of top line in H1 leading to occupancy rate improvement. Solid rebound of our profitability in H2 significantly due to the continuation of the good top line improvement, but with cost control. For us, this trend should continue in 2025.
With an EBITDA target between 15% to 18% improvement at constant perimeter. Our disposals are perfectly in line with our expectations. We've already done more than EUR 900 million disposals up until now, with a target that remains EUR 1.5 billion at the end of 2025. While we have EUR 600 million remaining to achieve our target, we are in discussions for more than EUR 2 billion. We are very confident that we will be able to achieve this target. Thanks a lot for the participation, and see you soon. Thanks a lot.
Thank you for joining today.