Good morning and welcome to the Emeis' Q3 2025 Revenue Conference Call, hosted by Mr. Jean-Marc Boursier, Group CFO, and Samuel Henry-Diesbach, Investor Relations Director. The call will be structured in two parts. First, a presentation by the Emeis's Group Management Team, and afterwards, there will be a Q&A session. During this session, you may ask questions by dialing #KEY5 on your telephone keypad to enter the queue. I will now hand over to the Management Team. Gentlemen, please go ahead.
Good morning to you, and thank you very much for attending this conference call related to our business activity and sales at the end of September 2025. I'm Jean-Marc Boursier, and before answering the question you may have with Samuel, I would like to share with you a few words about our activity and revenues. Please also note that a dedicated presentation can be found on our website. As you may have already seen in the press release published this morning, the third quarter of the year is part of a continued improvement trend that began to take shape in the middle of 2024. This momentum is indeed continuing both in terms of occupancy rate and sales across all businesses and all geographies where we operate. This third quarter even shows encouraging signs, especially in Germany, but also in our French clinics.
So first, regarding occupancy rates, the momentum continued to improve quarter after quarter. The group average occupancy rate now stands at 88% in the third quarter, up 1.8 points year-on-year and even four points when I compare to two years ago. As you can see on page two of the presentation, this indicator has been growing steadily and continuously for more than two years now. If we are still below our target, the trend should continue in the coming years and should bring our performance back to the standards we do expect to reach ahead. This favorable trend is particularly visible in our nursing homes business, the group's leading activity, where the average occupancy rate has now reached 87% since the beginning of the year and even 88% in the third quarter alone, up two points versus Q3 2024.
Everywhere, occupancy rate has improved, as you can see on page three, especially in Northern Europe, plus 2.8 points, in Central Europe, plus 2 points, and in France, plus 1.7 points. In Southern Europe and Latin America, occupancy rates were so far weighed down by the impact of not yet mature facilities that we've opened in 2024, but the strengths of the third quarter and the quick ramp-up of this facility are helping to catch up. The occupancy rate is now back in line with last year's level. Across all markets in which the group operates, occupancy rates are rising, progressively approaching pre-COVID levels. As it is already the case in Central Europe, you can see that our occupancy rate now stands at 92.2%.
If we do a quick focus on the performance of our two major markets, France and Germany, I'm on page four of the presentation, and as you can notice, in France, rates are nearly up 1.8 points above last year for the same quarter. Momentum remains strong and sustained, with another very solid performance in Q3. In Germany, the notable improvement partly reflects the measures that we implemented recently, particularly in terms of quality, with a segmented offering based on new residents' needs, the effect of which is gradually being booked along residents' notation. Momentum appears to be accelerating in Germany, which is the group's second-largest market, with an average occupancy rate now reaching 88%, up almost 3.8 points versus Q3 last year.
Consequently, in terms of sales, Topline is posting a solid performance, up 6.4% on a pure organic basis, reflecting the gradual recovery in activities following the measures that we have taken over the last 24 months. In the third quarter alone, the momentum was even more pronounced, with an organic growth of 7%. This is interesting to note that the positive dynamic is driven mostly by nursing homes, up 8.5% versus last year, and by the international market, I will come back to it, growing at around 10%. This increase in revenue year-to-date reflects the combination of three factors, as you can see on these slides, all of which were favorable, as you can see on page five. First, a positive price effect supporting organic growth by EUR 149 million, or up 3.8%. So this is representing the largest contribution to sales growth.
As a reminder, the price effect was 3.4% at the end of June, so clearly suggesting that the favorable pricing effect is increasing, and this is notably true in Germany and in Belgium. Second, as already commented, an increase in the average occupancy rate at the end of September of plus 1.8 points, contributing to 1.7% organic growth. And third, the impact of recently opened facilities with ramp-up contributed 1% to organic growth, and this is mainly true in the Netherlands and in Spain. For nursing homes, I'm on page six. For nursing homes, which is two-thirds of the group business, this publication marks the continuation of the recovery during the third quarter, plus 8.4% in organic growth, in line with the solid achievement reached so far in the previous years.
But as you can see also on this slide, the clinic business, which is showing a more moderate momentum earlier this year, is now recovering sharply. The organic growth of the clinic business in Q3 is up 4.4% versus Q3 2024, compared to only 1.8% at the end of June and even 0.6% only in Q1. So we see clearly the acceleration of our activity in the clinic business. This sequential improvement is particularly noticeable in France, which reflects both the negative base effects for the first quarter, which are smoothing over the nine-month period, and also the initial effects of new measures taken during the first half of the year, including better offer segmentation of services provided and also a new pricing strategy. During the first half, dedicated action plans have been tailored for each of the French clinics, identifying levers for performance enhancements.
And since then, on a weekly basis, these facilities are more closely monitored, and we are starting to see the impact of those recent measures. The evidence of the strong growth for the non-domestic markets, so everything outside France, can be seen on page seven. Internationally, performance is indeed very solid, with organic growth rates approaching 10% and even a little bit above 10%, notably in Northern Europe and in Southern Europe. In those two regions, we are benefiting from strong pricing impacts, notably in Germany, in Belgium, and in Austria, but also an increase in occupancy rates, particularly noticeable in the Netherlands and Austria, and a ramp-up of recently opened facilities, as I was telling you earlier, in the Netherlands and in Spain. As a conclusion, we obviously do reiterate our guidance for 2025 and beyond.
We are confirming our confidence for the coming quarters and also over a longer-term period. In the short term, the operational recovery trajectory will continue under the combined effect of recovery in occupancy rates, the capture of favorable price effects, but also a better control of our operating expenses. For 2025, I remind you that the group is having a guidance for an EBITDA increase between 15% and 18% on a like-for-like basis versus 2024, therefore extending and accentuating the performance improvement momentum that began in the middle of 2024. In the longer term, the group anticipates that the improvement in financial performance will continue.
Between now and 2028, the growth momentum in operating margin will be supported by a gradual normalization of occupancy rates to industry standards, namely above 90%, the continued capture of favorable price effects, but also the control of operating expenses, which the group anticipates to continue to grow. Those expenses will continue to grow at a slower pace than its revenue. The trajectory on a like-for-like basis, therefore excluding the impact of potential operational disposals, is expected to continue, and Emeis therefore reiterates its midterm outlook with, first, an average growth in revenue between 4% and 5% between 2024 and 2028, and second, an average annual growth for EBITDA between 12% and 16%, again, between 2024 and 2028. Both of those are at like-for-like basis. So thank you very much for your attention, and we are now available with Samuel to answer all the questions you may have.
If you wish to ask a question, please dial #KEY5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial #KEY6 on your telephone keypad. We have a question from Alexander Peterc from Bernstein. Please go ahead.
Yes, good morning. I just have two questions. One is a bit of just a maintenance question on the price impact that you had in the third quarter alone. So within your 7% like-for-like growth, how much was price year-on-year? And the second one is, if you could provide us a ballpark or maybe the maximum amount of further disposal transactions that you're currently engaged in, what should we reasonably expect on this front? Thank you very much.
Good morning, sir. So on your first question, the price impact, the price component was 3.4% at the end of June, and it is now 3.8% at the end of September. So for Q3 only, we are at around +4%. So we see an acceleration of our pricing strategy that has been successful in Q3. Regarding the second part of your question, we are obviously sticking to what we said at the end of September when we announced the H1 performance. We have, after the setup of our real estate company, we are targeting for the period between 1st of July 2022 and December 2025, a total disposal plan of EUR 2.1 billion, and we have no further announcement to be made on that respect today. And we are completely in line with that target.
So that means that we will obviously largely exceed the initial ambition of EUR 1.5 billion that we had historically. Do you want to add something, Samuel?
No, just have a quick.
You're good.
Go ahead, go ahead.
Yeah. Yeah, just a quick follow-up on pricing. Is it uniform across geographies? Do you see better traction in Germany and how is France versus the average?
Yes, the growth has been very good in Germany for two reasons. First, because our occupancy rate is now catching up more rapidly than expected, even. And second, because we have reviewed the segmentation of our homes. We have defined the upper segment of our segmentation called comfort rooms with a higher level of quality, and we are able to better price those comfort rooms. So in a nutshell, yes, we have been particularly pleased with the evolution of our activity in Germany. So I remind you that it represents €1 billion of revenue per annum, and this is our second-largest market. And by the way, we have also in Germany the catch-up effect in our pricing strategy of the past inflation. So we are able to pass on historical inflation to our customers, which is good news for us.
Thank you. Thank you very much.
As a reminder, if you wish to ask a question, please dial #KEY5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial #KEY6 on your telephone keypad. Now we have a question from Christophe Raphael Ganet from ODDO BHF . Please go ahead.
Hi, good morning, gentlemen. Is it possible to have in the pricing effect a split between what is your yield management and what is the regulation price increase? That would be my first question. The second one is, Jean-Marc, if I hear you correctly, I understand that you're slightly above your expectation in some zones or in some businesses. So I'd like to hear about that point, how much are we comfortable in advance compared to your plans? And the third question would be, is it possible to have an update of the opened bed year-to-date in terms of number of beds, actually, and notably for Netherlands and Spain, but for the whole group, if possible? Thank you.
Samuel, we'll answer the third question.
Yeah. Christophe Raphael . I'm just checking the exact number of beds opened by the end of 2024. What I can tell you is that globally, it's around 3% of the total sales. That's an occupancy rate on these ones, which is slightly above 50%, and an EBITDA margin, which is already slightly above 10%. We have there three or four openings in terms of facilities in Spain, and I think it's a dozen in the Netherlands, but I need to double-check these figures, and I will provide you with the number of beds which have been opened these past 12 months.
We are opening on average between 1,000 and 1,500 new beds out of a total of 100,000, and this is why it contributes to approximately 1%, 1-1.5% to organic growth year-on-year, and at the end of September, it's 1%. Your second question, Christophe Raphael , was regarding are there any locations where we had particularly good surprises this year? Yes, as you can notice, we are particularly pleased with the evolution of Northern Europe. Northern Europe includes four countries as far as Emeis is concerned: Germany, Netherlands, Belgium, and Luxembourg, and yes, the evolution of those activities in those regions is even slightly ahead of expectations, so well done to our local colleagues for the quick recovery. In terms of price increase, I'm not sure that I have fully captured your question.
You want me to give you an order of magnitude of the split of the price increase between public subsidy on one hand and private pricing on the other hand, if I understand correctly, so for the nursing homes business, the activity is almost split evenly between what is invoiced directly to the family and what is invoiced from the states, what is cashed in from the states, and it's very difficult to answer because it varies from one country to another one. Public subsidy can go up from 1% in some countries to 4% in other countries, so it's very difficult to give you that split on the top of my head. My answer might sound a little bit frustrating, but it's difficult to say.
Okay. Understood. Thank you.
What we can tell you, obviously, is that with the price increase of 4% in Q4, we have a price increase that is above the natural inflation of our costs. That's a fact. That's a reality.
Just coming back on the first question that you had, the figures that I found in the meantime is that the number of beds opened these past 12 months should be around in the Netherlands and in Spain, that should be around 1,100 beds.
So exactly in the range I was giving you. Yes.
As a reminder, if you wish to ask a question, please dial #KEY5 on your telephone keypad to enter the queue. Now we have a question from Laurent Gelebart from BNP Exan. Please go ahead.
Good morning. Just one question following up what you said regarding the fact that your prices are going above or is better than the evolution of your costs, so how is evolving the wage negotiation for next year? What do you see in terms of wage inflation for the company in 2026?
It varies from one country to another one, but we are starting the negotiation with the union representatives in the various countries, I would say, at a level that is lower than 2%. I don't want to be much more precise because I don't want to give the impression to the unions that we are making a public announcement before we are reaching an agreement with them, but it shall be in most of the countries below 2%.
Thank you.
Now we have a question from David Cerdan from Kepler. Please go ahead.
Yeah, good morning, gentlemen. I have a couple of questions. First one is just to have a clarification on the new bed. Your decision to open some new bed, is it a commitment because of a past decision, or is it some new decision? Second question is regarding your guidance. I would like just to have some precisions. When you say that you target plus 15 to plus 18 EBITDA growth for this year, can you give us the basis, what is the number, and when you expect the same trade of plus 12 to plus 16 for the next years, what could be the EBITDA 2025 on a pro forma basis? Thank you.
Good morning, sir. On your first question, the impact of the new openings for 2025 mostly relates to decisions that were made in 2024. We need roughly, let's say, 18 months before we decide to invest in a new facility and when the new residents are arriving. Just for your information, the investment decision process within Emeis is totally centralized. For every dollar that is invested by any of our subsidiaries for development, the decision is being made by Laurent Guillot and myself. So we have a weekly investment committee that decides to go or not to go ahead with new developments. So we are totally able to control the level of development that we want to do and in which geography we wish to allocate our financial resources. With regards to the guidance, that's very simple. The basis for comparison is 2024. The EBITDA for 2024 was 740.
So you will need to apply plus 15%-18% growth on that number, keeping in mind that we have also. This is a like-for-like comparison, keeping in mind that we have also some disposal of geography. For instance, we announced a few months ago that we have sold our activity in the Czech Republic. So we will need to take that into consideration when applying the organic growth. But clearly, the basis for comparison is the EUR 740 million of EBITDA in 2024, and this is the basis for comparison for both the 2025 annual guidance and the medium-term guidance, which I disclose, and which is an annual average growth rate between 2024 and 2028.
Okay. Theoretically, if I may, can you have an update on your CapEx plan between maintenance and expansion for this year and next year?
For next year, we didn't express ourselves yet. But for this year, the order of magnitude is EUR 300 million. So we will be investing this year EUR 300 million. That is split between approximately two-thirds in maintenance. And when I say maintenance, this is real estate maintenance and IT because we need to modernize our IT system. So we have a sizable amount of investment to be made within IT and one-third into development, development being set up of new residents. So that's the order of magnitude: EUR 300 million of CapEx, two-thirds maintenance, and one-third development.
Thank you.
There are no more questions at this time, so I will hand the conference back to the speakers for any closing comments.
As a conclusion, as you have understood, a good quarter for Emeis with an acceleration of our growth. Obviously, we remain today and the following days at your service. Should you have any more questions, we will be happy to answer, Samuel and myself. Thank you very much, and.