Hello, and welcome to the emeis Q3 2026 Revenue Conference Call, hosted by Mrs. Julia Clavel, Group CFO, and Mr. Samuel Henry-Diesbach, Investor Relations Director. The call will be structured in two parts. First, a presentation by the emeis Group management team, and afterwards, there will be a Q&A session. During this session, you may ask questions by dialing hash key 5 on your telephone keypad to enter the queue. I will now hand over to the management team. Please go ahead.
Good morning, everyone, and thank you for joining us. I am very pleased to be with you today for the first time as emeis Group CFO, and to share our nine-month figures. As just said, before Samuel and I take any questions you may have, I would like to share the key takeaways from our sales figures and business updates for the nine months ended September 2026. You will find on our website a few slides to illustrate my comments, and I will try and guide you through them as we go along. First and foremost, the key message from this release is very clear. emeis's operating momentum remains very strong, and we are well on track with our ambitions. The improvement underway since 2024 is continuing quarter after quarter, with simultaneous progress across all group markets and on all accounts: activity, occupancy rates, operating performance, and financial structure.
I will cover, in these introductory comments, four points. First, the solid revenue growth. Second, the continued recovery in occupancy rates. Third, the group's adaptation to the macroeconomic environment. Finally, the deleveraging trajectory and outlook. First point, our growth remains strong in all our geographies. At the end of September, revenue reached EUR 4.5 billion, representing organic growth of +6%, in line with the strong performance reported at the end of June. This performance is underpinned by balanced growth drivers, and this +6% like-for-like growth can be split, as you can see on page two of the slides, as follows. First, a positive price effect of 3.5%. Second, a 1.8% contribution from higher occupancy in mature facilities, and a 0.7 contribution from the ramp-up of facilities opened since the beginning of 2025.
If we move to the third slide, I want to stress in particular that nursing homes, which account for two-thirds of the business, are growing very strong and delivered an organic growth of 7.2%. Clinics grew by 3.5%, with a sequential improvement in France following the corrective measures implemented since the beginning of 2025. Moving to the fourth slide, growth is also geographically diversified. International operations, which now account for 60% of our revenue, grew by 7.8%, including growth of over 10% in the Netherlands, Poland, and the Iberian Peninsula. In France, organic growth was 3.6%. Beyond the level of growth, the important point I want to stress out is consistency. The third quarter confirms the trends already observed in the first half, following an already strong performance booked in 2025.
This is a testimony to the fact that this is not simply a one-off comparison effect, but indeed the continuation of a well-established operational improvement. Moving on to my second point, which concerns occupancy rates, continue to improve quarter after quarter. The second key message is that occupancy continues to recover, and importantly, the improvement is sequential. Group occupancy averaged 90.2% over the first nine months and reached 91% in Q3 alone, as you can see on page five and six of the slides. It shows that momentum is not losing steam and that the group still has further scope for operational improvement ahead. In nursing homes, the occupancy rate increased by 3.1 percentage points to 90.1%, now exceeding the 90% threshold. In French nursing homes more specifically, it reached 90.1% in the third quarter, +2.2 percentage points higher than in the first half.
This improvement reflects stronger commercial effectiveness with the short stays during the summer and the gradual transformation into long stays from September on. The trend is also broad-based and verified all across the group. In the third quarter, occupancy now reached 95% in Central Europe, 91.9% in Southern Europe, and now exceeds 90% in Germany. Even in Ireland, where temporary admission suspension had weighed on activity in the past months, occupancy has recovered on the affected facility by +8 points since January. Focusing on our first two main markets, France and Germany, we are happy to show you that on the right-hand side of the charts that you can see on page seven of the presentation online, that clearly illustrates that the momentum remains particularly positive on occupancy for the third year in a row.
In a nutshell, this rise in occupancy is a key indicator for the future, which continues to support margin growth and cash flow generation. Third point I wanted to make. emeis has significantly reduced its exposure to the current macroeconomic uncertainty. On interest rates, the group started an active hedging strategy at the very beginning of the year and progressively built up its position, being opportunistic since then. To date, 77% of gross debt is protected against interest rate risk through financial instruments, fixed rate debt, and cash invested at floating rates. Moreover, short-term refinancing risk is very, very limited. 2027 maturities represent only 5% of total gross debt, and there are no major debt maturities before 2030, 2031. In addition, the cash position at end of September, combined with undrawn credit lines, totaled EUR 800 million, which is sufficient to cover all debt maturities through the end of 2029.
Beyond its interest rate hedging policies that I just described, the group is also taking concrete action on its cost base to address inflation risk. First, payroll remained under control thanks to better workforce planning, reduced reliance on temporary staff, and greater team stability. Second, the third quarter also confirms the initial positive effect of our Boost program in purchasing in France. This program aims to improve organization, service quality, and operating efficiency simultaneously, with the target of reducing operating expenses in France by around 2% per year over the next four year. Bear in mind that this program is currently being deployed abroad, and we expect effects very promising. Finally, the group has secured a significant share of its energy costs. 96% of gas volume and 80% of electricity volume are hedged for 2026.
For 2027, 70% of energy costs are already hedged at fixed costs, with 80% of this hedging secured before the beginning of the Iran crisis. This means that our energy expenses will be based in 2027 at cost largely below current market levels. The combination of these measures, interest rate hedging, energy cost protection, and structural improvement of the cost base, strengthens the resilience of our model. Fourth, and last point before we take your questions, operating performance and disposals are accelerating deleveraging. More than EUR 1.1 billion of disposal have been completed or secured since the beginning of the year, including EUR 924 million already cashed in, as you can see on slide nine on the presentation. In early October, we have completed our operational exit from Latin America, finalizing the group refocusing on its strategic European markets.
If you move to page 10, you will see that fueled by EBITDAR growth, disposal proceeds that I just mentioned, and continued discipline in investments and capital allocation, leverage has continued to decline from 15.5 in the first half of 2025 to 11.8 at the end of 2025, and to 8.7 at the end of June 2026. Against all of this backdrop, we confirm our 2026 targets, with like-for-like EBITDAR growth of between 12% and 14%. Consequently, the ratio of net debt to EBITDAR, excluding IFRS 16, is expected to be between 8.1 and 8.5 at the end of 2026, compared, reminder, with 11.8 one year earlier. The trajectory achieved since the end of 2024 will thus be at the end of 2026 ahead of the medium-term targets, with average annual EBITDAR growth expected to be between 16% and 17% over the 2024 and 2026 period.
In summary, this release confirms that momentum remains very strong. Improvement is continuing quarter after quarter, with sustained growth, occupancy rising, efficiency gains becoming visible, and leverage declining rapidly. At the same time, emeis has strengthened its protection against interest rates and inflation risk. The priority is now to sustain this momentum and translate it into lasting improvement in margin, cash flow, and balance sheet. We believe that we are very well-positioned to deliver our 2026 objective while continuing to raise our standards of quality and care. That will be it for me. Thank you very much for your attention, and we are now available to answer any questions you may have.
If you wish to ask a question, please dial hash key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial hash key six on your telephone keypad. We have a question from Alexander Peterc from Bernstein. Please go ahead.
Yes, good morning, and thank you for taking my question. I just have a question on your occupancy rates. It seems to me that the methodology you apply is slightly different than peers, and I am finding it a bit hard to reconstruct your occupancy rates on a comparable basis. Just for the nursing home segment, could you provide the overall occupancy rate, as well as the rates by country, particularly for France, if you take that on all authorized beds and facilities, including the ramp-up phase, just to make everything comparable? Thank you.
Hello, Alexander. Thank you very much for your question. If we focus on the French occupancy rate that you just mentioned in your question. In nursing home overall, the occupancy rate increased by 3.1 percentage points, to remind you the number you just asked, to 90.1%. If we go more specifically on French nursing homes, it reached 90.1% in the third quarter, plus 2.2 percentage points higher than in the first half. One of your questions, if I am not mistaken, was that this was difficult to read because you feel like there is a change. You are right in France, but this concerns only the French nursing home. There has been a bit of change to align on the way we have been contabilizing our occupancy rates in every other countries in the group. And there are three different factors that have affected our occupancy rate in France.
The first one is, of course, the improvement in our performance and our occupancy. The second is the change in perimeter. We have divested from our senior services residences, which had a bit of a lower occupancy rates than our nursing home, which has an impact of 1.1 point. And the third element is the one I was just mentioning. We have aligned our method of calcul of the occupancy rates with the practices that we have in our other countries, which mean basically that we went from looking at the authorized beds to the sellable beds, which has a 1.2 impact. Both of those factors, of the two factors that I mentioned, have no impact on the organic growth of our revenue. And the main factor for us is still the growth of our occupancy overall. Does that answer your question, Alexander?
Yes, it does. Thank you very much. Can I just have two small follow-ups? How should we think about notably salaried costs into next year, given the backdrop of higher inflation, and to what extent you are able to pass that through with price increases across various geographies where you are present? Second question, congrats. I mean, just maybe a comment, well done on having secured your financing ahead of the surge in bond yields. That was very well done. I would just like to understand now if there is anything else to be done on the divestment front, or are you mostly done with your perimeter? Thank you.
Thank you very much. Well, thank you for the congratulations. Answering your question, starting from the last one, divestment-wise, as you know, we have reached the objective that we had given ourselves in terms of disposals. So now we are in a position where we can be selective on what we will dispose or not dispose of. When it comes to the operational perimeter, we have come to a point where we are focused now on our core businesses and core countries. So we will be very, very selective when it comes to operational divestments. When it comes to real estate divestments, we will keep on looking at opportunities in that regard, and potentially, we will most likely have additional real estate divestments over 2027.
But we are now free to do it in a position of which we can choose the best position for us, and only if conditions are interesting. On your second question, which is salary, as I was saying in my point earlier, our payroll cost remains under control thanks to different effects. First, we already had our negotiations for the upcoming years, so they are already embarked in our trajectory, and they are quite contained. In addition to the negotiation salary themselves, we have taken a bunch of other measures that will help us master our staff cost overall. As I was saying, we worked on efficiency through workforce planning, which is a very big topic for us in both nursing home and clinics, to reduce reliance on temporary staff, which is damaging both to cost and to quality of care.
And third, the team stability, which allows us for also lower cost than if you have a lot of recruitment all over the years. So we are quite at ease with the progression of our salary cost for the end of the year and for the year to come.
Can I just have one final follow-up, if I may?
Alex?
Yes, just
Just to add something to the first question you have regarding the occupancy rate. The answer of Julia was telling you the impact it has on French nursing homes. Remember that French nursing homes accounts for 20% of the total sales. The impact group-wise is not that significant if you take it point.
Okay, that is very clear. Thank you very much for that detail. Just one final point before I let you go, and that is, I would like to understand if there is any transmission between hostile bond markets and the value of your real estate or your cap rates. Should we think about anything in that respect, or does it have no influence at all?
Sorry, I think you cut off a little, Alexander. Can you repeat your question, please?
Yes. I was just wondering if there is any implication from higher bond yields generally for the value of your real estate and for the cap rates in your real estate portfolio. Is there any correlation between the bond markets and how much your real estate is worth?
Thank you very much. It is indeed a good question. First, bear in mind that the valuations are performed by independent experts and have not yet begun, so I cannot tell you anything for sure at this time. Three points are worth thinking of when you answer the question. First, of course, we are in a position that healthcare real estate remains a quite sought-after asset, even in this difficult market that we are in, alongside student houses and hotels, but we are in a strong position in that regard. The second is that even if there is indeed an increase in French sovereign yields, it does not necessarily translate into an equivalent increase in our capitalization rates. Bear in mind, this is important, that most of our portfolio is located outside of France.
The third point is that even if an increase in capitalization rates were to happen, it would not necessarily lead to a decline in value of the same magnitude, because, of course, we have rent indexation and improvement in operating performance of our facilities that will offset part of the potential downfall.
Maybe to add something on the top of that, Alex, globally, it is true to consider that when the yields are increasing, there is a risk on the valuation that waits. But bear in mind that there are plenty of different sub-sector on the real estate. To our knowledge, what is key is the visibility you can have in terms of rental income on a real estate asset over a long period of time. Healthcare assets are clearly amongst the asset type that provide probably the best visibility today. That is something that should, if I trust what I have heard recently, that is bringing a relatively strong appetite from investors compared to other asset type on the real estate for healthcare assets, but also hotel and also student housing. That is part of the sub-sector which are doing relatively pretty well.
No idea how it will end at the end of the year, but it's probably the good place to be in real estate.
That's very clear. Great. Thank you very much.
The next question comes from Chang-Hsin Lee from United Taiwan Bank. Please go ahead.
Hello. This is Darcy from United Taiwan Bank. I have two questions. The first one is, do you think that the recent political instability will affect your operating environment in France? The second one is, will the French budget deficit affect the subsidies emeis will receive from the government? Thank you.
Thank you very much for your questions. I mean, there are actually two questions. One is whether the recent political instability will affect our models, and the second is if we expect a change in subsidies based on, I'm guessing, the coming election.
Yes.
First, on political instability. Honestly, this is not a big I understand it's a big topic for France, but when it comes to our model, we're pretty much protected from that. Our budgets are voted annually, our subventions are voted annually, and are taken annually as well. We are a very vital sector to France overall.
Bear in mind that, because this is a very French question, this is not necessarily true elsewhere, that when it comes to our nursing home, half of our revenue is based not on subsidies, but on out-of-pocket money from our residents, which is also a huge buffer for us, especially as we are, and we're working in that direction, positioned in more of a, let's say, higher-end market of nursing home in French, which allow us to have some flexibility in pricing, which allowed me also to answer part of the question of the previous, Alexander, who asked if we were able to pass the inflation in our pricing. The answer to that is yes, we have gone in France through already two higher increase in pricing that have gone very smoothly. On the question of subsidies, I'll be honest, we are very cautious in our projections.
We have always had an increase in all the past few years, even if the public financing issues have been in place for quite some time now, but this has never been an issue. In the current law project, the rates, as we know of, because this law hasn't been passed yet, but the rates of increase in overall aging subsidies is 3.3%. But in our budget, we take very cautious increases so that there is pretty much only upside from there.
Okay. Thank you very much for your answer.
As a reminder, if you wish to ask a question, please dial hash key 5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial hash key 6 on your telephone keypad. We have a question from Christophe Ganet from Oddo. Please go ahead.
Thank you for taking my questions. Good morning, everyone. Actually, I would have three questions. One would relate to France. Is it possible to have a price effect and a split of price effect on one retirement home and on the clinics? Probably going forward, what do you see as price evolution when we see the ONDAM target? That's the first question. Then second, in terms of volume, I'd be curious to have an update on what the volume of beds to be opened in the fourth quarter, but in 2027 as well. The second question is, Julia, when you comment your point about wages control, you mentioned team stability. Is it possible to have an update on the personal turnover rate year-to-date to measure that team stability? Thank you.
Thank you very much for your question. So, three questions, I think, in yours. One is the price effect in France. Second is the volume of bed opening. I think, just to clarify, is that your question's only in France or overall in the group? Your third question is on team stability over the group. Is that right?
Exactly. Talking about beds, I was mentioning group level, not only France.
Okay. When it comes to volume of bed opening, I can't communicate a precise target right now. However, what I can tell you on this is that first, in France in particular, as you know, there are new authorizations that are being distributed at this time or very marginally. Our growth could only come from M&A operations, which we will be looking at, but very restrictively. The second point is we will have bed openings continuing, especially in Netherlands, as you know we have had a quite substantive growth over the years, and that will partially continue in 2027. In terms of price in France, the pricing effects are mostly driven by nursing homes. As you know, in our revenue streams, the clinics part comes mostly from subsidies and insurers, even though there is a part that comes from the revenue driven from our particular room.
Sorry, I don't want to say particular, I don't think it's the actual word, but individual room, I think, would be more accurate. But nursing homes, we have a lot more space on pricing, and it's the nursing homes that have driven the nursing up in France. Your third question is about turnover rates, which have been decreasing quite drastically over the past year. What I can tell you is in terms of variation, year-to-date, September 2026 compared to September 2025, we have done minus 4% in our turnover, which is why we can rely on that stability teams as an effect to control our staff cost overall.
Christophe, Raphaël, just to add a few figures on the first question you had regarding the price effect for France. If we split the 3.1% like-for-like growth on nursing homes in France, we can consider globally that around 1.5, 1.7 points of that, close to 1.7, is coming from occupancy rate improvement, and the rest is coming from the price effect. It's close to half of the like-for-like growth in France coming from price components at the end of September.
All right. Thank you. Actually, my point was looking forward consideration about the price expected on the clinics.
The price expected on the clinic perimeter?
Yeah.
That's the question. The point is that on clinic, the dynamic you can see is the split between the price effect and the volume effect is a bit less clear. That's a mixed business that plays potentially on the price component, but otherwise, it's volume, activity, et cetera. The price component can be the way potentially from one year to the other. The tariffication is moving regarding the dotation we can receive on the clinic side. But the main driver for growth and price effect is coming from, as you can imagine it clearly, coming from nursing homes. In France, the driver is, the split of the component is more difficult on the clinic side because it's a mix of price, but also mixed business activities, et cetera. So, it's less-
Specialty, behavior.
Yeah. But, of course, the key driver on the price components is what you can see on the nursing home side, and that's globally half of the components. I will investigate if I have some figures, if we can split these figures clearly on that component on the clinic side specifically, and I will let you know.
Thank you.
There are no more questions at this time, so I will hand the conference back to the speakers for any closing comments.
Well, thank you very much for having attended, and for those very interesting questions. Of course, we remain at your disposal if you were to have further questions after this call. We will talk soon. Thank you.