Clariane Aktie

Welcome to the Clariane 2026 Half Year Results Presentation. [Operator Instructions].

Now, I will hand the conference over to the management team. Please go ahead.

Thank you very much. Ladies and gentlemen, dear investors and financial partners, good afternoon, and welcome to the Clariane Group's 2026 half year results presentation. I'm Sophie Boissard, Chief Executive Officer of the Clariane Group; and together with Gregory Lovichi, the Group Chief Financial Officer, I will present our results for the first half of 2026, the refinancing transaction we completed during the period and our outlook for '26 and '28.

Let me start with the agenda. I will begin with the main highlights of the first half and the progress we made on our operational, financial and non-financial priorities. Gregory will then take you through the income statement, cash flow, debt and our owned real estate portfolio. I will return for the final section on the drivers of our performance and of course, on the outlook.

Let me now start with the key highlights. The first half results reflect the sound execution of our roadmap and confirm the solidity of our fundamentals. The strong improvement in our operating performance underpinned by the quality of our activities, the discipline in execution and the relevance of our model place us in a very favorable position with regard to our medium-term objectives.

Three messages stand out. First message, the group delivered a clear improvement in operating performance. As you see here on the slide, organic revenue growth reached 4.6%, supported by volume growth for 1.6% and a pricing gain of 3%, with all activities and all geographies contributing.

Pre-IFRS 16 EBITDA rose by 14.9% on a pro forma basis, excluding disposals, and the margin increased by 90 basis points to 10.4%. OPCO EBITDA grew by 25.1% on a pro forma basis, driving a 100 basis point margin increase to 6.2%. This reflects the first impact of the various operational levers we are implementing, including higher volume on the existing network, a diligent case mix management and several cost efficiency programs, which results in a positive price over cost effect.

The second message, as you see here on the slide, we have further strengthened and simplified our balance sheet structure. Following the assignment of Moody's and S&P ratings, we regained access to the debt capital markets and issued more than EUR 1 billion over the last 6 months.

We have streamlined and strengthened our capital structure, and we have also extended our debt maturity profile. We are now benefiting from a very strong liquidity position of more than EUR 1.7 billion before the ODIRNANE repayment that will happen in September. Wholeco leverage as published stood at 4.9x on a reported basis, and Gregory will explain later on how it translates in our balance sheet structure after repayment of the 2 hybrid bonds we had.

Third message, we confirm both our '23-'26 outlook and our '25-'28 medium-term plan outlook. The strong operating momentum achieved during the first half together with the refinancing completed and the implementation of our corporate roadmap Succeed Together, gives us the means to execute our strategy with confidence.

Let me now walk you through the key financials. I have already presented the main items of the P&L. I will therefore focus here only on the complementary cash flow, balance sheet and portfolio indicators shown on the right hand of the slide.

As you see, operating cash flow increased by 8.3% to EUR 144 million, reflecting the strong operating performance achieved during the period. Net financial debt, excluding IFRS 16 and IAS 17 stood at more than EUR 3 billion at the end of June, down by EUR 539 million compared with June '25.

Net profit attributable to the group stood at minus EUR 42 million and the post-IFRS 16 at minus EUR 48 million. These figures include EUR 51 million in exceptional costs related to restructuring and disposal transaction we have executed over the last 2 years.

Finally, the gross value of our real estate portfolio was EUR 2.4 billion, broadly stable, excluding perimeter effects, while net asset value increased by EUR 19 million to EUR 515 million versus December 2025.

Let me now say a few words about the ESG milestones achieved in H1 '26. The progress achieved on this dimension also reflects the central role of our mission commitments in Clariane's operating model is value creation and long-term resilience.

I would like to highlight 3 dimensions. The first one refers to social dialogue and human resources. We have renewed the agreement establishing our European Company Committee for a further 4 years with unanimous support from the members and the EPSU trade union federation. And we agreed with the workers' representatives that we would work on an agreement at European level to further promote common occupational health and to prevent absenteeism and workplace accident. We have also decided to work with the workers' representatives on artificial intelligence and how we can best roll it out in our operation.

When it comes to HR and to training and talent development, we have also continued to invest in leadership and internal development. We have launched a new program called OLM, Operational Leadership Masterclass dedicated to regional directors, and we have a0lready 40 participants among the group senior managers. The same program will be rolled out in Germany during the second half and also in Belgium with the aim to reach the target of 75% of facility directors and operational leaders promoted from within by the end of 2026.

In France, we initiated an innovative value-sharing and incentive scheme called the Prime Operationnelle de Progres program, benefiting to all Korian and Inicea facilities. This scheme is calculated at facility level, each facility level on a half yearly basis and based on financial value creation beyond budget.

Payment is, of course, conditional on mandatory quality of care indicators. Close to 50% of the facility could benefit from the incentive scheme over the first half, and we aim to replicate the scheme across all the network in 2027.

Let me now say a few words about quality of care and what we do in terms of medical research. Our medical teams have brought a strong contribution on research on healthy aging and prevention over the last half. They have contributed to 60 research projects with very well-known universities and hospitals, including 24 index publications, and we are very proud about it.

On digital solution in care, the benefits identified through the Karlsfeld experimentation, so a pilot project in Germany, close to Munich, are now being rolled out more broadly. This includes and will actually be deployed everywhere, AI supported for detection sensors to enhance patient safety and also -- and that is actually the most efficient voice-assisted care documentation that bring productivity gains for employees and also much more comfort in the daily routine.

Last but not least, let me say a few words on the environmental side. We have carried out in '24 and '25 a vulnerability analysis that had identified already extreme heat, heavy rainfall and flooding as the main risk that potentially can affect our portfolio. And we have started to translate this work, this analysis into a climate adaptation plan for priority sites with the related operating and capital expenditures integrated in our financial planning.

I would like also to mention what we do in the dimension of energy saving. We have signed and/or are implementing nearly 100 energy performance contracts in France that took place end of 2025, and we are continuing this effort across the whole portfolio across Europe with a view to further reducing our carbon footprint, but globally our energy consumption.

I would like now to say a few words about the very acute climate risk Europe is facing, and that is, of course, also a critical dimension for Clariane network. This slide illustrates how our climate illustration work, the one I just mentioned, translates into concrete operational preparedness beyond regulatory standards, of course, and into support for local communities. The various weather events currently affecting many regions across Europe provide a very concrete illustration of what our responsibility and capacity to act are about.

In France, all the 260 Korian nursing homes naturally comply with the requirements that were introduced following the 2004 Heatwave regulation. Each of our facilities has at least 2 air conditioned areas supported by mobile cooling units. And we have also installed a hot line with our key suppliers, so that they are able to carry out urgent repair within a target timeframe of 2 to 4 hours in terms of extreme heat condition.

Beyond these measures, we have taken recently voluntary action by building and activating a dedicated internal heatwave response plan that we call Plan Bleu plan across the network. Our plan reinforces the monitoring of residents and patients and the coordination of health, technical and human resources team. We have put in place a dedicated crisis unit at group level, which coordinates on a daily basis the response within each country. This dedicated crisis unit will remain in place all along the summer.

We are also making strong contribution to the communities around our facilities as our teams have been doing in Benelux over the last days by rescuing and hosting over 100 people that had to flee areas affected by the wildfires and the same happened also in the Madrid community.

I would like to warmly thank all our employees for their daily commitment. Their responsiveness, their professionalism, their dedication remain the group's greatest strength.

Let me now comment how we regained access to debt capital markets. The ratings assigned in February, B+ by S&P and B2 by Moody's have confirmed our access to debt capital markets and evidenced the strength of the group's fundamentals. The 3 in a row refinancing transactions completed during the first half provide a solid foundation for the execution of our medium-term plan.

In total, more than EUR 1 billion was issued in demanding market conditions and with solid subscription rates. The outcome is a simpler capital structure, a debt maturity profile largely extended beyond 2030 and greater visibility for the implementation of our business model with a clear focus on 3 priorities that are reflected here.

First priority, we will continue to fully leverage our existing capacities via an embedded growth representing roughly 7,000 beds in the nursing home segment. And we are continuing developing patient activity in specialty care and enrich the service offering.

The second priority is the pursuance of CapEx-light development for disciplined capital allocation and with the maintain of strict selectivity for greenfield projects. Last but not least, this is the third priority. We will continue actively managing the pricing and case mix to nurture positive price over cost effect, benefiting here from our balanced regulation profile between private resources and public funding, which represent each roughly 50% of our revenue. This combination of profitable and embedded organic growth, disciplined capital allocation and active management of the pricing and case mix is the basis of our '25-'28 plan.

Let me now say a few words about the operational roadmap, we have designed to deliver on the plan. Here, you see the operating priorities that form a clear operational roadmap, supporting our Succeed Together plan and are directly linked to the public health needs identified in each region. So here in the blue color, you see what we are focusing on for the long-term care activities, namely supporting the increasing care intensity and complexity within our facilities. We see that increasingly month after month.

We are also working closely hand-in-hand with local hospitals, which are becoming our closest partners in care pathway for nursing homes. And last but not least, we are developing new support solution for relative, for family helpers, including respite and short-stay solutions, which are offered in all of our nursing homes across Europe.

In the green line, you see what are our priorities for specialty care activities, namely promoting mixed rehabilitation pathways, combining inpatient and outpatient care in all clinics. In addition, we are transforming our post-acute clinics into integrated geriatric platforms that can support aging population in the local communities that is, of course, a critical need everywhere. And last but not least, we are also developing on top specialized pathway in coordination with payer and local public agencies to cover segments such as addiction, mood disorders, neurological disease and oncology.

Across both segments, digital and AI-enabled solution supports not only quality consistency, but also the efficiency of our services and at the end of the day, contribute to margin improvement. This combination of levers are central to the better support efficiency program.

I will now hand over to Gregory, which will take you through the income statement, cash flow debt and real estate portfolio in greater detail. Gregory, the floor is yours.

Thank you, Sophie. Good afternoon, ladies and gentlemen. I will begin with the group's revenue performance in the first half. As Sophie indicated, consolidated revenue stood at EUR 2.699 billion, up 1.6% on a reported basis and 4.6% on an organic basis. All activities and all geographical areas contributed to organic growth.

By activity, long-term care, which accounts for 75% of group revenue, grew by 5% organically. Medicalized nursing homes increased by 4.9%, supported by higher occupancy and pricing, while alternative living solutions increased by 5.7% organically.

Specialty Care, which accounts for 25% of revenue, grew by 3.2% organically. Specialty care and post-acute care increased by 1.9%, driven by higher volumes, particularly in outpatient care and an improvement in case mix. Mental Health grew by 6.6%, supported by the development of the network, particularly in Spain.

Looking at the geographical breakdown, Germany delivered organic growth of 7.2%, Belgium and the Netherlands 5.9%, Italy 3%, and Spain 15.5%. France grew by 1.7% organically. In long-term care, growth was primarily volume-driven with average occupancy rate in medicalized nursing homes increasing by 1.1 percentage points while price increases remain limited in the country. Specialty care continued to recover, supported by higher outpatient volumes and the favorable impact of case mix improvements implemented during 2025.

Adjusting the comparison basis for the exceptional SMA-related effects recorded in the first half of 2025, organic growth will have been at 4.3% on the segment of Specialty Care in France, out of which 2/3 are coming from price effects. The difference between reported and organic growth mainly reflects the disposal completed in 2025 as part of the plan to strengthen the group's financial position.

Let us now look at the revenue bridge. We start with reported revenue of EUR 2.656 billion in the first half of '25. Disposal plan and perimeter effects represent a negative EUR 90 million or 3.5%.

Organic growth was driven by volumes and by price and case mix. Volumes contributed EUR 41 million or 1.6%. Long-term care accounting for EUR 36 million of this increase, mainly through higher occupancy in medicalized nursing homes, particularly in Belgium and the Netherlands. Specialty Care contributed EUR 5 million, reflecting higher activity, including outpatient care, mainly in France and Spain. Price and case mix contributed EUR 77 million or 3%.

In Long-Term Care, the effect was EUR 61 million, led by Germany with positive contributions from France, Belgium, Netherlands, Spain and Italy. Specialty Care contributed EUR 16 million with positive effects in France, Italy and Spain.

As a reminder, other effects contributed a positive EUR 16 million as H1 '25 was affected by the starting point for the tariff reform of SMR Specialty Care in France. In total, reported revenue increased by 1.6% and organic revenue by 4.6%. Taken together, volume, price, case mix and other effects largely offset the planned reduction in perimeter.

Turning to occupancy. The positive trajectory in medicalized nursing homes continued throughout the first half. The average occupancy rate reached 91.7% compared with 90.5% in the first half of 2025, an increase of 1.2 percentage points. Based on beds actually available for occupancy, excluding around 400 beds temporarily unavailable due to renovation or maintenance work, the occupancy rate was 92.3%. The improvement was broad-based across the group, confirming the additional growth potential embedded in the existing network.

I will now turn to the EBITDA bridge pre-IFRS 16. Published EBITDA for the first half of '25 was EUR 263 million. The scope effects related to the disposal plan and the closure of a small number of underperforming facilities was negative EUR 19 million. This gives a pro forma comparison base of EUR 243 million with a margin of 9.5%.

Volumes contributed a positive EUR 10 million. Contribution was slightly positive across the geographies and reflects the increase in occupancy and activity. The net price effect was positive EUR 27 million. Price and tariff increases contributed EUR 77 million across all geographies, led by Germany.

Cost inflation represented EUR 50 million, mainly in France and Germany. On this basis, pre-IFRS 16 reached EUR 280 million, up 14.9% on a pro forma basis, excluding disposals and 6.5% on a reported basis. The margin increased to 10.4% compared with 9.5% on a pro forma basis in the first half of 2025. This improvement reflects higher volumes, good control of operating costs, active case mix management and the adaptation to the new pricing framework for SMR activities in France.

OPCO EBITDA reached EUR 168 million, up 25.1% on a pro forma basis and 13% on a reported basis. The OPCO EBITDA margin increased to 6.2% from 5.2%. This performance illustrates the strength of our operating model. Organic revenue growth of 4.6% translated into a 15% increase in pre-IFRS 16 EBITDA and a 25% increase in OPCO EBITDA, supported by the positive price over cost effect and the operational improvements primarily in Germany and Specialty Care in France.

This slide places the first half performance in the context of the trajectory since 2023. H1 EBITDA margin, excluding real estate development reached 10.4% in the first half of '26. This represents an improvement of around 100 basis points compared with the first half of 2023 on a pro forma basis.

Now looking at H2 versus H1 over the past 3 years, seasonality has consistently driven a sequential improvement in the pre-IFRS 16 EBITDA margin in the second half, ranging from 100 to 220 basis points compared with the first half.

Let us now move to cash flow and debt. Operating cash flow increased to EUR 144 million in the first half of '26 compared with EUR 133 million in the same period last year, primarily driven by EUR 70 million increase in EBITDA and EUR 11 million improvement in noncash and other items before taking into account the working capital and investment effects.

Working capital requirements showed a temporary and limited deterioration of EUR 9 million and maintenance and IT investments increased to EUR 57 million from EUR 50 million. Financial expenses and taxes paid amount to EUR 124 million compared with EUR 110 million in the first half of '25.

The increase mainly reflects the full first half impact of the EUR 500 million bond issued in June '25 and to a lesser extent, the high-yield bond issued in April 2026. This was partially offset by the repayment of the revolving credit facility.

Operating free cash flow stood at EUR 20 million compared with EUR 23 million last year. Development investment remained tightly controlled at EUR 46 million compared with EUR 48 million. Further financial divestment contributed to a positive EUR 22 million compared with a negative EUR 23 million in the first half of '25. As a result, net free cash flow after CapEx improved significantly by EUR 44 million from a negative EUR 48 million to close to breakeven. This is consistent with our ambition to turn cash flow positive on 2026.

After coupon payments, real estate transactions and the financing operations completed during the period, net debt decreased by EUR 49 million, including IAS 17 and by EUR 35 million, excluding IAS 17. The full year cash benefit of around EUR 40 million from refinancing the sting hybrid at a lower cost of funding is therefore only partially a in the first half cash flow.

The first half was marked by 3 successful bond transactions totaling EUR 1.63 billion. Following the assignment of a B+ rating by S&P and a B2 rating by Moody's, Clariane gained access to a broader round of financing options, including the high-yield market. These repeated transactions enabled the group to extend its maturity profile, simplify its capital structure and secure additional liquidity.

The transaction was a EUR 500 million inaugural high-yield senior unsecured bond issued on 10th of April maturing in 2031 and bearing a coupon of 6.875%. The proceeds, together with available cash are being used to refinance the Schuldschein maturing in '26 and '27 and the remaining Euro PP bond maturing in '28. The EUR 40.8 million Euro PP originated due in 2027 was repaid early on '25 of June.

Second transaction was issued on 28th of April of EUR 230 million of additional high-yield senior unsecured notes, tangible with the initial EUR 500 million issuance and forming a single series maturing in 2031. The proceeds enabled us to redeem the EUR 200 million bond sterling perpetual green hybrid bonds on 15th June. The transaction improved cash generation by around EUR 14 million on a full year basis.

Sub transaction was EUR 333 million deeply subordinated and dated hybrid bond issued on 23rd of June with a fixed coupon of 7.875% for the first 3 years. The proceeds will be used to redeem the ODIRNANE by 8th of September and avoid the application of the coupon setup clause. Once the corresponding repayments have been completed, the 3 transactions will extend the maturity profile, streamline the capital structure and improve cash generation by approximately EUR 27 million on a full year basis.

Financing the sterling hybrid with senior debt mechanically increased Wholeco leverage by approx 0.4x from 5.1x reported to 5.5x pro forma at the end 2025 reference base. The June hybrid issue retains equity treatment under IFRS and is neutral for leverage once its proceeds have been used to redeem the ODIRNANE. Following the assignment of our S&P and Moody's ratings, we are also beginning to benefit from our position as a repeat issuer in the debt capital markets with greater investor familiarity supporting broader access and more efficient execution.

This slide now shows the effect of the refinancing transactions on the group's maturity profile. On a reported basis, the proceeds are temporarily held in cash, while the relevant instruments are repaid either at maturity or ahead of schedule. The 2031 senior notes will refinance the Schuldschein maturities in '26 and '27 and the remaining Euro PP bond maturing in '28. 2027 Euro PP has already been repaid early.

After the planned use of proceeds, the corporate debt profile is significantly simpler with fewer debt instruments and main maturities pushed to 2030 and 2031. It is also worth noting that our factoring arrangements are diversified across 2 separate revolving facilities provided by 2 different banking partners.

Overall, the real estate debt profile remains well spread over time. This combination reduces short-term refinancing risks and support the group's policy of anticipating refinancing 12 to 18 months before maturity.

The balance sheet trajectory continues to improve. Net financial debt stood at EUR 3.020 billion at the end of June compared with EUR 3.559 billion 1 year ago. This represents a reduction of EUR 539 million. Gross borrowings and financial debt were EUR 4.431 billion.

Cash and cash equivalents stood at EUR 1.411 billion. Together with the undrawn revolving credit facility of EUR 325 million, reported liquidity reached a solid EUR 1.736 billion. This sound level of liquidity includes the EUR 733 million proceeds from the hybrid issue, which were still held in cash at 30th of June and are expected to be allocated to the redemption of the outstanding amounts under the ODIRNANE.

Reported Wholeco leverage stood at 4.9x, including the temporary EUR 733 million hybrid proceeds held in cash. Pro forma for the use of those proceeds to redeem the ODIRNANE Wholeco leverage stood at 5.4x. On a comparable pro forma basis, this compares with a 5.6x at the end of June '25. Compared with December '25, net debt was broadly stable, while EBITDA increased strongly, supporting the improvement in leverage.

At constant financial structure, neutralizing the mechanical effect of refinancing the Schuldschein with senior debt, Wholeco leverage stood at 5.1x. The trajectory since 2023 remains clear. Wholeco leverage has decreased substantially supported by the completion of the plan to reinforce the capital structure, improved operating performance, discipline in capital allocation as well as cash management and active debt management.

I will conclude my section with the owned real estate portfolio. Please note that as of June 2026, the portfolio is appraised by CBRE replacing Cushman & Wakefield as the group's external real estate valuer. The gross asset value of the group's real estate portfolio stood at EUR 2.428 billion at 30th of June '26 compared with EUR 2.456 billion on a pro forma basis, excluding disposal last year.

The EUR 28 million decrease reflects 3 main effects. First, indexation contributed a positive EUR 23 million. Then investments made during the period contributed EUR 9 million. And then these 2 positive effects were offset by a EUR 60 million impact from the limited increase in the average capitalization rate to 6.6% compared with 6.4% 1 year earlier.

Real estate debt decreased to EUR 1.389 billion from EUR 1.494 billion at the end of June '25 after restatement of Ages & Vie financial receivables. This decrease resulted from disposal of real estate assets over the past 12 months and the amortization of part of this debt.

The loan-to-value ratio was stable at 57%. Net asset value increased to EUR 550 million compared with an adjusted EUR 496 million at the end of December '25, so an increase of EUR 19 million. Portfolio, therefore, remains broadly stable in value, excluding perimeter effects, while the reduction in real estate debt supports an increase in the net asset value.

Taken together, the deleveraging trajectory, the resilience of our related value and the free cash flow close to breakeven, these results confirm that clients' financial foundations are being rebooked on a solid ground.

I will now hand back to Sophie for the outlook.

Thank you very much, Gregory. Let me conclude by recalling the operating levers supporting our performance looking forward and confirming our objectives.

The improvement in EBITDA will be supported, are supported and will be supported by a diversified and well-identified set of levers I've already touched upon previously. The first lever is definitely the use and the full leverage of our existing capacities and the continued enrichment of the service offering. We are step-by-step increasing occupancy in medicalized nursing home, and we are expanding outpatient activity in specialty care clinics. We are also developing services that respond to more complex care needs and improve the relevance of our pathway for patient residents and family caregivers.

The second lever contributing to EBITDA improvement is definitely active pricing and data-driven case mix management. The progress we achieved in Germany and in specialty care at Inicea in France during the first half confirms the value of a detailed facility level approach to activity, tariffs and CapEx.

The third level contributing to EBITDA improvement is definitely the better support efficiency program. We are streamlining process by process, both overheads and shared service centers. We are also redesigning selected operating workflows with the support of automation and artificial intelligence, applying a disciplined make-or-buy approach to selected services and optimizing maintenance and energy costs.

These actions are already contributing to our performance. Their impact will build progressively for the second half of '26 and into 2027. They strongly support the combination of relative organic growth, margin improvement and continued financial discipline set out in our medium-term plan.

To conclude, we confirm our objective across the 2 complementary horizons that are presented at the full year results. For the '23-'26 period, we continue to target an average annual organic revenue growth of around 5%. We expect an improvement of 100 to 150 basis points in the pre-IFRS 16 EBITDA margin pro forma of disposal and excluding real estate development compared with 2023. We also target Wholeco leverage below 5.5x at the end of 2026.

For the '25-'28 period, we target average annual pro forma revenue growth of around 4%. We target average annual growth in pro forma pre-IFRS 16 EBITDA of between 7% and 9%, and average annual growth in pro forma OPCO EBITDA of between 11% and 14%. Wholeco leverage is expected to be around 5x at the end of 2028.

As you have understood and as Gregory explained, the leverage objectives have been, of course, mechanically adjusted to reflect the new capital structure following the refinancing of the sterling-denominated hybrid bonds with senior debt.

Our operational ambition and the discipline of our financial policy remain unchanged. The first half performance of Clariane confirms the relevance of our model and the sound execution of our roadmap. We will remain more than ever focused on the quality of care, on the development and safety of our employees, on a disciplined capital allocation and on the progressive reduction of the leverage. More than ever, our work at Clariane is guided by our purpose, the purpose of taking care of each person's humanity in times of vulnerability.

Thank you very much for your attention. Gregory and I are now available to answer your questions.

[Operator Instructions]

Gregory, Sophie, thank you very much for the presentation. We already have a few questions. The first one probably for you, Sophie. What is your expected wage salary increase for 2027? Are the negotiation done?

Thank you very much for the question. So average expectation is around 2% most. And this is, of course, variable between across the countries. Most of the negotiation or indexation are already known and set. This is the case for France. This is also the case since we are already negotiating the rates, the care rate for '27 in Germany and the indexation is also fully known both in Belgium and in the Netherlands.

Thank you, Sophie. Next question probably for Gregory regarding the guidance in EBITDA. The EBITDA growth projected is higher than the revenue growth. Can you explain the different levers? And what part is cost saving?

Yes. Thanks for the question. So -- and maybe before starting with the guidance, and this is what is already visible on the first half, as a remember, with 5% growth on the -- organic growth of revenue, this has been translated into a 25% improvement in the EBITDA OPCO.

On the guidance and the way you need to look at it, it's 50% of the improvement that will come from top line and the remaining 50% will come from performance measures. If you then go into detail on the top line and what we see in the guidance, half of the growth will come on the volumes, remaining will come on pricing and case mix, and this is already visible in Germany and as well in France in Inicea.

And the remaining 50%, that I was mentioning will come on the performance improvement plan. One of them are the one already implemented in the reduction of the cost of structure. And last but not least, in our industry of fixed cost, obviously, the improvement of volume will benefit on the additional incremental EBITDA.

Thank you, Gregory. Next question is regarding the current events that we're experiencing in France and in Europe overall with the heatwaves and fires. Regarding heatwaves, is there any impact on your cost structure? Are you planning to put AC in your care homes, and do you know how much it could cost? And then regarding the fires in Spain and in France, is there any impact on all operations?

Thank you very much for the question. Starting with the last one, currently, we don't see any impact of the wildfire in Spain or France on our operation. I would say our facilities are doing and the staff are really doing well. And we are welcoming on the top of our resident or patients additional people coming from the local communities. So I don't see a negative impact on our activity, pretty much the opposite.

When it comes to the impact of extreme heatwave and the cost -- the additional costs related to further equipment into air conditioning, we have brought additional air conditioner with, in a lot of cases, some funding coming from the health care insurance to help us in it.

Directionally, for the next 3 years, we are going to prioritize and accelerate some further investments into air conditioning, especially in the northern part of our network, including South of Germany, Belgium and the Netherlands to equip them with more powerful air conditioning equipment. All in all, it should represent a kind of EUR 10 million CapEx. So as you see, it is totally absorbable in our maintenance CapEx.

Thank you, Sophie. An additional question regarding the heatwaves. As your facilities have AC, did you see any additional business coming because of the heatwave?

It's always difficult to answer this in that sense because, of course, what's happening is it's very difficult for the communities that are impacted. But definitely, we see kind of a 15% increase in short term -- in short stays in our facilities overall versus the previous years, very much related to the extreme heatwaves. A lot of families are asking to put their beloved ones in a safe place and knocking at the door in that sense.

So indeed, I would say the volume of activities has never been so acute and dense at this time of the year. And this is not only -- this is actually over Europe. We see families have realized that our beloved one are much safer in one of our nursing homes or clinics than alone at home without any close support to go for the extreme temperatures.

Thank you, Sophie. We have one question actually asked by several people regarding the seasonality in your business between H1 and H2. Could you please explain the seasonality and the reason of the seasonality? And are you expecting the same kind of seasonality as last year?

Yes. So thanks, Bisseuil. So as you've seen on the -- we just went back to the last 3 years on seasonality between H1 and H2. As you can see on the historical basis, you see a difference between 100 and 200 basis point EBITDA margin between H1 and H2. And if you can see as well as we have confirmed our guidance, and if you do the math, you will understand that the H2 of '26 should be higher in terms of margin than the H1.

Several elements that we see, but certainly on the H2 of this year, what will drive the continued improvement of margin. And we see this good trend of volumes that we expect to continue on the remaining part of the year. Good job on the case mix and pricing in France, especially clinics and as well in Germany will continue and will be visible in the second semester. And we'll have as well the full effect of the performance improvement plan that has already launched beginning of the year. That's the key driver that have already pushed the EBITDA margin up last year in H2 that will continue, and this is what is confirming our guidance for the second half of this year.

Thank you, Gregory. We have a question regarding the occupancy rate. What trends do you anticipate in occupancy rate within the next few years?

Maybe I will take this one. We expect actually to be up in the next 3 years, at least by 100 basis points to 150 basis points on a yearly basis in our nursing home networks. That's the step upward that we are betting on expecting.

Thank you. The next question is regarding the organic growth that you've seen us be slowing sequentially, particularly regarding pricing. What can you share on this point?

Yes. Just a reminder, the organic growth remains solid at 4.6% when you compare versus Q1 where we had an organic growth of 4.9%, bear in mind certainly that in the Q1, we benefited from a supported basis point of comparison with the sever flu that we have in the Q1 '25. And as well, the German pricing effect remained very solid in the half year with 7%, but was at 8% on the first quarter.

Thank you, Gregory. Regarding the Spain, what would you say is a normalized EBITDA level as a percentage of revenue?

EBITDA level in Spain could be expected as a normative between 18% to 20% EBITDA margin.

Regarding Italy, how do you explain a decrease in EBITDA margin?

There is no decrease in EBITDA margin in Italy. Pro forma of the disposal plan, last year, EBITDA margin was at 22.2%, while this year is at 22.1%. So it's a stable margin, yes.

Sophie, we have a few questions regarding Germany and the nursing home reform. Would you -- what do you expect regarding this reform?

It's still a little bit early to have a full picture. What we expect for sure is the recognition of what AI and digital can bring in terms of additional efficiency and the tackling of the structural scarcity of skilled nursing staff in Germany. And there is already a financing dedicated current facility or resident to accelerate the digitalization of the main processes, including care and reporting processes, documentation processes. And there might be some transfer of financing from the health care insurance or the federal state to local communities for people that are benefiting that have low revenue.

So this is actually the discussion ongoing. And last but not least, after a very strong catch-up on the wage levels that are fully refinanced in the care rate, we expect to see kind of slowing down of this catch-up of the level. Anyway, anyhow, the catch-up has been really done since the average wage of skilled nursing staff stand now above the average wage for the German working population. So that's basically what we expect to see.

We expect also the equipment in additional beds to be reopened in Germany because of the demographics for sure, the accelerating aging of the population, and it could be -- it seems that they are going to allow additional beds to be reinstalled into existing facilities, which, of course, will be very beneficial to large networks like Korian network in Germany. So that's basically the main actions or measures that could be in the package that is not yet final.

Thank you, Sophie. The next question is regarding Benelux. Someone apparently understood that there was a cost inflation for the reason of margin compression in Belgium or in Benelux. Do you have any comments to make?

No, that's certainly just to have in mind that on the Benelux, we have a stable margin on the period and an improvement margin in Belgium only. This is the comment we can do on this perimeter where we see visible improvement on the EBITDA margin.

And the only thing I can say is that the refinancing of staff costs and cost basis in general in Belgium is pretty well done with actually an indexation, sorry, of the rates according to wage evolution. So this is definitely a geography where the price over cost effect is a positive one.

Thank you, Sophie. Well we have one question regarding the starting point of the 2023-2026 guidance in terms of EBITDA margin. Would you please remind the starting point and the basis?

Yes. So the guidance on the EBITDA margin is between 23% and 26% and the EBITDA margin to be retained as a starting point stands at 10.5%. That was the EBITDA margin we had on 2023. So the improvement between 100 and 150 basis points that bring us to the guidance '26 need to be done with this basis of 10.5% EBITDA margin.

Thank you, Gregory. I think we have a question live from Bernstein.

The next question comes from Aleksander Peterc from Bernstein.

I have a few questions. Maybe we can take them one by one. So the first one is on Germany. You've already said quite a lot about it. I'm just wondering, given the EBITDA margin you achieved and very strong growth in the first half, are we there now in terms of as good as it gets for Germany? Or can you still envisage going back to the historical levels of 26% to 28%, probably the first one. Maybe you can take it one by one.

Yes. Aleksander, we expect further EBITDA margin growth in Germany, for sure, since we are not fully done with our repricing, and we still have some room for further volume improvement there. And of course, the marginal occupancy in existing nursing home, as Gregory explained, with a strong fixed cost base is a very contributed one. Last but not least, we are not fully matured yet in Germany with, I would say, additional services pricing. We are progressing, and we see an additional levers in terms of revenue and pricing in there.

That's great. Very helpful. The second one is, I think you highlighted more than 7,000 remaining beds in nursing homes carrying unused capacity. Can you tell us where these opportunities geographically? What are the main bottlenecks to fill them and whether you expect as a result of capacity gains to remain a meaningful contributor to growth beyond '26?

The 3 large contributors to this volume growth are France, Germany and the Benelux and especially the Netherlands with the ramping up very recent network. We expect to fill them step by step with the right staffing. So staffing is for sure, a point of attention in Germany, but we are now -- we have now, I would say, the largest basis for apprentices in comparison with our other players with 2,800 nursing apprentice there.

So they need triggers to be certified and then we keep them ongoing. So that's definitely the critical dimension to fully occupy, but we have already -- we are really progressing on a very constant and steady way in Germany. The additional -- the next pool is definitely coming from France, where we have actually close around 90% average 90% occupancy rate in France. And we see actually a strong potential with this demographic dip that we are progressively stepping out. And we see strong increase of demand coming forward starting '27, '28, '29. And so average, what we expect to see is that all networks will stabilize above 95%. That is actually what we see forward.

Probably because I don't expect a lot of new buildings to come in the next 7 years for various reasons, we will stabilize well above 95%. But for the time being, that's the target or the assumption we have taken. And this is also -- we are also very, very focused on defending the pricing because definitely, we really don't want to be entangled in a vicious circle where we would go for volume without being able to deliver sound and profitable quality. And this is why we are very, very attentive and cautious on defending the pricing everywhere.

Okay. That's very helpful. Coming back to France briefly, there was a dip, obviously, in French Specialty Care last year. H1 appears pretty encouraging. It would seem -- so what are you seeing today in terms of case mix normalization, outpatient growth profitability and so on? And in particular, how much of the planned increase in EBITDA in France is going to come from specialty care versus long-term care?

Yes, you're right. Situation is now normalizing. If we correct first half '25 from the various failure in the calculation of the funding and the rate, the post-acute activity in France posted a plus 4.2% growth that is well balanced between additional volume, mainly outpatient because inpatient was already very high and care mix and various levels of pricing.

I expect this type of momentum to be kept, to be continued over the next 2 years, because of further openings on outpatient units because of additional specialty to be granted that will, of course, fuel the increase in the case mix management and funding and also opening of additional beds and specialty. So that's this plus 4% of mainly or largely only organic growth is the rhythm we expect for Inicea.

The growth of the margin in France is actually equally balanced between elderly care with, again, a continuous increase in occupancy rate and a sound pricing approach on Korian side and this development at Inicea now that we have swallowed, digested the new financing scheme. And there are some -- the better support efficiency program that is contributing in both segments.

Gregory, we have a question regarding the new climate mitigation initiative that we are taking. Are those initiatives already incorporated in the CapEx assumption? Or do we expect to increase CapEx typically for air conditioning in rooms?

No, they are fully encompassed in the trajectory of CapEx.

Thank you, Sophie. We have an interesting question regarding AI. You mentioned AI automation, which is included in your efficiency program earlier presented. Could you elaborate on how Clariane plans to leverage AI in the future?

Yes. Actually, we have started to implement AI at scale on the back office and transactional services. So that's for the accounting, for the building, for the staff planning. So everything that is done back office is now AI supported. And this was actually one of the trigger of the social plan we had to -- we delivered in France and in Germany. So it's a total of 250 FTE that has been actually impacted or encompassed in this efficiency program.

And now we are starting to tackle, I would say, the front office function in the networks. So all the service facility management in the facilities with cleaning robots and everything that can be automated on the non-care function and based on the pilot facility, pilot case that we have tested and validated in Germany, we also see that AI and automated reporting and tracking can save precious time for the nurses.

So it's around 30 minutes a day. So as I was -- as I just said, in places where we are struggling to get the right number of nurses, it will help us to better cover and to better deploy the time of our skilled staff close to the residents. So this is actually how you should think about how AI can help replacing back-office function that's going and giving to the caregivers, the nurse, the skilled staff more time to be close to the resident and patients and also more time, more comfort to better support.

Thank you, Sophie. We have a question regarding the plans that we've announced in France and Germany last year or early this year. What has been the impact of those in H1?

In H1, actually, there is limited impact on the EBITDA because actually the departures, the costs reflected in EBITDA are not fully reflected yet. It will be much bigger in H2. When it comes to noncurrent costs related to the plan, they are fully factored into the figures we published for H1.

Thank you, Sophie. There is a question regarding 2029. With the expected growth of the demand in nursing home, what CapEx would be needed to match with the demand?

What you see, Stephane, that we expect to keep the EUR 300 million CapEx we have at least for the next 2 years, the EUR 150 million CapEx on the maintenance and the EUR 150 million on the development or CapEx to develop. And on top of this CapEx, having in mind and rebounding of was mentioned by Sophie earlier, and we have as well in between sufficient as well capacity to continue to grow, especially in the nursing homes in the next 2 years. This is the way you need to look at it.

[Operator Instructions]

So on our side, we don't have any more questions. So Sophie, if you want to conclude.

Yes. Thank you, everyone, for your interest in Clariane. Our next publication is set for the 28th of October. Until then, I wish you all restful holidays, and see you.

Welcome to the Clariane First Quarter 2026 Presentation. [Operator Instructions]

Now I will hand the conference over to the management team. Please go ahead.

Good afternoon, ladies and gentlemen, and thank you for joining Stephane Bisseuil and I today. I'm Gregory Lovichi, Chief Financial Officer of the Clariane Group, and I will present our revenue for the first quarter of 2026 and reiterate our guidance for 2026 as well as the longer-term outlook to 2028.

Before going into the details, let me highlight that this quarter is fully in line with the momentum observed in the second half of last year with solid growth across all our activities and geographies. I will start with the key highlights of the quarter and then walk you through the main drivers contributing to our revenue performance.

Let me start with the key highlights for the quarter on Slide 5. First, we delivered solid organic revenue growth of plus 4.9%, fully in line with our trajectory with all activities contributing. This performance is supported by both volume and pricing effects. In long-term care, occupancy continues to improve with an average rate of 91.7%, up 130 basis points compared to last year. This is an important driver of growth. Alternative Living Solutions also showed strong momentum with organic growth of plus 6.9%.

In Specialty Care, activity is supported by the continued development of outpatient care and management contracts, which are driving volume across all geographies. Second, we have confirmed our access to debt capital markets with a successful issuance of a EUR 500 million senior unsecured high-yield bond in a particularly challenging market environment. This transaction was very well received by investors as evidenced by a large oversubscription around 5x and allows us to secure the refinancing of our upcoming maturities while further strengthening the group's liquidity position.

Finally, we are confirming all our medium-term objectives. For the 2023-2026 period, we maintain our target of around plus 5% organic revenue CAGR, an improvement in our pre-IFRS 16 EBITDA margin of 100 to 150 basis points on 2023.

Therefore, with a 2026 EBITDA margin of 11.5% to 12% and a Wholeco leverage below 5x by the end of '26 per current definition and balance sheet structure. And looking beyond, our 2025-2028 outlook remains unchanged, with around plus 4% revenue CAGR, a pre-IFRS 16 EBITDA CAGR of plus 7% to plus 9% on a pro forma basis an EBITDA opco CAGR of plus 11% to plus 14% and a Wholeco financial leverage as defined in its bank financing agreement of around 4.5x at the end of 2028 per current definition and balance sheet structure.

Overall, this quarter confirms both the strength of our operating momentum and the consistency of our financial trajectory.

Let me now turn to the revenue performance in more detail. In the first quarter, revenue reached EUR 1.336 billion, representing reported growth of plus 1.4% and organic growth of plus 4.9%. This solid performance reflects a broad-based momentum with all activities and all geographies contributing to growth.

Starting with activities. Long-term care, which represents around 75% of the group's revenue, organic growth stood at plus 5.5%. This performance is driven by both occupancy increases and pricing, particularly in medicalized nursing homes, which grew plus 5.2% organically.

Alternative Living Solutions also showed strong organic growth of plus 6.9%, reflecting the continued development of the shared housing network. In Specialty Care, revenue grew by plus 3.3% on an organic basis. This reflects both an increase in activity, particularly in outpatient care and the positive impact of case mix improvement, notably in France.

Looking now at geographies, Germany and Spain are the main contributor to growth with organic growth of plus 8.3% and plus 15.2%, respectively, supported by both pricing and occupancy dynamics. Belgium and the Netherlands also delivered solid growth at plus 5.9%. In France, organic growth stood at plus 1.8% with a positive contribution from occupancy in long-term care and continued progress in pricing and case mix in Specialty Care.

Finally, Italy posted organic growth of plus 3.5%, driven by tariff increases with occupancy rates already at a high level. Overall, this performance illustrates once again the strength of our diversified model, both in terms of activities and geographies.

Let's now take a closer look at the revenue bridge. We start from a Q1 2025 reported revenue at EUR 1.317 billion. The first element to highlight is the perimeter effect, which is negative at minus EUR 44 million or minus 3.5%, mainly reflecting disposals in France, Italy and Germany as part of the plan to reinforce the capital structure of the group. On a like-for-like basis, this brings us to a pro forma revenue base of EUR 1.274 billion.

From this base, organic growth is plus 4.9%, driven by both volume and price effects. Volume contributed to plus EUR 20 million or plus 1.6%. This is mainly driven by long-term care of plus EUR 16 million with occupancy gains in medicalized nursing homes, particularly in Belgium and the Netherlands as well as growth in alternative living solutions.

Specialty Care also contributed positively to around plus EUR 4 million, supported by increased activity, particularly in outpatient care in France and Spain. Second key driver is price and case mix which contributed plus EUR 42 million or plus 3.3%. In Long-term Care, this represents plus EUR 36 million, mainly driven by pricing in Germany, Belgium, the Netherlands and France.

In Specialty Care, the contribution is plus EUR 7 million, reflecting the positive impact of corrective measures implemented in France following the SMA reform as well as the contribution from Italy. Overall, price and mix remain the main driver of growth in the quarter. Putting all these elements together, we reached Q1 2026 revenue of EUR 1.336 billion, with a reported growth of plus 1.4% and organic growth of plus 4.9%.

Let me briefly focus now on occupancy on Slide 9. In Q1 2026, the average occupancy rate reached 91.7%, up by 1.3 percentage points compared to Q1 2025. This confirms the continuous improvement trend we have seen since 2023. And importantly, we still have further growth potential embedded within our existing capacity.

Let's now turn to energy costs on Slide 11. In the current context, we have implemented a proactive approach to manage both supply and price volatility. As of February around 93% of our 2026 energy needs are already hedged, providing good visibility in the short term. As of today, this hedging goes to close to 98%. We have also significant coverage for 2027 and 2028. This strategy was anticipated ahead of recent geopolitical tensions and is based on estimated needs at group level. At the same time, we closely monitor the situation through dedicated governance with regular reviews at both group and country levels.

And finally, we continue to adapt our approach both through adjustments to our hedging strategy and through ongoing initiatives to improve energy efficiency. Overall, this allow us to limit exposure to volatility and secure our cost base.

Moving to our financing on Slide 13. You are already familiar with the overall trajectory, so I will focus on most recent development. In April, we successfully issued EUR 500 million of high-yield bond and unsecured senior notes maturing in 2031. This transaction was very well received in the market with an oversubscription of around 5x from a broad base of Tier 1 French and international institutional investors.

The bond carries a coupon of around 6.9%, which we consider very solid given the current market conditions. Proceeds will be used to refinance our 2026, 2027 and 2028 maturities and further strengthened the group's liquidity position. Importantly, this transaction confirms our restored access to the high-yield debt capital markets even in a more challenging context. More broadly, it is fully in line with our financial strategy, which is to anticipate financing well ahead 12 to 18 months before maturities and to continue optimizing our financial structure.

Note that the company continues to actively monitor market conditions with a view to keep streamlining its financial structure on an opportunistic basis.

Let's now move to Slide 15 and conclude on our outlook. Following the completion of the asset disposal plan and the successful refinancing, the group is now fully focused on its operations and on executing its road map. On this basis and in line with the operational efficiency measures already implemented, including the Better Support Program, cost reductions and digital transformation. We expect several drivers to support performance in 2026. First, continued volume growth across all geographies, both in the mature network and in ramp-up facilities; second, the full year effect of price increases implemented in 2025, particularly in Germany; and third, the benefit from active case mix management in Specialty Care in France.

In this context, we confirm our objectives for 2026. This means organic revenue growth of around plus 5%, an improvement in EBITDA margin of 100 to 150 basis points compared to 2023 and a financial leverage below 5x by the end of 2026.

Let me now briefly outline the key levers supporting our medium-term trajectory in Slide 16. First, we are focusing on our existing asset base to fully capture the growth and profitability potential embedded in our network. This is supported by the strength of our operating model, combining a robust quality management framework, strong medical expertise and continued investment in employee training.

Second, growth is already embedded in our platform. We expect to progressively reach higher occupancy levels in Long-term Care while continuing to develop outpatient activity in Specialty Care. At the same time, we will further improve case mix management and continue to grow private pay and nonregulated activities.

Third, we are maintaining strict discipline in capital allocation. This means prioritizing operational readiness being selective on investment and accelerating the digitalization of our operating model.

Last but not least, regarding public financing, we are operating with a cautious approach with limited reliance on public funding increases and with proactive cost-saving measures already identified. Overall, these levers give us good visibility on our growth and profitability trajectory over the medium term.

To conclude on Slide 17, let me briefly recap our medium-term outlook as well. First, as I pointed out previously, we confirm our 2023-2026 objectives. At the same time, our medium-term trajectory remain unchanged. Under our 2025-2028 plan, we are targeting around plus 4% revenue CAGR combined with EBITDA CAGR between plus 7% and plus 9% and an even faster improvement in profitability at the OpCo level with a CAGR expected at between plus 11% to plus 14%.

This will be supported by the operational levers we have just outlined as well as strict financial discipline. Overall, we have a clear and consistent road map combining growth, margin improvement and continued deleveraging.

On that note, thank you for your attention, and I'm available together with Stephane to take your questions.

[Operator Instructions]

Okay. Gregory, from the web, we have a few questions regarding the capital structures, more specifically regarding the hybrids. So how should we think about the capital strategy for the group, especially regarding your capital instrument, i.e., the GBP and the ODIRNANE? How are you going to deal with those bonds? Are you going to repay them in the next 12 to 18 months?

So thanks for the question. So as you know, hybrids are and especially as hybrids, including the GBP1 are considered as equity and IFRS and therefore, does not affect our total net leverage ratio, we call Wholeco leverage ratio. So we have a constraint, meaning that as the term of our SFA, redemption of hybrid instruments, with senior debt is possible as soon as the group total net leverage is below 5x, while our leverage or the latest leverage release was at 5.1x Wholeco.

Like we already said, we will, therefore, evaluate all the options to refinance these instruments at any time. And obviously, the group will communicate on due time on the way to do it. And maybe as a reminder, alongside the operational strengthening that we have experienced the past years, we have worked a lot on reinforcing the capital structure of the group with 2 main objectives: simplification of the capital structure and improving the cash generation.

And obviously, working on these hybrid treatments is one of the priority to achieve these 2 [ objectives ].

Thank you, Gregory. On the operational side, a few questions, the first one, at what level do you think occupancy could peak for the company versus the 91.7% of the moment? Is 95% achievable, and if so, how quickly?

Yes. Thanks for this. So the 91.7% show a strong improvement compared to the last quarter or the quarter of last year. And when you look, it's quite heterogenous between countries. We have countries like Italy that posted occupancy rate above 97%, meaning that we still have some potential in other countries. We'll not say that everybody will reach or will be above the 95%, but we can consider the range of 94%, up to 95% as a kind of a clear and a solid objective to target as a group when it came to occupancy rates in the nursing home.

Thank you, Gregory. We have a question regarding the energy cost due to the situation in Middle East. How do you expect your energy bill to be in 2026, 2027 compared to 2025?

Yes. So no in the -- like we are mentioning and especially in 2026, energy cost for us barely 2% of the total turnover of the group. Part of our hedging and risk policy, we have already hedged the main part of the energy last year, it was before what's happening currently in the Middle East, the energy on the market. Currently, we are close to 98% of the 2026 needs covered, meaning that we don't have impact when it came to the inflation of potential inflation on the energy for 2026. And we have as well a good level of coverage with next year because we are already hedged above 60%. So providing us good visibility in the short and medium term when it came to this specific sector.

Thank you. There is a question regarding the announcement that we made at the time of the full year publication regarding the cost reduction plan, especially in France and Germany. Can you provide an update?

Yes, for sure. So we -- part of the improvement and the profitability improvement at group level that we saw already in the P&L in H2 2025 and continuing in 2026, our cost reduction measures. These cost reduction measures come on top of the volume improvement that is visible in Q1, a strong price increase, and we saw it as well, 2/3 of the top line improvement in Q1 is coming from price. Big element as well on the profitability improvement is coming with the cost measures, especially central cost reduction.

So it was mainly in France and in Germany. The plan in Germany and in France, especially also in Germany, plan has been announced and is already done and implemented. And in France, well on track and discussion with representative of the employees are still ongoing, and the plan is executing according to the schedule we have in our budget.

Thank you, Gregory. Next question regarding France and more specifically in the health care following the reform that we -- that has been implemented last year. Where are we in terms of compensating for the consequences that we've seen in 2025 of this reform?

Yes. So thanks for the question. The reform, we already started to work some months and years ago on adapting to the reforms. Main element to adapt on the reforms were already visible in the second half of 2025. The team in Specialty Care in France is actively working on the case mix after the reforms to be able with price increase to offset part of overall funding that were not received the post the reforms.

And we will say that this element is progressing very well with case mix translated into price increases in France, Specialty Care continuing on the good trend in Q1 2026.

Thank you, Gregory. There is one question regarding that. I'm not sure this is the right call to answer this question, as we answered in Q1. But the question is, do you expect in amount, the net debt of the group to decrease compared to last year?

What I can say is that the guidance of the group is to be below 5x Wholeco EBITDA with the same capital structure by the end of December 2026, and that we've just confirmed the guidance.

Thank you. Regarding the disposal plan that we finished last year, are we expecting more disposals?

No, the disposal plan has been completed last year. And as a reminder, 6 months ahead of schedule. We didn't announce any new disposal program or plan Nevertheless, obviously, with a group of our size, we may be in a situation to make some portfolio review, but doesn't mean a disposal plan or program. It's more usual portfolio optimization for a group of our size.

Thank you. All in all, how much are we expecting in terms of inflation, especially regarding wage this year in the different geographies?

Two elements, when it came to wage inflation for our sector. This year, and especially in the main geographies, wage inflation have already been negotiated and implemented for 2026 early this year because they have been worked already in last year, and they are already negotiated in line with what we have budgeted. And I think we could have in mind as well in some main geographies like Germany, where we have as well and not only in Germany, but especially in Germany, and it was visible as well in the price improvement we saw in the last 2 years. We have this ability as well to pass through to the -- the price as the wage increase.

Thank you, Gregory. The next question will be live. So please, Maria, can you give the mic to [indiscernible] please.

The next question comes from Constantin Gumenita from Caius Capital.

A quick question for me. If you could -- looking at the countries, fantastic performance across the board, especially in international. But looking at France specifically, maybe if you could comment a little bit on the speed of getting to that 94% to 95% target occupancy rate that you mentioned versus the sort of 88%, 89% that you have right now. Any color would be helpful.

Yes. It's -- what we see in France, we still have a solid level of net entries compared to last year. And this is what we have seen as well in the nursing homes with occupancy rate at 88.5% compared to 87.4%. And what we see is that we have a good dynamic in France. And certainly, we see good dynamics. What we see is that we are able to regain in average 100 basis point a year when it came to occupancy.

So this is certainly -- sometimes it's -- we can regain it faster depending on some situation and some years it's a bit less, but this 100 basis point catch-up is certainly a good proxy in France. And when I say this as well in France occupation rate, we see a good development and certainly a better development than the market [indiscernible].

Thank you, Constantin. We'll take the last question. regarding the regulatory change in France and the pricing environment decided in the social security scheme. Could you tell us a little bit or give us a little bit of color regarding those changes?

So on the -- certainly, what we see on the -- and this is a question, and I will answer a little bit as well with the plan 2025, 2028. When we see the last evolution and especially in France in terms of social security budget is slightly positive, first. It's slightly positive and in line with what we have budgeted. So it's good news. And when we say slightly positive and in line, it's because when we set up the plan, we build a plan up to us with indiscernible] action plan, rather a plan built on the financing or public financing improvement. So it's a plus 0% to 1% public financing inflation over the plan and the profitability regain comes from the action we just mentioned during the call around the top line, around as well the cost reduction measures.

But all of this is gathered for one common purpose is quality of care, quality of service and the synergy we have with the medical expertise to serve our community.

Thank you, Gregory. So this was the last question. I leave you to the final remarks.

So thanks to all for attending this call, and we obviously remain with Stephane available after this meeting if needed. And I wish you a good end of afternoon.

Welcome to the Clariane 2025 Full Year Results Presentation. [Operator Instructions]

Now I will hand the conference over to Sophie Boissard, CEO. Please go ahead.

Thank you very much. Ladies and gentlemen, dear investors, welcome to the Clariane Group 2025 Annual Results Presentation Meeting. My name is Sophie Boissard, Chief Executive Officer of the Clariane Group. Together with Grégory Lovichi, Chief Financial Officer of the group, I will present Clariane's results for the 2025 financial year. I will then discuss our group's outlook for '28 as part of our new medium-term plan, Succeeding Together.

As you see on the Slide #5, there are actually 3 key highlights for 2025. First, we have delivered a solid operating performance in accordance with our announced targets. Second, we have successfully completed, under excellent condition, the plan to strengthen the financial position we launched in 2023. Three, we confirm our profitable growth target for '26 and beyond, looking ahead to '28.

Let's say a while on the first message. In '25, we delivered a solid operational performance, as you see here, with revenue of EUR 5.310 billion, representing organic growth of 4.5%. All of the group's geographical areas and activities contributed to the increase in revenue, thanks both to steady volume growth and favorable price effects, particularly in Germany, which once again benefited from a strong pricing effect of around 8%. This positive momentum is reflected in the increase in operating profit. EBITDA reached EUR 594 million, up 3.1% compared to 2024. And the EBITDA margin, which remained stable over the financial year, improved significantly in the second half to 12.5%, up more than 260 basis points compared to the first half of 2025.

Operating cash flow generation also improved significantly with an operating free cash flow amount EUR 267 million, up 46%, driven by strong operating performance in the second half and the normalization of working capital requirements.

In terms of nonfinancial performance, which makes a lot of sense in our industry, we have once again met and even exceeded our targets. I will come back to this in a few moments.

The second highlight of '25 is about the plan to strengthen our financial position, which we launched in November 2023 in response to inflation and sharp rises in interest rates. This plan has enabled us to regain access to the bond market and the 6 months ahead of schedule. More specifically, last year, we achieved 3 major milestones. First, we finalized our EUR 5 billion divestment program with very good valuation terms. Second, we have been able to extend our syndicated credit facility and to return to the bond market with an initial unrated issue of EUR 500 million last summer. And finally, three, we obtained an inaugural rating from S&P and Moody's at B+ and B2, respectively, rating, which will facilitate our regular access to the bond market in the future.

Overall, as expected, we have been able to significantly reduce both our debt and our Wholeco leverage to 5.1x, and we have recovered a strong liquidity position, EUR 1.2 billion at the end of 2025.

Based on this achievement, and this is the third message for '25, we are in position to confirm our announced target for the '23-'26 period, namely an average organic growth of around 5% over the period, an improvement in the EBITDA margin of 100 to 150 basis points compared to '23 and a Wholeco leverage to be reduced to below 5x at the end of '26. Beyond '26 and building on the quality of our pan-European platform on our business portfolio as well on the good visibility we have on our activity report, we are targeting an average revenue growth of around 4% per year, taking into account the expected normalization in price increase in Germany following the strong catch-up cycle that started in 2020. This momentum, combined with the impact of the productivity plans that we have implemented at headquarters and in shared service as part of our better support efficiency program will contribute significantly to the growth of group's operating margin.

We are targeting an average EBITDA growth of between 7% and 9% over the period '25, '28, and an OPCO EBITDA growth of between 11% and 14% on a pro forma basis. And of course, we will continue to make reducing our leverage a priority in our financial policy, targeting to reach around 4.5% by the end of 2028.

I would now like to review the various elements of the '25 performance. As you see here on Slide #6, the main financial aggregates for the year. First, you see reflected the level of activity already mentioned, EUR 5.3 billion in revenue, up 4.5% organically. In terms of profitability, pro forma IFRS 16 EBITDAR reached EUR 1.2 billion, up 3.5% and the reported pre-IFRS 16 EBITDA amounted to EUR 594 million, up 3.1%.

In terms of cash flow generation, as I mentioned a moment ago, operating cash flow was very strong, up 46%. This performance supports our debt reduction trajectory. Net financial debt decreased by EUR 390 million compared to December '24, reaching EUR 3.1 billion. And as a result, Wholeco leverage has fallen sharply to 5.1x compared to 5.8x in 2024.

Finally, the group's net profit returned to positive territory, EUR 36 million pre-IFRS 16 and plus EUR 2 million post IFRS 16 to be compared with the loss of EUR 55 million in '24.

In terms of real estate, the value of the portfolio of the group stands at EUR 2.5 billion and the loan-to-value ratio has remained stable at 58% over the year.

Let's turn now to the main component of operating performance. First, here, the reflection on the divestment program we initiated 2 years ago. After this, we see now the new streamlined profile of Clariane. We focused on 6 countries and 2 complementary lines of business. First line dedicated to the elderly care under the Korian brand and the second line dedicated to non-acute mental health and rehabilitation under the brands, Inicea, Kormed and ITA in Spain. With 1,215 facilities in 6 countries, representing more than 90,000 beds, 65,000 employees and nearly 850,000 patients, we operate one of the Europe's leading specialty care networks.

In terms of country split, France accounts for 43% of revenue, which are shared almost equally between Korian and Inicea, elderly care and post-acute care. Germany is our second largest country, accounting for 25% of revenue under the Korian brand, followed by Belgium and the Netherlands with 16% of the revenue, Italy with 12% and Spain with 5% and some room for further growth.

In terms of mix, 3/4 of our revenue comes from long-term care, elderly care and 1/4 comes from specialty care, mainly in follow-up care, mental health and addiction treatment. It should be noted that the latter accounts for 80% of patients treated due to a very high churn and a strong growth in outpatient care.

And as you see on the bottom part of the slide, we are now showing the pro forma financial information pre '24, '25 that forms the basis for our objective in the new format of Clariane post disposal plan. I hope this will help understanding our figures and guidance on an easier basis.

Let's move on now to Slide #8. And this slide provides a very concrete overview of the major milestones achieved since the end of '23 of our plan to strengthen our financial position. As a result of these various milestones, we are already 1 year ahead of schedule, very close to the target of below 5x leverage by the end of 2026 that was at the core of the plan.

Let's move on to Slide #9, which is dedicated to our nonfinancial performance. '25 was another very good year in terms of nonfinancials. This is particularly true when it comes to quality of care with an NPS measured by Ipsos among 85,000 patients and carers that has risen again this year to reach an unprecedented level of plus 45, placing us more than 20 points above industry benchmarks. We have also improved our quality standards with now 99% of our elderly care homes and clinics that are ISO 9001 certified.

In terms of human resources, we remain also very focused and quite successful over the year. We were again recognized as a Top Employer Europe for the third consecutive year and for actually as an exception in our industry. We have also signed a Europe-wide agreement with our unions on health and safety at work and which support our efforts to continuously reduce frequency of workplace accident and absenteeism. And of course, and this is probably the most important, we continue to invest more than ever in skills development in order to be able to source on very scarce labor market, our own workforce. In '25, more than 7,700 employees representing around 12% of Clariane workforce took one of the qualifying courses offered by our Clariane University. This feeds into our internal promotion policy with 55% of our Facility Director position filled internally.

As the strong results show, ESG is more than ever a central part of our business plan as it is inseparable from our mission and a ground of quality, attractiveness and sustainable performance.

I will now hand over to Grégory for the details of our financial performance. Grégory, the floor is yours.

Thank you, Sophie. Good afternoon, ladies and gentlemen. So we can go on to Slide 11. I would like to begin this section by discussing revenue growth. In 2025, we posted organic growth of plus 4.5%, and this is an important point. All activities in all geographical areas contributed to this growth. With the new segmentation, the Long-Term Care business, which, as Sophie said, accounts for 76% of revenue, grew by 5.4% organically. This momentum was driven by price increases and improved occupancy rates despite the effect of closures and disposal in several countries. Specialty Care business, SMR and mental health accounts for 24% of revenue and grew by plus 1.8% organically. Here, too, scope effect is at work with disposal in France and Italy. And in France, the reading is impacted by factors related to the implementation of the SMR pricing reform, as already mentioned earlier this year.

Looking now at the geographical breakdown, Germany, Spain and Benelux are the main drivers with organic growth of plus 8%, 7.8% and 5%, respectively, supported by pricing and occupancy rates. Italy is also growing at plus 2.4% organically with pricing on the rise and occupancy rate already at a very high level. In France, organic growth is plus 2.6%. We were affected at the beginning of the year by the flu outbreak in nursing homes in the first quarter, but we are seeing a rebound in the second half of the year in Specialty Care, thanks in particular to an improved mix. Overall, organic growth driven by all activities and geographies, reflecting the group's relevance and strength in terms of activities and geographies.

Let's take a quick look at the revenue bridge on the Slide 12. We start with published revenue for 2024 of EUR 5.3 billion, the impact of the disposal plan is minus EUR 125 million or minus 2.5%. On a like-for-like basis, this gives us a pro forma base for 2024 of EUR 5.2 billion. On this basis, organic growth is plus 4.5%, driven mainly by the price and mix effect at plus EUR 156 million or plus 3.1%. This is mainly due to Long-Term Care with price effects, particularly in Germany and France. Volumes also made a positive contribution of EUR 74 million, plus 1.4% linked to improved occupancy rates and increased activity in Specialty Care.

Finally, there were 2 negative items, other effect for minus EUR 42 million and portfolio management for minus EUR 35 million, mainly related to pricing in France and Specialty Care, suspension of real estate development activities and the effects of M&A and closure, particularly in Germany. This brings us to a 2025 turnover of EUR 5.3 billion, a reported growth of plus 0.5% and overall solid organic growth of plus 4.5%, driven mainly by price and mix supplemented by volumes.

On the Slide 13, in our Long-Term Care business, we continue to improve occupancy rates. This is an important point because it has a direct impact on our growth and a positive trend in our margins. In 2025, the average occupancy rate over the 12 months will reach 91%, up from 2024. And the momentum has strengthened over the course of the year with the rate rising to 91.6% in the fourth quarter after a slightly lower start of the year.

Taking a step back, the trajectory is very clear. We are moving from 86.6% in 2022 to 88.5% in 2023, then 90.6% in '24 and 91% in '25. In other words, improvement is steady and ongoing. Finally, we still have significant volume growth potential within our existing capacities.

I would now like to look to the EBITDA performance by geography. First point is that the group's EBITDA margin is stable at 21.8% in 2025, the same level as in 2024. Behind the stability with quite contrasting trend depending on the country, we have seen marked improvements in most regions. Germany is making a significant progress with its margin rising from 21.3% to 24%, an increase of 260 basis points. Benelux countries are also improving at 23.3%, up 100 basis points. Italy is up slightly at 21.8%, an increase of 30 basis points. Conversely, France declined to 20.2%, down 200 basis points. This change is mainly due to the negative impact of the implementation of pricing reform in Specialty Care in France, central deployment costs of our Better Support program, which will bear full fruits from '26 onwards.

Finally, Spain came in 19.9%, down 70 basis points. This is mainly a mix effect linked to the development of asset-light contract-based activity in social care that does not require capital expenditure. Overall, these movements offset each other and explains the stability of the EBITDA margin at group level with significant improvement in most of countries and 2 areas of concern identified in France and Spain.

On the next slide, I would like now to take a look at the EBITDA bridge for '25 versus '24 pre-IFRS 16 to better understand the main drivers. We start with published EBITDA for '24 of EUR 605 million with a margin of 11.5%. The scope effect related to the divestment plan represent minus EUR 29 million. On a like-for-like basis, pro forma EBITDA for '24 is therefore EUR 576 million with a margin of 11.2%. With this basis, we first have a positive volume effect of EUR 17 million linked to the growth in activity, which was positive overall in all regions.

Next, the price effect is significant, plus EUR 156 million, supported in particular by significant revaluation in Germany and a positive effect in France, Benelux and Italy. On the other hand, cost inflation, net of performance measures represents minus EUR 155 million. In other words, the price effect almost offset cost inflation over the year. It should be noted that, as mentioned at the end of the first half of the year, pricing anomalies linked to the entry into force of the new SMR financing framework in France had a negative impact of EUR 23 million on our cost base and the impact of the cost of deploying our Better Support program was around EUR 15 million. These 2 factors combined had a negative impact of 60 basis points on the annual EBITDA margin, which restated from these 2 items would be at 11.8%. In total, EBITDA for 2025 comes to EUR 594 million with a margin of 11.2%, stable margin on a like-for-like basis and a growth in value driven by volumes and the ability to pass on cost increase.

Let us now move on the analysis of the profitability by half year. As you can see, the EBITDA margin is historically higher in the second half of the year. In 2025, the improvement in margin was even more robust with an increase in the second half to 12.5% compared to 9.9% in the first half of 2025. This improvement is notably driven by volumes that continue to improve in each of our regions, good control of operating costs and improved rates in the second half in Germany and a performance that is normalizing in SMR clinics in France.

Let's now move on cash and debt. And I will start with cash generation presented in accordance with IFRS 16. So in 2025, operating cash flow will increase significantly to EUR 469 million, up EUR 69 million compared to last year. This improvement is due to 3 factors: firstly, noncash and miscellaneous items, which remain negative; secondly, a sharp improvement in working capital requirements, showing a continued improvement in this indicator after a sharp deterioration in 2023; and finally, a level of maintenance CapEx that remains under control at EUR 111 million. In this context, free operating cash flow amounted to EUR 267 million, up EUR 84 million year-on-year. This corresponds to an EBITDA conversion rate of approximately 45%. We benefited from lower financial expenses due to lower interest payments. We are also maintaining a strict discipline on CapEx with maintenance and development CapEx totaling EUR 159 million compared with EUR 242 million in 2024.

Finally, positive impact of disposal reached EUR 368 million compared with EUR 391 million in 2024, contributing directly to debt reduction. In total, the net debt will decrease by EUR 408 million by the end of '25, including IAS 17. And excluding IAS 17, the decrease will be of EUR 390 million, mainly driven by the contribution of disposal, increase in operating cash flow and the growth in free operational cash flow. It should be noted that excluding disposal, net debt will have decreased over the period, thanks to positive net free cash flow.

I will now move on the debt and liquidity as at 31st of December '25. The first point is the net debt reduction. Excluding IFRS 16 and IAS 17, net financial debt fell by nearly EUR 400 million over the year to [ EUR 155 million ], bringing it closer to the EUR 3 billion level. This improvement is a result of a combination of cash generation and the contribution from disposal as we have just seen. Secondly, maturity profile of our debt is now better spread out. Maturities are mainly positioned from 2027 onwards with further maturities in '29 and '30, which reduce the risk of short-term refinancing that is in line with the return to normalized aspect to financing. Thirdly, liquidity remains solid. It stands at around EUR 1.2 billion, including an undrawn revolving credit facility with cash levels up at the end of 2024. Finally, on the real estate side, maturities are spread out over time, which also contributes to visibility on the financing trajectory.

On Slide 20, with the strengthened financing framework, I would like to move on the performance and the financial trajectory elements. Wholeco leverage ratio stands at 5.1x at the end of December '25 compared with 5.8x at the end of '24 and 5.6x at the end of June '25. This represents a decrease of approximately 1.1x since 2023. This improvement is due to 2 factors: Firstly, the finalization of the plan to strengthen the financial structure of the group; and secondly, the increase in cash generation, particularly operating free cash flow.

I will now move on to owned real estate and the gross value of the portfolio. We are starting from a value of EUR 2.6 billion at the end of '24. Firstly, there is a perimeter effect linked in particular to the disposal plan with minus EUR 155 million achieved at market price in a challenging environment, which highlights the value and liquidity of the group's assets. After the disposal, the pro forma value at the end of '24 is EUR 2.5 billion. From this base, value is broadly stable. Market effects are close to balance with a net impact of around minus EUR 10 million, indexation at EUR 29 million, largely offset by a slight change in the capitalization rate, which rises to 6.5% at the end of '25 from 6.4% at the end of '24 for an impact of minus EUR 38 million. In total, this results in a portfolio value of approximately EUR 2.5 billion at the end of '25, excluding scope effects, the value is stable with cap rates normalizing and the portfolio continuing to benefit from indexation.

In real estate, financing structure at the end of '25 clearly illustrates our asset smart strategy. The consolidated real estate portfolio is valued at approximately EUR 2.5 billion, as already mentioned. It is now mainly held in the shared equity partnership vehicles, accounting for approximately 77% of the total of EUR 1.9 billion. The balance corresponds to the directly held portfolio, representing approximately 23% of the total or EUR 600 million.

On the partnership side, we have 4 vehicles in place since 2020 with leading and long-term partners. The gross value of the assets in these vehicles amounts to a low EUR 1.9 billion and client economic share is approximately 52%. This structure allow us to share capital on long-term assets while maintaining significant exposure and good visibility on the value creation. At the same time, we maintain a locally held portfolio with a gross value of EUR 600 million. This structure combines the stability of a long-term real estate portfolio with more efficient capital allocation and support of our debt reduction trajectory while maintaining a solid real estate base.

On that note, I will hand back to Sophie to conclude with our outlook for the current year and the medium-term.

Thank you very much, Grégory. Before moving on to the outlook, I would like to take a moment to emphasize what makes the Clariane model so unique compared to its peers as highlighted in recent discussions with rating agencies. First, our size and the diversity of our business portfolio. We are now positioned as one of the leading pan-European social infrastructure platform, specializing in care and prevention of fragility. Our network of more than 1,200 facilities gives us a presence in 1,100 catchment areas across Europe, home to 70% of the EU population aged 65 and over.

Second, our strong corporate culture very much related to the purpose-driven part of the company and strongly integrated through our European identity and high-quality social dialogue.

Three, the quality of the markets in which we operate. As you all know, we benefit from the structural growth prospects for local health care demand driven by both demographics and epidemiology.

Four, and Grégory just explained it, we have a very strong and unique asset smart real estate strategy that is definitely a key asset and has been developed over nearly 10 years in partnership with leading institutionals and maximize our flexibility and directly support operational execution while contributing to financial discipline.

Five, and finally, our most valuable asset is, of course, our people. I've been fortunate to be able to rely for nearly 10 years on remarkable management teams that are both solid and experienced, backed by a robust framework and supported by long-term shareholders committed to the company. All this, of course, reinforces visibility, consistency in execution. And this is why we are now in the best position to focus on 2 key objectives for the next 3 years. First, returning to a level of profitability close to that which we enjoyed before COVID and the high inflation wave of 2022; and second, continuing to invest as part of a disciplined financial policy. And this is exactly what it is about in our new business plan entitled Succeeding Together.

Just a few seconds on the slide you already saw, and that illustrates the group's highly effective focusing over the last 24 months. I think the most important here is to say that we are equally balanced in terms of regulatory risk. None of our business subsegments accounts now for more than 20% of the group revenue. And definitively, this was a critical dimension and achievement of the plan and the disposal program we have achieved.

Slide #27. You see here the 4 pillars on which our new midterm plan relies for cross-functional levers that are common to all our activities. The third (sic) [ first ] pillar is the integrated quality and operating model, which ensures that we are the benchmark operator and which allow us to fully utilize our installed capacity. So this is definitely a driver for profitable growth.

The second pillar is our human resources policy, which guarantees that we can recruit and retain expert employees and committed health care teams even in labor market under severe strain, and this is probably one of the critical dimension in our industry across Europe.

The third pillar is the expertise we have been developing in geriatrics, in physical medicine and rehabilitation and in psychiatry with the support of leading research team we are teaming up with.

And finally, the fourth pillar is the digital and tech platform that we have set up with our Clariane Solution internal tech platform, which underpins the data support efficiency program.

Slide #28. You will see here, it reflects the main strategic priorities by segment. On the Long-Term Care, we have identified 3 priorities. We want to support the increasing need for medical care in our facility in strong conjunction with hospitals, which are becoming across Europe, one of our primary sources of referrals everywhere. Second, we want to be positioned to offer tailored support clinicals in the form of respite stays, sorry. And this becomes more and more a very significant part of the local demand. And third, we want to be able to rethink and to redesign our operational structures by fully integrating and leveraging the impact of digital and robotic tools to increase both robustness of our service and efficiency and cost.

On the medical, the Specialty Care segment, we have also defined 3 priorities for our clinics network. First, in our 200-and-so facilities for medical, post-acute and rehabilitation, we are focusing more and more on pushing on mixed care pathway, combining full hospitalization on one hand side with second part, outpatient support in the context of daily hospitalization. The effectiveness of this pathway bring autonomy to chronic patient is now clearly established and well recognized in terms of pricing by the authorities. And this is why since 2017, we have equipped all our clinic facilities with outpatient units, which are now largely saturated and which we are committed to expanding.

The second priority is around the transformation of our multipurpose post-acute facilities into geriatric platforms that can also offer local medical beds that can provide primary care to the 1/3 of patients over the age of 75 that do not have a general practitioner in France or in Germany.

And lastly, we are in the process of opening new specialized medical department for the treatment of chronic condition in around 20 clinics in Europe, either within existing facilities or in the form of autonomous satellite, and this actually covers selected specialties such as addiction treatment, mood disorders, neurologic disorders or oncology.

On the Slide #29, you now see how we transform those strategic priorities into revenue margin. On the revenue side, the top line side. We expect those various initiatives to fuel profitable growth of around [indiscernible] in each business segment divided equally between additional volume coming from higher occupancy with Long-Term Care, more outpatient development on the Specialty Care and extended capacities in selected places.

And the other part, and this is pretty much equally divided, will come from pricing, private pay on one hand side, especially for the Long-Term Care with our value-based approach strongly reflected in the high NPS and case mix management for the Specialty Care side that is now very much strongly in place with a data-driven approach that enable us to make sure that we really protect the revenue integrity of this activity.

Next, you will -- you see now how we transform this into EBITDA growth and actually a pretty strong growth foreseen for the next 3 years. Again, this will be very much balanced between the contribution of relative top line growth that will transform into higher EBITDA growth and an efficiency cost reduction part that is encompassed in our Better Support efficiency program. This program covers, as already said, selected initiatives that are targeting overhead and shared services already started -- well started in Germany, in France with around 200 FTE that will be cut along the next 12 months. And with the redesign that is ongoing of operative workflows and automation within the facilities and a strong partnership with our core suppliers in order to reduce the cost of service to facilities.

Of course, improving EBITDA means also improving cash flow generation and contributes to further deleveraging of the company. And this is clear, the debt reduction over the next 3 years will now be mainly driven primarily by cash generation. At the same time, we target to actively managing our debt to anticipate refinancing 12 to 18 months before maturities and to work to simplify and optimize the cost of debt as we have already started. This trajectory is supported by a very cautious approach in terms of financial policy. There won't be any dividend distribution in the medium-term given the leverage cap in our financing agreement. And in the same vein, external growth operation will only be considered in line with leverage targets with strict criteria in terms of strategy and risk return profile. Our objective is very clear. We want to generate positive free cash flow from '26 onwards and to continue reducing leverage on an ongoing basis.

So this brings me now to the conclusion, and I would like to reiterate our financial targets with 2 complementary horizons. First, and this is reflected on the left-hand side of the slide, we confirm our '23-'26 objective. We are targeting annual average organic revenue growth of around 5% over those 3 years, and we expect to see an improvement in the EBITDA margin pre-IFRS 16 and pro forma of 100 to 150 basis points, excluding real estate development. And we confirm, as already said, our target of Wholeco leverage being brought below 5x at the end of '26 on a comparable balance sheet basis.

Beyond that, and this is reflected on the right-hand side of the slide, our plan for '28 is one of continuity with the growth and profitability trajectory built on the levers I have just detailed as well as a new indicator known as OP EDA, which allow us to fully assess both operational efficiency and rent control. In this perspective, we are targeting for the next 3 years, average annual revenue growth of around 4% and average annual pro forma growth in EBITDA pre-IFRS 16 of between 7% and 9% and in OPCO EBITDA of between 11% and 14%. And finally, we are targeting Wholeco leverage of around 4.5% at the end of '28, again, on a comparable balance sheet basis. These targets reflect a clear trajectory, control growth, gradual improved profitability and continued debt reduction. More than ever, in '26, we will remain focused on our vision to take care of each person's humanity in times of vulnerability.

Thank you very much for your attention. Grégory and I are available to answer any questions you might have.

Grégory, Sophie, thank you for the presentation. We already have some questions on the webcast. So the first one is probably for you, Sophie. Do you expect price anomalies due to the reform of SMR in France to be fully recovered?

Yes, definitely. Maybe again on this price anomaly, what happened? Actually, there has been a new financing framework issued by the government in '24. And the government has forgotten to take into consideration the facility that had been opened between '20 and 2024. So actually, they forgotten 20%, 20 facilities in our 100 facility network in France [indiscernible] represent a missing funding of EUR 23 million. This has been recovered for the future for '26 onwards. So the authorities, and this is a major achievement of '25 recognized the mistake and agreed to add this missing funding for the future. We haven't been able to forgot the missing money for '25 and '24. We are actually claiming that for the future, the problem is now solved.

Thank you, Sophie. Next question. Did you receive all the cash from the disposal program or some expected to be released in '26?

Yes, almost all cash has been received in '24, '25. Some residual payments will be received in the first quarter of 2026.

Thank you, Grégory. We have a few questions on the refinancing of the hybrids. Can you elaborate on this subject?

Yes. If you look on the refinancing as a whole and maybe before because a lot has been done by the group since the refinancing plan has been completed ahead of schedule. What is important to have in mind is that, the plan has been set up to reaccess to a certain extent to the capital market has been done last summer for EUR 500 million unrated bond like you know. Then we start with a strong liquidity of EUR 1.2 billion at the end of December. And we want as a company, of course, to remain opportunistic to refinance upcoming maturities, and this is what we do.

When specifically to the hybrid instrument that are part of the capital structure, what we would like to say is that, we don't want to make any comment on the [ GBP ] breakdown and neither the ordinance. As of today, the SFA documentation prevents the group from repaying the hybrid instrument with cash on hand debt if the Wholeco leverage ratio is above 5, that is the case. And in that case, we can only repay with similar instrument, equity or [ CLARI ] equity. Nevertheless, obviously, we want to be opportunistic and to treat the capital structure as a whole.

And certainly, as you've seen and as side comment, the group, as mentioned by Sophie has recently released inaugural rating from both agencies yesterday.

Thank you, Grégory. Sophie, we have a question regarding the cost-cutting plan in France and where do we stand in the execution of this plan?

So the plan has been prepared over '25 with the launch of a new accounting system that is now fully working. And based on this new and unified accounting system, we are going to close one of our accounting platform. And this requires a social plan to support our colleagues that work on the platform. The social plan has been announced and is currently under discussion with our unions. We intend to deploy and to merge and to close the platform within '26, so the second half of '26. So part of the savings, to put it short, will be reflected in the P&L this year and the run rate of this cost reduction plan on overhead and shared services will be fully reflected in '27.

Again, looking at the EBITDA development for the next 3 years, half of the EBITDA increase will come from the cost reduction plan and efficiency program. And again, half of the programs target the central and shared services part and the rest target productivity within the facilities.

Thank you, Sophie. We have a question regarding the syndicated loan, which to be extended to May 2029 is subject to repayment or refinancing or extension of the 2027, 2028 maturities. What is our view on the fulfillment of these subjects?

Yes. Thanks for the question. So we have 2 steps to confirm the extension, one step for the maturities of 2027 and the second step of 2028. The first step or the maturity of 2027 have already been extended 2028 to 2028, sorry. It was related to the issuance of a bond more than EUR 300 million with maturity above 2027. That was the case when we issued the bond last summer with the maturity of 2030. And then, not only for the 2028, but for the other maturities, we have our financial policy is to address the debt 12 or 18 months in advance. So we are currently working on various options to continue to work for the second extension of the maturity of 2028 moving to 2029. And this relates to a EUR 480 million social bond and Euro PP that need to be addressed before that date.

Thank you, Grégory. I think we have a live question on the call.

The next question comes from [ Constantin Gimenita from Keys Capital ].

This is [ Constantin from Kais ]. I've got 3 questions, and I want to ask them one by one, please. So the first question, the second half 2025 performance shows double-digit recovery in EBITDA with margins at 12.5%. So applying that 12.5% margin to the full pro forma revenue of EUR 5.2 billion would imply a sort of run rate EBITDA of EUR 646 million or almost 15% up on a pro forma basis. So on top of that, in 2026, you're expecting probably around 4% organic revenue growth and cost reductions. So is this the right way to think about it? And if so, why is your midterm EBITDA guidance capped at 7% to 9%? Should we read it as an intentionally conservative floor?

Maybe 2 way to look at it, Constantin. It's very important, and you get it right on the second part of the year, why we have this 12.5% EBITDA margin is what we have already mentioned during the Q3, it shows the effect of the action plan that has been set up with the pricing in Germany, cost reduction in some regions and the normalization of the margin in the clinics in France. So this is something that we want to settle as a base from a half year basis to the full year basis, certainly helps you as well to bridge the gap when we say we confirm the guidance from an EBITDA margin coming from 10.5% in '23 with an improvement from 150 basis points that bring us between 11.5% and 12% margin in 2026.

Got it. Okay. And then on the capital structure, if I may. So to go a little bit further, so the EUR 500 million bond you issued last summer now trades at a 6% yield. At the same time, the small term loan and undrawn RCF, they have restrictions on the refinancing of hybrids and the dividends. But given that you have access to the bond and loan markets, which is totally normalized now, are you contemplating an early refinancing of the term loan and RCF in order to remove the restrictions imposed by them or even perhaps a broader refi along with some of the hybrids?

Constantin, I think thanks for the question. As you can see, the group is working on several options to address the capital structure. We want to be as flexible as possible and to keep the advance on the schedule we have already on that topic. What is important to have in mind, I guess, and I will just reiterate what I just said, I guess the inaugural rating that we have just received yesterday is as well for the group, a good element to have even more optionality when it came to work on the capital structure as well.

Okay. Clear. And the third question that I had was, so you've sort of successfully stabilized the business. You have EUR 800 million of cash on balance sheet. There is EUR 1.2 billion of liquidity. The business does generate positive organic cash flow post debt service, as you've highlighted. At the same time, the debt trades at 6%, which is pretty healthy yield, but the equity is 25% below the 2025 highs we saw. So the question I have is sort of a little bit open-ended, but what are your primary strategic priorities for this excess cash? And given the valuation gap between credit and equity, how are you sort of evaluating the relative IRR perhaps of an equity buyback?

I think this one, if we contemplate on the plan and the plan is for the group is to continue to be the European leading platform on what we do. And when it came to the capital structure, the key element when we see to have a conservative financial policy is that our objective there is to continuing on the deleveraging. I think this is key as well for us when you look at it.

And Constantin, if I may, I mean, we have been -- we have now the inaugural rating in place. And our aim is definitely to improve the rating looking forward. This is really a critical dimension of sustainable and relative growth for shareholders as for other stakeholders. And this will be our guidelines for the next 3 years.

Okay. Understood. But I just wanted to highlight, given the bonds are yielding 6% and the equity is 25% below the '25 highs. It seems like the better trade so to say [indiscernible] long-term...

Yes, but they have -- I mean, equity market have to digest -- yes, you're right, but equity markets have to digest the news flow that we just communicated.

Understood. Congrats again on the strong set of numbers.

We have a question regarding the -- when the covenants are being tested? Is it on a yearly basis, especially for the Wholeco leverage?

We test covenant on the [ pre-yearly ] basis, meaning each and every 6 months.

Thank you, Sophie, Grégory. This is all the questions that we had. Sophie, if you want to have closing remarks.

Yes. Thank you very much, Stephane. I can just highlight that the company has been a very strong and good way in overcoming the high inflation and interest rate upsurge '23 and that we are now healthy and best positioned to deliver on our Succeed Together new midterm plan. Thank you very much.

Welcome to the Clariane Third Quarter 2025 Conference Call.

[Operator Instructions]

Now I will hand the conference over to Sophie Boissard, CEO. Please go ahead.

Thank you very much. Good afternoon, everyone, and thank you for joining us today to review Clariane's revenue for the first 9 months of 2025.

Today, together with Grégory Lovichi, the Group CFO, we will take you through the key highlights of the period, the drivers of our 9-month performance and the progress achieved on our refinancing and debt reduction road map. We will close with the outlook for the remainder of the year and beyond.

On Slide 2, let me start with the main highlights for the first 9 months of 2025. Clariane top line momentum accelerated in Q3, reaching plus 5.1% organic growth. Year-to-date revenue growth is plus 4.9%, fully in line with our guidance. All our activities and geographies have been contributing to the top line performance. Long-term care, of course, with an average occupancy rate, which reached 90.8% over 9 months, 91.6% for the third quarter, which means an increase of 90 basis points versus previous year.

In the Specialty Care segment, we are seeing continuous progresses on the case mix and the pricing management, reaping the first fruits of the action plan we initiated in France to adjust to the new regulation framework. Lastly, as for the Community Care segment, which actually covers mainly the Netherlands and France, the growth reached the high single digits, supported by strong demand for home care-like solution and shared housing.

Second highlight, we have completed the plan to reinforce our financial structure, which represents a major milestone for our group. Our EUR 1 billion asset disposal program is now finalized 6 months ahead of schedule with an average multiple for the transaction of around 14x '24 EBITDA. In parallel, we were able to successfully issue a EUR 500 million unsecured bond, including a EUR 100 million tap closed early August and to fully repay our revolving credit facility.

Regarding our '25 guidance, we are confirming both our revenue target at around plus 5% organic growth and our holdco leverage ratio target at below 5.5x by year-end. When it comes to our earnings, we expect EBITDA pre-IFRS 16 and pro forma of disposals to grow around plus 10% in the second half of '25 versus '24 to be compared to the decline of minus 4.1% recording in the first half. EBITDA margin should, therefore, reach around 12% for the second half, benefiting from the gradual ramp-up of the cost reduction plans initiated on the central and operating structures, mainly in France and Germany.

Based on these various factors, full year EBITDA pre-IFRS 16 and pro forma of disposal is expected to increase, albeit below the initial range of plus 6% to plus 9%. As we enter Q4, our ambition and priorities at Clariane remain unchanged. We are more than ever focusing on the improvement of our operating performance, and we expect to see the full effect of the actions undertaken in '25 in '26.

I will now hand over to Grégory, who will take you through the detail of our 9 months revenue performance by segment and by geography as well as the completion of our refinancing plan. Grégory, the floor is yours.

Thank you, Sophie, and good afternoon to all. So let's start with the top line. So the group revenue for the first 9 months of 2025 amounted to EUR 3.9 billion, up plus 4.9% on an organic basis, fully in line with our annual guidance. Reported growth was plus 1.1%. The difference between reported and organic performance is due to the impact of disposals in 2024 and 2025 as part of the plan to strengthen the group's financial position, restated for real estate revenue and the revision of expected income from the reform of healthcare activities in France.

Looking at our activities on an organic basis, all segments and geographies contributed positively. In long-term care, which represent around 2/3 of our revenue, revenue grew plus 4.7% organically, supported by strong occupancy and continued price adjustments.

Specialty Care rose plus 3.2%, showing the gradual recovery in France after the new SMA post-acute rehabilitation activities, tariff reform and robust activity elsewhere in Europe. Finally, Community Care achieved plus 9.4% organic growth, driven by strong demand for home care and shared housing solutions.

Geographically, performance was equally balanced. France was up 3.4%, Germany up 8.2%. Belgium and Netherlands were up plus 5.1% and Italy was up 2.4%, while Spain was up plus 6.4%. Overall, this broad-based balanced momentum reflects both higher volumes, plus 1.2% or EUR 47 million and trade and case mix effects of plus 3.7% or EUR 138 million, offsetting the expected scope impact from our disposal program. This bridge illustrates the main drivers of our plus 4.9% organic growth over the first 9 months of the year.

Starting on the left, we generated an additional EUR 47 million from higher volumes equivalent to plus 1.2%. this reflects both higher occupancy levels in long-term care, particularly in Belgium and the Netherlands. We'll return to that and increased outpatient activity in Specialty Care, mainly in France and Spain. Community Care also contributed positively with continued network expansion in France and Germany.

Next, price and case mix effects added another EUR 138 million or plus 3.7%. This increase was largely driven by tariff adjustments in Germany and France, additional pricing momentum in Spain and Italy and ongoing rebalancing of case mix in our health care activities. Price remains the main driver of the top line growth.

This positive drivers were partly offset by the EUR 109 million negative perimeter effect or minus 2.8% linked to the planned disposal completed in the U.K., France, Italy and Germany, including [indiscernible] as well as a few smaller sites closures. Finally, other effects amounting to minus EUR 33 million or minus 1% reflect the temporary impact of the French health care tariff reform in Specialty Care and the end of the real estate development activities at [indiscernible].

Together, these elements bring up to EUR 3.976 billion in revenue as of end of September 2025. This performance confirms our solid momentum across all networks and activities underpin by steady occupancy, price adjustments and disciplined portfolio management.

On the Slide 9, if we focus on long-term care, occupancy continues to rise quarter after quarter. The average rate stood at 91.6% in Q3 compared to 90.7% in Q3 '24. To note, the occupancy rate improved by a full point over the sole third quarter. It reached 90.8% for the first 9 months of 2025, up nearly 1 point from a year ago despite the saver flu season early in '25, impacting France mainly and up 2 points on Q4 2023. This improvement demonstrates both the resilience of demand and the quality of our offer. We still have growth potential in bed in existing capacities and the ongoing rollout of [indiscernible] shared housing facilities in France.

On the Slide 11, let's take a closer look at the third quarter. Revenue for Q3 2025 came in at EUR 1.320 billion, up plus 1.8% reported and plus 5.1% on an organic basis, confirming the acceleration we expected in the second half. All activities and regions contributed positively. In Long-Term Care, revenue rose plus 3.3%, driven by a further rise in occupancy to 91.6%. In Specialty Care, activity rebounded strongly, up plus 6.7%, thanks to case mix improvement and operational adjustments implemented earlier this year.

And in Community Care, growth remained robust at plus 11.7%, supported by sustained demand in home care and shared housing. Geographically, this acceleration in organic growth over the third quarter is visible in France. It reached plus 4.7% versus plus 2.8% for the first 6 months of the year and in Germany, where organic growth grew to plus 8.8% versus plus 8.1% for the first 6 months of the year.

On the Slide 12, this bridge shows the main factors behind our plus 5.1% organic growth in the third quarter on top of plus 1.8% reported growth. Starting from the left, revenue rose from EUR 1.297 billion in Q3 last year to EUR 1.320 billion this year. The first element, volume effects added EUR 13 million or plus 1.1%. This reflects stable activity in long-term care with higher volumes in France, offsetting small decreases in Belgium, the Netherlands and Germany and continued growth in Specialty Care and Community Care. In Specialty Care, volumes were up EUR 9 million, mainly from outpatient activity in Spain, France and Italy, while Community Care contributed EUR 5 million, driven by higher demand in France and Germany.

Price and case mix effects were again a key driver, adding EUR 49 million or plus 4% on the quarter. These gains came primarily from tariff increase in Germany and France, improved case mix in Specialty Care and stronger pricing in Community Care, particularly in Germany. Offsetting these positive drivers, the perimeter effect was EUR 41 million or minus 3.3% linked to the final disposal completed during the summer, mainly [indiscernible] in France, along with smaller transaction in Italy and Germany. All in all, these combined effects explain our strong third quarter revenue of EUR 1.320 billion, confirming the steady acceleration of our activity in the second half of 2025.

Turning to our financing. I'd like to underline that Clariane has now restored its access to the debt capital markets following the successful completion of the EUR 1.5 billion financial strengthening plan 6 months ahead of schedule. In February 2025, we signed the amendment and extension of our syndicated facility for a total of EUR 625 million, extending in maturity to May '29.

This includes a EUR 300 million term loan and a EUR 325 million revolving credit facility together with a new EUR 150 million real estate credit line with the same maturity profile. Then in June, we successfully placed a EUR 400 million unsecured bond, which was increased by EUR 100 million in August to a total of EUR 500 million maturing in June 2030 with a 7.875% annual coupon. The transaction was more than 3x oversubscribed, attracting strong demand from leading French and international institutional investors. It followed the successful extension of our bank facilities and the completion of the disposal program.

The proceeds are designed to refinance debt falling due well ahead of maturities and to strengthen our liquidity position, not to fund new CapEx or distributions. Altogether, this action give Clariane long-term financial visibility, a broad investment base and a solid liquidity position supporting our continued deleveraging trajectory.

I now hand over to Sophie.

Thank you very much, Grégory. Let's move now to the outlook for '25 and for '23-'26. So looking ahead to the second half, our operating performance continues to improve quarter after quarter. In '25, our main target was to finalize the plan to strengthen the financial structure of the group, and that major milestone has now been reached, well ahead of schedule and in favorable conditions when considering the 14x average multiple transaction attached to the disposal plan.

With that behind us, we expect the second half of the year to benefit from our 4 key drivers. First driver, the completion of the disposal plan and the streamlining of our portfolio. Second driver, the increase of the volumes across all geographies in the major network as well as in the recently opened facilities, namely in the Netherlands and also in Spain.

Third driver, the positive development of the pricing, notably in Germany, which will bring more fruit in the last quarter. And fourth driver, the active management of case mix in Specialty Care, namely in France. As planned and already mentioned in H1, we have also started a cost reduction plan covering both central functions and operations. This cost reduction program aims to adapt the group cost structure to its new scope post disposal, to reap the fruit of the digital transformation we initiated 2 years ago and to take into account the new regulation and market environment in France.

These various initiatives, which include a social plan in Germany and required extensive discussions with the workers representative are now ramping up. We expect the full effect of the program to materialize in 2026. In this context, as I pointed out in my introduction, we are confirming both our organic revenue growth target of around plus 5% for '25 and our holdco leverage target at below 5.5x by year-end '25.

When it comes to earnings, we are expecting the EBITDA to increase over the second half of around plus 10% to be compared to the minus 4% recorded in the first half. Pre-IFRS 16 EBITDA margin for the second half should reach around 12% with the ramp-up of the cost reduction plan initiated in France and Germany. The full year EBITDA pre-IFRS 16 and pro forma of disposal is expected to increase, albeit below the initial range of plus 6% to plus 9%.

Let us now come to the outlook for '23-'26. So to wrap up, our ambitions and priority for '25 and beyond remain unchanged. We expect to reap in '26 the full benefit of the actions implemented over the year in terms of pricing, in terms of portfolio management and in terms of streamlined cost base. As I said, the actions started in '25 will already deliver tangible results in the second half, and they provide us with a solid base for a further margin acceleration.

So moving to our midterm outlook. We expect our EBITDA margin pro forma of disposal and excluding real estate development to improve in '26 by 100 to 150 basis points versus '23. with a leverage ratio below 5x and of course, an average revenue organic growth of plus -- around plus 5% over the period.

All this is supported by a continued and renewed focus on quality within our facilities and network with an NPS that is to remain above plus 40 as well as a strong focus on health and safety at work with a targeted reduction in the frequency of workplace accidents.

Our midterm goals reflect the balance of our strategy, a stronger financial foundation, a disciplined operational focus and a continued commitment to care, quality and responsibility across all our networks.

On this, I would like to thank you for your attention, and Grégory and I are now ready to move on to your questions.

[Operator Instructions]

Sophie, Grégory, thank you. We have quite some questions regarding what has changed and the reason of the change in the EBITDA objective for 2025. So would you please explain what has changed since end of July?

Yes. Thank you very much for the question. Actually, what has changed since end of July is a slower ramping up of the various cost reduction measures initiated. What are these cost reduction measures? It is they are about reducing the scope of our central functions in the larger countries, Germany and France on the back of the disposal program. So we have just signed with our unions a social plan on the headquarters in Germany. So this has been signed this week, and we were expecting this to happen a little bit earlier in the second half.

And the second major part of it is the adjustment of the operating organization, namely in the Specialty Care segment in France. So on the back of the new regulation, we have initiated a very wide plan to adjust the working organization clinic by clinic. And we decided to give a little bit more time to the discussion with the workers' representative at the clinic level in order to secure a safe lending for each and every facility and not to jeopardize the quality of activity in those clinics.

And this, of course, costed a little bit more time than expected but brings us a strong basis for a smooth and continued swallowing of the new regulation framework for the specialty care in France. So all those combined lead us to a little bit lower expectation in terms of EBITDA increase over the year but will place us on a pretty solid EBITDA margin on the second half. That is also a solid basis for the year to come '26 and beyond.

Thank you, Sophie. There is a follow-up question regarding this saving and cost plans. Would you please give us some numbers?

Yes. Thanks for the question. And like we just mentioned, some discussions are still ongoing, as already mentioned. And it's still too early to provide numbers and figures on these programs. Nevertheless, we will do it on due time, especially to explain what are the numbers behind the cost reduction measures that are already embarked and the full effect will be visible in 2026.

Yes. And if I just give you a little bit more flavor on the Specialty Care. So this is definitely the most of the plan. It is about reducing the supervision rate. So the number of FTE for 100 patients according to the new tariff and financing framework. So we came basically from above 84, 85 FTE average to something that is now 99, 78, and this is actually where we want to be. And so we are progressively adjusting the supervision rate. So this ratio of FTE versus the patient. So it gives you the magnitude.

We are actually saving something that represents 6% to 10% of the average FTE that we need to provide the care quality. So it comes with a lot of reshuffling of various tasks with some digitalization, of course, and also a new structure for the planning, for the time planning of the caregivers. Of course, this with a very high level of expectation in terms of quality and specialization of the care. So that's basically for the operating transformation.

And on the central cost, it comes very much with the digital transformation on several transactional services, accounting, billing. And this will -- this comes, for example, in Germany with 170 FTE less on the overhead. This is what has been just signed and agreed some days ago in Germany.

Thank you, Gregory. Thank you, Sophie. The next question is still regarding H2 2025. You expect around 12% EBITDA margin, quite flat year-on-year. For which country do you expect EBITDA margin to be better or lower?

Yes, so 12% is not flat. It's higher than H2 2024 on a pro forma basis. That's the first point. And then when you look by country, higher margin and leading the way is more on the Germany that is improving the margin compared to last year in 2024.

Thank you, Gregory. The next question regarding guidance in 2026. Can you please remind us the basis of your objective of plus 100 to 150 basis points EBITDA margin pre-IFRS 16 in 2026? And what is the basis of reference? And what are the drivers of such progress?

So thanks for the question. Again, so the improvement is on the timing between 2023 and 2026. As part of the full year 2025 result publication early next year, we will provide the pro forma basis, sorry. That means including the full asset disposal effect. Just as a reminder, in the second half of the year, we have still approximately EUR 150 million to EUR 200 million disposal already secured but still under finalization. And this disposal will have obviously an effect on the pro forma. And this, we will be able to provide it, like I was mentioning during the 2025 full year result publication.

Thank you, Grégory. The next question is regarding the change in the outlook, but there is no change in the expected leverage. Would you please explain why this change of outlook in the EBITDA has no consequences on the leverage level?

What we say, so we confirm the leverage ratio of 5.5x by the end of '25 and below 5x by the end of '26. And this element on the leverage ratio is coming from this EBITDA but as well the plan to reinforce the capital structure that provide us well confidence on the other side on the leverage ratio, meaning on the debt to confirm this guidance on the leverage.

Thank you, Grégory. The next question regarding the French Specialty Care. You've mentioned the improvement that you were expecting regarding the case mix. Could you please elaborate on what did happen in Q3?

Yes. The actions we have undertaken on the enhanced case mix are definitely starting to bring -- to bear fruit. When we started the year, we were with an average case mix, today price around EUR 106, then we actually reached a first plateau at EUR 117, so per invoiced day and per patient. And we are currently navigating at a small EUR 120 for -- as an average level. So it all shows that the way we account for the care and service we provide and also the quality and integrity of what we are doing is more and more reflected in the billing. So this gives us a lot of confidence that we are now having a good level of control and understanding of this new funding and that we can also support our clinics and facilities to go for the right specialization, the right level of mix in terms of care and specialization.

And so this will be reflected also beyond '25, '26 and in the years to come. This will, of course, as I said, be one of the drivers of further margin improvement. So it's about not only increased volume, volume are increasing, especially in the outpatient but it is definitely about an enhanced mix of activity that is supported with the right understanding of the regulation framework.

Thank you, Sophie. Next question will be regarding your CapEx expectation for 2025 and 2026.

Yes. Maybe on the CapEx expectation on 2025 and 2026. As you know, we guide around EUR 300 million CapEx in both this year, the split between maintenance CapEx and CapEx to develop of around EUR 200 million. So we expect to remain in this area this year and as well next year.

Thank you, Grégory. Regarding next question is, do you have any disposal -- additional disposal plan after the success of the one that has been achieved in July?

There is no major disposal to come. We have, of course, a regular review of our portfolio, and we are looking at really all the noncore -- the remaining noncore facilities. So that's some additional very small size disposal could come on the back of the completion of the real estate assets that are, as Grégory recalled, still to be exited. But for the rest, I think we have now a pretty stable platform in terms of geographies and segment with actually 2 main universe, the elderly care one and the specialty care one. And the 2 universe are actually traveling with underlying increasing demand and a good development in terms of mix and additional pricing.

Thank you, Sophie. I think we have a few questions online. So please, operator, can we take those questions?

The next question comes from Constantine Gumanida from [ Curex Capital. ]

Congrats on a good set of results. So I guess I have a few questions maybe on revenues first. So Specialty Care, I think we can see it's inflecting meaningfully in the second H sort of along the lines of what you said on the last call. I just wanted to confirm, is this inflection in line with your expectations? Or is there potentially more to go? And in the same category, I recall on the last call, you mentioned there is some potential legal action that you're pursuing to recover some of these lost revenues. Could you perhaps comment a little bit on the status of that, please?

Yes, on the first part of the question, the case mix is evolving in line with our expectations. So it's very much what we expected to see on the case mix side. On the lost revenue, there is no major news to share today. We are still in intensive discussions with various counterparts. And as you can imagine, with all what happened in France in the recent weeks, these discussions are intensive but a little bit slow in the lending. But I mean we still have strong cases. So we will get, I hope, what we are asking for. It just takes some time.

Okay. Understood. And then in Germany, I think on the last call, you said that there is a lag between sort of cost inflation, which was front-loaded and then revenue growth or pass-through, which was more back-ended. So are we already seeing some of that inflection in pricing in Germany in Q3? Or is this more of a Q4 element? Can you comment a little bit on that, please?

You are seeing actually 1/3 of the effect. The most of the effect on the repricing are still to come. We have more than 100 negotiations still open on the repricing with pretty good visibility on the lending, and this will be fully then reflected in '26, of course.

Okay. And can I on sort of the guidance, just to make sure that we're looking at the right numbers. So I think you said on the last call that the starting pro forma number for 2024 is EUR 5017 million in terms of revenues. So I think the guidance that you have for this year, the 5% this year and 5% next year, is it applied to that number? Or is it applied to a different number? So that's on revenues. And then equally, the EBITDA guidance of, I guess, plus 100 to 150 basis points on top of the 12% and change in 2023. Is it applied to the first number that I just mentioned?

I think on the number and the guidance, Constantin, what is close to the guidance is what we have mentioned in the H1 results where we see on the 2025, we were mentioning pro forma of EUR 5 billion approx EUR 5.7 billion of revenue total '24. Obviously, on this '24, and this is what was mentioning at that part, we still have some adjustment due to the disposal ongoing to make it more accurate.

But again, when we mentioned it, the EUR 5 billion something and the EUR 555 million for '24 on the pro forma is a good basis. It will evolve, and this is what I was trying to mention earlier on. We will provide during the full year 2025 publication more accurate number based on the finalization of the...

[Operator Instructions] The next question comes from Robert Watkins from Chepstow Lane Capital.

A couple for me. Just the first one on the organic adjustments you make on the revenue side. Part of that adjustment reflects expected changes in the French health care regulation. So can you give a bit of color in terms of how you actually make those calculations and determinations that feed into that organic revenue growth number?

No. What we mentioned on the organic adjustment was more adjustment that has been already done in the first semester after on the tariff reforms. It doesn't imply any change in the future was not to rebate and to be able to compare apple-to-apple in '25 versus last year but has no impact on the regulation on the pricing, let's say, moving forward.

So to be more specific than that is what the Specialty Care kind of case management. I don't quite follow what exactly the anticipated adjustments or adjustments that have already taken place that you're then feeding into this number.

It was impacting, and this is what we've mentioned in June during the con call. It was an adjustment made in June based on the finalization of what was the tariff we received for the year before. And eventually, we didn't receive the full amount. So we correct it, and this is what we call organic so that we are able to have a comparable basis. And again, we have a pro forma. So this is not something that has an impact going forward. It's more to compare existing, and we have adjusted by the end of June numbers in 2025.

Okay. Got it. And second question on occupancy in the French LTC segment. A data point you gave at the last set of numbers indicated, I think, 90% plus, maybe 91% occupancy recovering from a kind of bad flu epidemic in Q1. That number seems to have stepped back a bit in the intervening months. Can you give a bit more explanation in terms of what you're seeing on the occupancy side?

Yes. Actually, on the occupancy side, no, we have been -- we have seen continuous growth over July, August and September, which is actually a pretty good recovery from the low coming from the flu epidemic. So that's actually -- so for us, France is delivering according to the expectation over the third quarter.

But specifically in the French LTC segment, I think you gave a higher data point than what was the Q3 average. So it must have been stepped backwards in the intervening months. Is that not correct?

You mean what I mentioned in my introduction. In my introduction, this was the average Q3 for all geographies. So not only France but covering also Italy and Belgium and Germany and so all the LTC segment across the 6 geographies. I mentioned 91.6% over the third quarter, which is actually the average occupancy for the Q3 across the 6 geographies.

Yes. Okay. I mean my question was just about France and its long-term care segment occupancy, which seems to have stepped backwards from that July data point you gave, but maybe I need to go back and check that. And then last question, just...

Maybe just to confirm, it was on the press release. On the year-to-date, the France occupancy is 88.1%. And on the third quarter, it's 89.5%. So you see the third quarter in France is higher the year-to-date. It means that we have this recovery quarter 3 on the France LTC market.

That too, [ Ben, ] I understand what you are alluding to. It is true that the highest point reached over summer was above 90% with a lot of short-term stays happening over summer season. So we see those kind of cycles on, I would say, on a normal basis in France, and we will see the seasonal stays restarting to increase as the Christmas and winter holiday season will come nearer.

Okay. And then just final question in terms of what from your perspective, you are seeing on the political side in terms of a likelihood of a budget being passed this year? Or does it seem like it's going to be slipping into next year? Kind of how are you guys seeing the setup for the budget passing and what that means for your business?

It's a good question. I'm not so sure I can provide you with 100% certainty on this. What I can just say currently, what is under discussion at the parliament hasn't -- does not provide any major change for long-term care or for specialty care. So that's for the discussion for the new budget. an alternative if they are not able to find an agreement on this basis would be to come back to the '25 budget provisions. So we are -- and this is also the reason why we are working on cost reduction plan and will be streamlining our organization. We are equipped to navigate whatever, I would say, the budget discussion will lead to. And I don't expect this to jeopardize our overall regulation universe.

Just be aware that we are operating in similar conditions with the public hospital, public nursing homes. So there is a kind of good referencing of the segment because we are providing essential services and the public structure or non-for-profit structure are also exposed -- would be also exposed to significant cuts in the funding or significant increase in the staff cost framework. So that's basically what I can say. It is actually -- we know how to navigate with what is currently under discussion.

Thank you, Grégory, Sophie. We have one last question, which is, do you have any update on upcoming maturities, i.e., the OCEANE or the ODIRNANE and the terms?

Yes, I will take that one. So on the -- maybe on the maturities and on the debt, what is important to have in mind that like I was mentioning earlier on, we issue a bond and rated bond this summer of EUR 500 million. This EUR 500 million bond maturing 2030. Coming back to your question, OCEANE, as a reminder, our maturity is Q1 '27. So this bond has a maturity -- longer maturity than the OCEANEs. By the way, I remind it you know it but when we issue the bond, we fully undrawn and released the revolving credit line facility at the end of this announce its fully undrawn.

And on the second part on the ODIRNANE, we are working on all the topics. And obviously, this instrument like ODIRNANE. We don't make any comments as on the previous quarter on the ODIRNANE. What we have in mind as well, and it's important to remind it is that the SFA and the documentation we have with the banking pool prevent repaying hybrid instruments such as ODIRNANE with cash or debt if the WC ratio is above 5x. I think it's important that we have this in mind.

Thank you, Gregory. Sophie, if you have some final remarks to make.

Yes. Thank you very much, Stephane. So I would like to actually highlight 3 takeaways. First of all, the underlying momentum of our activity is a good one, be it on the long-term care segment or the specialty care, which gave us some headache in the previous quarters with the total reshuffling of the regulation framework. So that's for the revenue side.

When it comes to the earnings and margin evolution, we are taking a little bit more time to do the cost adjustment. We plan to -- in order to secure a soft landing from a social dialogue and with our workers' representative in Germany and mainly in France, we don't want to take any risk in the current environment in France by actually going too hard and too fast on this cost basis adjustment. But we are very clear about the lending on this streamlined cost basis, be it on the central shared services or on the operational structure. This gives us pretty clear visibility on the second half performance in terms of EBITDA and enable us also to have also a good visibility on what we are going to deliver in '26 in terms of earnings and margin. So that's what I would like to highlight.

And last but not least, of course, we have done an intensive work on the financial structure of the company to strengthen it and to contribute to the deleveraging of the company, and we are confirming our target in terms of holdco leverage for '25 and also directionally for '26 according to what we said previously. Thank you very much for your attention and happy, of course, to answer follow-up questions, if any. Thank you very much.