Clariane SE (CLARI) Earnings Call Transcript & Summary

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.