2023 financial targets achieved:

Organic revenue growth of 8.4%

EBITDA excluding IFRS 16 slightly higher at €614 million

Leverage of 3.8x, in line with revised targets, with a LTV at 61%

All 2023 ESG targets achieved or exceeded: an NPS of +44 (up 8 points relative to 2022) and 12% of employees taking part in qualifying paths as part of their career development

Refinancing Plan well underway:

AMF exemption granted to Predica

First tranche of asset disposals completed, raising €268 million, a quarter of the target under the disposal plan

Net income from continuing operations, excluding IFRS 16 and asset impairment*, was breakeven. The Group’s share of net profit was a loss of €63m.

PARIS–(BUSINESS WIRE)–Regulatory News:

Clariane (Paris:CLARI):

The full 2023 financial statements* are presented in the appendix to this press release.

In millions of euros –

2022

2023

Reported growth

Organic growth

Revenue

4,534

5,047

+11.4%

+8.4%

EBITDAR excluding IFRS 16

1,091

1,127

+3.3%

EBITDA excluding IFRS 16

607

614

+1.1%

EBITDA including IFRS 16

1,003

1,021

+1.8%

Net result from continuing operations excluding IFRS 16

67

-49

Net result from continuing operations excluding IFRS 16 and excluding asset impairment**

67

2

Net profit – Group share excluding IFRS 16

52

-63

Operating free cash flow excluding IFRS 16

371

191

* The consolidated audited financial statements for 2023 were approved by the Board of Directors at its meeting of 28th February 2024. The Statutory Auditors will be issuing a report with unconditional certification within the coming days. The consolidated financial statements were prepared in accordance with the IFRS 16 standard. For purposes of comparability, the financial information below is presented excluding the application of IFRS 16.

** Impairment related to asset disposals (United Kingdom and Netherlands) and other impairment (Italy and Spain) amounting to €60 million, net of tax (benefit of €9 million).

As the leverage ratio was greater than 3.5x at 31 December 2023, the Group will not pay a dividend in respect of 2023, in accordance with the clauses of the unsecured syndicated loan agreement.

Sophie Boissard, CEO of Clariane, said:

In 2023, we once again delivered strong operational performance in market conditions that were made more difficult by persistent inflation and, in Germany, by delays in implementing the new regulatory framework, which adversely affected our margins. Against this backdrop, all our businesses and all our geographical regions are nonetheless enjoying positive momentum in terms of volumes and prices. I would like to highlight the outstanding dedication shown by the 70,000 professionals who make up the Clariane community, who cared for around 900,000 patients and residents in 2023 in our facilities and in their homes, and whose efforts are acknowledged by constantly increasing quality indicators. We exceeded all of our ESG targets, which were defined in 2019 and increased as part of the process of adopting purpose-driven company status, and particularly our main targets regarding quality, training and recruitment, skills development and the occupational health and safety of our staff members.

In financial terms, access to funding became much tougher as a result of industry conditions and, combined with higher interest rates, this led the Group in November 2023 to embark on a plan to strengthen its financial position by raising €1.5 billion. The first two parts of that plan – forming two real-estate partnerships and securing real-estate credit facilities – were completed by the end of 2023. The Group is now focused on carrying out a €300 million capital increase, which will be put to shareholders in the 26 March 2024 general meeting of shareholders, and on completing asset disposals, with two initial transaction, announced today, involving all of our UK business for a total amount of €268 million, representing a quarter of the amount we intend to raise from disposals. The plan – made possible in particular by the support of our main shareholder Crédit Agricole Assurances, which I would like to thank for its long-term commitment to the Group – should enable us to bring our gearing below 3x by the end of 2025 and get back on track in terms of delivering ongoing growth and creating value for our stakeholders.

2024 will be an important transitional year for the Group, in which we will focus more than ever on the quality and performance of our operations, as well as on the completion of our Refinancing Plan. The dedication of our staff members and good momentum in our various business segments and geographies mean that we can look ahead to the coming year with confidence.”

Disclaimer

This press release does not constitute, and shall not be deemed to constitute, an offer to the public or an offer to buy or the solicitation of public interest in an offer to the public, nor shall there be any sale of securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful absent registration or approval under the securities laws of such state or jurisdiction. The distribution of this document may be subject to specific restrictions in certain countries. Persons in possession of this document are required to inform themselves of and to observe any such local restrictions.

A prospectus relating to the capital increase will be submitted by Clariane S.E. to the Autorité des marchés financiers for approval prior to the effective launch of the capital increase.

All forward-looking statements included in this document speak only as of the date of this press release. Clariane S.E. undertakes no obligation and assumes no responsibility to update the information contained herein beyond what is required by applicable regulations.

In this press release, unless otherwise indicated, all changes are expressed on a year-on-year basis (2023/2022), and at constant scope and exchange rates.

The main alternative performance indicators (APIs), such as EBITDA, EBIT, net debt and financial leverage, are defined in the Universal Registration Document available on the company’s website at www.clariane.com.

1 – 2023 financial performance: key elements

1.1 – Group income statement

1.1.1 – Analysis of revenue on a reported basis and at constant scope and exchange rates

At the end of the year, the network consisted of 1,327 facilities as opposed to 1,195 in 2022, representing almost 92,000 beds versus around 88,000 in 2022. In 2023, the Group’s 70,000 healthcare professionals cared for around 900,000 residents and patients in the seven European countries in which it operates.

Reported revenue growth was supported by:

Growth in business volumes, which had a net positive impact of €134 million (higher occupancy rate in mature facilities, additional capacity coming onstream), with €171 million of additional revenue more than offsetting non-recurrence of compensation income, which had a negative impact of €38 million relative to 2022;

Price increases had a positive impact of €243 million, particularly in France, Germany and Belgium;

Changes in scope had a net positive impact of €137 million resulting mainly from the addition of Grupo 5 in Spain, partly offset by disposals (Germany and France) and closures of facilities and networks, particularly in Belgium (Brussels) and Germany;

The Long-Term Care business, which accounted for 61.7% of the Group’s business activity in 2023 as opposed to 64% in 2022, generated revenue of €3,116 million, up from €2,922 million in the previous year, representing reported growth of 6.7% and organic growth of 8.0%.

That growth came from price increases in response to cost inflation, particularly in Germany, France and Belgium, and from a further rise in the occupancy rate, which averaged 88.5% as opposed to 86.6% in 2022 due to a gradual return to normal operating conditions post-Covid and a ramp-up in newly introduced capacity. In December 2023, the occupancy rate in this segment was 89.4%.

The Healthcare business generated €1,305 million of revenue in 2023, 25.9% of the Group total, equating to reported growth of 17.4% and organic growth of 6.4%. In France (under the Inicea brand), Italy and Spain, the Group’s Healthcare facilities cared for more than 700,000 patients during the period.

Growth was driven in particular by the developments in the following areas:

Medical and rehabilitation care: new technical platforms came into service and new areas of specialist care were developed, particularly in oncology and neurology.

Mental health: the integration of Grupo 5 in Spain strengthened the Group’s position in the mental health sector.

Revenue from outpatient activities (consultations and partial hospitalisation) rose by more than 25% (11% on an organic basis).

Revenue in the Community Care business, whose brands include Petits-fils and Ages & Vie, amounted to €626 million in 2023, representing 12.4% of the Group total and growth of 25.3% or 15.4% on an organic basis. Over the period as a whole, almost 80,000 patients used Clariane’s services in this segment.

Performance was driven by:

Ongoing development of the shared housing offering, with 38 new Ages & Vie residences;

Further strong growth in the homecare network, with 20 new Petits-fils branches.

1.1.2 – EBITDAR and EBITDA

EBITDAR excluding IFRS16 was €1,127 million in 2023, as opposed to €1,091 million in 2022, representing reported growth of 3.3%.

EBITDA excluding IFRS16 amounted to €614 million as opposed to €607 million in 2022, equating to reported growth of 1.1%. This performance reflects resilient margins, achieved despite ongoing high inflation in 2023, in all regions except Germany where margins fell significantly due to particularly tough sector conditions and delays implementing the new pricing framework intended to compensate for inflation.

The increase in EBITDA resulted from the positive impact of:

higher business levels (+€68 million);

higher prices (+€243 million);

the net impact of changes in scope (+€9 million).

These positive effects more than offset the negative impact of:

a decrease in compensation payments for loss of business (-€38 million);

cost inflation, net of subsidies (-€269 million);

a decrease in the contribution of real-estate activities (-€7 million).

As a result, EBITDA margin was 12.2% in 2023, as opposed to 13.4% in 2022.

Two thirds of the decrease in EBITDA margin resulted from the specific situation in Germany.

1.1.3 – Net result from continuing operations excluding IFRS 16

The Group made a €49 million net loss from continuing operations in 2023, as opposed to net income of €67 million in 2022.

The €116 million decrease was mainly due to the following factors:

a €15 million increase in depreciation, amortisation and provisions from €292 million in 2022 to €307 million in 2023, arising particularly from the opening of new facilities;

a €12 million increase in financial expense from €144 million in 2022 to €156 million in 2023, although the impact of higher interest rates was partly offset by the positive effect of unwinding the Group’s hedging positions;

An €89 million increase in non-recurring expense from €76 million in 2022 to €165 million in 2023, of which €60 million was due to provisions for impairment on assets in the process of being sold (mainly in the United Kingdom and the Netherlands), along with around €30 million of restructuring and reorganisation costs in Germany and Belgium.

Adjusted for impairment on asset disposals in the United Kingdom and the Netherlands and other impairment (Italy and Spain) in a total amount of €60 million, or €51 million net of tax (benefit of €9 million), the Group made a net result from continuing operations, excluding IFRS 16 and asset impairment, of €2 million in 2023 as opposed to net result of €67 million in 2022.

Finally, the Group made a net loss – Group share of -€63 million in 2023, as opposed to net profit of €52 million in 2022.

1.2 – Performance by geographical zone

1.2.1 – France

In millions of euros

2022

2023

Reported growth

Organic growth

Revenue

2,081

2,243

+7.8%

+6.7%

EBITDAR excl. IFRS 16

545

557

+2.3%

EBITDAR margin

26.2%

24.8%

Revenue remained firm in France throughout the period, rising by 6.7% on an organic basis.

Revenue in the Long-Term Care segment included the impact of revised pricing against a backdrop of high inflation, as well as an increase in volumes with the average occupancy rate continuing to rise to 88.1% in December 2023 as opposed to 87.3% in December 2022 based on the network of operational facilities. As a result, revenue rose by 5.0% on an organic basis.

The Healthcare segment achieved organic revenue growth of 7.4%. Each of the sub-segments – homecare, mental health and medical and rehabilitation care – achieved significant growth over the period as a whole. Outpatient and partial hospitalisation activities are now offered in all facilities and made a good contribution in 2023.

Finally, the Community Care segment achieved strong growth in 2023 (31.4% on an organic basis), driven by robust demand for services such as those offered by Ages & Vie and Petits-fils.

This resulted in Group EBITDAR of €557 million in 2023, up from €545 million in 2022. At a time of high cost inflation, which was only partly offset by higher prices, and a decrease in the contribution of real-estate activities, EBITDAR margin fell 140 basis points in 2023 relative to 2022.

1.2.2 – Germany

In millions of euros

2022

2023

Reported growth

Organic growth

Revenue

1,082

1,166

+7.8%

+10.4%

EBITDAR excl. IFRS 16

254

220

-13.2%

EBITDAR margin

23.5%

18.9%

Revenue in Germany rose sharply in 2023, driven mainly by significant price increases negotiated in 2022 with local authorities following large pay rises for staff in September 2022. It should be noted that reported figures include the impact caused by the sale of 18 nursing homes, completed in the first half of 2022, and the closure of six facilities and two home care centres in 2022.

Looking at individual business segments:

The Long-Term Care segment posted organic growth of 9.8%, supported by price rises and an occupancy rate that rose from 87.0% at end-December 2022 to 87.9% in December 2023.

Revenue in the Community Care segment grew by 11.6% on an organic basis.

Against a backdrop of particularly high inflation and a 12% adjustment of the pay scale applicable within the sector in 2023, price increases approved during the year were not enough to offset the rise in costs because of a significant increase in the time taken for price-setting authorities to issue instructions. At the end of the year, almost 35% of the facilities operated by the Group had not yet had their requested price increases for 2023 approved.

This time lag between the impact of inflation and price increases should be gradually eliminated in 2024 and 2025 by new pricing measures currently being negotiated.

As a result, EBITDAR in Germany amounted to €220 million in 2023, as opposed to €254 million in 2022, pushing down EBITDAR margin by 460 basis points.

In the circumstances, the Group is continuing to refocus its network in Germany: in 2023 and 2024 combined, it will stop operating 11 loss-making facilities, which will help to restore profitability.

1.2.3 – Benelux

In millions of euros

2022

2023

Reported growth

Organic growth

Revenue

667

748

+12.1%

+12.0%

EBITDAR excl. IFRS 16

142

167

+17.9%

EBITDAR margin

21.3%

22.4%

Growth remained strong in the Benelux region, with revenue rising by 12.0% on an organic basis in the year as a whole.

In Belgium, revenue totalled €617 million, up 9.4% on an organic basis. EBITDAR amounted to €139 million, representing reported growth of 13.1%.

Revenue in the Long-Term Care segment rose by 9.2% on an organic basis. This was supported by the increase in the occupancy rate, which rose to 90.2% over the period as a whole (91.4% in December 2023) as opposed to 86.9% in 2022, and by steady price increases, which fully offset the effect of inflation.

The Community Care segment, meanwhile, achieved organic growth of 13.5%.

In the Netherlands, revenue was €131 million, up 25.7% on an organic basis. EBITDAR totalled €28 million, representing reported growth of 49.0%.

The Group’s three Dutch business segments achieved firm growth throughout the period.

Long-Term Care revenue rose by 20.5%, supported by an improvement in the occupancy rate to 75.4% over the period as a whole (75.0% in December 2023) versus 67.3% in 2022. This reflects the rapid ramp-up of recently completed greenfield facilities in favourable market conditions.

Revenue in the Healthcare segment, which still accounts for less than 3% of the total in the Netherlands, grew by 15.9% on an organic basis.

The Community Care segment – which accounts for around 14% of the Group’s revenue in the Netherlands – achieved organic revenue growth of 72.3%.

As a result, and taking into account the limited impact of inflation on costs, EBITDAR totalled €167 million in this region in 2023, as opposed to €142 million in 2022, and EBITDAR margin increased by 110 basis points.

1.2.4 – Italy

In millions of euros

2022

2023

Reported growth

Organic growth

Revenue

559

609

+9.0%

+6.3%

EBITDAR excl. IFRS 16

117

129

+10.4%

EBITDAR margin

21.0%

21.2%

Growth in the Italian market remained robust, with revenue rising by 6.3% on an organic basis. Adding in acquisitions made in 2022, reported growth was 9.0% in 2023.

Long-Term Care revenue rose by 8.2%, supported by a high occupancy rate of 94.4% over the period as a whole (95.1% in December 2023) versus 91.7% in 2022.

The Healthcare segment posted organic revenue growth of 3.8% in 2023, supported by improvements in the follow-up care, mental health and outpatient businesses.

The Community Care segment – which accounts for around 7% of the Group’s revenue in Italy – achieved organic revenue growth of 9.8%.

As a result, and taking into account the limited impact of inflation on costs, EBITDAR totalled €129 million in this region in 2023, as opposed to €117 million in 2022, while EBITDAR margin increased by 20 basis points.

1.2.5 – Spain/UK

In millions of euros

2022

2023

Reported growth

Organic growth

Revenue

145

281

+94.6%

+9.6%

EBITDAR excl. IFRS 16

33

52

+59.2%

EBITDAR margin

22.7%

18.7%

The region as a whole posted solid revenue growth of 9.6% on an organic basis, supported by price rises and the ramp-up of the UK business. Reported revenue surged by 94.6%, mainly due to the Grupo 5 acquisition in Spain.

In Spain, revenue totalled €218 million, up 6.0% on an organic basis. EBITDAR amounted to €37 million, representing reported growth of 84.4%.

Revenue in the Long-Term Care segment – which accounts for around 20% of revenue in Spain – rose by 10.0% on an organic basis. This was supported by an occupancy rate of 84.8% (87.3% in December 2023) versus 82.5% in 2022, and by a slight increase in prices.

Healthcare revenue grew 3.0% on an organic basis and 207.1% as reported due to the acquisition of Grupo 5.

The Community Care segment – which accounts for less than 2% of the Group’s revenue in Spain – achieved rapid organic growth of 9.9%.

In the United Kingdom, revenue totalled €63 million, up 17.2% on an organic basis. EBITDAR amounted to €16 million, representing reported growth of 20.5%.

This performance resulted from price rises and the ramp-up of facilities, with an occupancy rate of 84.1% in 2023 (85.2% in December 2023) versus 82.9% in 2022.

In the region as a whole, EBITDAR totalled €52 million in 2023 as opposed to €33 million in 2022. The change in the business mix resulting from the integration of Grupo 5 caused EBITDAR margin to fall by 400 basis points. However, after taking into account rental expenses, the integration of Grupo 5 has had a positive impact on margins.

2 – 2023 cash flows

In millions of euros, excluding IFRS 16

2022

2023

EBITDA

607

614

Operating cash flow

517

288

Operating free cash flow

371

191

Development and financial investments

-372

-315

Dividends paid

-26

-24

Real-estate investments or divestments

-460

-218

Real-estate partnerships and capital increase

45

306

Other

-51

-1

Change in net debt (including IAS 17)

-492

-61

The change in operating free cash flow relative to 2022 was driven equally by:

An increase in the working capital requirement, resulting particularly from lengthy delays in payments from paying organisations in Germany because of the new pricing schedule;

A sharp reduction in cash flow from real-estate activities in France, which made a particularly large contribution in 2022, because of the investment cycle.

Net debt increased by €61 million in 2023, after a €492 million increase in 2022. This improved performance resulted from:

A decrease in investment from €372 million in 2022 to €315 million in 2023, comprising €154 million of investment related to programmes initiated in recent periods and €161 million of net financial investments, mainly resulting from the acquisition of Grupo 5;

dividend payments amounting to €24 million, stable relative to 2022;

net real-estate investments totalling €218 million, much lower than the 2022 figure of €460 million;

€306 million of equity funding from real-estate partnerships, up from €45 million in 2022;

other items representing a negative impact of €1 million, as opposed to €51 million in 2022.

3 – Real-estate portfolio

The updated valuation of Clariane’s real-estate portfolio was calculated on the basis of a 5.94% capitalisation rate (vs. 5.4% in December 2022), reflecting a general deterioration in the real-estate market in countries where the Group operates.

On that basis, the Group’s real-estate portfolio had a value of €3,007 million at 31 December 2023, as opposed to €3,152 million at 31 December 2022 (adjusted for the value of the Ages & Vie portfolio due to deconsolidation on 30 June 2023).

This change has no impact on the valuation of assets in the Group’s financial statements, which are recognised at historical cost except for recently acquired assets.

However, the change affects the LTV1 ratio, as explained below.

4 – Balance sheet at 31 December 2023

The Group’s net debt increased from €3,775 million at 31 December 2022 to €3,780 million at 31 December 2023.

The increase reflects:

borrowings and gross debt of €4,532 million at 31 December 2023 as opposed to €4,508 million at 31 December 2022;

a cash position of €678 million at 31 December 2023 versus €734 million at 31 December 2022.

Real-estate debt amounted to €1,838 million at 31 December 2023. With its real-estate portfolio valued at €3,007 million, this represents a Loan to Value (LTV) of 61% as opposed to 55% at 31 December 2022. The Group points out that its syndicated loan agreement includes an LTV covenant of 65%.

On that basis, the Group’s gearing, as defined in the syndicated facility agreement announced on 25 July 2023, was 3.8x at 31 December 2023, in line with the target announced on 24 October 2023. Under the terms of its syndicated loan agreement, the Group’s covenant on the leverage ratio will be progressively lowered to 4.5x in June 2024, 4.25x in December 2024, 4.0x in June 2025 and 3.75x in December 2025, as previously communicated.

On 3 November 2023, the Group drew down the full amount of its RCF credit facility, i.e. around €500m, for a period of six months. Renewal, scheduled for 3 May 2024, is subject to compliance with a minimum cash covenant of €300m.

Lastly, as of the date of this press release, the Group has repaid approximately €80m of its total €372m debt maturing in 2024, excluding factoring.

5 – Update on the Refinancing Plan

The refinancing plan announced on 14 November 2023 was put in place to deal with the liquidity difficulties presented on that occasion and reiterated in the press release of 8 February 2024. These risks are described in the notes to the 2023 financial statements, which will be available on the www.clariane.com website in the course of next week.

Contacts

Investor Relations

Stéphane Bisseuil
Head of Investor Relations

+33 (0) 6 58 60 68 69

stephane.bisseuil@clariane.com

Press Contacts

Matthieu Desplats
Press relations Director

06 58 09 01 61

matthieu.desplats@clariane.com

Julie Mary
Press relations Manager

06 59 72 50 69

julie.mary@clariane.com

Florian Bachelet
Press relations Manager

06 79 86 78 23

florian.bachelet@clariane.com

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