(News Bulletin 247) – The retirement home operator is jumping on the Paris Stock Exchange after confirming its annual targets. Clariane also claims that its financial restructuring is well advanced, with three of the four parts of this plan already finalized.

A month after completing Act 3 of its refinancing plan, Clariane reassures the markets. The former Korian has confirmed its annual objectives after revealing improved half-yearly accounts.

Between January and June, the retirement home operator saw its revenues increase by 6.8% on a comparable basis and by 6.1% in published data, reaching 2.64 billion euros. In detail, Clariane explains that it benefited from an increase in the volume of activity as well as a price increase of 3.6% across all regions, particularly in France, Germany and the Belgium-Netherlands region.

Another positive point of the publication is that the average occupancy rate of establishments has improved to reach 89.5% outside the United Kingdom, compared to 87.9% in the first half of 2023. Clariane adds that for the month of June alone, this average occupancy rate stands at 90.5%, compared to 88.3% in June 2023.

A little further down in the accounts, gross operating income (EBITDA) before taking into account the IFRS 16 accounting standard reached 290 million euros, compared to 285 million euros in the first half of 2023, an increase of 1.6% on a published basis and 3.5% pro forma for disposals.

On the pre-IFRS 16 net result side, this is a loss of 28 million euros in the first half of 2024. Clariane attributes this shift in the accounts into the red to “interim financing costs put in place pending the capital increase as well as the sale of serviced residence activities in France”.

The generation of free cash flow from operations, before application of IFRS 16, is up significantly, to 74 million euros, compared to 45 million euros as of June 30, 2023.

On the strength of this first half, the retirement home operator confirms its annual objectives. For 2024, the group is counting on a growth in its turnover of more than 5% on an organic basis and an EBITDA, pre IFRS 16 and pro forma of disposals, at least stable in amount.

On the Paris Stock Exchange, Clariane’s announcements of the day are appreciated. All the more so since the market cannot help but make the comparison with its competitor Emeis (the former Orpea) which had clearly disappointed at the end of July, after having reduced its annual forecasts due to a weaker than expected recovery in the occupancy rate in its establishments in France.

Clariane shares rose another 6.8% to 1.774 euros on Tuesday around 10:30 a.m., after peaking at +14.15% in early trading.

A well-advanced plan”

Clariane also took advantage of this half-yearly publication to declare that its “plan to strengthen the group’s financial structure” was “well advanced”. The company recalls having “successfully” carried out capital increases for a total gross amount of 329 million euros.

The group also added that it has already completed around 40% of an asset disposal programme, which constitutes the fourth part of its refinancing programme. At the end of June, Clariane announced that it had sold its serviced residences business in France to Odalys, a subsidiary of the Duval real estate group.

Let us recall that the company was forced last November to announce a refinancing plan of 1.5 billion euros intended to strengthen its financial structure. The aim was very clearly to avoid default for Clariane, which has also been weakened by the negative fallout from the Orpea affair, but also by the sharp rise in interest rates and inflation.

With this plan, the company therefore intends to start again on a healthy basis with a view to piloting its strategic program “By your side”. To this end, the company had unveiled its medium-term objectives for the period 2023-2026 in May. The European number one in retirement homes is aiming for average annual organic growth of around +5% over this period.

The company also expects a gross operating margin (EBITDA) to increase by 100 to 150 basis points (or 1 to 1.5 percentage points) by 2026, excluding the impact of the IFRS 16 accounting standard.

The company also hopes to reduce the debt leverage ratio to a level below 3 times EBITDA by the end of 2025. At the end of June 2024, it stood at 3.6 times and the group posted net debt of 3.77 billion euros.