Good day, and welcome to Clariane third quarter and nine-month revenue 2023 conference call. Today's call is being recorded. At this time, I'll now turn the call over to Philippe Garin, CFO. Please go ahead, sir. Yes, thank you. Good morning, ladies and gentlemen, and thank you for attending today's conference call on Clariane third quarter 2023 revenue. I am Philippe Garin, CFO of the group, and I am with Stéphane Bisseuil, Head of Investor Relations, and with Charles Regard, with whom many of you know already. Let's move to slide two, where you can read our disclaimer regarding the forward-looking statements that this presentation may contain. Let me begin on slide three, with the three main topic I'd like you to remember about this quarter. Firstly, our growth is very strong. Clariane nine-month revenue figure came at EUR 3.7 billion, up 11.6% on a reported basis, on the back of market increase in volume, pricing, and consolidation of previous acquisition. Revenue was up 9% on organic basis, with all region and business line contributing to this growth. Secondly, an important milestone was also reached this quarter. Sustainable Fitch awarded Clariane an inaugural rating of two, defined as a good ESG profile. We are delighted Clariane work over the past five years has been acknowledged by the rating agency, and we intend to further our effort in this domain. Finally, we confirm our operational guidance for the full year. This means organic revenue growth of more than 8% and a stable EBITDA in value. But we are now expecting our leverage to be around 3.8, which includes the impact of the new real estate market environment. On slide four, we have you have here the revenue bridge for the first nine months of this year. You can clearly see the three drivers, with volume growth at 5%, pricing increase at 5.2%, and the impact of external growth with mainly Grupo 5, contributing an additional 3.9% to our revenue. Personally, I'm quite happy to see these three motors, of course, working in such a balanced way. On slide five, now, you can see that the main driver in our revenue expansion in long-term care has been the continued and marked improvement in occupancy rate over the past year, as the sector return to normal. The rate was 89% in Q3 of this year, and 160 basis points progression from one year ago. On slide six, focus on healthcare, which represents slightly more than a quarter of our revenue. In this activity, the story this year has been the acquisition of the Spanish platform, Grupo 5. It's a great company that is largely, largely outperforming its market and considerably strengthening the group mental health business. We expect this business in France, Spain, Italy, to generate at least 300, 330 million EUR of revenue in 2023. Moving now to slide seven, to our performance by geographies. All the region grew well, as organic growth range from 6%-14%, depending on the region. The volume impact on growth was well-spread throughout all the region, while the price component was more important in Germany and Benelux. Let's move to France on slide eight. In our largest country, business level remained firm, with revenue up 6%, 6.1% on organic basis over the first nine months, with an acceleration to 6.4% in Q3. Revenue in long-term care was mainly supported by higher pricing and by a slight increase in occupancy rate to 87.4%. This slight increase is mainly related to a high level of short stay last year during the summer. Today, occupancy rates stand at 88.6%, up 110 basis points on last year comparable figure. Our current occupancy rate include a larger share of long stays, which is a solid foundation for the coming months. Organic growth in healthcare was 6%, with each of the sub-segment of activity growing well. Finally, community care grows, grew strongly in the first nine months of the year on the back of a strong performance of Petits-fils. Let's move to Germany in slide nine. With a significant price increase negotiated in 2022, revenue rose sharply in the first nine months of 2023. Despite a context of staff scarcity, we increased our occupancy rate by a percentage point to 87%. 2023 negotiations have been underway since the spring, with the various pricing authority to review across the fare applicable throughout the network. To date, the result of this negotiation represents an average increase of 10% on an annual basis. On slide 10, you have our performance in the Benelux region, that rose to 14% on an organic, on an economic basis since the beginning of the year. Activity was strong in both markets, as occupancy rates increased significantly in Belgium and through the strong ramp up of greenfield in the Netherlands. They were also complemented by steady price increase. Moving to our last geographic region, on slide 11. In Italy, growth remained robust, with revenue rising by 7% on organic basis, driven by an impressive increase in occupancy rate. Adding an acquisition made in 2022, reported growth was 11. In Spain and U.K., revenue growth was fueled by increase in occupancy rate, price in the U.K., and the dynamism of mental health in Spain. On slide 12, you have detail on our inaugural Sustainable Fitch evaluation. Fitch analysis reflects how Clariane integrates ESG consideration into its business, strategy, and management. The assessment recognized our effort over the past year. On slide 13, we have outlined the credit financing milestone achieved since the beginning of the year. All in all, this operation reflects the confidence of our financial partners in Clariane and its financial and ESG strategy. Looking ahead, we are confident in our ability to realize two more real estate monetization operation by the end of the year. On the right, you have the breakdown of our debt and can see our maturity profile following this recent operation. Since the beginning of the year, we have extended EUR 650 million in debt maturity beyond the next two years, and the average maturity in our debt after this refinancing have moved from 4.1- 4.5 years. On slide 14, we have mapped out the evolution in leverage over the past 15 months. You can see that our expectation for year end now stand at 3.8, down from 4.1, end of June, but above our previous guidance of 3.5. Today, in light of the appraisal of the new context in the healthcare real estate market, the main exchange is related a more cautious appraisal of healthcare real estate market condition, with two significant impact. A cap rate increase comparable to H1 to circa 5.8%. A reduced financing appetite from investor and lenders, with LTV estimated at 55%. Finally, on slide 15, after this element and our updated leverage, you can see the confirmation of our operational guidance for the full year. This means organic revenue growth and more than 8% of stable, and stable EBITDA in a month. Thank you, all. Now, let's turn to the Q&A session. Alan, can we move to questions, please? Ladies and gentlemen, if you'd like to ask a question, please press star one on your telephone keypad. To withdraw your question, please press star two. We'll pause for just a moment to allow everyone an opportunity to signal for questions. I will now hand over back to the floor for written questions. Okay, we do have some questions on the chat. First one: What is your confidence regarding real estate transaction closings in the coming months? I would say, it's always difficult to speak about a deal which is not completed, because if it would have been completed, we will have announced it. We are clearly confident to complete those. As you know, one is expected in the week to come, and the other one probably end of November or beginning December. And I would say we are exactly on the same trend that what has been shared with you in July. Okay, another question on ongoing disposal of assisted living facilities. Can you comment on the status of this proposal? Same comment, a deal is not achieved until it is not fully completed and the cash is not in. But clearly, we are totally confident to complete it before year end. And we have other deal—no big deal this year, as you know, but a bit less in number and in value than last year. But still, some deal which are most of them to be complete before end year, in November and December. Okay. And another question on disposals. You mentioned some disposals to come. Can you comment on this, on site, in particular? Yes. As you know, we want our leverage to decrease. One of the ways to do it is to increase the number of disposal. We are used to do it, but as you are—I have just shared with you the number of disposal and the value of disposal in 2022 was higher than in 2023. We need to at least be back to 2022, and we want to increase the amount of disposal. We are reviewing all the assets of the group. Some of them are not fully necessary for the strategy. So in line with the strategy of the group and the detailed review of our network, we are going to increase the number of disposal in the year to come. Okay. We do have a few questions as well on financing and in particular, on next maturities coming. The question being, how—what are the next short-term maturities and how will you address it? As you know, our main, we have two maturities before end year. We have some, like, each quarter, some maturity in real estate, and we have a significant maturity in Schuldschein. We have no issue in the reimbursement of both maturity. And we are working in, even though we have said and shared with you that we, it's much more difficult to achieve real estate based on, sorry, debt on real estate, we are still making some. We are not moving from to zero. It is less easy than before, but we are still working on the subject, and we don't see big issue in achieving our level of real estate debt and the monetization in vehicles. Okay. If we continue to go through questions on the chat, we have a question on CapEx reduction plan. Are you on track, sorry, with your ambition? And which kind of CapEx do you plan to reduce in full year 2024? Our goal that we share with you in July is still the same. We should be, for the second half of this year, including the small disposal we have planned, we should have a free cash flow above CapEx, and it will be clearly the case next year, in 2024, that our free cash flow will be above our CapEx, which are in an envelope of EUR 250 million, excluding maintenance. You know that we are always speaking about CapEx after maintenance. The 2.5% of maintenance CapEx will be achieved anyways. So when we are speaking about reduction of CapEx, development CapEx, M&A, and real estate. These three families of CapEx should be decreased to EUR 250 million. It's difficult for me because as we are planning CapEx and to say where we will be exactly end of this year. But overall, our target of both target will be achieved. Okay. Another question on the chat regarding leverage, and notably the new figure provided for leverage end of 2023. Could you provide details on why this has been changed from 3.5- 3.8? I don't know if you remember what we have shared with you i n July regarding the situation in June. We had already a decrease in the value of real estate by 20 basis points, or an increase of cap rate of 20 basis points. We were believing that the increase of the second half should be significantly balanced by the index. What we are seeing today is in some country, and namely in Germany, the increase of cap rate, and so as a consequence, the decrease of real estate value, are stronger and quicker than expected. So we included in our valuation of real estate expected valuation of real estate end of this year this new cap rate which by definition has an impact on our leverage. The second impact is our ability to achieve real estate debt at the level of 58%-60%. You know that we have a cap of 65, but it's quite sensible, and our ability to be- we were at 58 in June. I don't think we will be in a situation to have 58% of our real estate as a debt. 58, yes, the value, 58% of the value of our real estate as debt. So we are seeing less appetite than before and a bit more difficult way to set up real estate debt. As a consequence, our LTV should probably, I guess, decrease to what was our former usage at 55%. I just want to comment that it's clearly something which is cautious. We may, we probably, maybe we are a bit cautious. By definition, it's forecast. It's what we are seeing currently of the market, and maybe we were a bit optimistic. It's very difficult. We know that we are in a trend of decrease of asset, and this trend is a mix of many country. In 2022, we have been surprised by the quite significant decrease in the value in U.K., when most of the other country didn't move a lot. In 2023, we were expecting something stronger, and it is still not too much, except in Germany, where we have a significant impact on the market of the increase of cap rate. So it's a mix of the increase of cap rate, as a consequence, the decrease of the value of our real estate and our ability to generate debt among this real estate. Our new assumption is that we should be more at 3.8 than at 3.5, mainly for this reason. I think we have a question on the call. Alan? We will take our next question from Patrick Gilson from Société Générale. Your line is open. Please go ahead. Yes. Good afternoon, Philippe and, Stéphane. Can you hear me, please? No. Yeah, yeah. Can you hear me? Yes. Can you? Yeah, yeah, perfectly. Good afternoon. My first question is on the comments made by Sophie Boissard in the press release. She says that regarding the situation, you are considering various option, including the disposal of some assets. Could you, could you comment on the other options which are not the disposal of Opcos, for instance? Well, yeah, you may know that I'm not going to be extremely precise regarding this answer. We have ways to—First, we are making savings, clearly, we want to improve our cash flow, and one of the... I would say, we have not been, I would say we were quite cautious when we were preparing 2023. And I have to say that the impact in Germany market with a new situation regarding working capital has been hurting us. The real estate market is decreasing, clearly, a bit too quickly. And our ability to improve our EBITDA and our cash is clearly not at the situation we were looking at. So, all the group is now only working on increasing generation of cash, which will be for 2024 and starting 2023. So increasing our generation of cash, and any other kind of option which are, by definition, when we are in a situation, I would say everybody knows that we need to find solution between before 2026, meaning it has to be implemented during the year 2024. We are running in working on all the alternative, and we will see what is the best to be put in place. Okay. Thank you for this answer. Regarding the targeted disposal, I'm not sure I have understood if you intend to make some targeted disposal of Opcos before the end of this year? No, before the end of this year, we have what has been announced, meaning mainly the situation regarding service flat or RSS little activity in France, which should be disposed before the end of this year. And it's not a surprise because it was already booked as held for sale in 2022 and in June. And we have some other small unit and some real estate. But I will say, what we are expecting to do represent around EUR 50 million before the end of this year. It's going to be a small year of disposal in 2022, in 2023, sorry. We really would like to be back to 2022, where we were, more than EUR 100 million of disposal, and probably increasing more, for the year 2024 and 2025... but nothing more than what was expected to come before, before Johan. Okay, thank you. And my other question on slide 13, I'm not completely clear about the third box in the slide, where you mentioned continued rollout of real estate financing during H1 2023, to more expecting to four. The continued rollout of real estate, are you speaking about monetization there, or are you speaking about financing of real estate? Both. And both. When more are you speaking about financing or are you speaking about disposal of real estate or monetization? No, financing. In this slide, we're speaking about financing. Okay. We still, what I was describing is, we need a lot, as we are amortizing our debt on real estate, we need to have a kind of, we need to have new real estate debt each year. Okay. If we do nothing, our level of real estate debt is decreasing year after year. Okay. Our ability to replace the debt is a bit slower than before. But we still are generating debt, and clearly there is, it's more a question that we are amortizing quite a lot, so we need to deliver quite a lot, but we are still going to deliver some new real estate debt. Okay. So, the EUR 150 million refers to rollout that were made in first half? And, and when you speak about two more expected in Q4? No, no, no. The two more expected are related to monetization. Monetization. The rollout of 150 will not represent 150 for the second half, but will be not million. Okay. But when I look at the EUR 207 million in the bar in the chart for 2023, which is what you have repaid to for real estate debt in the second part of 2023, so EUR 207 million, what is your visibility on your ability to refinance 100% of this EUR 207 million? We, we, we- To all. We'll not refinance 100%, but we will refinance between 75% and 85%. Okay. Thank you very much for that. The discrepancy is affecting our leverage directly. Yes, of course. And maybe I would say final question on this from my side on this topic. What is the level of liquidity that you expect for the end of the year, bearing in mind that was 875 at the end of H1, and while taking everything into account, where do we expect to be, including or not, the EUR 300 million and the EUR 280 million of additional real estate monetization? I would say that as we are currently achieving our vehicles and a reasonable level of financing on real estate, we don't see any issue regarding liquidity for the end of this year. Thank you. Okay, if we go back to the questions online, we have several questions on liquidity, and in particular, have you drawn your RCF today? No, we have not. Okay. Also, several questions on operations in Germany. Do you see, so what is the current trading in Germany? Do you see further price increase? And, what is your view on working capital perspectives? I will try to be short. As you can see, when you read the slide about Germany, you see a very nice increase on the pricing, and you see quite a good increase too on the occupancy rate. We are not at a very high level, but not nowhere, because we are around 87 now, which is reasonable. What are the issue in Germany? The main issue is, we are struggling to increase further our occupancy rate due to the lack of skilled staff. It's not a new story, because it's the same topic since many years, but clearly, the COVID has not helped in improving the situation. The good news on this topic is, a new law, which is called PBEM, at the federal level, which allow us, which will allow us, which will come to allow us, because as you know, it has to be pushed down, land by land, to get some flexibility between skilled nurse and non-skilled nurse. Meaning for the same level of skilled nurse, we will be in a situation to welcome more residents or with some, with our current level of resident, we will be in a situation to reduce the number of skilled nurse when they are too expensive, which is totally new, which has, which we are not expected now, but it's clearly in the situation. That one, one of the first topic which will help us to increase the situation against staff. It will take a bit of time. It's why we have shared with you in July that recovery in Germany will be a bit longer than expected. It's clearly the case. It will take a bit longer than expected. Regarding price, we were expecting a significant increase in price in 2024. Negotiated in 2023, applicable in 2024. Unfortunately, what we are going to obtain, which is not nothing, because we are in average, we are in the middle of the negotiation, not totally completed. But our expectation is to have something like 10% of increase. This ten percent are going to help us for 2024, but are not going to cover the discrepancy we had in 2023. But same story. We have things to pay them and things the other way to work on the tariff. Some area in which we will be in a situation to improve margin. As an example, we can work with the authorities saying, "Okay, we would like to reduce the number of beds in the facility from 120- 100 per resident, because we believe that it's too difficult for this facility to welcome 120 people." The advantage of such request is our fixed cost will be divided by 100 when they were divided by 120. So with the same occupancy rate, we will be in a situation to increase our margin. So the situation in Germany is moving the right way. It's not. It's clearly not easy to see it in the result, because we had such a difficult situation in end of 2022 and beginning of 2023, when we have both a very difficult COVID exit and a huge increase of cost with reduced increase of price. From the moving from that situation to the current one, the light in the tunnel is clearly much stronger. But again, we are in Germany, everything has to be negotiated locally, very detailed. It takes time, so it will be a slow recovery over 2024 and 2025. We will take our next question from Katarina Borichevsky from BlackRock. Your line is open. Please go ahead. Katarina? No, Katarina. Katarina, sorry. Katarina, maybe your line is under mute. Please unmute yourself. Hello, can you hear me? Yes. Oh, hi. Thanks for taking my question. I just wanted to ask, the maturity wall that you show in your slide, is that as of June, where you show still EUR 550 million of maturities remaining for 2023? And if so, if it's for June, would you be able to give us an idea of how much of that is remaining as of now? It just... I understand that you... Oh, there's a lag. Sorry? There's a lag. Hi, can you hear me? Yes. Oh, yeah. Yeah. So the maturity chart that you show in your presentation, is that as of June? And if so, the EUR 550 million of maturities that you have outstanding, how much of that is currently outstanding as of October? No, the maturity is end of July, so as in set up, end of July. So we have included what has been renegotiated in July, mainly our term loan of EUR 500 million, which has been renewed to end 2026. So in the 2023 column, we have only the maturity of the second half. Okay. What are the maturities outstanding as of now? Oh.... hello? Yes, because in dark blue, you have manufacturing, which with roll from a semester to another semester, so we don't have any issue with the dark blue. So we have mainly the light blue, with, which is, no, sorry, orange with Schuldschein, which represent EUR 200 million in December. Okay. And, the light blue and the dark blue? The light blue- The red. The light blue is split between two parts. One of it is bridge because we have some we need a bit of time between the period we are buying real estate and the period we are putting in place. So half of it is bridge, which will be renewed, and half of it is real estate amortization, and it's spread out over the period. So I guess you have a small half of it, which is already repaid. Got it. And what about your GBP-denominated debt that's resetting next year to a quite high coupon. You had previously said you wanted to refinance that with some other, perhaps more permanent form of financing in your, on your, unencumbered U.K. debt, on your unencumbered U.K. real estate, sorry. Is that still the case? We are working on many alternatives regarding this debt, which is not included in the chart, which is only a debt, and this one is a hybrid. And clearly, the maturity is April. We are working on it. Okay. Do you have a valuation of the unencumbered assets that you own in the United Kingdom? Will that be provided by Cushman at some point, or do you disclose that? Yeah, it's our real estate in the U.K. as of today, we don't have any specific, only a small finance note on it, and we don't have any investor. This vehicle is one of the vehicle we would like, we want, we will achieve before end of this year. And the value has slightly decreased since the acquisition, but it's around GBP 200 million pounds. Value of real estate. Yeah, and this value is available in our annual report from Cushman & Wakefield on our website. Okay, thank you very much. We will take our next question from [Peter Osevich from Cairn]. Your line is open, please go ahead. Hello, and thank you for taking my questions. Just a couple of follow-ups, really. So, maybe starting with the real estate monetizations that you expect this year, are those referring to new transactions that have not been announced yet, or that refers to the transactions already announced that will be closing by the year end? Oh, it's always. As we are speaking since the beginning of this year about this transaction, in fact, we have, we are going to, we want to achieve four transactions. Two of them have been completed first half. One of the two completed in first half has been announced in March and completed in June. It was a vehicle with Covéa and Crédit Agricole. This vehicle has been completed in June. Another vehicle, but a development one, has been achieved also with Banque des Territoires, and this one has been announced, sorry, in June, and should be completed, I guess, in November. But it's a development vehicle, so the investor is not paying a lot when he join, because he will pay during the development phases. That is for the two first vehicle. After, we have two other vehicle which were planned in the second half. We are still planned the second half. One in U.K., which has been announced, as one of the vehicles that we want to, monetize. And we have not announced any, update, of what has been done on this vehicle. We are just saying that we will complete it before end of this year. And the last one, which is a French one, same topic. We have not announced. We will not announce anything before the closing of both vehicles, because it's quite difficult for this, regarding the situation. Entering is in negotiation or having a signing is a bit too complex, so we will announce it the day of closing. Okay, understood. So basically, from the two more transactions, two more monetizations this year, one already announced in the U.K. to be completed, and one which has not been announced, and is to be announced and completed? There were none of them have been announced. The two vehicles have been set up, so we have always said that we have one vehicle in the U.K. that we want to monetize, and one vehicle in France we want to monetize, and that's it for both of them. The only thing is what we have said, that our current status of work in U.K. is a bit more advanced than the one, the current status of work in France. Okay, understood. Thank you. Now, when you are monetizing your real estate, are you generally selling the entire equity stake, or you are selling a minority stake and keeping some still? We are selling a minority stake. Okay, so you will remain involved in those. When you make those disposals of minority stakes, does it come with any committed CapEx that your new equity partners expect you to commit over the coming years? Of course, we have some commitment on CapEx, as an operating company and as a co-owner. So it's depending to the law in every country, but clearly it's including the decision of CapEx each time. Okay, but basically, that means that you will... you have a committed CapEx for the properties, the equity in, you are currently monetizing? Clearly, the committed CapEx, regarding most of the vehicle, which are the close one so are very small CapEx. It's maintenance CapEx, which are split between the landlord and the operating company. When we have a development vehicle, as one we have announced with Banque des Territoires, we have an envelope of CapEx, which are foreseen, which represent EUR 120 million. The ultimate decision to invest is done CapEx by CapEx, and I will say, the agenda of the investment will be spread over the three next year. Okay, thank you. Split between that, Banque des Territoires as a co-owner and us. Okay, that is clear. Just moving on to the occupancy rates. I think for July, you announced 89.2%, so the full quarter was obviously a little bit below that 88.7. So, what is the occupancy in, say, September or October? Currently, we are, I'm a bit surprised where we, maybe we were at 89 in August because of our end of July, because we have always- End of July. End of July, we have a significant part of short stay. So it's very often the case that we are decreasing during September, and having being at 89% end of October or mid-October is clearly a significant increase compared to 89 in July. So it is the same figure, but as the share of short stay is significantly less than the one we have in July, it's a good figure. Okay. And this utilization is reported on the same number of beds or larger number of beds? I mean, I'm trying to understand what that mean in terms of actual- We don't have big move in the bed. We have some decrease where we want to close bed or to reduce, but clearly overall, our number of beds is roughly the same since July. Okay, that's clear. Thank you. And moving on to the rents, and apologies if this has been at some point already disclosed. But to what extent are the leases you pay indexed to CPI or any other index? It's, we should have a dedicated call to that, because we have many situations with the various countries, and we are owners in some countries, less owners in other countries. And the values index are quite numerous. It's typically a question that you can follow with Stéphane or you are- Okay. Okay, I will do so. And last question for me, more on the high level. So obviously monetization of real estate is helpful, but given, you know, EUR 4.5 billion of that you have, I mean, they do not really move the needle that much. So of course, I mean, it's... I understand why you are doing this, but it doesn't really make so much of a difference. So is the goal to accelerate the pace of those monetizations into 2024, 2025, or there are some other levers that you are considering? No, most of the real estate monetization will be completed end of this year. So the remaining available real estate for the next year is quite low. But our goal is still to be back to a leverage of three or around three and probably later. So we believe this is, I would say, a good level of leverage for an Opco in the year to come. But we are working to achieve it. Okay, thank you. Thank you. That is all the time we have today for question- and- answer session. Now, I would like to turn the call over back to speaker for closing remarks. Thanks to all of you. I hope you have answer to all your question, all explanation was clear enough. Do not hesitate to call the team, and clearly Stéphane, who has joined us a few months ago now, is fully on board, and knows the group by heart, and will be very pleased to give all his explanation. Thanks to all of you, and see you. Thank you for joining today's call. You may now disconnect.