Earnings call transcript: Clariane SE Q1 2025 sees organic growth, stock declines

Clariane SE reported its Q1 2025 earnings, showcasing a 4.8% organic revenue growth, driven by improvements across all business segments. The stock dropped 6.73% to $3.52 in after-hours trading, continuing a challenging week that saw a total decline of 8.66%. This recent volatility comes despite the stock’s impressive 282% return over the past year, reflecting mixed investor sentiment about the company’s trajectory.

According to InvestingPro, analysts have identified multiple key factors affecting Clariane’s performance. InvestingPro subscribers have access to 10 additional exclusive insights about the company’s current position and future potential.

Key Takeaways

• Clariane SE achieved a 4.8% organic revenue growth in Q1 2025.
• The stock fell by 6.73% in after-hours trading, indicating investor caution.
• Revenue growth was primarily driven by price increases, overtaking volume growth.
• The company confirmed its 2025 outlook, projecting 5% organic revenue growth.
• Occupancy rates improved significantly to 90.4%.

Company Performance

Clariane SE demonstrated solid performance in Q1 2025, with all business segments contributing to a 4.8% organic revenue growth. The company saw a reported revenue increase of 0.7%, despite a negative scope effect of 4.1%. The long-term care segment, comprising 63% of the business, led the growth with a 5.6% increase. The company’s multi-local strategy and strong geographical presence helped maintain its competitive edge.

Financial Highlights

• Revenue: 1.32 billion euros, representing a 0.7% increase.
• Organic growth: 4.8%, with a comparable growth of 5.5%.
• Occupancy rates: Improved to 90.4% from 85.6% in Q2 2022.
• Development CapEx: 200 million euros allocated for network upgrades.

Outlook & Guidance

Clariane SE reaffirmed its 2025 outlook, expecting approximately 5% organic revenue growth and an EBITDA growth of 6-9%. The company aims for a core leverage ratio of less than 5.5x. Long-term targets from 2023 to 2026 include an average annual revenue growth of 5% and a margin improvement of 100-150 basis points.

Executive Commentary

CEO Sophie Boissard expressed confidence in the company’s trajectory, stating, "We will continue to move ahead in the coming months with a great deal of determination and confidence." CFO Gregory Lidovsky highlighted the shift in revenue drivers, noting, "The price effect has overtaken volume to become the main driver of our revenue increase."

Risks and Challenges

• Wage Inflation: Varying wage increases, particularly in Germany, could impact margins.
• Market Conditions: Geographical pricing variations may pose challenges.
• Operational Costs: Continued investment in network upgrades could strain resources.
• Competitive Landscape: Maintaining a competitive edge in a recovering market.
• Economic Uncertainty: Broader economic conditions could affect future performance.

Clariane SE’s Q1 2025 earnings report underscores its robust growth strategy, but the market’s cautious response highlights the challenges ahead. The company’s focus on pricing and strategic investments will be crucial in navigating the evolving market landscape.

Full transcript - Clariane SE (CLARI) Q1 2025:

Alan, Conference Coordinator: Welcome to the Clariant q one two thousand twenty five revenue conference call. My name is Alan, and I’ll be your coordinator for today’s event. Please note this call is being recorded. And for the duration, your lines will be on listen only. However, you will have the opportunity to ask questions at the end.

This can be done by pressing star one on your telephone keypad, and participant can also submit their questions over the webcast. I will now hand you over to your host, Sophie Boyser, CEO, to begin today’s conference. Thank you.

Sophie Boissard, Chief Executive Officer, Clariant: Thank you, Ellen. Ladies and gentlemen, dear investors, good afternoon. Welcome to the Clariant Group’s First Quarter twenty twenty five Revenue Presentation. I am Sophie Boissard, Chief Executive Officer, and I am today together with Gregor Lidovichy, our Chief Financial Officer. Let us begin on Slide five with the four key highlights of this first quarter.

Revenue for the three months to end March 2025 rose by 4.8% on an organic basis. This corresponds to a 5.5% increase on a comparable basis. Second, all business segments and regions contributed to the organic revenue growth, with volume growth coupled to positive price and CASM effect. Three, our 2025 outlook is confirmed. As a reminder, our guidance for this year is composed of organic revenue growth of around 5%, EBITDA growth of between 69% pre IFRS 16 and excluding disposals whole core leverage ratio of less than 5.5x.

Finally, the quarter saw us move forward on our disposal program with more than EUR 600,000,000 of the program now secured as opposed to a little bit more of EUR 500,000,000 at end of twenty twenty four. Total proceeds from this asset disposal program initiated at the end of twenty twenty three as part of our plan to strengthen our financial structure are expected to amount to EUR 1,000,000,000 by the end of twenty twenty five. I will now hand over to Gregory to provide additional details on our revenue figures. Gregory, the floor is yours.

Gregory Lidovsky, Chief Financial Officer, Clariant: Thank you, Sophie. I will begin on Slide seven, where you can see our revenue growth by geography. The difference between reported and organic growth comes from the impact of disposals carried out in 2024 as part of the plan to strengthen the Group’s financial position. Importantly, growth rate must also take into account the fact that there was one less business day in 2025 than in the first quarter of twenty twenty four, which was a leap year. Adjusted for the factor, organic growth was 5.5.

All regions posted solid organic growth this quarter with Germany leading the way at plus 8% on the strength of its recovery program, driven by steady growth in business volumes and the ongoing catch up in prices that began in 2023. Fewer than France, and more specifically on long term care, in this segment, revenue grew 2.8% organically supported by price adjustment. Affected by the flu deliveries, particularly quickly in 2025 and despite a significant increase in new arrivals compared with previous years, the average occupancy rate was almost unchanged at 87.4%. It should be noted that the occupancy rate was 88% in the first quarter of twenty twenty five when stripping out the beds temporarily unavailable because of refurbishment and improvement programs. Moving now to slide eight with the year on year revenue bridge.

The plus 0.7% increase in reported revenue growth can be broken down between an increase in business volumes in all segments that boosted revenue by 1.1% corresponding to a net 13,000,000 uptick. This came from a higher volume of days built in mature networks and additional capacity coming on stream. Price increases that had a positive impact of 3.7% and boosted revenue by EUR47 million, with the revenue growth essentially coming from the long term care segment in France, Germany and the Belgium, Netherlands region. And an important negative scope effect of minus 4.1% of EUR51 million due to the disposals made in line with the group’s financial strengthening plan. The main impact corresponds to the SAIL UK and home hospitalization activities in France.

Looking now at the breakdown in revenue by activity on Slide nine. Once again, the revenue increase was well spread throughout our balanced portfolio. Long term care, which accounted for 63% of the group’s business activity this quarter, grew 5.6% on an organic basis and 6.3% when excluding the Lipia effect. Growth was driven by the ongoing increase in business volumes despite the impact of very strong flu epidemic this year and by pricing upticks. Specialty care, accounting for around 25% of the group total with organic growth of 1.42.2% when excluding the leap year effect.

To note, revenue in France in this segment was almost unchanged, reflecting higher volumes coming from the strong development of outpatient activities at ’24. The basic scope for copaysomine prices was temporarily unfavorable with annual index linked price increases being implemented on 04/01/2025. And revenue in community care with brands, including petty fees and AJV, represented 12% of the group total, posting the strongest organic growth at 7.88% when excluding the lepia effect. Here too, the reported revenue was down due to scope effects. On Slide 10, you have the updated snapshot of the evolution in our occupancy rates.

The continued improvement in our occupancy rates since mid twenty twenty two had been the main driver in our revenue expansion in long term care as the sector returned to normal. To note, since Q2 of last year, the price effect has overtaken volume to become the main driver of our revenue increase. From a low of 85.6% in Q2 of twenty twenty two, with now reached 90.4% in this quarter. On a year on year basis, the improvement is 80 basis points despite the impact in France, Germany, and Spain of the very strong flu epidemic. Looking ahead, this trend is very positive.

We have room for embedded growth in our existing capacity. I will now hand back to Sophie to conclude on our refinancing plan and outlook for 2025.

Sophie Boissard, Chief Executive Officer, Clariant: Thank you, Gregory. Let us now move to the update of our plan to strengthen our financial structure on Slide 12. As you know, with the successful completion of the capital increase in the first half of last year, Clariant has completed the first three stages of this plan, which was announced in November 2023. The plan was achieved despite challenging market conditions in a sound time frame, considering volatility remains strong in the following quarters. The fourth and final part of our plan consists of a program to dispose of operational and real estate assets and to raise EUR 1,000,000,000 in gross disposal proceeds.

Today, slightly over 60% of that amount is already realized or secured. On Slide 13, you have the principles that have guided and will continue to drive our assets disposal strategy. At end December twenty twenty four, Clarion had already completed or secured disposals generating gross proceeds of EUR $5.00 4,000,000. Since the beginning of this year, Clariant has continued to implement its program in accordance with its strategy to become more focused in terms of business activities and geographical footprint. During the first quarter, we secured six further disposals relating to around 15 care facilities or networks in France, Germany and Italy for around €100,000,000 Clarion is currently implementing various disposal processes of various size and geographies to complete its asset disposal program and to ensure that we achieve our target of EUR 1,000,000,000 gross disposal proceeds by the end of twenty twenty five twenty twenty four twenty twenty five, sorry.

I will now conclude on Slide 15 on our unchanged guidance for the current financial year and for the period of 2023 to 2026. I have already outlined in introduction our 2025 yearly guidance, I will remind you of our outlook for the twenty twenty three-twenty six period. We are counting on average annual growth rate in revenue of around 5%. This will come with improvement in margin with a target increase of 100 to 150 basis points by 2026, pro form a of disposal and 23.26 scope effects. And at the end of ’26, we expect our whole core leverage to be below 5x, consolidating the group’s financial structure and the recovery in operating performance.

Our ESG commitments remain unchanged. With the achievements of our plan to strengthen our financial structure, the strong business momentum and the sound fundamentals of our business portfolio, we will continue to move ahead in the coming months with a great deal of determination and confidence. Thank you very much for your attention. Operator, can we move to questions, please?

Alan, Conference Coordinator: Thank you. If you like to ask a question or make a contribution on today’s call, please press 1 on your telephone keypad. To withdraw your question, please press 2. You will be advised when to ask your question. We will take our first question from Laurent Gaelbart, BNP Paribas.

Your line is open. Please go ahead.

Laurent Gaelbart, Analyst, BNP Paribas: Afternoon, Sophie. Good afternoon, Gregory.

Sophie Boissard, Chief Executive Officer, Clariant: Good afternoon, Laurent.

Laurent Gaelbart, Analyst, BNP Paribas: Yeah. I have three questions. I hope you you listen you can listen to me clearly. So the first one relates to your occupancy rate on French nursing homes. We have been seeing a kind of a slight decline in Q1 due to the epidemic.

Could you let us know what has been the trend in April? I mean, do you see an upturn coming in and the further improvement of your occupancy rate? So the second question relates to hosted and to your SSR business. You mentioned the press release that basically the implementation of prices being pushed forward to April 1. So can you explain a bit what has been happening and what kind of tariff revaluation you expect from April onwards?

Third, on the disposal program you have been achieving since the start of the year, so the EUR 100,000,000 of deals being closed, could you let us know what is the turnover in front of that and EBITDA? And last one, could you a bit guide us in terms of impact, scope effects we are going to see for the year with all the disposals that we been achieving today? So what would be the overall full year impact, what you have been doing as we speak in terms of supply and EBITDA if you can? Thank you,

Sophie Boissard, Chief Executive Officer, Clariant: Laurent. So I will take the two first questions. And agree, Guillaume, you take the third one on the impact of our disposal program on revenue. So on the nursing home France, yes, you’re right. We have actually, we had the highest ever inflows of entries, growth inflows.

But of course, we faced also a pretty lengthy period of seasonal infections from December on to March, which actually globally, not only in France, represent 90 bps equivalent impact on occupancy rate average. So it’s pretty significant. Currently, since March, we see net occupancy resuming since actually, epidemic is really stepping going down at last. And we are back to something that is above eighty eight percent. This taking in consideration the fact that we have also several five projects where we did some structural work, and we are still expecting licenses to operate to be granted again after the delivery on the work.

So this will present some 200 spares that are kind of impacting the basis. So all in all, occupancy net occupancy is going up again since March, and entry inflows are really good and strong. We’ll see also further trends, as I always that I’ve already highlighted, The level of dependency and the type of profile, has been, is actually more and more towards, happier dependency and then the profiles of residents and the profile of states is definitely, moving forward onto geriatric long term care rather than, elderly care as it used to be some five or six years ago. When it comes to the post acute and the SMA, so care rate, actually, the environment has been a little bit, volatile over the first quarter. What I can say in a nutshell is that we will benefit all in all this year from an average of plus 2% indexation on a yearly basis.

This being the result of a blended effect, we have a plus 3% on the mental health, which is representing a rough a little bit less than 30% of our network. We have a zero plus on the post acute indexation that we benefit from an increase on the average care mix effect on the back of the reform last year. So this is why the pure pricing effect is something on a yearly basis around plus 2%. And we have, of course, the active case mix management that comes on top of this, And this is going to support the growth in that segment plus the outpatient activity that is not capped in terms of volume. But all in all, plus 2%.

Then I’ll leave the last question to Gregory.

Gregory Lidovsky, Chief Financial Officer, Clariant: On Laurent, yes. On on the question on the disposal program, and as you can see already in the in the first quarter of the year, we had an impact of disposal of €53,000,000. And and and when you you project on the full year basis, taking into account as well as the EUR 600,000,000 secured disposal, we’ll have a scope effect on the top line of EUR 160,000,000 on a full year basis.

Laurent Gaelbart, Analyst, BNP Paribas: Thank you. And regarding the deals you have including in Q1, so what what is it Ofco? Is it propco? Is it was it profitable? Was it dilutive to the group, etcetera?

So

Sophie Boissard, Chief Executive Officer, Clariant: it’s mainly 90% COA, a very small component of real estate, and this were definitely above the below average EBITDA margin of the company or facilities that would have needed CapEx in the next three years. So this was so it is definitely contributing to the margin profile of the company looking forward. And the multiple

Gregory Lidovsky, Chief Financial Officer, Clariant: In 2013. In average, that is that we have since 2024 and multiple around the above the. What you need have in mind as well on the disclosure program? Blended one. On the blended And and the disposal program is set up as well for the for for the delivery.

That’s the key key criteria as well when we look to to to get this proposal.

Laurent Gaelbart, Analyst, BNP Paribas: Thank you. Good for me.

Gregory Lidovsky, Chief Financial Officer, Clariant: Thank you.

Alan, Conference Coordinator: We will take our next question from Pierre Botsky, HPK. Your line is open. Please go ahead.

Pierre Botsky, Analyst, HPK: Hey, thanks for taking my questions and congrats on a solid set of numbers. A few from my side. Just on the multiple, I didn’t hear the number of the disposal program. What was that? The blended multiple, and is that blended for real estate and operations, or is it just the blended operations multiple?

And then for the real estate, could you provide the cap rates at which you sold on average?

Gregory Lidovsky, Chief Financial Officer, Clariant: For the disposal and the blended blended for OpCo and PropCo. So it’s another blended for the €600,000,000 secured disposal program. And then on the cap rate, what’s important to have in mind, and this is what we put in the last financial release, tend to work with capitalization rate of the geographic where the disposal program has been made.

Pierre Botsky, Analyst, HPK: What’s the blended multiple, the number?

Gregory Lidovsky, Chief Financial Officer, Clariant: It is between 11 times and and slightly times. Yeah. For for the whole 600,000,000.

Pierre Botsky, Analyst, HPK: Okay. Understood. Great. Yeah. And then couple more financial and operational.

One, how are you thinking about the 2526 Schulzheim maturities? Are you planning to address these with disposals or refinance? And then on development CapEx, the 200,000,000, how how should I think about that? Is that mainly on sort of a few select large projects, or is it refurbs across the states? And I guess, where are you spending most of that money on?

And then in the new term loan docs, is there anything obviously, there’s a dividend blocker above a certain leverage level. Is there anything that prevents you from redeeming your perpetual bonds as well since that sort of could be seen similar to to a dividend? And then lastly, on the impact of the leap year, how maybe I’m thinking about this wrong, but how can it be such a big impact if it’s only ninety one versus ninety days? And then, for example, in Italy, your organic growth would have gone from 2.2% to 3.3, I. E, a 50% increase on one extra day?

Or yes. Is is there another accounting mechanism there?

Sophie Boissard, Chief Executive Officer, Clariant: So for the the the last question, it’s probably we we need to clarify something because, actually, it’s it’s only one day over ninety ninety days. So it’s definitely we have we have have just highlighted the impact on the organic thinking. I think on Italy, since we have done some, some disposal there, I think it’s just a clarification on the basis of comparison. So it has nothing to do with the, with the leap year. On the on the if

Gregory Lidovsky, Chief Financial Officer, Clariant: you want on the, yes. You’re right.

Laurent Gaelbart, Analyst, BNP Paribas: And maybe if you add a look

Gregory Lidovsky, Chief Financial Officer, Clariant: to to 2025, it’s a year we we don’t have, or we have a limited amount of debt maturities in 2025 mainly and and like you pointed out correctly, they are linked to Shukshan and and real estate debt. Obviously, we will look from an opportunity and primitive way to to work on maturities as well on the on the Shukshan. But what we need to have in mind is that the plan to reinforce the capital structure as as as of the group as well and the and the and and the way we we work on the disposal program is as well a way to to address this this maturity. And then I I I would maybe give the the question on the development to Sophie, but you have question on the on the SFA for the dividend and as well for the agreed. Yes, you’re right.

When it comes to hybrid and the SAP documentation, prevent the group from replying hybrid instruments with debt when the wall call average is about five. That’s why, you know, everything what we are mentioning and the target of the Volco leverage is key because when the Volco will be below five, it will be possible to work on the hybrid either on cash or on the equity or equity link instruments. And as well, when it comes to dividends, we have we have a constraint on the on the dividends with with the SFA when when we have a certain level, and it’s about four times what.

Sophie Boissard, Chief Executive Officer, Clariant: As you mentioned, actually. So the the the the dividend blocker you mentioned is correct, and that’s what we showed in our annual report. Development CapEx of February, actually, we are as you know, we have a pretty wide network, in our six geographies, 1,000 to a little bit more than 1,200 to different location. And we have actually a portfolio of 25, 30 projects that are currently under development. It’s mainly about rebuilding or upgrading or opening additional capacities in selected places.

And this, the total amount of this is actually is EUR 150,000,000 or EUR 50,000,000 internal development CapEx that we need to post. And on top of that, we have some, selected earnouts that are related to the the the development we did in Italy and in Spain with the pipeline. So we are currently delivering the last project related to this pipeline in Spain and in Italy. And this is also taken into consideration in the EUR 200,000,000 of development CapEx.

Pierre Botsky, Analyst, HPK: Okay, fantastic. That’s very clear. And and just one last one. I’m sorry for taking so much time. Can you maybe just share a bit of color on the situation in Germany?

I I think you had a a very big, staff cost inflation, a number of years ago, and now you you sort of have this catch up mechanism. And I think there was also a staff shortage that was sort of capping your occupancy there. I guess, yeah, just trying to understand how is that recovery going? How long will that cost catch up effect last? And then sort of by what time do you expect to return to, I guess, a normalized level of operations?

Sophie Boissard, Chief Executive Officer, Clariant: We are in good track to be there by the end of this year and probably, with the last part of repricing to be delivered next year, but this is only in a very good way. And when it comes to wage inflation there, this is definitely coming down. So we had to swallow a plus 25% in 2023. So this has been pretty steep wage increase. Definitely, with now the the the the current economic conditions and now that we we have we are living in an environment where wage inflation is definitely slower, we had to pass an additional five to 6% for this year that was pre financed by the repricing in ’24.

I do not foresee any further regulated wage increase in the next eighteen months so ’26. And this has been pretty well taken into consideration in the new coalition government program that has been published some days ago. So I see from a market condition point of view, I see a rather positive development in Germany for sure. And when it comes to staff shortage, we have been developing a lot our own training programs and having the highest number ever in apprentices and having a good retention rate on these young nurses. So the more we go, the the less we see tensions on on recruitment that would block us, in the in the volume we can deliver.

And we are currently traveling at the highest ever level of occupancy in Germany, which is close to 91%, way higher than what we used to have before the coronavirus pandemic crisis five years ago. And I think directionally that we can increase probably by one or two points at least in terms of volume, plus further repricing and plus some extension, as I said, in places where we are at 100%. So we have already we’re overguide already at full capacities. So directionally, the market conditions in Germany are pretty good and well financed.

Pierre Botsky, Analyst, HPK: Thank you very much. Super helpful and much appreciated.

Alan, Conference Coordinator: We will take our next question from Konstantin Guomenica, Cowen Capital. Your line is open. Please go ahead.

Konstantin Guomenica, Analyst, Cowen Capital: Hi. Good afternoon, and thank you for taking my questions. Maybe to follow-up on the most recent question, could you please comment on the overall labor inflation as a percentage for the group this year? And in particular for France, could you comment on the availability of staff, sort of absenteeism rates, churn rates that you’re seeing currently? Then the next one is gonna be on the disposals, just the 100,000,000 done year to date.

If you could, confirm the multiple just for this perimeter and also confirm how many beds, it relates to. And lastly, with regards to the inflation in the, clinics business in France, if you could just clarify whether that 2% is for the entire 2025 or just from April onwards?

Sophie Boissard, Chief Executive Officer, Clariant: Last question. The 2% blended is for, is for the whole year. K. On the clinic business. Staff so wage inflation blended for the company is around 2% with a pretty significant gap between Germany with another 65% to 6%, as I said, on the yearly effect and Italy or Spain that are more between 01%.

And France probably will be in the same region around 1% to 2%. So this leads to a kind of 2% wage inflation for the year. When it comes to the market, labor market condition in France, what can I say? I think from we have exactly, as I said, for Germany, we have a very strong organization to source and train and develop, the the the core, expertise that we need, nurses, assistant nurses, and this is working pretty well. So with the equivalent, more than 2,000, apprentices or, employees that are trained to, upskilled to to in the in the care profession.

So this is really working, well for for the company in France so that we have in our hands. Absenteeism rate, has been has been higher in q one twenty five than, than in q one and and previous year ’24 in France, very much related to the seasonal flu that I just alluded to, up by, average one one point, 100 basis point, percentage points, meaning that we are above 8% of the absenteeism, for the permanent staff, in France. I see now a decrease in April, but it’s a bit early to say. Definitely, absenteeism environment in France is, as it is, for all industries, a point of attention, and we are working hard with the support of our unions internally with the also incentive plan to to to lower this effect that is that is costing a lot of time and energy and also money, to our network. So, yes, absenteeism, pretty under control, and a strong action plan to, to decrease with good internal support on the plan.

Multiple, so we only communicated actually on the blended multiple on the 600,000,000 that we have delivered until now. I can say that for the last fifteen OkCos we have disposed in Q1, we were in a high single digit multiple. So definitely, as we said before, the facilities we disposed were not were definitely ones where that are deserving further CapEx or restructuring. So this is also reflected in the level of multiple. And when it comes to the number of beds, it’s 2,000 beds or equivalent beds, that we disposed, with this 15 facility.

I hope it’s clear.

Konstantin Guomenica, Analyst, Cowen Capital: Great. Thank you very much.

Webcast Moderator: Thank you, Sophie. As we have no other questions live, we have a few questions on the web. First one would be regarding the clarification that we could expect for the next quarters, and if you can give a little bit more flavor flavors regarding the geographies.

Sophie Boissard, Chief Executive Officer, Clariant: On the index index or regulated classification

Gregory Lidovsky, Chief Financial Officer, Clariant: for the next quarter.

Sophie Boissard, Chief Executive Officer, Clariant: Let me let me try to make it simple. So for France, actually, I have I have explained what we are going to live with for the for the the specialty care segment. It’s plus 2% blended taxation when it comes to health care funding. On the Nursing or Elderly Care Homes segment in France Au Corrion, we expect to benefit from around blended a plus 3% price increase over 25%. This is a combination of the private pay part that is above 3%, three point five And the the subsidized parts, the care part, that is, that will be probably we have informal information on it that will be probably, between two and three.

So that’s what we explained. So this lead to a group of three around three or a little bit more than 3% from a pure pricing effect, regulated indexation effect. And when it comes to Germany, we are expecting that this is really due to our local negotiation home by home, practically. So we expect to benefit on a yearly effect to something that would be kind of 6% to 7% of pricing indexation on a yearly basis with the second with the benefit of the second half negotiation. Most of the negotiation take place in the second half.

So it will be a yearly average. And when it comes to the other geographies, it’s it’s, between 23% in Belgium, and it’s more in the region of 5.56, in The Netherlands. Italy is definitely, between, depending from the region, between zero and two on the regulated pricing. Then we have the the private pay that is mainly from Belgium. And in Spain, it’s difficult to give a global multiple because elderly care, mental health, and social care are, of course, differently regulated.

But in each case, we are definitely more in a region around 2% indexation. So a little bit, above, the wage evolution.

Webcast Moderator: Thank you, Sophie. Next question, and I read the question. Since EBITDA pre IFRS 16 is

Laurent Gaelbart, Analyst, BNP Paribas: to grow

Webcast Moderator: nearly at the same pace than revenues in 2025. Can you explain us what are the main drivers of cost increase this year?

Gregory Lidovsky, Chief Financial Officer, Clariant: I can take that one if you want. To remind, so if we’re not, because the guidance is the EBITDA growth between 6% to 9%, while the revenue will grow by 5%. So why we will, this year, regain margin? It will be the effect of of this price and case mix effect and as well as the positive effect from our better support program that will bring, you know, further margin points and make our EBITDA growing faster than our top line.

Webcast Moderator: Thank you, Gregory. Have no more questions. So, Sophie, if you want to conclude.

Sophie Boissard, Chief Executive Officer, Clariant: Yes. Absolutely. So, again, we are really working to talk when it comes to to support Clariant network development to the quality of care we are providing to our patient and to the local communities and in an environment that is definitely with some strong momentum for elderly care and for long term care, but also from some headwinds from the overall economic environment, we actually benefit from the fact that we are multilocal, well positioned and with a very stable and balanced portfolio. So this is why we will continue to move ahead in the coming months with this very great level of dedication and confidence with all our Cayanos community. Thank you very much for your attention.

Alan, Conference Coordinator: Thank you for joining today’s call. You may now disconnect.

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