Clariane - comment

Clariane’s H1 results are a little weak, but the company has reiterated its FY25 guidance, targeting pro forma EBITDA pre-IFRS 16 growth of 6 to 9%. This outlook is underpinned by continued organic growth and is expected to support progressive improvement in cash flow and leverage metrics. Clariane remains committed to reducing Wholeco financial leverage to below 5.5x by the end of FY25.

Clariane has reported its H1 results, delivering 2.8% pro forma revenue growth and 4.8% organic growth. This performance was driven by higher volumes, reflecting improved occupancy rates and additional capacity, as well as increased pricing.

EBITDA pre IFRS 16 declined by 6% on a pro forma basis, primarily due to the impact of healthcare pricing reforms in France. These reforms delayed annual index-linked price adjustments until 1 April, contributing significantly to weaker H1 profitability. However, Clariane expects this headwind to ease over the remainder of the year, supported by ongoing cost-saving initiatives.

Looking ahead, Clariane has issued FY26 guidance, projecting further revenue growth and EBITDA margin expansion. Combined with planned asset disposals, net debt is anticipated to fall below €3 billion, with Wholeco's financial leverage improving to below 5.0x.

A notable item from the H1 release is the pricing dynamic: while higher prices contributed €89 million to EBITDA, this was outweighed by increased operating costs, most notably from scheduled wage increases in Germany, which had a €100 million negative impact. The resulting net effect was an €11 million drag on EBITDA. This highlights a structural challenge within the care home sector: while price increases are gradually being implemented, they continue to lag behind rising cost pressures, particularly labour. Ongoing pricing reforms, such as those in France, are likely to maintain pressure on margins going forward.