Release Date: October 04, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Emeis (WBO:ORP2, Financial) reported a revenue increase of 9.2%, outperforming the sector, driven by higher occupancy rates and favorable pricing.
- The company's debt has been significantly reduced by nearly 50% from the previous year, standing at EUR4.4 billion, supported by real estate disposals.
- Occupancy rates have improved across all markets, with a notable recovery in France, contributing to overall business growth.
- Emeis (WBO:ORP2) has implemented a new governance structure and identity, enhancing the perception of the group among residents and their families.
- The company has achieved a significant reduction in financial expenses by 24%, reflecting successful recapitalization efforts.
Negative Points
- EBITDAR growth was modest at 0.8%, impacted by increased personnel costs and a time lag in sales growth.
- Free cash flow remains negative, although it has improved by EUR111 million compared to the previous year.
- The company's net income is still very negative at EUR257 million, despite improvements.
- France's operations are underperforming due to the time lag between rising operating expenses and their impact on sales.
- The average cost of debt increased to 5.44% from 4.71% in the first half of 2023, affecting financial performance.
Q & A Highlights
Q: Can you explain the discrepancy between the debt reduction and cash flow improvement?
A: Laurent Guillot, CEO, explained that while cash flow has improved, it remains negative due to gradual investment debt reduction. This accounts for the difference between debt reduction and cash flow figures.
Q: Is there a possibility of a new capital increase to address cash flow issues?
A: Jean-Marc Boursier, CFO, ruled out a new capital increase. He emphasized that operational improvements and asset disposals will support growth and financial stability.
Q: What factors contributed to the recent decline in stock price?
A: Laurent Guillot, CEO, noted that limited market liquidity and significant shareholders transitioning from bondholders may have impacted the stock price, but he refrained from further speculation.
Q: How is the company addressing procurement challenges in France?
A: Jean-Marc Boursier, CFO, stated that they are focusing on leveraging purchasing power to negotiate better terms and improve service quality in clinics and nursery homes.
Q: What are the expectations for occupancy rates and margins in France moving forward?
A: Laurent Guillot, CEO, indicated that with inflation decreasing and occupancy rates recovering, margin pressure is easing, and improvements are expected in the coming years.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
