Elior: first quarter revenue up 11.7% 22/23 – 26/01/2023, 08:18

(AOF) – Income from continuing operations of the Elior group for the first quarter of the 2022-2023 financial year was 1.23 billion euros, compared to 1.12 billion euros in the same period of the previous year. This +9.8% increase reflected organic growth of +11.7%, a +3% favorable currency effect (appreciation of the US dollar against the euro) and a -4.9% change in coverage (mainly due to the discontinuation of preferred meals). in the United States). On a comparable basis, sales increased by +10.2% compared to +16.2% recorded a year ago.

This turnover reflects a price increase of +3.8%. In addition, commercial development helped boost revenue by +10% compared to +9.2% in the first quarter of 2021-2022.

Finally, the loss of contracts means a -8.5% decrease in turnover. Thus, the retention rate as of December 31, 2022 is 91.5%, slightly higher than the 91.3% as of December 31, 2021, despite voluntary exits from contracts with an impact of -1.1% .

Bernard Gault, Chairman and CEO of Elior Group, commented on these quarterly results: “The organic growth recorded by the Group in the first quarter of 2022-2023 remains sustainable. Elior continues to benefit from the impact of the Covid catch-up since the rebound. Our volumes were hampered by the first wave of Omicron in the first half of the previous year. Sales growth should continue in the coming months thanks to commercial dynamism and the price increases we received from our customers. Inflationary pressures, particularly on food products, remain strong and, in particular, the renewal of ongoing contracts with public sector customers. discussion requires efforts.

Inflationary pressures, particularly on food products, remain strong and require continued efforts to renegotiate contracts with public sector customers in particular.

In this context and assuming a stable health condition, Elior maintains its expectations for the financial year 2022-2023: organic growth in revenue of at least 8%; Adjusted EBITA margin between 1.5% and 2.0% and capital expenditures between 1.5% and 1.7% of revenue.

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Key points

– Collective catering group, No. 1 in France, Spain and Italy, No. 5 in Great Britain and the United States and founded in 1991;

– Turnover reached 4.3 billion euros, diversified up to 13% services and 36% from companies, 33% in education, then 31% in health and social services;

– Business model based on 5 levers: strengthening of the most profitable activities, autonomy of field teams, loyalty systematization, cost optimization and cash management;

– In April-May 2023, 48.4% of the capital belongs to Derichebourg, 5.42% to Emesa and 5.25% to the Strategic Participation Fund, Daniel Derichebourg will be the Chief Executive Officer and Chairman of the Board of Directors consisting of 12 members executes;

– A tight financial position with a debt leverage of 8.3 at the end of the financial year on September 30, 2022, but in the process of a strong recovery after the acquisition of the Dericherbourg multiservice branch financed by Elior shares in the spring of 2023. .

Challenges

– Development strategy:

– focuses on the integration of the Derichebourg multiservice branch within the services division,

– changing the profile of the group, increasing the share of services in revenues to 31%;

– Target recurring synergies of at least 30 million euros by the end of 2026;

– Innovation strategy:

– internal: the Life4 innovation platform, which combines employee innovation and the Food Academy in Italy and the Nutrition Research LAB in France,

– for customers: the fight against undernutrition, the introduction of the nutrition score and the flexibility of the offers,

– support and purchase of start-ups;

– Environmental strategy for 2025:

– 12% reduction in CO2 emissions per meal (compared to 2020),

– 30% reduction in food waste per meal,

– 80% renewable electricity;

– Development of the healthcare hotel industry in the US through LiveWell’s integration with Traditions.

Challenges

– 3 growth catalysts to watch: SME penetration rate (+21% in 2021), professional mobility solutions and customer retention rate (93.2%);

– Strong impact of inflation on operating margins and strong sensitivity to Covid recoveries, which are struggling with the recovery plan:

– a global and systematic program of renegotiation of tariff schedules;

– co-construction with customers of more sustainable offers,

– strengthening control of operating costs,

– systematic review of contract portfolio (exit from Preferred Meals in USA);

– Continued risk of capital gains despite the expected reduction in debt leverage from the equity-financed takeover of Derichebourg’s service business;

– 2022-23 target: revenue growth of +8%, operating margin of 1.5-2% and capital expenditure between 1.5-1.7% of revenue.