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Today, Elior Group (Paris:ELIOR) (Euronext Paris – ISIN: FR
0011950732), a world leader in contract catering and multiservices,
is releasing its unaudited results for the 2023-2024 fiscal year
(twelve months ended September 30, 2024).
The Group’s transformation and business development strategy
launched in April 2023 is paying off:
- A much stronger operating profile, with EBITA surging €108
million (183%) vs 2022-2023, i.e., a €215 million increase in just
two years.
- A more robust and agile Group thanks to an overhauled and
leaner organizational structure to make us more customer
centric.
- A faster pace of deleveraging, rewarded by improved credit
ratings1.
Robust growth for all indicators in fiscal 2023-2024
- €6,053 million in consolidated revenue, representing year
on-year organic growth of 5.1% (vs a target of 4% to 5%) and 4.9%
on a pro forma basis.
- Sharp €127 million increase in EBITDA, to €333 million.
- Strong rise in adjusted EBITA to €167 million, and adjusted
EBITA margin widening 170 basis points to 2.8% (vs a target of
>2.5%).
- A return to positive generation of free cash flow, coming in at
€215 million (vs a negative €58 million a year earlier) and helping
reduce the Group's leverage ratio by 1.6 points to 3.8x.
Outlook for fiscal 2024-2025 and objectives
- Organic revenue growth between 3% and 5%.
- Adjusted EBITA margin over 3%
- Confirmation of the objective to achieve €56 million in
run-rate operating synergies by 2026.
- Continuation of the deleveraging strategy, with target leverage
ratios of below 3.5x at September 30, 2025 and below 3.0x at
September 30, 2026.
Commenting on these results, Daniel Derichebourg, Elior
Group’s Chairman and CEO, said:
“The Group’s impressive results for fiscal 2023-2024 were
achieved as a result of putting into action the strategy I launched
in 2023 following the alliance between Elior and Derichebourg
Multiservices, which is now clearly paying off. We’ve overhauled
our entire organizational structure to make decision-making more
agile and to become more customer centric. We’ve won market share
and grown our business through new acquisitions and new contracts.
And we’re in the process of successfully transforming our Group:
Elior is now stronger and more agile, and is continuing to
deleverage. This performance illustrates how we're well on track to
getting Elior back to its rightful place in the market and
re-establishing its winning mindset. I have every confidence in our
ability to continue down this path and keep up our growth
trajectory. I’d like to take this opportunity to thank warmly all
of our teams and stakeholders – both internal and external – for
their hard work, engagement and support. The performance supported
in the beginning of the fiscal year confirms this recovery. Elior
is back.”
1 Assigned by S&P Global Ratings and Fitch Ratings
Revenue
Consolidated revenue from continuing operations amounted to
€6,053 million for fiscal 2023-2024, compared with €5,223
million a year earlier. This 15.9% increase reflects (i) organic
growth of 5.1% (versus targeted growth of 4% to 5%), (ii) a 0.3%
negative currency effect (shaving €13 million from the revenue
figure), and (iii) an 11.1% positive impact (€579 million) from
changes in scope of consolidation, mainly due to the consolidation
of Derichebourg Multiservices (DMS) as from April 18, 2023 and
Cater To You Food Services (in the United States).
On a pro forma basis, organic revenue growth came to 4.9%,
including rises of 5.3% for Contract Catering and 3.8% for
Multiservices.
On a like-for-like basis (excluding contract start-ups and
exits), revenue climbed 5.6%, with a 2.3% volume effect and a 3.3%
price effect.
Business development remained robust in 2023-2024, driving up
revenue by 8.1% (9.6% in 2022-2023). Performance was fueled by
strong sales momentum in Contract Catering, particularly in Spain
and the United Kingdom, and by the Multiservices business in
France.
The retention rate was 91.2% at September 30, 2024, slightly
down on the 92% rate for 2022-2023 (which only included DMS for 5.5
months). The year-on-year change reflects the Group’s strategy of
increasing its margins by winning new contracts that have a net
positive effect on revenue (adding 0.8% to revenue in 2023-2024)
and exiting loss-making contracts (1.5% negative impact for the
year). Excluding voluntary contract exits, the retention rate
remained high, at 92.7%.
Revenue by business segment
Revenue from Contract Catering came to €4,381 million,
versus €4,151 million in 2022-2023, representing year-on-year
growth of 5.5%. This business recorded robust 5.3% organic growth,
with only minimal impacts from changes in the scope of
consolidation and exchange rates (+0.6% and -0.4%
respectively).
Multiservices revenue surged almost 57% to €1,655 million
from €1,056 million the previous year. This rise was driven by a
€555 million positive impact from changes in scope of
consolidation, mainly due to the consolidation of DMS, as well as
solid organic growth of 4.3%.
The Corporate & Other segment, which includes the
Group’s “Ciel de Paris” and “Maison de l’Amérique Latine”
concession catering activities, generated €17 million in revenue,
versus €16 million in 2022-2023.
Adjusted EBITA and Other Income Statement Items
Consolidated adjusted EBITA from continuing operations
came to €167 million in 2023-2024, compared with €59 million the
previous year, representing a €108 million increase. Adjusted EBITA
margin widened by 170 basis points to 2.8%, in line with the
Group’s guidance of at least 2.5%. These year-on-year rises chiefly
stemmed from the effect of price increases passed on to clients to
offset inflationary impacts, as well as operational efficiency
gains achieved since the consolidation of DMS in April 2023. The
measures taken to streamline the Group’s portfolio – through
business development and voluntary exits from loss-making contracts
– also considerably boosted profitability during the year.
In Contract Catering, adjusted EBITA continued its upward
trend, advancing to €133 million from €47 million in 2022-2023.
Adjusted EBITA margin for this business was 3.0%, up 190 basis
points from 1.1% a year earlier, propelled by price rises,
productivity gains, higher internalization of margins, and
continued efforts to streamline the contract portfolio.
In Multiservices, adjusted EBITA jumped by €24 million
year on year to €48 million, with DMS contributing a full twelve
months for the first time. Adjusted EBITA margin was 2.9%, up 60
basis points on the 2.3% reported for 2022-2023. The ongoing strong
impact of wage inflation was mitigated by productivity measures put
in place, synergies achieved and price rises.
For the Corporate & Other segment, adjusted EBITA
represented a €14 million loss (€12 million loss in 2022-2023),
impacted by the consolidation of DMS.
Recurring operating profit from continuing operations
totaled €131 million in 2023-2024, up €98 million year on year.
Non-recurring income and expenses represented a net
expense of €31 million, which was much lower than the €81 million
net expense reported in 2022-2023. The 2023-2024 figure primarily
includes €23 million in restructuring costs for France and the
United States.
The Group’s net financial expense rose to €105 million in
2023-2024 from €78 million in 2022-2023. Net cost of debt came to
€99 million, up €26 million year on year, reflecting the combined
impact of (i) higher average debt during the year (with an
additional seven months of costs for DMS’ factoring program
compared with 2022-2023), and (ii) persistently high interest rates
for the majority of the year.
The Group recorded a €36 million net income tax expense
for 2023-2024 versus a €29 million net income tax benefit the
previous year. The 2022-2023 figure was boosted by €40 million in
deferred tax income in France following the first-time
consolidation of DMS (giving rise to a €53 million difference in
deferred taxes between 2022-2023 and 2023-2024). The current tax
expense was €24 million (compared with €11 million in 2022-2023),
resulting from the higher amount of taxable profit in France. The
French CVAE tax totaled €7 million in 2023-2024 – the same amount
as the previous year.
In view of the factors described above, the Group ended fiscal
2023-2024 with a €41 million net loss for the period
attributable to owners of the parent – a considerable
improvement on the €93 million attributable net loss recorded for
2022-2023. The Group posted adjusted attributable net profit
of €9 million for 2023-2024, moving back to positive territory from
an adjusted attributable net loss of €6 million a year earlier.
Cash Flows, Debt and Liquidity
The strong year-on-year increase in EBITDA, combined with
efficient management of working capital, resulted in a return to
positive free cash flow in 2023-2024, with an inflow of €215
million compared with an outflow of €58 million the previous
year.
Net capital expenditure rose by €21 million year on year
to €98 million, reflecting the Group’s larger scope of
consolidation. It represented 1.6% of consolidated revenue,
compared with 1.5% in 2022-2023.
The net change in operating working capital corresponded
to a cash inflow of €107 million, buoyed by an improvement in
operating working capital and the favorable impact of the new trade
receivables securitization agreement put in place in September
2024.
Net debt amounted to €1,270 million at September 30,
2024, 8% lower than one year earlier. Excluding the fair value of
derivative financial instruments and debt issuance costs, net debt
was reduced by €124 million to €1,269 million.
The leverage ratio (net debt/EBITDA) was 3.8x at
September 30, 2024, i.e., a 1.6 point improvement year on year.
This was better than the objective of around 4.0x set by the Group
for that date, and was still well below the 4.5x applicable in the
covenant for the leverage ratio test at end-September 2024.
The Group’s available liquidity totaled €394 million at
September 30, 2024, against €313 million at September 30, 2023. It
included €142 million in cash and cash equivalents, an undrawn
amount of €170 million under its €350 million revolving credit
facility, and €82 million in other available credit facilities.
The Group’s former trade receivables securitization program, set
up in 2017, was restructured in September 2024 and extended to some
DMS subsidiaries as well as UK and Italian entities. The new
securitization program has a renewable three-year term (maturing in
September 2027) and its cap has been raised to €800 million from
€360 million previously.
Synergies target for 2026 confirmed
In 2023-2024 we pursued, and stepped up, our drive to generate
cost and revenue synergies. These synergies essentially related to
optimizing the Group’s structures and operations as well as
insourcing a number of activities. In addition to streamlining the
Group’s structures, a new sales and marketing organization was put
in place to make it easier to pool across different activities the
services we offer to clients. The success of the new organization
continued to be felt, as illustrated by services contracts won with
our long-standing Contract Catering clients and catering contracts
won with our Multiservices clients.
We are standing by our target (as revised upwards in November
2023) of generating €56 million in run-rate synergies by 2026
(including €44 million in cost synergies and €12 million in revenue
synergies).
New Corporate Social Responsibility (CSR) goals
The Group’s strategy and performance go hand in hand with our
CSR commitments. In 2023-2024, we set new CSR targets for 2030
based on a double materiality assessment. The new CSR plan – called
“Aimer sa terre 2030” (Embracing our Planet – 2030) – is based on
four pillars:
The Group has pledged to reduce its food waste by 50%, to use
100% sustainable containers in its Contract Catering activities,
and to lower its greenhouse gas (GHG) emissions by a quarter.
In 2023-2024, we made significant headway in this area,
reducing food waste by 47% and raising our proportion of
sustainable food containers to 70%. We also lowered our GHG
emissions by 12%, representing 3.57 kg of CO₂ per meal.
- Providing food and services sustainably
The Group’s 2030 targets for providing food and services
sustainably include for 70% of its recipes to have an A or B
Nutri-Score (or equivalent) and to offer “green” services
classified as eligible activities under the EU Taxonomy. We also
intend to increase donations of food that would otherwise go to
waste.
In 2023-2024, 48.6% of the Group’s recipes had an A or B
Nutri-Score and there was a 35% increase in “green” offerings.
- Cultivating talent and differences
The Elior group is committed to ensuring the health, safety and
well-being of its employees and we have set targets of a 7%
reduction in workplace accidents and an employee retention rate of
90%. Internal mobility is also a focal point for us. We are aiming
for 66% of managers to be promoted from within, and for training
hours per employee to rise by 20%. In tandem, to increase social
cohesion, our objectives for 2030 include for women to make up 40%
of the Leaders Committee and for the number of people with
disabilities working in the Group to rise to 5,000.
In 2023-2024, the workplace accident frequency rate was
23.1, up 5% year on year. 40% of managers were promoted from within
the Group and each employee received six hours of training on
average. In terms of diversity, women accounted for 35% of the
Leaders Committee and there were 4,337 disabled workers within the
Group.
- Supporting a responsible economy
The Group’s is committed to local sourcing and favors local and
seasonal produce, as well as sustainable and ethical supplies.
In 2023-2024, 13% of the Group’s food purchases were
locally sourced, 74.7% of its fresh fruit and vegetables were
seasonal, and 14.5% of its food produce was certified.
Additionally, 44.5% of our fish was sustainably sourced and 19.4%
of our egg purchases were cage-free eggs.
All of the above commitments demonstrate how the Group is taking
action to foster sustainable growth that respects resources,
people’s health and safety and social equity.
Events After the Reporting Date
On October 17, 2024, the Group acquired two companies (Limpezias
Alarcon and Acierta Outsourcing), reinforcing its positions in the
cleaning services market in Spain.
On October 23, 2024, the ratings agency, Fitch Ratings, assigned
Elior Group a Long-Term Issuer Default Rating of B+ with a positive
outlook. This reflects Fitch's analysis of the Group’s operational
recovery and its capacity to generate positive free cash flow which
will help it continue to deleverage. This new rating comes after
S&P Global Ratings revised its outlook for the Group from
negative to positive in July 2024, while affirming its B
rating.
On October 31, 2024, the Group repaid in advance €61 million of
its €100 million Term Loan, in accordance with the 2024
securitization agreement which provides that any financing received
in excess of €500 million under the securitization program must be
used to pay down the Term Loan in the same amount.
Outlook
The Group is going into fiscal 2024-2025 with confidence thanks
to the successful transformation of its business model that it has
been working on for the past 18 months. We remain well positioned
in both of our business segments and in all of our geographies. The
growth drivers seen in 2023-2024 are expected to continue in
2024-2025, based on inflation holding steady and a more extensive
deployment of synergies in a high-growth market. Higher
profitability and free cash flow generation remain key priorities
for the Group.
In view of the above factors, our financial targets for fiscal
2024-2025 are as follows:
- Organic revenue growth between 3% and 5%
- Adjusted EBITA margin over 3%
- Net debt/EBITDA ratio below 3.5x at September 30, 2025
We are standing by our mid-term financial targets, namely:
- €56 million in run-rate synergies by 2026 (compared with the
initially targeted €30 million announced when DMS was first
consolidated)
- Net debt/EBITDA ratio below 3.0x at September 30, 2026
The Group will continue to assess opportunities for optimizing
its capital structure and debt maturity profile in light of market
conditions. The proceeds from any resulting transactions could be
used to refinance future debt maturities, repay revolving credit
facilities, or carry out other forms of refinancing.
Presentation
The Group’s presentation of its results for the fiscal year of
2023-2024 will take place on November 20, 2024, at 9:00 a.m.
Paris time and will be accessible by webcast and telephone.
Participants will be able to ask questions over the phone only.
The webcast will be accessible via the following link:
https://channel.royalcast.com/landingpage/eliorgroup/20241120_1/
The dial-in numbers for the conference call are as follows:
France: +33 (0) 1 70 37 71 66 United Kingdom: +44 (0) 33 0551 0200
United States: +1 786 697 3501 Access code: Elior
Please log in at least 10 minutes before the start of the
presentation.
Financial calendar
- January 28, 2025 : Annual Shareholders’ Meeting
- May 21, 2025 : 2024-2025 first half results –
Post-market press release and conference call
- November 19, 2025 : 2024-2025 full-year results –
Post-market press release and conference call
Please note that the Group’s first-half and full-year results
releases will now be issued post market.
Appendices
Appendix 1 : Revenue by business segment and geographic area
Appendix 2 : Adjusted EBITA by business segment Appendix 3 :
Consolidated financial statements Appendix 4 : Definition of
alternative performance indicators
About Elior Group
Founded in 1991, Elior Group is a world leader in contract
catering and multiservices, and a benchmark player in the business
& industry, local authority, education and health & welfare
markets. With strong positions in eleven countries, the Group
generated €6.053 million in pro forma revenue in fiscal 2023-2024.
Our 133,000 employees cater for 3.2 million people every day at
20,200 restaurants and points of sale on three continents.
The Group’s business model is built on both innovation and
social responsibility. Elior Group has been a member of the United
Nations Global Compact since 2004, reaching advanced level in
2015.
To find out more, visit www.eliorgroup.com/Follow Elior Group on
Twitter: @Elior_Group
Appendix 4: Definitions of alternative performance
indicators
Organic growth in consolidated revenue: Growth in
consolidated revenue expressed as a percentage and adjusted for the
impact of (i) changes in exchange rates, using the calculation
method described in Chapter 4, Section 4.2 of the Universal
Registration Document, (ii) changes in accounting policies, and
(iii) changes in scope of consolidation.
Retention rate: Based on the percentage of revenue from
the previous fiscal year, adjusted for the cumulative year-on-year
change in revenue attributable to contracts or sites lost since the
beginning of the previous fiscal year.
Adjusted EBITA: Recurring operating profit, including
share of profit of equity-accounted investees, adjusted for
share-based compensation (stock options and performance shares
granted by Group companies) and net amortization of intangible
assets recognized on consolidation.
The Group considers that this indicator best reflects the
operating performance of its businesses as it includes the
depreciation and amortization arising as a result of the capex
inherent to its business model. It is also the most commonly used
indicator in the industry and therefore enables meaningful
comparisons between the Group and its peers.
Adjusted EBITA margin: Adjusted EBITA as a percentage of
consolidated revenue.
Operating free cash flow: The sum of the following items
as defined in the Universal Registration Document and recorded
either as individual line items or as the sum of several individual
line items in the consolidated cash flow statement:
- EBITDA
- net capital expenditure (i.e., amounts paid as consideration
for property, plant and equipment and intangible assets used in
operations less the proceeds received from sales of these types of
assets)
- repayments of lease liabilities (IFRS 16)
- change in net operating working capital
- share of profit of equity-accounted investees
- non-recurring income and expenses impacting cash
- other non-cash movements.
This indicator reflects cash generated by operations.
Adjusted net profit/(loss): This indicator is calculated
based on net profit/(loss) from continuing operations attributable
to owners of the parent, adjusted to exclude (i) non-recurring
income and expenses, (ii) impairment of goodwill and amortization
of intangible assets recognized on consolidation of acquisitions,
(iii) exceptional impairment of investments in and loans to
non-consolidated companies, and (iv) the impacts of gains or losses
on disposals of consolidated companies classified as held for sale.
All of these adjustments in (i)to (iv) are net of tax.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241119637463/en/
Press contact Silvine Thoma –
silvine.thoma@eliorgroup.com +33 (0)6 80 87 05 54
Investor contact Christine Ropert –
christine.ropert@eliorgroup.com +33 (0)1 71 06 70 85
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