Catering and concessions group Elior on Wednesday raised its organic growth forecast for fiscal 2022-2023 and confirmed its targets for the following fiscal year after releasing results weighed down by inflationary tensions for the 12-month period ended September 30, 2022.
For fiscal 2022-2023, Elior now expects organic revenue growth of at least 8%. So far, the group has aimed for growth of at least 7%. Elior also expects an adjusted EBITA margin of between 1.5% and 2% and capital expenditures of between 1.5% and 1.7% of sales.
In the medium term, Elior is targeting compound annual organic sales growth of at least 7% for fiscal years 2023-2024 and 2024-2025. The group confirmed its target of an adjusted EBITA margin of around 4% in 2023-2024. It intends to resume paying dividends for the same fiscal year.
For the year ended September 30, 2022, Elior recorded a net loss of 427 million euros compared to a loss of 100 million euros in 2020-2021.
Elior also achieved an adjusted EBITA loss from continuing operations – current operating income adjusted for certain items – of 48 million euros, after a loss of 64 million euros in 2020-2021.
Excluding losses from Preferred Meals in the US, the adjusted Ebita loss is 6 million euros. The group was targeting adjusted Ebita excluding Preferred Meals, “about the balance”. This activity of manufacturing and distributing ready meals, fresh and frozen, was acquired in 2016 and sold in September 2022.
Revenue for the 2021-2022 fiscal year was €4.45 billion, up 20.6% on a reported basis and 18.3% excluding currency and scale effects. In the fourth quarter alone, Group sales increased organically by 12.2%, after an increase of 20.3% in the first nine months of the fiscal year.
Net financial debt was 1.22 billion euros at the end of September, compared to 1.11 billion euros as of September 30, 2021. During a conference call with journalists, the group’s finance director, Esther Gaide, said that debt remained stable in the second half of the year.
For his part, the Group’s CEO, Bernard Gault, confirmed that inflationary pressures remain very strong. The market leader has shown its determination to raise prices, the only way to restore its margins, despite opposition from the public sector.
The action is picking up speed
According to a consensus compiled by FactSet, analysts on average expected a net loss of €254 million, an adjusted EBITA loss of €43 million and sales of €4.39 billion, on organic growth of 17.7%.
Elior’s annual financial statements contained no major surprises, comments Stifel. The financial intermediary sees the improved dynamics of net new business on the positive side and the ongoing weakness in equity on the negative side. For the current financial year, the research department points out that the sales forecast is slightly above consensus, but still appears cautious. The profitability target is in line with expectations, although given the inflationary context it could be difficult to achieve, adds Stifel. The latter remains concerned about the financial situation of the group, whose net debt is still more than double what it was before Covid.
For their part, UBS analysts judged the publication of the results to be in line with expectations “should calm down”. This relief was noticeable on the Paris Stock Exchange. In the late morning on Wednesday, Elior shares rose 8% to 2.58 euros. It’s still down 60% since the beginning of the year.