Elior (mass catering) runs in Paris after a better-than-expected half year

(Il Sole 24 Ore Radiocor) - Elior was rewarded by investors at the Paris Stock Exchange, after beating expectations with its half-year accounts and having revised guidance for the year. The foodservice and corporate services group presented its first-half results on Wednesday after the close of the session, which showed a net profit of 43 million euros, compared to 1 million last year, and an improvement in operating profitability. Adjusted EBITDA amounted to EUR 132 million, compared to EUR 121 million on average expected by analysts and compared to EUR 100 million last year, with a margin of 4.1%. Consolidated revenue amounted to EUR 3.2 billion from EUR 3.1 billion. Free cash flow increased to 205 million, an improvement of 36 million, and net debt decreased to 1.1 billion from 1.25 billion.

"The results of the first half-year clearly show that the strategy we have been implementing since 2023 is the right one, which is to put the profitability of our company first. Since April 2023, we have introduced an organisational structure that brings us closer to our customers and partners and now allows us to increase business synergies and achieve greater profitable growth. At the same time, the complete overhaul of our IT systems will strengthen our operational efficiency, revenue dynamics and service quality,' said Group President and CEO Daniel Derichebourg. Elior now expects anorganic revenue growth, focused on profitability, of between +1% and +2% (compared to +3% and +5% initially forecast) and an adjusted EBITDA margin of 3.3-3.6% (from 'over 3%').

"Elior has posted half-year results characterised by a strong increase in profitability with a Ebit higher than our expectations (EUR 118 million) and those of the consensus", commented analysts at TP Icap Midcap, who maintain their Buy rating on the stock. "The group revised its targets for 2024/25, reducing growth forecasts and increasing margin forecasts. Although the growth message is negative, analysts are expected to revise their earnings expectations upwards to account for improved profitability," note the Invest Securities experts.