Elior Group

Stable numbers support even better forecast

The Elior Group, founded in 1991 as a provider of catering and support services, manages its international operations from Paris.
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The Elior Group, founded in 1991 as a provider of catering and support services, manages its international operations from Paris.

Growth signals. The first half of the 2021-2022 fiscal year ended March 31, 2022, for Elior Group, a global provider of catering and support services headquartered in Paris.

With sales of €2.239 billion, the signs are for "organic growth compared to the first half of 2020-2021" at 18 percent, the company reports. Available liquidity as of March 31, 2022, is reported at €444 million, compared with €500 million as of Dec. 31, 2021. For the full fiscal year 2021-2022, Elior expects at least 16 percent revenue growth and forecasts ambitious goals for the next two years, when average annual organic revenue growth is expected to be at least 7 percent.

Pressure on margins

Commenting on the resumption of dividend payments in fiscal 2023-2024, Bernard Gault, CEO of Elior Group, said:"Despite the disruption caused by Omicron, the business has recovered thanks to strong sales momentum. However, rising inflation has put pressure on our operating margins, which have already been impacted by the pandemic. We are therefore implementing a bold, four-step margin recovery plan that will see us systematically renegotiate all our pricing tariffs globally, work with our customers to develop new, more sustainable product and service offerings, systematically review the contract portfolio, and exercise even tighter control over operating costs." On this basis, the Board of Directors has taken the decision to divest Preferred Meals in the U.S., as this industrial activity is too distant from the core business and is a heavy burden on the Group's finances.

Highly motivated team

After two difficult years, Gault acknowledges the collective efforts and motivation of the team: "I am firmly convinced that together we will restore the Group's operational profitability and achieve the goals set for 2024." Elior has signed or renewed several major catering and services contracts in the first half of fiscal 2021-2022. In France, these include companies such as Siemens, Safran, three CNRS centers and public schools in Lyon, Brest and Thonon-les-Bains. In the UK, these include Allianz Insurance,The Lloyd's of London, the Glasgow Warriors and Hibernian Edinburgh sports clubs, and the campuses of London Business School and West London University.

In the U.S., for example, the Jewish Federation of Sarasota-Manatee in Florida, correctional facilities in Cobb County, Georgia, and Rutherford County, Tennessee, and around 60 Harmony charter schools in Texas have been signed up; in Italy, several hotels, including the NH Porta Nueva in Milan and the Best Western City in Bologna, social services for the city of Venice, and Ministry of Defense facilities in several provinces. In Spain, these include the Moncloa Palace in Madrid (official residence of the Spanish Prime Minister), the National Theater of Catalonia in Barcelona, the Comarcal del Vendrell multidisciplinary health clinic in Tarragona and the Oms retirement home in Palma de Mallorca, to name a few.

Business performance contributed to a 9.9 percent increase in revenues, a significant improvement over the 4.4 percent increase a year ago. Finally, contract losses reduced revenues by 8.7 percent.

Internationally positioned

International operations accounted for 56 percent of revenues in the six months ended March 31, 2022, compared to 52 percent a year ago. Revenues in France totaled 985 million euros, an improvement of 10.7 percent year-on-year.
Despite increased home office working during the pandemic, the upturn was particularly pronounced in the business and industry market, while it was more moderate in the health and well-being market due to a less favorable basis for comparison. The education segment ran lower due to the particularly stringent health protocols put in place by authorities to combat the Omikron variant. International sales increased 27.5 percent to 1,248 million euros. The growth rate is made up of 24.1 percent organic growth, a positive currency effect of 4.3 percent and a negative scope effect of 0.9 percent.

The United Kingdom recorded the strongest growth as it was relatively unaffected by Omikron, while strict closures applied in the first half of 2020-21, except for the year-end vacation season. Revenues from the Corporate & Other segment, which includes the remaining concession activities not sold with Areas, amounted to almost €6 million in the first half of 2021-2022, compared with a contribution of practically zero a year ago.

New positions

More than a side note should be the appointment of the new Chief Legal Officer, Thierry Thonnier, as a member of the Group's Executive Committee. Among other qualifications, Thierry Thonnier holds a postgraduate degree in business law from the University of Paris. He joined the Elior Group in 1992 and held several positions in the legal department. He rose to head of the legal department and became secretary to the board of directors in 2006. In 2020, Thierry Thonnier expanded his responsibilities and took charge of the Elior Group's compliance function. As a member of the Executive Committee, the manager actively participates in its operational and strategic decision-making.
About Elior Group
Founded in 1991 and headquartered7 in Paris, Elior Group has become one of the world's providers of catering and support services, active in the business and industrial, education, health and social, and leisure sectors. With strong positions in five countries, the Group generated revenues of €3.690 billion in the 2020-2021 fiscal year. Our 99,000 employees serve over 3.6 million people every day in 22,700 restaurants on three continents. In addition, Elior offer services in 2,400 locations in France. Innovation and social responsibility are at the heart of our business model. The Elior Group has been a member of the United Nations Global Compact since 2004 and achieved GC Advanced Level in 2015.