Regulatory News:
Elior Group (Paris:ELIOR) (Euronext Paris – ISIN: FR 0011950732), one of the world’s leading operators in the catering and support services industry, today released its consolidated revenue figures for the first quarter of fiscal year 2016-2017, corresponding to the three months ended December 31, 2016.
Commenting on these figures, Philippe Salle, Elior Group’s Chairman and Chief Executive Officer, said: “Our performance in the first quarter of 2016-2017 was in line with our forecasts. Excluding the effect of voluntary contract exits, organic growth for the three months ended December 31, 2016 came in at 2.9%, reflecting further strong sales momentum, particularly in the United States and United Kingdom. At the same time, the implementation of our acquisition program contributed to the acceleration in our overall revenue growth. And thanks to the effective rollout of projects under our Tsubaki transformation plan, we are standing by our financial objectives for the full fiscal year.”
Revenue (in € millions) |
3 months 2016-2017 |
3 months 2015-20161 |
Organic |
Reported | |||||
| Contract catering & services | 1,187 | 1,093 | 0.2% | 8.5% | |||||
| Concession catering | 407 | 382 | 3.9% | 6.7% | |||||
| Group | 1,594 | 1,475 | 1.1% | 8.1% | |||||
Business development
Business development was buoyant in the first three months of FY 2016-2017. The retention rate for contract catering & services rose once again during the period, although it was negatively affected by the Group’s strategy of taking a much more selective approach to contract renewals, particularly in France and Italy. A number of major contracts were won in the first quarter of the fiscal year in the contract catering & services business, including with Klésia, the municipality of Hénin-Beaumont, Saint-Omer hospital, and Nexity in France, as well as with BNP Paribas in Italy, Barts Health NHS Trust in the United Kingdom, the armed forces in Spain and the National Gallery of Art in the United States.
External growth
During the first quarter of FY 2016-2017, the Group carried out three bolt-on acquisitions in its contract catering business – in Spain, Italy and the United States – with the aim of consolidating its contract portfolio. The newly-acquired companies together contributed €14 million to consolidated revenue for the period.
Revenue
Consolidated revenue totaled €1,594 million for the first quarter of FY 2016-2017. The 8.1% year-on-year increase reflects (i) organic growth of 2.9% (excluding the 1.8% negative effect of voluntary contract exits), (ii) an 8.1% positive impact from acquisition-led growth, and (iii) a 1.1% negative currency effect.
The portion of revenue generated by international operations rose to 55% in the first quarter of FY 2016-2017 from 52% in the comparable prior-year period.
Contract catering & services revenue was up €93 million (or 8.5%) year on year, coming in at €1,187 million and accounting for 74% of the Group’s total consolidated revenue.
Organic growth was 0.2%. Excluding voluntary contract exits from low- and non-profit-making contracts in Europe organic growth was 2.0%. It was weighed down by an unfavorable calendar effect compared with first-quarter FY 2015-2016 estimated at over 1%.
Recent acquisitions3 accounted for €106 million (or 9.7%) of this business line’s revenue figure.
The currency effect during the period was a negative 1.3%.
Revenue generated in France totaled €556 million. Organic growth was a negative 0.4% but excluding voluntary contract exits it amounted to 1.1%.
- In the business & industry market, revenue was buoyed by the strong business development seen in the previous fiscal year, particularly for high-end catering services.
- In the education market, revenue was down year on year due to an unfavorable calendar effect, although this negative impact was partly offset by increased restaurant attendance.
- Revenue decreased in the healthcare market as a result of certain contracts not being renewed.
Revenue for the international segment advanced 17.9% to €631 million. Organic growth for this segment was 0.6%, or 2.7% excluding the impact of voluntary exits from low- and non-profit-making contracts in Europe. Recent acquisitions generated additional growth of 19.8% whereas the currency effect was a negative 2.6% during the period.
- In Spain, the business & industry and education markets reported strong performances, fueled by sustained business development, which more than offset a revenue contraction in the healthcare market.
- In the United States, organic growth was boosted by the start-up of new contracts, particularly in the education market and for high-end catering services.
- In Italy, revenue was hampered by voluntary contract exits, especially in the education and healthcare markets, as well as by an unfavorable calendar effect in the business & industry market.
- In the United Kingdom, revenue in the business & industry market was also weighed down by an adverse calendar effect. In the education and healthcare markets, however, the start-up of new contracts had a positive revenue impact.
Concession catering revenue rose €25 million in the first quarter of FY 2016-2017, amounting to €407 million and representing 26% of total consolidated revenue.
Organic growth came to 3.9%. Changes in the scope of consolidation resulting from the Group’s May 2016 acquisition of a portfolio of contracts in the French railway stations market fueled a 3.4% revenue increase. Changes in exchange rates – notably for the Mexican peso – had a 0.6% negative effect.
Revenue generated in France amounted to €161 million, up 5.1% on the same period of FY 2015-2016, although organic growth was a negative 3.4%.
- Performance in the motorways market continued to be weighed down by the termination of a number of contracts and the effects of renovating sites whose concession agreements have been renewed.
- Revenue in the airports market decreased year on year due to the loss of the catering contract for terminals E and F at Paris-Charles-de-Gaulle airport in February 2016 and a slump in air traffic at Orly-Sud airport as a result of airlines being assigned differently at the various terminals.
- The city sites & leisure market reported a revenue increase, powered by the start-up of new contracts in the railway stations segment and the positive effect of the Paris Motor Show, which was held in October 2016.
In the international segment, 7.7% growth drove revenue up to €246 million for the first quarter of FY 2016-2017. Organic growth was 8.7%, but changes in exchange rates trimmed 1.0% off the revenue.
- The motorways market felt the positive effects of higher traffic volumes in Spain, Portugal and the United States, as well as the opening of new service areas in Portugal, which more than offset the closure of a number of areas in Italy.
- Revenue in the airports market was lifted by upward trends in traffic volumes and the opening of new points of sale, notably at Bilbao airport in Spain, LAX in the United States, and in Mexico.
Outlook
As part of its strategic plan for 2016-2020, the Group has embarked on a transformation process with a view to accelerating its development. Its aim for FY 2016-2017 is to continue towards the profitable growth targets it has set itself for 2020. Thanks to the first quarter of FY 2016-2017 performance, the Group is standing by its objectives for the full fiscal year, namely to achieve the following:
- Organic growth4 of at least 3%, excluding the impact of voluntary contract exits (which is expected to be less than 100 basis points). Acquisitions carried out in FY 2015-2016 represented aggregate non-consolidated in FY 2015-2016 revenue of c. €250 million.
- A 20 to 30 basis-point increase in EBITDA5 margin compared with FY 2015-2016 (based on a constant scope of consolidation).
- A significant rise in EBITDA5 and adjusted earnings per share6.
Financial calendar:
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Appendix 1: Revenue by business line and geographic region
Appendix
2: Revenue by geographic region
Appendix 3: Revenue by market
The English-language version of this document is a free translation from the original, which was prepared in French. All possible care has been taken to ensure that the translation is an accurate representation of the original. However, in all matters of interpretation of information, views or opinions expressed therein, the original language version of the document in French takes precedence over this translation.
About Elior Group
Founded in 1991, Elior Group has grown into one of the world's leading operators in the catering and support services industry, and is now a benchmark player in the business & industry, education, healthcare and travel markets. Now operating in 15 countries, the Group generated €5,896 million in revenue through 23,000 restaurants and points of sale in FY 2015-2016. Our 120,000 employees serve 4.4 million customers on a daily basis, taking genuine care of each and every one by providing personalized catering and service solutions to ensure an innovative customer experience.
We place particular importance on corporate social responsibility and have been a member of the United Nations Global Compact since 2004. The professional excellence of our teams, as well as their unwavering commitment to quality and innovation and to providing best in-class service is embodied in our corporate motto: "Time savored".
For further information please visit our website: http://www.eliorgroup.com or follow us on Twitter: @Elior_Group
Appendix 1: Revenue by Business Line and Geographic Region | |||||||||||||
| (in € millions) |
Q1 |
Q1 |
Organic |
Changes in |
Currency |
Total growth | |||||||
| France | 556 | 558 | -0.4% | 0.0% | 0.0% | -0.4% | |||||||
| International | 631 | 535 | 0.6% | 19.8% | -2.6% | 17.9% | |||||||
| Contract catering & services | 1,187 | 1,093 | 0.2% | 9.7% | -1.3% | 8.5% | |||||||
| France | 161 | 154 | -3.4% | 8.5% | 0.0% | 5.1% | |||||||
| International | 246 | 228 | 8.7% | 0.0% | -1.0% | 7.7% | |||||||
| Concession catering | 407 | 382 | 3.9% | 3.4% | -0.6% | 6.7% | |||||||
| GROUP TOTAL | 1,594 | 1,475 | 1.1% | 8.1% | -1.1% | 8.1% | |||||||
Appendix 2: Revenue by Geographic Region | |||||||||||||
| (in € millions) |
Q1 |
Q1 |
Organic |
Changes in |
Currency |
Total growth | |||||||
| France | 717 | 712 | -1.0% | 1.8% | 0.0% | 0.8% | |||||||
| Other European countries | 560 | 546 | 0.0% | 5.6% | -3.0% | 2.5% | |||||||
| Rest of the world | 316 | 217 | 10.9% | 34.9% | 0.1% | 45.8% | |||||||
| GROUP TOTAL | 1,594 | 1,475 | 1.1% | 8.1% | -1.1% | 8.1% | |||||||
Appendix 3: Revenue by Market | |||||||||||||
| (in € millions) |
Q1 |
Q1 |
Organic |
Changes in |
Currency |
Total growth | |||||||
| Business & industry | 505 | 500 | -0.4% | 3.9% | -2.4% | 1.0% | |||||||
| Education | 385 | 305 | 0.5% | 26.3% | -0.3% | 26.4% | |||||||
| Healthcare | 296 | 288 | 0.7% | 2.4% | -0.4% | 2.7% | |||||||
| Contract catering & services | 1,187 | 1,093 | 0.2% | 9.7% | -1.3% | 8.5% | |||||||
| Motorways | 129 | 132 | -2.6% | -0.1% | 0.2% | -2.5% | |||||||
| Airports | 177 | 168 | 6.7% | 0.1% | -1.0% | 5.7% | |||||||
| City sites & leisure | 101 | 82 | 8.5% | 15.9% | -1.0% | 23.5% | |||||||
| Concession catering | 407 | 382 | 3.9% | 3.4% | -0.6% | 6.7% | |||||||
| GROUP TOTAL | 1,594 | 1,475 | 1.1% | 8.1% | -1.1% | 8.1% | |||||||
| 1. | Organic growth: change in revenue based on a constant scope of consolidation and excluding the currency effect. | ||
| 2. | Changes in scope of consolidation correspond to the acquisitions carried out in France, the United States, the United Kingdom, Italy and Spain | ||
| 3. | The currency effect stems from changes in the USD, GBP, MXN and CLP exchange rates. | ||
| NB: | The figures of FY 2015-2016 have been restated due to the reclassification of non-strategic assets held by Areas Northern Europe as discontinued operations | . |
1 Restated due to the reclassification of non-strategic
assets held by Areas Northern Europe as discontinued operations.
2
Excluding the impact of changes in scope of consolidation and the
currency effect.
3 ABL Management – consolidated since
December 1, 2015; Preferred Meals – consolidated since July 1, 2016;
Waterfall Catering Group – consolidated since September 1, 2016, and
bolt-on acquisitions.
4 Excluding the impact of changes
in scope of consolidation and the currency effect.
5
Excluding the impact of stock options and performance shares.
6
Adjusted for (i) non-recurring income and expenses, net of the tax
effect (calculated at the standard rate of 34%), and (ii) net
amortization of intangible assets recognized on consolidation in
relation to acquisitions.
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