Elior Group Sa · EURONEXT:ELIOR
Elior Group Sa — H1 2018-2019 Earnings Presentation
32 slides from Elior Group Sa's earnings presentation, May 29, 2019
Slide 1: Elior Group H1 2018-2019 Results
ELIOR GROUP H1 2018-2019 RESULTS May 29, 2019
Slide 2: Disclaimer
DISCLAIMER This document was prepared by Elior Group for the sole purpose of this presentation. This presentation includes only summary information and does not purport to be comprehensive. The information contained in this document has not been independently verified. No representation or warranty,
Slide 3: Today's Agenda
TODAY’S AGENDA 1 2 3 H1 HIGHLIGHTS NEW ELIOR H1 PERFORMANCE 4 5 OUTLOOK CONCLUSION AND Q&A 05/29/2019 3 ELIOR GROUP
Slide 4: H1 Highlights
1 H1 HIGHLIGHTS PHILIPPE GUILLEMOT ELIOR GROUP CEO 05/29/2019 4 ELIOR GROUP
Slide 5: Significant Achievements in H1
SIGNIFICANT ACHIEVEMENTS IN H1 • Binding offer received for Areas • Successful execution of the Group’s strategy: • Operations • Contracts • Innovation • People 05/29/2019 5 ELIOR GROUP
Slide 6: Binding Offer Received for Areas
BINDING OFFER RECEIVED FOR AREAS • Enterprise value: c. €1.54bn • Equity value* expected to amount to c. €1.4bn • c. €50m minorities and pension commitments to be deconsolidated by Elior Group • c. €50m WCR adjustments subject to closing accounts • c. €50m transaction/separation costs • c. €70m vend
Slide 7: Operations
OPERATIONS • Elior France: concentration and optimization of central kitchens network • Elior India: expansion in Delhi and Hyderabad in B&I • Elior Italy: • Termination of large contracts in the public sector • Reallocation of resources to SMBs end-market • Elior Spain: first airport VIP lounge con
Slide 8: Contracts
CONTRACTS • Elior France: Renault, Télécom ParisTech, APEI Chambéry • Elior India: Mercedes-Benz • Elior Italy: Sanremo Casino • Elior NA: University of Wisconsin • Elior Services: Bordeaux University • Elior Spain: Bellvitge Hospital, BASF • Elior UK: South Western Railway 05/29/2019 8 ELIOR GROUP
Slide 9: Concepts & Innovation
CONCEPTS & INNOVATION • Development of well-being offering: • BeWell in North America • Therapeutic diet menu in India • Launch of MaCantine and Twenty salads concepts in France • Launch of Cheatah offering in the UK 05/29/2019 9 ELIOR GROUP
Slide 10: People
PEOPLE • Elior France: • Appointment of Jean-Yves Fontaine as CEO • Strengthening of the executive team • Elior NA: appointment of Olivier Poirot as CEO • Support functions: • Reinforcement of HR, purchasing and finance departments • Creation of a Group Nutrition Officer position 05/29/2019 10 ELIOR
Slide 11: New Elior
2 NEW ELIOR PHILIPPE GUILLEMOT ELIOR GROUP CEO 05/29/2019 11 ELIOR GROUP
Slide 12: Second Largest Global Pure Player in Contract Catering
SECOND LARGEST GLOBAL PURE PLAYER IN CONTRACT CATERING • Focus on contract • Strong positions • Challenger in fast- catering and locally growing ancillary services • Recognized geographies • Focus on 6 expertise and • New segment countries brands opportunities in mature markets 05/29/2019 12 ELIOR G
Slide 13: Attractive and Sustainable Cash-Generative Profile
ATTRACTIVE AND SUSTAINABLE CASH-GENERATIVE PROFILE • Steady growth potential in the industry • Significant margin improvement potential • Lower capex requirement following Areas disposal • Limited working capital requirements Strong cash flow generation and value creation potential 05/29/2019 13 ELI
Slide 14: Resilient and Robust Profile
RESILIENT AND ROBUST PROFILE • Reduced cyclicality and seasonality of operations • Strengthened balance sheet: Leverage ratio reduced to 1.5x-2.0x net debt/EBITDA Ratings confirmed by S&P and Moody’s • Attractive financing conditions: c. 1% gross cost of debt May 2023 maturity 05/29/2019 14
Slide 15: Strong Value Creation Opportunity
STRONG VALUE CREATION OPPORTUNITY Attractive cash generative profile and incremental organic opportunities • Mid-term annual organic growth target: +2-4% • Mid-term adjusted EBITA margin growth target: +10-30 bps p.a. • Annual capex below 3% of sales Strong cash flow generation Uses of cash Total re
Slide 16: H1 Financial Performance
3 H1 FINANCIAL PERFORMANCE ESTHER GAIDE ELIOR GROUP CFO 05/29/2019 16 ELIOR GROUP
Slide 17: Impact of Areas Transaction on Financial Statements
IMPACT OF AREAS TRANSACTION ON FINANCIAL STATEMENTS • Following the announcement of a binding offer received by the Group for the acquisition of its Areas subsidiary • Application of IFRS 5 to concessions activities: treated as assets held for sale/discontinued operations as from H1 2018-2019 • Cont
Slide 18: H1 Revenue Analysis
H1 REVENUE ANALYSIS GROUP REVENUE (€m) H1 H1 2017- organic perimeter 2018- 2018 growth effect forex effect other 2019 2,564 +1.4% 2,600 12 12 (0.9)% +1.3% 1,424 1,392 +1.7% 1,160 1,164 (0.6)% H1 2017-2018 H1 2018-2019 2,564 2,600 France contract International contract Corporate catering & services c
Slide 19: Q1/Q2 Revenue Analysis
Q1/Q2 REVENUE ANALYSIS Q1 Q1 Q2 Q2 2017- organic perimeter 2018- 2017- organic perimeter 2018- 2018 growth effect forex effect other 2019 2018 growth effect forex effect other 2019 +0.7% (0.9)% (0.9)% +2.2% +1.8% +0.2% (1.5)% +1.2% 1,291 1,320 1,272 1,280 05/29/2019 19 ELIOR GROUP
Slide 20: Organic Growth Analysis
ORGANIC GROWTH ANALYSIS • France organic growth: +0.9% yoy • Good performance on existing sites in B&I • Good development and retention in Healthcare • Slowdown in education in Q2 due to increased selectivity • International growth: (1.8)% yoy • Negative impact of contract exits in Italy • Terminati
Slide 21: H1 EBITA Analysis (1/2)
H1 EBITA ANALYSIS (1/2) GROUP ADJUSTED GROUP ADJUSTED EBITA (€m) EBITA MARGIN 131 (6.5)% (40) bps 122 65 66 5.1% 4.7% 72 69 (6) (13) H1 2017-2018 H1 2018-2019 H1 2017-2018 H1 2018-2019 France contract International contract Corporate catering & services catering & services & other 05/29/2019 21 ELIO
Slide 22: H1 EBITA Analysis (2/2)
H1 EBITA ANALYSIS (2/2) (€m) contract catering and H1 2017-2018 D&A corporate costs services operations H1 2018-2019 -7 Impact of past capex increase -6 4 Investment in support functions and IT Incl. negative Supportive of ongoing CICE impact transformation (20) bps (20) bps stabilization 131 122 In
Slide 23: Profit & Loss Account Analysis
PROFIT & LOSS ACCOUNT ANALYSIS H1 H1 €m YoY CHANGE 2018-2019 2017-2018 Revenue 2,600 2,564 +1.4% Adjusted EBITA 122 131 €(9)m Adjusted EBITA margin 4.7% 5.1% (40) bps Including charges related to share- EBITA 116 126 €(10)m based compensation Acq. intangible amortization (10) (9) €(1)m Non-recurring
Slide 24: Focus on Tax
FOCUS ON TAX • H1 2019 P&L tax charge: yoy increase • €14m one-off income in H1 2018 • Replacement of CICE tax credit by taxable reduction in social charges • 23% estimated yearly income tax rate in FY 2019 (excluding CVAE) • CVAE expected to remain flat yoy at c. €24m • No cash tax spent in H1 2019
Slide 25: Free Cash Flow Analysis
FREE CASH FLOW ANALYSIS €m H1 2018-2019 H1 2017-2018 YoY CHANGE Adjusted EBITDA 184 190 €(6)m Share-based compensation impact (6) (5) €(1)m EBITDA 178 185 €(7)m Incl. €35m securitization Change in WCR (18) (78) +€60m Benefit from CICE termination Net capex (60) (96) +€36m Expected to accelerate in H
Slide 26: Net Debt Analysis
NET DEBT ANALYSIS (€m) -28 Leverage ratio: -8 1 922 Leverage ratio: 3.6x EBITDA 89 3.9x EBITDA (pro-forma for (pro-forma for acquisitions) High seasonality acquisitions) (1,830) of Concessions -125 activities -20 Net debt end Free cash flow Interests Net Discontinued Others Net debt end Sept 2018 ac
Slide 27: Outlook
4 OUTLOOK PHILIPPE GUILLEMOT ELIOR GROUP CEO 05/29/2019 27 ELIOR GROUP
Slide 28: 2019: Getting Back on Track
2019: GETTING BACK ON TRACK • (1)% organic revenue growth for continuing activities – including a c. 1% estimated impact of voluntary contract exits in Italy • c. 1% additional revenue growth from acquisitions • Stable adjusted EBITA margin at 3.6% • Capex below 3% of sales • Sharp increase in opera
Slide 29: Financial Agenda
FINANCIAL AGENDA • July 25, 2019: Revenue for the first nine months of 2018-2019 • December 4, 2019: Full year 2018-2019 results 05/29/2019 29 ELIOR GROUP
Slide 30: Conclusion Q&A
5 CONCLUSION Q&A PHILIPPE GUILLEMOT ESTHER GAIDE ELIOR GROUP CEO ELIOR GROUP CFO 05/29/2019 30 ELIOR GROUP
Slide 31: Appendix
APPENDIX 05/29/2019 31 Elior Group
Slide 32: Definition of Alternative Performance Indicators
DEFINITION 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 4.1.4.1 of the FY 2015-2016 Reg