Elis Sa · EURONEXT:ELIS
Elis Sa — FY2022 Earnings Presentation
45 slides from Elis Sa's earnings presentation, Mar 8, 2023
Slide 1: 2022 annual results
Pelis 2022 annual results 8 March 2023
Slide 2: Disclaimer on outlook
This document may contain information related to the Group’s outlook. Such outlook is based on data, assumptions and estimates that the Group regarded as reasonable at the date of this press release. Those data and assumptions may change or be adjusted as a result of uncertainties relating particula
Slide 3: 2022 financials, responsible business, 2023 outlook, Q&A
2022 A responsible 2023 Q&A financials business outlook 3
Slide 4: 2022 key figures
above 2019 level since spring of which +21.0% on an organic basis across the board notably driven by higher customers needs for hygiene and Adjusted EBITDA margin down -150bps at 33.0% traceability in most geographies Adjusted EBIT margin up +150bps at 14.2% and most end-markets: average , with a gr
Slide 5: Strong commercial momentum across the board
Strong commercial momentum across the board +25.3% Rebound in Hospitality (essentially France, Southern Europe and the UK & Ireland) as 2021 was still strongly impacted by +€38m €3,821m the pandemic +€95m +€257m Several pricing initiatives were implemented throughout +€383m 2022 with a gradual ramp-
Slide 6: Customers cannot operate without Elis services
➔ Most of our customers cannot operate their business without our Flat linen, Workwear or Hygiene services ➔ Our price increases are therefore not very significant in our customers’ P&L ➔ Re-internalization is generally not an option ➔ Most competitors are also facing a strong increase of their cost
Slide 7: Hospitality performance
➢ Continuous rebound in Europe, especially in France, Spain and Portugal ➢ Activity in the UK is still slightly below 2019 level; focus was mostly on pricing rather than volumes ➢ Inflationary context helped additional pricing discussions with customers ➢ Limited pressure on new bids in a context of
Slide 8: Many new contract wins in 2022
Many new contract wins in 2022, with an acceleration Clients consume more workwear than before (e.g., in first-time outsourcing daily changes vs 3 changes per week) Healthcare professionals are moving back to textile The Group is rolling out services that have already vs disposable paper (more relia
Slide 9: Inflation impact on costs in 2022
Gas, biomass, electricity and fuel c. +80% c. €140m Personnel costs c. +6% c. €85m Other items (Chemical products, spare parts, c. +9% c. €50m consumables, etc) 1The impact of inflation in 2022 has been calculated using a N-1 cost base equal to: 2021 reported cost base, plus The costs linked to the
Slide 10: Fixed rate energy tariffs for 2023-2025
Since H2 2022, the Group has progressively negotiated fixed rate tariffs for its 2023-2025 volumes: c. 95% of 2023 volumes @ c. €80/MWh c. 90% of 2023 volumes @ c. €235/MWh c. 60% of 2024 volumes currently hedged c. 15% of 2024 volumes currently hedged c. 40% of 2025 volumes currently hedged c. 5% o
Slide 11: Adjusted EBITDA and margin bridge 2021 to 2022
2021 adjusted EBITDA to 2022 adjusted EBITDA1 2021 adjusted EBITDA % to 2022 adjusted EBITDA %1 1400 35,0% +€257m 1300 +€44m 34,0% +€35m +110bps = +€147m 1200 33,0% +60b… 32,0% 1100 34.5% €1,260m 31,0% 33.0% 1000 -€275m -320bps €1,052m 30,0% 900 29,0% 800 Adjusted Inflation (net Volumes (net) Produc
Slide 12: Regional performance
Good top line dynamic (rebound of Hospitality and pricing) Profitability impacted by the lag between the strong increase in gas prices (with gas volumes largely unhedged in 2022) and the implementation of pricing adjustments Impact of absenteeism and workforce shortfall on the region’s productivity
Slide 13: Regional revenue 2022
2022 revenue: c. €8m 2022 revenue: c. €21m 2022 revenue: c. €6m 2022 revenue: c. €92m 13
Slide 14: Mexican acquisition
A leader in its industry with great know-how Only player with national coverage Century-old business, family-owned 10% National coverage and high-quality industrial assets 2% Experienced management continues to run the business Healthcare (earn-out mechanism over 2023-2025) Hospitality Others Great
Slide 15: 2022 business highlights
2022 business A responsible 2023 Q&A highlights business outlook 15
Slide 16: Diversified and well-balanced profile
Elis offers a highly diversified and well-balanced profile By activity Workwear Hygiene Flat Linen & Well-being Pelis FY 2022 revenue breakdown By market Trade & Services Industry Healthcare Hospitality By geography Southern Europe . France Latin America UK & Ireland Scandinavia & Eastern Europe Eur
Slide 17: Adjusted EBITDA margin change by region
-70bps -230bps vs 2021 -290bps -70bps +30bps -140bps -150bps Group level 17
Slide 18: Income statement
As a % of revenue 33.0% 34.5% As a % of revenue 14.2% 12.7% +150bps Amortization of intangible assets (80.1) (81.1) recognized in a business combination Non-current operating income (9.0) (16.1) and expenses Tax (80.5) (56.6) Capital employed2 as of January 1st (B) 4,673.9 4,627.3 Percentage change
Slide 19: Pre-tax ROCE 2018-2022
Pre-tax ROCE 2018-2022 14% 12% 10% 8% 6% 4% 2% 0% 2018 2019 2020 2021 2022 19
Slide 20: Headline net income
Convertible related interests (B) (9.6) (6.7) 1 On a fully diluted basis 2 Previously communicated 2021 numbers have been retrospectively restated from the impact of IFRS 3 (please see the Appendix) 3 Net of tax effect 20
Slide 21: Headline net income per share since IPO
Fully-diluted headline net income per share evolution since IPO 1,50 1,30 1,10 0,90 0,70 0,50 0,30 0,10 2015 2016 2017 2018 2019 2020 2021 2022 21
Slide 22: Cash flow
Non-recurring items and changes in provisions (9.7) (14.1) Acquisition and disposal expenses (4.4) (1.6) Other (1.7) (1.6) at 18.1% (vs 18.7% in 2021) 10.1 despite the significant inflation of linen price Net interest paid (72.9) (74.6) Tax paid (100.1) (83.2) linked to the impact of strong activity
Slide 23: Debt maturity profile
Coupon 4.125% Maturity 2027 Coupon 1.0% Maturity 2025 Coupon 1.625% Maturity 2028 Coupon 1.75% Maturity 2024 Coupon 2.875% Maturity 2026 Coupon 3.00% Maturity 2032 Coupon 2.70% Maturity 2029 1250 Coupon 2.25% 1000 Maturity 20291 Coupon 0% 750 Maturity 2023 500 < 1 year 250 0 Maturity 2027 2023 2024
Slide 24: Leverage ratio evolution
3400 3,5 3,3 3300 3.0x 3,1 3200 2.5x 2,9 2,7 3100 2,5 2.1x 2,3 3000 2,1 1,9 2900 1,7 2800 1,5 Dec 2017 Dec 2018 Dec 2019 Dec 2020 Dec 2021 Dec 2022 Dec 2023 guidance Deleveraging was limited over the 2017-2019 period due to the implementation of a 3-year capex program following the acquisition of Be
Slide 25: 2022 financials summary
Sharp recovery in Adjusted EBITDA Headline net income up Strong deleveraging: activity in all our margin down -150bps +58.7% at €353m ratio at 2.5x at verticals and as expected but Headline net income December 31, 2022, geographies: adjusted EBIT margin per share up +57.0% at expected to continue To
Slide 26: A responsible business
2022 business 2022 2023 Q&A highlights financials outlook 26
Slide 27: Circular product life cycle
1 6 Product Changing 7 design product 5 Cleaning 2 Product in Secondary Other life use by our energy Product customers production Second 8 life 3 4 Maintenance New life control Delivery to Delivery customer at Elis 27
Slide 28: Circular economy drivers
by optimizing product by offering reusable usage through product solutions, cleaned locally sharing and industrial and contributing to local management economic development Driven by regulations, business trends and CSR group practices to reduce natural resource consumption. Solutions based on produ
Slide 29: CO2 savings versus disposable alternatives
Using a hand towel with a cotton spool reduces CO2 emissions by up to 29% compared to a disposable paper towel solution The use of reusable hospital scrub suits in healthcare establishments allows a 31% reduction in CO2 emissions compared to disposable ones, which can go up to 62% Using workwear in
Slide 30: Environmental commitments
✓ ✓ ✓ In line with our objective to : 70% of our textiles are have at least one being reused or recycled, 58 % of with -25% carbon intensity (i.e. made from sanitary and beverage reduction over 2010-2025 responsible materials) in each of equipment collected in France our product families ✓ Engaged t
Slide 31: Social and governance actions
✓ Nearly ✓ Elis has put in place a (commercial & logistics) between (1st session took place in July 2021) 2020 and 2022: 258 to 715). ✓ CSR Director reports directly to the CEO ✓ +10 electric heavy trucks, positioning Elis ✓ Implementation of a as a pioneer ✓ ✓ Top 500 executives have expected for 2
Slide 32: CSR indicators
Climate Change intensity -25% Responsible vehicles 232 Thermal energy intensity1 -26% Textile recycling 70% Range of responsible Water intensity1 -43% products 51% Frequency rate +0.8% Extend Chevron 310 Program Gender Diversity / 34% Women Foundation 4th class Direct supplier CSR assessment 94% 1 E
Slide 33: ESG ratings
Elis ranked after 5 for its 2nd consecutive years at year of reporting Gold level Elis among (B in 2021) the top 1% of 90,000 assessed companies Significant 10-point improvement in performance Elis’ rating with maintained at Gold to level (72/100) 14.8 (“low risk”) 33
Slide 34: 2023 outlook
2022 business 2022 A responsible Q&A highlights financials business 34
Slide 35: Revenue and EBITDA margin resilience
4 500 40% 33.6% 33.8% 34.5% 4 000 32.7% 32.3% 31.8% 32.7% 32.2% 33.0% 35% 32.2% 31.7% 31.1% 31.7% 31.9% 32.1% 32.5% 31.5% 30.9% 30.6% 31.5% 30.5% 31.1% 3 500 30% 3 000 25% 2 500 20% 2 000 15% 1 500 10% 1 000 500 5% 0 0% 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 Revenue EBITDA
Slide 36: Resilient end-markets
, which mostly Food processing: 25% are very resilient themselves Pharma: 15% (that is largely used with Water / waste management: 10% workwear clients) can help absorb a slight slowdown in our Automotive: 10% clients’ activity Construction, energy, transport: 10% Hospitals and clinics: 80% Nursing
Slide 37: Structural growth drivers
Need for more hygiene creates cross-selling opportunities (new products and services) and accelerates the development of outsourcing (need for employers to ensure a clean work environment) Structural growth of the nursing home business, driven by ageing European population (Flat linen, Workwear for
Slide 38: Support to customers and churn reduction
and potential workforce shortfall, , which were sometimes totally closed and stopped servicing their customers Elis acted as a during the pandemic, adapting invoicing terms to the reality of our customers (discounts, contracts put on hold, etc.) Steady churn rate reduction in place in all our geogra
Slide 39: 2023 guidance
✓ Expected ✓ Topline dynamism, further ✓ Driven by top line dynamism and a (with a significant part of price productivity gains and hedging in slight decrease in D&A as a % of adjustments in the books since place on energy purchases should revenue January 1st, 2023) generate ✓ Effect of as of 31 Dec
Slide 40: Conclusion
In a difficult macro Strong industrial Impact of inflation on In 2023, the Group environment, Elis know-how and valuable cost base offset in euro expects another year of delivered strong commercial terms by ability to adjust strong results along with financial performance in relationships, allowing
Slide 41: Appendix
2022 business 2022 A responsible 2023 highlights financials business outlook 41
Slide 42: IFRS 3 restatement of 2021 income statement
IFRS 3 requires previously published comparative periods to be retrospectively restated for business combinations (recognition of the final fair value of the assets acquired and the liabilities and contingent liabilities assumed when this fair value was provisionally determined at the previous balan
Slide 43: IFRS 3 restatement of balance sheet
Employee benefit assets (51.8) (34,1) Cash and cash equivalents (160.1) (137,6) Intangible assets recognized in the Group’s last LBO (net of deferred tax) (1,537.7) (1,536.8) TOTAL EQUITY AND LIABILITIES EQUITY Employee benefit liabilities Borrowings and financial debt Bank overdrafts and current bo
Slide 44: Definitions of financial indicators
in the Group’s revenue is calculated excluding (i) the impacts of changes in the scope of consolidation of “major acquisitions” and “major disposals” (as defined in the Document de Base) in each of the periods under comparison, as well as (ii) the impact of exchange rate fluctuations is defined as a
Slide 45: Investor Relations contact
Investor Relations Director 5, boulevard Louis Loucheur Tel: +33 1 75 49 98 30 92210 Saint-Cloud Mob: +33 6 83 77 66 74 France Email: nicolas.buron@elis.com https://fr.elis.com/en 45