Elis Sa · EURONEXT:ELIS
Elis Sa — Q3 2023 Earnings Presentation
30 slides from Elis Sa's earnings presentation, Oct 26, 2023
Slide 1: Q3 2023 trading update
Q3 2023 trading update October 26, 2023
Slide 2: Forward-looking statements disclaimer
This presentation may include data information and statements relating to future events, trends, plans, expectations, objectives, outlook and other forward-looking statements relating to the Group’s future business, financial condition, results of operations, performance and strategy as they relate
Slide 3: Agenda
Q3 2023 business Ambitious 2030 climate highlights targets Update on Q&A 2023 outlook 3
Slide 4: Q3 2023 business highlights
Q3 2023 business highlights
Slide 5: Another quarter of very solid organic revenue growth in Q3 at +9.5%
Another quarter of very solid organic revenue growth in Q3 at +9.5% Q3 2023 revenue up +9.0% to €1,123.3m Organic growth of +9.5%, in line with expectations All 2023 targets confirmed ≫ Pricing momentum remains strong on the back of the adjustments implemented in 2022 and 2023 to offset cost inflati
Slide 6: +9.5% organic growth in Q3, in line with full-year expectations
+9.5% organic growth in Q3, in line with full-year expectations Q3 2023 organic revenue evolution by geography +12.3% +11.6% +10.9% +10.3% +8.8% +9.5% +5.0% 9M 2023 organic revenue evolution by geography +16.6% +16.0% +15.8% +11.8% +13.1% +10.9% +9.2% France Central Scandinavia UK & Latin Southern G
Slide 7: New Workwear contracts signed in the first 9 months of 2023
New Workwear contracts signed in the first 9 months of 2023 underscore the success of Elis’ commercial initiatives Strong momentum in Workwear Many opportunities in Healthcare Development of the Pest control Roll out of Elis’ services offer across the board, especially in in our existing geographies
Slide 8: Multiple pricing initiatives in past 18 months to offset inflation-related cost increases
Multiple pricing initiatives in past 18 months to offset inflation-related cost increases The nature of the services provided by Elis and high-quality client relationships give us good pricing power Elis has been running fair and transparent negotiations with its clients ≫ Most of our cost inductors
Slide 9: Pricing momentum will continue to be driven by wage inflation
Pricing momentum will continue to be driven by wage inflation No downward pressures on prices from clients: the Expected minimum wage inflation will mechanically lead to further most important COST ITEMdriver for our price % ofare wages the cost base pricing adjustments ≫ Wages account for c. 60% of
Slide 10: France: Good growth momentum driven by commercial activity and pricing adjustments
France: Good growth momentum driven by commercial activity and pricing adjustments +8.8% revenue growth in Q3 (entirely organic) ≫ Additional new signings in Workwear and in Pest control ≫ Slight decrease in our activity with small clients, especially for non- essential services in a more sluggish e
Slide 11: Central Europe: Sound top line growth driven by good pricing momentum in Germany
Central Europe: Sound top line growth driven by good pricing momentum in Germany +12.9% revenue growth in Q3 (+12.3% organically) ≫ Good progress in the Workwear business across the region, driven by new outsourcing, especially in Germany and in the Netherlands ≫ Strong pricing effect corresponding
Slide 12: Scandinavia & Eastern Europe: Good commercial momentum, strong pricing discipline
Scandinavia & Eastern Europe: Good commercial momentum, strong pricing discipline and negative FX effect -2.2% revenue growth basis in Q3 (+5.0% organically) ≫ Significant negative effect from the evolution of SEK, NOK and RUB ≫ Further gains in Workwear/Cleanroom business in Sweden and in Denmark ;
Slide 13: UK & Ireland: Good performance on the back of pricing adjustments
UK & Ireland: Good performance on the back of pricing adjustments and strong commercial effort +11.1% revenue growth in Q3 (+11.6% organically) ≫ Pricing momentum remains very solid ≫ Strong commercial effort and control of churn led to further growth in Workwear ≫ Client activity remains subdued in
Slide 14: Latin America: Continued sound revenue growth
Latin America: Continued sound revenue growth +14.0% revenue growth in Q3 (+10.9% organically) ≫ Further outsourcing, notably in Healthcare ≫ Pricing momentum remains strong, with a lag now in our favor as inflation is receding ≫ Very limited number of volume losses Organic revenue growth 10.9% 10.9
Slide 15: Southern Europe: Solid pricing plus commercial momentum
Southern Europe: Solid pricing plus commercial momentum driven by outsourcing trend +11.7% revenue growth in Q3 (+10.3% organically) ≫ Outsourcing trend continues with new contract wins in Workwear in Q3 ≫ Pricing level remains satisfactory ≫ Activity in Hospitality was very good in Portugal but dis
Slide 16: Rapid deleveraging continues
Rapid deleveraging continues Net financial leverage at 2.2x as of September 30, 2023 3500 3,5 Mexican acquisition 3400 3,3 paid 100% in cash 3300 3,1 3200 2,9 3100 2,7 3000 2,5 2900 2,3 2800 2,1 2700 1,9 2600 1,7 2500 1,5 Dec 2019 Dec 2020 Dec 2021 Dec 2022 September 2023 Dec 2023 guidance ≫2020 was
Slide 17: A well-diversified debt profile along with well spread maturities
A well-diversified debt profile along with well spread maturities Well-diversified Debt reduction, rating improvement financing and tactical refinancing will limit Debt and rating highlights rise in financial costs ≫ Financial leverage of 2.2x as of September 30, 2023 vs 2.6x at ≫ Elis has always en
Slide 18: Ambitious 2030 climate targets
Ambitious 2030 climate targets
Slide 19: Elis' growth model is a virtuous circle: circular economy
Elis’ growth model is a virtuous circle: Our business is based on the circular economy 1 6 Product Changing 7 design product A B 5 Cleaning 2 Product in 9 Secondary Other life use by our energy Product customers production Second 8 C life Taken out 3 4 of rotation Maintenance New life control Delive
Slide 20: A renewed ambition validated by SBTi
A renewed ambition validated by SBTi (Science Based Targets initiative) 2030 Climate plan The Group’s targets are aligned with the Paris Agreements and will contribute to keeping the Scopes 1 & 2 temperature rise below 1.5°C (emissions linked to energy) (Scopes 1 & 2) and well below between 2019 and
Slide 21: An ambitious but pragmatic plan to reach our targets
An ambitious but pragmatic plan to reach our targets 2030 Climate plan Scope 1 & 2 reduction Scope 3 reduction 1 Further optimize our energy Improve and optimize our 1 use in our industrial laundries 1 operating practices, especially on linen management Reduce the environmental impact of our product
Slide 22: Update on 2023 outlook
Update on 2023 outlook
Slide 23: Proven business resilience over the years
Proven business resilience over the years Dot-com bubble Covid-19 War in September 11 Global Financial Crisis recession Ukraine attacks 4 500 33.7% 40% 34.5% 33.6% 33.8% 33.0% 4 000 32.7% 32.2% 32.2% 31.7% 31.1% 31.7% 31.9% 32.1% 32.5% 32.3% 31.8% 32.7% 31.5% 30.9% 30.6% 31.5% 35% 30.5% 31.1% 3 500
Slide 24: Elis' strong market positioning in most of its countries
Elis’ strong market positioning in most of its countries generates operational efficiency and competitive edge 1 Elis’ market positioning by country 2 2 1 1 1 2 1 1 1 2 2 3 3 3 1 1 2 4 1 1 Source: Elis’ estimates 24
Slide 25: Elis' end-markets are very resilient through economic downturns
Elis’ end-markets are very resilient through economic downturns Main contributors End market Main market characteristics to revenue Industry is resilient given the nature of our clients, which are Food processing: 25% Industry mostly very resilient themselves Pharma: 15% The fixed fee invoicing meth
Slide 26: Elis' organic growth profile reinforced in all non-Hospitality markets
Elis’ organic growth profile reinforced in all non-Hospitality markets Need for more hygiene creates cross-selling opportunities (new products and services) 01 and accelerates the development of outsourcing (need for employers to ensure a clean work environment) Structural trends are Re-industrializ
Slide 27: All full-year 2023 objectives confirmed
All full-year 2023 objectives confirmed Organic revenue growth Adjusted EBITDA margin Adjusted EBIT expected at c. +12% expected up c. +70bps expected above €660m ✓ Expected pricing effect of at least ✓ Topline dynamism, further productivity ✓ Driven by top line dynamism and a +9% (with a significan
Slide 28: Q&A
Q&A
Slide 29: Appendix: Financial definitions
Appendix: Financial definitions ▪ Organic growth 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 imp
Slide 30: Investor Relations contact
Nicolas Buron ELIS SA Director of Investor Relations, Financing & Treasury 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