Elis: Full-year 2023 revenue
Record 2023 revenue at €4.3bn, up +12.8%
vs. 2022
Estimated 2023 financial results are
above targets: 2023 adjusted EBITDA at c.
34.2%2023 free cash-flow slightly above
€300m
2023 revenue at €4,309.4m, driven by
organic growth of +11.8%
- Good pricing
momentum on the back of adjustments implemented since 2022 to
offset inflation
- Price effect was c.
+9% on average in 2023, with a sequential decrease throughout the
year, linked to the base effect
- Many new contract
wins in Workwear, driven by outsourcing momentum, especially in
Southern Europe and in Latin America
- Hospitality
benefited from a favourable comparable base in Q1; activity then
stabilized over the rest of the year
- Strong pricing
discipline for tenders or contract renewals, resulting in a
moderate increase in churn
- Excellent level of
performance by our Mexican operations, consolidated since July
2022: double-digit organic revenue growth in H2 2023
- Satisfactory
activity in Q4: organic revenue growth of +8.1%; no sign of
meaningful slowdown in our clients’ activity
2023 operational performance leads to
estimated 2023 results that are better than previously-communicated
targets1
- The Group’s pricing
discipline, combined with further logistics and industrial process
optimization, enable us to estimate 2023 adjusted EBITDA margin at
c. 34.2%, up c. +120bps yoy, i.e. c. €215m above 2022 level
- 2023 adjusted EBIT,
headline net income and headline net income per share should also
be above targets communicated in October, on the back of the strong
increase in EBITDA
- Despite an
unfavorable calendar effect, good cash collection at year-end leads
to estimated 2023 free cash-flow of slightly above €300m, up c.
€75m compared to 2022
- All the above
should lead to a financial leverage ratio at c. 2.0x as of 31
December 2023
- The financial data
for the financial year ended on December 31, 2023 have been
prepared on the basis of unaudited estimates as at December 31,
2023
- Full-year 2023
results will be released on 7 March 2024 before market
Saint-Cloud, 30 January 2024 –
Elis, the global leader in circular services at work, today
announces its 2023 full-year revenue. The financial data disclosed
in this press release is provided by Elis’ annual accounting
process and is currently being audited. The Group’s financial
statements will be approved by Elis’ Management Board on 6 March
2024.
Commenting on the announcement, Xavier
Martiré, Chairman of the Management Board of Elis,
said:
« In 2023, Elis delivered record revenue of
€4.3bn, up nearly +13% year-on-year, and should deliver a
better-than-expected 2023 financial performance.
With inflation remaining strong in Europe,
growth largely benefited from the pricing adjustments implemented
throughout 2022 and in 2023 to offset the increase in our cost
base; the impact from these pricing adjustments is c. +9% in
2023.
This strict pricing discipline sometimes led to
the non-renewal of an existing contract, or to a missed opportunity
while tendering for a new contract. Consequently, we observed a
1-point increase in churn to c. 7%.
Commercial momentum in Workwear remained strong
in all our geographies, still driven by further outsourcing in many
industries. Our offers, which address the increasing needs of our
clients for hygiene, traceability and for a more secure supply
chain, continue to be a resounding success, and we achieved a high
level of new contract signings in 2023.
In Hospitality, after a catch-up effect in Q1,
activity showed a mixed picture during summer but has slightly
improved since then.
The good operational performance in 2023
reflects the Group’s strategy; it should lead to 2023 results that
are above the targets communicated to the market in October. Our
strong pricing discipline, coupled with logistics and industrial
process optimization, enable us to estimate 2023 adjusted EBITDA
margin at c. 34.2%, up c. +120pbs year-on-year. The other P&L
aggregates should also be above the previous guidance on the back
of the strong increase in EBITDA. Finally, good cash collection at
year-end enables us to estimate 2023 free cash-flow at slightly
above 300m€ and the financial leverage ratio as of 31 December 2023
at c. 2.0x.
We entered 2024 with confidence: visibility is
good, both in terms of revenue (pricing, activity forecast) and
cost base (salary negotiations, purchasing contracts). 2024 should
thus be another year of profitable growth for Elis. We will
provide, as usual, a detailed financial outlook for 2024 when we
release our full-year 2023 results on March 7.
The great resilience that Elis demonstrated
through the various recent crises, its operational know-how, its
strengthened organic growth and its model based on the principles
of the circular economy are major assets that will enable the Group
to continue to assert its leadership in all the countries in which
it operates. »
I. 2023 revenue
Full-year 2023 reported growth breakdown
In millions of
euros |
2023 |
2022 |
Organic growth |
External growth |
FX |
Reported growth |
France |
1,311.6 |
1,185.0 |
+10.7% |
- |
- |
+10.7% |
Central Europe |
1,013.4 |
870.0 |
+15.1% |
+0.7% |
+0.7% |
+16.5% |
Scandinavia &
East. Eur. |
599.2 |
580.7 |
+8.5% |
+0.3% |
-5.5% |
+3.2% |
UK &
Ireland |
534.9 |
476.5 |
+14.0% |
- |
-1.8% |
+12.3% |
Latin America |
444.9 |
347.3 |
+10.4% |
+16.3% |
+1.3% |
+28.1% |
Southern
Europe |
379.2 |
330.5 |
+13.6% |
+1.1% |
- |
+14.7% |
Others |
26.1 |
30.8 |
-14.0% |
- |
-1.0% |
-15.0% |
Total |
4,309.4 |
3,820.9 |
+11.8% |
+1.8% |
-0.8% |
+12.8% |
« Others » includes Manufacturing
entities and
Holdings. Percentage
change calculations are based on actual figures.
2023 organic growth breakdown
|
Q1 |
Q2 |
H1 |
Q3 |
Q4 |
H2 |
France |
+15.8% |
+11.6% |
+13.5% |
+8.8% |
+7.4% |
+8.1% |
Central Europe |
+21.4% |
+16.7% |
+18.9% |
+12.3% |
+10.9% |
+11.6% |
Scandinavia &
East. Eur. |
+15.8% |
+7.4% |
+11.5% |
+5.0% |
+6.4% |
+5.7% |
UK &
Ireland |
+23.9% |
+13.9% |
+18.5% |
+11.6% |
+8.5% |
+10.1% |
Latin America |
+12.6% |
+9.5% |
+10.9% |
+10.9% |
+9.4% |
+10.1% |
Southern
Europe |
+24.7% |
+15.4% |
+19.4% |
+10.3% |
+7.1% |
+8.8% |
Others |
-15.4% |
+6.6% |
-4.4% |
-20.3% |
-22.5% |
-21.4% |
Total |
+18.3% |
+12.5% |
+15.2% |
+9.5% |
+8.1% |
+8.8% |
« Others » includes Manufacturing entities and
Holdings. Percentage
change calculations are based on actual figures.
Q4 2023 reported growth breakdown
In millions of
euros |
Q4 2023 |
Q4 2022 |
Organic growth |
External growth |
FX |
Reported growth |
France |
324.2 |
301.9 |
+7.4% |
- |
- |
+7.4% |
Central Europe |
258.8 |
231.4 |
+10.9% |
- |
+0.9% |
+11.8% |
Scandinavia &
East. Eur. |
155.2 |
153.3 |
+6.4% |
- |
-5.1% |
+1.3% |
UK &
Ireland |
134.2 |
123.3 |
+8.5% |
- |
+0.3% |
+8.8% |
Latin America |
114.1 |
103.7 |
+9.4% |
- |
+0.7% |
+10.1% |
Southern
Europe |
91.2 |
83.5 |
+7.1% |
+2.2% |
- |
+9.3% |
Others |
7.0 |
9.0 |
-22.5% |
- |
+0.3% |
-22.2% |
Total |
1 084.7 |
1 006.1 |
+8.1% |
+0.2% |
-0.5% |
+7.8% |
« Others » includes Manufacturing entities and
Holdings. Percentage
change calculations are based on actual figures.
France
2023 full-year revenue was up +10.7% (entirely
organic). Pricing dynamic was good, driven by the adjustments
implemented since 2022 to offset cost inflation. We continued to
record many contract wins in Workwear and Pest Control. However, we
noticed a slight slowdown in the activity of our small clients,
notably for non-essential services. In Hospitality, the comparable
base was favorable in Q1 but more difficult afterwards: overall,
activity was stable compared to 2022.
In Q4 2023, revenue was up +7.4% (entirely
organic).
Central Europe
In 2023, revenue was up +16.5% (+15.1% on an
organic basis). Commercial momentum was satisfactory, notably in
Germany and in the Netherlands, the region’s main countries, where
further outsourcing led to new contract signings in Workwear.
Germany delivered organic revenue growth of +c. 17%: most of our
pricing adjustments negotiated in 2022 to offset strong inflation
(mainly wages) were implemented at the beginning of 2023. However,
the Group’s pricing discipline led to some contract losses in some
countries, notably in Germany (Healthcare).
In Q4 2023, revenue was up +11.8% (+10.9% on an
organic basis).
Scandinavia & Eastern Europe
2023 full-year revenue was up +3.2% (+8.5% on an
organic basis), with an FX impact of -5.5%, mainly due to the
evolution of the Swedish Krona and the Norwegian Krone. Organic
revenue growth was driven by pricing adjustments and commercial
dynamism in Workwear (including Cleanroom). In Hospitality,
activity was fine.
In Q4, revenue was up +1.3% (+6.4% on an organic
basis), with a still-negative FX impact (-5.1%). However, we
observed a rebound in commercial dynamism.
UK & Ireland
2023 revenue was up +12.3% (+14.0% on an organic
basis), with a negative FX impact of -1.8% year-on-year. The
region’s pricing dynamic was good. Healthcare activity remained
very solid. In Industry and Trades & Services, we recorded new
contract signings thanks to continuous commercial efforts, but
client activity was impacted by the deteriorating macro environment
in the UK. Finally, our pricing discipline led to some volume
losses in Hospitality.
In Q4 2023, revenue was up +8.8% (+8.5% on an
organic basis).
Latin America
In 2023, revenue was up +28.1% (+10.4% on an
organic basis). Acquisitions contributed to +16.3% to the growth in
the region. Our Mexican acquisition, consolidated since July 1,
2022 delivered double-digit organic growth in H2. This acquisition
significatively strengthens our growth profile in the region. In
addition, we saw further outsourcing trends in all the countries of
the region, and we continued to record contract wins, notably in
Healthcare. Finally, contract losses were very limited despite a
pricing effect above inflation level throughout the year.
In Q4 2023, revenue was up +10.1% (+9.4% on an
organic basis).
Southern Europe
In 2023, revenue was up +14.7% (+13.6% on an
organic basis), driven by good pricing dynamic. In Workwear, the
outsourcing trend continued to be solid, and we recorded many new
contract signings, notably with food-processing companies. Activity
in Hospitality continued to rebound and returned to pre-Covid
levels. Finally, the acquisitions of Gruppo Indaco in Italy and
Levante in Spain create local platforms to boost the development of
Pest Control in the region. These acquisitions contributed +1.1% to
the region’s annual growth.
In Q4 2023, revenue was up +9.3% (+7.1% on an
organic basis).
II. CSR developments
The circular economy at the heart of Elis’ business
model
Elis offers its clients products that are
maintained, repaired, reused, and reemployed to optimize their
usage and lifespan. The Group therefore selects its textile
products based on sustainability criteria, to ensure frequent
washing, and also operates repair workshops. Elis’ conviction is
that the circular economy model, which notably aims at reducing
consumption of natural resources by optimizing the lifespan of
products, is a sustainable solution to address today’s
environmental challenges.
The services offered by Elis are a sustainable
alternative to simple purchase or use of products, or to single use
/ disposable products.
Furthermore, these alternatives to a linear
consumption approach enable our clients to avoid CO2 emissions and
contribute to a reduction of their own emissions.
The Ellen MacArthur Foundation states that the
circular economy can significantly contribute to reaching Net Zero
and that nearly 9 billion tons of CO2eq (i.e. 20% of world
emissions) could be reduced thanks to the transition of just some
key industries from the current model towards a circular
economy.
Non-financial rating
The Group CSR performance is recognized by
non-financial rating agencies:
- In 2023, MSCI
rating agency improved Elis’ ESG rating to A from BBB. It rewards
the Group commitment regarding CSR and its continuous
improvements,
- In 2023, Elis
obtained a Gold medal to the EcoVadis questionnaire, maintaining
its score of 75/100. This prize confirms Elis commitment towards
its clients, partners and employees, and places the Group within
the best assessed companies of the business sector. Elis’ CSR
strategy fulfills EcoVadis’ assessment criteria, which are based on
international standards and 4 CSR themes (Environment, Social &
Human Rights, Ethics and Sustainable Purchasing). This medal places
Elis within the top 5% of the c. 100,000 companies assessed by
EcoVadis,
- On its last
assessment, the Group was also rated A by the CDP (Carbon
Disclosure Project), a non-profitable organization which performs
independent assessments on the basis of information made available
by companies on their strategy, performance and commitment of
stakeholders on climate goals. This assessment places the Group in
the « Leadership » category and underlines its commitment
and action in the area of climate change. Furthermore, the Group
was also rated A by the CDP Supplier Engagement Leaderboard which
places Elis in the top 8% of companies assessed for their
climate-friendly actions across value chain,
- Sustainalytics
maintains the Group rating as « low risk » concerning
CSR,
- Finally, Elis
improved its score with rating agency Ethifinance ESG Rating
(ex-Gaia), to 75 from 73 previously, maintaining its “Gold”
level.
Our climate commitment: ambitious 2030 climate
targets
On September 4, Elis unveiled its climate
roadmap and related 2030 targets, underscoring its commitment to
contributing to a low-carbon society.
Elis’ ambition is to achieve the following
targets by 2030:
- Reduce absolute
scope 1 and 2 GHG emissions by 47.5% by 2030 from a 2019 base
year2;
- Reduce absolute
scope 3 GHG emissions from purchased goods and services, fuel and
energy related activities, upstream transportation and
distribution, employee commuting, and end-of-life treatment of sold
products by 28% within the same timeframe.
These targets have been approved by the Science
Based Targets initiative (SBTi), an international reference and a
partnership between the United Nations Global Compact, the World
Resources Institute (WRI), the Carbon Disclosure Project (CDP) and
the World Wildlife Fund for Nature (WWF). They are fully in line
with the objectives of the 2015 Paris Climate Agreements to
contribute to restrict global warming to less than 1.5°C compared
to pre-industrial levels on Scope 1 and 2, and well below 2°C on
Scope 3.
These climate targets mark a new step in Elis’
sustainability strategy and climate actions. The Group has worked
for many years to reduce its energy consumption and CO2eq
emissions.
In December 2023, these 2030 targets have been
integrated to the calculation of the margin of the €900 million
Sustainability-Linked Revolving Credit Facility of the Group.
III. Other information
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 impact of
exchange rate fluctuations.
- Adjusted EBITDA is
defined as adjusted EBIT before depreciation and amortization net
of the portion of grants transferred to income.
- Adjusted EBITDA
margin is defined as adjusted EBITDA divided by revenue.
- Adjusted EBIT is
defined as net income (loss) before net financial income (loss),
income tax, share in net income of equity accounted companies,
amortization of intangible assets recognized in a business
combination, goodwill impairment losses, other operating income and
expense, miscellaneous financial items (bank fees recognized in
operating income) and IFRS 2 expense (share-based payments).
- Adjusted EBIT
margin is defined as adjusted EBIT divided by revenue.
- Headline net result
corresponds to net income or loss excluding extraordinary items
which, due to their type and unusual nature, cannot be considered
as intrinsic to the Group’s current performance.
- Free cash flow is
defined as adjusted EBITDA less non-cash-items and changes in
working capital. purchases of linen, capital expenditures (net of
disposals), tax paid, financial interest paid and lease liabilities
payments.
- The financial
leverage ratio is the leverage ratio calculated for the purpose of
the financial covenant included in the banking agreement signed in
2021: Leverage ratio is equal to Net financial debt / adjusted
EBITDA, pro forma of acquisitions finalized during the last 12
months, and after synergies.
Geographical breakdown
- France
- Central Europe:
Austria, Belgium, Czech Republic, Germany, Hungary, Luxembourg,
Netherlands, Poland, Slovakia, Switzerland
- Scandinavia &
Eastern Europe: Denmark, Estonia, Finland, Latvia, Lithuania,
Norway, Russia, Sweden
- UK &
Ireland
- Latin America:
Brazil, Chile, Colombia, Mexico
- Southern Europe:
Italy, Portugal, Spain & Andorra
Presentation of 2023 full-year revenue (in
English)
Date: January 30, 2024 at 5:00pm GMT (6:00pm CET)
Speakers: Xavier Martiré (Chairman of the Management Board) and
Louis Guyot (CFO)
Webcast link: https://edge.media-server.com/mmc/p/9tz7zqjj
Conference call & Q&A session
link:https://register.vevent.com/register/BI54cb97be6a4c4883bdeb6d117121f06d
An investor presentation will be available at 4:50pm GMT (5:50pm
CET) at this address:
https://fr.elis.com/fr/groupe/relations-investisseurs/information-reglementee
Disclaimer
The financial data for the financial year ended
December 31, 2023 presented in this press release are estimates.
These estimates have been prepared in accordance with an accounting
and consolidation process similar to that normally used to prepare
consolidated financial statements. The accounting basis used for
these estimates is consistent with the accounting methods applied
by Elis and described in its consolidated financial statements.
However, all annual approval procedures have not yet been
completed. These estimated financial data have been reviewed by the
Management Board of Elis, and have not been audited by the
statutory auditors of Elis. These financial data are not derived
from consolidated financial statements that have been officially
approved by the Management Board of Elis. The approval of the
consolidated financial statements for the financial year ended
December 31, 2023 by the Management Board of Elis is scheduled for
March 6, 2024. The results with respect to the financial year ended
December 31, 2023 will be published on March 7, 2024, before market
opening, according to the financial calendar available on the
Elis’s website (www.elis.com).
Also, this press release may include data
information and statements relating to estimates, 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 to climate objectives, financial targets
and other goals set forth therein. Forward-looking statements are
not statements of historical fact and may contain the terms “may”,
“will”, “should”, “continue”, “aims”, “estimates”, “projects”,
“believes”, “intends”, “expects”, “plans”, “seeks” or “anticipates”
or words of similar meaning. In addition, the term “ambition”
expresses an outcome desired by the Group, it being specified that
the means to be deployed do not depend solely on the Group. Such
information and statements are based on data, assumptions and
estimates that the Group considers as reasonable as of the date of
this press release and, by nature, involve known and unknown risks
and uncertainties. These data have not been audited by the
statutory auditors of Elis. These data, assumptions and estimates
may change or be adjusted as a result of uncertainties, many of
which are outside the control of the Group, relating particularly
to the economic, financial, competitive, regulatory or tax
environment or as a result of other factors of which the Group is
not aware on the date of this press release. In addition, the
materialization of certain risks, especially those described in
chapter 4 “Risk management and internal control” of the Universal
Registration Document for the financial year ended December 31,
2022, which is available on Elis’s website (www.elis.com), may have
an impact on the Group’s business, financial condition, results of
operations, performance, and strategy, notably with respect to
these climate-related objectives, financial objectives or other
objectives included in this press release. Therefore, the actual
achievement of climate-related objectives, financial targets and
other goals set forth in this press release may prove to be
inaccurate in the future or may differ materially from those
expressed or implied in such forward-looking statements. The Group
makes no representation and gives no warranty regarding the
achievement of any climate objectives, targets and other goals set
forth in this press release. Therefore, undue reliance should not
be placed on such information and statements.
This press release and the information included
therein were prepared on the basis of data made available to the
Group as of the date of this press release. Unless stated otherwise
in this press release, this press release and the information
included therein are accurate only as of such date. The Group
assumes no obligation to update or revise any of these
forward-looking statements, whether to reflect new information,
future events or circumstances or otherwise, except as required by
applicable laws and regulations.
This press release includes certain
non-financial metrics, as well as other non-financial data, all of
which are subject to measurement uncertainties resulting from
limitations inherent in the nature and the methods used to
determine them. These data generally have no standardized meaning
and may not be comparable to similarly labelled measures used by
other companies. The Group reserves the right to amend, adjust
and/or restate the data included in this press release, from time
to time, without notice and without explanation. The data included
in this press release may be further updated, amended, revised or
discontinued in subsequent publications, presentations and/or press
releases of Elis, depending on, among other things, the
availability, fairness, adequacy, accuracy, reasonableness or
completeness of the information, or changes in applicable
circumstances, including changes in applicable laws and
regulations.
This press release may include or refer to
information obtained from or established on the basis of various
third-party sources. Such information may not have been reviewed,
and/or independently verified, by the Group and the Group does not
approve or endorse such information by including them or referring
to them. Accordingly, the Group does not guarantee the fairness,
adequacy, accuracy, reasonableness or completeness of such
information, and no representation, warranty or undertaking,
express or implied, is made or responsibility or liability is
accepted by the Group as to the fairness, adequacy, accuracy,
reasonableness or completeness of such information, and the Group
shall not be obliged to update or revise such information.
The climate-related data and the climate-related
objectives included in this press release were neither audited nor
subject to a limited review by the statutory auditors of the
Group.
Next information
- Full-year 2023
results: March 7, 2024 (before market) – webcast at 7:30am GMT
(8:30am CET)
- Q1 2024 revenue:
May 6, 2024 (after market)
IV. Contacts
Nicolas BuronDirector of Investor Relations,
Financing and TreasuryPhone: + 33 (0)1 75 49 98 30 -
nicolas.buron@elis.com
Charline LefaucheuxInvestor Relations Phone: +
33 (0)1 75 49 98 15 - charline.lefaucheux@elis.com
1 On October 26, 2023, the Group confirmed the
following objectives:
- 2023 adjusted EBITDA margin
expected up c. +70bps yoy
- 2023 adjusted EBIT expected above
€660m
- 2023 headline net income expected
above €410m
- 2023 headline net income per share
expected above €1.65 (on a fully diluted basis)
- 2023 free cash-flow expected above
€260m
- Financial leverage ratio expected
at c. 2.1x as of 31 December 2023
2 The target boundary includes land-related
emissions and removals from bioenergy. Scope 2 emissions targets
are market-based.Scope 1 (direct emissions) is mainly associated
with consumption of gas, fuel, etc. Scope 2 (indirect emissions) is
associated with consumption of electrical energy or steam; Scope 3
(other indirect emissions) is associated with emission from other
areas: purchases, upstream transport, employee travel, etc.
- Elis - Full-year 2023 revenue
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