ELIS -
Further organic growth in all geographies of Elis' historical scope
o +2.3% in France: decent summer season and favorable comps
o +1.4% in Europe: lower growth in Spain and disappointing summer season in Switzerland
o +5.0% in Latin America: good commercial momentum in Brazil but difficult comps due to the 2016 Olympics
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Strong contribution of acquisitions: +44.5% in the quarter
Berendsen is consolidated since 1st September and contributed to one month of revenue this quarter
Further consolidation in the Brazilian market with the acquisition of Bardusch Brazil in July
Favorable impact of the acquisition of Indusal and Lavebras : +13.1% this quarter
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Efficient takeover of Berendsen
Potential synergies significantly above the €40m estimated in June
New investment plan currently in preparation
UK: soft market currently, clearly identified potential for operational improvements in flat linen
Scandinavia and Central Europe: good momentum overall
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2017 outlook confirmed for Elis excluding Berendsen
Revenue above €1.75bn
Group organic growth in line with 2016
EBITDA margin improvement in all geographies
Commenting on the third quarter revenues, Xavier Martiré, CEO of Elis, said:
« Elis posted revenue growth of more than 46% in Q3 with organic growth of +2.3%. All the geographies in Elis' historical scope showed positive trends despite a high comparable base in Spain and in Brazil. In France, the improvement observed in the first half of the year continues, with a sequential improvement of organic growth in Q3.
Our recent acquisitions continue to drive growth, notably Indusal, Lavebras and of course Berendsen, which is consolidated as of September, 1st.
On the back of these numbers, we confirm the full-year objectives we provided in July for Elis' historical scope: we target revenues of €1.75bn and forecast EBITDA margin improvement in all geographies.
We finalized the acquisition of Berendsen on September, 12th. Since then, a specific integration program has been put in place. A set of detailed analyses are being run in all countries to identify both operational and financial improvements and to announce the Group's new organization. Some first measures have already been put in place. It is still too early to deliver a comprehensive assessment of our observations but we are confident about our ability to deliver an amount of synergies significantly above the 40 million euros that we estimated in June. After more than sixty plant visits, we are currently working on an investment plan adapted to the real needs of Berendsen's industrial asset base. Alongside part of Elis' Management team, I will be pleased to present a detailed strategic plan during an Investor Day that will take place in January in London. »
Elis SA
Head Office: 5 Boulevard Louis Loucheur, 92210 Saint-Cloud - France - Phone: +33 (0) 1 75 49 94 00 www.corporate-elis.com
Joint-stock corporation governed by an Executive Board and a Supervisory Board Registered capital of 219,350,914 euros - RCS: 499 668 440 Nanterre
Following the acquisition of Berendsen (consolidated in the P&L since September 1st, 2017), Elis will now report its revenue based on a new geographical breakdown. This new breakdown is presented below for Q3 2017 revenue and 9-month 2017 revenue.
Q3 revenues (EUR million) | 2017 | 2016 | Reported growth | Organic growth |
France | 267.2 | 257.9 | +3.6% | +2.3% |
Central Europe | 98.1 | 57.4 | +71.0% | +0.2% |
Scandinavia & Eastern Europe | 40.1 | - | n/a | n/a |
UK & Ireland | 38.1 | - | n/a | n/a |
Southern Europe | 75.1 | 46.9 | +60.1% | +3.6% |
Latin America | 67.0 | 36.1 | +85.7% | +5.0% |
Manufacturing entities | 4.2 | 4.6 | -8.4% | -6.1% |
Total | 589.8 | 402.8 | +46.4% | +2.3% |
A detail of the countries included in each geography is presented in the « Geographical breakdown » section of this release.
Percentage change calculations are based on actual figures.
9-month revenue (EUR million) | 2017 | 2016 | Reported growth | Organic growth |
France | 761.8 | 742.6 | +2.6% | +1.5% |
Central Europe | 228.6 | 159.8 | +43.0% | +1.7% |
Scandinavia & Eastern Europe | 40.1 | - | n/a | n/a |
UK & Ireland | 38.1 | - | n/a | n/a |
Southern Europe | 198.9 | 120.7 | +64.8% | +5.9% |
Latin America | 154.6 | 95.9 | +61.2% | +7.4% |
Manufacturing entities | 13.5 | 14.0 | -3.5% | +0.3% |
Total | 1,435.6 | 1,133.1 | +26.7% | +2.5% |
A detail of the countries included in each geography is presented in the « Geographical breakdown » section of this release.
Percentage change calculations are based on actual figures.
FranceQ3 2017 revenue was up +3.6% in France of which +2.3% organic growth. Trends in Hospitality and Trade
& Services are positive, which confirms the dynamism seen in the first half. However, Hospitality benefited from a relatively easy comparable base: Paris and the French Riviera were impacted during the summer of 2016 by the terrorist attack in Nice. Industry and Healthcare also show an improvement compared to the first half, on the back of the general improvement of the business climate.
Central EuropeQ3 2017 revenue in Central Europe amounts to €98.1m. This breaks down into €67.6m corresponding to three months of revenue for the « Northern Europe » geography in the former Elis scope, and €30.5m corresponding to September revenue for Berendsen in the region (a detail of the countries included in this geography is presented in the « Geographical breakdown » section of this release).
Organic growth of the region in Q3 (which thus corresponds to the Elis scope only) was +0.2%. Switzerland is down due to a disappointing summer season and growth in Germany remains limited.
In this region, Berendsen mainly operates in Germany, Netherlands and Poland. It mostly serves clients in Industry (c. 50% of revenue) with good momentum, and in Healthcare (c. 30%). Organic revenue growth for the Berendsen scope in the region was up +5.1% in the first 9 months of the year.
Scandinavia & Eastern EuropeQ3 2017 in Scandinavia & Eastern Europe corresponds entirely to the activity of Berendsen in September. This region corresponds to the historical scope of the Sophus Berendsen group (Sweden and Denmark), with clients in Trade & Services, Industry and Hospitality. Commercial momentum is good and revenue was up +3.4% on an organic basis in the first 9 months of the year.
UK & IrelandQ3 2017 revenue in UK & Ireland corresponds entirely to the activity of Berendsen in September. In this region, the Group serves clients in Healthcare (c. 50% of revenue), in Hospitality (c. 25%) and in Industry (c. 25%). The UK market is currently sluggish, with a clear drop in occupancy rates in hospitality and revenue in the region is down -2.8% on an organic basis in the first 9 months of the year.
Our first observations of Berendsen's production sites highlight clear upside potential in flat linen processing.
Southern EuropeQ3 2017 revenue was up +60.1% in Southern Europe, with the acquisition of Indusal in Spain in December 2016 driving this growth. Organic growth was +3.6%. This performance was again driven by Portugal (c.
+7.5% organic growth). Activity remains good in Spain, although we note a slight slowdown due to both a high comparable base (the summer of 2016 was very good). Note that the recent events in Catalonia (Barcelona terrorist attack and political situation), did not impact the hospitality business.
Latin AmericaQ3 2017 revenue was up +85.7% in Latin America, with organic growth of +5.0%, a +82.2% contribution from acquisitions (including 3 months from Lavebras) and a -1.4% impact from foreign exchange. Commercial momentum remained very good in Brazil despite a tough comparable base due to the uplift generated by the Olympic Games in Q3 and Q4 2016.
Furthermore, price increases are now in line, or even slightly above inflation, which was running below 3% on an annualized basis in Q3 2017.
In order to facilitate understanding, Elis's standalone Q3 2017 revenue and 9-month 2017 revenue (i.e. excluding Berendsen's contribution) are presented below under the geographical split that was provided in our past financial releases.
Q3 revenues (EUR million) | 2017 | 2016 | Reported growth | Organic growth |
Trade & Services | 90.0 | 87.1 | +3.4% | +3.4% |
Hospitality | 96.0 | 91.8 | +4.6% | +3.4% |
Industry | 47.2 | 46.8 | +0.9% | +0.9% |
Healthcare | 43.4 | 40.4 | +7.5% | +2.1% |
Francea | 267.2 | 257.9 | +3.6% | +2.3% |
Northern Europe | 67.6 | 57.4 | +17.9% | +0.2% |
Southern Europe | 75.1 | 46.9 | +60.1% | +3.6% |
Europe | 142.7 | 104.3 | +36.9% | +1.4% |
Latin America | 67.0 | 36.1 | +85.7% | +5.0% |
Manufacturing Entities | 4.2 | 4.6 | -8.4% | -6.1% |
Total | 481.1 | 402.8 | +19.4% | +2.3% |
a : After other items including rebates
Percentage change calculations are based on actual figures
9-month revenue (EUR million) | 2017 | 2016 | Reported growth | Organic growth |
Trade & Services | 264.7 | 257.7 | +2.7% | +2.7% |
Hospitality | 252.7 | 241.5 | +4.6% | +3.5% |
Industry | 139.9 | 140.9 | -0.7% | -0.7% |
Healthcare | 129.7 | 122.9 | +5.5% | +1.1% |
Francea | 761.8 | 742.6 | +2.6% | +1.5% |
Northern Europe | 198.1 | 159.8 | +23.9% | +1.7% |
Southern Europe | 198.9 | 120.7 | +64.8% | +5.9% |
Europe | 397.0 | 280.6 | +41.5% | +3.4% |
Latin America | 154.6 | 95.9 | +61.2% | +7.4% |
Manufacturing Entities | 13.5 | 14.0 | -3.5% | +0.3% |
Total | 1,326.9 | 1,133.1 | +17.1% | +2.5% |
a : After other items including rebates
Percentage change calculations are based on actual figures.
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.
Geographical breakdown
France
Central Europe: Germany, Netherlands, Switzerland, Poland, Belgium, Austria, Czech Republic, Hungary, Slovakia, Luxemburg
Scandinavia & Eastern Europe: Sweden, Denmark, Norway, Finland, Latvia, Estonia, Lithuania, Russia
UK & Ireland
Southern Europe: Spain, Portugal, Italy
Latin America: Brazil, Chile, Colombia
Elis | Berendsen | |
France | | |
Central Europe | | |
Germany | | |
Netherlands | | |
Switzerland | | |
Poland | | |
Belgium | | |
Austria | | |
Czech Republic | | |
Hungary | | |
Slovakia | | |
Luxemburg | | |
Scandinavia & Eastern Europe | | |
Sweden | | |
Denmark | | |
Norway | | |
Finland | | |
Estonia | | |
Latvia | | |
Lithuania | | |
Russia | | |
UK & Ireland | | |
UK | | |
Ireland | | |
Southern Europe | | |
Spain & Andorra | | |
Portugal | | |
Italy | | |
Latin America | | |
Brazil | | |
Chile | | |
Colombia | | |
Manufacturing entities | | |
France | | |
UK | |
Investor and analyst conference call in English
Speakers:Xavier Martiré, CEO Louis Guyot, CFO
Date:Thursday, October 26th, 2017 6:00pm CET
Webcast link (live and replay):https://edge.media-server.com/m6/p/59bg65fj
Webcast replay will be available for 1 year following the event.
Dial-in numbers:France: +33 1 76 77 22 26
United Kingdom: +44 203 427 1911
United States of America: +1 212 444 0412
Code: 8281323 Replay numbers:France: +33 1 70 48 00 94
United Kingdom: +44 207 984 7568
United States of America: +1 719 457 0820
Elis SA published this content on 26 October 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 26 October 2017 15:49:02 UTC.
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