Elior: CC and Contact: A third profit warning but share price correction looks excessive
Elior: (BUY-TOP PICKS, Fair Value EUR17,5 vs. EUR19,5 (+32%))CC and Contact: A third profit warning but share price correction looks excessive
A third sales and profit warning after Philippe Salle’s departure, it seems to be clear that there are some errors related to its management with too ambitious short and medium-term objectives, even if some of the adjustments result from temporary factors. In fact these letter factors i.e. slower ramp-up of new contracts, bad weather conditions and transport strikes in France explaining 50% of the EBITDA margin downgrade. The remaining margin impact was link to group specific organization in France with actions already undertaken. In line with management new guidance and waiting the new business plan wich will be presented on 26th June, we have downgraded our estimates. Based on a DCF and using lower long term EBITDA margin, our FV move to EUR17.5.
Elior is a contracted food and support services group based in France. Co. provides personalized catering and service solutions to 3.7 million customers in the business & industry, education, healthcare, leisure and travel markets through 17,500 restaurants and points of sale in 13 countries. Co. offer solutions in two core segments, Contract Catering & Support Services (provides foodservice solutions to Business & Industry, Education and Healthcare as well as support services for facilities management and cleaning services) and Concession Catering & Travel Retail (food service solutions for motorways, airports, railway stations and leisure).
Since 1996, Bryan, Garnier & Co has been growing with an absolute conviction that the investment banking landscape would experience a major revolution: most of the large local generalist banking groups will disappear to the benefit of a handful of global powerhouses, and an emerging group of independent, highly specialised boutique investment banks.
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