Elior: CMD: New short term adjustment in an environment not yet stabilized
Elior: (NEUTRAL vs. BUY-TOP PICKS, Fair Value EUR14,5 vs. EUR17,5 (+13%))CMD: New short term adjustment in an environment not yet stabilized
After three years of margin decreases and capex increases, new management first main objectives is to stabilize the situation in order to be able to start on a sounder base in an environment marked by the return of inflation and evolving behaviour, especially among millenniums. So, confirming 2018 guidance, management’s expectation for the first year of the plan is to maintain the EBITA margin with capex at the same level as a % of revenue, which explains our main forecast adjustments. Moreover, management’s objectives at the end of 2021 to deliver above 3% organic per annum on average, with adjusted EBITA growth double that of organic, are lower than our anticipation – notably a return to the 2016 margin that we considered until now conservative. We downgrade our recommendation to Neutral with a FV of EUR14.5.
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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