ELIOR SELL | EUR3.1 VS. EUR4.7 Guidance seems overly ambitious
In this report, we revise our forecasts following H1 results and to take account of the latest outlook and market conditions. Indeed, before a new CEO is appointed, Elior has revised its EBITA margin for FY24 downwards from 4.6% to 4% mainly due to a high inflation rate and a new adaptation plan, including the exit of Preferred Meals in the US. However, considering Elior’s relatively low retention rate and its historical performance, we think its guidance is overly ambitious in a currently unfavorable macro environment. Finally, the announcement of Derichebourg's acquisition of 14.7% of Elior's capital from BIM at a price of EUR5.65, representing a premium of more than 100%, does not seem to reflect the economic and financial reality of the group in our view. We maintain our recommendation at Sell and have adjusted our TP to EUR3.1 from EUR4.7.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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