Elis - Growth still driven by rising prices, attractive valuation for a resilient business model
Q3 sales growth of 9.0% reported and 9.5% organic, in line with our estimatesDecline in hospitality business due to lower occupancy rates, but encouraging signs for SeptemberWinning of several new professional clothing contractsGuidance confirmed for 2023Slight downward revision of full-year sales guidance due to FX effectsFinancial leverage of 2.2x at end-September, in line with target of 2.1x leverage at year-endExpected organic growth for 2024 of around 5%, of which 3% price effect and 2% volume effectProfitability expected to improve in 2024 thanks to lower energy costs (hedging contracts in place)Price target unchanged at €20 and "BUY" opinion confirmedElis is a multi-service group in the rental, laundry and maintenance of textile, hygiene and well-being items in Europe and Latin America. Co. serves hundreds of thousands of customers of all sizes, belonging to various professional customer segments: hospitality, healthcare, industry, trade and services. Co. also has a manufacturing business carried out by two entities, Le Jacquard FranASSais and Kennedy Hygiene Products which together form one of the company's operating segments.
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