All players in facility management sector published better than expected results and many of them upgraded their guidance showing that Inflation has driven a stronger than expected top line organic growth while margins remained in line with expectations. Historically, market leaders were resilient with steady organic growth and relatively stable margin during recessions and crises since 2001. Since inflation is here to stay, we have revised slightly upwards our top line estimations for all stock...
Silver lining appears post-Covid Elis is a French company that specialises in linen rental, washroom cleaning and well-being services across 28 countries in Europe and LATAM. Covid-19 has brought increasing structural needs, providing a silver lining for Elis: higher hygiene standards, traceability of workwear, flat linen inventory management. Considering Elis’ resilience in past financial crises, its growth potential and leadership position in the market, we initiate at Buy with a Target Pric...
Disappointing H1 figures with operating result impacted by Covid-restrictions in China. However, with these restrictions now lifted, management confirmed its FY guidance, notably for operating margin in line with last year’s level, i.e. a reassuring message given the environment. Buy confirmed.
Business Services What does the “new normal” post-Covid look like for business services? As office life transitions to more flexible solutions, the sector needs to adapt. We believe Compass and ISS can reap the benefits from being able to reshape. Both are upgraded to Buy. We remain negative on Elior for structural reasons and confirm our neutral opinion on Sodexo. • Adapting to the new ecosystem in the workplace remains vital: Clearly, working from home was a positive experience for many employ...
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 unfav...
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