Q1 2019 revenue growing by +4.3%
Organic growth at +2.4%
Full-year 2019 objective of c. +3% confirmed
- Good organic growth momentum for the Group despite negative calendar effects across the board
- One less billing day in Q1 and shift in Easter week to Q2 in 2019 (vs. Q1 in 2018)
- The organic growth dynamic remains very satisfying in France (+2.0%), in Scandinavia & Eastern Europe (+3.6%), in Southern Europe (+7.0%) and in Latin America (+4.7%)
- Slightly lower performance in Central Europe (+1.3%)
- In UK & Ireland (-1.5%), further progress in the reorganization in the United Kingdom with gradual price increase in Hospitality and churn rate improvement in the Workwear segment; Ireland posted a slight slowdown compared to Q1 2018
- Negotiations with our clients on prices are in line with the gradual price increase expected throughout the year
- +2.6% impact of the acquisitions on Q1 growth, mainly explained by acquisitions finalized in Germany and in Spain in 2018 and 2019
- 2019 outlook confirmed
- Organic revenue growth of c.+3%
- Group EBITDA margin between c. 31.2% and c.31.6% (excluding IFRS 16)
- Capex at 20% of revenue
Saint-Cloud, May 2nd, 2019 – Elis, an international multi-service provider, offering textile, hygiene and facility services solutions across Europe and Latin America, today publishes its revenue for the three months ended March 31, 2019.
Commenting on the first quarter announcement, Xavier Martiré, CEO of Elis, declared:
“With organic revenue growth of +2.4% in Q1, Elis is starting the year with good momentum in most of its geographies.
In Southern Europe organic growth is up +7.0%, driven by the price increases negotiated in Spain in a context of a strong increase in labor costs. In Scandinavia & Eastern Europe, France and Latin America, trends are also very satisfactory. United Kingdom & Ireland slowed down due to lower organic growth in Ireland. In the United-Kingdom, we continue to increase prices in Hospitality and our efforts made in the commercial field continue to bear fruit with an improvement in the client retention rate in Workwear. In Germany, Workwear remains well-oriented and we continue our efforts to increase prices in the Healthcare market.
Moreover, Elis continued the densification of its network in its existing geographies with small-size acquisitions in Sweden, Denmark, Spain and more recently in Russia. These acquisitions have almost no impact on the debt leverage because of their small size and the reasonable multiples paid.
Furthermore, in Q1 Elis refinanced part of its debt: The €800mn bond with a 3% coupon and a 2022 maturity has been refinanced with a €500mn bond with a 1.75% coupon and 2024 maturity and a €300mn USPP financing with a 2.70% coupon and a 2029 maturity, leading to a lower average cost of debt and extended maturities. This refinancing has been very well received by the markets and illustrates the confidence of investors in the Group’s strategy and business model.”
Q1 2019 Revenue (excluding the activities of Clinical Solutions for 2019 and 2018)
(EUR million) | 2019 | 2018 | Reported growth | Organic growth |
| France | 246.9 | 242.1 | +2.0% | +2.0% |
| Central Europe | 177.3 | 160.8 | +10.2% | +1.3% |
| Scandinavia & Eastern Europe | 124.9 | 121.3 | +3.0% | +3.6% |
| United Kingdom & Ireland | 94.3 | 94.6 | -0.4% | -1.5% |
| Latin America | 63.4 | 63.5 | -0.1% | +4.7% |
| Southern Europe | 64.3 | 57.8 | +11.3% | +7.0% |
| Others | 5.7 | 4.7 | +21.5% | +20.9% |
| Total | 776.7 | 744.7 | +4.3% | +2.4% |
Percentage change calculations are based on actual figures.
« Others » includes Manufacturing Entities and Holdings.
France
Q1 2019 organic revenue growth was up +2.0%. All segments are well-oriented despite the negative calendar effects and the impact of the Yellow Vest movement.
Central Europe
Q1 2019 revenue growth was up +10.2%, of which +1.3% organic growth and +8.7% from acquisitions. The organic growth dynamic remains very good in countries such as the Netherlands and Poland. In Germany, organic growth is slightly down in Q1 due to negative calendar effects and Flat linen activity, with one material contract loss in Healthcare at a time when the priority is placed on price increases. The Workwear segment remains well-oriented.
Scandinavia & Eastern Europe
Q1 2019 organic revenue growth was up +3.6%, driven by a commercial dynamic that remains very good. In particular, we saw double-digit growth in the Baltics, in Russia and in Finland.
United Kingdom & Ireland
Q1 2019 revenue growth was down -0.4%, of which -1.5% on an organic basis. Ireland slowed down compared to Q1 2018. In the United Kingdom, organic growth improved compared to Q1 2018:
- Further price increases in Hospitality, where many price negotiations took place with our clients in Q1; their implementation is ongoing, and an acceleration is expected throughout the year,
- Continuing improvement of the churn rate in Workwear thanks to the close attention paid to commercial relations.
Southern Europe
Q1 2019 revenue growth was up +11.3% of which +7.0% of organic growth. This performance is mainly driven by Spain, where the negotiations with our clients to increase prices are starting to have a positive effect. Moreover, Portugal continues with its very good commercial momentum.
Latin America
Despite very high comps, Q1 2019 organic revenue growth in the area was up +4.7% with the commercial dynamic that remains very good in Brazil. We observe an impact of acquisitions of +1.6% and an unfavorable foreign exchange effect of -6.5% in the zone.
Financial definitions
Organic growth in the Group’s revenue is calculated excluding (i) the impacts of changes in the scope of consolidation of “major acquisitions” and “major disposals” (as defined in the Document de Base) in each of the periods under comparison, as well as (ii) the impact of exchange rate fluctuations.
Geographical breakdown
- France
- Central Europe: Germany, Netherlands, Switzerland, Poland, Belgium, Austria, Czech Republic, Hungary, Slovakia, Luxembourg
- Scandinavia & Eastern Europe: Sweden, Denmark, Norway, Finland, Latvia, Estonia, Lithuania, Russia
- UK & Ireland
- Southern Europe: Spain & Andorra, Portugal, Italy
- Latin America: Brazil, Chile, Colombia
Forward looking statements
This document may contain information related to the Group’s outlook. Such outlook is based on data, assumptions and estimates that the Group regarded as reasonable at the date of this press release. Those data and assumptions may change or be adjusted as a result of uncertainties relating particularly to the economic, financial, competitive, regulatory or tax environment or as a result of other factors of which the Group was not aware on the date of this press release. Moreover, the materialization of certain risks described in chapter 2 “Risk factors and insurance policy” of the Registration Document may have an impact on the Group’s activities, financial position, results or outlook and therefore threaten this outlook. The attainment of the outlook also assumes that the Group’s strategy will be successful. As a result, the Group makes no representation and gives no warranty regarding the attainment of any outlook set out above.
Next information
Half year results: July 24, 2019 (after market)
Contacts
Nicolas Buron
Investor Relations Director – Phone: +33 1 75 49 98 30 - nicolas.buron@elis.com
Audrey Bourgeois
Investor Relations – Phone: +33 1 75 49 96 25 - audrey.bourgeois@elis.com
Attachment
