Strong growth in Q3 2017 revenue, up +46.4%
Organic growth at +2.3%

Integration of Berendsen underway

  • Further organic growth in all geographies of Elis' historical scope
    • +2.3% in France: decent summer season and favorable comps
    • +1.4% in Europe: lower growth in Spain and disappointing summer season in Switzerland
    • +5.0% in Latin America: good commercial momentum in Brazil but difficult comps due to the 2016 Olympics
  • Strong contribution of acquisitions: +44.5% in the quarter
    • Berendsen is consolidated since 1st September and contributed to one month of revenue this quarter
    • Further consolidation in the Brazilian market with the acquisition of Bardusch Brazil in July
    • Favorable impact of the acquisition of Indusal and Lavebras : +13.1% this quarter
  • Efficient takeover of Berendsen
    • Potential synergies significantly above the €40m estimated in June
    • New investment plan currently in preparation
    • UK: soft market currently, clearly identified potential for operational improvements in flat linen
    • Scandinavia and Central Europe: good momentum overall
  • 2017 outlook confirmed for Elis excluding Berendsen
    • Revenue above €1.75bn
    • Group organic growth in line with 2016
    • EBITDA margin improvement in all geographies

Saint Cloud, October 26, 2017 - Elis, the leading multi-services group in Europe and Latin America, specializing in the rental and maintenance of flat linen, professional clothing, hygiene and well-being appliances, today announces its revenues for the 9 months ended 30 September 2017.

Commenting on the third quarter revenues, Xavier Martiré, CEO of Elis, said:

 « Elis posted revenue growth of more than 46% in Q3 with organic growth of +2.3%. All the geographies in Elis' historical scope showed positive trends despite a high comparable base in Spain and in Brazil. In France, the improvement observed in the first half of the year continues, with a sequential improvement of organic growth in Q3.

Our recent acquisitions continue to drive growth, notably Indusal, Lavebras and of course Berendsen, which is consolidated as of September, 1st.

On the back of these numbers, we confirm the full-year objectives we provided in July for Elis' historical scope: we target revenues of €1.75bn and forecast EBITDA margin improvement in all geographies.

We finalized the acquisition of Berendsen on September, 12th. Since then, a specific integration program has been put in place. A set of detailed analyses are being run in all countries to identify both operational and financial improvements and to announce the Group's new organization. Some first measures have already been put in place. It is still too early to deliver a comprehensive assessment of our observations but we are confident about our ability to deliver an amount of synergies significantly above the 40 million euros that we estimated in June. After more than sixty plant visits, we are currently working on an investment plan adapted to the real needs of Berendsen's industrial asset base. Alongside part of Elis' Management team, I will be pleased to present a detailed strategic plan during an Investor Day that will take place in January in London. »

Following the acquisition of Berendsen (consolidated in the P&L since September 1st, 2017), Elis will now report its revenue based on a new geographical breakdown. This new breakdown is presented below for Q3 2017 revenue and 9-month 2017 revenue.

Q3 revenues (EUR million) 2017 2016 Reported
growth
Organic
growth
France 267.2 257.9 +3.6% +2.3%
Central Europe 98.1 57.4 +71.0% +0.2%
Scandinavia & Eastern Europe 40.1 n/a n/a
UK & Ireland 38.1 n/a n/a
Southern Europe 75.1 46.9 +60.1% +3.6%
Latin America 67.0 36.1 +85.7% +5.0%
Manufacturing entities 4.2 4.6 -8.4% -6.1%
Total 589.8 402.8 +46.4% +2.3%

A detail of the countries included in each geography is presented in the « Geographical breakdown » section of this release.
Percentage change calculations are based on actual figures.                                                                                          

9-month revenue (EUR million) 2017 2016 Reported
growth
Organic
growth
France 761.8 742.6 +2.6% +1.5%
Central Europe 228.6 159.8 +43.0% +1.7%
Scandinavia & Eastern Europe 40.1 - n/a n/a
UK & Ireland 38.1 - n/a n/a
Southern Europe 198.9 120.7 +64.8% +5.9%
Latin America 154.6 95.9 +61.2% +7.4%
Manufacturing entities 13.5 14.0 -3.5% +0.3%
Total 1,435.6 1,133.1 +26.7% +2.5%

A detail of the countries included in each geography is presented in the « Geographical breakdown » section of this release.
Percentage change calculations are based on actual figures.

France

Q3 2017 revenue was up +3.6% in France of which +2.3% organic growth. Trends in Hospitality and Trade & Services are positive, which confirms the dynamism seen in the first half. However, Hospitality benefited from a relatively easy comparable base: Paris and the French Riviera were impacted during the summer of 2016 by the terrorist attack in Nice. Industry and Healthcare also show an improvement compared to the first half, on the back of the general improvement of the business climate.

Central Europe

Q3 2017 revenue in Central Europe amounts to €98.1m. This breaks down into €67.6m corresponding to three months of revenue for the « Northern Europe » geography in the former Elis scope, and €30.5m corresponding to September revenue for Berendsen in the region (a detail of the countries included in this geography is presented in the « Geographical breakdown » section of this release).

Organic growth of the region in Q3 (which thus corresponds to the Elis scope only) was +0.2%. Switzerland is down due to a disappointing summer season and growth in Germany remains limited.

In this region, Berendsen mainly operates in Germany, Netherlands and Poland. It mostly serves clients in Industry (c. 50% of revenue) with good momentum, and in Healthcare (c. 30%). Organic revenue growth for the Berendsen scope in the region was up +5.1% in the first 9 months of the year.

Scandinavia & Eastern Europe

Q3 2017 in Scandinavia & Eastern Europe corresponds entirely to the activity of Berendsen in September. This region corresponds to the historical scope of the Sophus Berendsen group (Sweden and Denmark), with clients in Trade & Services, Industry and Hospitality. Commercial momentum is good and revenue was up +3.4% on an organic basis in the first 9 months of the year.

UK & Ireland

Q3 2017 revenue in UK & Ireland corresponds entirely to the activity of Berendsen in September. In this region, the Group serves clients in Healthcare (c. 50% of revenue), in Hospitality (c. 25%) and in Industry (c. 25%). The UK market is currently sluggish, with a clear drop in occupancy rates in hospitality and revenue in the region is down -2.8% on an organic basis in the first 9 months of the year.

Our first observations of Berendsen's production sites highlight clear upside potential in flat linen processing.

Southern Europe

Q3 2017 revenue was up +60.1% in Southern Europe, with the acquisition of Indusal in Spain in December 2016 driving this growth. Organic growth was +3.6%. This performance was again driven by Portugal (c. +7.5% organic growth). Activity remains good in Spain, although we note a slight slowdown due to both a high comparable base (the summer of 2016 was very good). Note that the recent events in Catalonia (Barcelona terrorist attack and political situation), did not impact the hospitality business.

Latin America

Q3 2017 revenue was up +85.7% in Latin America, with organic growth of +5.0%, a +82.2% contribution from acquisitions (including 3 months from Lavebras) and a -1.4% impact from foreign exchange. Commercial momentum remained very good in Brazil despite a tough comparable base due to the uplift generated by the Olympic Games in Q3 and Q4 2016.

Furthermore, price increases are now in line, or even slightly above inflation, which was running below 3% on an annualized basis in Q3 2017.

In order to facilitate understanding, Elis's standalone Q3 2017 revenue and 9-month 2017 revenue (i.e. excluding Berendsen's contribution) are presented below under the geographical split that was provided in our past financial releases.

Q3 revenues (EUR million) 2017 2016 Reported
growth
Organic
growth
Trade & Services 90.0 87.1 +3.4% +3.4%
Hospitality 96.0 91.8 +4.6% +3.4%
Industry 47.2 46.8 +0.9% +0.9%
Healthcare 43.4 40.4 +7.5% +2.1%
Francea 267.2 257.9 +3.6% +2.3%
Northern Europe 67.6 57.4 +17.9% +0.2%
Southern Europe 75.1 46.9 +60.1% +3.6%
Europe 142.7 104.3 +36.9% +1.4%
Latin America 67.0 36.1 +85.7% +5.0%
Manufacturing Entities 4.2 4.6 -8.4% -6.1%
Total 481.1 402.8 +19.4% +2.3%

a : After other items including rebates
Percentage change calculations are based on actual figures

9-month revenue (EUR million) 2017 2016 Reported
growth
Organic
growth
Trade & Services 264.7 257.7 +2.7% +2.7%
Hospitality 252.7 241.5 +4.6% +3.5%
Industry 139.9 140.9 -0.7% -0.7%
Healthcare 129.7 122.9 +5.5% +1.1%
Francea 761.8 742.6 +2.6% +1.5%
Northern Europe 198.1 159.8 +23.9% +1.7%
Southern Europe 198.9 120.7 +64.8% +5.9%
Europe 397.0 280.6 +41.5% +3.4%
Latin America 154.6 95.9 +61.2% +7.4%
Manufacturing Entities 13.5 14.0 -3.5% +0.3%
Total 1,326.9 1,133.1 +17.1% +2.5%

a : After other items including rebates
Percentage change calculations are based on actual figures.

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, Luxemburg
  • Scandinavia & Eastern Europe: Sweden, Denmark, Norway, Finland, Latvia, Estonia, Lithuania, Russia
  • UK & Ireland
  • Southern Europe: Spain, Portugal, Italy
  • Latin America: Brazil, Chile, Colombia
  Elis Berendsen
France yes  
Central Europe yes yes
Germany yes yes
Netherlands   yes
Switzerland yes  
Poland   yes
Belgium yes yes
Austria   yes
Czech Republic yes yes
Hungary yes  
Slovakia   yes
Luxemburg yes  
Scandinavia & Eastern Europe   yes
Sweden   yes
Denmark   yes
Norway   yes
Finland   yes
Estonia   yes
Latvia   yes
Lithuania   yes
Russia   yes
UK & Ireland   yes
UK   yes
Ireland   yes
Southern Europe yes  
Spain & Andorra yes  
Portugal yes  
Italy yes  
Latin America yes  
Brazil yes  
Chile yes  
Colombia yes  
Manufacturing entities    
France yes  
UK yes  

Investor and analyst conference call in English

Speakers:
Xavier Martiré, CEO
Louis Guyot, CFO

Date:
Thursday, October 26th, 2017
6:00pm CET

Webcast link (live and replay):

https://edge.media-server.com/m6/p/59bg65fj
Webcast replay will be available for 1 year following the event.

Dial-in numbers:
France: +33 1 76 77 22 26
United Kingdom: +44 203 427 1911
United States of America: +1 212 444 0412
Code: 8281323

Replay numbers:
France: +33 1 70 48 00 94
United Kingdom: +44 207 984 7568
United States of America: +1 719 457 0820
Code: 8281323
Audio replay will be available for 1 week following the event.

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 the Prospectus. 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 document. 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

FY 2017 revenue: January 30, 2018 (before market)
Investor day: January 30, 2018

Contact

Nicolas Buron, Investor Relations Director - Phone: +33 1 75 49 98 30 - nicolas.buron@elis.com

Elis - Q3 2017 revenue



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Source: Elis via Globenewswire