2018 annual
results
Strong improvement
in EBITDA margin, net result and free cash-flow, driven by the
successful integration of Berendsen and the good performance of
Elis' historic scope
-
Record revenue, EBITDA margin
up in all geographies and strong improvement in headline net
result
-
Revenue: €3,133.3mn (+42.8% of which +2.6%
organic growth and +2.4% organic growth on a pro forma basis)
-
EBITDA: €985.6mn (31.5% of revenue)
-
EBITDA margin up in all geographies
-
Headline net result increased by +40% at
€224.3mn
-
Successful integration of
Berendsen, with an improvement of profitability in the relevant
areas
-
United Kingdom & Ireland: Headcount
adjustments, improvement of operational KPIs and stabilization of
revenue in Q4
-
Scandinavia: Material central cost savings and
acceleration of commercial dynamism
-
Germany: Good commercial momentum in Workwear
and merger of operations in Flat linen
-
Continuation of Elis' M&A
strategy and rationalization of its services portfolio
-
7 new acquisitions announced in 2018, of which 3
in Germany
-
Ongoing sales process for Clinical Solutions
activity, identified as non-core business
-
Cash generation improvement,
well-controlled investments and stable financial
structure
-
€154mn free cash-flow, up sharply compared to
2017
-
2018 capex equivalent to 20% of revenue, of
which c. 2% related to the 2nd part of the
Berendsen capex plan
-
Stable leverage ratio at 3.3x as of 31 December
2018
-
2019 outlook
-
Organic growth of c. +3.0%
-
Expected EBITDA margin of between 31.2% and
31.6% of revenue (excluding IFRS 16), in an inflationary
environment related to increases in labour costs and energy
-
Capex at 20% of revenue
-
Proposal of a payment of €0.37
per share, stable vs last year
In millions of euros |
2018 |
2017
restated1 |
Change |
Revenue2 |
3,133.3 |
2,193.6 |
+42.8% |
EBITDA2 |
985.6 |
670.2 |
+47.1% |
EBITDA margin2 |
31.5% |
30.6% |
+90bps |
EBIT2 |
426.4 |
294.4 |
+44.8% |
Consolidated net result |
81.8 |
42.1 |
+94.3% |
Headline net result2 |
224.3 |
159.7 |
+40.4% |
Free cash-flow |
153.7 |
(119.0) |
n/a |
1 Cf. bridge of
the adjustments related to the previous financial year information
presented on page 6.
2 Continuing
activities.
Saint Cloud,
March 7, 2019 - Elis, an international multiservice provider,
offering textile, hygiene and facility services solutions across 28
countries in Europe and Latin America, today announces its 2018
full-year financial results. The accounts have been approved by the
Management Board and examined by the Supervisory Board on March 6,
2019. They have been audited and the auditors issued a report
without any qualification.
Commenting on the 2018 full-year
results, Xavier Martiré, CEO of Elis,
said:
"2018 was a
record-year for Elis in terms of revenue, which reached €3,133.3mn
with an acceleration in organic growth in H2. In line with our
expectations, our EBITDA margin increased by 90bps to 31.5% of
revenue mainly thanks to the synergies that we achieved through
Berendsen's integration and to further productivity gains in Elis'
historic scope.
The Group
successfully continued its strategy across all
its geographies. In France, organic growth was above 2% and margin
remained stable at 35% of revenue, despite the negative impact
related to the increase of several operational taxes. Latin America
continued to post very good results with organic growth of more
than 8% and margin improvement of 270bps. These good results were
driven by Brazil, where the integration of Lavebras is now
completed, with the expected synergies achieved. In Southern
Europe, the Hospitality activity slowed down in Spain, but the
region's organic growth remained well-oriented, with margin
improving as well.
Remarkable
operational progress has been made in Berendsen's
integration:
In Scandinavia,
rationalization of central costs led to margin improvement of
240bps on a pro forma basis at more than 37% of revenue, and the
first implementation tests of Elis' multiservice approach
contributed to maintaining organic growth at more than 3%.
In the
United-Kingdom, the actions implemented to improve quality of
service in Hospitality enabled a reduction of contract losses
and price increases. Similarly, our strategic
focus on small clients in the country led to a reduction in client
losses in Workwear, although they still remain at a high level and
generate a negative mix effect on the country's profitability.
Organic growth of the United-Kingdom and Ireland region has
been improving throughout the year and became positive in Q4. We
estimate that the underlying business in the region was still down
in 2018, but the structural adjustments and the first industrial
measures implemented contributed to a 30bps margin improvement on a
pro forma basis.
In Central
Europe, the only region where there was overlap between Elis and
Berendsen prior to the acquisition, the savings achieved along with
the first gains in logistics optimization helped improve margin by
60bps on a pro forma basis.
In 2018, the
Group continued its consolidation strategy in its existing
geographies with 7 new acquisitions, further densifying its
network. This ongoing international expansion has contributed over
the past several years to diversifying our geographic exposure:
France now represents one-third of Group revenue, compared to 70%
three years ago.
For 2019, we
expect organic revenue growth of c. 3%. Since H2 2018, we are
facing an unusual increase of several of our production costs,
mainly wages, related to the high increase in minimum wages
announced by several countries such as Spain or the United-Kingdom.
Our ability to pass this increase in our cost base to our customers
will be a key factor for our margin evolution. As of today, we
target an EBITDA margin of between 31.2% to 31.6% of
revenue."
In the first half
of 2018, the Group triggered the sale process for its Clinical
Solutions activity (operating only in the United Kingdom) and
anticipates that the sale will occur in the next 6 months.
Consequently, unless stated otherwise, the figures presented in the
present press release exclude the Clinical Solutions activity for
2017 and 2018.
Revenue
As announced on January 30, 2019,
Group revenue for 2018 is up +42.8% at €3.1bn. Organic growth is up
+2.6% and pro forma organic growth is up +2.4%.
The 2018 organic growth
illustrates the strong performance of Elis' historic scope and the
smooth integration of Berendsen's countries, with an acceleration
of Group pro forma organic growth in H2.
In France, growth is above +2%
despite the impact of the Yellow Vests movement in December. In
Southern Europe, growth remains above +3% in spite of the slowdown
observed in Hospitality in Spain during the summer. In Berendsen's
geographies, Scandinavia continues its good momentum, with organic
growth of more than +3%. In the United Kingdom, the measures
implemented to improve quality of service have borne fruit and
allowed us to reduce the churn rate and increase prices. The trend
has improved throughout the year, with slightly positive organic
growth in Q4, compared to -3% one year ago. In Central Europe, the
only geography where there was overlap between Elis and Berendsen
before the acquisition, growth is up +2%. Growth is high in Poland
and the Netherlands, and remains slower in Germany and Switzerland,
although we observed encouraging trends in H2. Finally, Latin
America posted organic growth of more than 8%. The market remains
very dynamic despite the decrease of inflation in Brazil, and we
continue to open the market in these high growth potential
countries.
EBITDA pro forma
for the acquisition of Berendsen (as if Berendsen was consolidated
on January 1st,
2017)
In millions of euros |
2018 |
2017 pro forma |
Var.
|
|
H1 |
H2 |
Total |
H1 |
H2 |
Total |
H1 |
H2 |
17/18 |
France |
171.1 |
190.9 |
362.0 |
166.9 |
186.8 |
353.7 |
+2.5% |
+2.2% |
+2.4% |
As of % of revenue |
33.8% |
36.2% |
35.0% |
33.7% |
36.2% |
35.0% |
+10pb |
+3pb |
- |
Central Europe |
98.7 |
111.2 |
209.9 |
95.1 |
98.2 |
193.3 |
+3.9% |
+13.2% |
+8.6% |
As of % of revenue |
29.9% |
31.5% |
30.6% |
29.5% |
30.3% |
30.0% |
+35pb |
+117pb |
+60pb |
Scandinavia & Eastern Eur. |
87.6 |
93.4 |
181.0 |
82.9 |
86.6 |
169.5 |
+5.7% |
+7.9% |
+6.8% |
As of % of revenues |
36.4% |
38.4% |
37.4% |
34.5% |
35.5% |
35.0% |
+190pb |
+292pb |
+240pb |
United Kingdom & Ireland |
52.9 |
52.4 |
105.3 |
52.8 |
53.5 |
106.3 |
+0.3% |
-2.1% |
-0.9% |
As of % of revenue |
26.8% |
26.1% |
26.4% |
25.7% |
26.4% |
26.1% |
+115pb |
-35pb |
+30pb |
Southern Europe |
32.5 |
38.5 |
71.0 |
30.7 |
37.2 |
67.9 |
+5.9% |
+3.5% |
+4.6% |
As of % of revenue |
25.6% |
27.3% |
26.4% |
24.8% |
27.5% |
26.2% |
+80pb |
-22pb |
+30pb |
Latin
America |
32.2 |
34.5 |
66.7 |
20.0 |
33.6 |
53.7 |
+61.1% |
+2.7% |
+24.4% |
As of % of revenue |
25.6% |
28.2% |
26.9% |
22.8% |
25.2% |
24.2% |
+280pb |
+303pb |
+270pb |
Others |
(6.0) |
(4.3) |
(10.3) |
(13.3) |
4.6 |
(8.7) |
-55.0% |
-193.5% |
+18.4% |
Total |
469.1 |
516.5 |
985.6 |
435.0 |
500.6 |
935.7 |
+7.8% |
+3.2% |
+5.3% |
As of % of revenue |
30.6% |
32.3% |
31.5% |
29.4% |
32.1% |
30.8% |
+125pb |
+20pb |
+70pb |
Percentage change calculations are
based on actual figures.
« Others » includes Manufacturing Entities and
Holdings.
In 2018, Group EBITDA strongly
increased by +47.1% at €985.6mn, driven by the acquisition of
Berendsen. EBITDA margin rose by 90bps and was up in all
geographies.
France
In 2018, EBITDA margin was stable
at 35.0% of revenue, with a slightly favorable price environment
that was offset by the increase of several taxes (CICE, taxes
related to waste water treatment, tax on gas price, etc.).
Central
Europe
In 2018, EBITDA margin was up
60bps on a pro forma basis to 30.6% of revenue. This increase is
mainly explained by overhead savings related to Berendsen and by
the first logistics costs savings achieved thanks to the roll-out
of Elis' multi-service approach, notably in the Netherlands.
Scandinavia &
Eastern Europe
In 2018, EBITDA margin increased
240bps on a pro forma basis to 37.4% of revenue. This increase
illustrates the savings made on Berendsen's central costs (that
used to be largely borne by this region) and the rationalization
that has been achieved locally.
United Kingdom
& Ireland
In 2018, EBITDA margin increased
30bps on a pro forma basis. This margin trend reflects the good
integration of Berendsen in the United Kingdom, considering that
many costs, such as wages, rose significantly (rise in minimum wage
of +4.4% in April 2018 on top of +6.6% in 2017), as well as energy
(especially natural gas).
In Hospitality, the improvement of
quality of service enabled price increases. In Workwear, attention
has been paid to commercial tracking and client retention. The
client loss rate has improved, although it remains at a high level,
creating a negative mix effect (margin in Hospitality being broadly
below Workwear margin).
Southern
Europe
In 2018, EBITDA margin increased
30bps at 26.4% of revenue. This slight improvement is explained by
the productivity gains in the region as well as the success of the
integration of Indusal, compensated by a poorer price dynamic in
the Indusal scope compared to Elis' historic scope.
Latin
America
In 2018 EBITDA margin is up 270pb
at 26.9% of revenue. This improvement is attributable to the
achievement of synergies related to the integration of Lavebras,
which has now been completed, as well as some productivity gains in
the region.
From EBITDA to
net result
In millions of euros |
2018 |
2017 restated |
EBITDA |
985.6 |
670.2 |
As a % of revenue |
31.5% |
30.6% |
Depreciation & amortization |
(559.2) |
(375.8) |
EBIT |
426.4 |
294.4 |
As a % of revenue |
13.6% |
13.4% |
Operating income before other income and expenses and
amortization of customer relationships |
407.5 |
284.2 |
As a % of revenue |
13.0% |
13.0% |
Amortization of customer relationships |
(112 .5) |
(79.1) |
Other operating income and expenses |
(49.8) |
(89.0) |
Financial
result |
(110.5) |
(59.8) |
Net result before tax |
134.7 |
56.4 |
Tax |
(51.7) |
(13.6) |
Net result |
83.0 |
42.8 |
Consolidated net result1 |
81.8 |
42.1 |
Headline net result2 |
224.3 |
159.7 |
Margin rate calculations are based on precise
figures.
1 Including the
Clinical Solutions activity.
2 A
reconciliation between net result and headline net result is
presented on page 5.
EBIT
As of a percentage of revenue, EBIT was up 20bps in 2018, impacted
mainly by the revaluation of Lavebras and Berendsen assets as part
of the allocation of goodwill.
Operating income
before other income and expenses and amortization of customer
relationships
As a percentage of revenue,
operating income before other income and expenses and amortization
of customer relationships was stable in 2018.
The bulk of the amortization of
customer relationships corresponds to the goodwill allocation of
Berendsen. In 2017 the amortization of customer relationships was
mainly made of assets accounted for in 2007, whose amortization
period ended in October 2018.
Financial
result
In 2018, financial expenses
increased by €50.7mn compared to 2017. This increase is mainly
explained by the rise of gross debt related to the acquisition of
Berendsen and by a positive foreign exchange effect of c. €20mn
recorded in 2017, regarding the anticipated reimbursement of the
USPP loan previously taken out by Berendsen.
Net
result
Net result was €83.0mn in 2018, up
+93.9% compared to 2017.
From net result
to headline net result
In millions of euros |
2018 |
2017 restated |
Net result |
83.0 |
42.8 |
Amortization of
customer relationships1 |
86.6 |
57.6 |
IFRS
2 expense1 |
15.6 |
8.1 |
Accelerated
amortization of bridge loan issuing costs1 |
2.6 |
- |
Other income and expenses (non-current)1
including: |
36.4 |
51.2 |
Restructuring fees related to Berendsen
acquisition1 |
17.4 |
23.3 |
Restructuring fees related to Indusal
acquisition1 |
- |
3.0 |
Restructuring fees related to Lavebras
acquisition1 |
- |
3.8 |
Costs related to the acquisition of Berendsen,
Indusal et Lavebras1 |
22.3 |
21.1 |
Headline net result |
224.3 |
159.7 |
1 Net of tax
effect
Headline net result is €224.3mn in
2018, increasing by +40.4% compared to 2017.
Cash-flow
statement
In millions of euros |
2018 |
2017 restated |
EBITDA |
985.6 |
670.2 |
Exceptional items |
(31.9) |
(50.1) |
Acquisition fees |
(4.4) |
(27.3) |
Provision
variance |
(3.6) |
0.7 |
Cash-flow before finance costs and tax |
945.7 |
593.4 |
Net capex |
(644.3) |
(480.2) |
Change in working capital requirement |
(15.8) |
(118.4) |
Net interests
paid |
(55.2) |
(60.5) |
Tax
paid |
(76.7) |
(53.3) |
Free
cash-flow |
153.7 |
(119.0) |
Acquisition of subsidiaries |
(62.2) |
(1,362.9) |
Change arising from
acquired/sold subsidiaries |
(12.7) |
(687 .2) |
Other flows related to financing activities |
(26.4) |
17.4 |
Dividends, capital
increase and treasury shares |
(81.6) |
456.6 |
Others |
(41.9) |
12.8 |
Net
debt variance |
(71.1) |
(1,682.3) |
Adjusted net debt at closing |
3,378.4 |
3,296.6 |
Investments
In 2018, Group investments
amounted to 20.1% of revenues (including Clinical Solutions revenue
in the calculation of the ratio) compared to 21.7% of revenues over
the same period in the preceding year. They include the investments
made in linen, industrial investments as well as the additional
investments (mainly industrial) at Berendsen, as announced last
year.
Free
cash-flow
In 2018, free cash-flow was
€153.7mn, up +€272.7mn compared to 2017.
Adjusted net
financial debt
Group adjusted net financial debt
as of 31 December 2018 was €3,378.4mn. The debt ratio (adjusted net
financial debt / EBITDA proforma for the full-year impact of
acquisitions finalized during the year and after the impact of
synergies) stood at 3.3x.
Payment for the
2018 financial year
At the next Annual General Meeting
of Shareholders on 23 May 2019, the Supervisory Board will
recommend the payment of €0.37 per share for the 2018 financial
year, stable vs last year.
Bridge of the
adjustments related to the previous financial year
information
In millions of euros |
2017
published |
IFRS 3 |
IFRS 5 |
2017 restated |
Revenue |
2,214.9 |
- |
(21.4) |
2,193.6 |
EBITDA |
670.0 |
1.7 |
(1.5) |
670.2 |
Depreciation and amortization |
(371.3) |
(5.1) |
0.7 |
(375.8) |
EBIT |
298.6 |
(3.4) |
(0.8) |
294.4 |
Amortization of customer relationships |
(54.2) |
(24.9) |
- |
(79.1) |
Other operating income
and expenses |
(89.9) |
(1.0) |
1.8 |
(89.0) |
Tax |
(17.9) |
4.7 |
(0.4) |
(13.6) |
Consolidated net result |
66.8 |
(24.6) |
- |
42.1 |
Financial definitions
-
The pro forma figures considered the hypothesis
that Berendsen was integrated 1st January 2017
to capture the full year impact of figures.
-
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.
-
EBITDA is defined as EBIT before depreciation
and amortization net of the portion of grants transferred to
income.
-
EBITDA margin is defined as EBITDA divided by
revenues.
-
EBIT is defined as net income (or net loss)
before financial expense, income tax, share in income of
equity-accounted companies, amortization of customer relationships,
goodwill impairment, other operating income and expenses,
miscellaneous financial items (bank fees recognized in operating
income) and expenses related to IFRS 2 (share-based
payments).
-
Free cash-flow is defined as cash EBITDA minus
non-cash-items items and after (i) change in working capital, (ii)
linen purchases and (iii) manufacturing capital expenditures, net
of proceeds, minus tax paid and minus financial interests'
payments.
-
The concept of Adjusted net financial debt used
by the Group consists of the sum of non-current financial
liabilities, current financial liabilities and cash and cash
equivalents adjusted for capitalized debt arrangement costs, the
impact of applying the effective interest rate method, and the loan
from employee profit-sharing fund.
-
"Pro forma" figures are restated for Berendsen,
as if the integration of Berendsen took place as of 1st January 2017
to consider the full-year impact of the acquisition in 2017.
Consolidated financial
statements
Consolidated financial statements for the year
2018 are available in the "Financial Information" section of Elis'
Investor Relations website:
http://www.corporate-elis.com/en/investor-relations
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
Presentation of Elis' Full-Year
2018 results (in english)
Date:
Thursday 7 March 2019 at 8:30am GMT (9:30am CET)
Venue:
Four Seasons Trinity Square, 10 Trinity Square, London EC3N 4AJ
Webcast link:
https://event.on24.com/wcc/r/1948884-1/C8EEF7405882D42A18427D0B7DB6D457?partnerref=rss-events
Investor
presentation:
An investor presentation will be available at 8:15am GMT (9:15am
CET) in the "Other publications" section of Elis' corporate
website: http://www.corporate-elis.com/en/investor-relations
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
Q1 2019 revenue: May 2, 2019
(after market)
Contact
Nicolas Buron, Investor
Relations Director - Phone: +33 1 75 49 98 30 -
nicolas.buron@elis.com
Audrey Bourgeois, Investor
Relations - Phone: + 33 (0)1 75 49 96 25 -
audrey.bourgeois@elis.com
Elis - 2018 full-year
results
This
announcement is distributed by West Corporation on behalf of West
Corporation clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Elis via Globenewswire
Elis (EU:ELIS)
Graphique Historique de l'Action
De Mar 2024 à Avr 2024
Elis (EU:ELIS)
Graphique Historique de l'Action
De Avr 2023 à Avr 2024