Caterer Elior sees 2024 revenue growth below estimates (updated)

Elior SA

22/11/2023 07:37

(Adds CEO quote in paragraph 8, details and context in
paragraphs 1-2 and 9-10)
    By Federica Mileo
       Nov 22 (Reuters) - French catering group Elior
 ELIOR.PA  on Wednesday forecast 2024 sales growth below market
expectations for its 2024 financial year, saying volumes were
normalising after being boosted by an Omicron catch-up effect
this year.
    After being hit by lockdowns and other COVID-related
restrictions in recent years, Elior had to slash its margin
forecast twice in 2023 as it grappled with high food and wage
inflation and difficult contract renegotiations in France.
    Elior, Europe's third biggest contract caterer after
Britain's Compass  CPG.L  and French peer Sodexo  EXHO.PA ,
expects organic revenue growth of between 4% and 5% and a margin
for adjusted earnings before interest, taxes and amortisation
(EBITA) of around 2.5% in the fiscal year that started in
October.
    Analysts polled by the company had forecast organic revenue
growth of 5.9% and an EBITA margin of 2.6% for 2024.
    Elior's adjusted EBITA was 59 million euros ($64.35 million)
in the 12 months through September, its first annual core profit
since the pandemic started, beating the 50 million expected by
analysts.
    "The combined balance of the volume effect and price
increases almost offsets the impact of inflation," CEO Daniel
Derichebourg said in a statement. 
    He also pointed to a positive effects from acquisitions and
improved results from the renegotiation of catering contracts in
France and Italy. 
    "These difficulties are now almost completely resolved,
except for one contract still under renegotiation," Derichebourg
added.
    Elior, which is in the process of integrating recently
acquired Derichebourg Multiservices (DMS), said it expected to
reach 56 million euros in annual synergies connected to the deal
by 2026, compared to its initial 30 million euro target.
    The DMS acquisition has strengthened Elior's multiservices
offering in soft facility management and introduced new services
in security, hard facility management and aeronautical
subcontracting, it said.
($1 = 0.9168 euros)

 (Reporting by Federica Mileo in Gdansk; editing by Milla Nissi)
 ((federica.mileo@thomsonreuters.com))