Record 2023 revenue at €4.3bn, up +12.8% vs. 2022
Estimated 2023 financial results are above targets:
2023 adjusted EBITDA at c. 34.2%
2023 free cash-flow slightly above €300m
2023 revenue at €4,309.4m, driven by organic growth of +11.8%
- Good pricing momentum on the back of adjustments implemented since 2022 to offset inflation
- Price effect was c. +9% on average in 2023, with a sequential decrease throughout the year, linked to the base effect
- Many new contract wins in Workwear, driven by outsourcing momentum, especially in
Southern Europe and inLatin America - Hospitality benefited from a favourable comparable base in Q1; activity then stabilized over the rest of the year
- Strong pricing discipline for tenders or contract renewals, resulting in a moderate increase in churn
- Excellent level of performance by our Mexican operations, consolidated since
July 2022 : double-digit organic revenue growth in H2 2023 - Satisfactory activity in Q4: organic revenue growth of +8.1%; no sign of meaningful slowdown in our clients’ activity
2023 operational performance leads to estimated 2023 results that are better than previously-communicated targets1
- The Group’s pricing discipline, combined with further logistics and industrial process optimization, enable us to estimate 2023 adjusted EBITDA margin at c. 34.2%, up c. +120bps yoy, i.e. c. €215m above 2022 level
- 2023 adjusted EBIT, headline net income and headline net income per share should also be above targets communicated in October, on the back of the strong increase in EBITDA
- Despite an unfavorable calendar effect, good cash collection at year-end leads to estimated 2023 free cash-flow of slightly above €300m, up c. €75m compared to 2022
- All the above should lead to a financial leverage ratio at c. 2.0x as of
31 December 2023 - The financial data for the financial year ended on
December 31, 2023 have been prepared on the basis of unaudited estimates as atDecember 31, 2023 - Full-year 2023 results will be released on
7 March 2024 before market
Saint-Cloud,
Commenting on the announcement, Xavier Martiré, Chairman of the Management
« In 2023, Elis delivered record revenue of €4.3bn, up nearly +13% year-on-year, and should deliver a better-than-expected 2023 financial performance.
With inflation remaining strong in
This strict pricing discipline sometimes led to the non-renewal of an existing contract, or to a missed opportunity while tendering for a new contract. Consequently, we observed a 1-point increase in churn to c. 7%.
Commercial momentum in Workwear remained strong in all our geographies, still driven by further outsourcing in many industries. Our offers, which address the increasing needs of our clients for hygiene, traceability and for a more secure supply chain, continue to be a resounding success, and we achieved a high level of new contract signings in 2023.
In Hospitality, after a catch-up effect in Q1, activity showed a mixed picture during summer but has slightly improved since then.
The good operational performance in 2023 reflects the Group’s strategy; it should lead to 2023 results that are above the targets communicated to the market in October. Our strong pricing discipline, coupled with logistics and industrial process optimization, enable us to estimate 2023 adjusted EBITDA margin at c. 34.2%, up c. +120pbs year-on-year. The other P&L aggregates should also be above the previous guidance on the back of the strong increase in EBITDA. Finally, good cash collection at year-end enables us to estimate 2023 free cash-flow at slightly above 300m€ and the financial leverage ratio as of
We entered 2024 with confidence: visibility is good, both in terms of revenue (pricing, activity forecast) and cost base (salary negotiations, purchasing contracts). 2024 should thus be another year of profitable growth for Elis. We will provide, as usual, a detailed financial outlook for 2024 when we release our full-year 2023 results on
The great resilience that Elis demonstrated through the various recent crises, its operational know-how, its strengthened organic growth and its model based on the principles of the circular economy are major assets that will enable the Group to continue to assert its leadership in all the countries in which it operates. »
I. 2023 revenue
Full-year 2023 reported growth breakdown
In millions of euros | 2023 | 2022 | Organic growth | External growth | FX | Reported growth |
1,311.6 | 1,185.0 | +10.7% | - | - | +10.7% | |
1,013.4 | 870.0 | +15.1% | +0.7% | +0.7% | +16.5% | |
Scandinavia & East. Eur. | 599.2 | 580.7 | +8.5% | +0.3% | -5.5% | +3.2% |
534.9 | 476.5 | +14.0% | - | -1.8% | +12.3% | |
444.9 | 347.3 | +10.4% | +16.3% | +1.3% | +28.1% | |
379.2 | 330.5 | +13.6% | +1.1% | - | +14.7% | |
Others | 26.1 | 30.8 | -14.0% | - | -1.0% | -15.0% |
Total | 4,309.4 | 3,820.9 | +11.8% | +1.8% | -0.8% | +12.8% |
« Others » includes Manufacturing entities and Holdings.
Percentage change calculations are based on actual figures.
2023 organic growth breakdown
Q1 | Q2 | H1 | Q3 | Q4 | H2 | |
+15.8% | +11.6% | +13.5% | +8.8% | +7.4% | +8.1% | |
+21.4% | +16.7% | +18.9% | +12.3% | +10.9% | +11.6% | |
Scandinavia & East. Eur. | +15.8% | +7.4% | +11.5% | +5.0% | +6.4% | +5.7% |
+23.9% | +13.9% | +18.5% | +11.6% | +8.5% | +10.1% | |
+12.6% | +9.5% | +10.9% | +10.9% | +9.4% | +10.1% | |
+24.7% | +15.4% | +19.4% | +10.3% | +7.1% | +8.8% | |
Others | -15.4% | +6.6% | -4.4% | -20.3% | -22.5% | -21.4% |
Total | +18.3% | +12.5% | +15.2% | +9.5% | +8.1% | +8.8% |
« Others » includes Manufacturing entities and Holdings.
Percentage change calculations are based on actual figures.
Q4 2023 reported growth breakdown
In millions of euros | Q4 2023 | Q4 2022 | Organic growth | External growth | FX | Reported growth |
324.2 | 301.9 | +7.4% | - | - | +7.4% | |
258.8 | 231.4 | +10.9% | - | +0.9% | +11.8% | |
Scandinavia & East. Eur. | 155.2 | 153.3 | +6.4% | - | -5.1% | +1.3% |
134.2 | 123.3 | +8.5% | - | +0.3% | +8.8% | |
114.1 | 103.7 | +9.4% | - | +0.7% | +10.1% | |
91.2 | 83.5 | +7.1% | +2.2% | - | +9.3% | |
Others | 7.0 | 9.0 | -22.5% | - | +0.3% | -22.2% |
Total | 1 084.7 | 1 006.1 | +8.1% | +0.2% | -0.5% | +7.8% |
« Others » includes Manufacturing entities and Holdings.
Percentage change calculations are based on actual figures.
2023 full-year revenue was up +10.7% (entirely organic). Pricing dynamic was good, driven by the adjustments implemented since 2022 to offset cost inflation. We continued to record many contract wins in Workwear and Pest Control. However, we noticed a slight slowdown in the activity of our small clients, notably for non-essential services. In Hospitality, the comparable base was favorable in Q1 but more difficult afterwards: overall, activity was stable compared to 2022.
In Q4 2023, revenue was up +7.4% (entirely organic).
In 2023, revenue was up +16.5% (+15.1% on an organic basis). Commercial momentum was satisfactory, notably in
In Q4 2023, revenue was up +11.8% (+10.9% on an organic basis).
Scandinavia &
2023 full-year revenue was up +3.2% (+8.5% on an organic basis), with an FX impact of -5.5%, mainly due to the evolution of the Swedish Krona and the Norwegian Krone. Organic revenue growth was driven by pricing adjustments and commercial dynamism in Workwear (including Cleanroom). In Hospitality, activity was fine.
In Q4, revenue was up +1.3% (+6.4% on an organic basis), with a still-negative FX impact (-5.1%). However, we observed a rebound in commercial dynamism.
2023 revenue was up +12.3% (+14.0% on an organic basis), with a negative FX impact of -1.8% year-on-year. The region’s pricing dynamic was good. Healthcare activity remained very solid. In Industry and Trades & Services, we recorded new contract signings thanks to continuous commercial efforts, but client activity was impacted by the deteriorating macro environment in the
In Q4 2023, revenue was up +8.8% (+8.5% on an organic basis).
In 2023, revenue was up +28.1% (+10.4% on an organic basis). Acquisitions contributed to +16.3% to the growth in the region. Our Mexican acquisition, consolidated since
In Q4 2023, revenue was up +10.1% (+9.4% on an organic basis).
In 2023, revenue was up +14.7% (+13.6% on an organic basis), driven by good pricing dynamic. In Workwear, the outsourcing trend continued to be solid, and we recorded many new contract signings, notably with food-processing companies. Activity in Hospitality continued to rebound and returned to pre-Covid levels. Finally, the acquisitions of Gruppo Indaco in
In Q4 2023, revenue was up +9.3% (+7.1% on an organic basis).
II. CSR developments
The circular economy at the heart of Elis’ business model
Elis offers its clients products that are maintained, repaired, reused, and reemployed to optimize their usage and lifespan. The Group therefore selects its textile products based on sustainability criteria, to ensure frequent washing, and also operates repair workshops. Elis’ conviction is that the circular economy model, which notably aims at reducing consumption of natural resources by optimizing the lifespan of products, is a sustainable solution to address today’s environmental challenges.
The services offered by Elis are a sustainable alternative to simple purchase or use of products, or to single use / disposable products.
Furthermore, these alternatives to a linear consumption approach enable our clients to avoid CO2 emissions and contribute to a reduction of their own emissions.
Non-financial rating
The Group CSR performance is recognized by non-financial rating agencies:
- In 2023, MSCI rating agency improved Elis’ ESG rating to A from BBB. It rewards the Group commitment regarding CSR and its continuous improvements,
- In 2023, Elis obtained a Gold medal to the
EcoVadis questionnaire, maintaining its score of 75/100. This prize confirms Elis commitment towards its clients, partners and employees, and places the Group within the best assessed companies of the business sector. Elis’ CSR strategy fulfills EcoVadis’ assessment criteria, which are based on international standards and 4 CSR themes (Environment, Social & Human Rights, Ethics and Sustainable Purchasing). This medal places Elis within the top 5% of the c. 100,000 companies assessed byEcoVadis , - On its last assessment, the Group was also rated A by the CDP (
Carbon Disclosure Project ), a non-profitable organization which performs independent assessments on the basis of information made available by companies on their strategy, performance and commitment of stakeholders on climate goals. This assessment places the Group in the « Leadership » category and underlines its commitment and action in the area of climate change. Furthermore, the Group was also rated A by the CDP Supplier Engagement Leaderboard which places Elis in the top 8% of companies assessed for their climate-friendly actions across value chain, - Sustainalytics maintains the Group rating as « low risk » concerning CSR,
- Finally, Elis improved its score with rating agency Ethifinance ESG Rating (ex-Gaia), to 75 from 73 previously, maintaining its “Gold” level.
Our climate commitment: ambitious 2030 climate targets
On
Elis’ ambition is to achieve the following targets by 2030:
- Reduce absolute scope 1 and 2 GHG emissions by 47.5% by 2030 from a 2019 base year2;
- Reduce absolute scope 3 GHG emissions from purchased goods and services, fuel and energy related activities, upstream transportation and distribution, employee commuting, and end-of-life treatment of sold products by 28% within the same timeframe.
These targets have been approved by the Science Based Targets initiative (SBTi), an international reference and a partnership between the United Nations Global Compact, the
These climate targets mark a new step in Elis’ sustainability strategy and climate actions. The Group has worked for many years to reduce its energy consumption and CO2eq emissions.
In
III. Other information
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.
- Adjusted EBITDA is defined as adjusted EBIT before depreciation and amortization net of the portion of grants transferred to income.
- Adjusted EBITDA margin is defined as adjusted EBITDA divided by revenue.
- Adjusted EBIT is defined as net income (loss) before net financial income (loss), income tax, share in net income of equity accounted companies, amortization of intangible assets recognized in a business combination, goodwill impairment losses, other operating income and expense, miscellaneous financial items (bank fees recognized in operating income) and IFRS 2 expense (share-based payments).
- Adjusted EBIT margin is defined as adjusted EBIT divided by revenue.
- Headline net result corresponds to net income or loss excluding extraordinary items which, due to their type and unusual nature, cannot be considered as intrinsic to the Group’s current performance.
- Free cash flow is defined as adjusted EBITDA less non-cash-items and changes in working capital. purchases of linen, capital expenditures (net of disposals), tax paid, financial interest paid and lease liabilities payments.
- The financial leverage ratio is the leverage ratio calculated for the purpose of the financial covenant included in the banking agreement signed in 2021: Leverage ratio is equal to Net financial debt / adjusted EBITDA, pro forma of acquisitions finalized during the last 12 months, and after synergies.
Geographical breakdown
France Central Europe :Austria ,Belgium ,Czech Republic ,Germany ,Hungary , Luxembourg,Netherlands ,Poland ,Slovakia ,Switzerland - Scandinavia &
Eastern Europe :Denmark ,Estonia ,Finland ,Latvia ,Lithuania ,Norway ,Russia ,Sweden UK &Ireland Latin America :Brazil ,Chile ,Colombia ,Mexico Southern Europe :Italy ,Portugal ,Spain &Andorra
Presentation of 2023 full-year revenue (in English)
Date:
Speakers:
Webcast link:
https://edge.media-server.com/mmc/p/9tz7zqjj
Conference call & Q&A session link:
https://register.vevent.com/register/BI54cb97be6a4c4883bdeb6d117121f06d
An investor presentation will be available at
https://fr.elis.com/fr/groupe/relations-investisseurs/information-reglementee
Disclaimer
The financial data for the financial year ended
Also, this press release may include data information and statements relating to estimates, future events, trends, plans, expectations, objectives, outlook and other forward-looking statements relating to the Group’s future business, financial condition, results of operations, performance and strategy as they relate to climate objectives, financial targets and other goals set forth therein. Forward-looking statements are not statements of historical fact and may contain the terms “may”, “will”, “should”, “continue”, “aims”, “estimates”, “projects”, “believes”, “intends”, “expects”, “plans”, “seeks” or “anticipates” or words of similar meaning. In addition, the term “ambition” expresses an outcome desired by the Group, it being specified that the means to be deployed do not depend solely on the Group. Such information and statements are based on data, assumptions and estimates that the Group considers as reasonable as of the date of this press release and, by nature, involve known and unknown risks and uncertainties. These data have not been audited by the statutory auditors of Elis. These data, assumptions and estimates may change or be adjusted as a result of uncertainties, many of which are outside the control of the Group, relating particularly to the economic, financial, competitive, regulatory or tax environment or as a result of other factors of which the Group is not aware on the date of this press release. In addition, the materialization of certain risks, especially those described in chapter 4 “Risk management and internal control” of the Universal Registration Document for the financial year ended
This press release and the information included therein were prepared on the basis of data made available to the Group as of the date of this press release. Unless stated otherwise in this press release, this press release and the information included therein are accurate only as of such date. The Group assumes no obligation to update or revise any of these forward-looking statements, whether to reflect new information, future events or circumstances or otherwise, except as required by applicable laws and regulations.
This press release includes certain non-financial metrics, as well as other non-financial data, all of which are subject to measurement uncertainties resulting from limitations inherent in the nature and the methods used to determine them. These data generally have no standardized meaning and may not be comparable to similarly labelled measures used by other companies. The Group reserves the right to amend, adjust and/or restate the data included in this press release, from time to time, without notice and without explanation. The data included in this press release may be further updated, amended, revised or discontinued in subsequent publications, presentations and/or press releases of Elis, depending on, among other things, the availability, fairness, adequacy, accuracy, reasonableness or completeness of the information, or changes in applicable circumstances, including changes in applicable laws and regulations.
This press release may include or refer to information obtained from or established on the basis of various third-party sources. Such information may not have been reviewed, and/or independently verified, by the Group and the Group does not approve or endorse such information by including them or referring to them. Accordingly, the Group does not guarantee the fairness, adequacy, accuracy, reasonableness or completeness of such information, and no representation, warranty or undertaking, express or implied, is made or responsibility or liability is accepted by the Group as to the fairness, adequacy, accuracy, reasonableness or completeness of such information, and the Group shall not be obliged to update or revise such information.
The climate-related data and the climate-related objectives included in this press release were neither audited nor subject to a limited review by the statutory auditors of the Group.
Next information
- Full-year 2023 results:
March 7, 2024 (before market) – webcast at7:30am GMT (8:30am CET ) - Q1 2024 revenue:
May 6, 2024 (after market)
IV. Contacts
Director of Investor Relations, Financing and
Phone: + 33 (0)1 75 49 98 30 - nicolas.buron@elis.com
Charline Lefaucheux
Investor Relations
Phone: + 33 (0)1 75 49 98 15 - charline.lefaucheux@elis.com
1 On
- 2023 adjusted EBITDA margin expected up c. +70bps yoy
- 2023 adjusted EBIT expected above €660m
- 2023 headline net income expected above €410m
- 2023 headline net income per share expected above €1.65 (on a fully diluted basis)
- 2023 free cash-flow expected above €260m
- Financial leverage ratio expected at c. 2.1x as of
31 December 2023
2 The target boundary includes land-related emissions and removals from bioenergy. Scope 2 emissions targets are market-based.
Scope 1 (direct emissions) is mainly associated with consumption of gas, fuel, etc.
Scope 2 (indirect emissions) is associated with consumption of electrical energy or steam;
Scope 3 (other indirect emissions) is associated with emission from other areas: purchases, upstream transport, employee travel, etc.
Attachment
- Elis - Full-year 2023 revenue
© OMX, source