Earnings Release • Sep 10, 2014
Earnings Release
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September 10, 2014
The English-language version of this document is a free translation from the original, which was prepared in French. All possible care has been taken to ensure that the translation is an accurate representation of the original. However, in all matters of interpretation of information, views or opinions expressed therein, the original language version of the document in French takes precedence over this translation.
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| Nine months ended June 30, |
||
|---|---|---|
| 2013 | 2014 | |
| in € millions | ||
| Revenue | 3,771.9 | 4,040.7 |
| Purchase of raw materials and consumables | (1,124.4) | (1,219.2) |
| Personnel costs | (1,786.2) | (1,870.9) |
| Other operating expenses | (522.5) | (589.7) |
| Taxes other than on income | (40.4) | (49.2) |
| Share of profit of associates | 0.8 | 1.6 |
| EBITDA | 299.2 | 313.4 |
| Depreciation, amortization and provisions for recurring operating items | (101.0) | (100.0) |
| Recurring operating profit including share of profit of associates | 198.2 | 213.4 |
| Other income and expenses, net | (36.5) | (53.2) |
| Operating profit including share of profit of associates | 161.7 | 160.2 |
| Net financial expense | (96.4) | (111.6) |
| Profit before income tax | 65.4 | 48.6 |
| Income tax | (27.1) | (29.1) |
| Profit for the period | 38.3 | 19.5 |
Consolidated revenue increased by €268.8 million, or 7.1%, to €4,040.7 million for the nine months ended June 30, 2014 from €3,771.9 million for the corresponding prior-year period. For information purposes, THS has been consolidated since April 15, 2013.
The following table shows a breakdown of consolidated revenue by segment as well as a breakdown of revenue growth between organic growth, changes in scope of consolidation and foreign currency effect for each segment individually and for the Group as a whole.
| (in € millions) | 9 months 2013‐2014 2012‐2013 |
9 months | Organic growth |
Difference in working days |
Changes in scope of consolidation |
Currency effect |
Total change |
|---|---|---|---|---|---|---|---|
| France | 1,652.0 | 1,632.1 | +1.9% | ‐0.7% | ‐ | ‐ | +1.2% |
| Other countries | 1,300.0 | 1,075.0 | +4.6% | ‐ | +16.5% | ‐0.2% | +20.9% |
| Total Contract Catering & Support Services | 2,951.9 | 2,707.1 | +3.0% | ‐0.4% | +6.6% | ‐0.1% | +9.0% |
| France, Germany, Belgium and Italy | 658.2 | 647.9 | +2.6% | ‐ | ‐1.0% | ‐ | +1.6% |
| Áreas | 430.6 | 416.8 | +9.1% | ‐ | ‐2.5% | ‐3.2% | +3.3% |
| Total Concession Catering & Travel Retail | 1,088.7 | 1,064.7 | +5.1% | ‐ | ‐1.6% | ‐1.3% | +2.3% |
| Consolidated total | 4,040.7 | 3,771.9 | +3.6% | ‐0.3% | +4.3% | ‐0.4% | +7.1% |
Consolidated revenue for the nine months ended June 30, 2014 totaled €4.040 billion, up 7.1% on the same period of FY 2012-2013. This performance reflects solid 3.6% organic growth as well as a 4.3% positive impact from changes in scope of consolidation, notably the acquisition of THS which has been consolidated since April 15, 2013.
The following table shows a revenue breakdown between the Group's six main markets, and the growth rates by market for the first nine months of FY 2013-2014 and FY 2012-2013.
| (in € millions) | 9 months 2013‐2014 2012‐2013 growth |
9 months Organic | Difference in Changes in scope working days of consolidation |
Currency effect |
Total change |
||
|---|---|---|---|---|---|---|---|
| Business & Industry | 1,313.5 | 1,241.9 | +3.9% | ‐0.3% | +2.2% | ‐ | +5.8% |
| Education | 884.3 | 814.0 | +2.4% | ‐1.0% | +7.4% | ‐0.1% | +8.6% |
| Healthcare | 754.1 | 651.2 | +2.1% | ‐ | +14.0% | ‐0.2% | +15.8% |
| Total Contract Catering & Support Services | 2,951.9 | 2,707.1 | +3.0% | ‐0.4% | +6.6% | ‐0.1% | +9.0% |
| Motorways | 380.4 | 362.1 | +5.7% | ‐ | ‐ | ‐0.6% | +5.1% |
| Airports | 433.6 | 408.7 | +10.0% | ‐ | ‐2.0% | ‐1.9% | +6.1% |
| City Sites & Leisure | 274.7 | 294.0 | ‐2.4% | ‐ | ‐3.0% | ‐1.1% | ‐6.6% |
| Total Concession Catering & Travel Retail | 1,088.7 | 1,064.7 | +5.1% | ‐ | ‐1.6% | ‐1.3% | +2.3% |
| Consolidated total | 4,040.7 | 3,771.9 | +3.6% | ‐0.3% | +4.3% | ‐0.4% | +7.1% |
Contract Catering & Support Services revenue rose 9.0% to €2,951.9 million for the nine months ended June 30, 2014. The segment's organic growth over the period came to 3.0%, led by business wins.
Concession Catering & Travel Retail revenue increased by 2.3% to €1,088.7 million for the nine months ended June 30, 2014, with organic growth of 3.0%. The pace of growth accelerated during the last three months of the period, driven by the ramp-up of business in the United States and a sharp increase in motorway and airport users in Europe. Changes in scope of consolidation trimmed 1.6% off revenue, due to the sale of non-strategic businesses comprising Hold & Co UK, Honoré James and the Group's Concession Catering subsidiaries in Argentina and Morocco. Changes in exchange rates – notably for the US dollar, the Chilean peso and the Mexican peso – had an adverse impact of 1.3%.
This item increased by €94.8 million, or 8.4%, to €1,219.2 million for the nine months ended June 30, 2014 from €1,124.4 million in the corresponding prior-year period.
The following table sets out purchases of raw materials and consumables by segment and as a percentage of the revenue of each segment.
| Nine months ended June 30, |
|||||
|---|---|---|---|---|---|
| 2013 | 2014 | ||||
| in € millions and % of revenue | |||||
| Purchase of raw materials and consumables | |||||
| Contract Catering & Support Services | (824.7) | 30.5% | (907.5) | 30.7% | |
| Concession Catering & Travel Retail | (313.5) | 29.4% | (325.3) | 29.9% | |
| Headquarters, holding companies and purchasing entities | 13.8 | — | 13.6 | — | |
| Total | (1,124.4) | 29.8% | (1,219.2) | 30.2% |
Purchases of raw materials and consumables in the Contract Catering & Support Services segment rose by €82.8 million, or 10.0%, to €907.5 million for the nine months ended June 30, 2014 from €824.7 million in the corresponding prior-year period. The acquisition of THS in April 2013 contributed €78.7 million of the year-on-year increase.
As a percentage of revenue, the segment's purchases of raw materials and consumables edged up to 30.7% from 30.5%, chiefly reflecting the acquisition of THS, whose purchases of raw materials and consumables represent a higher percentage of revenue than the segment's other businesses. Excluding THS, as a proportion of revenue this item was 0.7 of a percentage point lower than in the first nine months of FY 2012- 2013. This decrease mainly derived from Italy, as a result of (i) the start-up of the new on-board train catering contract which, due to the nature of the services provided, involves a different product mix and a much lower raw materials cost ratio than the Group's other contract catering operations, and (ii) improved purchasing conditions, particularly for Gemeaz, demonstrating the purchasing synergies that are gradually being achieved, as well as the success of the actions plans put in place for raw materials.
Purchases of raw materials and consumables in the Concession Catering & Travel Retail segment increased by €11.8 million, or 3.8%, to €325.3 million for the nine months ended June 30, 2014 from €313.5 million in the equivalent period of FY 2012-2013. As a percentage of revenue, this item increased to 29.9% from 29.4%, mainly due to the opening of new motorway rest areas in Germany, whose purchases of raw materials and consumables represent a higher percentage of revenue than the segment's other businesses.
Consolidated personnel costs rose by €84.7 million, or 4.7%, to €1,870.9 million for the nine months ended June 30, 2014 from €1,786.2 million in the corresponding prior-year period, but decreased as a percentage of revenue to 46.3% from 47.4%.
The following table sets out personnel costs by segment and as a percentage of the revenue of each segment.
| Nine months ended June 30, |
||||
|---|---|---|---|---|
| 2013 | 2014 | |||
| in € millions and % of revenue | ||||
| Personnel costs | ||||
| Contract Catering & Support Services | (1,362.2) | 50.3% | (1,449.8) | 49.1% |
| Concession Catering & Travel Retail | (393.8) | 37.0% | (389.6) | 35.8% |
| Headquarters, holding companies and purchasing entities(1) | (30.1) | — | (31.6) | — |
| Total | (1,786.2) | 47.4% | (1,870.9) | 46.3% |
(1) Represents personnel costs associated with headquarters, holding companies and purchasing entities (including the IT department) invoiced to operating entities for management and shared services. As the corresponding invoices do not break down the costs invoiced by nature, they cannot be allocated to specific operating segments. They are therefore recorded as a credit under "Other operating expenses" within the Headquarters, holding companies and purchasing entities segment.
Personnel costs in the Contract Catering & Support Services segment increased by €87.6 million, or 6.4%, to €1,449.8 million for the nine months ended June 30, 2014 from €1,362.2 million in the nine months ended June 30, 2013. The rise was mainly due to the effect of the acquisition of THS (which accounted for €60.2 million of the overall increase) and, to a lesser extent, an increase in personnel costs (in line with revenue growth) for the segment's French operations.
As a percentage of revenue, this segment's personnel costs decreased to 49.1% from 50.3%, mainly as a result of (i) a mix effect arising from acquisitions, as THS has a lower personnel costs to revenue ratio than that of the Group's other Contract Catering & Support Services businesses, and (ii) the positive impact on the segment's personnel costs to revenue ratio in Italy caused by the start-up of on-board train catering services, which are largely subcontracted.
Personnel costs in the Concession Catering & Travel Retail segment edged back by €4.2 million, or 1.0%, to €389.6 million for the nine months ended June 30, 2014 from €393.8 million in the corresponding prior-year period. This year-on-year reduction was primarily attributable to a decrease in Áreas's personnel costs due to the sale in the first quarter of FY 2013-2014 of the Group's operations in Argentina and Morocco.
As a percentage of revenue, personnel costs for the Concession Catering & Travel Retail segment contracted to 35.8% from 37.0%. This decrease mainly reflects the fact that Áreas had a lower ratio of personnel costs to revenue during the period due to higher business volumes, which led to productivity gains, as well as to the impact of the restructuring plan put in place with a view to reducing personnel costs at Madrid Barajas airport (for which the Group's contract was renewed and expanded to include a greater number of outlets during FY 2012-2013).
Other operating expenses increased by €67.2 million, or 12.9%, to €589.6 million in the nine months ended June 30, 2014 from €522.4 million in the same period of FY 2012-2013.
The following table sets out other operating expenses by segment and as a percentage of the revenue of each segment.
| Nine months ended June 30, |
||||
|---|---|---|---|---|
| 2013 | 2014 | |||
| in € millions and % of revenue | ||||
| Other operating expenses | ||||
| Contract Catering & Support Services | (253.8) | 9.4% | (317.8) | 10.8% |
| Concession Catering & Travel Retail | (283.2) | 26.6% | (292.0) | 26.8% |
| Headquarters, holding companies and purchasing entities(1) | 14.6 | — | 20.2 | — |
| Total | (522.4) | 13.9% (589.6) | 14.6% |
(1) Represents a portion of the revenue invoiced to operating entities by headquarters, holding companies and purchasing entities (including the IT department) for management and shared services. As the corresponding invoices do not break down the costs invoiced by nature, they cannot be allocated to specific operating segments. They are therefore recorded as a credit under "Other operating expenses" for Headquarters, holding companies and purchasing entities and mainly comprise personnel costs.
Other operating expenses reported for the Contract Catering & Support Services segment increased by €64.0 million, or 25.2%, to €317.8 million for the nine months ended June 30, 2014 from €253.8 million in the corresponding prior-year period. The acquisition of THS accounted for €13.7 million of the overall rise. The figure was also pushed up due to increased use of subcontracting in Italy as a result of the start-up in November 2013 of the Group's services under new on-board train catering contracts.
As a percentage of revenue, other operating expenses for the Contract Catering & Support Services segment rose to 10.8% from 9.4%, primarily reflecting the increase in subcontracting costs.
1.1.4.2 Concession Catering & Travel Retail
Other operating expenses in the Concession Catering & Travel Retail segment increased by €8.8 million, or 3.1%, to €292.0 million for the nine months ended June 30, 2014 from €283.2 million in the corresponding prior-year period. Higher business volumes for Áreas and the Group's German motorways operations were the main contributors to this rise. As a percentage of revenue, the segment's other operating expenses were more or less unchanged year on year, representing 26.8% versus 26.6%.
This item rose by €8.8 million, or 21.8%, to €49.2 million for the nine months ended June 30, 2014 from €40.4 million in the equivalent prior-year period. The following table sets out taxes other than income by segment and as a percentage of the revenue of each segment.
| Nine months ended June 30, |
||||
|---|---|---|---|---|
| 2013 | 2014 | |||
| in € millions and % of revenue | ||||
| Taxes other than on income | ||||
| Contract Catering & Support Services | (26.0) | 1.0% | (33.8) | 1.1% |
| Concession Catering & Travel Retail | (11.8) | 1.1% | (12.0) | 1.1% |
| Headquarters, holding companies and purchasing entities | (2.7) | — | (3.3) | — |
| Total | (40.4) | 1.1% | (49.2) | 1.2% |
Taxes other than on income for the Contract Catering & Support Services segment increased by €7.8 million, or 30.0%, to €33.8 million for the nine months ended June 30, 2014 from €26.0 million in the corresponding prior-year period. The acquisition of THS accounted for €6.9 million of this year-on-year rise.
Taxes other than on income for the Concession Catering & Travel Retail segment inched up by €0.2 million, or 1.7%, to €12.0 million for the nine months ended June 30, 2014 from €11.8 million in the corresponding prior-year period. As a percentage of revenue, however, they remained unchanged.
The following table sets out EBITDA by segment and as a percentage of the revenue of each segment.
| (in € millions) | EBITDA 9 months 2013‐2014 |
EBITDA 9 months 2012‐2013 |
EBITDA margin 9 months 2013‐2014 |
EBITDA margin 9 months 2012‐2013 |
|---|---|---|---|---|
| Contract Catering & Support Services: | ||||
| France……………………………………………… | 148.7 | 157.0 | 9.0% | 9.6% |
| Other countries……………………………… | 94.4 | 83.4 | 7.3% | 7.8% |
| Total Contract Catering & Support Services | 243.1 | 240.4 | 8.2% | 8.9% |
| Concession Catering & Travel Retail: | ||||
| France, Germany, Belgium, Italy……… | 45.1 | 48.4 | 6.9% | 7.5% |
| Áreas……………………………………………… | 26.4 | 14.9 | 6.1% | 3.6% |
| Total Concession Catering & Travel Retail | 71.5 | 63.3 | 6.6% | 5.9% |
| Headquarters, holding companies and | ||||
| purchasing entities………………………… | (1.2) | (4.5) | ||
| Consolidated total…………………………. | 313.4 | 299.2 | 7.8% | 7.9% |
Consolidated EBITDA increased by €14.2 million, or 4.8%, to €313.4 million for the nine months ended June 30, 2014 from €299.2 million in the equivalent prior-year period. As a percentage of revenue, it represented 7.8%, on a par with the first nine months of FY 2012-2013. Changes in exchange rates did not have a material impact on the Group's operating results for the nine months ended June 30, 2014.
EBITDA for the Contract Catering & Support Services segment increased by €2.7 million, or 1.1%, to €243.1 million for the nine months ended June 30, 2014 from €240.4 million in the same period of FY 2012- 2013. The year-on-year increase was mainly due to the acquisition of THS in FY 2012-2013 and the positive performance of the Support Services business in France, although these favorable impacts were partially offset by (i) an erosion of contract catering margins in France, notably in the Business & Industry and Education sectors due to the fewer working days and higher number of bank holidays than in the first nine months of FY 2012-2013, which had an estimated €5 million negative effect, and (ii) start-up costs for certain new contracts. International Contract Catering & Support Services subsidiaries posted a sharp yearon-year increase in EBITDA, with the United Kingdom, Spain and the United States turning in very satisfactory performances both in absolute value and margin terms. Conversely, the figures for Elior Ristorazione were affected by the general economic situation in Italy.
As a percentage of revenue, this segment's EBITDA came to 8.2% versus 8.9% in the first nine months of FY 2012-2013.
EBITDA for the Concession Catering & Travel Retail segment rose by €8.2 million, or 13.0%, to €71.5 million for the nine months ended June 30, 2014 from €63.3 million in the corresponding prior-year period. The increase was primarily attributable to (i) a strong performance by Áreas due to higher business volumes in both the United States and the Airports sector in Spain and Portugal, and (ii) improved margins in the Leisure market in France. The segment's other markets saw EBITDA contractions in France and Germany however, both in absolute value and margin terms, particularly in the Motorways sector.
As a percentage of revenue, the segment's EBITDA rose to 6.6% from 5.9%.
Consolidated depreciation, amortization and provisions for recurring operating items decreased by a slight €1.0 million, or 1.0%, to €100.0 million in the nine months ended June 30, 2014 from €101.0 million in the first nine months of FY 2012-2013.
The following table sets out depreciation, amortization and provisions for recurring operating items by segment and as a percentage of the revenue of each segment.
| Nine months ended June 30, |
||||||
|---|---|---|---|---|---|---|
| 2013 | 2014 | |||||
| in € millions and % of revenue | ||||||
| Depreciation, amortization and provisions for recurring operating items | ||||||
| Contract Catering & Support Services | (45.9) | 1.7% | (43.2) | 1.7% | ||
| Concession Catering & Travel Retail | (53.5) | 5.0% | (55.6) | 5.1% | ||
| Headquarters, holding companies and purchasing entities | (1.6) | — | (1.2) | — | ||
| Total | (101.0) | 2.7% (100.0) | 2.5% |
Depreciation, amortization and provisions for recurring operating items for the Contract Catering & Support Services segment decreased by €2.7 million, or 5.9% to €43.2 million from €45.9 million in the first nine months of FY 2012-2013. The year-on-year decrease was primarily due to reversals of surplus provisions for contingencies related to contracts in Italy.
Depreciation, amortization and provisions for recurring operating items for the Concession Catering & Travel Retail segment rose by €2.1 million, or 3.9%, to €55.6 million for the nine months ended June 30, 2014 from €53.5 million in the corresponding prior-year period. This increase was primarily attributable to capital expenditure for Áreas's new contracts in the United States and Spain.
This item represented a net expense of €53.2 million for the nine months ended June 30, 2014, chiefly reflecting (i) €4.0 million in amortization of intangible assets (customer relationships) recognized on the first-time consolidation of THS in the United States as part of the purchase price allocation process, (ii) the €2.5 million disposal loss recognized on the sale of Áreas subsidiaries in Morocco and Argentina, (iii) €26.1 million in IPO-related costs and fees that could not be charged against the issue premium, and (iv) €16.1 million in costs related to the repayment of debt following the IPO (notably the penalty incurred as a result of redeeming in advance a portion of the Elior Finance & Co SCA Senior Secured Notes and the expensing of debt issuance costs that were previously capitalized and unamortized).
For the nine months ended June 30, 2013, "Other Income and Expenses, net" represented a net expense of €36.5 million and mainly broke down as (i) €23.4 million in non-recurring advisory and due diligence fees related to the Amend & Extend process, (ii) restructuring costs for the Contract Catering & Support Services businesses in Spain and the Support Services business in France, and (iii) €5.1 million in costs related to the early repayment of debt.
Net financial expense increased by €15.2 million, or 15.8%, to €111.6 million for the nine months ended June 30, 2014 from €96.4 million in the corresponding prior-year period. This increase was mainly due to the Group's higher average level of debt during the period as a result of the acquisition of THS that took place in April 2013, as well as the full-period impact of the interest payable on the Senior Secured Notes issued in April 2013. The debt repayments made following the IPO in June 2014 have not yet had a significant effect on net financial expense.
The Group's income tax expense rose by €2.0 million, or 7.4%, to €29.1 million for the nine months ended June 30, 2014 from €27.1 million in the same period of FY 2012-2013. The year-on-year rise was primarily attributable to the acquisition of THS and an increase in the tax expense recorded in Italy, where a one-off corporate income tax credit (IRES) had been recognized in the prior-year period due to the introduction of legislation allowing the deduction of a portion of the regional IRAP tax.
As a result of the above-described factors, and particularly the non-recurring costs related to the IPO and higher net financial expense during the period, the Group reported profit of €19.5 million for the nine months ended June 30, 2014 versus €38.3 million for the nine months ended June 30, 2013.
The following table provides an overview of the Group's cash flows for the nine-month periods ended June 30, 2013 and June 30, 2014
| Nine months ended June 30, |
||
|---|---|---|
| 2013 | 2014 | |
| in € millions | ||
| Net cash from operating activities | 48.0 | 102.0 |
| Net cash used in investing activities | (361.4) | (151.0) |
| Net cash from financing activities | 286.1 | 189.1 |
| Effect of exchange rate and other changes | 1.3 | (5.2) |
| Net increase/(decrease) in cash and cash equivalents | (26.1) | 134.9 |
The following table sets out the components of consolidated net cash from operating activities for the ninemonth periods ended June 30, 2013 and June 30, 2014.
| Nine months ended June 30, |
||
|---|---|---|
| 2013 | 2014 | |
| in € millions | ||
| EBITDA | 299.2 | 313.4 |
| Change in working capital | (99.9) | (36.8) |
| Interest paid | (92.3) | (105.9) |
| Tax paid | (18.0) | (20.6) |
| Other (including dividends received from associates) | (41.1) | (48.2) |
| Net cash from operating activities | 48.0 | 102.0 |
Operating activities generated a net cash inflow of €102.0 million in the nine months ended June 30, 2014 versus a net cash inflow of €48.0 million in the first nine months of FY 2012-2013. The year-on-year increase reflects movements in all of this item's components during the period.
Change in working capital resulted in a lower cash outflow in the nine months ended June 30, 2014 (€36.8 million) than in the same period of FY 2012-2013 (€99.9 million). This improvement primarily reflects better client payment times and tight management of working capital, particularly in the Group's contract catering operations in Spain and Italy and in the support services business in France. However, these positive effects were partially offset by the impact of an increase in CICE tax receivables in the balance sheet due to the recognition of a higher amount of these receivables in the nine months ended June 30, 2014 than in the corresponding prior-year period.
Tax paid includes corporate income tax paid in all of the geographic areas in which the Group operates. It also includes the Italian IRAP tax (Imposta Regionale Sulle Attività Produttive) and the French CVAE tax.
This item represented a net cash outflow of €20.6 million in the nine months ended June 30, 2014 versus an €18.0 million net cash outflow in the nine months ended June 30, 2013.
Other cash flows from operating activities primarily relate to (i) non-recurring income and expenses recorded under "Other income and expenses, net" in the consolidated income statement and (ii) payments made in connection with purchase price accounting adjustments related to acquisitions recognized in accordance with IFRS. For the nine-month periods ended June 30, 2013 and 2014, other cash flows from operating activities represented net cash outflows of €41.1 million and €48.2 million, respectively. The figure for the nine months ended June 30, 2014 primarily related to (i) restructuring costs incurred by Áreas in Spain, which had been provisioned at September 30, 2013, (ii) the Group's recent acquisitions of Ansamble and Gemeaz, and (iii) cash outflows related to Elior's IPO and the partial redemption of the Elior Finance & Co SCA Senior Secured Notes in June 2014.
The following table sets out the components of consolidated net cash used in investing activities for the ninemonth periods ended June 30, 2013 and June 30, 2014.
| Nine months ended June 30, |
||
|---|---|---|
| 2013 | 2014 | |
| in € millions | ||
| Purchases of and proceeds from | ||
| sale of property, plant and equipment and intangible assets | (131.4) | (145.7) |
| Purchases of and proceeds from sale of non-current financial assets | 3.1 | (2.7) |
| Acquisition/sale of shares in consolidated companies | (233.2) | (2.6) |
| Net cash used in investing activities | (361.4) | (151.0) |
Net cash used in investing activities totaled €361.4 million for the nine months ended June 30, 2013 and €151.0 million for the nine months ended June 30, 2014.
Total consolidated cash used for capital expenditure (net of proceeds from sales) increased from €131.4 million in the nine-month period ended June 30, 2013 to €145.7 million for the first nine months of FY 2013-2014.
The figure for the Contract Catering & Support Services segment came to €46.0 million for the nine months ended June 30, 2013 and €53.0 million for the nine months ended June 30, 2014, representing 1.7% and 1.8% of the segment's revenue respectively, and reflecting a steady pace of capital expenditure.
In the Concession Catering & Travel Retail segment, net cash used for capital expenditure totaled €83.3 million for the nine months ended June 30, 2013 and €90.2 million for the nine months ended June 30, 2014, representing 7.8% and 8.3% of the segment's revenue respectively. The high level of capital outlay over the period was mainly due to the purchase of non-current assets in the Motorways sector during the third quarter of the fiscal year, as well as the ongoing capital expenditure programs for the renovation of rest areas on the Florida and Maryland Turnpikes in the United States.
Net cash used for capital expenditure by Headquarters, holding companies and purchasing entities came to €2.2 million and €2.6 million in the nine-month periods ended June 30, 2013 and 2014 respectively, and primarily corresponded to purchases of software and hardware.
The consolidated net cash outflow of €2.7 million related to "Purchases of and proceeds from sale of noncurrent financial assets" in the nine months ended June 30, 2014 mainly reflects an increase in loans and deposits.
The consolidated net cash inflow of €3.1 million generated from this item in the nine months ended June 30, 2013 primarily related to the repayment of a vendor loan granted in connection with the prior disposal of a main-street fast-food business, partially offset by an increase in loans and deposits.
For the nine months ended June 30, 2013, acquisitions and sales of shares in consolidated companies represented a net cash outflow of €233.2 million and mainly corresponded to the acquisition of THS in the United States and the purchase of non-controlling interests in contract catering operations in Spain.
For the nine months ended June 30, 2014, this item represented a net cash outflow of €2.6 million and concerned the payment of acquisition-related liabilities (additional purchase price consideration payable by THS to certain former shareholders of subsidiaries previously acquired by THS), partly offset by proceeds received during the period from the sale of the Group's subsidiaries in Argentina and Morocco.
The following table sets out the components of consolidated net cash from financing activities for the ninemonth periods ended June 30, 2013 and June 30, 2014.
| Nine months ended June 30, |
||
|---|---|---|
| 2013 | 2014 | |
| in € millions | ||
| Movements in share capital of the parent and in shareholder loans | (0.0) | 777.9 |
| Dividends paid to non-controlling interests in consolidated companies | (2.2) | (0.4) |
| Proceeds from borrowings | 1,008.2 | 168.4 |
| Repayments of borrowings | (719.9) | (756.7) |
| Net cash from financing activities | 286.1 | 189.1 |
Net cash from financing activities totaled €189.1 million and €286.1 million in the nine-month periods ended June 30, 2014 and 2013 respectively.
There were no movements in share capital during the nine-month period ended June 30, 2013.
During the nine months ended June 30, 2014 the Group carried out a €785.0 million capital increase, corresponding to the issue of 53.2 million new shares for the purpose of the Company's IPO on June 11, 2014. A total of €8.4 million in IPO-related costs that could be charged against the issue premium was paid out in the first nine months of FY 2013-2014, notably corresponding to fees of the advisory banks involved.
This item represented net cash outflows of €2.2 million and €0.4 million for the nine-month periods ended June 30, 2013 and 2014, respectively, and chiefly corresponded to dividends paid to non-controlling shareholders of MyChef.
Consolidated cash inflows from proceeds from borrowings totaled €1,008.2 million and €168.4 million in the nine-month periods ended June 30, 2013 and 2014 respectively.
In the nine months ended June 30, 2013, these proceeds mainly corresponded to (i) €44.1 million from new securitized receivables, (ii) €39.3 million drawn down under a new financing arrangement set up by Áreas to fund its capital expenditure in the United States, (iii) €453.0 million drawn down under the Elior Facility 2019, (iv) €350.0 million in proceeds from the issuance in April 2013 by Elior Finance & Co SCA of Senior Secured Notes maturing in 2020, and (v) a €117.7 million bank loan set up in the United States for the acquisition of THS.
In the nine months ended June 30, 2014, this item primarily corresponded to (i) €134.8 million from new securitized receivables, due to the inclusion of Serunión and then Elior Italy in the securitization program, (ii) €34.6 million in cash received on the sale of the CICE tax receivable for 2013, and (iii) €27.9 million drawn down by Áreas under a bank credit facility to refinance its borrowings and fund its capital expenditure in the United States.
Repayments of borrowings led to net cash outflows of €719.9 million and €756.7 million in the nine-month periods ended June 30, 2013 and 2014 respectively.
In the first nine months of FY 2012-13, this item mainly corresponded to repayments of (i) syndicated borrowings representing an aggregate €696.4 million, (ii) finance lease liabilities in an amount of €4.0 million, and (iii) various bank borrowings totaling €19.5 million.
In the first nine months of FY 2013-2014, repayments of borrowings primarily related to (i) early repayment of €615.0 million worth of three syndicated bank loans granted to Elior SA and Elior Participations SA, (ii) early redemption of €122.5 million worth of the Elior Finance & Co SCA 6.5% Senior Secured Notes maturing in May 2020, representing 35% of the outstanding notes, (iii) amounts repaid under finance leases (€4.1 million), and (iv) repayments of various bank borrowings (€15.1 million).
In the nine months ended June 30, 2014, fluctuations in exchange rates and other changes had a negative €5.2 million cash impact. This overall adverse effect reflects the following combined factors: cash amounts received by Áreas USA for the Florida Turnpike short-term financial receivable recorded in accordance with IFRIC 12, offset by (i) unfavorable currency effects on consolidated cash and cash equivalents and (ii) bank fees paid in connection with the Group's debt repricing in February 2014.
In the first nine months of FY 2012-2013, fluctuations in exchange rates and other changes had an overall positive cash impact, primarily reflecting the combined effect of bank fees paid in relation to the Amend & Extend process for the Senior Credit Facility and the €350 million Senior Secured Notes issue carried out in April 2013, offset by cash amounts received by Áreas USA for the Florida Turnpike short-term financial receivable recorded in accordance with IFRIC 12.
for the Nine-Month Periods Ended June 30, 2014 and 2013
The English-language version of this document is a free translation from the original, which was prepared in French. All possible care has been taken to ensure that the translation is an accurate representation of the original. However, in all matters of interpretation of information, views or opinions expressed therein, the original language version of the document in French takes precedence over this translation.
| Condensed Interim Consolidated Financial Statements 18 | ||
|---|---|---|
| 1. | Consolidated Income Statement and Statement of Comprehensive Income 18 | |
| a. | Consolidated Income Statement 18 | |
| b. | Consolidated Statement of Comprehensive Income 19 | |
| 2. | Consolidated Balance Sheet 20 | |
| a. | Assets 20 | |
| b. | Equity and Liabilities 20 | |
| 3. | Consolidated Cash Flow Statement 20 | |
| 4. | Consolidated Statement of Changes in Equity 22 | |
| Notes to the Condensed Interim Consolidated Financial Statements 23 | ||
| 1. | General Information 23 | |
| 2. | Basis of Preparation 23 | |
| 3. | Significant Events 23 | |
| 4. | Accounting Policies 24 | |
| 5. | New Standards, Amendments and Interpretations 25 | |
| 6. | Use of Estimates 26 | |
| 7. | Exchange Rates 26 | |
| 8. | Seasonality of Operations 26 | |
| 9. | Operating Segment Information 27 | |
| 10. | Business Combinations 30 | |
| 11. | Other Income and Expenses, Net 31 | |
| 12. | Income Tax 31 | |
| 13. | Dividends 31 | |
| 14. | Goodwill 31 | |
| 15. | Intangible Assets 32 | |
| 16. | Property, Plant and Equipment 33 | |
| 17. | Borrowings, Loans and Net Financial Expense 34 | |
| 18. | Short- and Long-Term Provisions 36 | |
| 19. | Related Party Transactions 37 | |
| 20. | Events after the Balance Sheet Date 37 |
| (in € millions) | Note | Nine months ended June 30, 2014 Unaudited |
Nine months ended June 30, 2013 Unaudited |
|---|---|---|---|
| Revenue | 9.a | 4,040.7 | 3,771.9 |
| Purchase of raw materials and consumables | (1,219.2) | (1,124.4) | |
| Personnel costs | (1,870.9) | (1,786.2) | |
| Other operating expenses | (589.7) | (522.5) | |
| Taxes other than on income | (49.2) | (40.4) | |
| Depreciation, amortization and provisions for recurring operating items | (100.0) | (101.0) | |
| Recurring operating profit | 211.8 | 197.4 | |
| Share of profit of associates | 1.6 | 0.8 | |
| Recurring operating profit including share of profit of associates | 9.b | 213.4 | 198.3 |
| Other income and expenses, net | 11 | (53.2) | (36.5) |
| Operating profit including share of profit of associates | 160.2 | 161.8 | |
| Financial expenses | 17 | (114.1) | (97.8) |
| Financial income | 17 | 2.5 | 1.4 |
| Profit before income tax | 48.6 | 65.4 | |
| Income tax | 12 | (29.1) | (27.1) |
| Profit for the period | 19.5 | 38.3 | |
| Attributable to owners of the parent | 21.4 | 44.9 | |
| Attributable to non-controlling interests | (1.9) | (6.6) | |
| Basic earnings per share (in €) | 0.19 | 0.41 | |
| Diluted earnings per share (in €) | 0.19 | 0.41 |
| (in € millions) | Nine months ended June 30, 2014 Unaudited |
Nine months ended June 30, 2013 Unaudited |
|
|---|---|---|---|
| Profit for the period | 19.5 | 38.3 | |
| Items that will not be reclassified subsequently to profit or loss | |||
| Post-employment benefit obligations | 0.3 | (1.6) | |
| Items that may be subsequently reclassified to profit or loss | |||
| Financial instruments | 0.5 | 14.6 | |
| Currency translation differences | (3.3) | (0.3) | |
| Income tax | (0.2) | (5.0) | |
| Total other comprehensive income/(expense) for the period | (2.7) | 7.6 | |
| Total comprehensive income for the period | 16.8 | 46.0 | |
| Attributable to: | |||
| - Owners of the parent | 18.7 | 52.5 | |
| - Non-controlling interests | (1.9) | (6.6) |
| (in € millions) | Note | At June 30, 2014 Unaudited |
At Sept. 30, 2013 Audited |
At June 30, 2013 Unaudited |
|---|---|---|---|---|
| Goodwill | 14 | 2,357.2 | 2,411.6 | 2,448.5 |
| Intangible assets | 15 | 230.6 | 143.4 | 102.0 |
| Property, plant and equipment | 16 | 502.5 | 489.5 | 526.3 |
| Non-current financial assets | 38.0 | 39.3 | 27.6 | |
| Investments in associates | 6.5 | 6.7 | 6.1 | |
| Fair value of derivative financial instruments (*) | 0.4 | 0.6 | 0.0 | |
| Deferred tax assets | 236.2 | 227.8 | 204.0 | |
| Non-current assets | 3,371.5 | 3,318.9 | 3,314.5 | |
| Inventories | 89.9 | 94.2 | 93.6 | |
| Trade and other receivables | 1,009.6 | 905.2 | 976.4 | |
| Current income tax assets | 25.3 | 19.5 | 19.4 | |
| Other current assets | 46.1 | 46.2 | 44.8 | |
| Short-term financial receivables (*) | 5.3 | 8.5 | 9.6 | |
| Cash and cash equivalents (*) | 312.4 | 210.0 | 90.3 | |
| Current assets | 1,488.5 | 1,283.6 | 1,234.1 | |
| Total assets | 4,860.0 | 4,602.5 | 4,548.6 |
(*) Included in the calculation of net debt
| At June 30, | At Sept. 30, | At June 30, | ||
|---|---|---|---|---|
| (in € millions) | Note | 2014 | 2013 | 2013 |
| Unaudited | Audited | Unaudited | ||
| Share capital | 1.6 | 1.1 | 1.1 | |
| Reserves and retained earnings | 1,294.9 | 582.1 | 624.9 | |
| Non-controlling interests | 29.5 | 67.6 | 64.3 | |
| Total equity | 4.a) & b) | 1,326.1 | 650.8 | 690.3 |
| Long-term debt (*) | 17 | 1,647.9 | 2,240.8 | 2,267.7 |
| Fair value of derivative financial instruments (*) | 25.4 | 25.7 | 26.9 | |
| Non-current liabilities relating to share acquisitions | 148.7 | 40.1 | 48.6 | |
| Deferred tax liabilities | 40.1 | 23.1 | 20.2 | |
| Provisions for pension and other post-employment | 18 | 97.0 | 97.6 | 96.0 |
| benefit obligations | ||||
| Other long-term provisions | 18 | 13.5 | 13.5 | 16.4 |
| Other non-current liabilities | 0.1 | 0.0 | 0.0 | |
| Non-current liabilities | 1,972.7 | 2,440.9 | 2,475.7 | |
| Trade and other payables | 685.8 | 667.2 | 621.7 | |
| Due to suppliers of non-current assets | 15.8 | 30.2 | 20.5 | |
| Accrued taxes and payroll costs | 607.6 | 525.5 | 560.1 | |
| Current income tax liabilities | 22.8 | 3.1 | 16.8 | |
| Short-term debt (*) | 17 | 110.2 | 136.1 | 68.4 |
| Current liabilities relating to share acquisitions | 18.9 | 26.4 | 21.0 | |
| Short-term provisions | 18 | 79.8 | 101.3 | 57.0 |
| Other current liabilities | 20.4 | 21.1 | 17.1 | |
| Current liabilities | 1,561.2 | 1,510.9 | 1,382.5 | |
| Total liabilities | 3,533.9 | 3,951.7 | 3,858.2 | |
| Total equity and liabilities | 4,860.0 | 4,602.5 | 4,548.6 | |
| (*) Included in the calculation of net debt | 1,465.4 | 2,183.5 | 2,263.1 | |
| Net debt excluding fair value of derivative financial | 1,458.8 | 2,181.4 | 2,258.6 | |
| instruments and debt issuance costs |
| (in € millions) | Nine months ended June 30, 2014 Unaudited |
Nine months ended June 30, 2013 Unaudited |
|
|---|---|---|---|
| Cash flows from operating activities | |||
| Recurring operating profit including share of profit of associates | 213.4 | 198.3 | |
| Amortization and depreciation | 102.1 | 98.9 | |
| Provisions | (2.1) | 2.1 | |
| EBITDA | 313.4 | 299.2 | |
| Dividends received from associates | 1.6 | 0.9 | |
| Change in working capital | (36.8) | (99.9) | |
| Interest paid | (105.9) | (92.3) | |
| Tax paid | (20.6) | (18.0) | |
| Other cash movements | (49.0) | (42.0) | |
| Net cash from operating activities | 102.8 | 48.0 | |
| Cash flows from investing activities | |||
| Purchases of property, plant and equipment and intangible assets | (151.9) | (139.2) | |
| Proceeds from sale of property, plant and equipment and intangible assets | 6.2 | 7.8 | |
| Purchases of non-current financial assets | (4.3) | (7.1) | |
| Proceeds from sale of non-current financial assets | 1.6 | 10.3 | |
| Acquisition of Elior shares | 0.0 | 0.0 | |
| Acquisition/sale of shares in other consolidated companies | (2.6) | (233.2) | |
| Net cash used in investing activities | (151.0) | (361.4) | |
| Cash flows from financing activities | |||
| Movements in share capital of the parent and in shareholder loans | 777.1 | 0.0 | |
| Dividends paid to non-controlling interests in consolidated subsidiaries | (0.4) | (2.2) | |
| Proceeds from borrowings | 168.4 | 1,008.2 | |
| Repayments of borrowings | (756.7) | (719.9) | |
| Net cash from financing activities | 189.1 | 286.1 | |
| Effect of exchange rate and other changes | (5.2) | 1.3 | |
| Net increase/(decrease) in cash and cash equivalents | 134.9 | (26.1) | |
| Cash and cash equivalents at beginning of period | 130.1 | 54.8 | |
| Cash and cash equivalents at end of period | 265.0 | 28.7 |
Bank overdrafts repayable on demand and current accounts held for treasury management purposes are an integral part of the Group's cash management and are therefore deducted from cash in the cash flow statement whereas they are classified as short-term debt in the balance sheet. These items represent the sole difference between the cash and cash equivalents figure presented in the balance sheet and the amount presented in the cash flow statement under "Cash and cash equivalents at end of period".
| (in € millions) | Number of shares |
Share capital |
Additional paid-in capital and other reserves |
Profit for the period attributable to owners of the parent |
Translation reserve |
Equity attributable to owners of the parent |
Non-controlling interests |
Total equity |
|---|---|---|---|---|---|---|---|---|
| Balance at September 30, 2012 (reported) | 108,820,358 | 1.1 | 596.2 | (30.1) | 1.8 | 568.8 | 50.1 | 618.9 |
| Impact of change in accounting method: IAS 19R | (5.8) | (5.8) | (5.8) | |||||
| Balance at September 30, 2012 | 108,820,358 | 1.1 | 590.4 | (30.1) | 1.8 | 563.0 | 50.1 | 613.1 |
| Profit for the period | 44.9 | 44.9 | (6.6) | 38.3 | ||||
| Post-employment benefit obligations | (1.6) | (1.6) | (1.6) | |||||
| Changes in fair value of financial instruments | 9.6 | 9.6 | 9.6 | |||||
| Currency translation differences | 0.4 | 0.4 | (0.7) | (0.3) | ||||
| Comprehensive income for the period | 8.0 | 44.9 | 0.4 | 53.2 | (7.3) | 46.0 | ||
| Appropriation of prior-period profit | (30.1) | 30.1 | ||||||
| Dividends paid | (0.8) | (0.8) | (1.5) | (2.3) | ||||
| Other movements (a) | 10.6 | 10.6 | (23.0) | 33.6 | ||||
| Balance at June 30, 2013 | 108,820,358 | 1.1 | 578.0 | 44.9 | 2.2 | 626.0 | 64.3 | 690.3 |
| Balance at September 30, 2013 | 108,820,358 | 1.1 | 567.2 | 8.7 | 6.3 | 583.2 | 67.6 | 650.8 |
| Profit for the period | 21.4 | 21.4 | (1.9) | 19.5 | ||||
| Post-employment benefit obligations | 0.3 | 0.3 | 0.3 | |||||
| Changes in fair value of financial instruments | 0.3 | 0.3 | 0.0 | 0.3 | ||||
| Currency translation differences | (2.3) | (2.3) | (1.0) | (3.3) | ||||
| Comprehensive income for the period | 0.6 | 21.4 | (2.3) | 19.7 | (2.9) | 16.8 | ||
| Appropriation of prior-period profit | 8.7 | (8.7) | 0.0 | 0.0 | ||||
| Capital increase | 55,392,327 | 0.5 | 768.0 | 768.6 | 768.6 | |||
| Dividends paid | (0.3) | (0.3) | 0.7 | 0.4 | ||||
| Other movements (b) | (74.7) | (74.7) | (35.9) | (110.5) | ||||
| Balance at June 30, 2014 | 164,212,685 | 1.6 | 1,269.5 | 21.4 | 4.0 | 1,296.6 | 29.5 | 1,326.1 |
Elior SA (Holding Bercy Investissement SCA until June 11, 2014) is a French joint stock corporation (société anonyme) registered and domiciled in France. Its headquarters are located at 61-69 rue de Bercy, Paris, France. At June 30, 2014, Elior was 41.3%-held by investment funds managed by Charterhouse and Chequers, 19.67%-held by Bagatelle Investissement et Management – "BIM" (which is wholly owned by Robert Zolade), 1.09%-held by the SOFIA investment fund and companies of the Intermediate Capital Group (ICG), and 37.95%-held by private and public investors following Elior's admission to trading on Euronext Paris on June 11, 2014.
The Elior Group is a major player in Europe's contracted food and support services industry. It operates its businesses of Contract Catering & Support Services and Concession Catering & Travel Retail through companies based in 13 countries – mainly in the Eurozone, the United Kingdom, Latin America and the USA.
These condensed interim consolidated financial statements for the nine-month periods ended June 30, 2014 and 2013 have been prepared in accordance with IAS 34, "Interim Financial Reporting". They should be read in conjunction with the annual financial statements for the year ended September 30, 2013, which were prepared in accordance with IFRS.
The condensed interim consolidated financial statements were approved for issue by Elior's Board of Directors on September 10, 2014.
In December 2013, the Group sold its Moroccan and Argentinian concession catering activities (previously operated by Áreas). Prior to the sale these activities generated aggregate annual revenue of around €20 million.
During the nine months ended June 30, 2013, the Group carried out the following transactions:
The Group's lending margins on its syndicated bank loans were reduced by its partner banks, effective from February 3, 2014. The reductions correspond to (i) 75 basis points on the outstanding amount of Elior and Elior Participations' main term loans representing a total of €1,571.3 million, and (ii) 25 basis points on €192.5 million in undrawn revolving credit facilities. In connection with the reductions obtained, the Group paid €6.8 million in bank fees, which are included in the effective interest rate of the loans and are therefore being deferred in the balance sheet in accordance with the IFRS accounting treatment applicable to a debt renegotiation that does not result in any substantial changes to the loan agreement.
Elior has been listed on NYSE Euronext Paris since June 11, 2014. The IPO involved the issue of 53.2 million Elior shares at a unit price of €14.75, resulting in an overall €785 million capital increase. Of this amount, €769 million was recognized in equity, net of the direct costs of the IPO which were charged against the issue premium in an amount net of the related tax effect.
As a listed company, in accordance with IAS 32 Elior considers that it no longer has control over the exercise conditions of the put option held by Emesa on 38.45% of Áreas' share capital. Consequently, a corresponding liability has been recognized in the first consolidated accounts prepared after the Company's stock market floatation, i.e. these financial statements for the nine months ended June 30, 2014. The amount of this liability recognized in the consolidated balance sheet at June 30, 2014 – corresponding to €130 million of which €112 million was deducted from equity – was calculated by means of a multi-criteria valuation analysis performed on Áreas and its subsidiaries, using methods based on discounted cash flows, valuation multiples for comparable listed companies and recent transaction multiples.
Following the Company's stock market flotation on June 11, 2014 Elior repaid (i) €615 million worth of its syndicated bank debt maturing in 2019 and (ii) €122 million worth of the Elior Finance & Co SCA May 2020 Senior Secured Notes.
The accounting policies adopted are consistent with those used for the previous financial period except for (i) the accounting treatments described below and (ii) the change in accounting method arising from the Group's application of the revised version of IAS 19 (IAS 19R) as described in paragraph 5 below.
For interim periods, taxes on income (other than the CVAE tax levied in France on value added generated by the business) are accrued using the tax rate that would be applicable to expected total annual profit. In these financial statements the CVAE tax – which is included in income tax – and employee profit-sharing have been accrued based on three quarters of the expected full-year charge.
No actuarial assessments of pension and other post-employment benefit obligations have been performed for these condensed interim consolidated financial statements. The related expense for the nine-month periods ended June 30, 2013 and 2014 represents three quarters of the expense calculated for the full years ended September 30, 2013 and 2014, respectively.
New Standards, Amendments and Interpretations adopted by the European Union and applied by the Group
The standards, amendments and interpretations described below have been issued by the IASB for application in financial years subsequent to 2012-2013. They were adopted by the European Union at December 31, 2012, and will therefore be applicable by the Group as from January 1, 2014 unless the Group early adopts them. The practical implications of applying the following standards, amendments and interpretations and their effect on the Group's financial statements are currently being analyzed but they are not expected to have a material impact on the presentation of the Group's results or on its financial position:
The other standards, amendments and interpretations that have been issued but are not yet effective are not expected to have a material impact on the consolidated financial statements and are listed below:
The preparation of interim consolidated financial statements requires Management of both the Group and its subsidiaries to use certain estimates and assumptions that may have an impact on the reported values of assets, liabilities and contingent liabilities at the balance sheet date, and on items of income and expense for the period.
These estimates and assumptions – which are based on historical experience and other factors believed to be reasonable in the circumstances – are used to assess the carrying amount of assets and liabilities. Actual results may differ significantly from these estimates if different assumptions or circumstances apply.
In preparing these condensed interim consolidated financial statements, the significant judgments made by Management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended September 30, 2013, with the exception of changes in estimates that are required in determining the provision for income taxes.
For the nine-month periods ended June 30, 2014 and 2013, the balance sheets, income statements, and cash flow statements of certain subsidiaries whose functional currency differs from the presentation currency used in Elior's accounts have been translated (i) at the exchange rate prevailing at June 30, 2014 and 2013 respectively for the balance sheet, and (ii) at the average exchange rate for the period for the income statement and cash flow statement, except in the case of significant fluctuations in exchange rates. Translation differences have been recorded in equity.
The main exchange rates used in the consolidated financial statements for the nine-month periods ended June 30, 2014 and 2013 are based on Paris stock exchange rates and were as follows:
| June 30, 2014 | Period-end rate | Average rate |
|---|---|---|
| - €/US \$: | 1.3692 | 1.3678 |
| - €/£: | 0.8005 | 0.8280 |
| June 30, 2013 | Period-end rate | |||||
|---|---|---|---|---|---|---|
| - €/US \$: | 1.3010 | 1.3046 | ||||
| - €/£: | 0.8556 | 0.8304 |
Revenue and recurring operating profit generated by the majority of the Group's operations are subject to seasonal fluctuations. During the summer, the Concession Catering & Travel Retail segment typically experiences a significant increase in revenue and, notably due to the effect of this increase in revenue on the absorption of fixed costs, a more than proportional rise in both the amount of recurring operating profit and recurring operating profit as a percentage of revenue. In contrast, during the same period the Contract Catering & Support Services segment experiences lower business volumes and therefore a more than proportional decrease in its recurring operating profit, both in absolute value terms and as a percentage of revenue, due to the fact that a large number of employees and students are on vacation in the summer.
At Group level, these seasonal fluctuations do not have any impact on reported quarterly revenue due to offsetting effects between the Group's two business segments. Each quarter accounts for approximately 25% of the Group's total annual revenue, excluding the effect of changes in the scope of consolidation.
In terms of recurring operating profit, seasonal fluctuations result in a higher figure being recorded during the second half of the year due to higher revenue and margins in the Concession Catering & Travel Retail segment. The proportion of recurring operating profit recorded during the first and second half of each financial year represents approximately 40% and 60% respectively.
In addition, changes in the number of working days and the dates on which bank or school holidays fall, as well as changes in the scope of consolidation, impact the period-on-period comparability of revenue and profitability for the Group's two business segments.
Net cash from operating activities is also subject to seasonal variations, which are mainly due to changes in working capital as:
At June 30, 2014, the Group had two main operating segments: Contract Catering & Support Services, and Concession Catering & Travel Retail, as well as an operating segment corresponding to "Headquarters, holding companies and purchasing entities". Within the two main operating segments used for reporting purposes until December 31, 2013, segment profit and non-current assets are now also analyzed by main geographic area (likewise used for internal management purposes), as follows:
The tables below present detailed income statement information by operating segment as well as a breakdown of consolidated revenue by client sector and geographic area for the nine-month periods ended June 30, 2014 and 2013.
− Detailed income statement information by operating segment
| Nine months ended June 30, 2014 Unaudited |
France | Contract Catering & Support Services International |
Total | Europe excluding |
Concession Catering & Travel Retail Áreas |
Headquarters, holding companies and purchasing entities |
Group total |
|
|---|---|---|---|---|---|---|---|---|
| (in € millions) | Áreas | |||||||
| Revenue | 1,652.0 | 1,300.0 | 2,952.0 | 658.2 | 430.6 | 1,088.7 | 0.0 | 4,040.7 |
| Recurring operating profit/(loss) | 121.6 | 78.3 | 199.9 | 14.8 | 1.0 | 15.8 | (2.4) | 213.4 |
| Recurring operating profit/(loss) as a % of revenue | 7.4% | 6.0% | 6.8% | 2.3% | 0.2% | 1.5% | (0.1)% | 5.3% |
| Other income and expenses, net | (0.2) | (6.7) | (6.9) | (1.4) | (2.5) | (3.9) | (42.4) | (53.2) |
| Operating profit/(loss) | 121.3 | 71.7 | 193.0 | 13.4 | (1.5) | 11.9 | (44.7) | 160.2 |
| Net financial expense | (111.6) | |||||||
| Income tax | (29.1) | |||||||
| Profit for the period attributable to non-controlling interests |
(1.9) | |||||||
| Profit for the period attributable to owners of the parent | 21.4 | |||||||
| Depreciation, amortization and impairment of property, plant and equipment and intangible assets |
(25.0) | (20.3) | (45.3) | (30.5) | (25.0) | (55.5) | (1.3) | (102.1) |
| Other expenses with no cash impact | (2.1) | 4.3 | 2.1 | 0.3 | (0.4) | (0.1) | 0.1 | 2.1 |
| EBITDA | 148.7 | 94.4 | 243.1 | 45.1 | 26.4 | 71.4 | (1.1) | 313.4 |
| Contract Catering & Support Services | Concession Catering & Travel Retail | Headquarters, holding companies and purchasing |
Group total |
|||||
|---|---|---|---|---|---|---|---|---|
| Nine months ended June 30, 2013 Unaudited (in € millions) |
France | International | Total | Europe excluding Áreas |
Áreas | Total | entities | |
| Revenue | 1,632.1 | 1,075.0 | 2,707.1 | 647.9 | 416.8 | 1,064.7 | 0.0 | 3,771.9 |
| Recurring operating profit/(loss) | 131.7 | 62.8 | 194.5 | 19.5 | (9.7) | 9.8 | (6.0) | 198.3 |
| Recurring operating profit/(loss) as a % of revenue | 8.1% | 5.8% | 7.2% | 3.0% | (2.3)% | 0.9% | (0.2)% | 5.3% |
| Other income and expenses, net | (1.9) | (5.3) | (7.1) | (0.6) | 0.0 | (0.6) | (28.8) | (36.5) |
| Operating profit/(loss) | 129.8 | 57.5 | 187.4 | 18.9 | (9.7) | 9.2 | (34.8) | 161.8 |
| Net financial expense | (96.4) | |||||||
| Income tax | (27.1) | |||||||
| Profit for the period attributable to non-controlling interests |
(6.6) | |||||||
| Profit for the period attributable to owners of the parent | 44.9 | |||||||
| Depreciation, amortization and impairment of property, plant and equipment and intangible assets |
(24.3) | (19.2) | (43.5) | (29.9) | (24.4) | (54.3) | (1.0) | (98.9) |
| Other expenses with no cash impact | (1.0) | (1.4) | (2.4) | 1.0 | (0.2) | 0.8 | (0.5) | (2.1) |
| EBITDA | 157.0 | 83.4 | 240.4 | 48.4 | 14.9 | 63.3 | (4.4) | 299.2 |
− Revenue by operating segment and client sector
| (in € millions) | Nine months ended June 30, 2014 Unaudited |
% of total revenue |
Nine months ended June 30, 2013 Unaudited |
% of total revenue |
Year-on-year change |
% change |
|---|---|---|---|---|---|---|
| Contract Catering & Support Services | ||||||
| Business & Industry | 1,313.5 | 32.5% | 1,241.9 | 32.9% | 71.6 | 5.8% |
| Education | 884.3 | 21.9% | 814.0 | 21.6% | 70.3 | 8.6% |
| Healthcare | 754.1 | 18.7% | 651.2 | 17.3% | 102.9 | 15.8% |
| Sub-total: Contract Catering & Support Services | 2,951.9 | 73.1% | 2,707.1 | 71.8% | 244.8 | 9.0% |
| Concession Catering & Travel Retail | ||||||
| Airports | 433.6 | 10.7% | 408.7 | 10.8% | 24.9 | 6.1% |
| Motorways | 380.4 | 9.4% | 362.1 | 9.6% | 18.4 | 5.1% |
| City Sites & Leisure | 274.7 | 6.8% | 294.0 | 7.8% | (19.3) | (6.6)% |
| Sub-total: Concession Catering & Travel Retail | 1,088.7 | 26.9% | 1,064.7 | 28.2% | 24.0 | 2.3% |
| (in € millions) | Nine months ended June 30, 2014 Unaudited |
% of total revenue |
Nine months ended June 30, 2013 Unaudited |
% of total revenue |
Year-on-year change |
% change |
|---|---|---|---|---|---|---|
| France | 2,148.9 | 53.2% | 2,142.8 | 56.8% | 6.0 | 0.3% |
| Europe excluding France | 1,459.7 | 36.1% | 1,376.9 | 36.5% | 82.7 | 6.0% |
| Other countries | 432.1 | 10.7% | 252.1 | 6.7% | 180.0 | 71.4% |
| Total | 4,040.7 | 100.0% | 3,771.9 | 100.0% | 268.8 | 7.1% |
The definition of client sectors and the basis of measurement of segment profit or loss are unchanged from the annual consolidated financial statements for the year ended September 30, 2013.
| (in € millions) | Contract Catering & Support Services | Headquarters, Concession Catering & Travel Retail holding companies Group total and |
||||||
|---|---|---|---|---|---|---|---|---|
| Nine months ended June 30, 2014 Unaudited |
France | International | Total | Europe excluding Áreas |
Áreas | Total | purchasing entities |
|
| Revenue | 1,652.0 | 1,300.0 | 2,952.0 | 658.2 | 430.6 | 1,088.7 | 0.0 | 4,040.7 |
| Non-current assets | 1,184.9 | 775.0 | 1,959.9 | 699.7 | 410.6 | 1,110.4 | 20.1 | 3,090.4 |
| (in € millions) | Contract Catering & Support Services | Concession Catering & Travel Retail | Headquarters, holding companies and purchasing |
Group total |
||||
|---|---|---|---|---|---|---|---|---|
| Nine months ended June 30, 2013 Unaudited |
France | International | Total | Europe excluding Áreas |
Áreas | Total | entities | |
| Revenue | 1,632.1 | 1,075.0 | 2,707.1 | 647.9 | 416.8 | 1,064.7 | 0.0 | 3,771.9 |
| Non-current assets | 1,179.9 | 769.3 | 1,949.1 | 695.2 | 413.0 | 1,108.2 | 19.5 | 3,076.8 |
In April 2013, the Group acquired 78% of the share capital of the US contract caterer, TrustHouse Services Group (THS). THS generates some \$440 million in annual revenue and operates primarily in the Education, Healthcare and Corrections sectors.
The acquisition was carried out via the acquisition vehicle Gourmet Acquisition Holding (GAH), which was financed by a €100 million equity investment made by Elior Restauration & Services SA and the rollover of management shares in THS. At June 30, 2014 Elior owned 78% of GAH and the remaining 22% was held by members of THS' management team. In order to draw as little as possible on Elior's financial resources, the acquisition was also financed through a syndicated bank loan set up locally by GAH in an amount of \$155 million (€118 million at inception) and maturing in April 2019.
Consequently, the acquisition cost of THS on a 100% basis, net of the cash acquired and including due diligence and legal fees totaled €235 million.
THS has been consolidated since April 15, 2013.
For the nine months ended June 30, 2014, THS contributed €243.2 million to consolidated revenue and €20.0 million to consolidated EBITDA, compared with respective amounts of €262.2 million and €21.2 million (both on a pro forma basis) for the corresponding prior-year period.
For the nine months ended June 30, 2014 this item represented a net expense of €53.2 million and primarily included (i) €4.0 million in amortization of the intangible assets (customer relationships) recognized as part of the THS purchase price allocation process, (ii) a €2.5 million loss recognized on the divestment of the Group's concession catering operations in Argentina and Morocco, (iii) the discount fee paid on the sale in March 2014 of the 2013 CICE tax receivable, (iv) €26.1 million in costs and fees incurred in connection with the IPO, and (v) an aggregate €16.1 million in costs related to the repayment of debt following the IPO (notably the penalty incurred as a result of redeeming in advance a portion of the Elior Finance & Co SCA May 2020 6.5% Senior Secured Notes, and the exceptional amortization of the issuance costs of the repaid debt that were previously capitalized and unamortized).
For the nine months ended June 30, 2013, "Other income and expenses, net" represented a net expense of €36.5 million and mainly corresponded to (i) €23.4 million in non-recurring advisory and due diligence fees related to the Amend & Extend process, (ii) restructuring costs for the Contract Catering & Support Services businesses in Spain and the Support Services business in France, and (iii) €5.1 million in costs incurred in connection with the early repayment of debt.
Income tax expense, excluding the CVAE tax on value added generated by the business, is recognized based on Management's estimate of the weighted average annual income tax rate expected for the full financial year. The estimated average annual tax rate used for the year ending September 30, 2014 is 27.0%. The tax rate used for the nine months ended June 30, 2013 was 21%.
The CVAE tax is accrued based on three quarters of the expected annual CVAE charge. The estimated CVAE charge for the nine months ended June 30, 2014 amounted to €21.9 million (€22.1 million for the corresponding prior-year period).
No dividend for the year ended September 30, 2013 was paid by Elior (formerly HBI) during the nine months ended June 30, 2014.
A total dividend payout of €2.2 million was made during the nine months ended June 30, 2013, mainly to non-controlling shareholders of Áreas.
| (in € millions) | At June 30, 2014 |
At Sept. 30, 2013 |
At June 30, 2013 |
At Sept. 30, 2012 |
|---|---|---|---|---|
| Contract Catering & Support Services | 1,670.3 | 1,724.8 | 1,737.0 | 1,531.7 |
| Concession Catering & Travel Retail | 686.9 | 686.8 | 711.5 | 699.2 |
| Goodwill | 2,357.2 | 2,411.6 | 2,448.5 | 2,230.9 |
No goodwill impairment losses were recognized in either of the interim periods under review.
The decrease in the total gross value of goodwill at June 30, 2014 compared with September 30, 2013 corresponds to changes in the value of the goodwill recognized on the acquisition of THS in the United States. These changes arose from the purchase price allocation process, during which €78.7 million provisionally recognized as goodwill was reallocated to identifiable intangible assets (customer relationships) based on a valuation performed by an independent valuer. The intangible assets are being amortized through the income statement over a period of 15 years. Excluding the deferred tax liability recognized, the net impact on goodwill of the above-described reallocation amounted to €54.5 million.
The increase in goodwill between September 30, 2012 and June 30, 2013 primarily reflects the first-time consolidation of THS, including a correction to align the amount of goodwill initially presented in the published consolidated financial statements at June 30, 2013 with the full goodwill method which was applied in the annual consolidated financial statements at September 30, 2013.
| (in € millions) | At Sept. 30, 2013 |
Additions | Disposals | Other movements (2) |
At June 30, 2014 |
|---|---|---|---|---|---|
| Concession rights | 102.0 | 10.6 | (1.3) | 10.2 | 121.4 |
| Assets operated under concession arrangements (1) | 36.3 | 0.0 | 0.0 | 0.0 | 36.3 |
| Trademarks | 33.8 | 0.0 | (0.0) | 0.1 | 33.9 |
| Software | 90.8 | 4.0 | (1.8) | 1.5 | 94.5 |
| Prepayments for intangible assets | 28.6 | 8.1 | 0.0 | (11.5) | 25.1 |
| Other | 17.4 | 0.4 | (0.3) | 83.3 | 100.8 |
| Gross value | 308.8 | 23.1 | (3.5) | 83.6 | 412.0 |
| Concession rights | (37.3) | (3.6) | 0.4 | 5.2 | (35.4) |
| Assets operated under concession arrangements (1) | (36.2) | (0.5) | 0.0 | (0.0) | (36.7) |
| Trademarks | (9.8) | (0.8) | 0.0 | 0.0 | (10.5) |
| Software | (69.3) | (6.3) | 1.7 | (0.2) | (74.0) |
| Other | (12.7) | (4.7) | 0.6 | (7.9) | (24.7) |
| Total amortization | (165.3) | (15.9) | 2.7 | (2.9) | (181.4) |
| Carrying amount | 143.4 | 7.2 | (0.7) | 80.7 | 230.6 |
(1) These assets reflect the restatement of the three-way finance leases entered into concerning central kitchen facilities in the Group's Education sector.
(2) "Other movements" primarily relate to the final purchase price allocation for the THS acquisition in the USA as well as to identifiable intangible assets (customer relationships) and the related amortization (see Note 14 above).
| (in € millions) | At Sept. 30, 2012 |
Additions | Disposals | Other movements |
At June 30, 2013 |
|---|---|---|---|---|---|
| Concession rights | 97.7 | 0.8 | (2.4) | (9.9) | 86.2 |
| Assets operated under concession arrangements (1) | 36.3 | 0.0 | 0.0 | 0.0 | 36.3 |
| Trademarks | 27.6 | 10.7 | (0.0) | (0.0) | 38.2 |
| Software | 83.4 | 4.1 | (0.1) | 1.1 | 88.5 |
| Prepayments for intangible assets | 1.5 | 1.7 | (0.0) | (3.5) | (0.3) |
| Other | 19.8 | 1.1 | (0.2) | 0.1 | 20.7 |
| Gross value | 266.4 | 18.3 | (2.8) | (12.2) | 269.7 |
| Concession rights | (38.5) | (2.9) | 0.9 | 0.1 | (40.5) |
| Assets operated under concession arrangements (1) | (35.2) | (0.8) | 0.0 | 0.0 | (36.0) |
| Trademarks | (7.9) | (0.7) | 0.0 | 0.0 | (8.5) |
| Software | (61.5) | (6.1) | 0.1 | 0.2 | (67.3) |
| Other | (15.2) | (0.6) | 0.2 | 0.1 | (15.5) |
| Total amortization | (158.3) | (11.0) | 1.2 | 0.4 | (167.7) |
| Carrying amount | 108.1 | 7.3 | (1.5) | (11.9) | 102.0 |
(1) These assets reflect the restatement of the three-way finance leases entered into concerning central kitchen facilities in the Group's Education sector.
| (in € millions) | At Sept. 30, 2013 |
Additions | Disposals | Other movements |
At June 30, 2014 |
|---|---|---|---|---|---|
| Land | 3.2 | 0.0 | (0.1) | (0.0) | 3.1 |
| Buildings | 151.0 | 8.9 | (1.4) | 0.5 | 159.1 |
| Technical installations | 765.1 | 57.8 | (48.5) | (1.8) | 772.6 |
| Other items of property, plant and equipment | 456.2 | 34.6 | (12.5) | 7.0 | 485.3 |
| Assets under construction Prepayments to suppliers of property, plant |
22.6 | 13.5 | (0.6) | (17.6) | 17.9 |
| and equipment | 2.5 | 1.7 | (0.1) | (1.8) | 2.3 |
| Gross value | 1,400.6 | 116.5 | (63.0) | (13.7) | 1,440.3 |
| Buildings | (85.1) | (7.3) | 1.5 | 0.0 | (90.9) |
| Technical installations | (528.4) | (52.8) | 46.4 | 4.0 | (530.7) |
| Other items of property, plant and equipment | (297.6) | (34.3) | 13.3 | 2.4 | (316.1) |
| Total depreciation | (911.1) | (94.3) | 61.2 | 6.4 | (937.8) |
| Carrying amount | 489.5 | 22.1 | (1.8) | (7.3) | 502.5 |
| (in € millions) | At Sept. 30, 2012 |
Additions | Disposals | Other movements |
At June 30, 2013 |
|---|---|---|---|---|---|
| Land | 1.9 | 0.6 | 0.0 | 0.7 | 3.2 |
| Buildings | 139.5 | 5.9 | (4.0) | 14.9 | 156.3 |
| Technical installations | 749.8 | 46.7 | (20.2) | 4.7 | 781.0 |
| Other items of property, plant and equipment | 428.7 | 19.0 | (16.6) | 23.7 | 454.8 |
| Assets under construction Prepayments to suppliers of property, plant |
24.6 | 36.3 | (1.3) | (12.1) | 47.5 |
| and equipment | 2.4 | 0.7 | (0.1) | (1.8) | 1.1 |
| Gross value | 1,346.8 | 109.2 | (42.1) | 30.1 | 1,443.9 |
| Buildings | (77.8) | (7.2) | 3.9 | 0.0 | (81.1) |
| Technical installations | (503.2) | (49.4) | 18.0 | (9.8) | (544.4) |
| Other items of property, plant and equipment | (277.5) | (32.9) | 16.7 | 1.6 | (292.1) |
| Total depreciation | (858.5) | (89.6) | 38.7 | (8.2) | (917.6) |
| Carrying amount | 488.3 | 19.6 | (3.5) | 21.9 | 526.3 |
The Group's debt can be analyzed as follows:
| At June 30, 2014 |
At Sept. 30, 2013 |
||
|---|---|---|---|
| (in € millions) | Original currency | Amortized cost (1) |
Amortized cost (1) |
| Bank overdrafts | € | 30.8 | 30.6 |
| Other short-term debt (including short-term portion of finance lease obligations) |
€ / \$ | 79.4 | 105.5 |
| Sub-total – short-term debt | 110.2 | 136.1 | |
| Syndicated loans (including THS loan) | € / \$ | 1,051.7 | 1,666.7 |
| Other medium- and long-term borrowings | € | 222.4 | 344.2 |
| Factoring and securitized trade receivables | € | 313.4 | 180.3 |
| Other long-term debt (including finance lease obligations) | € | 60.4 | 49.6 |
| Sub-total – long-term debt | 1,647.9 | 2,240.8 | |
| Total debt | 1,758.1 | 2,376.9 |
| At June 30, 2013 |
At Sept. 30, 2012 |
||
|---|---|---|---|
| (in € millions) | Original currency |
Amortized cost (1) |
Amortized cost (1) |
| Bank overdrafts | € / \$ | 45.1 | 46.8 |
| Other short-term debt (including short-term portion of finance lease obligations) |
€ | 23.2 | 30.1 |
| Sub-total – short-term debt | 68.4 | 76.9 | |
| Syndicated loans (including THS loan) | € /\$ | 1,674.0 | 1,808.8 |
| Other medium- and long-term borrowings | € | 344.0 | |
| Factoring and securitized trade receivables | € | 178.1 | 134.0 |
| Other long-term debt (including finance lease obligations) | € / \$ | 71.5 | 34.9 |
| Sub-total – long-term debt | 2,267.6 | 1,977.7 | |
| Total debt | 2,336.0 | 2,054.6 |
(1) The amortized cost of bank borrowings is calculated taking into account the bank commissions payable on the Group's debt refinancing operations (Amend & Extend process and the Elior Finance & Co notes issue), which represented a net amount of €18.4 million at June 30, 2014 and €22.4 million at June 30, 2013.
The Group's net financial expense came to €111.6 million for the nine months ended June 30, 2014, versus €96.4 million for the nine months ended June 30, 2013, breaking down as follows:
| (in € millions) | Nine months ended June 30, 2014 |
Nine months ended June 30, 2013 |
|---|---|---|
| Interest expense on debt | (107.5) | (94.3) |
| Interest income on short-term financial investments | 1.7 | 1.9 |
| Other financial income and expenses (1) | (3.9) | (1.7) |
| Interest expense on post-employment benefit obligations (2) | (1.9) | (2.2) |
| Net financial expense | (111.6) | (96.4) |
| (1) Including: | ||
| - Fair value adjustments on interest rate hedging instruments - Disposal gains/(losses) and movements in provisions for impairment of shares in non |
(1.1) | (0.1) |
| consolidated companies | 0.8 | (0.9) |
| - Amortization of debt issuance costs | (3.6) | (1.2) |
| - Net foreign exchange gain | 0.0 | 0.4 |
(2) This item relates to the discounting of pension and other post-employment benefit obligations.
The Group's net financial expense increased year on year mainly due to a higher average level of debt during the nine months ended June 30, 2014 than in the comparable prior-year period, particularly as a result of (i) the acquisition of THS in April 2013, and (ii) the 9-month interest rate impact of the Elior Finance & Co May 2020 6.5% Senior Secured Notes issue that took place in April 2013.
The Group's debt can be analyzed as follows by maturity:
| At June 30, 2014 | At Sept. 30, 2013 | |||
|---|---|---|---|---|
| Current | Non-current | Current | Non-current | |
| (in € millions) | ||||
| Bank borrowings | ||||
| Medium-term borrowings – Elior SA (formerly HBI SCA) | 200.1 | 405.1 | ||
| Medium-term borrowings – Elior Participations SA and THS | 863.2 | 1,278.9 | ||
| Other medium- and long-term bank borrowings | 47.5 | 37.0 | ||
| Sub-total – bank borrowings | 0.0 | 1,110.7 | 0.0 | 1,721.0 |
| Other debt | ||||
| Elior Finance & Co SCA – May 2020 6.5% Senior Secured Notes | 227.5 | 350.0 | ||
| Finance leases | 4.2 | 12.4 | 4.6 | 11.6 |
| Other (1) | 57.9 | 315.6 | 51.5 | 181.3 |
| Bank overdrafts (2) | 30.8 | 30.6 | ||
| Current accounts (2) | 0.3 | 1.1 | ||
| Accrued interest on borrowings (2) | 16.9 | 48.3 | ||
| Sub-total – other debt | 110.2 | 555.5 | 136.1 | 542.9 |
| Total debt | 110.2 | 1,666.3 | 136.1 | 2,263.9 |
(1) Including liabilities under the receivables securitization program.
(2) Amounts deducted from cash and cash equivalents in the cash flow statement.
At June 30, 2013 At Sept. 30, 2012
| Current | Non-current | Current | Non-current | |
|---|---|---|---|---|
| (in € millions) | ||||
| Bank borrowings | ||||
| Medium-term borrowings – Elior SA (formerly HBI SCA) | 405.1 | 642.4 | ||
| Medium-term borrowings – Elior Participations SA and THS | 1,285.3 | 1,172.2 | ||
| Other medium- and long-term bank borrowings | 58.6 | 21.0 | ||
| Sub-total – bank borrowings | 0.0 | 1,749.0 | 0.0 | 1,835.6 |
| Other debt | ||||
| Elior Finance & Co SCA – May 2020 6.5% Senior Secured Notes | 350.0 | |||
| Finance leases | 5.0 | 11.8 | 5.0 | 12.9 |
| Other (1) | 1.8 | 179.2 | 17.3 | 135.0 |
| Bank overdrafts (2) | 45.1 | 46.8 | ||
| Current accounts (2) | 0.6 | 1.8 | ||
| Accrued interest on borrowings (2) | 15.9 | 6.0 | ||
| Sub-total – other debt | 68.4 | 541.0 | 76.9 | 147.9 |
| Total debt | 68.4 | 2,290.0 | 76.9 | 1,983.5 |
(1) Including liabilities under the receivables securitization program.
(2) Amounts deducted from cash and cash equivalents in the cash flow statement.
The medium- and long-term bank borrowing contracts entered into by Elior SA and Elior Participations SA include financial covenants that could trigger compulsory early repayment in the event of non-compliance. The covenants are based on Elior's consolidated financial ratios and compliance checks are carried out at the end of each quarter. None of the covenants had been breached at either June 30, 2014 or 2013.
| (in € millions) | At June 30, 2014 |
At Sept. 30, 2013 |
|---|---|---|
| Commercial risks | 3.4 | 8.6 |
| Employee-related disputes | 15.1 | 16.8 |
| Reorganization costs | 10.0 | 21.1 |
| Tax risks | 24.9 | 24.3 |
| Employee benefits | 11.2 | 8.7 |
| Other | 15.2 | 21.8 |
| Short-term provisions | 79.8 | 101.3 |
| Employee benefits | 98.9 | 97.6 |
| Non-renewal of concession contracts | 8.5 | 8.4 |
| Other | 3.1 | 5.1 |
| Long-term provisions | 110.5 | 111.1 |
| Total | 190.3 | 212.4 |
| (in € millions) | At June 30, 2013 |
At Sept. 30, 2012 |
|---|---|---|
| Commercial risks | 8.5 | 8.6 |
| Employee-related disputes | 13.5 | 14.5 |
| Reorganization costs | 8.6 | 15.8 |
| Tax risks | 2.2 | 2.3 |
| Employee benefits | 9.6 | 9.2 |
| Other | 14.7 | 24.3 |
| Short-term provisions | 57.0 | 74.7 |
| Employee benefits | 97.7 | 95.4 |
| Non-renewal of concession contracts | 9.3 | 7.8 |
| Other | 5.5 | 8.0 |
| Long-term provisions | 112.4 | 111.2 |
| Total | 169.4 | 185.9 |
Following the Company's stock market floatation on June 11, 2014 the service and consulting agreements between Elior and SOFIBIM and ORI Investissements were terminated.
A total of €963,000 was paid under these agreements during the nine months ended June 30, 2014 (versus €1,533,000 during the nine months ended June 30, 2013). This amount included salaries, social security contributions and other costs incurred by SOFIBIM and ORI Investissements for the performance of their services.
Also in connection with the Company's floatation, Bercy Présidence was merged into Elior on June 11, 2014. This company was chaired by Gilles Petit and controlled by Charterhouse and Chequers and acted as the Managing Partner of Elior when Elior was a partnership limited by shares (SCA).
In accordance with a decision taken by the Company's shareholders on November 19, 2009, Bercy Présidence received €382,000 in the nine months ended June 30, 2014, corresponding to remuneration payable in its capacity as Managing Partner of Elior for the period from October 1, 2013 to June 11, 2014 (€412,500 for the period from October 1, 2012 to June 30, 2013).
No other expenses or financial benefits were recorded during the period in relation to Elior's executive officers.
None.
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