Earnings Release • Mar 9, 2022
Earnings Release
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Elis SA Head office: 5 Boulevard Louis Loucheur, 92210 Saint-Cloud – France – Phone: +33 (0) 1 75 49 94 00 http://www.elis.com Joint-stock corporation governed by an Executive Board and a Supervisory Board Registered capital of 224,076,007 euros – RCS: 499 668 440 Nanterre
Saint-Cloud, March 9, 2022 – Elis, an international multi-service provider, offering textile, hygiene and facility services solutions, which is present in Europe and Latin America, today announces its 2021 full-year financial results. The accounts have been approved by the Management Board and examined by the Supervisory Board on March 8, 2022. They have been audited and the auditors issued a report without any qualification.
"In 2021, Elis again demonstrated the strength of its business model as activity steadily recovered after 2020 was marked by the beginning of the pandemic and a global economic slowdown.
All Group financial KPIs showed strong improvement in 2021, and Elis emerges from the crisis unquestionably reinforced. Our clients' new needs for more hygiene, more traceability, a more secure supply chain as well as for responsible products and services, significantly improve Elis' growth profile. Furthermore, the continued optimization of industrial processes, as well as the sustainable efforts made on the cost base, especially in H2 2020, allowed to generate lasting profitability gains in 2021. This good operational performance contributed to an acceleration in the Group's deleveraging with record free cash flow at 228 million euros in 2021 and a financial leverage ratio at 3.0x as of December 31, 2021. After being suspended for two years, we are pleased to propose the resumption of a dividend distribution of €0.37 per share at the next AGM; this is line with the amounts paid prior to the pandemic and an option of payment in Elis shares will be available.
In 2021, the Group returned to pre-crisis levels in terms of environmental efficiency and achieved progress on most of its extra-financial objectives. For example, 73% of Group linen was reused or recycled and the intensity of CO2 emissions decreased by -19% compared to 2010. Aware of the environmental challenges with regard to climate change, Elis wants to define emission reduction targets that are in line with the Paris Agreement, to contribute keeping the increase in temperature below 1.5C° compared to preindustrial levels. Therefore, at the end of 2022, the Group will present climate objectives that are aligned with the methodology of the Science Based Target initiative.
We are also announcing today the acquisition of a leading player in the Mexican market. Elis thus enters its 4th country in Latin America, a region that is one of the Group's growth engines. In Mexico, Elis becomes a leader in a strongly growing market, where competition is particularly fragmented. The acquired group operates a high-quality asset base and is the only player with nationwide coverage. It essentially serves clients in Healthcare and posts very good profitability. The acquisition multiples are very attractive, and this operation should generate a c. 4% accretive impact on headline net income per share and will contribute to strengthen Elis's growth profile.
In 2022, the very strong increase in energy costs recorded since the second half of 2021 will temporarily impact our EBITDA margin for the year, but our other financial KPIs i.e. organic growth, EBIT and EPS, should show strong improvement. Elis has no presence in Ukraine and only limited presence in Russia, but we shall continue to pay great attention to developments in this geopolitical crisis.
The great resilience shown by Elis since the beginning of the crisis, its operational know-how and its strengthened organic growth profile are major assets which will enable the company to assert its leadership in all the countries in which it is present."
| In millions of euros | 2021 | 2020 | Var. | ||||||
|---|---|---|---|---|---|---|---|---|---|
| H1 | H2 | FY | H1 | H2 | FY | H1 | H2 | FY | |
| France | 420.7 | 533.1 | 953.8 | 412.5 | 455.3 | 867.8 | +2.0% | +17.1% | +9.9% |
| Central Europe | 344.3 | 390.9 | 735.3 | 343.3 | 360.8 | 704.2 | +0.3% | +8.3% | +4.4% |
| Scandinavia & East. Eur. | 236.1 | 262.7 | 498.9 | 233.3 | 240.7 | 474.0 | +1.2% | +9.1% | +5.2% |
| UK & Ireland | 155.3 | 208.9 | 364.2 | 143.8 | 161.3 | 305.1 | +8.0% | +29.5% | +19.4% |
| Southern Europe | 95.1 | 140.8 | 235.9 | 97.2 | 101.1 | 198.2 | -2.1% | +39.3% | +19.0% |
| Latin America | 112.4 | 121.8 | 234.1 | 108.7 | 104.7 | 213.4 | +3.3% | +16.3% | +9.7% |
| Others | 11.6 | 14.5 | 26.1 | 12.9 | 30.6 | 43.5 | -10.2% | -52.7% | -40.1% |
| Total | 1,375.5 | 1,672.7 | 3,048.3 | 1,351.7 | 1,454.5 | 2,806.3 | +1.8% | +15.0% | +8.6% |
« Others » includes Manufacturing Entities and Holdings.
Percentage change calculations are based on actual figures.
| H1 organic growth | H2 organic growth | 2021 organic growth | |
|---|---|---|---|
| France | +1.9% | +17.1% | +9.9% |
| Central Europe | -1.9% | +6.8% | +2.5% |
| Scandinavia & East. Eur. | -1.3% | +7.4% | +3.1% |
| UK & Ireland | +3.7% | +20.8% | +12.8% |
| Southern Europe | -2.1% | +39.3% | +19.0% |
| Latin America | +16.3% | +11.9% | +14.1% |
| Others | -10.5% | -53.9% | -41.0% |
| Total | +1.3% | +13.0% | +7.4% |
« Others » includes Manufacturing Entities and Holdings.
Percentage change calculations are based on actual figures.
As announced on January 31, 2022, there was a strong rebound in 2021 activity across all our business lines and all our geographies. In 2021, Elis recorded revenue increase of +8.6%, of which 7.4% on an organic basis.
In France, revenue was up +9.9% (entirely organic). Activity in Healthcare, Industry and Trade & Services was driven by good commercial dynamism in Workwear and by an increasing need for hygiene-related products and services. A rebound in Hospitality has been noted since May. Tourism activity was good during the summer holidays and business in Hospitality has rebounded since the beginning of September. A slight slowdown was recorded in December with the outbreak of the Omicron variant.
In Central Europe, revenue was up +4.4% (+2.5% on an organic basis) with all countries in the region delivering positive organic numbers. Commercial momentum was very good in Workwear: Poland, Germany, the Czech Republic and Belux delivered very good growth, driven by the activity of clients operating in food processing and pharmaceuticals. In Germany, activity was good with care homes, but normalized with hospitals in H2 after a particularly strong H1.
In Scandinavia & Eastern Europe, revenue was up +5.2% (+3.1% on an organic basis). The fact that the greater share of our clients operates in the Industry and Trade & Services segments enabled the region to be quite resilient since the beginning of the crisis. The recovery was therefore less marked compared to regions that suffered more in 2020. Commercial momentum remained strong in Workwear in the Baltic States and Russia; both these regions posted double-digit organic revenue growth in 2021.
In the UK & Ireland, revenue was up +19.4% (+12.8% on an organic basis). Elis continued to gain market share in Healthcare on the back of contract wins. In 2021, Industry and Trade & Services were down c. -15% compared to pre-crisis levels, still impacted by their exposure to fast-food clients and collective catering clients. Finally, we noted a rebound in Hospitality, driven by dynamic domestic tourism and by the partial resumption of international travel.
In Southern Europe, revenue was up +19.0% (entirely organic). Activity in Hospitality (which represented more than 60% of total revenue in 2019) showed a strong rebound. The summer season was notably good in Spain. In Workwear, activity was still well-oriented on the back of good commercial dynamism and increased outsourcing, due to growing client needs for more traceability and hygiene amid the pandemic.
In Latin America, 2021 revenue was up +9.7% (+14.1% on an organic basis). The Group successfully developed new offers to meet new client requirements (especially in public/private healthcare and in food processing), leading to short-term contract wins (waterproof overgowns for revenue of c. €6m in 2021) or permanent contracts (healthcare garments, increase in linen rotation, development of outsourcing…). Furthermore, Brazil's strong inflation since the second half of 2021 led us to significantly increase our prices at year-end.
The strong decrease in "Others" revenue results from the return to normal activity of Kennedy, a subsidiary based in the UK that manufactures hygiene devices. In 2020, Kennedy revenue was strongly up, as a result of higher demand for hygiene products (soap and gel dispensers, hand drying devices, etc).
| In millions of euros | 2021 reported |
2020 restated1 |
Var. 21/20 | ||||||
|---|---|---|---|---|---|---|---|---|---|
| H1 | H2 | Total | H1 | H2 | Total | H1 | H2 | Total | |
| France | 153.2 | 220.5 | 373.7 | 145.0 | 184.9 | 329.9 | +5.6% | +19.3% | +13.3% |
| As of % of revenue | 36.3% | 41.2% | 39.1% | 35.1% | 40.5% | 38.0% | +120bps | +70bps | +110bps |
| Central Europe | 111.2 | 129.4 | 240.5 | 110.8 | 120.3 | 231.0 | +0.3% | +7.6% | +4.1% |
| As of % of revenue | 32.1% | 33.0% | 32.6% | 32.1% | 33.2% | 32.7% | = | -20bps | -10bps |
| Scandinavia & East. Eur. | 92.1 | 99.8 | 191.9 | 91.4 | 93.0 | 184.4 | +0.8% | +7.3% | +4.1% |
| As of % of revenue | 39.0% | 38.0% | 38.5% | 39.2% | 38.6% | 38.9% | -20bps | -60bps | -40bps |
| UK & Ireland | 46.7 | 65.3 | 112.1 | 36.8 | 51.9 | 88.7 | +26.9% | +25.9% | +26.3% |
| As of % of revenue | 30.1% | 31.3% | 30.8% | 25.6% | 32.1% | 29.0% | +450bps | -90bps | +170bps |
| Southern Europe | 24.2 | 43.5 | 67.7 | 22.4 | 23.3 | 45.7 | +8.0% | +86.5% | +48.0% |
| As of % of revenue | 25.4% | 30.9% | 28.7% | 23.0% | 23.1% | 23.0% | +240bps | +780bps | +560bps |
| Latin America | 37.6 | 40.2 | 77.8 | 38.0 | 34.2 | 72.1 | -1.0% | +17.6% | +7.8% |
| As of % of revenue | 33.5% | 33.0% | 33.2% | 34.9% | 32.6% | 33.8% | -150bps | +40bps | -60bps |
| Others | (6.3) | (5.3) | (11.6) | (4.5) | 0.2 | (4.3) | -41.5% | -3407.5% | -169.3% |
| Total | 458.7 | 593.4 | 1 052.1 | 439.9 | 507.7 | 947.6 | +4.3% | +16.9% | +11.0% |
| As of % of revenue | 33.3% | 35.5% | 34.5% | 32.5% | 34.9% | 33.8% | +80bps | +60bps | +70bps |
1 : A reconciliation is provided in the "Restated income statement for prior financial years" section of this release. Margin rates and percentage change calculations are based on actual figures.
« Others » includes Manufacturing Entities and Holdings.
In 2021, Group EBITDA reached €1,052.1m. EBITDA margin increased by +70bps to 34.5% of revenue.
In France, after a very resilient year in 2020 (margin remained stable despite the crisis), 2021 EBITDA margin was up +110bps at 39.1%. The significant activity pick-up in 2021 and the very significant cost adjustment measures implemented in the country in 2020, both at plant and HQ level, resulted in strong operating leverage.
In Central Europe, EBITDA margin was virtually stable compared to 2020 at 32.6% and was +100bps above pre-crisis level.
In Scandinavia & Eastern Europe, EBITDA margin was down -40bps at 38,5%, with a negative mix effect in a context of recovery of Hospitality activity. Nevertheless, margin remained very high and was close to its 2019 level.
In the UK & Ireland, EBITDA margin was up +170bps compared to 2020 at 30,8%. This margin level illustrates the success of our plan to improve the former Berendsen operations in the UK, despite the pandemic and high inflation.
In Southern Europe, EBITDA margin was up +560bps compared to 2020, at 28.7%. Margin is almost back at pre-crisis level even though Hospitality is still below its 2019 level. Continued activity recovery towards normative levels should contribute to further improve margin level.
In Latin America, EBITDA margin was down -60bps compared to 2020, at 33.2%, but was +300bps above 2019 level. Some of the temporary, very profitable contracts (waterproof overgowns for revenue of c. €6m in 2021) that were signed at the beginning of the pandemic with especially high margin rates came to an end and were converted into long-term contracts with normative margins, leading to a slight profitability decrease in 2021.
| In millions of euros | 2021 reported |
2020 restated1 |
Var. |
|---|---|---|---|
| EBITDA | 1,052.1 | 947.6 | +11.0% |
| As a % of revenue | 34.5% | 33.8% | +70bps |
| D&A | (663.7) | (656.1) | |
| EBIT | 388.3 | 291.5 | +33.2% |
| As a % of revenue | 12.7% | 10.4% | +240bps |
| Current operating income | 358.8 | 276.4 | +240bps |
| Amortization of intangible assets recognized in a business combination | (81.0) | (93.9) | |
| Non-current operating income and expenses | (16.1) | (64.5) | |
| Operating income | 261.7 | 118.0 | +121.7% |
| Net financial result | (90.5) | (88.4) | |
| Income tax | (56.6) | (27.0) | |
| Income from continuing operations | 114.6 | 2.7 | x43 |
| Net income | 114.6 | 2.7 | x43 |
| Headline net income2 | 222.7 | 138.8 | +60.4% |
1 : A reconciliation is provided in the "Restated income statement for prior financial years" section of this release. 2 : A reconciliation is provided in the "Net income to headline net income" section of this release.
Percentage change calculations are based on actual figures.
As a percentage of revenue, EBIT was up +240bps in 2021, due to the significant decrease in linen capex in 2020, implying relative stability of D&A for 2021 and 2022.
The main items between EBIT and Operating income are as follows:
In 2021, net financial expense was 90.5m€. It slightly increased compared to 2020 due to accelerated amortization of costs linked to the refinancing carried out during the year.
Net income was €114.6m in 2021, compared to €2.7m in 2020.
| In millions of euros | 2021 reported |
2020 restated1 |
|---|---|---|
| Net income | 114.6 | 2.7 |
| Amortization of intangible assets recognized in a business combination2 | 65.3 | 74.3 |
| IFRS 2 expense2 | 25.9 | 13.4 |
| Accelerated amortization of loans issuing costs2 | 2.1 | 0.1 |
| Refinancing costs2 | 3.3 | - |
| Non-current operating income and expenses including: | 11.5 | 48.2 |
| Litigation provisions2 | (0.2) | 0.6 |
| Exceptional expense relating to the sanitary crisis2 | - | 16.5 |
| Restructuring costs2 | 4.8 | 25.2 |
| Acquisition-related costs2 | 3.7 | 4.6 |
| Other2 | 3.1 | 1.4 |
| Headline net income | 222.7 | 138.8 |
| Attributable to: | ||
| - owners of the parent | 222.6 | 138.8 |
| - non-controlling interests | 0.1 | (0.0) |
| Headline net income per share (in euros): | ||
| - basic, attributable to owners of the parent | 1.00 | 0.63 |
| - diluted, attributable to owners of the parent | 0.97 | 0.62 |
1 : A reconciliation is provided in the "Restated income statement for prior financial years" section of this release.
2 : Net of tax effect. Headline net income was €222.7m in 2021, up +60.4% compared to 2020 and headline net income per share was up +56.4% at €0.97 (on a fully diluted basis).
| In millions of euros | 2021 reported |
2020 restated1 |
|---|---|---|
| EBITDA | 1,052.1 | 947.6 |
| Non-recurring items and changes in provisions | (14.1) | (55.2) |
| Acquisition and disposal expenses | (1.6) | (4.2) |
| Other | (1.6) | (1.4) |
| Cash flow before finance costs and tax | 1,034.7 | 886.8 |
| Net capex | (569.5) | (493.7) |
| Change in working capital requirement | 10.1 | 26.6 |
| Net interest paid | (74.6) | (64.1) |
| Tax paid | (83.2) | (65.8) |
| Lease liabilities payments - principal | (89.4) | (73.4) |
| Free cash flow (after lease liabilities payments) | 228.1 | 216.3 |
| Acquisitions of subsidiaries, net of cash acquired | (86.9) | (87.6) |
| Changes arising from obtaining or losing control of subsidiaries or other entities | (8.9) | (4.3) |
| Other cash flows related to financing activities | 6.8 | (4.8) |
| Proceeds from disposal of subsidiaries, net of cash transferred | 0.0 | 0.5 |
| Dividends and distributions paid | - | - |
| Equity increase & treasury shares | 17.7 | (1.3) |
| Other | (21.4) | (27.6) |
| Net debt variance | 135.4 | 91.2 |
| Net financial debt | 3,145.6 | 3,281.0 |
1 : A reconciliation is provided in the "Restated income statement for prior financial years" section of this release.
In 2021, the Group's net capex represented 18.7% of revenue. The strong pick-up in activity in 2021, as well as our commercial successes and significant contract wins in Workwear, led to a sharp increase in linen capex after the decrease recorded in 2020. We also noted significant inflation in H2, driven by the increase in cotton prices and transportation costs. This should continue in 2022.
In 2021, despite the negative impact from the activity increase on trade receivables, change in working capital was positive at c. +€10m: a high amount of government subsidies was owed to the Group at the end of 2020, and we recorded excellent cash collection ratios (average payment time reached a record low of 51 days as of December 31, 2021 compared to 55 days as of December 31, 2020).
In 2021, free cash flow (after lease liabilities payments) reached €228.1m, up +€11.9m yoy (+5.5%).
The Group's net financial debt as of December 31, 2021 stood at €3,145.6m compared to €3,202.6m as of June 30, 2021 and €3,281.0m as of December 31, 2020. The financial leverage ratio was 3.0x as of December 31, 2021 (historical leverage ratio was 3.3x as of December 31, 2021, compared to 3.7x as of December 31, 2020).
In 2021, Elis continued to strengthen its debt profile with a new bond issuance of €200m maturating in 2028 as part of its EMTN program and the implementation of its first €900m sustainability-linked revolving credit facility, which has a term of five years plus two one-year extension options.
The financial strength of the group was recognized in 2021 by S&P, which upgraded Elis' financial rating to BB+ on October 27, 2021.
At the next Annual General Meeting of shareholders on 19 May 2022, the Supervisory Board will recommend a dividend distribution of €0.37 per share for the 2021 financial year, with option of payment in Elis shares. This is line with the amounts paid before the pandemic. As a reminder, no distribution was made for the 2019 and 2020 financial years.
Further activity pick-up, the success of Elis' new commercial offers and the new needs of our clients following the pandemic (increasing demand for hygiene products and increasing consumption of workwear) allow us to anticipate 2022 organic revenue growth of between +13% and +15%. This is based on a working assumption that H1 2022 activity in Hospitality, which continued to improve in January and February 2022, will be -20% below the 2019 level, and that further improvement will be seen in H2 2022.
Elis has no presence in Ukraine and only limited presence in Russia (revenue of c. €20m).
In a context of very strong energy price inflation, 2022 EBITDA margin is expected to be at around 33.5%, assuming that gas prices for 2022 (North gas exchange point) will stabilize for the remainder of the year at the average price recorded between January 1, 2022 and March 8, 2022 i.e. €100/MWh (to put things into perspective, historical price never exceeded the monthly average of €30/MWh between January 2010 and July 2021). Should gas prices remain significantly above €100/MWh in H1 2022, we would act on our pricing as early as this summer, with an additional +1% increase passed on to our customers for every €30 tranche above €100 per MWh.
2022 EBIT is expected at c. €500m, with a limited increase in 2022 D&A.
2022 headline net income per share should increase by c. 40% at c. €1.35.
2022 free cash flow (after lease payments) is expected at c. €200m as a result of the impact on working capital requirement of the strong pick-up in activity and the increase in linen capex due to inflation. This was already felt in H2 2021, with increase in cotton price and transportation costs.
Financial leverage ratio is expected at 2.6x as of December 31, 2022, compared to 3.0x as of December 31, 2021.
In all our geographies, business in Healthcare, Industry and Trade & Services benefits from the success of our new commercial offers and from new client needs in Workwear and Hygiene & Well-Being (organic growth of +5% in 2021 on these 3 markets).
This dynamism is a direct consequence of the need generated by the sanitary crisis for more hygiene, more traceability, more responsible products and services, and for a more secure supply chain; this should be a long-lasting trend that will sustainably drive Elis' organic revenue growth.
Elis' post-crisis normative organic revenue growth (i.e., excluding post-Covid crisis Hospitality catch-up effect) should be above +3.5%.
The EBITDA margin decrease expected in 2022 should be reversed in 2023, either mechanically if the gas price goes down, or through the price increase we will implement from H2 2022 onwards.
It is a century-old business and a leader in the Mexican market. It mainly provides flat linen and workwear to clients in the Healthcare market. It operates 11 production sites, 12 distribution centers and a manufacturing workshop. The company employs more than 2,600 employees. 2021 revenue was €74m with EBITDA margin of c. 38% and EBIT margin of c. 18%. The business delivers strong organic revenue growth, driven by the rapid development of the Mexican market. Annual organic revenue growth should be close to 10% in the coming years.
o Further development in Latin America, a geography in which Elis posts strong organic growth
• Mexican economy strongly correlated with US activity
The total invested amount for the acquisition of 100% of the share capital corresponds to a multiple of 5.6x 2021 EBITDA and 12.0x 2021 EBIT. The highly experienced management team will remain to contribute to driving future growth; the transaction includes some potential earn-outs over the 2023-2025 period at lower multiples.
Completion of the acquisition remains subject to the approval of the Mexican competition authority. This acquisition is expected to close by end-July 2022.
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:
These alternatives to a linear consumption approach enable our clients to avoid CO2 emissions and contribute to reduce their own emissions.
The Ellen MacArthur Foundation states that "circular economy is necessary to reach Net Zero" and that "nearly 10 billion tons of CO2 (i.e., 20% of world emissions) could be reduced thanks to the transition of our current model towards a circular economy". (https://climate.ellenmacarthurfoundation.org)
In 2021, Elis maintained a "Gold medal" related to the EcoVadis questionnaire and improved its global performance (score of 72 compared to 70 in 2020). This medal places Elis within the top 5% of companies assessed by EcoVadis.
Furthermore, the Group was rated B by the CDP (Carbon Disclosure Project), a non-profit organization which performs independent assessments on the basis of information made available by companies on their strategy, risk & opportunity management, climate goals, annual climate performance, etc…
In addition, Elis scored higher with rating agency Gaïa (83 in 2021 vs 80 in 2020), and with MSCI (6.7 in 2021 vs 5.6 in 2020).
Elis has been working on reducing its energy consumption and CO2 emissions for a long time. The Group has reduced its consumption of thermal energy per kg of linen delivered by -22% between 2010 and 2021 in its European laundries and has accelerated the transition of its vehicle fleet. Furthermore, the Group has reduced the intensity of CO2 emissions per kg of linen delivered by -19% compared to 2010, which underscores the efforts put in place over many years.
Conscious of the environmental challenges with regard to climate change, Elis wants to commit to an approach to reduce its emissions that is in line with the Paris Agreement to contribute to keeping the increase in temperature below 1.5C° compared to preindustrial levels. The Group will thus present climate objectives that are aligned with the methodology of the Science Based Target initiative at end-2022. Once defined, these climate objectives will be submitted to shareholder approval in a "Say on climate" resolution. At the coming AGM on May 19, 2022, the Group will propose to its shareholders a non-binding advisory resolution in order to validate this approach.
The table below presents the adjustments made retrospectively linked to business combinations (IFRS3) on the previously published income statement as of December 31, 2020.
| In millions of euros | 2020 reported |
IFRS 3 |
2020 restated |
|---|---|---|---|
| Revenue | 2 806,3 | - | 2 806,3 |
| EBITDA | 947,5 | 0,1 | 947,6 |
| EBIT | 291,5 | 0,0 | 291,5 |
| Current operating income | 276,4 | 0,0 | 276,4 |
| Amortization of intangible assets recognized in a business combination | (93,0) | (0,9) | (93,9) |
| Non-current operating income and expenses | (64,1) | (0,4) | (64,5) |
| Operating income | 119,3 | (1,3) | 118,0 |
| Net financial result | (88,4) | 0,0 | (88,4) |
| Income tax | (27,1) | 0,1 | (27,0) |
| Income from continuing operations | 3,9 | (1,2) | 2,7 |
| Net income | 3,9 | (1,2) | 2,7 |
Date: Wednesday 9 March 2022 at 7:30am GMT (8:30am CET)
Speakers: Xavier Martiré (CEO) and Louis Guyot (CFO)
Webcast link: https://edge.media-server.com/mmc/p/psi7vh7z
Conference call dial in numbers: From France: +33(0)1 70 70 07 81 From the UK: +44(0) 2071 928 338 From the US: +1 646 741 3167 Code: 8352998
Investor presentation: An investor presentation will be available at 7:20am GMT (8:20am CET) at this address: https://fr.elis.com/fr/groupe/relations-investisseurs/information-reglementee
This document may contain information related to the Group's outlook. Such outlook is based on data, assumptions and estimates that the Group regarded as reasonable at the date of this press release. Those data and assumptions may change or be adjusted as a result of uncertainties relating particularly to the economic, financial, competitive, regulatory or tax environment or as a result of other factors of which the Group was not aware on the date of this press release. Moreover, the materialization of certain risks, especially those described in chapter 4 "Risk factors, risk control, insurance policy, and vigilance plan" of the Universal Registration Document for the financial year ended December 31, 2020, which is available on Elis's website (www.elis.com), may have an impact on the Group's activities, financial position, results or outlook and therefore lead to a difference between the actual figures and those given or implied by the outlook presented in this document. Elis undertakes no obligation to publicly update or revise the Group's outlook or any of the abovementioned data, assumptions, or estimates, except as required by applicable laws and regulations. Reaching the outlook also implies success of the Group's strategy. As a result, the Group makes no representation and gives no warranty regarding the attainment of any outlook set out above.
Q1 2022 revenue: May 10, 2022 (after market)
Nicolas Buron, Investor Relations Director - Phone: +33 1 75 49 98 30 - [email protected]
| (in millions of euros) | 31/12/2021 | 31/12/2020 |
|---|---|---|
| Revenue | 3,048.3 | restated 2,806.3 |
| Cost of linen, equipment and other consumables | (517.5) | (527.9) |
| Processing costs | (1,127.8) | (1,018.6) |
| Distribution costs | (470.9) | (424.8) |
| Gross margin | 932.1 | 834.9 |
| Selling, general and administrative expenses | (581.7) | (544.8) |
| Net impairment on trade and other receivables | 8.4 | (13.7) |
| Operating income before other income and expenses and amortization of intangible assets recognized in a business combination |
358.8 | 276.4 |
| Amortization of intangible assets recognized in a business combination | (81.0) | (93.9) |
| Goodwill impairment | - | - |
| Other operating income and expenses | (16.1) | (64.5) |
| Operating income | 261.7 | 118.0 |
| Net financial income (expense) | (90.5) | (88.4) |
| Income (loss) before tax | 171.1 | 29.7 |
| Income tax expense | (56.6) | (27.0) |
| Income (loss) from continuing operations | 114.6 | 2.7 |
| Income from discontinued operation, net of tax | - | - |
| NET INCOME (LOSS) | 114.6 | 2.7 |
| Attributable to: | ||
| - owners of the parent | 114.5 | 2.7 |
| - non-controlling interests | 0.1 | (0.0) |
| Earnings (loss) per share (EPS) (in euros): | ||
| - basic, attributable to owners of the parent | €0.51 | €0.01 |
| - diluted, attributable to owners of the parent | €0.51 | €0.01 |
| Earnings (loss) per share (EPS) from continuing operations (in euros): | ||
| - basic, attributable to owners of the parent | €0.51 | €0.01 |
| - diluted, attributable to owners of the parent | €0.51 | €0.01 |
| (in millions of euros) | 31/12/2021 | 31/12/2020 restated |
|---|---|---|
| Goodwill | 3,817.0 | 3,743.6 |
| Intangible assets | 750.1 | 806.4 |
| Right-of-use assets | 439.2 | 438.6 |
| Property, plant and equipment | 1,910.9 | 1,886.1 |
| Other equity investments | 0.1 | 0.2 |
| Other non-current assets | 64.7 | 64.4 |
| Deferred tax assets | 31.5 | 36.6 |
| Employee benefit assets | 51.8 | 34.1 |
| TOTAL NON-CURRENT ASSETS | 7,065.5 | 7,010.1 |
| Inventories | 138.8 | 137.3 |
| Contract assets | 38.1 | 27.6 |
| Trade and other receivables | 600.7 | 517.0 |
| Current tax assets | 17.1 | 13.6 |
| Other assets | 18.9 | 18.8 |
| Cash and cash equivalents | 160.0 | 137.6 |
| Assets held for sale | 0.4 | 0.4 |
| TOTAL CURRENT ASSETS | 974.0 | 852.3 |
| TOTAL ASSETS | 8,039.5 | 7,862.4 |
| (in millions of euros) | 31/12/2021 | 31/12/2020 restated |
|---|---|---|
| Share capital | 224.1 | 221.8 |
| Additional paid-in capital | 2,531.6 | 2,575.6 |
| Treasury share reserve | (1.6) | (11.2) |
| Other reserves | (322.6) | (366.1) |
| Retained earnings (accumulated deficit) | 581.5 | 387.6 |
| EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT | 3,013.1 | 2,807.7 |
| NON-CONTROLLING INTERESTS | 0.7 | 0.6 |
| TOTAL EQUITY | 3,013.8 | 2,808.3 |
| Provisions | 87.7 | 83.9 |
| Employee benefit liabilities | 105.9 | 108.9 |
| Borrowings and financial debt | 3,084.5 | 3,066.6 |
| Deferred tax liabilities | 282.9 | 302.3 |
| Lease liabilities | 367.0 | 368.3 |
| Other non-current liabilities | 33.1 | 20.9 |
| TOTAL NON-CURRENT LIABILITIES | 3,961.0 | 3,951.0 |
| Current provisions | 12.6 | 14.8 |
| Current tax liabilities | 28.2 | 25.5 |
| Trade and other payables | 262.9 | 221.3 |
| Contract liabilities | 74.9 | 62.7 |
| Current lease liabilities | 86.2 | 79.0 |
| Other liabilities | 378.7 | 347.7 |
| Bank overdrafts and current borrowings | 221.1 | 352.0 |
| Liabilities directly associated with assets held for sale | - | - |
| TOTAL CURRENT LIABILITIES | 1,064.6 | 1,103.1 |
| TOTAL EQUITY AND LIABILITIES | 8,039.5 | 7,862.4 |
| (in millions of euros) | 31/12/2021 | 31/12/2020 restated |
|---|---|---|
| Consolidated net income (loss) | 114.6 | 2.7 |
| Income tax expense | 56.6 | 27.0 |
| Net financial income (expense) | 90.5 | 88.4 |
| Share-based payments | 24.4 | 12.9 |
| Depreciation, amortization and provisions | 745.6 | 752.0 |
| Portion of grants transferred to income | (0.6) | (0.3) |
| Net gains and losses on disposal of property, plant and equipment and | ||
| intangible assets | 0.7 | 4.2 |
| Other | 2.9 | (0.1) |
| CASH FLOWS BEFORE FINANCE COSTS AND TAX | 1,034.7 | 886.8 |
| Change in inventories | 1.0 | (13.0) |
| Change in trade and other receivables and contract assets | (76.8) | 114.5 |
| Change in other assets | 2.8 | 2.4 |
| Change in trade and other payables | 35.3 | (57.7) |
| Change in contract liabilities and other liabilities | 45.5 | (20.3) |
| Other changes | 0.1 | 2.7 |
| Employee benefits | 2.3 | (1.9) |
| Tax paid | (83.2) | (65.8) |
| NET CASH FROM OPERATING ACTIVITIES | 961.6 | 847.6 |
| Acquisition of intangible assets | (21.1) | (16.0) |
| Proceeds from disposal of intangible assets | - | 0.1 |
| Acquisition of property, plant and equipment | (552.8) | (483.2) |
| Proceeds from disposal of property, plant and equipment | 3.8 | 5.3 |
| Acquisition of subsidiaries, net of cash acquired | (86.9) | (87.6) |
| Proceeds from disposal of subsidiaries, net of cash transferred | 0.0 | 0.5 |
| Changes in loans and advances | 1.0 | (1.3) |
| Dividends earned | 0.0 | 0.0 |
| Investment grants | 0.5 | 0.0 |
| NET CASH FROM INVESTING ACTIVITIES | (655.4) | (582.1) |
| Capital increase | 10.3 | (0.0) |
| Treasury shares | 7.3 | (1.3) |
| Dividends and distributions paid | ||
| - to owners of the parent | (0.0) | 0.0 |
| - to non-controlling interests | - | - |
| Change in borrowings (1) | (141.7) | (146.6) |
| - Proceeds from new borrowings | 776.1 | 868.6 |
| - Repayments of borrowings | (917.8) | (1,015.2) |
| Lease liability payments - principal | (89.4) | (73.4) |
| Net interest paid (including interest on lease liabilities) | (74.6) | (64.1) |
| Other cash flows related to financing activities | 6.8 | (4.8) |
| NET CASH FROM FINANCING ACTIVITIES | (281.2) | (290.2) |
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 25.0 | (24.8) |
| Cash and cash equivalents at beginning of period | 137.6 | 170.8 |
| Effect of changes in foreign exchange rates on cash and cash equivalents | (2.7) | (8.4) |
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | 159.9 | 137.6 |
(1) Net change in credit lines
The Group is pursuing ESG-related actions and initiatives. The 2021 performance related to the 2025 commitments are as follows:
| The pillars of our strategy | Our stakes Sources of risks and opportunities |
Our commitments and objectives | 2021 actual |
|---|---|---|---|
| Fight against and adapt to climate change |
Reduce by 20% CO2 intensity in the operations between 2010 and 2025 |
- 19 % | |
| Reduce our energy consumption | Improve thermal energy efficiency in European laundries by 35% between 2010 and 2025 |
-22 % | |
| Circularity and Exemplarity to reduce our impact on |
Reduce our energy consumption | Accelerate logistic fleet transition towards alternative vehicles |
257 alternative vehicles (134 in 2020) |
| the Planet | Optimise our usage and limit our impact on eco-systems |
Reduce by 50 % water consumption per kg au linen delivered between 2010 and 2025 in European laundries |
-40% (Europe) |
| Further develop circularity & Reduce and properly manage of our waste |
Reuse or recycle 80% of our end of-life textile by 2025 |
73% | |
| Eco-design our product and services | Offer at least one collection composed of sustainable materials for each product family |
46% | |
| Protect our employees | Reduce by 50% our employee frequency rate between 2019 and 2025 |
-6,3 % | |
| Empower our employees and support their development |
Ensure non-discrimination and equal opportunity |
Reach 40% women in executive or managerial roles by 2025 (42% by 2030) |
34% |
| Listen to and value our employee and ensure their well-being at work |
Extend the Chevron program within the Group |
300 chevrons (+30 % vs 2018) |
|
| Make a positive impact | Contribute to our local communities and support the causes that we value |
Triple the Foundation impact by 2025 |
3rd graduates |
| for the Society | Work responsibly with third parties | 95% of direct suppliers being assessed against CSR criteria during the past 3 years |
93% |
Furthermore, since 2018, the Group has reached 14% reduction of water used per kilogram of linen delivered (cf. the objectives set in the context of the RCF).
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