As soon as won, as soon as lost! Elior Group relapsed 10% on the stock market on Wednesday, the day after a gain of 7.5%, linked to anticipations of good surprises on the occasion of the publication of the half-yearly accounts of the collective catering group. Bad expectations, because the forecasts announced on Wednesday do not live up to expectations. The group had abandoned its targets in January due to fears over Omicron.
For its financial year ending at the end of September, Elior is only aiming for growth, at constant scope and exchange rates, of at least 16%, against 18% previously, for operating profit (Ebita) close to breakeven, against a margin of 2% to 2.5% previously. This, excluding the losses of the subsidiary Preferred Meals estimated at 35 million euros over the whole of the twelve months. In the first half, the deficit amounted to 21 million. It was decided to sell this American activity, which notably prepares meals for schools, the elderly or emergency centers.
War in Ukraine, drought and bird flu
If activity rebounded at the end of March, with turnover up 18%, to 2.23 billion euros, “ the intensification of inflationary pressures weighs on our operating margins, already degraded by the pandemic “says Bernard Gault, the general manager. The war in Ukraine, the drought in France and the avian flu which weighed on chicken supplies are notably mentioned.
Another point underlined by analysts, the retention rate, which can be likened to an indicator of loyalty on the part of customers, does not go up. It thus remained stable at the end of March, at 91.3%, compared to its level of December 31. In particular, the group decided, in order to raise its margins, to terminate contracts that are now in losses. Finally, the service of the dividend will only be resumed for the 2023-2024 financial year. It was expected earlier.
A new CEO in the coming weeks
For Bernstein analysts, the publication has therefore ” nothing exciting “, even at current price levels, more than half lower than at the end of December. The action even loses 75% over three years and nearly 90% over five years…” Elior is still far from the recovery initiated by its peers », Estimates the research office.
Nor did the forecasts announced by Elior for 2024 click, a horizon for which organic growth of at least 7% is expected for the 2022-2023 and 2023-2024 financial years. But the operating margin is no longer fixed at 4%, against 4.6% previously. The new impetus could be given by the appointment of a new CEO, after the departure of Philippe Guillemot at the beginning of March. The group is currently in the final decision-making phase as part of the selection process, said Bernard Gault early in the morning. There are now two candidates in the running and the decision will be made in the coming weeks.