Jan 27 (Reuters) – Elior on Thursday suspended its financial targets for the current fiscal year despite a rebound in first-quarter sales, citing a lack of visibility over the impact of restrictions introduced to stem the epidemic tide due to the Omicron variant of the coronavirus.
The sector, which had benefited from an upsurge in activity with the resumption of school and face-to-face work, was faced last month with new restrictions linked to the jump in contamination by Omicron in Europe.
Elior said all of its markets have been affected by the stricter health protocols implemented since early December, including the return to telework as well as more class closures and unplanned absences.
“These disruptions make it difficult to anticipate daily volumes, with its consequences on the quantities produced and the organization of the teams,” said general manager Philippe Guillemot in a press release.
The group also discussed the effects of accelerating inflation in all the countries where it operates.
Around 11:15 a.m., Elior shares fell 10.85% to 5.22 euros, after losing nearly 14% in session and hitting their lowest level since February 1, 2021 at 5.045 euros.
“We would have preferred to see a range (of forecasts) given, even if it was lower than previously,” Deutsche Bank analysts said.
The collective catering group, which supplies businesses, schools, prisons, hospitals and retirement homes, has so far anticipated organic growth in its turnover “of at least 18%” and a margin on operating profit (Ebita) between 2.0% and 2.5% for the financial year 2021-2022.
Citi analysts point out that the suspension of Elior’s forecasts contrasts with the maintenance of the annual objectives of competitor Sodexo, which has however warned that the recourse of companies to teleworking this winter could weigh on its volumes.
Elior, Europe’s third-largest catering company, reported first-quarter revenue of €1.12 billion, representing organic growth of 16.7% compared to the same one-year period earlier.
In France, first-quarter revenues amounted to €489 million, compared to €447 million a year ago, as growth in the Enterprise business offset part of the impact of health protocols on its Education activity.
The company has confirmed its forecast for 2024. (Report Federica Mileo and Diana Mandia in Gdansk; French version Elena Vardon and Laetitia Volga, edited by Blandine Hénault)