(AOF) – Elis announced on Monday that the public investment bank Bpifrance had taken a stake of “more than 5%” in the capital of the industrial laundry group. Bpifrance made this investment through its Lac1 fund, Elis said in a press release, without specifying the financial terms of the operation.
“The company will propose the appointment of Bpifrance Investissement as a member of the supervisory board, replacing its mandate as non-voting member, at Elis’ next general meeting. To date, Elis’ supervisory board is therefore made up of of 10 members and a censor,” the group said.
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Key points
– International provider of rental-maintenance solutions for textile, hygiene and well-being items;
– Turnover of €3 billion balanced between industry, health, shops and services, then hotels and restaurants;
– International presence, with France providing 31% of revenues, ahead of Central Europe (24%), Scandinavia and Eastern Europe (16%), the United Kingdom and Ireland (12%), Southern Europe (8%) and Latin America;
– Business model summarized in 2 points: geographic and business diversity, operational excellence through cost reduction and strict management of delivery fleets;
– Split capital (12.32% of the shares and 20.62 of the voting rights for the Canada Pension Fund and 6.3% for Prédica), Thierry Morin chairing the 11-member supervisory board and Xavier Martiré the executive board;
– Financial situation still tense with €3 billion in equity and as much debt, but debt leverage reduced to 2.7 at 30 June.
Challenges
– Strategy aimed at consolidating positions via 4 levers: organic growth and targeted acquisitions, regular opening of new markets, improvement of operational excellence and enrichment of the offer through cross-selling of services ;
– Innovation strategy focused on digitalization:
– for customers, Elis Connect traceability program and electronic contracts,
– internally, deployment of GLAD, a logistics support solution;
– Environmental strategy:
– expectation for 2023 of climate objectives,
– circular economy at the heart of the economic model -eco-design, sustainability and recovery of textiles- and “cleanliness” of delivery fleets,
– “green” line of credit of €900 million;
– Diversification in pest control services with the acquisition of the Danish Crisal;
– Reinforcement of the presence in Latin America – Brazil, Chile, Colombia and Mexico.
Challenges
– Continuation of the successful diversification in healthcare, industry and commerce and expectation of a return to 2019 levels in hotels and restaurants;
– Integration of Mexico’s No. 1 in the rental of flat linen and workwear, which should be positive on earnings;
– Inflation: securitization for the next few years of gas purchase conditions for a large part of the volumes but, for the rest, insufficient compensation for tariff adjustments;
– After a 27.1% growth in revenues at the end of September, 2nd adjustment of the 2022 objectives: +20% increase in turnover, but operating margin at 33%, earnings per share of €1.45, free cash flow of €200 million and debt leverage of 2.5;
– Return of the leverage to 2% in 2023 and to -2% in 2024, the debt being entirely at a fixed rate of 2%.