(AOF) – Elis has announced the acquisition of Gruppo Indaco SRL in Italy. This acquisition will be consolidated in the accounts from June 1, 2023, and 2023 revenue is expected to be around €5 million on an annual basis. Gruppo Indaco specializes in Pest Control with a presence throughout Italy, mainly in Lombardy and Piedmont, which represent more than 70% of 2022 turnover. The group employs around sixty people; the services offered (control of rodents, crawlers and insects) are almost exclusively B2B.
The specialist in rental-maintenance solutions for textile articles explains that it is continuing “the consolidation of its positions in Italy in a very buoyant segment, the development of which has accelerated since the end of the pandemic”.
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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%.