• Revenue: EUR4.6 billion, up 6.1% year-on-year, with 5.2% organic growth.
• EBITDA: EUR1.6 billion, up 9.2%, with a margin increase of 100 basis points to 35.2%.
• EBIT: EUR733 million, up 7.3%, with a margin increase of 20 basis points to 16%.
• Net Income: EUR338 million, up 29% year-on-year.
• Free Cash Flow: EUR346 million, up 14% year-on-year.
• Return on Capital Employed (ROCE): 14.5%, up 60 basis points.
• Financial Leverage Ratio: Decreased by 0.2 times to 1.85 times.
• Clean Room Revenue: EUR255 million, up 11% year-on-year.
• Pest Control Revenue: EUR75 million, up 24% year-on-year.
• France Revenue Growth: 3.3% organic growth, with an EBITDA margin of 41.8%.
• Central Europe Revenue Growth: 12.3%, with an EBITDA margin improvement of 180 basis points to 32.3%.
• UK and Ireland Revenue Growth: 4.3% organic growth, with an EBITDA margin improvement of 90 basis points to 31.6%.
• Latin America Revenue Growth: 8.7% organic growth, with an EBITDA margin increase of 50 basis points to nearly 35%.
• Southern Europe Revenue Growth: 5.4% organic growth, with an EBITDA margin up 130 basis points to 32.6%.

• Warning! GuruFocus has detected 3 Warning Signs with FRA:7EL.

Release Date: March 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Elis SA (FRA:7EL) achieved record financial performance in 2024, with a 6.1% revenue growth reaching nearly EUR4.6 billion.
• EBITDA increased by 9.2% to EUR1.6 billion, with a margin improvement of 100 basis points to 35.2%.
• The company reported a significant 29% increase in net income, reaching EUR338 million.
• Free cash flow reached a record EUR346 million, showing a 14% improvement year-on-year.
• Elis SA's return on capital employed reached a record level of 14.5%, with a 60 basis point improvement.

Negative Points

• The hospitality sector underperformed due to the negative impact of the Paris Olympics on activity.
• The EBITDA margin in Scandinavia and Eastern Europe declined by 120 basis points, despite remaining at a high level.
• The company faced challenges in pricing negotiations, particularly in Denmark and with public healthcare customers.
• Elis SA's stock price has not reflected its operational and financial performance, with valuation multiples significantly lower than in 2019.
• The company anticipates a slight increase in costs, particularly in labor, with a projected 4% rise in wage expenses for 2025.

Q & A Highlights

Q: You announced a new capital allocation policy with a share buyback. If you don't achieve the targeted bolt-ons, would you increase buybacks or dividends to reach the target leverage? A: Yes, if we have fewer bolt-ons, we will have more funds to return to shareholders. We will decide between exceptional dividends or share buybacks based on market conditions. (Xavier Martire, CEO)

Q: What was the split between volume and price in 2024, and what do you expect for 2025? A: In 2024, there was more price than volume due to cost base inflation. In 2025, we expect a more balanced contribution from both, with possibly slightly more from price. (Xavier Martire, CEO)

Q: Can you clarify if a US acquisition aligns with your updated capital allocation policy? A: We have no current discussions for a large acquisition in the US or elsewhere. Any future large acquisition must maintain our investment-grade rating and be favorable to shareholders. (Xavier Martire, CEO)

Q: Regarding the German market, is there further capacity to improve margins, and are there bolt-on opportunities? A: Yes, there is room for further margin improvement in Germany, and we have bolt-on targets in the pipeline. The market still has many family businesses, offering consolidation opportunities. (Xavier Martire, CEO)

Q: How are trends in hospitality, and what is the impact of the rollout to smaller clients? A: Hospitality trends are improving, especially in Paris and Spain. The rollout to smaller clients is progressing well in countries like the UK and Brazil, contributing to organic growth. (Xavier Martire, CEO)

For the complete transcript of the earnings call, please refer to the full earnings call transcript.