(BFM Stock Exchange) – The collective catering group unveiled disappointing growth in the first half of its year 2024-2045, but it was accompanied by a frank improvement in its profitability. Elior is experiencing strong volatility on the stock market after this publication.

Due to its limited floating, Elior remains a very volatile action and its courses sometimes tend to react strongly to its publications. This is again the case this Thursday, May 22.

In progress at the opening, the title of the collective catering group then turned down, and then accelerate upwards and gain 7.5% around 10:30 am. He displays the highest increase in SBF 120 by far, after Elior published the results of the first half of 2024-2025, closed at the end of March.

Throughout the first half of the company 2024-2025 of the company, from October to March, Elior released income of 3.21 billion euros, up 2.9% over one year in published data, and 1.5% in comparable data.

Turnover is therefore lower than expectations, Oddo BHF retained income from 3.265 billion euros and a consensus cited by the design office 3.261 billion euros.

Elior has made an “little disappointing” organic growth (+1.5%), also recognizes TP ICAP Midcap. According to the design office, it is explained by “a multiservice activity impacted by a weakness of temporary work and an effective net commercial activity which amputated -1.9% of growth due to a continuation of voluntary outings in France (-60 basic points) and the fact that the group did not try to fight for renewals of non -profitable contracts in Italy”.

TP ICAP MIDCAP therefore puts Elior’s half -yearly half -yearly growth which is fully justified by the selectivity that the group is now shown during its signatures.

Key indicator in the collective catering sector, Elior’s retention rate on its customers fell 91% at the end of March against 91.2% at the end of September 2024 and 92.3% on March 31, 2024. This is however due to the group’s desire to end non -profitable contracts, an initiative that has weighed up to 0.6 percentage points on this rate of retention.

Profitability above expectations

Elior, however, revealed solid profitability over the period. The retired operating profit of certain elements (EBITA) increased by 33% over one year to reach 132 million euros, for a corresponding margin up 90 base points (0.9 percentage point) at 4.2%. Elior did better than the expectations of TP ICAP Midcap which aimed at an EBITA of 118 million euros, and the consensus cited by the design office (121 million euros).

“The progression of the margin was remarkable and pulled by the closure of the catch -up of inflation by the prices, the net openings and the continuation of the group’s integration (the group evoking an amount of 40 million euros of synergies in annual rhythm)”, remarks Julien Thomas Analyst at TP ICAP Midcap.

Since 2023, the President and CEO Daniel Derichebourg has placed profitability as the first of the priorities for the collective catering group. He took a series of measures to refocus Elior towards more profitable contracts.

The company has also taken operational efficiency measures allowed by the integration of DMS, the Multiservice Branch (Cleaning, Disinfection) of Derichebourg. This activity was taken up by Elior in April 2023. In exchange for the contribution of DMS to the collective catering group, Derichebourg rose to around 48% of the capital of Elior.

In addition, the debt lever, the net debt reported to the gross operating result (EBITDA) over twelve slippery months, registered at 3.3 against 3.8 to the end of September 2024. The company is thus largely under its “Covenant”, that is to say its maximum debt ratio allowed by its creditors, of 4.5.

Focus on profitability

In 2024-2025, Elior will favor profitability at the expense of growth. The management indicates to expect the second half to a growth similar to that recorded in the first. The group has thus reduced its expectations, aimed at organic growth between 1% to 2%, which is much less than the previous objective (3% to 5%) communicated by Elior.

The company has in parallel, slightly raised its prospects for the current year now aimed at a margin of Ebita between 3.3%and 3.6%, while it was initially expected “greater than 3%”.

The debt lever is still expected at less than 3.5 to the end of September 2025, when the consensus hoped for a 3.1x debt ratio. “Due to an effort to catch up with investments, the group should not generate cash in the second half, explaining why it is still a lever less than 3.5x in September 2025,” said TP ICAP Midcap.

“This publication confirms Elior’s solid operational progress with commercial development which should be more supported in 2026 (we already retain organic growth of +2.9%), estimates ODDO BHF.