Elis: Full-year 2024 results

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Full-year 2024 results

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Record 2024 financial performance, in line with guidance

Further progress of all financial indicators expected in 2025

New capital allocation policy to improve returns to shareholders

150 million-euro share buyback program in 2025

2024 key figures

• Revenue of 4,573.7 million euros (+6.1% of which +5.2% organic)
• Adjusted EBITDA up +9.2% at 1,609.8 million euros (margin up +100bps at 35.2%)
• Adjusted EBIT up +7.3% at 733.0 million euros (margin up +20bps at 16.0%)
• Net income up +29.0% at 337.8 million euros
• Headline net income up +3.0% at 446.3 million euros
• Headline net income per share up +1.3% at 1.89 euros (+3.1% at 1.76 euros on a fully diluted basis)
• Free cash flow up +14.1% at 346.4 million euros
• Financial leverage ratio down c. -0.2x at 1.85x at December 31, 2024

2024 business highlights

• Activity remains well-oriented, driven by development of outsourcing and initiatives designed to harness growth opportunities in each country
• Favorable pricing effect in all geographies, driven by wage inflation
• Further productivity gains in all our geographies, thanks to optimization of industrial processes and logistics, as well as better energy purchasing conditions
• Outstanding performance in Germany: strong growth and marked improvement in profitability
• New targeted, value-creating acquisitions: Elis strengthened its position in the Netherlands and entered Malaysia
• Elis reports that 69% of revenue is aligned with the EU taxonomy's "circular economy” objective, underscoring the sustainability of its business model

New cash allocation policy to improve shareholder return

• Continuation of bolt-on acquisitions budgeted between 50 and 150 million euros annually
• Retention of investment-grade rating; further reduction in Group financial leverage ratio, limited to c. -0.1x per year
• Remaining cash to be used mainly to improve returns to shareholders, through dividend or share buyback

2025 outlook: Elis targets further progress in all financial indicators

• Full-year organic revenue growth expected slightly below +4%, factoring in a c. -0.3% negative calendar effect
• Adjusted EBITDA margin, adjusted EBIT margin, headline net income per share (fully diluted) and free cash flow all expected slightly higher
• Financial leverage ratio expected to decline c. -0.1x at December 31, 2025 vs December 31, 2024, in line with new cash allocation policy

Application of the new cash allocation policy: implementation of a 150 million-euro share buyback program in 2025 in addition to a proposed dividend of 0.45 euro

• Implementation of a 150 million-euro share buyback program in 2025, starting today
• Proposed cash dividend of 0.45 euros per share for the 2024 financial year at the next Annual General Meeting of shareholders, up c. +5% yoy

Saint-Cloud, March 6, 2025 - Elis, the global leader in circular services at work, today announces its 2024 full-year results. The accounts have been approved by the Management Board and examined by the Supervisory Board on March 5, 2025. Audit procedures regarding the consolidated financial statements and verification procedures regarding sustainability information have been completed. The corresponding reports are being prepared.

Commenting on the announcement, Xavier Martiré, Chairman of the Management Board of Elis, said:

" In 2024, Elis once again demonstrated the strength of its model, with all key financial indicators reaching record levels.

In a context marked by many economic and political uncertainties, the Group deployed its strategy of profitable growth. In all our geographies, Elis' commercial salesforce stayed focused on taking advantage of local growth opportunities resulting from the further development of outsourcing, and the Group signed a large number of new contracts, particularly in workwear.

Revenue, up +6.1% at close to 4.6 billion euros, also benefited from a favorable pricing dynamic, driven by wage inflation in our countries, and from several targeted acquisitions, including in the Netherlands and Malaysia, the Group's first Asian market.

EBITDA margin, sharply up by +100bps at 35.2%, reflects many productivity gains recorded over the year, as well as better purchasing conditions for energy and consumables. We are also very satisfied with our progress in Germany, which recorded record revenue and margin in 2024. Group EBIT margin, headline net income per share and free cash flow also reached record levels, while Elis' financial leverage ratio fell to a historic low of 1.85x at December 31, 2024.

Elis has entered 2025 with confidence, and the visibility afforded by our model allows us to anticipate a new year of profitable growth: organic growth should be slightly below +4%, with other indicators slightly up.

Since its 2015 IPO, the Group transformed radically, thanks in particular to the successful integration of different-sized acquisitions. In almost a decade, and despite the intervening economic and health crises, Elis has multiplied revenue more than threefold, while income per share has increased by +11% per year on average. Furthermore, Group free cash flow has almost doubled over the last five years, while its financial leverage ratio nearly halved.

These past achievements and the Group's confidence in its outlook now enable us to introduce a capital allocation policy that considerably improves returns to shareholders. Furthermore, since the market does not fully value Elis' strengths and potential, we are implementing a 150 million-euro share buyback program for 2025.

The Group's operational know-how, its growth profile and its model based on circular economic principles will enable Elis to continue to assert its leadership in all countries where it operates, while exploring all profitable growth opportunities. "

I. 2024 annual results

Full-year 2024 reported growth breakdown

" Others " includes manufacturing entities, holding companies and Asia.        

Percentage change calculations are based on actual figures.

2024 organic growth breakdown

" Others " includes manufacturing entities, holding companies and Asia.

Percentage change calculations are based on actual figures.

As announced on January 30, 2025, Elis delivered record full-year 2024 revenue of 4,573.7 million euros, up +6.1% year-on-year.

In France, 2024 full-year revenue was up +3.3% (entirely organic), driven by commercial momentum in workwear (Industry, Trade & Services) and a strong pricing dynamic. In Hospitality, some adverse elements (poor weather conditions in May and June, disturbances caused by the general elections and a negative effect from the Paris Olympics Games) reduced occupancy rates in 2024, despite a better trend at the very end of the year.

In Central Europe, 2024 full-year revenue was up +12.3% (+7.5% on an organic basis). Germany performed particularly well with c. +8% organic growth, driven by workwear development and strong pricing dynamics. The acquisitions of Moderna and Wasned in the Netherlands, respectively consolidated since March 1, 2024 and November 1, 2024, contributed +4.3% to the total 2024 revenue growth for the region and enabled Elis to develop flat linen activity rapidly in the country.

In Scandinavia & Eastern Europe, 2024 full-year revenue was up +3.4% (+3.8% on an organic basis). Organic growth was driven by the performance of Sweden (c. +6%), Norway (c. +6%) and the Baltics (c. +13%), where the outsourcing dynamic remains strong. However, pricing negotiations were sometimes more difficult, notably with customers from the public healthcare sector, where contractual indexes were below the actual inflation of our cost base.

In UK & Ireland, 2024 full-year revenue was up +6.6% (+4.3% on an organic basis), driven by good commercial momentum in Healthcare and in workwear (standard and cleanroom), as well as a favorable pricing effect, linked to the marked inflation in the area. In Hospitality, activity was mixed with disappointing 2nd and 3rd quarters due to poor weather conditions. However, our indicators of client satisfaction and service quality sharply improved in 2024. The strengthening of the British pound contributed +2.3% to the yearly growth of the region.

In Latin America, 2024 full-year organic revenue was up +8.7%, driven by further development of outsourcing and a pricing effect in line with inflation. We signed a large number of new contracts, notably in Healthcare, across all the countries of the region. Activity remained particularly strong in Mexico and Brazil, with 2024 organic growth up c. +9% for both countries. 2024 reported revenue increased +2.4%, after a negative local currency effect (negative FX impact of -6.3% in the year).

In Southern Europe, 2024 full-year revenue was up +6.9% (+5.4% on an organic basis). In Industry, Trade & Services, development of outsourcing continued, and we signed a large number of new contracts. In Hospitality, overall activity was satisfactory. All countries of the region performed well. Acquisitions closed in 2023 in Italy and in Spain in the Pest control market contributed +1.5% to 2024 reported growth.

The other sectors comprise the manufacturing entities (including Le Jacquard Français, designer and manufacturer of household linen in France, and Kennedy Hygiene, a washroom appliance manufacturer in the United Kingdom), holding companies as well as the Group's activity in Malaysia. 2024 full-year revenue was up +17.4% (+4.6% on an organic basis), with a +11.1% scope effect related to the Malaysian acquisition that was consolidated from July 1, 2024.

Adjusted EBITDA

¹: Please refer to the " Restated income statement for prior financial years " section of this release.

Margin rates and percentage change calculations are based on actual figures.

" Others " includes manufacturing entities, holding companies and Asia.

In 2024, Group adjusted EBITDA was up +9.2% year-on-year, at 1,609.8 million euros; adjusted EBITDA margin was up +100bps to 35.2%.

In France, logistics savings, optimization of our industrial processes and a decrease in some consumables led to a +150bps improvement in EBITDA margin, to 41.8%.

In Central Europe, adjusted EBITDA margin was up +180bps, at 32.3%. This improvement was driven by the excellent performance in Germany (+450bps yoy at c. 29%), which benefited from better energy purchasing conditions and productivity gains. The acquisition of Moderna, operating flat linen for Hospitality and consolidated since March 1, 2024, has a slight dilutive effect on the margin of the region.

In Scandinavia & Eastern Europe, adjusted EBITDA margin was down -120bps, at 35.3%. The competitive landscape was tougher in Denmark in 2024, especially in the mats market.

In UK & Ireland, adjusted EBITDA margin was +90bps at 31.6%, on the back of better energy purchasing conditions and productivity gains.

For the same reasons, adjusted EBITDA margin in Latin America was up +50bps at 34.9%; in particular, Colombia showed significant productivity savings.

In Southern Europe, the strong increase in revenue, productivity gains and better energy purchasing conditions led to a +180bps EBITDA margin improvement at 32.6%.

From adjusted EBITDA to net income

¹: Please refer to the " Restated income statement for prior financial years " section of this release.

Margin rates and percentage change calculations are based on actual figures.

D&A

In 2024, D&A came back to its normative level: the 2023 number still benefited from one year of linen investment that was lower than normal due to the pandemic.

Adjusted EBIT and ROCE

In 2024, adjusted EBIT was up +7.3% compared to 2023, at 733.0 million euros. Adjusted EBIT margin was up +20bps at 16.0%.

Pre-tax ROCE, defined as adjusted EBIT divided by capital employed at the beginning of the period, stood at 14.5% in 2024, compared to 13.9% in 2023.

The calculation of capital employed is provided in the "Capital employed” section of this release.

Operating income

The main items between adjusted EBIT and Operating income are as follows:

• Non-current operating losses strongly decreased, as 2023 was marked by the reevaluation of the earn-out of the acquisition in Mexico in 2022. The financial outlook of the acquired group was revised upwards last year.
• Expenses related to share-based payments (IFRS 2). These are stable compared to 2023.
• Amortization of intangible assets linked with past acquisitions are relatively stable as it mostly results from the acquisition of Berendsen in 2017.

Net financial result

In 2024, net financial expense was 130.4 million euros. It was 5.8 million euros higher compared to 2023, linked with the increase of interest charges, as refinancing rates are higher.

Income tax

Income tax was up 18.0 million euros compared to 2023, consistent with 25.83% rate applied to the tax base (operating income excluding expenses related to share-based payment + net financial result). Furthermore, 2023 benefited from c. 15 million euros of activation of deferred taxes linked to carry-forward losses.

Net income

Net income was up +29.0% in 2024, at 337.8 million euros, compared to 261.9 million euros in 2023. The strong increase in EBIT (+50 million euros), combined with the decrease in non-current operating losses (c. +49 million euros), was partially offset by the increase in financial expenses (c. -6 million euros) and income tax (c. -18 million euros).

Net income to headline net income

¹: Please refer to the "Restated income statement for prior financial years” section of this release.

Headline net income was 446.3 million euros in 2024, up +3.0% compared to 2023. Headline net income per share was up +1.3% at 1.89 euros (up +3.1% at 1.76 euros on a fully diluted basis).

Cash flow statement