Elis confirms 2024 targets despite hospitality slump

Elis, a global leader in circular services, reported a 5.5% increase in revenue for the third quarter of 2024. The company experienced organic growth of 4.9% during the quarter, attributed to its various commercial initiatives across different countries.

This growth is consistent with the 5.3% organic revenue increase over the first nine months of the year.

Despite the overall positive performance, the hospitality sector underperformed in the third quarter, with a notable decrease in occupancy rates, especially in France and the United Kingdom.

The company pointed out that events such as the Olympic and Paralympic Games had a negative impact on tourism, leading to the cancellation or postponement of many professional events scheduled in Paris during the summer. Hospitality operators' focus on maintaining high prices at the expense of occupancy rates also contributed to the sector's downturn.

On the M&A front, Elis announced its first foray into the Asian market with the acquisition of Wonway, a cleanroom service provider in Malaysia, on July 1, 2024.

Although discussions with two potential partners in the United States were terminated in early October due to financial discipline considerations, Elis continues to evaluate numerous small-sized acquisition opportunities within its current markets.

Elis reiterated its full-year 2024 financial targets, projecting organic growth between 5.2% and 5.5%, an adjusted EBITDA margin ranging from 35.2% to 35.5%, and a stable year-over-year adjusted EBIT margin around 16%.

The company also expects a headline net income per share above €1.75 on a fully-diluted basis and free cash flow at approximately €340 million. The financial leverage ratio is forecasted to decrease by 0.2x compared to December 31, 2023.

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Source: Investing.com