Elis places 300 million euros in 5-year bonds – 05/17/2022 at 18:04

Elis places 300 million euros in 5-year bonds – 05/17/2022 at 18:04

(AOF) – Elis has announced that it has successfully placed, under its EMTN (Euro Medium Term Notes) program, a principal amount of 300 million euros of senior unsecured bonds, whose maturity is 5 years and offers an annual fixed coupon of 4.125%. The order book amounted to more than 3 billion euros, an oversubscription rate of more than 10 times. The net proceeds of this issue will be dedicated to the refinancing of the bond issue for a principal amount of 450 million euros, the maturity of which is set for February 15, 2023.

This operation, which is in line with the Group’s active refinancing strategy, will extend the average maturity of its debt.

The placement of this issue was led by seven banks: Crédit Agricole Corporate and Investment Bank, Danske Bank, Deutsche Bank, HSBC, La Banque Postale, Natixis and Société Générale.

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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), 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 3.

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 digitalisation: for customers, Elis Connext traceability program and electronic contract, internally, deployment in 2021, in Europe, of GLAD, a logistics support solution;

– Environmental strategy: expectation for the end of 2022 of climate objectives, acceleration of the use of “clean” vehicles for delivery fleets, circular economy, at the heart of the economic model: eco-design, product sustainability, textile recovery, line “green” loan 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;

– Ability to have price increases accepted from the 2nd half, to offset the negative impact of the rise in gas prices;

– Expectations for 2022: 13 to 15% increase in turnover, growth in operating profit towards €500 million, free cash flow of €200 million and debt leverage reduced to 2.6;

– Return to the dividend for 2021 at €0.37.

Business services: road transport faced with a labor shortage

A report published by Dares (Direction de l’Animation de la recherche, des Etudes et des Statistiques) in October 2020 pointed out that truck drivers were among the thirty most stressed professions in France in 2019. This tension is not fallout and could even increase in the coming years. According to the OTRE (Organization of European Road Carriers), the needs could reach 100,000 jobs in the next five years. The phenomenon, which was lessened during successive confinements, reappeared with the resumption of activity. It is partly linked to a lack of image and unattractive remuneration. Unfortunately the recent negotiations between the social partners to revalue the minima of branch did not succeed.


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