Elis Reports Third Quarter 2024 Results

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 various commercial initiatives across different countries.

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

Hospitality Sector Underperformance

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

The company noted that events such as the Olympic and Paralympic Games negatively impacted tourism, leading to the cancellation or postponement of numerous 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.

M&A Activity

On the M&A front, Elis announced its first entry 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 explore numerous small-sized acquisition opportunities within its current markets.

Financial Outlook

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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