(AOF) – After opening sharply higher, the title Elis turned to post a decline of 0.43% to 16.03 euros, the day after the publication of the group’s annual turnover. In 2021, the specialist in maintenance and hygiene services nevertheless experienced good growth despite the context: its activity indeed increased by 8.6% to 3.048 billion euros, including + 7.4% organically. . It is even slightly above expectations, since Midcap Partners was aiming for a turnover of 3.009 billion and the consensus was 3.026 billion.
“This performance implies a last quarter with growth of 19.1%, including 17.1% organically, showing that the group was relatively little impacted by the new Omicron variant, with in particular a hotel and catering activity which reached 80% of its activity in 2019. (and even 85% in December) vs 75% in Q3”, notes Midcap Partners.
Revenue generated in Health, Industry and Retail & Services represented nearly 85% of total 2021 revenue over the financial year, and activity for the year in these 3 markets is higher around 5% from the 2019 level, Elis said.
Elis was also cautious about landing at the end of the financial year, specifying that its 2021 EBITDA margin should stand at 34.5%: “the strong inflation observed in December, in particular that of the price gas, slightly penalizes the end-of-year performance, our price adjustments not being made until January,” the group explained. Inflation of raw materials which could also be felt in 2022, according to Midcap.
The annual free cash flow (after payment of rents) should however be in the upper part of the range previously communicated by Elis, between 200 million and 230 million euros.
“The group’s good resistance in the hotel industry allows us to be more optimistic on the group’s top line, writes Midcap Partners in an analysis note. For the 2021 financial year, despite the 10 bps downward revision of our EBITDA margin, the turnover being higher than our expectations, this leads us to revise our EPS up by 3.8%”.
The broker has also lowered its EBITDA margin target for 2022, to 34.2% (compared to 34.4 previously), but raised its earnings per share forecast by 1.9%.
Midcap thus remained Buy on Elis, while maintaining its target price of 24.10 euros, stressing that at less than 14x 2022 EBIT, “the group is still trading at a discount of more than 20% in front of its peers, unjustified in our view in view of the group’s visibility and resilience in a context that is however complicated”.
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