* Elior had issued profit warning on May 16
* H1 EBITDA margin 6.9 pct vs 7.9 pct year-ago
* Full year guidance confirmed
* Vows to be more disciplined on cash use and capex
* Shares fall
By Dominique Vidalon
PARIS, May 29 (Reuters) - Catering company Elior, which issued a profit warning earlier in May, said on Tuesday it would aim for more discipline on its use of cash, after it posted lower first-half earnings.
Chief Executive Officer Philippe Guillemot said its general outlook remained solid and that this would be reflected in a three-year plan Elior will present on June 26.
Elior’s contract arm, which provides catering to businesses, schools and hospitals, accounts for 76 percent of its overall business. It also has a concessions business, which serves airports, railways and motorways.
“Cash is king. We will be more disciplined on the use of our cash and more selective on projects. You can expect over the next three years a decrease in capital expenditures as a percentage of revenue versus the peak reached this year,” Guillemot told a conference call.
Elior, whose net debt reached 1.8 billion euros ($2.1 billion) at the end of March following recent acquisitions, is targeting capital expenditure of 300 million euros for its 2017/2018 full financial year.
Guillemot made the comments after Elior reported lower first-half earnings, in-line with preliminary results announced on May 16 when the company made its profit warning.
At the time, Elior had cut its full-year guidance due partly to tough competition in the French contract catering sector. .
Elior’s May profit warning came after rival Sodexo had also cut its full-year sales and profit margin outlook in March while Compass Group, the world’s biggest catering firm, missed first-half earnings expectations in May.
Elior reported on Tuesday an adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) margin of 6.9 percent, down from 7.9 percent a year-ago.
It reiterated a forecast for an adjusted EBITDA of 7.5-7.8 percent for 2017-18, down from 8.3 percent in 2016-17.
Elior’s shares, which had slumped on the day of its May 16 profit warning, were down 2 percent in early session trading on Tuesday. The stock has fallen around 15 percent so far in 2018.
$1 = 0.8672 euros Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta