December 6, 2017 / 6:07 AM / a year ago

French caterer Elior targets further growth as sales and earnings rise

PARIS, Dec 6 (Reuters) - Elior, Europe’s third-largest catering group, predicted on Wednesday that organic sales growth would accelerate to at least 3 percent in the 2017/18 fiscal year from 2.3 percent achieved in the 2016/17 fiscal year ended Sept. 30.

Elior, which competes with France’s Sodexo and Britain’s Compass, also predicted that its adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) margin would remain stable in the current year after declining by 20 basis points in the 2016/17 fiscal year.

The company made the forecasts after reporting that revenues rose by a reported 8.9 percent to 6.422 billion euros ($7.59 billion) in the year ended Sept. 30, helped by acquisitions.

Closely watched organic revenue growth was 3.6 percent, excluding the impact of voluntary contract exits, and 2.3 percent, including the negative impact of these exits.

Elior’s adjusted EBITDA rose 5.9 percent to 531 million euros, giving a margin of 8.3 percent of revenue against 8.5 percent a year earlier. This was in a line with toned-down margin target provided in November.

Elior added it would continue to eye acquisitions, notably in the United States, which is now its second-biggest revenue contributor.

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.

$1 = 0.8465 euros Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta

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