Elis Sa · EURONEXT:ELIS

Elis Sa — Investor Day (November 2012)

52 slides from Elis Sa's investor day presentation, Nov 27, 2012

  1. Slide 1: Investor day

    Investor day Pantin - November 27, 2012

  2. Slide 2: About us… (1/2)

    About us… (1/2) Profile  European leader in linen rental and laundry services to the hospitality sector, workwear rental services & hygiene appliances  With an additionnal offer of well-being services: mats, water coolers and espresso machines  Services exclusively for professionals (B-to-B) Mult

  3. Slide 3: About us… (2/2)

    About us… (2/2) 2011 Key figures  Revenue: €1,149m Uninterrupted growth for 40 years  EBITDA: €371m, EBIT: €193m  290,000 customers of all sizes and across all industry sectors  91 laundries and 156 service centers in Europe  14,550 employees in 10 European countries  Increasing share of non d

  4. Slide 4: Agenda

    Agenda 1. Unique multi-service business model enhancing resilience and profitability throughout the cycle  Xavier MARTIRE, CEO 2. Creating tomorrow’s value: strong basis for future growth  Xavier MARTIRE, CEO 3. Financial performance: Elis at the forefront of its industry  Anne-France LACLIDE-DRO

  5. Slide 5: Agenda

    Agenda 1. Unique multi-service business model enhancing resilience and profitability throughout the cycle  Xavier MARTIRE, CEO 2. Creating tomorrow’s value: strong basis for future growth  Xavier MARTIRE, CEO 3. Financial performance: Elis at the forefront of its industry  Anne-France LACLIDE-DRO

  6. Slide 6: Summary

    Summary Revenue growth on all Improved economic sectors, efficiency grounded on a wide range of multi-service of products model and services Capital expenditure to Environmental and social improve plant responsibility, productivity while a milestone of Elis consolidating development barriers to entr

  7. Slide 7: Proven business model & solid competitive positioning

    Proven business model & solid competitive positioning 1 Low market penetration 8 and high potential for 2 rental services Stability & Pioneer in predictibility in cash multi-service generation 7 3 State of the art Strong track record in processing, logistics financial and commercial performance plat

  8. Slide 8: Markets & products: Hospitality & Healthcare

    Markets & products Hospitality & Healthcare HOSPITALITY – 29% of revenue in France (€262m) HEALTHCARE – 14% of revenue in France (€128m) Loyal customers in a competitive market Elis strengths  Large corporate accounts  Product/service innovation to support  Classic and technical workwear are high

  9. Slide 9: Markets & products: Industry, Trade & Services

    Markets & products Industry, Trade & Services INDUSTRY – 19% of revenue in France (€178m) TRADE & SERVICES – 36% of revenue in France (€332m) A large diversity of clients Elis strengths  Any company can be a client  Multi-service offer  The entire range of products and services  Long term multi-

  10. Slide 10: Steady growth in all markets

    Steady growth in all markets Revenue by market in France 1.0% 332.5 323.8 1.1% 0.5%  Bar chart in €m  Change n/n-1 in % 2.8% 177.7 170.3 1.4% 0.2% 4.8% 128.1 119.0 1.8% 0.9% -2.2% 3.2% 7.6% 262.4 241.7 2008 2009 2010 2011 Hospitality Healthcare Industry Trade & Services Other 10

  11. Slide 11: Rental business: Resilience & predictability

    Rental business Resilience & predictability Key factors of success 1. A client-oriented economic deal (vs. in-board laundry) 2. Reliable products and logistics 3. Flexibility and "on-demand" capability 4. Geographical proximity 5. Average duration of contracts: 3 to 5 years 6. Environmental performa

  12. Slide 12: A unique organization: High density of locations

    A unique organization High density of locations Europe France  Present in 9 countries  156 plants & service centers in Europe, a significant barrier to entry for competitors  In France, 111 business units deliver an undisputed high quality service 12

  13. Slide 13: A unique organization: Multi-service as a backbone…

    A unique organization Multi-service as a backbone… Commercial organization delivery Commercial Leveraging fixed cost base across Supply chain organization multiple services  Customer single management & point of contact up-selling/ Each ”stop” is an opportunity product cross-selling  More than 2 s

  14. Slide 14: Revenue growth: Major steps to build up speed…

    Revenue growth Major steps to build up speed… 2010 - 2011 2007 - 2011 2011 - 2012 2009 2008 - 2009 Quality of Large corporates Products / services Sales force Cross-selling service / client dynamic innovation reinforcement: action plan retention +100 people  At least 1 large  Rebranding and new lo

  15. Slide 15: Major industrial projects for higher barriers to entry

    Major industrial projects for higher barriers to entry 2009/2012 - FRENCH RIVIERA - HOSPITALITY 2012 - PANTIN - HOSPITALITY Strategic rational Strategic rational  Acquisition of Grenat (Toulon, 2009),  A "mega" hospitality and healthcare plant opening of a new plant in Nice (2012) responding to El

  16. Slide 16: Increasing productivity for economic value (1/2)

    Increasing productivity for economic value (1/2) Water consumption (L/kg delivered)(1) Energy consumption (kWH/kg delivred)(1) 100 100 2009 2010 2011 2011 2010 2009 95 90 90 85 80 75 80 70 65 70 60 55 60 Benefit = €0.7m (full year) Benefit = €1.4m (full year)  Between 2009 and 2011, water  In spit

  17. Slide 17: Increasing productivity for economic value (2/2)

    Increasing productivity for economic value (2/2) Detergents consumption Workwear productivity (WW/h)(1) (cts €/kg delivered)(1) 100 2009 2010 2011 130 2009 2010 2011 90 120 80 110 70 100 january march may july september november Benefit = €3.8m (full year) Benefit = €7.0m (full year)  New sourcing

  18. Slide 18: On the road to product service system

    On the road to product service system Traditional economy Product service system Rental for specific use (and Economic process Sale of product supply of associated services) Value created by the producer Value created by the producer Economic value cycle and destroyed by the user and used by the use

  19. Slide 19: Our commitments to CSR

    Our commitments to CSR Social responsibility Sustainable development  Individual success with the team  Release of a dedicated leaflet: “Au service du développement durable”  Training  Member of the U.N. “Global Compact”  Availability and listening program since 2006 as a behaviour rule  Membe

  20. Slide 20: Agenda

    Agenda 1. Unique Multi-service business model enhancing Resilience and profitability through the cycle  Xavier MARTIRE, CEO 2. Creating tomorrow’s value: strong basis for future growth  Xavier MARTIRE, CEO 3. Financial performance: Elis at the forefront of its industry  Anne-France LACLIDE-DROUIN

  21. Slide 21: Summary

    Summary Elis business model Growth potential takes up the challenge remains strong of international in France development Products and marketing innovation, Odyssey IT program, a key factor for a major breakthrough tomorrow’s growth 21

  22. Slide 22: Low penetration and high potential for rental services…

    Rental market in France Low penetration and high potential for rental services… Markets for textile Market penetration & hygiene services Current rental scope Potential for rental penetration Workwear 25% 75% Hygiene 15% 85% appliances Healthcare 40% 60% Hospitality 40% 60% Mats 20% 80% Water cooler

  23. Slide 23: Rental market in France: Significant potential for conversion

    Rental market in France Significant potential for conversion Rental 36% 13% 36% 6% 9% 52% 53% 11% 20% Rental Hospital Laundry Laundry & in-house cleaning ELIS Rentokil Initial RLD Anett Other French market: €4.7bn Rental: €1.7bn  Rental represents c. €1.7bn of an estimated market of €4.7bn  Market

  24. Slide 24: Rental market in France: A national leader, strong regional players

    Rental market in France A national leader, strong regional players Staff: 11,200 Locations: 111  Leader in textile rental market Linen (t/year): 252,000 Revenue (€m): 900  Comprehensive offer WW (people): 1,200,000 Staff: 3,900 Locations: 60  Most comparable player to Elis Linen (t/year): 100,000

  25. Slide 25: Continental Europe: A growing & fragmented market

    Continental Europe A growing & fragmented market Elis ranks #1 in Continental Europe Elis revenue by country (2011) France International: Top 5 players represent 40% of the market 18% 4% Belgium Luxembourg Spain Top 5 = 39% Germany 12% Italy Portugal Other 60% 78% Switzerland 8% UK (Production) Fran

  26. Slide 26: The challenge of international development

    Elis proven business model The challenge of international development 2011 2007 - 2011 2009 - 2010 2007 - 2011 PORTUGAL SALES FORCE Revenue from EXTERNAL ITALY GROWTH international  Opening  Investment has  Deeply of a new plant been growing activities has streamlined in Algarve by 30% increased

  27. Slide 27: Germany: An organic growth based strategy

    Germany An organic growth based strategy Elis in the German market Organic growth strategy  Interests and objectives  From an installed base of 3 factories − The largest market in Western Europe − Fierce competiiton in workwear and healthcare, with major  Opportunistic acquisition of two location

  28. Slide 28: Switzerland: External growth to build a leader

    Switzerland External growth to build a leader Elis in the Swiss market External growth strategy  Interests and objectives LAVOTEL - 2010 − A relatively protected market due to customs barriers,  Acquisition of Lavotel, leader in French with additional potential for outsourcing speaking area for fl

  29. Slide 29: Iberian peninsula: Facing economic crisis

    Iberian peninsula Facing economic crisis Elis in the Iberian market Spain: external growth strategy  Market − A very fragmented €470m market, with a low penetration of rental (28%) CWS Spain - 2007 − A major market in hospitality La Paloma - 2008  Elis in Spain in Portugal − Ranking 3rd (13 b.u.)

  30. Slide 30: New territories: Expanding our horizon (1/2)

    New territories Expanding our horizon (1/2) GDP growth 10,0% 8,0% 6,0% 4,0% 2,0% 0,0% Euro zone China Brasil India Russia Turkey 2011 2012 Estimate  As GDP growth in Euro zone is expected close to zero in the coming years  Elis is now searching for perspectives in territories with stronger economi

  31. Slide 31: New territories: Expanding our horizon (2/2)

    New territories Expanding our horizon (2/2)  Search for growth opportunities 2015/2020 by opening new territories in high potential areas  Work in progress to identify appropriate countries, based on: − Population − GDP per capita − GDP growth − Geopolitics − Business safety − Existing multination

  32. Slide 32: Products and marketing innovation a key factor for tomorrow’s growth

    Products and marketing innovation a key factor for tomorrow’s growth MARKETING ORGANIZATION A NEW ERA  Recruitment of a new Marketing  New logo and rebranding Director  Renewal of major lines of products  Coming from B-to-C  Launch of new services  Product line based organization  State-of-th

  33. Slide 33: Renewal of Elis “blockbusters” (1/4): Garment

    Products & marketing innovation Renewal of Elis “blockbusters” (1/4)  Re-design of web sites: elis.com − In line with the new logo and brand image − Targeting prospects, customers, suppliers and job applicants  Reinforcement of PPE* garment expertise: − This range of products has been growing by 1

  34. Slide 34: Renewal of Elis “blockbusters” (2/4): Garment

    Products & marketing innovation Renewal of Elis “blockbusters” (2/4)  Everywear, the new standard in workwear: − Replaces Elis aging best seller "Atlanta" − i.e. 20% of garment revenue in France − Modern and colourful design  Prote’in, a new garment range for food retail segment: GARMENT − New des

  35. Slide 35: Renewal of Elis “blockbusters” (3/4): Beverages

    Products & marketing innovation Renewal of Elis “blockbusters” (3/4)  A new range of point-of-use water coolers: − An increasing number of clients switch to point-of-use BEVERAGES equipment − Elis is drawing profit from this strong trend with a +17% increase in 2011  A comprehensive range of coffe

  36. Slide 36: Renewal of Elis “blockbusters” (4/4): Hygiene

    Products & marketing innovation Renewal of Elis “blockbusters” (4/4)  The new "Duo" offer in hospitality: BED LINEN − Duvet and cover brought together in a global solution − A unique offer on the market  Aqualine, a brand new range of hygiene equipment: − Comprehensive re-design: clear, modern and

  37. Slide 37: Beverages, a success story

    Products & marketing innovation Beverages, a success story  Launched in 1998, beverages services post a 32% CAGR since 2000: − Water coolers launched in 1999 − Espresso machines launched in 2002 − Point-of-use water coolers added in 2010 50 45 40 35 Espresso 30 Water coolers €m 25 20 15 10 5 0 2000

  38. Slide 38: Resident linen, a high potential segment

    Products & marketing innovation Resident linen, a high potential segment  Following the take-over of a niche player (AD3) in 2005, Elis has accelerated the development of this promising range of services: − Built-in laundries on clients locations − Opening of 8 business units dedicated to resident

  39. Slide 39: Odyssey IT Program: A major breakthrough

    Odyssey IT Program A major breakthrough  A diagnosis of Elis existing IT Systems was Adjustment & Implementation of HRM conducted in 2010: 1 reinforcement tools (potential & of management team careers monitoring) − Aging and obsolete software, home made − An heterogeneous core system, a limit to El

  40. Slide 40: Agenda

    Agenda 1. Unique Multi-service business model enhancing Resilience and profitability through the cycle  Xavier MARTIRE, CEO 2. Creating tomorrow’s value: strong basis for future growth  Xavier MARTIRE, CEO 3. Financial performance, Elis at the forefront of its industry  Anne-France LACLIDE-DROUIN

  41. Slide 41: Summary

    Summary Profitability A necessary and cash flow: condition a strong to meet Elis needs track record in CAPEX As well as Placing Elis requirements in financing among the best costs and deleveraging in its industry 41

  42. Slide 42: A strong track record, a resilient model

    A strong track record, a resilient model Revenue (€m) EBITDA & EBIT (€m) CAGR*: +4.0% CAGR*: +3.7% / +1.6% organic CAGR*: +3.7% 371 335 347 318 327 298 Reported +4.3% +0.6% +2.4% +7.6% growth 180 193 159 167 169 171 Organic +3.0% -0.6% +0.7% +3.2% growth ** 2006 2007 2008 2009 2010 2011 EBITDA EBIT

  43. Slide 43: Constant cash flow generation

    Constant cash flow generation Operating cash flow after tax (€m) Net debt (€m) & Leverage (vs. EBITDA) 43% 46% 40% 5.8 x 39% 5.7 x 5.6 x 5.5 x 36% 5.2 x 1,842 1,878 1878 1,868 1868 1,920 1920 1,934 1934 1842 153.4 144.1 137.1 140.5 116.9 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011  A 40% norm

  44. Slide 44: Exceptional needs in CAPEX in 2011 and 2012

    Exceptional needs in CAPEX in 2011 and 2012 9.0% Rented equipment Recurring PPE Major PPE projects IT vs net sales 19.0 Normative 6.9% 6.8% level 4.4 36.6 8.2 24.8 107.0 6.8 €m 78.5 46.0 73.6 30.3 34.0 15.0 16.6 17.4 2010 2011 2012 Est. 2011 2012  Two factors disrupt the normal level of CAPEX:  Th

  45. Slide 45: Current initiative to reduce net debt

    Current initiative to reduce net debt Sale & lease of real estate assets External financing of assets  c. 85 properties in France  Rental deal with a real estate investor and Switzerland  Building according to Elis requirements  Impact on net debt: c. €150m  Long term rental  Agenda: 2013 & 20

  46. Slide 46: Among the best in its industry

    Among the best in its industry Revenue (2011) €1,149m c. €1,240m c. €3,248m EBIT (2011) €193m c. €175m c. €281m Revenue 7% 17% by category 29% (Est.) 29% 63% 29% 71% 72% Textile Hygiene Textile Hygiene Textile Hygiene Other Other Revenue by France: 77% Scandinavia: 35% UK & Ireland: 41% geography EU

  47. Slide 47: Agenda

    Agenda 1. Unique Multi-service business model enhancing Resilience and profitability through the cycle  Xavier MARTIRE, CEO 2. Creating tomorrow’s value: strong basis for future growth  Xavier MARTIRE, CEO 3. Financial performance: Elis at the forefront of its industry  Anne-France LACLIDE-DROUIN

  48. Slide 48: Summary

    Summary Brazil, Prevention 2D, opening of a subsidiary Elis Pest Control service, dedicated to workwear to be launched in 2013 in Sao Paulo area CONCLUSION 48

  49. Slide 49: November 2012: opening of Elis in Brazil

    Coming up next… November 2012: opening of Elis in Brazil Positioning: Workwear in Sao Paulo area  Workwear has the lowest outsourcing rate among textile rental markets: 10 to 15%  Market size: R$150m  36% in Sao Paulo area  One the most dynamic regions in Brazil: # of workers is growing by 5% pe

  50. Slide 50: Introducing “Prevention 2D”, Elis Pest Control service

    Coming up next… Introducing “Prevention 2D”, Elis Pest Control service About Pest Control… Market snapshot Revenue Revenue  Sustainable protection plans against pests in Europe in France − Curative actions against insects, rodents or bacteria − Preventive long term action €300m €2,700m − Related on

  51. Slide 51: Coming up next… Prevention 2D, Visual

    Coming up next… Prevention 2D, Visual 51

  52. Slide 52: Conclusion

    CONCLUSION Consolidation of European leadership, worldwide ambitions  Boosting organic growth through innovation in sales & marketing  Opening of new territories outside Europe  Improvement of profitability for non domestic areas  Acceleration of deleveraging program 52

Elis — Investor Day (November 2012) on 6ix