Elior : Press release (PDF, 300.47 KB)

PRESS RELEASE

Paris, November 24, 2021

Full-year2020-2021 financial results

Sharp rebound in the fourth quarter leading to positive outlook for 2021-2022 and beyond, with strong ambitions for 2024

Elior Group (Euronext Paris - ISIN: FR 0011950732), one of the world's leading operators in catering and support services, announces its unaudited full-year fiscal 2020-2021 results, ended September 30, 2021. All financials are presented after application of IFRS 16.

Key figures for fiscal 2020-2021

• Fourth quarter revenues were equivalent to 85% of revenues for the same period in 2018- 2019 (pre-Covid), up significantly from between 73% and 74% in the previous three quarters
• Full-yearrevenues came to €3.69bn, compared with €3.97bn in 2019-2020, a limited organic decrease of 5.3%
• Adjusted EBITA was a loss of €64m, a slight improvement compared with the loss of €69m last year, reflecting rigorous operating cost control
• Free cash flow was +€13m compared with -€15m last year
• Capex was well managed at 1.7% of revenues
• Available liquidity at September 30, 2021, was €539m, compared with €630m the previous year

Outlook for 2021-2022

For fiscal 2021-2022, we expect organic growth of at least 18% and an adjusted EBITA margin between 2.0% and 2.5%, with capex around 2.5% of revenues. Based on the assumption that the health situation does not require additional restrictive health protocols that impacts our business.

Ambitions for 2024

Our updated New Elior 2024 strategic plan has enabled us to reaffirm our Value Creation Drivers defined in 2019. Our objective is to accelerate and amplify our development to return to our pre- pandemic revenue level (€4.92 billion in 2018-2019) and generate a significantly higher adjusted EBITA margin (3.6% in 2018-2019).

• Annual organic revenue growth of at least 7% for 2022-2023 and 2023-2024
• Adjusted EBITA margin of around 4.6% in 2023-2024
• Organic revenue growth / Capex in % of revenues between 2x and 3x
• Resumption of dividend payments based on fiscal 2022-2023 results

CSR commitments for 2025:

• 12% less greenhouse gas emission per meal by 2025, compared to 2020 (scopes 1-2-3)
• 30% reduction in food waste per meal by 2025, compared to 2020
• 80% renewable electricity use by 2025 and reduction of our energy consumption

Elior Group CEO, Philippe Guillemot, commented: "We have just concluded fiscal 2020-2021,a year that has been totally unprecedented for the entire contract catering sector. So, first and foremost, I would like to praise the enduring commitment of Elior's teams. They stood by our clients and guests, at the ready, to accompany and help them face this unparalleled and ongoing crisis. With its sound fundamentals, Elior has done better than just weather the crisis. Not only

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have we maintained a sound financial base, we have also set things in motion - everywhere- to accelerate our transformation. Today, Elior is perfectly organized for a return to sustainable, profitable growth based notably on an optimized cost structure and new offers that are even more suited to market expectations.

Between July and September, Elior recorded its best quarter since the pandemic began, with revenues equivalent to 85% of those generated over the same period in 2018-2019. This reflects a more favorable operating environment as the vaccination campaigns progressed in all the countries where we operate. However, our full fiscal year 2020-2021 revenues are down slightly on 2019-2020, which was only affected by the crisis during the last seven months. Despite extremely unfavorable conditions worldwide, we managed to lower our operating loss through relentless and effective cost control efforts.

Provided the health situation remains under control, the improvement in operations should gather momentum in the coming months, despite the return of higher than expected inflation, which is already the subject of negotiations with clients of which these efforts will be more visible in the second half. For fiscal 2021-2022, we therefore expect organic growth of at least +18% and an adjusted EBITA margin of between 2.0% and 2.5%.

As we emerge from this crisis, it is clear that our New Elior 2024 strategic plan - launched in 2019

• has proven to be perfectly adapted. Indeed, we have not only withstood the crisis and stayed on track, but we have also stepped up our transformation and are now able to seize new opportunities. By closely involving the management teams in all our geographical regions, we have put the last few months to good use reviewing our five Value Creation Drivers and revising our strategic plan. It is thanks to this collective effort, shouldered by our 99,000 employees, that we can now set ambitious goals for 2024.
  At the heart of our ambition and value proposition, Elior reaffirms its CSR commitment as illustrated by our objective to reduce our carbon footprint by 12%. Food waste will be reduced by 30% and our energy mix will be 80% renewable. Priority will be given to our teams' development and their skills to support our businesses transformation. Embarking all our teams, Elior Group has launched a project - steered by the Executive Committee - to collectively define our "raison d'être"."

Business development

Elior renewed or secured several major new contracts in the fourth quarter of 2020-2021, both in contract catering and services. These included:

• In France, the French Alternative Energies and Atomic Energy commission's Le Ripault center, Saipem, Alstom Transport, , educational establishments in Rennes and Antony (Greater Paris Area) as well as the ABRAP senior citizen services and assistance association. For Elior Services, in healthcare, the Trousseau Hospital in Paris, and in cleaning, several Orange facilities and the offices of Pôle Emploi (the French unemployment agency) in the Provence- Alpes-Côte d'Azur region.
• In the UK, several educational establishments such as the Red Kite Learning Trust and United Colleges Group as well as the McCarthy Stone retirement properties.
• In the US, the North Dakota State Capitol, several educational establishments including Unity College, Northern Oklahoma College, Texas Leadership Academy, Reading School District, the Cornell Tech campus, the Arsht Performing Arts center, the New Mexico Correctional Facility, Sutter County Jail as well as the Presbyterian Manors of Mid-America senior residences.
• In Italy, educational establishments in Rome and Rieti (Lazio region), the Association of the Italian Knights of the Sovereign Military Order of Malta, and the senior care services group H&W Korian.
• In Spain, the company Inetum on the Costa Brava, Jesuitinas Miralba educational establishment in Vigo and Jaume I El Conqueridor school in Valencia, as well as the Aspeyo Hospital in Madrid and Montecelo Hospital in Pontevedra.

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Revenues

Consolidated revenue from continuing operations totaled €3.690 billion for fiscal 2020-2021,compared with €3.967 billion a year earlier. The 7.0% year-on-yeardecline reflects an organic decline of 5.3% and a currency headwind of 1.6%, notably due to the US dollar (no material impact from acquisitions or divestments).

Like-for-like revenues were down 2.9%, a significant improvement on the 16.7% drop recorded a year earlier at the height of the pandemic.

Business development boosted revenues by 6.2% versus 5.2% last year.

Lastly, lost contracts accounted for an 8.6% decline in revenues. The retention rate was 91.4% at September 30, 2021, versus 91.3% at June 30, 2021, and down slightly compared with 91.8% on September 30, 2020.

The share of revenue generated by international operations for the fiscal year ended September 30, 2021, amounted to 54% compared to 55% the prior year.

Revenue by geography

International revenue was down 9.5% at €1,975 million, compared with €2,182 million in 2019- 2020, reflecting an organic decline of 6.4% and a currency headwind of 2.9%, notably due to the US dollar (no material impact from acquisitions or divestments).

The UK was impacted by the particularly strict lockdown introduced in early January and not fully lifted until July. The United States, which proved very resilient at the beginning of the pandemic when revenues were sustained by emergency meals, was hit this year by widespread hybrid learning (in-person / remote). Italy and Spain saw renewed growth thanks to a strong rebound in the Education market. Italy also benefited from the fact that most of its clients in Business & Industry are industrial, so it was less impacted by working-from-home.

Revenue generated in France totaled €1,711 million in 2020-2021, compared with €1,778 million a year ago, an entirely organic decline of 3.8%. Like the other countries, it was a year of contrasts for France, with severe health restrictions in the first half, followed by a gradual lifting of protective measures as the vaccination campaign progressed. The Education market was hit by the stricter health protocol introduced by the authorities in the spring.

The Corporate & Other segment, which includes the Group's remaining concession catering activities that were not sold with Areas, generated €4 million in revenue in 2020-2021, compared with €7 million the previous year.

Revenue by market:

Business & Industry generated revenue of €1,341 million, down 17.2% on 2019-2020, of which an organic contraction of 15.8%. Fourth quarter revenues were equivalent to 75% of revenues for the same period in 2018-2019(pre-Covid), a strong rebound from 58% in the third quarter, reflecting the return to on-site working in the services sector.

The Education market generated revenue of €1,215 million in 2020-2021, up 5.7% year-on- year, including 7.7% organic growth. Fourth quarter revenues were equivalent to 99% of revenues for the same period in 2018-2019(pre-Covid), up substantially from 87% in the third quarter, reflecting the return to quasi-normality in all the countries where we operate.

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Health & Welfare generated revenue of €1,134 million, down 5.3% year-on-year, and 3.5% on an organic basis. Fourth quarter revenues were equivalent to 92% of revenues for the same period in 2018-2019(pre-Covid), up slightly from 91% in the third quarter, reflecting the very gradual easing of health restrictions in places open to the public.

Revenues by market for the last six quarters are summarized in the table below and expressed as a percentage of revenues for the same period in fiscal 2018-2019(pre-Covid), at constant exchange rates.

Revenues as a %	Q3	Q4	Q1	Q2	Q3	Q4
of 2018-2019
revenues1	2019-2020	2019-2020	2020-2021	2020-2021	2020-2021	2020-2021
Business &
Industry	38%	67%	54%	55%	58%	75%
Education	45%	85%	84%	85%	87%	99%
Health &
Welfare	92%	95%	93%	93%	91%	92%
GROUP TOTAL	54%	79%	73%	73%	74%	85%

Adjusted EBITA and recurring operating profit

Adjusted EBITA for continuing operations was a €64 million loss for the fiscal year ended on September 30, 2021, a slight improvement on the €69 million loss in 2019-2020. The adjusted EBITA margin remained stable at -1.7%, despite the decrease in revenues, thanks to our operating cost control initiatives.

In the International segment, adjusted EBITA totaled -€22 million, an improvement on -€30 million last year. The adjusted EBITA margin was -1.1%, compared with -1.4% a year earlier.

In France, adjusted EBITA came to -€21 million versus -€13 million in 2019-2020, reflecting the pandemic's full-year impact on Business & Industry, versus only seven months during the prior fiscal year. The adjusted EBITA margin is -1.2%, compared with -0.7% a year earlier.

The Corporate & Other adjusted EBITA was -€21 million for the fiscal year 2020-2021 compared

with -€26 million a year ago.

Recurring operating loss from continued operations (including share of profit of equity-accounted

investees) was €87 million for the full year 2020-2021, compared with a loss of €89 million in 2019-2020.

Non-recurringitems represented a net expense of €1 million, compared with €240 million in 2019-2020, which included €123 million of goodwill impairment and €117 million in

restructuring provisions.

Net financial result was a €44 million expense compared with a €38 million expense a year ago.

1 Fiscal quarters and at constant exchange rates

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For income tax, the Group recorded an income of €12 million compared with an expense of €83 million the previous fiscal year. This improvement is mainly due to the recognition of deferred tax assets in some jurisdictions like France.

The tax charge also includes the French CVAE of €11 million, compared with €19 million in 2019- 2020, following the 50% tax rate reduction since January by the tax authorities.

Taking into account the above factors, net loss from continuing operations for the period was €120 million, a substantial improvement compared to a loss of €450 million in fiscal 2019-2020.

Attributable net loss for the period was €100 million, compared with a loss of €483 million last year.

Cash flow and debt

Operating free cash flow for 2020-2021 was €19 million, compared to -€4 million last year.

Net debt was €1,108 million at September 30, 2021, compared to €995 million a year earlier. The next test of the covenants governing the Group's senior debt and French State Guaranteed Loan (PGE) will be in November 2022 based on financial results as of September 30, 2022.

Liquidity

At end-September 2021, Elior's available liquidity amounted to €539 million, compared with €630 million at September 30, 2020. This includes cash of €80 million and total available, undrawn revolving credit facilities of €350 million. Remaining available credit lines amount to €109 million.

As part of the refinancing plan concluded on July 8, 2021, the Group has adjusted its liquidity to a level appropriate to its needs, while extending its debt's maturity and diversifying its funding sources.

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