Elior Group Stock

Welcome to the Elior Group Half Year 2025-2026 Financial Results Presentation. Please note, this call is being recorded. The management discussion and slide presentation plus the analyst question-and-answer session is broadcasted live over the Internet. Today's call will be managed by Didier Grandpre, Group CFO. He will carry on with the usual presentation before opening the Q&A session. Mr. Grandpre, please go ahead.

Thank you very much, and good morning, everyone, and thank you for joining Elior Group for our 2026 half year financial presentation. The first half shows the resilience of the group. We delivered positive organic growth, resilient underlying profitability and a positive net result. The semester was affected by a delayed ramp-up of newly signed large contracts and by one exceptional item related to a tariff dispute in Italy. We are adjusting our full year guidance to reflect this updated visibility while remaining confident in the group's medium-term perspective as Elior benefits already from solid financial foundations following the turnaround since 2023.

Before starting, please take a moment to review the disclaimer shown on this slide. This presentation contains summary information and includes forward-looking statements based on current assumptions. Actual results may differ from the statement because of risks and uncertainties described in our 2024-2025 universal registration document.

I will begin with a brief introduction to Elior and to our strategic positioning. We'll then review the financial results for the first half of 2025-2026. After that, I will cover the main highlights of the period, including financing, business development and strategic initiatives. I will close with an updated outlook before opening the floor to questions.

Elior is one of the global leaders in contract catering and multiservices with a strong local presence across our markets. In fiscal year 2024-2025, the group generated EUR 6.15 billion in revenue. We employ around 133,000 people. Our footprint covers 11 main countries across 3 continents, combining local execution with global governance. Contract catering remains the group's core activity with EUR 4.455 billion of revenue in 2024-2025, representing around 73% of total group revenue. We operate across 4 main markets: business and industry, event catering, education and health and welfare. The scale of the activity is significant with around 19,600 restaurants on point of sale, approximately 3.3 million guests served per day and more than 80,000 employees worldwide.

Our objective is to provide healthy, tasty and more sustainable food offerings adapted to local needs and client expectations. Multiservices is a complementary and increasingly important pillar of Elior Group. In fiscal year 2024-2025, the segment generated EUR 1.683 billion in revenue, around 27% of total group revenue. The division brings together high value-added solutions across tertiary and industry, aeronautics, energy and urban services and HR recruitment and temporary staffing. With more than 52,000 employees and around 26,000 client sites, multiservices provides recurring demand, cross-selling opportunities and a broader relationship with clients.

Our ambition is clear to be a leader in contract catering and multiservices with a strong local presence. Our mission is to meet essential needs, feeding guests with healthy, tasty and more environmentally friendly offerings and taking care of buildings and their occupants while preserving the environment. We rely on distinctive assets, 150 central production kitchen, EUR 1.7 billion in food purchases, a local operating model supported by global management and stable family-based governance. Our CSR strategy Aimer sa Terre Horizon 2030 is built around 4 pillars and 10 commitments, preserving resources, providing sustainable food and services, cultivating talents and differences and supporting a responsible economy. Profitable growth and operational responsibility are inseparable in our model.

Let's now turn to the first half financial performance. The semester combines positive organic growth and resilient underlying profitability. Two factors weighed on the reported performance, the delayed ramp-up of new contracts and an exceptional tariff dispute on a significant Italian contract with a railway operator. Our message is balanced. We are adjusting the near-term outlook, while the medium-term direction remains intact.

Regarding the highlights. So the first key figure is organic growth, which reached plus 1.3% in the first half. Adjusted EBITDA margin reached 3% on a reported basis and 3.9% excluding the exceptional item in Italy, only 20 basis points below last year. Net results remained positive despite the exceptional item at EUR 21 million and reached EUR 46 million, excluding the exceptional item in Italy, meaning a net margin of 1.4%, slightly better than the 1.3% last year. And I guess that you all understood that this is a critical KPI for Daniel Derichebourg as a tangible evidence of the robustness of Elior's foundation and operating model deployed over the last 3 years. Free cash flow was positive at EUR 9 million despite higher CapEx and a less favorable working capital phasing. To be noted that it's not fully comparable to the EUR 205 million from last year that benefited from the ramp-up of a new securitization program that contributed EUR 172 million in the first half 2025. Leverage ratio stood at 3.6x at the end of March 2026, still comfortably below our covenant level. Fitch upgraded Elior to BB- with a stable outlook, recognizing the improvement in our financial profile.

Focusing on more details and starting with revenue. Reported revenue was EUR 3.179 billion, down 1.1% year-on-year, mainly because of a negative foreign exchange effect of minus 2.6%. Underlying organic growth was positive at plus 1.3%. Multiservices grew by plus 2.6% organically, driven notably by Aeronautics and energy activities, while contract catering grew by plus 0.9%. Contract catering was affected by delays in the start-up of new contracts, especially as recent wins include larger contracts with longer mobilization periods. So this is a timing issue, not a sign of a weaker commercial momentum as we will see later in this presentation with a net commercial balance higher than last year. The recent win should flow through revenue growth progressively with a stronger effect expected from the next fiscal year.

Comparable growth was supported by both volume and price. Volume contributed plus 0.6%, notably from Spain and the U.K. and price increases contributed plus 1.4% from all divisions. Pricing remains disciplined and continues to support margin protection in an inflationary environment, even though inflation was less intense than in prior period. Net development was a negative minus 0.7% with strong openings close to 8%, but lower than expected due to a longer ramp-up of new contracts. Closing reflected the full year effect of our portfolio rationalization, while the retention improved to 91.4% at March end 2026 compared with 91% one year earlier and 90.6% at the end of September 2025. This positive retention trend shows that the portfolio is stabilizing after the rationalization phase.

Regarding margin, reported adjusted EBITDA reached EUR 95 million in the first half with an adjusted EBITDA margin of 3%. Excluding the Italian exceptional item, adjusted EBITDA reached EUR 120 million, corresponding to a margin of 3.9%, 20 basis points lower than last year. The Italian item relates to a significant contract affected by unilateral changes in economic terms that triggered unexpected operating losses, which are currently subject to a tariff dispute. It should not be viewed as representative of the underlying group trend. Contract catering margin was 3.8% or 5% excluding the Italian exceptional item, down 20 basis points year-on-year.

Multiservices improved to 2.5%, up 50 basis points year-on-year, driven by the revenue increase in Aeronautics and Energy as well as the start of the profitability recovery in temporary staffing. On a year-on-year basis, price revision and renegotiation showed a minus EUR 5 million net inflation impact, which mostly comes from one shot price renegotiation a year ago, while the net inflation balance is almost neutral in this first semester. The net inflation balance was nevertheless more than offset by operational efficiencies that further contributed to close to EUR 9 million in the first semester. The delayed contribution from newly signed large contract mechanically weighted on EBITDA in the short term with a negative EUR 9 million impact from net development in the first half.

Forex exchange impact was more significantly this semester than in previous period, although still neutral in terms of margin. The first semester recorded continued investment in SG&A and IT to support further commercial development and productivity gains. And excluding the Italian exceptional items, the group delivered a 3.9% margin despite the timing effect on the net development.

At income statement level, EBITDA was EUR 83 million, including share-based compensation and a slightly lower PPA amortization. Nonrecurring charges fell sharply to EUR 2 million. Financial charges improved slightly to EUR 50 million and the tax charge decreased to EUR 10 million. Net result group share was EUR 21 million or EUR 46 million compared with EUR 43 million last year, excluding the Italian exceptional item. And Elior remains profitable at net income level with fundamentals which are much healthier following the turnaround phase.

Moving to cash flow. Free cash flow remained positive at EUR 9 million compared with EUR 205 million last year. The year-on-year decrease is mainly driven by working capital. Last year benefited from a nonnormative positive effect linked to the implementation of a securitization program that contributed to EUR 172 million. This semester, working capital was negative by EUR 52 million mainly due to catering seasonality and the temporary billing delay following the merger of the 2 biggest legal entities in cleaning activities. CapEx increased by EUR 22 million to EUR 83 million or 2.6% of revenue, in line with the investment policy we announced. We are actually maintaining investment in central kitchen and IT transformation to support further revenue growth, productivity improvement and cash flow generation. This translated in a slight increase in the net debt that moved from EUR 1.125 billion in September 2025 to EUR 1.182 billion in March 2026. Free cash flow was positive, but it was more than offset by interest and financial fees. IFRS 16 debt movement triggered by capital leases on the [indiscernible], a small acquisition in Hong Kong and dividend payment.

Consequently, leverage increased to 3.6x EBITDA at March 2026 compared with 3.3x at September 2025. The ratio remains comfortably below the 4.5x covenant threshold. This temporary increase does not call into action the debt reduction trajectory, but has been in place since April 2023 when the leverage ratio stood at 7.1x EBITDA. The covenant headroom, the rating upgrade and the refinancing action all strengthened the group's financial flexibility.

Let's move to the highlights of the period that show that we continue to strengthen the group beyond the first half financial performance. Our focus remains on strengthening the balance sheet, maturities and liquidity as well as supporting the growth pathway. This initiative support medium-term profitable growth despite the short-term adjustment to guidance. First, Fitch upgraded Elior's Issuer Default Rating by one notch from B+ to BB- with a stable outlook. The upgrade reflects an improved standalone credit profile of Elior and the quality of our reference shareholder, Derichebourg S.A. This is an external validation of a tangible improvement in Elior's financial profile and our debt reduction discipline.

Next, as a complement, during the period, Elior early redeemed the remaining EUR 159 million of July 2026 senior notes. We also successfully placed EUR 150 million of additional 5.625% senior notes due in 2030. Available liquidity increased to more than EUR 500 million at EUR 512 million precisely from EUR 385 million at the end of September 2025 after the repayment of the state-guaranteed loan in the first semester, the dividend payment and the refinancing effects on the revolving credit facility and the bonds. This action extend and consolidate our maturities and reinforce visibility for the next phase of the group's development.

Elior sports event on the business side is a new strategic growth driver, combining our catering and multiservices expertise. The offer includes tailored catering and nutrition for Elite athletes, multiservices for stadium, arenas and training center. And event solution for major sports and cultural events. This initiative is led by Sébastien Rouault that you can see on the picture, who joined as a new Elior employee. He is a 2-time European swimming champion and former head of a Main Operations Center for the Paris 2024 Olympic Games. This launch supports higher value cross-business development in resilient and attractive end markets.

Next, we have as well strengthened the premium catering that is complementary to our existing activities and aligned with growing demand for high-quality ingredients, culinary creativity and exceptional service. Stéphane Duval, Meilleur Ouvrierde France brings a strong culinary reference to this initiative. The roadmap is to develop buffets, cocktail reception, cold dishes and gourmet creations while structuring the business for large-scale event catering. This is both a business opportunity and a way to strengthen Elior's culinary differentiation. We made as well a new acquisition to enhance France culinary heritage with the acquisition of a natural mineral water, 808 in the southeast of France, which fits our strategy of promoting French culinary heritage and high-quality assets. 808 is a natural mineral water drawn at the depth of 808 meters, nitrate-free with a distinctive mineral profile and a dedicated taste. The investment program will modernize the bottling plant in the Southeast of France and double the local workforce. The target channels include prestigious establishment and selective distribution channels, including event caterers. This is a targeted enhancing initiative, not a shift away from our core catering and multiservices model.

Regarding artificial intelligence, we are providing here an example of briefly by Derichebourg Interim, which is an in-house artificial intelligence assistant for recruiters. Simply said, after an interview, the tool generates a structured summary that the recruiter adds to the candidate profile and can send to the client. So AI is here to support employee and free up time. It does not replace human judgment. The rollout is connected to our broader AI strategy, including the partnership with IBM that we already mentioned in the past to create an Agentic AI and Data Factory. So for us, AI is a practical productivity lever to improve our operational processes at Elior and create new customer solutions.

To conclude this section on the business development, as you can see, the net development remained positive in the first semester with close to EUR 300 million of gains, exceeding losses by EUR 122 million of net development on a 12-month run rate basis, mostly in France. Importantly, commercial synergies and cross-selling opportunities contributed to around 25% of total new gains, validating the strategic fit between contract catering and multiservices and leveraging the regional approach closer to customer. Our commercial momentum is stronger than what is visible in first half revenue because of higher share of recent wins that are large contracts with longer implementation phases, supporting our medium-term confidence in further revenue growth. This is illustrated in particular by contracts such as the catering and cleaning of 113 middle schools in the Yvelines French district or the headquarters of a major bank in the Paris area. This explains the lag in the impact on revenue growth and their contribution.

Moving to the next section on the updated outlook for the fiscal year 2025-2026. This update is a reset of near-term expectations based on the visibility we have today. It does not change our strategic priorities, which remain profitable growth, disciplined investment, cash generation and deleveraging. In the second half, organic revenue growth should remain broadly stable and lower than initially expected with the new large contract wins to start generating revenue after the summer break. We expect the group adjusted EBITDA margin to remain stable compared to the second half of last year, while reflecting ongoing inflationary pressures. We also expect a temporary lower cash contribution from working capital, driven by revenue trends and potential delays in receivable collections, particularly in the context of e-invoicing reform in France to start in September. Consequently, for fiscal year 2025-2026, we now expect organic revenue growth between 1% and 2%. Adjusted EBITDA margin, excluding the exceptional item in Italy to be around 3% for the fiscal year, leverage ratio to be around 3.5x at September 2026, still comfortably below the 4.5x covenant. Overall, the guidance adjustment reflects a reset of near-term expectation while maintaining investments for further growth and profitably focused trajectory. The group remains confident in medium-term profitable growth and deleveraging, considering the order backlog, the quality of the pipeline and the investment policy to support further growth and efficiency.

As a complement, the supporting cash flow assumptions are as follows: CapEx around 3% of revenue and nonrecurring cash below EUR 10 million, both unchanged. A more cautious change in operating working capital assumption, as just mentioned, revised down to between neutral to a contribution of EUR 20 million considering the impact of a new revenue outlook on securitization as well as some risk on the timely collection of receivables with a new French invoicing reform to come into force in September. CapEx remains temporarily elevated as we are investing in central kitchen, IT transformation and growth infrastructure. We will maintain our investment policy, including opportunistic tactical acquisition when relevant to support future growth.

To conclude, the investment case rests on sound financial foundation, a diversified activity portfolio, a streamlined contract base, positive business momentum and resilient end markets. Elior benefits as well from a stable family-based governance with a long-term approach as well as from a strong operational execution driven by stable management teams. The turnaround achieved since 2023 has created a much stronger foundation for the next phase. The fiscal year 2025-2026 adjustment is a near-term phasing issue, not a reversal of a strategy. We'll continue to execute with discipline, invest selectively and build profitable growth over the medium term.

Thank you for your attention, and I'm now ready to answer your questions.

[Operator Instructions] The next question comes from Leo Carrington from Citi.

Could I ask first on more details on Italy -- the Italy rail contract. Can you just provide a few more details to the extent that you can on this? Why this pricing dispute has arisen now rather than earlier on since the contract was won in 2022. How has this provision been calculated? And what is the risk that there is additional impact in H2, maybe further dispute or further provisioning needed? Separately, on the timing effect of the delayed contracts in France, with organic growth guidance for the year down 2 percentage points, is this decrease in guidance effectively all relating to these delayed contracts in France? Or is there some other factor that we should be aware of as well?

Thank you, Leo. So regarding the Italian contract, as a matter of fact, we were close to neutral profitability around last summer when there was a significant increase in some costs that were driven in particular by salary increase on our customer side that have been extended to our contract. So this is quite recent. We have started some negotiation, but understood at some point that we would have to go to a more -- through more dispute process, so which is now underway.

So regarding the provision that we took, considering that we don't have the full visibility on the timing of the resolution of this dispute, we took a prudent approach to provision the total amount of the expected losses under the current economic condition until the end of the contract in April 2027. So this item is exceptional in nature and does not reflect the underlying trend of the contract catering portfolio. And I would say, including in Italy with the recent rationalization of the contract portfolio there and a positive commercial momentum, especially in the private sector.

So with this provision, which again, covers the period till the end of the contract at the end of April 2027, we are not expecting any additional impact at EBITDA level in H2. And we are let's say, looking at the profitability of the group, excluding this item, considering the expected delay to get the resolution of the dispute.

Regarding your second question about the organic growth. So compared to H1, we are actually expecting a lower contribution from volumes as clients are becoming more cautious considering the overall inflationary context, limiting the demand for additional or exceptional services in contract catering and facility services. Price revision should continue to contribute to a similar level as in the first semester, considering that most price revisions have already taken place at the beginning of the fiscal year for the education market, in particular, or at the beginning of the calendar year for other markets and multiservices activity. Net development should progressively converge towards a more balanced contribution to revenue growth with new openings to start ramping up in H2 and the improvement in the contract retention that we saw already at the end of March 2026, I would say, as expected.

Okay. May I just ask a follow-up on the Italy contract. I don't think I quite understood the implications for H2. In the guidance statement, there's a comment that you estimate a profitability figure similar to last year, excluding the impact of the pricing dispute. To me, this reads as if there is still some risk in H2 associated with this contract. Am I reading that the right way?

No. So what we -- the objective with the EUR 25 million provision that was recorded in H1 is definitively to cover the expected loss regarding the execution of this contract till the end of the contract, which is end of April 2027. What we wanted to indicate by mentioning, excluding exceptional item regarding the revised guidance at around 3% in terms of EBITDA margin is to exclude the amount of the provision that was already recorded in H1.

[Operator Instructions] There are no more questions at this time. So I hand the conference back to the speakers for any closing remarks.

Thank you, everyone, for your attention and for your continued interest in Elior Group. I also want to thank our clients, partners and shareholders for their trust. Most importantly, I want to thank our teams whose dedication and service mindsets are the foundation of Elior's resilience. We remain confident in the group's solid foundations and in our ability to build profitable growth over the midterm. Thank you. Goodbye.

The conference is now over. Thank you for your participation. You may now disconnect.

Welcome to the Elior Group Full Year 2024-'25 Financial Results Presentation. Please note, this call is being recorded. The management discussion and slide presentation plus the analyst question-and-answer session is broadcasted live over the Internet. Today's call will start with an introduction of Daniel Derichebourg, Chairman and Group CEO. Mr. Derichebourg will speak in French with an English translation right afterwards. After this introduction, Didier Grandpre, Group CFO, will carry on with the usual presentation before opening the Q&A session. Mr. Derichebourg, please go ahead.

[Interpreted] So hello, everybody. Firstly, I'm sorry for not speaking English, but you know what, at my age, I'm not going to start learning now. We had told you in May that everything was going a lot better. And if everything went according to plan, we would be able to pay out a dividend. And as you've seen in the press release, that has now been confirmed.

Okay. So I'd like to thank you all for being here. It really is an honor to have you all here. And I'd now like to hand over to our Financial Director, Didier Grandpre, who's going to take us through the results.

Thank you, Daniel. Good afternoon, ladies and gentlemen, and welcome to Elior Group's full year results presentation. We have provided detailed financial information in our press release issued earlier this afternoon, which is available on Elior's website. I invite you to read the disclaimer on Slide 2, which is an integral part of the presentation.

I will make a short introduction before covering our full year results in detail. Then I will share the progress made in the implementation of our CSR strategy, and I will continue with the business review section. And finally, I will conclude with our outlook for the next fiscal year before we answer Daniel and I, your questions.

2 years ago, the 2022-2023 fiscal year marked a turnaround in our operational profitability with a positive adjusted EBITDA of EUR 59 million compared to a loss of EUR 48 million in 2021-2022. The following year saw a remarkable improvement in performance with adjusted EBITDA increasing by EUR 108 million in 1 year. Now the 2024-2025 fiscal year is a new major milestone. We've not only strengthened operating profitability with adjusted EBITDA exceeding EUR 200 million, but also achieved a turnaround in profit before tax, reaching EUR 65 million compared to a loss of EUR 5 million last year.

Elior has once again improved its performance in 2024-2025, although this was limited by a particularly challenging year for our temporary staffing business, which recorded an exceptional sharp revenue decline and an unusual negative EBITDA. After the takeover by a new management team in the second half of the year, our objective is clear: achieve a rapid return to profitability in this segment. In this context, it was important for us to present the 2024-2025 results, of course, as reported, but also excluding the underperformance of the temporary staffing business.

Globally, our results for 2024-2025 are in line with the revised objectives set last May. First, in line with the first semester and our revised ambition, the organic growth was modest in the second semester, reaching plus 1.3% for the year. Growth stands at 1.7% when excluding temporary staffing activities. Adjusted EBITDA continued to grow, both in absolute value and in margin rate, up 50 basis points to 3.3% Notably, the margin rate for 2024-2025 reached 3.5% when excluding the underperformance of temporary staffing activities, corresponding to a 70 basis point increase. We achieved a positive profit before tax of EUR 65 million, an improvement of EUR 70 million, including lower non-recurring charges following the successful implementation of optimized organization across our geographies within 2 years.

The payment of a dividend of EUR 0.04 per share has been approved by the Board of Directors today and will be proposed to the AGM approval on February 4, 2026. We remain focused on delivering value to our shareholders while continuing to pursue our deleveraging objectives. On this front, our leverage ratio was reduced by 0.5 points during the year, reaching 3.3x at the end of September 2025, thanks to a sustained free cash flow exceeding EUR 200 million for the second year in a row.

Moving to our financial results in more detail, starting with the revenue on Slide 7. Group revenue reached EUR 6.15 billion, corresponding to an overall revenue growth of 1.6%, made of group organic growth at 1.3% within the expected range. Tactical acquisitions contributing for 0.8%, including notably the regional expansion of facility services in Spain to complement our leadership position in contract catering in that country. The negative currency impact of minus 0.3% came mainly from the softening of the U.S. dollar.

Organic growth was driven by contract catering at 2% itself supported by strong commercial development in Spain, rigorous pricing discipline in the U.K. and successful commercial activity in the U.S., especially in the education market. In 2024-2025, activity in Italy declined due to non-renewal of some public contracts at a level of margin below our expectations. In Multiservices, the organic revenue decline is mainly due to temporary staff solutions. Excluding this activity, the segment grew by 1.1%, thanks to a strong recovery in Aeronautics and energy activities in the second semester.

Contract retention slightly decreased in H2, including the full year impact of voluntary exits and non-renewals of some public contracts in Italy at the beginning of the fiscal year to reach 90.6% at the end of September 2025 versus 91% at the end of March and 91.2% 1 year ago. Following the rationalization of our portfolio, we expect contract retention to start improving from next year.

Operational profitability increased again this year, thanks to maintained discipline on price increases, especially in the U.S., U.K., and France, continued productivity improvement in purchasing and labor. It is worth noting, despite a negative commercial balance in revenue, this still contributed positively to adjusted EBITDA, especially in France, underscoring our strategy of profitable growth.

The Slide 9 illustrates the robustness of the foundation consolidated during the fiscal year '25 with a strong improvement in the profitability of contract catering activities, up 100 basis points driven by price increases in the U.S., U.K., and France, and accretive commercial development in Spain, the rationalization of our contract portfolio, and the streamlining of the operational organization in France and Italy. Excluding temporary staffing, there was a slight improvement in the profitability of Multiservices activities, up 10 basis points to 3% in fiscal year '25. This improvement came notably from the increase in the level of activity in the industrial sector in the second semester.

The Slide 10 presents a major achievement for the past year with a positive pretax profit of EUR 65 million compared to a loss of EUR 5 million last year, an improvement of EUR 70 million and a positive net profit of EUR 87 million this year compared to a loss of EUR 41 million last year, an improvement of EUR 128 million. This turnaround is due to the continued improvement in operating profitability as just described, a decrease in amortization of intangible assets, down EUR 13 million due to a one-off charge last year in the U.S. for EUR 11 million related to short-term contracts.

A sharp reduction in non-recurring charges down to EUR 9 million in fiscal year 2025, following the implementation of reorganization plans over the past 2 years, especially in France for both support and operational functions and in Italy to adjust the organization to the level of activity and regain commercial agility.

Based on this year's strong performance and outlook, we activate net operating losses in the U.S. and France for a total of EUR 39 million, resulting in a tax benefit of EUR 22 million compared to a EUR 36 million tax charge last year. The adjusted net group profit stood at EUR 112 million, corresponding to an adjusted EPS of EUR 0.44.

Moving to Slide 12. Free cash flow for the 2024-2025 fiscal year amounted to EUR 228 million, which represented 2/3 of the EBITDA that reached EUR 342 million or 5.6% of revenue. Free cash flow improved by EUR 13 million compared to last year, mostly from operations. CapEx amounted to EUR 144 million or 2.3% of revenue, up EUR 46 million or 70 basis points of revenue year-on-year. This increase included investment in Central Kitchen to ensure sufficient production capacity for new contracts, real estate investments to replace more expensive rentals in the long run and offer greater flexibility and the first phase of our transformation and innovation program to harmonize operational and financial processes within a common ERP platform on top of business as usual investments related to new commercial contracts or renewals.

In addition to adjusted EBITDA, up by EUR 10 million, other components of free cash flow also improved compared to last year, notably the change in operating working capital, which contributed EUR 56 million, an improvement of EUR 32 million, thanks to better performance in the timely collection of receivables. The ramp-up of our new securitization program, which began in September 2024 and contributed EUR 89 million for the year, an improvement of EUR 6 million compared to last year. Non-recurring expenses amounted to EUR 15 million for the year, down EUR 11 million from last year following the completion of reorganization programs.

IFRS 16 rents were EUR 81 million for the year, down EUR 4 million due to either termination of leases or renewal of leases under better economic conditions. Tax paid remained stable at EUR 17 million. The free cash flow contributed to reducing net debt from EUR 1.269 billion to EUR 1.125 billion at the end of September 2025. Financial interest amounted to EUR 97 million, plus EUR 13 million in refinancing costs for the revolving credit facility and the high-yield bond.

IFRS 16 debt continued to decline, as previously mentioned, and tactical disposals and acquisitions resulted in a net increase of EUR 9 million for the year. The reduction of the net debt by EUR 144 million, combined with an improved adjusted EBITDA allowed us to stabilize our leverage ratio at 3.3x below the covenant of 4.5x and in line with our goal to fall below 3.5x by year-end towards a target of 3x in the short term.

Moving to the next session on corporate social responsibility. This year, the group continued to implement its CSR strategy presented last year, Aimer sa Terre or Love your Earth, Horizon 2030. With the new CSRD requirements, we refined the double materiality assessment and identified 37 material items consistent with our strategy. The table shows significant progress this year in the four pillars of our strategy towards the 2030 targets. This is especially true for the first pillar, preserve resources with a significant step in reducing greenhouse, gas emissions, and contract catering activities, achieving a 7% reduction in fiscal year '25, supported by a doubling year-on-year of low-carbon recipes. 2/3 of single-use containers are sustainable packaging and a 42% reduction in food waste, getting closer to the 50% target in 5 years.

Similarly, for the second pillar, sustainable food and services, recipes with the highest nutrition score rating increased by 12 points to reach 61% in fiscal year 2025, getting closer to the 70% target. Third, significant social progress was achieved this year, including a 10% decrease year-on-year in the frequency rate of workplace accidents. The promotion of internal resources to management position whenever relevant. This was actually the case for nearly half of vacancies this year. The group also strengthened its commitment to gender equality with 38% of women on leadership committees.

Finally, the group expanded its local anchoring with 2/3 of national sourcing and maintain responsible sourcing with more than 15% purchased food products that are certified. In addition, the group has defined a decarbonization plan built around 9 levers of action and carried out a vulnerability assessment of its assets to physical risk, paving the way for adaptation plans.

Moving to the business review section, starting on Slide 18 that shows the evolution of the securitization program in the second semester according to the seasonality of our sales. It is worth noting the weight of off-balance sheet compartment, reaching 82% at the end of March and 77% at the end of September 2025, up compared to previous years. It illustrates the quality of our receivables and the rigor applied in managing this new program. The right-hand side of the slide is a reminder of the maturity profile of our debt with extended visibility up to 2029 and 2030 following its refinancing at the beginning of the year.

Liquidity remains solid in fiscal year 2025, globally stable around EUR 400 million since our refinancing at the start of the calendar year, supported by several factors: the securitization program providing an additional cash inflow of EUR 18 million at the end of September 2025. As a reminder, the ramp-up of this program in the first quarter of the fiscal year was accompanied by the repayment of the entire term loan at the end of December 2024 for EUR 100 million and a reduction of our bank overdraft credit line by EUR 14 million. The refinancing of the RCF and bond provided a positive net available liquidity of EUR 30 million. The success of our refinancing at the beginning of the year and improved performance already in H1 allowed us to revitalize our new commercial paper program, which reached EUR 81 million at the end of September and has since surpassed EUR 100 million, providing further visibility to this program.

Finally, we executed the second annual repayment of the PGE, the state granted loan for EUR 56 million. Then we pursued the deployment of synergies from the combination of Elior and Derichebourg Multiservices with a further increase of EUR 4 million in recorded synergies and EUR 3 million in annualized synergies that reached EUR 43 million at the end of September. We have almost completed the implementation of cost synergies, while commercial synergies are gaining momentum and are expected to further ramp up next year.

Following the rationalization of our contract portfolio, the commercial activity developed during the year demonstrated the relevance of our commercial and management organization closer to customers and greater empowerment of regional teams. New contract signings totaled nearly EUR 540 million on an annualized basis, resulting in net positive commercial balance of EUR 112 million, representing between 1.5% and 2% organic growth.

In France, several notable signings occurred in both Contract Catering and Multiservices segments. for contract catering, the signing of next-generation campus in the utility sector in the Paris area, thanks to an offer meeting the needs of fluidity, diversity, and innovation catering. The signing of the Ministry of Ecology responding to a need to an offer integrating CSR innovation and inclusion.

For Multiservices, contracts reinforcing our position as a leading player in retail and commercial spaces, the rehabilitation contract in the insurance sector demonstrating our capacity to manage multiple technical lots, including structural works. In temporary staffing solutions, the national expansion of a contract with a major logistics provider, strengthening our position in these sectors.

Other examples of notable signings came as well from outside France, in the U.S. with the entry into the public university market with the signing of a large university, demonstrating our ability to win and deploy complex multisite programs and campuses. In the U.K., with the expansion in the business and industry sector following the recent rebranding to Elior at Work and the introduction of new culinary innovations with a particular focus on health, well-being and digital.

In Spain, we contracted with a leading Spanish student residence operator, a fast-growing market for which Elior has developed a specific catering project, consolidating its market leadership. In Italy, commercial development was refocused on the private sector, especially in B&I, including a new site with a major player in defense and another contract in the health hygiene sector, strengthening our position in the high-end market segment.

Moving to Slide 22. I mentioned previously the drivers of the CapEx increase in fiscal year 2025, reaching 2.3% in percentage of revenue. CapEx are expected to increase up to around 3% in fiscal year 2026, driven by two main factors. First, it is essential for our group to continue investing in its capacity to develop commercial activity in the education and early childhood markets, further strengthening our leadership position in this area.

Investment to fulfill additional capacity requirements in our central kitchens were decided soon after Daniel Derichebourg took over as Group CEO. These requirements have been confirmed by a growing commercial momentum in this area. These are medium-term investments with the first deployment realized in fiscal year 2025 and a strong ramp-up expected this year in fiscal year 2026 to expand our regional footprint with around 10 central kitchens. Second, last semester, we announced the launch of a major transformation and innovation program to complete the integration of DMS and Elior activities on harmonized processes and common platform.

Fiscal year '25 and '26 will be mainly focused on the design and building of the core model, while investment afterwards will support deployment in all our geographies. So while overall CapEx should actually increase up to around 3% in fiscal year 2026, the ratio should trend towards circa 2% in the midterm. It is also worth keeping in mind the time lag between the investment in new production tools and the subsequent generation of revenue, shorter for early childhood and aligned with school years for education. In other words, revenue growth objective for fiscal year 2026 include only partially the contribution expected from this CapEx made in fiscal year '26.

So this leads us to the last section of this presentation, starting with the outlook for fiscal year 2025-2026. So after the efforts focused on optimizing the organization, pragmatically streamlining the contract portfolio and then developing commercial activity close to our customers, the 2025-2026 fiscal year should be marked by a return to growth, driven by price increases for which strict application is now established and a return to positive business development while preserving margin.

Organic growth is thus expected to be between 3% and 4% in fiscal year 2026. The same 2 factors, price increases and business development should continue to contribute to the ongoing improvement of operational profitability with an adjusted EBITDA margin expected to increase by 20 to 40 basis points in the 3.5% to 3.7% range, framing a margin level equivalent to the last pre-COVID results. Finally, pursuing the net debt deleveraging remains a key priority with a leverage ratio to further decrease down to around 3x by the end of September 2026, consistent with our goal to further upgrade our credit rating.

Conclusion on the -- to conclude on Page 25, with a further improvement in the profitability despite moderate revenue growth, this fiscal year 2025 demonstrated the robustness of the model that has been put in place under the leadership of Daniel Derichebourg. The commercial approach with greater proximity to customers and empowered regional teams started bearing fruit with a positive net development balance on an annualized basis, thanks to the new wins consolidating our leadership in historical and new market segments. Combined with price discipline that will continue with the same rigor, the operating margin is expected to improve to reach next year similar level to pre-COVID.

Free cash flow generation and a prudent financial approach remain our priority while securing investments to support revenue growth and continuous productivity improvement. All these actions contribute to creating value for our shareholders with the payment of dividends that resumed this year and is expected to continue in the coming years. For the future, we expect the payment of dividends to trend towards around 30% of net result group share.

So this concludes our presentation. We are now ready to answer your questions. Operator, could you please take the first question?

[Operator Instructions] The next question comes from Jaafar Mestari from BNP Paribas.

Jaafar, we don't hear you.

Us with some direction on what you expect in terms of net new business pricing and volumes, please, for '26. And secondly, on synergies, you said you almost completed the delivery. I just wanted to check if the total target is still EUR 56 million. So that would mean another EUR 10 million to EUR 15 million in the next year. The run rate seems to be lower than that. You're close to adding EUR 4 million synergies, I think, in the second half. So is there a jump in '26? Is the last batch a bit bigger?

And lastly, in terms of your leverage targets, net debt to EBITDA at 3x at the end of '26. This is despite CapEx, which is going to be at least EUR 40 million higher, if I'm correct. Is that reduction in leverage mostly from a growing EBITDA? Or can we expect absolute debt to come down meaningfully in '26, please?

Sorry, I'm not sure we understood in full your first question, but my understanding is that you wanted to get more details about the driver of EBITDA improvement, of volume improvement, revenue growth for next year. So actually, the two main drivers that we see for next year are still the price increases that I would say we would expect between 1.5% and 2%. And then the volume and net development in the same range, meaning in total, this range of between 3% and 4%.

So regarding the synergies, actually, most of the annualized synergies are made of the cost synergies to reach EUR 43 million. So we have I would say, still around EUR 5 million of cost synergies to be generated in fiscal year 2026. And we are expecting the ramp-up of commercial synergies that should increase, especially on an annualized basis in fiscal year 2026 to come around, I would say, the initial target. Then considering the leverage ratio of 3x at the end of September 2026, this is actually mainly driven by the EBITDA that is expected to increase next year in the same range as EBITDA, while, as you said, CapEx will further increase next year.

At the same time, we need to keep in mind that we will have as well a further -- we're expecting as well a further ramp-up in the cash flow generated by the reduction of our operating working capital. We made really a very significant progress in fiscal year 2025, especially through the improvement of our collection of receivables. We still see some opportunities in some business lines. So they are part of the range we provided as well in our modeling details contributing to a further contribution of the operating working capital next year, that will be as well complemented by a further ramp-up of our securitization program.

[Operator Instructions] The next question comes from Pravin Gondhale from Barclays.

Firstly, on the next year EBITDA margin guidance of 3.5% to 3.7%. It appears a bit conservative given the ramp-up in organic growth as well as you are expecting net retention to go trend upwards next year, which should be margin accretive. Could you please help us provide some steer on what are the drivers of margin growth assumptions in your guidance there? And then secondly, the working capital securitization and factoring benefit of around $90 million this year, you explained that it was due to ramp-up of new securitization program. How should we be thinking about evolution of this in FY '26 and thereafter?

So on your first question regarding the EBITDA drivers, what we have seen in H2 and which was according to as per our expectation is that we will have in 2026, let's say, convergence of price increases towards close to a breakeven balance, while it was contributing this year to EUR 13 million on a full year basis, which is the first element. Second, we are actually expecting a further contribution of net commercial balance that should take also into account the slight impact of higher CapEx that will impact slightly the EBITDA moving forward. And then we are still expecting our operational efficiency plans to deliver further benefits. So I would say it will be mainly a split between the net development and efficiencies and synergies contributing to this increase between 20 basis points and 40 basis points next year.

Then the expected contribution of the operating working capital is in the range that we have provided in the modeling details between EUR 40 million and EUR 60 million I would say, roughly speaking, you should expect 1/3 coming from the operational improvement, especially driven by a continuous improvement in the collection of receivables, as previously mentioned. The remaining part coming from the further ramp-up of the securitization program during the year, but still keeping in mind the seasonality, so meaning that we are still expecting a peak in mid-year around March as it was the case in fiscal year 2025 and then a decline in the second semester, which is offset in parallel by the free cash flow generation from operational activities. And after next year, we expect this to be fairly stable or slightly improving, but to a lesser extent.

[Operator Instructions] The next question comes from Sabrina Blanc from Bernstein.

I have two questions from my part. The first one is regarding the Multiservice performance. You have provided organic growth, excluding temporary staffing solutions. So I would like to understand, firstly, could you remind us the size of the temporary staffing solutions? And do you anticipate any, I don't know, selling or something like that regarding this activity or just to highlight the fact that this year, the activity was not very good. And my second question is regarding the taxes. I understood for 2025, you have benefited from positive element, but could we have a guidance for 2026, please?

So on your first question, the temporary staffing services are representing around 10% of Multiservices activity. We do expect this activity to come back to a positive territory quickly. That's why it was important for us to highlight that this year was an exceptional one. We have now a new management team fully in place with a new general manager, a new financial officer. They have worked on the reorganization of the activity. They have redirected the organization towards the commercial development. We have seen the first positive signs in terms of commercial momentum at the end of the fiscal year, and we are expecting the recovery to start already next year. So no other plans than recovering the level of performance that we used to get in the past.

Regarding tax, we are not providing any guidance for next year. I mean, we are -- we still have some room to activate net operating losses as we did this year. Maybe it will be to a lesser extent, but it is today a little bit premature to assess what it could bring.

The next question comes from Christian Devismes from CIC Market Solutions.

I have one question about the growth guidance in 2026 in terms of EBITDA margin and EBITA margin because in 2025, we have an increase by 50 basis points in the EBITA margin, but only 10 basis points in the EBITDA margin due to the move in provision and so on. What should we expect in 2026? You guide on a growth of -- between 20 and 30 basis points on the EBITA margin. What should we expect on the EBITDA margin?

Yes. So you're right. So there were different movements in EBITDA and EBITA in the last 2 years. For 2026, we expect a kind of normalization, if you want, from that perspective. So our expectation is the same level of contribution at the level of EBITDA than at the level of EBITA.

There are no more questions at this time. So I hand the conference back to the speakers for any closing remarks.

So this concludes our call today. Our next financial release will be on May 20, post market with our half year results for fiscal year 2025-2026. Until then, please do not hesitate to get in touch. Thank you, and good evening, everyone. Goodbye.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]