Paris, June 9, 2005 — Elior, a European leader in contracted foodservice, reports 2005 first-half earnings. Elior Chairman Robert Zolade comments on guidance and outlook.
– Investor relations: +33 1 40 19 51 01, Contact IR
– Company website: www.elior.com
EuroBusiness Media (EBM): Elior, a European leader in the foodservice industry, just reported first-half earnings. Robert Zolade, welcome. You are the chairman of Elior. What are your comments on the company's performance in the first half?
Robert Zolade (RZ): Well, we are globally satisfied because we think that we have reached our targets, both regarding sales and profitability. If we come back to sales, organic growth is over 6%, and total growth is over 10%. Regarding profitability, we have said that in the first-half we expected to remain at the same level of margin -- which was reached in terms of EBIT -- and also that we expect an increase in the pre-tax profit, and we reached an increase of over 16%.
EBM: Let's talk about strategy now. Robert Zolade, what is your strategy for growth now in the airport shops business?
RZ: As we have been very successful and we have gained a very strong market position in the restaurant business in airports, we are now very open to the development of retailing activities. In Spain, our subsidiary Areas has a significant position in this market, with retailing already representing nearly 30% of global sales of Areas. Based on these encouraging results, we aim to develop these kinds of retailing activities in airports not just in Spain, but also in other countries like France, England and South America.
EBM: And more generally, what is your strategy for growth in the travel-retail business?
RZ: We have already embarked on developing travel retail, but we are also following up, based on a positive experience notably in South America and Mexico, a development of duty-free shops. This represents a new field for us, with some unique market characteristics, and we are making preparations to develop this activity in the future. We have recently announced that we are on the way to take 23% stake of a specialized operator - Dufry -- one of the significant worldwide operators in duty-free activities.
EBM: Why have you chosen this particular moment in time to increase your presence in the U.K. market, the home market of Compass, which is the uncontested market leader in the U.K.? Do you really have a chance of being able to compete with Compass in the U.K.?
RZ: Well, our situation is different regarding the two core businesses of Elior, contract catering on one side and concession restaurants on the other. The U.K. market is incontestably the most developed outsource market for contract catering in Europe. We need to have a significant presence in this market, because the potential is enormous. We are presently No. 4 in this market, and we want to be a significant challenger. As the market is very open, a number of open bids are organized month after month, and we must be positively positioned to be able to win of several of these deals, thus increasing our market share in contract catering in the U.K.
EBM: And finally, what is your outlook for the full year?
RZ: Well, our targets are to have an increase of over 10% in global growth, in terms of sales. With organic growth over 5% -- a target we have already reached in the first half, as I mentioned earlier. Secondly, this year we are aiming for at least the same operational margin, EBIT margin, as last year, with perhaps an increase, somewhere between 0 and 10 basis points. And we also aim to be in a position to show an increase of a pre-tax profit of over 15% for the whole year.
EBM: Robert Zolade, chairman of Elior, thank you very much.
RZ: Thank you.