Caterer Elior posts third annual loss as costs, French contract talks weigh

November 23, 2022 07:23 AM GMT | By Reuters
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(Reuters) - Elior, Europe's third-biggest contract caterer, reported a third annual core loss since the start of the COVID-19 pandemic on Wednesday, weighed down by tough contract renegotiations in its home market France amid soaring inflation.

Elior, like peers Compass and Sodexo, is renegotiating rates and supplier agreements, reining in costs and reducing menu options to cope with rising energy and food prices.

The French catering group said it had successfully renegotiated 67% of its contracts by Sept. 30, but in France only 20% of the total price increases had an impact on its annual results due to a more complex negotiation process and difficult talks with public sector clients.

"There's no way we're going to sit back and wait for things to happen," Elior's communications director Anne-Laure Descleves told reporters, saying the group was asking for an average price increase of 9%, sometimes as high as 15%.

The group narrowed its adjusted core loss (EBITA) to 48 million euros ($49.6 million) in the 12 months to Sept. 30, from a loss of 64 million a year earlier and in line with analysts' average estimate for a 49 million euro loss in a company-compiled poll.

Elior said it saw organic revenue growth of at least 8% for the fiscal 2022/23, and a quick return to profitable growth with a positive adjusted EBITA margin of between 1.5% and 2% next year.

The company added it expected to exceed pre-COVID operating margin levels in 2024.

($1 = 0.9686 euros)

(Reporting by Diana Mandiá and Federica Mileo in Gdansk; editing by Milla Nissi)


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