Elior: Develop, Innovate, Accelerate: An Ambitious Strategy for 2016-2020

Regulatory News:

Our ambition: to be the caterer of choice, driven by quality and innovative customer experience.

• A value-creating strategy
• A new organization with strengthened teams
• A transformation plan with eight main projects that will be rolled out at Group level
• New financial targets for 2020:
  • Revenue of between €7 billion and €8 billion
  • An EBITDA margin representing 9% to 10 % of revenue
  • A free cash flow/EBITDA ratio of between 45% and 50%

The Elior group (Paris:ELIOR)(Euronext Paris – ISIN : FR0011950732), one of the world's leading operators in the contracted food and support services industry, today announced its strategic plan for the period from 2016 to 2020.

Commenting on the plan, Philippe Salle, Chairman and Chief Executive Officer of the Elior group, said: "Customer centricity is one of the driving forces behind our new strategy. Anticipating our guests’ needs and expectations will be key in this respect. We will reinvent ourselves if need be. To this end, we intend to leverage the new powerful digital tools now available to us. Our ambition at Elior is to be the caterer of choice, driven by providing quality products and services as well as innovative – and even unique – customer experience. It was with these goals in mind that we drew up our strategic plan for 2016-2020, which entailed answering three overriding questions – "what?”, "where?” and "how?”. In order to help us successfully carry out this corporate mission we have designed a new, more efficient organizational structure with strengthened teams, and we are also rolling out a large-scale transformation plan comprising eight main projects”.

SIGNIFICANT OPPORTUNITIES ON GROWING MARKETS

In structurally high-growth markets, the Group plans to seize significant growth opportunities. Our average organic growth target is over 3% per year¹ and we will adopt a selective approach to how we participate in market consolidation.

The worldwide outsourced contract catering market is an extremely large market that is currently estimated to represent €150 billion. It is in the full throes of expansion and its forecast average annual growth rate between now and 2018 is 6%.

Our objectives are to consolidate our leading positions in our long-standing markets of France, Spain and Italy, considerably increase our presence in the United States and the United Kingdom, and gain a foothold in Asia.

The worldwide concession catering market currently represents €25 billion and is expected to grow by 4% a year between now and 2018, driven notably by an increase in airport passenger traffic.

Having now successfully integrated Areas, the Elior group is looking to consolidate its leading positions in continental Europe, sharply accelerate its organic growth in the United States, and seize new growth opportunities in Northern Europe, the Middle East and Asia, essentially in the airports sector.

A VALUE-CREATING STRATEGY

The Elior group’s strategy for 2016-2020 is based on:

• Continuing to build our operations focused on contract and concession catering, with an offering of selected related services;
• Ensuring that we have a balanced coverage of the markets and segments in which we aim for leader positions;
• Applying an innovative marketing and digital approach centered on customer experience.

Our in-depth consumer knowledge combined with our technological prowess and innovative mindset all represent considerable strengths.

Implementing this strategy involves putting in place a new organizational structure and strengthening our teams. It also entails the rollout of a transformation plan (which we have called "Tsubaki”) comprising eight main projects aimed at accelerating growth, reducing costs and supporting our operational excellence. In addition, the Group will devote up to one billion euros to acquisitions over the period between 2016 and 2020.

¹ In the current low-inflation environment

AMBITIOUS FINANCIAL TARGETS FOR 2020

The Elior group has set itself the following financial targets for 2020:

• To generate revenue of between €7 billion and €8 billion.
• To achieve an EBITDA margin representing 9% to 10% of revenue.
• To have a free cash flow/EBITDA ratio of between 45% and 50%.

The Group intends to pursue its dividend payment policy, with a payout ratio of at least 40% of attributable profit, and its aim is to have a leverage ratio (net debt/EBITDA) of around 2.5x in 2020.

This press release is published in French and English. The English-language version of this document is a free translation from the original, which was prepared in French. All possible care has been taken to ensure that the translation is an accurate representation of the original. However, in all matters of interpretation of information, views or opinions expressed therein, the original language version of the document in French takes precedence over this translation.

About the Elior group

Founded in 1991, the Elior group, one of the world's leading operators in the contracted food and support services industry, is the caterer of choice in the domains of business, education and healthcare, as well as in the world of travel.

In 2014, the Group generated revenue of €5,341 million in 13 countries. Its 106,000 employees serve 3.8 million customers every day in 18,000 restaurants and points of sale. Their mission is to welcome and take care of each individual through personalized catering and service solutions which create an innovative consumer experience.

The Elior group pays particularly close attention to its corporate social responsibility and has been a member of the UN Global Compact since 2004. The professional excellence of its teams, their daily commitment to quality and innovation, and their dedication to providing special moments is expressed through its motto: "Time savored."

For further information please visit our website (www.elior.com) or follow us on Twitter: @Elior_France/@Elior_Group

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