Food caterer Elior sees higher profits next year

(Reuters) -French food caterer Elior on Wednesday said that it expects a core profit margin of between 3.5% and 3.7% in 2026, citing a return to profitability levels higher than the pre-COVID19 period.

CONTEXT

Elior, which supplies catering services to businesses, schools, prisons, hospitals and care homes, has taken longer to recover from the pandemic than rivals Sodexo and Compass.

The group has been sharpening its portfolio since April 2023 by withdrawing from loss-making contracts and expanding in profitable areas.

WHY IT'S IMPORTANT

Elior posted a net income of 88 million euros ($102 million) for the 2025 fiscal year, compared to a loss of 41 million euros the previous year, and aims to distribution of a dividend of 4 cents per share.

It said in a statement that it expects its restored financial strength to support a rise in annual dividend payouts to 30% of its group net income going forwards.

Key Quotes

"The group posted a positive net result for the first time since 2019, illustrating the renewed strength of the model and the effectiveness of the actions undertaken by Daniel Derichebourg since the merger with Derichebourg Multiservices," it said in a press release.

BY THE NUMBERS

Elior posted an organic revenue growth of 1.3% to 6.15 billion euros, compared to 5.1% growth the year before.

It said its adjusted earnings before interest, taxes, and amortisation (EBITA) for the year came in at 202 million euros, up from 167 million euros the year prior, with an adjusted EBITA margin of 3.3%.

WHAT’S NEXT

The French caterer expects 2026 sales to grow organically by between 3-4%, and to have a debt ratio of 3.0 times annual earnings as at September 30, 2026.

($1 = 0.8668 euros)

(Reporting by Dimitri Rhodes; Editing by Matt Scuffham)