Elior - comment

Elior's top line was well above our expectations driving a higher EBITDA. We had estimated that price rises to recover inflation would be delayed into 2024, but Elior did a much better job than we expected. As a result of the outperformance, Elior met its FYE23 leverage covenant (5.4x vs 6.0x). Moreover, the company's banks also agreed to loosen the leverage covenant from 4.5x to 5.25x in H124 (our forecast is for leverage at 5.2x). Cash on hand was in line with our estimates, driven by a worse-than-expected working capital performance, which will reverse in H124. We will review our model and update it over the next few days.