Strategic Positioning

OUR SUBSIDIARIES AND AFFILIATES ARE GROWING AND DELIVERING INCREASINGLY GOOD PERFORMANCES

During the fiscal year ended September 30, 2016 we significantly restructured our ownership interests in our holdings.

Firstly, we increased our stake in Elior Group from 24% to 25.14%, which we financed through the issuance of €200 million worth of 5-year exchangeable bonds in October 2015. The balance of the proceeds from this issue was used to refinance all of our bank borrowings. At Elior Group’s Annual General Meeting held in March 2016, Servinvest (a Bim entity) was elected as a director, which means that we now have three representatives on Elior Group’s Board.

In our education division, we now hold a 100% interest in Novetude Santé and during the year we also bought out substantially all of the remaining minority interests in the various subsidiaries that own our colleges. This has created a more straightforward structure, which enabled Novetude’s teams to complete their organizational streamlining measures launched in 2014-2015.

In the hotels division we raised our stake in Compagnie Hôtelière de Bagatelle to 100% in January 2017 by buying out all of this subsidiary’s minority interests.

Lastly, in outdoor hospitality, we now own 97% of Holding Bel Air Investissements (the division’s holding company). Taking into account the remaining minority interests in this division’s subsidiaries, our percentage ownership of the Compagnie de Bel Air sub-group (on a fully-diluted basis) was 68.5% at September 30, 2016, compared with 55.3% one year earlier.

Our subsidiaries and affiliates are growing and delivering increasingly good performances

In 2015-2016, Elior Group’s consolidated revenue rose 3.9% to €5,896 million. Its EBITDA climbed €26 million year on year to €501 million and represented 8.6% of revenue.

The group significantly reinforced its presence in the UK and USA during the fiscal year. In the UK it acquired Waterfall Catering, rounding out its operations in the education sector, and in the USA it purchased Cura (healthcare), Starr (business & industry), ABL (universities and corrections facilities) and Preferred Meals (meal deliveries), further extending Elior North America’s geographic coverage of the region. These US acquisitions have also given Elior North America new expertise which will serve as a platform for its future growth. In France, Elior Group acquired the concession catering operations of its competitor, Autogrill, in Paris railway stations, thereby strengthening its leadership in this market.

Novetude began to feel the benefits of its reorganization measures and saw its EBITDA margin jump from 2% to 10%. It made a number of significant real-estate investments in 2015- 2016 with a view to relocating and redeveloping its osteopathy colleges in Paris and Bordeaux. It also acquired the Saint-Etienne osteopathy college towards the end of the fiscal year, cementing its undisputed leadership position in this market.

Compagnie Hôtelière de Bagatelle completed the refurbishment works on its latest bijou – the five-star Roch Hôtel & Spa, which bears the hallmark of the interior designer, Sarah Lavoine, and the architect Vincent Bastie. The hotel opened in the summer of 2016 and has been a resounding success ever since, as illustrated by the many excellent reviews it has received.

However, Compagnie Hôtelière de Bagatelle’s other hotels suffered the effects of the fall in tourist numbers in Paris following the tragic events of November 13, 2015, as well as the growing popularity of private rentals through organizations such as Airbnb.

Compagnie de Bel Air (“CBA”) had an excellent year, not only in terms of revenue and profitability, but also for business growth in general. It began to reap the benefits of its heavy outlay on increasing its mobile home rental portfolio and improving its infrastructure. It also purchased and fully refurbished a new outdoor hospitality site at Torreilles Plage in the Eastern Pyrenees region of France, which represented aggregate capital expenditure (including the refurbishment) of more than €20 million during the year. CBA’s teams have now launched a multi-year strategic plan to reposition CBA as one of the highest-quality and best-performing operators in the outdoor hospitality industry. This plan takes into account the effects of the digital revolution, developments in consumer expectations and changes in marketing methods.

The value of our holdings is increasing and the outlook is good

At September 30, 2016, the gross value of our holdings was €1,005 million, versus €839 million at September 30, 2015.

For 2016-2017, despite a very uncertain operating environment, Elior Group is expected to continue its upward trajectory, with organic growth forecast to come in at a minimum of 3% and EBITDA margin to rise by 20-30 basis points.

All of our other businesses are also expected to deliver growth during the fiscal year. The hotels division will see the positive effects of the ramp-up of the Roch Hôtel & Spa and business for the outdoor hospitality division will be boosted by the new site at Torreilles Plage. Additionally, the integration of Novetude Santé’s new college will be a growth driver for the education business.

Thanks to Bim’s financial structure and credit facilities, it is in a position to seize new acquisition opportunities in the future, which could accelerate its revenue and earningsgrowth.

Gilles Cojan
Chief Executive Officer