Strategic Positioning

OUR SUBSIDIARIES AND AFFILIATES ARE GROWING AND DELIVERING INCREASINGLY GOOD PERFORMANCES

Bim actively pursued its business development plan in the fiscal year ended September 30, 2017

During the fiscal year, we raised our interest in Elior Group from 25.14% to 27.31% by purchasing shares on the open market during the second calendar quarter of 2017.

Through our subsidiary AMAC (formerly Compagnie de Bel Air), we acquired two additional outdoor hospitality sites, increasing AMAC’s total number of sites from six to eight. AMAC invested heavily during the year on enhancing the infrastructure at its sites and continued to implement its strategy of enlarging its fleet of mobile homes.

In the hotels business, the five-star Roch Hôtel & Spa opened in Paris, marking the end of the capital expenditure program carried out over the past few years.

Lastly, Novetude Santé, our subsidiary dedicated to higher education, returned to the growth track and made three acquisitions in the sector of colleges offering preparatory courses for medical studies (for the “PACES” competitive exam and medical internships) as well as in continuing professional education for nurses.

As a result of all of these transactions, we decided to reorganize and streamline our financing structure, and therefore in September 2017 we carried out a Euro private placement (“Euro PP”), raising €85 million in two tranches maturing in six and seven years respectively.

Concerning our holdings:

For Elior Group, 2016-2017 was a year that saw an acceleration in the growth momentum begun in the previous fiscal year, with revenue climbing 8.9% and topping the €6 billion mark for the first time. International operations accounted for 56% of the total revenue figure and the United States became the group’s second-largest revenue contributor.

EBITDA was up by almost 6% to €530 million, reflecting a very satisfactory operating performance overall, even if some divisions were unable to achieve the ambitious objectives they were set, which meant that the group didn’t meet its target of significant growth in adjusted earnings per share. The main reasons for this were the combination of an unfavorable calendar effect for contract catering and a sharp increase in the costs incurred for the group’s IT and digital transformation process.

Elior Group expects to see a further revenue rise in 2017-2018, with organic growth amounting to at least 3% and acquisition-led growth representing over 2%. It anticipates that adjusted EBITDA margin will remain stable based on a constant scope of consolidation and exchange rates and that adjusted earnings per share will increase slightly.

The proportion of revenue contributed by international operations will continue to increase, especially in the United States, where the group’s organic growth is currently the strongest. It will of course pursue its productivity drive and, as has been the case in recent years, it will pass on some of its efficiency gains to clients.

In addition, as a world leader in catering and related services Elior Group considers that it has a duty to lead the way. Corporate social responsibility now plays a key role in the success of companies and their teams and the group is rising to this challenge, notably through the Positive Foodprint Plan – its CSR strategy which is aimed at leaving a positive foodprint by 2025.

Revenue generated by AMAC AMAC (formerly Compagnie de Bel Air) rose by more than 8% year on year, primarily fueled by the higher number of its directly-owned mobile homes. In 2016-2017, AMAC overhauled its online sales and marketing systems, which should drive further revenue growth. EBITDA increased in line with the division’s revenue growth, enabling EBITDA margin to hold firm year on year.

AMAC acquired two new prime sites – Soleil Plage in the Dordogne region and Les Chardons Bleus on France’s Atlantic Coast. Soleil Plage will become fully operational during the course of 2017-2018 but Les Chardons Bleus requires extensive refurbishment so will only come fully on stream for the 2018-2019 season.

AMAC should see significant growth in both revenue and earnings going forward, which will be driven by the ramp-up of its new sites as well as by ongoing installation of new equipment at its six pre-existing sites and a steadily improving sales and marketing performance.

Compagnie Hôtelière de Bagatelle reaped the benefits of both the successful opening of the Roch Hôtel & Spa and the recovery in the tourism industry in Paris which had been severely hit by the terrorist attacks in late 2015. This division reported a 54% year-on-year surge in revenue and its EBITDA margin was also well up on 2015-2016.

In 2017-2018, Compagnie Hôtelière de Bagatelle is expected to report further growth if tourist numbers continue to rise and if Parisian hotel prices return to an upward trend. In addition, the recent regulatory changes introduced in Paris concerning “collaborative” rental platforms such as Airbnb should have a favorable impact on the city’s traditional hospitality industry.

The picture was mixed in 2016-2017 for Novetude Santé, which saw a sharp increase in the intake of new students for its osteopathy colleges but was negatively affected by regulatory changes concerning colleges that provide preparatory courses for para-medical studies. Overall, this division posted a near-4% year-on-year rise in revenue and its EBITDA margin remained stable.

In 2017-2018, Novetude Santé expects to report robust growth, led by further active recruitment of new students and the impact of the three new colleges acquired in late 2017.

The value of our holdings has risen significantly

At September 30, 2017, the value of our holdings was €1,154 million, versus €1,005 million one year earlier. This steep rise reflects the acquisitions carried out during the fiscal year as well as the higher value of each of our holdings on a comparable-scope basis.

Following the change in Elior Group’s governance and the membership structure of its Board of Directors, in January 2018, Bim sold 4.24% of Elior Group’s capital to Fonds Stratégique de Participations (FSP). As FSP is a long-term investor, Elior Group’s Board decided to recommend to the company's shareholders at the 2018 AGM that they elect FSP as a director.

Gilles Cojan
Chief Executive Officer