Interview with Gilles Cojan, Chairman of the Board of Directors
"We are looking to the future with optimism"
In the summer of 2017, the Board decided on a new governance structure for the Group. Is this fully in place now?
Although the roles of Chairman of the Board of Directors and Chief Executive Officer were officially separated in early November 2017, the new structure only took full effect when Philippe Guillemot joined the Group as Chief Executive Officer in December 2017.
During the first six months of 2018, Philippe worked in parallel on forming his Executive Committee and drawing up a three-year strategic plan for the Group, which was then unanimously approved by the Board. In fiscal 2017-2018, three new directors joined the Board: Philippe Guillemot (director and Chief Executive Officer), Bernard Gault (independent director) and Virginie Duperat-Vergne (independent director), who represents Fonds Stratégique de Participations. With its ten members, the Board now seems to me to be extremely balanced from all perspectives.
So yes, the Group’s new governance structure is now well in place, with on the one hand the Board of Directors and the Board’s committees, which are fully focused on their respective tasks, and on the other hand a Chief Executive Officer and his Executive Committee, whose objectives and action plans have been clearly defined. The Board is fully confident that the Group’s management teams in their new form have the ability and talent to successfully carry out all of the missions assigned to them.
How would you sum up the Group’s performance in fiscal 2017-2018?
We achieved our objectives for the year, with 3% organic growth, adjusted EBITA margin of 4.3% and around €290 million in capex. The roadmap established by the Chief Executive Officer for the period up to 2021 marks a real return to Elior Group’s fundamentals – i.e. strictly monitoring the quality of our business development, constantly enhancing the appeal of our offerings and tightly controlling all of our costs. We have also put in place rigorous procedures for authorizing capex to ensure that we use our financial resources more effectively in both our contract catering and concession catering businesses.
How do you see Elior Group’s future?
There are still opportunities to be tapped in our markets. In particular, the outsourcing rate for the education, healthcare and seniors sectors of the contract catering & services business line remains relatively low, giving us strong growth potential.
Our share of the US contract catering market is still small, despite our some $1.3 billion in revenue generated in 2017-2018, and we have many opportunities in the United States in terms of both organic and acquisitionled growth. The support services market in France also offers new avenues for expansion that are complementary to our catering activities. In concession catering, traffic volumes on transport networks are constantly on the rise, creating more and more opportunities every day for our teams to develop our business in our various market segments.
Thanks to these growth and investment prospects, allied with the talent of our people, we are looking to the future with optimism.
How do things stand regarding the review of the strategic options for the concession catering business?
The Board of Directors is considering whether the Group’s long-standing business model, which combines contract catering & services with concession catering, is still the right configuration. There are two main reasons for this. First, because it’s questionable whether this model allows sufficient financial resources to be allocated to each of our business lines. And second, in an increasingly complex, competitive and specialized operating environment, it is uncertain whether we can hold firm against competitors that are focused on just one of these business areas. The Board therefore felt it might be the right time to separate our two business lines in order to give each of them the appropriate resources to accelerate their respective growth trajectories.