| Valuation method | Value, € | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 60.29 | 146 |
| Intrinsic value (DCF) | 11.13 | -55 |
| Graham-Dodd Method | n/a | |
| Graham Formula | 20.14 | -18 |
Elis SA (ELIS.PA) is a leading European provider of textile, hygiene, and well-being services, operating across multiple regions including France, the UK, Scandinavia, and Latin America. Founded in 1883 and headquartered in Saint-Cloud, France, Elis specializes in linen and workwear rental, hygiene solutions, and facility services. The company serves diverse sectors such as catering, healthcare, retail, and public administration with offerings like table linens, industrial wipers, medical waste disposal, and washroom hygiene services. Elis’s circular business model emphasizes sustainability through reusable textile solutions, positioning it as a key player in the industrial services sector. With a market cap of €5.54 billion and operations in over 30 countries, Elis leverages its extensive logistics network and long-term client relationships to maintain industry leadership. Its ESG-focused approach aligns with growing demand for eco-friendly business services, reinforcing its competitive edge in the Industrials sector.
Elis SA presents a compelling investment case due to its resilient business model, diversified geographic footprint, and recurring revenue streams from essential services. The company’s €4.57 billion revenue and €337.8 million net income (FY 2024) reflect steady demand in its core markets, supported by high customer retention. However, its elevated debt (€4.26 billion) and beta of 1.534 signal sensitivity to economic cycles, while capital expenditures (€860.8 million) may pressure short-term cash flow. The dividend yield (~1.6% at a €0.43/share payout) is modest but sustainable. Investors should weigh Elis’s strong cash flow generation (€1.45 billion operating cash flow) against exposure to labor and energy costs in its asset-intensive operations.
Elis SA dominates the European textile rental and hygiene services market through scale, vertical integration, and a sustainability-driven value proposition. Its competitive advantages include: (1) **Logistics Network**: A dense infrastructure across 30+ countries ensures rapid service delivery, creating high switching costs for clients. (2) **Circular Economy Focus**: Reusable textile solutions reduce client costs and environmental impact, differentiating Elis from single-use product providers. (3) **Diversified Clientele**: Exposure to defensive sectors like healthcare (~20% of revenue) offsets cyclicality in hospitality. However, regional competitors like Berendsen (now part of Elis) historically challenged its margins, while labor-intensive operations limit scalability. Elis’s M&A strategy (e.g., acquisitions in Latin America) expands reach but integrates execution risks. The company’s €4.26 billion debt load, though manageable at 3x EBITDA, could constrain agility if interest rates rise. Competitors with leaner models (e.g., Cintas in corporate uniforms) pose threats in niche segments, but Elis’s full-service offering and ESG alignment solidify its moat in core markets.