Elis: less growth, more synergies, according to SG.

(CercleFinance.com) - Société Générale (SG) insists on its position: indeed, industrial launderer Elis' quarterly results included a slowdown in sales, although synergies with Berendsen are expected to be increased.

Still a buyer of the share, analysts are also maintaining their 12-month target price of 26.8 euros.

Admittedly, Elis' organic sales growth was limited to 2.3% in Q3, while SG expected 2.8%. While the French market is accelerating, Southern Europe is decelerating, in particular due to the highly dynamic Spain in the recent past, while Northern Europe remains almost unchanged "due to weakness in Switzerland." Still, Latin America (+5%) "remained strong," even though SG expected 6%.

Above all, "Management has visited 65 of c.100 Berendsen plants and remains confident on synergies and the additional capex," SG's report underlines. The estimated synergies resulting from the merger are therefore "significantly higher" than the initial forecast (at least 40 million euros per year). Meanwhile, SG anticipates 100 million euros.


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