Moody's changes Elior outlook to positive

Moody's Investors Service said it affirmed Elior SA’s corporate family rating at Ba3 and probability of default rating at Ba3-PD and Elior Finance & Co SCA’s senior secured notes due 2020 at B1 and changed the outlook to positive from stable.

The agency said the change to a positive outlook reflects the further track record of organic growth rates in excess of 3%, the reduction in interest costs following the refinancing of the company's bank facilities in December, further deleveraging of the company since the initial public offering last year and expectations of continued organic growth alongside improvements in margins and cash flow generation in the next 12 to 18 months.

The ratings reflect the company's strong market positions in its key markets, its improving geographic diversification following the majority acquisition in 2013 of TrustHouse Services in the United States, the contractual nature of its revenue streams and the potential for continued growth from increased outsourcing penetration, the ramp up of renovated motorway concessions and gradually improving economic conditions, Moody’s said.

At the same time, the rating reflects the company's high leverage despite significant deleveraging following its IPO, the strongly competitive market environment and a relatively aggressive financial policy with significant debt-financed acquisitions and dividend distributions, the agency said.

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