Good day, and thank you for standing by. Welcome to the first half 2024 results presentation. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Mr. Martiré, CEO. Please go ahead. Thank you. Good afternoon, and welcome to Elis H1 2024 results presentation. I am Xavier Martiré, CEO of Elis. I'm here in Paris with our CFO, Louis Guyot. After an overview of Elis' half year highlights, I will hand over to Louis. He will detail the results for the first half. I will then come back to provide you with an update on our CSR journey and our strategy before updating you on our upward revision of our full year outlook. Finally, we will have a Q&A session to answer your question, and after our call, Nicolas Buron will be available to answer any of your questions offline. Before we start, please take the time to read the disclaimer. So I'm very happy to report a very solid financial performance in the first half, with a sound revenue growth, marked improvement EBITDA margin, and good cash generation. Top-line momentum was strong, with a growth of +6.9%, of which 5.5% on an organic basis, to reach nearly EUR 2.5 billion, a record number for Elis for first half. EBITDA reached EUR 774 million, with EBITDA margin up +120 basis points at 34.5%. EBIT came at EUR 344 million, with EBIT margin up +20 basis points at 15.3%. Headline net income per share was up 1.6% and reached EUR 0.83 on a fully diluted basis. Free cash flow was good for the first half at more than EUR 55 million, bearing in mind that Elis traditionally generates most of its free cash in the second half of the year. Finally, the financial leverage ratio at the end of June was at 2.06 times, which puts us on track to achieve our full year guidance of 1.8 times. In the first half, our commercial activity was well-oriented, and we continued to sign many new contracts in all our geographies as a result of new outsourcing and growing needs in hygiene, traceability of products and sustainable services. Pricing remains solid to offset the inflation of our cost base, and I'm happy to report that we recorded a good evolution of our churn, with client retention returning to where it was before the very unusual inflation year we had in 2023. I will give you more detail in this presentation. Finally, we continued to deliver significant productivity gains, thanks to better efficiency in our plants and improve logistics. This good first half performance and the visibility we have on the second half allow us to upgrade our organic growth and EBITDA margin objectives for the full year, and we confirm with great comfort all the other objectives that we gave in March. I will come back to this at the end of the presentation. Moving on to the next slide. Revenue growth in H1 was driven by strong commercial activity in workwear, with many new contracts signed. Central Europe and Southern Europe were both especially well-oriented and benefited from the ongoing outsourcing trend in many industries and markets. In the first half, we maintained a very strict pricing policy to offset the inflation of our cost base, which is mainly driven by the increase in salaries. As far as energy prices are concerned, the hedging we gradually put in place in 2022 led to a favorable effect in the first half, with the overall inflation of our cost base below our average price increase. Overall, inflation is slowing down in all geographies, so we expect a slight decrease in the pricing effect going forward. In the first half, despite continued strong pricing discipline, we managed to improve our churn. This normalization of the retention rate clearly underscores the very tight relationship Elis enjoys with its clients. However, the contracts lost last year had a mechanical carry-forward effect in the first half of 2024. In hospitality, the picture is mixed. Occupancy rates are higher in Southern Europe, with projected record numbers in Spain for the summer. The UK and France were more disappointing, as bad weather in May and June, as well as the general elections organized in both countries, had a negative impact on activities. Furthermore, as of now, the Olympics have had a negative effect on activity in Paris, with several professional events originally scheduled in June, deferred to September or October. M&A had a +1% impact in H1 2024 revenue growth, corresponding to +EUR 22 million uplift, essentially driven by the acquisition of Moderna, consolidated from the beginning of 2024. Lastly, FX had a +0.4% impact on revenue in H1 2024, mostly driven by the evolution of the pound and the Mexican pesos. Moving on to the next slide, we continue to deploy our services in all our geographies, and commercial momentum was good in the first half of the year. The growing need for more hygiene, as well as the European regulations that change market standards, results in a steady development of the outsourcing. Our circular services perfectly address these evolving needs, and we continued to record many successes in workwear and with small clients. More generally, we continue to roll out the offering of our services to SMEs when our network density allows, as our ability to efficiently serve small clients is essentially linked to the density we have in a specific country. Furthermore, the post-COVID environment remains very favorable for this, with an increasing need for hygiene in general, notably for pest control and the clean room business, which deliver more than 10% organic growth over the last few years and continue to record very strong growth in the first half. Pest control is a perfect example of a margin accretive service that we added to our offering. Over time, we have signed many pest control contracts with existing customers, leveraging our strong commercial relationship and second to none network density. Even in more mature markets, such as hospitality or healthcare, opportunities are still there, thanks to the development of nursing home markets and the steady trend of new hotel openings in Europe. All these opportunities have been identified by Elis early in the cycle, and we are currently reinforcing our sales force in many countries to capture an even bigger piece of this growing cake. The total investment represents a cost of around EUR 20 million in 2024. Moving on to the next slide, one big achievement of the first half was churn level returning to 6% at group level. As a reminder, we saw a 1-point increase in 2023 as a result of the significant price increase we had to pass, to pass on to offset the increase in our cost base. In some very rare cases, some clients, most of them being public entities in Central Europe and Scandinavia, did not recognize the very unusual situation we were going through and refused to enter pricing negotiations. We then decided not to renew these contracts or even terminated them when we could. In the first half of 2024, things returned to normal, thanks to our first-class quality of service, the close commercial relationship we have with our customer, and the fact that our services, which are essential to our clients' activity, generally represent only a fraction of their P&L. We monitor our clients' satisfaction using a set of tools. An independent department at Elis notably runs thousands of direct interviews every year. In the first half, we reached a score close to 90%, a record level. These good results are perfectly consistent with all the internal KPIs we track regarding service quality, such as the speed at which we actually start to operate a contract once it has been signed, or the in-full metric, which measures the accuracy of the quantity of linen delivered compared to what was ordered, and all these KPIs have shown some good progress in the first half and will keep up the good work. Let's now take a look at each of our geographies. France first, where revenue growth was entirely organic at +3.6% in the first half. This was driven by commercial momentum in workwear, especially in industry, for industry and trade and services. However, hospitality activity was impacted in Q2 by poor weather in May and June, the Olympics preparation in Paris, and the general elections, which seems to have somewhat limited weekend trips. Furthermore, several professional events, such as company seminars, have been rescheduled from Q2 to September or October. This, along with a good level of bookings, leave our hospitality clients quite optimistic for the second half of the year. EBITDA margin was up +190 basis points to reach nearly 41%, thanks to the neutral balance of inflationary impacts and some further productivity gains, especially on logistics and energy consumptions. Finally, margin also benefited from the stable level of fixed costs, which creates some operating leverage. Moving on to the next slide. Our stock price lost around 16% since the dissolution of the French National Assembly. which seems exaggerated, given the actual risk that this political instability represents for Elis. So what would be the impact of a potential shift in the French economy policy? First, the increase in minimum wage would translate into inflation of our cost base, and I believe we have proven on many occasions our ability to efficiently reflect the inflation in our pricing. With that in mind, we could expect an additional revenue increase of between 1%-2%, resulting from higher pricing with stable margin percentage. Second, in case of a significant slowdown in French GDP, revenue should remain stable due to the high diversification in terms of end markets and the fact that a large part of our revenue in the country correspond to monthly fixed-fee invoicing. Looking at what happened back in 2009, during the last big economic crisis, we would expect to lose between one and two percentage points on revenue in France. Furthermore, we clearly demonstrated during the last pandemic, our ability to quickly adjust our cost structure in case of a meaningful activity slowdown, so we would not expect any margin impact or Free Cash Flow shortfall. Therefore, we believe that even a significant political shift in France will not have any major impact for Elis. Moving on to the next slide. Central Europe delivered a strong performance, notably due to the significant progress recorded in Germany. Organic growth was strong at +7.7%, driven by good commercial momentum in workwear across the board, with Germany posting a +15% growth in this business line in H1. Additionally, the significant wage inflation in the region led to material price increase, and the acquisition of Moderna, consolidated since the beginning of March 2024, contributed another +3.6% to the region's growth in H1. EBITDA margin showed significant improvement, up +180 bips, compared to the same period last year at 31.3%. Again, Germany was especially strong, with margin improvement by 350 bips in the semester, following some organization and management changes in the country. Furthermore, energy purchasing conditions improved in the first half compared to last year. This also contributed to the margin expansion. Moving on to the next slide. Also, organic growth and margin in Scandinavia and Eastern Europe are solid. It is the only region where margin went down in the first half. Organic growth was driven by the performance of Sweden and the Baltics, where the outsourcing trend continues, but Denmark was tougher, with some exceptional losses due to our pricing discipline. EBITDA margin remained high in H1, at close to 35%, but decreased -50 basis points. We have a significant number of clients in the public sector in Sweden and Denmark, whose contracts have a specific and unusual clause that make pricing adjustment less flexible than in our standard contract. This is a small drag for our margin in the region. Moving on to the next slide. The UK and Ireland continue to be well-oriented, with solid organic growth, +5.1%, and significant EBITDA margin improvement. The reinforcement of our sales team has paid off, with many successes in workwear for both healthcare and industry clients. Pricing was also a significant top-line growth driver in a context of significant minimum wage increase in the region. EBITDA margin was 31.1%, up +130 basis points, with a favorable evolution in our energy purchasing conditions, as well as continuous productivity gains on industrial processes and logistics. Moving on to the next slide. Performance in Latin America was also very satisfactory, with organic revenue growth at +7.5% and EBITDA margin close to 35%. Mexico continued to be very strong, with organic growth of around 10% and a record level of EBITDA margin at 42%. Latin America continues to offer many growth prospects, with a steady outsourcing trend occurring in workwear for industry and in flat linen for healthcare, where we continue to see hospitals closing their internal laundry and switching to outsourcing. Next slide. Next region, Southern Europe, posted very significant EBITDA margin in the first half, up 250 bips at 32%. The organic performance of +6.6% was driven by good commercial momentum in workwear and strong activity in hospitality, which, by the way, looks very promising for the summer, too. On top of this volume uplift, the better purchasing condition of energy and further productivity gains led to around 250 bips margin improvement to nearly 32%. Moving on to the next slide, we acquired Moderna, a quite big company in the Netherlands, at the end of February. Moderna is a EUR 50 million top-line business, which provides flat linen, workwear, and hygiene and well-being services to clients in the hospitality, industrial, and trade and services industry.... This acquisition complements Elis' existing network in the Netherlands, especially in the dynamic workwear market, and allows the group to address the flat linen market in the country, which was not the case before. This business generated 26% EBITDA and 13% EBIT margin in 2023, which a lower share of rental services than the group average, and therefore less textile amortization. It is consolidating in our account since the beginning of March. Its integration is going very well and is perfectly on track. Moderna employs around 400 people and operates a plant that is very modern and has been very well invested in the last few years. This plant, which has become one of the largest of the group, is located in the northeastern region of the country, close to the German border, and can address the entire Dutch territory, thanks to the two supply center. This network, combined with the Elis network in the country that was already very dense, leaves room for very significant logistic optimization going forward. Moving on to the next slide, to conclude on M&A, we also announced the acquisition of Wonway in Malaysia, early July. Wonway is a family business that was founded in the 1980s. The group employs around 200 employees and can address the entire Malaysian territory, thanks to three specialized laundries. It provides reusable garment services in clean room to mainly international groups operating in semiconductors, medical devices, and chemical industries. In 2023, Wonway delivered revenue close to EUR 6 million. It is therefore a small acquisition, but with interesting prospects going forward, given the very strong momentum of the clean room market in Malaysia. Additionally, this acquisition reinforce Elis' leadership position in the global clean room market. This is the end of the first part of the presentation, and let me now hand over to Louis. He will give you more color on our first half financial performance. Thank you, Xavier. Good evening, everyone. Let me first go through the usual revenue breakdown by activity and market on geography, to illustrate the group's high level of diversification, which provides us with a highly resilient model in terms of crisis. Whichever way you look at the graphs, you will see that Elis' positioning is well-balanced, which contributes significantly to its resilience. In terms of activity, flat linen, workwear, and general wellbeing represent 46%, 37%, and 17% of revenue, respectively. Looking at our end markets, hospitality is now back to normalized level on our four end markets, which all have different growth drivers. Each roughly account for one quarter of our activity, which is a key strength in times of crisis. In terms of geographies, France represents now only 30% of our total turnover, and we have a balanced mix with, on the one hand, Central Europe, Scandinavia being more mature, on the, on the other hand, Southern Europe, Latin America, offering higher growth prospects. The good diversification in terms of activity client geographies does not come about by chance. It is a consequence of a long-term strategy, backed by product innovation, commercial efficiency, and M&A. Going to the next slide, let's have a look now at revenue growth on EBITDA margin by geography. As explained by Xavier, the growth of 6.9% is strong. It encompass 1% of M&A, with mainly Moderna, 0.4% of positive Forex on the back of the recovery of currencies like British pound, and last, 5.5% of organic growth. The organic growth embeds the majority price, as inflation is still high in several countries like Germany, UK, and Spain. It's worth noting that inflation is now below 5% in LATAM, thus below a lot of European countries. In addition, volumes are recovering, as the losses of 2023 are now behind us in terms of delayed effects, and as the efforts put in strengthening our sales force are paying off with significant commercial development in the half. Indeed, in hospitality, the contracts signed in H1 2024 are 12% above H1 2023. The major countries being France, Spain, UK, and Germany. In healthcare, the level of contracts signings is also record, notably in Brazil, Mexico, Germany and France. In industry, trade and service, we set a new record for new contracts with Germany, Spain, Brazil, Poland, Denmark and Netherlands leading the way. On the only cyclical part of the business, which is hospitality, we note a disappointing occupancy rate of the hotels in Q2, in France and UK, due to weather, Olympic preparation and elections, whereas it's been good in Spain. The other major satisfaction of the H1 is, of course, margin, with another significant improvement of 120 bips. The three geographies that have historically lagged behind are closing the gap. Central Europe, UK, Ireland and Southern Europe are above 31% in H1. They benefit from the strong top line development, the continuous progress in productivity, and better energy purchasing conditions. The two mature geographies, Nordics and LATAM, are still very strong, around 35%, while France performance is again amazing at above 30%. As you know, France is a laboratory for every new productivity idea and will always be ahead of the pack. Let's now look at the full P&L. Below EBITDA, depreciation is normalizing at 19.2% of sales, after 18.2% in H1 2023. This reflects the return to a normal depreciation quantum, following the decrease in linen CapEx recorded in 2020 and in 2021. As you know, linen is depreciated over three years. This led to an EBIT margin of 16.3%, up 20 bps year-on-year. The main items between EBIT and operating income are as follows: First, non-recurring, non-current operating expenses for EUR 40.8 million. This is mainly from another increase in the earnout provision in Mexico for EUR 25 million, as the new forecast for Mexico is above the last one. As a reminder, this, earnout provision was EUR 16 million in 2023. The IFRS 2 expenses represent the dilution cost of the LTIP, the increase being linked to the higher share price. And last, the intangible amortization is stable, as the main part is linked to Berendsen goodwill in 2017. Below operating income, you will find the financial results, EUR 10 million above 2023, as we anticipated, due to the new financing being more costly. Please note that encompass EUR 9 million euros earnout accretion, more or less like in 2023. The last line is corporate tax, which has a normative average tax rate of 26%. But as the EUR 50 million of cost above are not deductible, like earnouts on LTIP, the visual tax on EBT is above that. Note that in H1 2023, we recognized a deferred tax asset for around EUR 10 million, which explain the lower tax rate. At the end of the day, these accounting effects have a negative impact on end result, which is below H1 2023. But we know that H2 will have opposite effects, and that the full year net result will be significantly above 2023. By the way, part of these effects are restated in the EPS, as you can see. The main items restated between net result and current net result are always the same. This is amortization of intangible assets, minus tax. IFRS 2 expenses, which is without tax. Accretion on revaluation of earnout, which is without tax, and non-current expenses, which is with tax. As a result, headline net income is around 1% above last year. In addition, the reimbursement of the OCEANE in October 2023 has led to fewer potential shares being created, so fully diluted EPS is around 2% above last year. You remember that for the full year, we expect an improvement of around 12% above EUR 1.75. Moving to the next slide. Elis generated a free cash flow of EUR 55 million in the first half, compared to EUR 17 million in the first half in 2023. That's an improvement of EUR 39 million. Let's take a detailed look at the cash flow statement. CapEx stands at 19.2%, below 2023. The main difference comes from linen, which benefits from better purchasing condition. Working capital is very negative, but not for the same reason as last year. In Q2 2023, growth was still very high, creating an important receivables effect. In Q2 2024, it's the calendar, which has a major impact on receivables, as the last two days of June were Saturday, Sunday, and as a result, we lost three days of DSO between May 2024 and June 2024. It's still very good, 55 days, but of course, with an important impact of -EUR 68 million in H1. The net interest paid reflects the higher cost of the new refinances. For example, we raised a EUR 400 million bond in Q1 at 3.75% to repay the EUR 500 million bond in 2025 at 1%. The tax paid stands at a normalized 24% rate, without the accounting effect you are seeing in the P&L. The lease increases with the development of the assets under lease and the increase of the index, which are like a variable rate. All in, free cash flow was EUR 55.5 million, which is a record for the first half, reflecting the sharp improvement in EBITDA and the better ratio of linen and working capital. Below free cash flow, we saw two main cash outs. First, acquisitions with Moderna and the second Mexican earnout. As a reminder, there will be a final one in 2025. Second, dividend payment in June, fully paid in cash. You remember that last year, the scrip option was proposed, and the amount paid only represented 60% of dividend payments. The debt showed a normal increase at end June, above EUR 3.2 billion, with leverage under control at 2.06. Let's look at the debt in detail. We have been active on the financing side in the first half, with the issuance of a 6-year, EUR 400 million bond at 3.75% coupon, dedicated to the refinancing of the EUR 500 million bond due April 25. In line with the strategy, the debt is well spread between 25 and 35 at fixed rates. Going forward, we will remain opportunistic about potential refinancings. We are also committed to continuing to improve the group's perceived risk profile in the future, and keep our investment grade rating. So moving on to the next slide. Net financial leverage was 2.06 at the end of June, which puts us well on track to reach our full year objective of 1.8 times. You remember that H1 is always much below H2 in terms of cash flow, notably because of working capital and dividend payments. As we forecast continuous EBITDA growth along with debt reduction, the financial leverage ratio will continue to decrease in the coming years, which is consistent with the strategy followed since 2019. To conclude this section, the key H1 takeaways are, first, a strong top-line growth on the back of pricing discipline, churn normalization, and commercial momentum, allowing us to improve our full year guidance. Second, further significant improvement in EBITDA margin, allowing us to improve our full year guidance. Third, EPS growth in line with the full year target above EUR 1.75. Fourth, an excellent free cash flow in H1, in line with our leverage target of circa 1.8x and 24. I will now hand back to Xavier, who will give you an update on our CSR achievements in the first half of the year. Thank you, Louis. So let me present the highlights of our recent initiatives and achievements. First, we were recently awarded several recognition for CSR engagement and leadership regarding CSR and circular economy. In particular, we received a special mention at the Sustainable Transformation Summit. We were also ranked in the top 500 most sustainable companies in the world by the Time and Statista, positioning Elis as the 25th French company listed. Regarding our logistics fleet, the number of our alternative vehicles continues to increase. 75 electric EV trucks will be delivered over the summer in France, along with 45 biofuel trucks by the end of the year. We also continue the development of our GLAD tool, aiming at optimizing logistics routes, which means fewer kilometers and therefore lower fuel consumption. On another topic, so innovative and alternative range are expecting-- expanding, sorry. Our textile-to-textile project with zero waste approach is now made available in many of our countries. We also recently launched new products in our recycled dispenser range, Phoenix, a new mats with high recycled content named ReTech, and transition one of our biggest workwear range, Motion. We are also happy to share that we are making significant improvement in health and safety within the group. Our frequency rate is down by more than 14% on the 12-month basis as of end of May 2024. Another great achievement, our thermal energy efficiency is still improving with about +1.5% improvement year to date. Finally, we have just closed our fifth cohort of young talent for the Elis Foundation. These young talent, who have the ambition of pursuing a competitive academic curriculum but are facing financial difficulties, will be supported economically by the foundation, while also being mentored by an Elis employee. Moving on to the next slide, the group's engagement and actions has been rewarded by several CSR rating agencies also. In 2023, MSCI improved its rating from triple B to A, recognizing the group's CSR performance. Furthermore, Elis was rated A- by the Carbon Disclosure Project, positioning the group in the leadership level. We are also ranked among the top 5% of 100,000 assessed companies by EcoVadis with a gold medal. We also maintain our sustainability rating at low risk, and more recently, our Moody's ESG rating was significantly improved from 50 to 61, positioning the group way higher than its sectors. So let's now turn to our strategy and outlook. The very solid performance delivered by Elis over the last years is a result of a sound strategy that we have been applying for more than a decade. This strategy relies on four pillars. First, the development of sustainable services and promotion of the circular economy, which has always been at the heart of our business model. Second, our industrial and commercial excellence to generate continuous productivity improvement and create valuable trusting relationships with our customers. Third, the consolidation of current positions, which leads to network density and creates both a key competitive advantage for us and a high barrier to entry for the other competitors. And last, the expansion of our network, which over time, provided the group with a more balanced geographical and end market mix. Now, before moving to our 2024 outlook, let's take a quick look at this graph that we like to present regularly. There you see the evolution of top line and margin performance over the last two decades, and it is fair to say that the last few years have clearly demonstrated the resilience of our business model and our strong pricing power. The backbone of our resilience is twofold. First, the diversified geographical footprint I already touched on, with France representing less than one-third of our business. And second, the diversified portfolio of clients in terms of size and end markets. It is worth noting that this resilient profile was significantly improved with the acquisition of Berry ten, and the addition of new countries in Central Europe and Scandinavia. Consequently, you can see on the graph that margin has constantly been evolving at high and stable levels within a very narrow range, regardless of external events, and taking into consideration the impact of IFRS 16 from 2019 onwards. On top of that, one very interesting characteristic of our business that we saw in 2020, is that linen investments come on and on with top line growth. That means that conversely, they mechanically go down during bad top line years, with a favorable impact on cash generation. The cash generation trajectory have been impressive over the last four years, with free cash flow increasing from EUR 186 million in 2019, to more than EUR 300 million in 2023. We expect this trajectory to continue in the coming years. Now let's talk about our 2024 outlook. Starting with organic growth, that we expect to be better than anticipated, between +5.2% and +5.5%, driven by churn improvement and good commercial momentum in workwear. This compares to our initial guidance of around +5%. Adjusted EBITDA margin should also be better than anticipated, between 35.2% and 35.5%, driven by operating leverage, further productivity gains, and hedging in place on energy purchases. As a reminder, our initial target was close to 35%. All the other objectives that we indicated in March remain valid, and we feel very comfortable about our capacity to meet these numbers. Our next communication will be for Q3 revenue on October 30, after market. This concludes this presentation. I thank you all for your attention, and we can now move on to the Q&A. Operator, back to you. Thank you. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. We will now take our first question. Please stand by. The first question comes from the line of David Cerdan from Kepler Cheuvreux. Please go ahead, your line is now open. Good evening, gentlemen, David Cerdan from Kepler. Great results. I would like just to come back on what you said. My first question is related to the workwear. What has really changed in this segment? You said that there is some new regulation, so can you give us some example of a new regulation? And how long do you think that this favorable momentum in workwear will continue in Europe? My second question is related to France. You gave an example, but what was your assumption regarding the minimum wage upgrade? So in other words, if the minimum wage in France is up 10%, by how much do you expect to increase the pricing to compensate? Is there a risk of lower demand because your services will be too much expensive for some clients? I have a last question regarding your mix of activity. So yes, you progress in the EBITDA margin. This is not the case for EBIT margin. Is it also because of the workwear that is maybe more important in your business than the linen? Thank you. Hello? Yes, Ah, pardon. lot of, a lot of questions, David, so give me one second. Oh, okay. No, no, no, no problem. So let's come, let's start with workwear. So what has changed? It is, it is not one massive change in H1, it is a regular trend regarding more hygiene, more regulation, and the changes in workwear are the following: Workwear are more and more considered as protective, personal protective equipment. And when you are considered as protective equipment, then you have immediately a regulation in Europe. So I have already given some example, where we were talking about high visibility, for instance. So I remember the regulation in Europe, when you have high visibility jacket if it is considered, so if you want to protect your employee, it is considered as personal protective equipment, and then the rules in Europe is after 50 washes, you need to destroy the jacket. It is not considered anymore as a protective equipment. So that means that, for a company with employee working outside, you need to protect them regarding the risk, if they work during the night, for instance. So you provide a jacket with high-visibility band, and you need to follow the number of washes. So if you don't work with a company like Elis, you cannot provide this data, and you take the risk to not be able to demonstrate in case of accident, that your employee was protected. So it is not, as I said, it's not one big major event that changed the rules in H1 2024. It is a natural trend that is regularly reinforce, reinforce, reinforce. Same story for more and more hygiene. You know that we have a large part of our portfolio in industry, like pharmaceutical industry or food processing. Then, it's the hygiene regulation regarding hygiene is reinforced regularly, and they need absolutely to be sure that when the employee starts the day, he has a proper uniform, and you cannot have this assurance if you ask your employee to wash at home. You have also the risk of cross-contamination with their own personal clothes. That explains why more and more companies want to outsource with us. The second part of your question regarding workwear was, do we see a limit regarding this potential of growth? And today, the answer is no, because it is, it is clearly the end market and the service where the level of outsourcing is more limited in, even in Europe, in some mature markets. It's quite interesting to see what happened in Germany, for instance. You see in Germany, you could consider that it is, by definition, a very mature market, not in a good shape in terms of, what is, GDP growth, expected, what is the trend, the macro trend for industry in, Germany. So normally, everything is in place to, to deliver a low level of organic growth. And there, as we said during the call, we have been able to deliver 15% organic growth in workwear for industry in Germany. So it's I like that we have a lot of room to, to still continue to develop our business, and it is also the reason why we could be considered as quite immune in case of a big GDP slowdown. Second part of your question, so minimum wage and what is the impact? So it's we are talking about something close to 2%-3% of additional pricing to digest in case of more than 10% in the minimum wage. So it's not, it's not a drama. We have seen that Spain in the past increased by even more than that. Germany increased by more than that. This year it was more or less the magnitude of the increase in Ireland or in in UK. In Latam, it is also the magnitude of the salary increase that we have to digest regularly. So that's why it's not a major shock in our P&L. You can imagine that when we had the price multiplied by ten in gas, it was a more massive shock to digest. And then your comment, your third comment is about, do we have the risk after that, that the cost of the Elis service start to be too expensive for the customer and the market? And here the answer is clearly not. Let's come back to what is the weight of Elis services in the P&L of our customer. For industry, so workwear for industry, it's nothing, absolutely nothing. For the sole end market where it is more important, it is hospitality. But even in hospitality, we are talking about, as we said, less than EUR 10, 5 to 10 EUR of linen per room, where they charge, between EUR 200- EUR 500, for each room. And so even if we have to increase by 1, 2, 3%, EUR 10, it's nothing in comparison to the total, price charged to their final customer. And at the end, the question is not only, is it too expensive or not, the service of Elis? It is more, can they work without the service of Elis? And the answer is not easy, because to provide the room without linen inside, I'm not sure that it is the best idea from for the hospitality market. And to be able to provide the service on another way, like, for instance, reopening some internal laundries, they will be less efficient than us. So at the end, if you have the minimum wage, very costly in France, if an hotel decide to open a internal laundry, they will have the same, the same huge cost of labor to manage the laundry. So at the end, they will not be less expensive than us. It is the opposite. So that's why for us, it's not at all a major concern. The last topics regarding EBIT, it's more largely the more than the breakdown between flat linen and workwear. I want more to highlight the fact that we have more commercial dynamism. If you compare what is the organic growth rate of Elis now and where we were three, four, five years ago, we say now that we'll deliver on a regular and constant basis, at least 4% of organic growth, even with an environment of very low level of inflation. So that means that we sign more contracts, and this acceleration of the commercial development has put more need of new linen, because you know that in our industry, we invest totality of the stock of linen, day one, when we sign a contract. So that's why if you analyze the evolution of the EBIT margin, you have two subjects. First one, quite technical. It is as we have depreciation of linen in three years, and we have not invest a lot during COVID year, so 2020 and 2021. Of course, we had a kind of lag effect with low depreciation, and it is also the reason why EBITDA has improved faster than EBIT. Nevertheless, on top of that, the level of CapEx, globally speaking, is now more in the round of 19% due to this increase of the commercial performance of the company. Okay, great. Thank you very much. Thank you. We will now take our next question. The next question comes from the line of Benjamin Wild from Deutsche Bank. Please go ahead. Your line is now open. Good evening, everybody. Three questions for me, please. Firstly, just on energy, you talked about better purchasing conditions for energy across the group. Can you just clarify, when you look at the energy prices that you're paying, and given the hedge rates that you entered in previous years and compare them with the spot rates, what kind of multiple are you paying on spot? And when do you expect the rates that you pay to converge to spot rates in the market available today? The second question on margins. You're clearly very focused on several initiatives across the group to drive margins higher, including through energy, as you've discussed. When you put these initiatives together, what is your ambition for the EBITDA margin level of the group? What do you think you can achieve in terms of ongoing margin expansion over the coming years? And then, a third and final question on the free cash flow. You're raising the organic growth guidance. You've raised the EBITDA guidance at the half year, and in H1, CapEx, in proportion to sales, is lower year-on-year. When I put those together, the FCF guide looks pretty conservative. Is there any reason in particular why you've not raised the FCF guide at this stage? And can we expect maybe some conservatism baked into the EUR 340 million number? Thank you. So energy. So energy is perfectly in line with what we have already disclosed to the market. You know that close to 90-95% of the price is hedged for 2024 with massive savings. So we are talking around between EUR 30 million and EUR 40 million of savings in comparison to what we paid in 2023. And what we said, that is exactly the same for the year 2025 and 2026. We expect more or less the same magnitude of savings. For 2025, it's—we can say that is more or less already done because we have now a level of hedged in place that cover the vast majority. We are close to 90% or so of our expected needs of energy for 2025. We know that in 2026, we will have another savings to reach, at the end of 2026, the actual level of spot price. So it's, let's say, three step of close to EUR 30 million every year in 2024, in 2025, and in 2026. In terms of margin ambition, so it's clear that we expect a regular improvement of the margin at the group level. We know that during three years we had this nice to have a decrease of energy price, and where we don't give back 100% to the market, and the part stay in our pocket. By the way, it has allow us also to increase investment in the structure, in the commercial structure. You remember that in 2024, with all the new positions that we have created in all our geographies to be able to push the top-line dynamism, it was an effort of EUR 20 million. Then we have been able to digest it, thanks to the natural improvement of the margin. So it's clear that we still continue to improve the margin in the years to come. It's quite complex for me, at this stage, to give you a final long-term ambition for the margin. But you have seen that, even in the... in our best countries, we are able to deliver a margin above 40% with regular improvement, like in France, like in Mexico. We have a lot of other example like this. So that's why I will not define the, today, a limit on the margin expansion. Guidance, so we have decided to improve the guidance, where it was totally clear that we have evidence that we will be significantly above what we previously said. For all the other criteria, when it is not evident that we are massively above the initial guidance, we have preferred to stay cautious. What is behind is mainly linen, linen CapEx, because you have understood that the top line react better than expected. We are losing less customers. We have a better commercial performance, so it consumes more linen than expected, and the impact with more linen will be more depreciation, so we stay cautious with EBIT. And so if we are cautious with EBIT, we are cautious with EPS... and linen and CapEx, it's also cash. So that's why, as we said, we are very comfortable with the guidance given at the beginning of the year, but not enough headroom to improve all the key KPIs at this stage, after the first semester. Okay, thanks very much. Thank you. We will now take our next question. Please stand by. The next question comes from the line of Sabrina Blanc from Bernstein. Please go ahead, your line is now open. Good evening, everybody. I have three questions, if I may. The first one is regarding the margin in Scandinavia that you have mentioned, a slowdown, and due to the exposure to the public segment. And could you provide more color on that, and notably the part of your business coming from the public? The second question is regarding your very good performance in Germany and with price increase. You have mentioned that the churn has improved, but could we have more granularity, and notably the difference of margin between workwear and healthcare? The latest question is regarding the Asian strategy following your acquisition in Malaysia, how do you see the market? And do you see other opportunities in other countries? Thank you, Sabrina. So margin Scandinavia. So it's a small slowdown, clearly, 50 bips. We are quite confident when we analyze the full year expectation for Scandinavia, and we expect to be close to what we deliver last year as a margin. So last year, remember, we were at 36.5%, something like this. And so we should be close to that, so that means that it's not a huge trend, a drama with something totally new in the market. So it's let's be lucid with Scandinavia, when we talk about Sweden or Denmark, at the end, it's a small industry, small country. You have 5-6 million inhabitants in Denmark. We have more than EUR 240 million of business, so it is not where we will find the highest level of potential of organic growth. So it is also countries where we don't put a lot of industrial CapEx, so it's more for us, a kind of area where we have a kind of cash cow. So we will keep a decent and solid margin, when we talk about close to 36.5%, it's not nothing, with a high level of cash. So it's clear that we have a part, I don't have the precise figures in mind, of public contracts, where the, in terms of inflation, it was more challenging to pass everything in the price, with them. Nevertheless, we—to summarize, it is a stable, stable area for Elis, cash cow, high level of cash generation, a small expectation of organic growth, and so no operating leverage due to this lack of huge organic growth. So stabilization of the margin at a very high level with very good cash. So Germany. Germany, it's a very interesting country for us because it is a sizable country, and it is a second country of Elis. We deliver now a business on a full year basis that will be at around EUR 600 million, so it's quite sizable. When you are able to deliver more than 300 bips margin improvement, as in H1, 350 bips, it start to be quite with a nice impact at the group level. It is a mix of different things, so clearly we are more efficient with a better management team at every level in Germany. So all the efforts put in place for years now start to bring fruits. We are very happy with the improvement of productivity. The mix of the growth is very good. We-- It was part of your question, and the magnitude of the difference in margin can be simple to the double if we compare the margin in workwear, in comparison to the margin in the flat linen for healthcare, for instance. And due to the high level of growth in workwear, we are talking about 15% in H1, it's clear that it drive also a better margin at the end, at the country level. The churn now, we have lost less customer due to a price increase, even in Germany. We are back even in this country, to a more normative level of losses, that conduct at the group level, to be able to say that now the 100 basis point of growth lost in 2023 due to extra losses, it is behind us. When we analyze the level of losses at the group level, and so also in Germany, we are back to what we had in the past at a normative level. Asia, so the strategy, you have understood that it is a very long-term strategy, and the impact is very limited at the group level with the first acquisition, EUR 6 million. It highlights, by the way, the fact that today the market in Asia is very fragmented. We have conducted several market study in different countries, in China, in South Korea, in Malaysia, and Singapore. We have not seen all this list of countries. We have not seen marvelous jewel like in Mexico, where we could enter directly with a sizable company. It's not the case. Nevertheless, we know that for the very long term of the company, it makes sense. That's why we decided to make a first move in Malaysia, small move. Interesting also to see that it is in a very nice end market for us, so the cleanroom business, where we are one of the worldwide leader. It is a market that is quite consolidated, the cleanroom business in terms of customer, and so we have a lot of international customer that are quite happy to see us entering in Asia, so it's interesting. What will be the next step of the story? So we will have a look in Malaysia, of course, and probably also in Singapore, that is very close, to see if we can develop a little through bolt-on, the first step. But as I said, all the market study shows that we have not a big company there, so it will be always very small step. Yeah, perhaps just to be precise on the Nordics part. So as you know, a lot of service are done by municipalities, like healthcare or whatever, so we have a higher part of public clients there, but probably in the 25% region. Those are points that we are—historically, the Nordics have focused on big clients, so major or industrial clients or big clients, which are also tougher to maneuver around in terms of pricing. That's why one of the strategy in the Nordic is to push for smaller clients developments, as we mentioned earlier. Thank you. We will now take our next question. Please stand by. The next question comes from the line of Sylvia Barker from JP Morgan. Please go ahead. Your line is now open. Thank you. Hi, evening, everyone. One question left for me, please. Just your comment around inflation slowing down. Could you clarify the inflation impact in Q2, and then the expectations for Q3 and Q4, more precisely, if that's actually moved quicker, moved down quicker than you expected? Thank you. So we cannot say that inflation will decrease quicker than expected. Because all in, when we analyze why we are able to increase the guidance for the top line and the organic growth, we can say that more or less, we are quite happy with the level of price increase during the year, and it will be slightly above what we could expect even at the beginning of the year. So it's not. So we knew that we will have this regular decrease of the level of inflation all over the year. Nevertheless, we have seen that on the same time, the level of the impact of losses will be less important. The report effect of losses in 2023 will be less important all over the year 2024, so it will more than mitigate the gap in inflation. And in losses, we'll deliver a better performance than expected in the year. For commercial success, we are happy with the performance, slightly better than expected. And for activity in the sole cyclical part of our business, for 25%-30% of the business, that is hospitality, here, we are clearly below our expectation for the full year. We have made the comment of bad results in the activity in June, in France and the UK. The first days of July are quite weak also, around the event of Olympics in Paris. And so, here, in terms of activity in hospitality, our forecast is below our initial expectation at the beginning of the year. So it is a mix of everything that explains that all in, we are better than expected in the level of growth. So, pricing, even it was anticipated that the momentum of inflation will decrease regularly over the year. But at the end, the pricing performance is better than expected for the full year for Elis. Churn, better than expected. Commercial development and signature of new contracts, slightly better. And we are disappointed by the volume in hospitality. Okay, thank you. Maybe just checking on the volume in hospitality, could you just comment on how much of that do you think comes back, and how much is just lost as people are obviously not gonna be able to use up their holidays? A small part will come back, can come back in the second part of the year. We are quite cautious in our forecast. We don't expect to see everything lost in June and July coming back in September and October. It wouldn't be very cautious. So what our customer said is, they start to see some better occupancy rates starting next week in Paris. So that means that they expect, and they have some better figures for next week. Probably, August will be better than usual, but it was expected in our forecast, initial forecast, and so on. We expect small improvement in September and October, but we are very, very cautious in our full year guidance with the volume in hospitality, and we don't expect any miracle even in the second semester. Thank you very much. Thank you. We will now take our next question. The next question comes from the line of Christoph Greulich from Berenberg. Please go ahead, your line is now open. Yeah, good evening, and thank you for taking my questions. Yeah, two from my side, please. First, on the Olympics, so you have already flagged that as a headwind for the business, given the slowdown of some hospitality clients. Just, is it possible for you to quantify roughly what will you expect in terms of lost revenues, kind of stemming from that event for Elis? And then secondly, just also a follow-up on the prior question on inflation. Would you be willing to give us the numbers, how much pricing has contributed to the organic growth in Q2, and then what you're expecting for H2? So the impact, what we see today for the volume and the so-called lost due to Olympics, we are talking about something close to EUR 2 million- EUR 3 million expected in this period of June, July. So it is a magnitude of this, so you can see that it's not a drama in comparison to the size of the group. Nevertheless, it's quite disappointing, and we could have expected more. Hopefully, if you remember, we have always been very careful with the impact of Olympics. And if you remember when we had a discussion at the end of 2023, to design the guidance for 2024 and so on, we have always said that, "Oops, we don't take too much into consideration for the impact of Olympics." Because we had the experience of Rio, 2014, where it was not a massive, a massive improvement on volume. So that's why it is below last year, so it is disappointing, but not a drama. For Rio Olympics, 2016, sorry. '16. It was a World Cup in 2014. So inflation, so we are in the round of what we said, the price effect for Elis for the full year will be around between 3% and 4%, as we have always mentioned. So, it's a good year of price increase, and it will be, so you can make a model where it is less and less, quarter by quarter, but to finish between 3% and 4% at the full year level. That's very helpful. Thank you. Thank you. We will now take our next question. Please stand by. The next question comes from the line of David Cerdan from Kepler Cheuvreux. Please go ahead, your line is now open. Yeah, a quick question regarding the earn-out for the Mexican acquisition. Is it correct that next year we can anticipate something like EUR 50 million, 50? Yeah, it depends on the EBIT of 2024, but it's the magnitude of what can be expected in cash indeed. Okay. And second question is to challenge you on Asia. Okay, you go to Malaysia. What do you think about the, I would say, the Western countries, like Japan, Australia, is this something that could have some interest for you? And the second question is on, in terms of capital allocation, how do you reconcile the local risk to the profitability and some other option to use your cash flow? So, other countries that you mentioned, that you know that one of the four pillars of the strategy is to regularly open some new area. So of course, we try to have a look on every potential area for Elis. You know also that we have already worked a little on Australia in the past. We were monitoring the situation. We decided not to go there. It was seven years ago. It was more or less, you know, the same time than the Berendsen acquisition. We had the opportunity to have a look on some companies in Australia, but at the end, we decided not to enter. So, I can just say that, of course, we are always looking to any potential new area for Elis. It's part of the strategy, but we are very cautious with the use of the cash of the company. I'm not sure that we can talk about any kind of capital allocation when we see an acquisition of EUR 6 million in Malaysia. So it is like a small bolt-on paid with the cash, so it does not change a lot the situation and the capital allocation, I think. So, does it mean that you don't expect to invest a lot of EUR millions in Asia in the next 1-2 years? Or... Because today it's only EUR 6 million, but if you're ambitious, you will target something more important? No, and then I'm back, I'm back to what I describe as the result of the different market study, David. That means that, Okay ... today we, the targets are very small, and the market are totally fragmented. So even if we wanted to push a lot and to be quite aggressive in the development of the business in Asia, we don't have the target in the countries that we are highlighting, so Malaysia, Singapore, and so on. So we will probably, in the coming years, still continue to make some small bolt-on to regularly develop this position. But it is a much more strategy like Colombia than Mexico, to give you a comparison of what- Mm ... we did in Latin. So Mexico, we had a very massive and super leader. So it was a bigger move day one. Colombia, we made the market study, but you had no leader clearly in place. So it has been a story of a very small acquisition, small bolt-on. Now we are by far the leader in Colombia, by the way, with a very nice margin. But only with a very small move, some millions of revenue each time, but not more. And it is probably the situation that we will have in the future in the countries that we have targeted in Asia. Okay. Very clear, and, good holidays. Thank you, David. Thank you. Once again, to ask a question, you will need to press star one one on your telephone. As there are no further questions, I would like to hand back to Mr. Martiré for closing remarks. I think that David gave the conclusion. I wish everybody a wonderful summer, and happy to see you in September, October, and so on, and for the Q3 performance of the group. Bye-bye. This concludes today's conference call. Thank you for participating. You may now disconnect.