Atalian - comment

Atalian Revenue and EBITDA were in line with our estimates, but the operating environment is difficult, and there is little reason to believe it will improve quickly in 2025. The gap between the collective bargaining pay rise for cleaners and the rise in the minimum wage (SMIC) cost €10m EBITDA in the year to September. Higher payroll taxes (mainly through reductions in relief) cost another €16m. The French Budget is also likely to add to this burden in 2025. Atalian company is struggling to pass higher staffing costs to its clients, but management hopes the government can be persuaded to reduce the impact on SMEs. However, nothing is certain. Also, whilst a positive working capital performance (partly driven by new factoring line utilisation) boosted OCF above our forecast, Atalian is still trying to repair the Working Capital outflows in Q1, and receivables are still higher than we expected. We will revisit our model in the coming days.