Elior - comment

Elior is making progress on cost recovery, but the process isn’t quick. Our concern about Elior is the ability to achieve inflationary price rises. H1 was a positive start, but Elior expects more friction on pass-throughs in H2, so despite generating a margin of 1.75% in H1, FY margins will be at the low end of the 1.5% - 2.0% guidance. Leverage of 7.1x in H1 beat the 7.5x covenant, but the 6.0x full year will require careful cash harvesting.