Atalian - comment

An inability to pass through higher costs to clients continues to drag on Atalian’s results; the company also admitted that full recovery of higher wages will not happen in 2025 either. Under recovery is a problem for everyone in the industry, but not everyone is as stretched as Atalian. In addition, the €250m factoring line (€230m drawn) maturing in mid-September still hasn’t been renewed; if the banks reduced this line, this would be a setback for liquidity, but we do not see this as likely. The renewal agreement could be as late as the end of September, as the banks could temporarily renew whilst negotiations continue. After his conviction in June, Franck Julien transferred his shares in Atalian to his wife Sophie Pécriaux; we see this as largely cosmetic with little by way of change of control. We will update our model and forecasts over the next few days to account for the latest results.

This year, cleaning industry staff and employers agreed to a 3.2% pay rise; so far, Atalian has only been able to pass on around 50% of the higher costs to clients. The pay increase was more than the 1.13% increase in the French minimum wage, further hampering the pass-through of costs. Atalian company has also suffered from increased social taxes (also not being fully passed through).