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Elo/Auchan (ELOFR; NR, BB Neg) S&P Comments on property arm

CONSUMER STAPLES

S&P has done a standalone comment on the property arm which it treats as a subsidiary.


  • It's forecasting €380-400m EBITDA per year over 2024/25 (FY23; €392m).
  • Reminder S&P sees group EBITDA at €1.2b (-17%yoy) and therefore implies S&P's retail EBITDA assumption is €800-820m for FY24 (-29%yoy). Given 1H's €166m it still expects a strong pick-up to to €644m (-15%yoy) in the 2H.
  • It sees cash generated from the arm being used to service debt and capex (i.e. leverage neutral).
  • It expects interest cover to remain in 2.8-3x and leverage in 8-9x range.
  • It says company has signed asset sales of €300m in 2024.
  • Again there is cautionary tone, mainly around Auchan flagging it will increase "interaction with NIH with regards to its hypermarket surface restructuring plans". S&P is worried on a capex blowout from that which would drag on debt levels.

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