Elior Group SA (ELIOR) Earnings Call Transcript & Summary

Hello, and welcome to the Elior Group Full Year 2019 to 2020 Financial Results. My name is Molly, and I'll be your coordinator for today's event. Please note that this call is being recorded. [Operator Instructions] I would now like to hand the call over to your host, Philippe Guillemot, Chief Executive Officer, to begin today's conference. Thank you.

Good morning, ladies and gentlemen, and thank you for joining us today. Esther Gaide, our group CFO, and I will comment on Elior Group's annual 2019-2020 results. As usual, we will take questions after our presentation. This presentation follows on the November 6 publication of our preliminary full year financial results and the impact of the COVID-19 crisis. Esther will provide you with additional details to these figures as part of this presentation. During this webcast, I will explain why Elior is very well positioned for the future. First, I would like to salute the outstanding commitment of our teams since the onset of this crisis. Initially, during the first wave, our teams in contract catering and cleaning activities, those in our health care and welfare and industry markets and now in schools and universities, and furthermore, our teams in the white collar sector, which remains hard hit by the virus and ever-changing lockdown measures but where we are currently rolling out a host of innovations and working with our clients and guests to reinvent our offerings. Turning to Slide 2. Beginning in March, faced with these exceptional circumstances, Elior swiftly executed a coordinated, group-wide action plan. We managed to preserve a high level of liquidity and financing capacity, thanks to our agility, flexible organization and strict cost management. Thanks to our solid economic and financial fundamentals, our expertise in hygiene and food safety, the fantastic commitment of our teams and the goodwill that we built with our clients and guests over the last several months, Elior is well positioned to meet the challenges of the second COVID-19 wave. During the second half, Elior leveraged its solid fundamentals to reinforce its positions in both contract catering and services in education, health and welfare and business and industry. In these markets, excluding the white collar sector, business is now close to pre-COVID-19 levels. We are also accelerating the rollout of new foodservice offerings that are more flexible in terms of when and where to better serve the needs of businesses in the white collar sector. Today, Elior is at the forefront of this historical sector transformation as a socially and environmentally responsible caterer. In short, though Elior has been affected, it remains robust through this crisis. With solid fundamentals, the group is accelerating the rollout of its new Elior strategic plan that we introduced to you in December last year. When countries will emerge from this crisis, Elior intends to leverage its more flexible, agile and competitive profile to build on the momentum generated to confirm its leadership. Slide 3. To start this presentation, let's take a quick look back to the start of our fiscal year 2019-2020 when we set ambitious objectives on organic growth and adjusted EBITDA margin. We confirmed this objective with the publication of our first quarter revenues as we were well on track to deliver them, a notable achievement considering the French general strike in December and January. Unfortunately, the arrival of the COVID-19 pandemic has radically changed the trading environment, which has indeed been challenging. Yet, Elior has stayed the course. Our agility through the pandemic has enabled us to deliver a drop-through of 27%. We further reinforced our cash management processes that delivered a positive change in working capital of EUR 35 million. And while our revenue were impacted by the COVID-19 lockdowns, we controlled our CapEx to 2.2% of revenues. Elior's agility extends to using our existing capacity to serve new markets and implement new foodservice solutions. Plus, we adapted our offers, contractual model, terms and financial conditions. Also, our covenant holiday has been extended until the end of September 2022. Now turning to Slide 4. We chose to place corporate social responsibility at the center of our strategy. And even in turbulent times, we stick to our commitments and can show progress on each of our 4 strategic pillars. A year ago, in France, we launched Nutri-Score in corporate contract catering. We are uniquely positioned as the only contract caterer to offer Nutri-Score to our B&I guests. Then in September 2020, despite the complex situation, we carried out the launch of Nutri-Score in our education market, again, as a forerunner of guest nutritional information. Because safety of our employees is an absolute paramount and especially in those difficult times, let me insist on another source of satisfaction. The action plans on organization setup on that matter lead to an 18% reduction in the group incident frequency rate. Given the particularly sensitive situation of the most economically fragile population, the partnership with the food banks has been reinforced in France, Spain and Italy. Beyond sustainability, we have proven our agility at the service of our clients. Let's take a closer look at who are our customers. Turning to Slide 6. We have a diversified market mix that makes us uniquely positioned in contract catering during the pandemic. In the center of the slide, the chart shows Elior's revenues per business market. Let's first look at education on the left side of the slide. You can see that 90% of Elior's education market is children from preschool to high school, which has proven to be very resilient. In the U.S.A., we are a leader in the National School Lunch Program, which was maintained even during the peak in lockdowns. On the right side of the slide, you will see that our business and industry accounted for 46% of Elior's group revenue. White collar accounts for only 38% of Elior's B&I revenues, which means that overall, white collar makes up less than 18% of Elior Group's revenue. In the B&I market, we also cater for correctional facilities in France and the U.S.A., train services and government administrations in Europe. Now turning to Slide 7. We have provided our diverse customer base day after day with healthy and varied meals throughout the pandemic by flexing our assets. For example, in the U.S.A., we adapted our banqueting restaurants to provide emergency meals for those most in need. In Spain, we developed grab & go, which permitted our clients to open their sites by providing them with meals cooked at our central kitchens, which we did previously on-site. We also multiplied our service modes, greatly enabled by our digital assets. I will go into more details on these solutions later in the presentation. We also quickly made use of furlough and deferred payment options where available. When possible, we offered employees opportunities to transfer from one activity to another. Furthermore, we relentlessly flexed our fixed costs and renegotiated terms and commitments with our suppliers. We renegotiated with client contracts that offers new service modes and adaptation as the pandemic evolved. We implemented weekly monitoring and reporting of client negotiations with the objective of providing enough agility that takes into consideration the ever-evolving dynamic of the pandemic. This has created goodwill with our clients, which can be measured in our improvement in retention, looking at Slide 8. As of now, we will provide you with our revenue bridge as represented on this slide. As this is the first year we do it this way, we also provide you with fiscal year 2019 as a reference. You can see that fiscal year 2020 new business accounted for 5.2% in additional revenues. That lost contracts accounted for minus 8.2%, and that like-for-like, mostly due to the COVID-19 crisis for minus 16.7%, resulting in a revenue drop of 19.7%. We improved by 140 basis points on lost contracts compared to last year. This translates into an additional EUR 77 million in retained revenues compared to last year. On the following slide, you have a selection of some of the many contracts we won across our markets during the fiscal year 2019-2020. You will see it is a solid and well-diversified mix of clients. Next slide. All these efforts have laid a solid foundation for us to build upon, and we are highly positioned to leverage the economic recovery, most likely with the rollout of vaccination and accelerate on implementing our strategic plan, which is well underway. Turning to Slide 11. Elior was proving its agility well before the health crisis. We had already started our transformation with the unveiling of the new Elior 2024 Plan, which I presented to you during our full year results last year. The current crisis has been a catalyst for us to accelerate our strategic plan. By spinning up the rollout of our 5 value-creation drivers in the new Elior plan, the group will be highly positioned to benefit from renewed economic growth. To demonstrate this, I would like to recap the progress made on value-creation drivers 1 and 3 on the 2 next slides before looking at value-creation driver 2 in a bit more detail. Esther will cover value-creation drivers 4 and 5 in her presentation. Regarding value-creation driver 1 on Slide 12. I touched on this when I explained that our business mix is less exposed to the impact of the crisis and the current second wave lockdown measures. But this business mix also means we are well placed to capitalize on the economic recovery when we will emerge from the crisis. For example, in the medium term, Elior's experience will make it one of the major players supporting economic stimulus plans in the countries where it operates by responding to the surge in demand for meals for the most vulnerable populations. This market perfectly matches our positioning as a socially responsible caterer. It mirrors what we did during the first lockdown in the U.S. when we cooked and distributed 34 million meals to vulnerable populations; and in Spain, when Serunion guaranteed the distribution of 18,000 meals to Andalusian students during the lockdown. Looking to the long term, our business mix also allows us to focus on driving transformation and innovation in our catering business in our 3 markets, a topic I will return to in a few minutes. Before I do so, let's look on Slide 13. I would quickly like to recap our value-creation driver 3 of our new Elior plan. As we already said, one of our priorities in the onset of this unprecedented crisis has been to use the situation to build goodwill with our clients. We have, therefore, implemented a new organization in every country with dedicated retention managers. We have aligned best practices and implemented new processes and tools, including a vulnerability dashboard and systematic postmortem reviews. As a result, our retention rate has increased, as I stated earlier in the presentation. I would like now to spend a few minutes on the second value-creation driver of our new Elior plan. Our client needs is the focus of our transformation. Turning to Slide 15. Corporate contract catering is a sector where the existing business models are most in need of a structural and organizational transformation. That is why we have developed a comprehensive, diversified range of products and services based on digital innovations and our existing infrastructures. The aim is to meet the needs of our traditional clients, head offices and large sites, smaller companies, SMEs and small sites; and needs of employees working more and more remotely. To do so, we must be more flexible in terms of when and where without compromising on quality so we can offer new avenues of growth and boost profitability. As you can see on this slide, we are reinventing our core catering business by introducing new offerings, new production method, the way to make meals available to the guest. By doing so, we address the market's new challenges. Let's look at a few of this trend on Slide 16. As far as our catering solutions are concerned, we are now -- we can now respond to new ways of consuming meals and to the long-term development of remote working, which has accelerated since the onset of the crisis. For example, our guests are able to order a bespoke lunch the prior day -- or pick up a balanced meal at 2:30 p.m. after a long meeting. That is what we do with our click-and-collect and click-to-serve offers in France with Chefs & Go and Petite Brigade; in Spain with Bites & Go; in Italy with iColti; and in the U.S. with Prepped. That is how we fulfill our clients and guests' greater need for flexibility in terms of when. Turning to Slide 17. The need to be more flexible in terms of where also prompted us to rethink our meal production methods. We can now prepare meals in existing restaurants and dedicated kitchen studios with on-site or nearby dining options for our clients. That is what we are doing in France with our new Chaud Bouillant piping hot service, which we prepare at one client location then can also be delivered to other nearby client premises in a hub-and-spoke logic. This is how we capture the needs of companies that want to offer their employees high-quality, freshly cooked meals that do not have on-site cooking facilities or dedicated dining areas. We also offer new meal technology with modified atmosphere packaging, which extends food life and allows us to meet the growing demand for take-home meals for people working remotely. They can collect their meals at the office and eat them the following days. This is what we do in Italy with Urban 360. We're able to roll out these solutions in a cost-effective manner without increasing our CapEx, thanks to Elior's extensive network of restaurants and dedicated kitchen in Europe and in the U.S. Lastly, on Slide 18. By combining our digital expertise and production innovation, we can now offer new ways of distributing our products, once again, to meet the needs of our clients and guests. I would like to take this opportunity to dispel a misconception. The digital disruption is not a barrier to entry that is hindering our capacity for innovation. In fact, by leveraging our existing digital expertise and the solutions that are already available on the market and by continuously upgrading our own apps, we have found a cost-effective way to develop the tools we need to reinvent our businesses. This is something we've been working on for several years, which is why we now have some of the market's top-rated mobile apps. As a result, we are able to offer innovative distribution systems like our connected fridges in France, our smart collection points in the U.K. via the Breaz app, El Chef in India, our Colmado corner stores in Spain. On the following Slide 19, you will see that business in the education sector remains brisk because of the group's low exposure to university, which has been hit hardest by the lockdown measures, and because of this key social role we play in providing school meals, notably for low-income students. For example, our K-12 by Elior team in the U.S.A. has served 100,000 meals per day at 900 sites to students who would otherwise go hungry. To date, our K-12 team has served over 40 million meals to students throughout the pandemic and school closures. Food, health and safety is our utmost priority. In the U.S., for example, the Aladdin team transformed 196 school and university cafeterias across the country into safe cafes with dedicated cleaning teams in blue vest to show the students the steps we are taking to keep them safe and healthy. We also continue to innovate within new health and safety restrictions. Each student in each school is entitled to a healthy, tasty, well-balanced meal despite the restriction created by the pandemic. That is why in France, Elior went ahead with the launch of Nutri-Score in schools in September 2020 and intends to make it available in all school canteens by the end of the school year. We were the first and the only one to adapt the nutrition information system to corporate contract catering in late 2019 and are now the first to make it available to students and parents to help them choose healthy, well-balanced meals. Serving children high-quality, nutritional meals and making them aware of the importance of healthy eating remains one of our key missions, and that will not change despite the change created by the COVID-19 crisis. Like the B&I sector, the education sector continues to reinvent in sales, notably offering click-and-collect solutions like weekly, daily for high schools in France. Looking now at Slide 20. Business has also remained resilient in the health and welfare market since the beginning of the pandemic. Firstly, our teams were able to adapt to the situation. For example, in the U.S., our Cura teams sustained 100% of operations during the pandemic, providing 20 million meals to residents and patients this year. The Cura team also found ways to support health care professionals by turning hospital cafes into pop-up markets with groceries and take-home meals. These markets help health care professionals avoid an extra trip to the grocery store. Secondly, we continue to innovate, notably with products and services for the elderly. For example, we have adapted our offerings to individual pathologists and malnutrition prevention with a launch nearly a year ago of IDÉQUATIO in France and more recently of NutriAge in Italy. Additionally, we have now -- we are now developing own deliveries of meals from our central kitchens to prevent isolation and made demand for hyper-personalized food, paving the way for the catering business models of the future for the next generation of seniors. On Slide 21, at Elior Services in France, even greater technical expertise and rigor has been necessary since the beginning of the pandemic. Our training teams have drawn up 60 new COVID-19 bio-cleaning protocols in the onset of the crisis to ensure that our teams adjust their procedures to new safety measures and to meet our clients' new needs. We can now offer our clients the COVID-19 hygiene measures safety verified by AFNOR certification. This data is based on an audit of our clients' premises, which must meet 72 criteria. The assessment follows a method developed by AFNOR experts using recommendation and fact sheets provided by the health authorities. Certification of Elior Services clients' premises takes several weeks and is based on a toolbox and step basis assistance, from approving the quote, scheduling visits with the clients, kicking off the audit and carrying out the verification to submitting the report, and finally, displaying the certification logo on site. The label is valid for 1 year and is therefore a long-term way of reassuring our partners and stakeholders, employees and clients, regardless of the sector, as well as patients and residents in the health and social care sector. Thanks to this certification, we have consolidated our leadership position in bio-cleaning and health care hospitality in France. Esther will now go over Elior Group's financial results with you. Esther?

Thank you, Philippe. Let's start off with Slide 23. You will see that COVID-19 impacted Elior's revenues by EUR 246 million in the fourth quarter. Excluding the COVID-19 impact, voluntary contracts exits in Italy and lower scope of the Tesco contract in the U.K., Elior's revenue growth in the fourth quarter would have been 2%. Turning to Slide 24. You will see that COVID-19 hit revenues for the second half by EUR 845 million, explaining the decrease in revenues. Excluding the COVID-19 impact, voluntary contract exits in Italy and lower scope of the Tesco contracts in the U.K., Elior's revenue growth in the second half would have been 1.9%. Now moving to Slide 25. Group revenue declined 19.4% year-on-year to EUR 3.9 billion. Revenue generated in our France segment totaled EUR 1.8 billion, down 20% for the full year 2019-'20 compared to last year. Our International segment revenues totaled EUR 2.2 billion, accounting for 55% of Elior Group's revenues, which is stable a year ago. On the right side of the slide, you can see that organic revenue decline was 19.7%. Impact of ForEx and perimeter for the full year were minor. Now let's take a closer look at our full year revenues on Slide 26. You will see that the total effect of COVID-19 was nearly EUR 1 billion, explaining the decrease in revenues. Excluding all these items, full year revenues would have shown an organic growth of 1.7%, generating over EUR 5 billion in revenue. Now let's take a look at Elior Group's EBITA on Slide 27. Overall, we had an adjusted EBITA loss of EUR 69 million versus a positive EUR 176 million a year ago. Last year, our France segment generated an adjusted EBITDA of EUR 109 million versus the EUR 13 million loss this year. Our International segment generated EUR 90 million last year and incurred a EUR 30 million loss for the fiscal year '19-'20. As shown on Slide 28, the unprecedented COVID-19 crisis immensely impacted Elior Group's full year EBITA by EUR 268 million. The adjusted EBITA was a EUR 69 million loss for the full year. Now let me take you through the P&L on Slide 29. The EUR 250 million drop in EBITA reflects what I have already covered. Then acquisition intangible amortization was EUR 20 million, pretty much stable year-on-year. We also recorded an impairment of goodwill for EUR 123 million, a EUR 117 million charge mainly related to restructuring provisions to proactively protect margins and allow us to be more agile when business picks back up again. I will go further details on financial charges and income tax charges in a few minutes. Accordingly, our net loss from continuing operations was EUR 450 million compared to EUR 68 million a year ago. After the discontinued operations, Elior Group net loss was EUR 483 million compared to a net profit of EUR 271 million last year, taking into account the capital gain of EUR 208 million related to the sale of Areas. On Slide 30, you have our financial results detail. Following the sale of Areas in July 2019, we deleveraged Elior Group, which resulted in a lower debt ratio and a lower margin paid to the banks, translating to a drop in interest charges by EUR 31 million. Turning to next slide. Then I think we have a small topic. The current line is not correct and should be read minus EUR 50 million, minus EUR 26 million and plus EUR 11 million. But we correct that on the next -- on the document that would be posted afterwards. Income tax expenses amounted to EUR 83 million in 2020 against a profit of EUR 4 million last year. I remind you that last year, our current tax expense in France benefited from a EUR 20 million net tax credit generated from the Areas transaction. This credit was used to offset tax on current other taxable income from operations. This year, in current tax, we are still incurring a CVAE of EUR 19 million, which is the value-added tax on revenues in France. The group did not recognize a deferred tax asset for fiscal year 2020 losses related to our French entities, and a valuation allowance was booked on previous deferred tax assets recognized in prior years. Excluding exceptional elements, the adjusted effective tax rate would have been 28%. Now turning to cash flow on Slide 32. Starting from the adjusted EBITDA, we show a strong management of CapEx at 2.2% of revenues versus 2.3% a year ago but with a EUR 1 billion decrease in revenues, a positive increase in working cap of -- capital of EUR 35 million. We also had a one-off payment to the U.S. minority shareholders that was an agreement dating from 2018. Other cash items is mostly related to nonrecurring restructuring expenses. The lower free cash flow impacted our net debt, as you will see on the bridge on the following slide. The net debt increased by EUR 228 million, of which EUR 119 million were one-offs, consisting of share buyback, dividends and final price adjustment for Areas. Including IFRS 16, net debt was EUR 995 million versus EUR 782 million last year. On my last slide, 34, Elior Group's available liquidity at the end of September was EUR 630 million. Remaining available credit lines amount to EUR 592 million. As Philippe already mentioned, the covenant holiday has been extended. The next test will be at the end of 2022 based on financial results at the end of September 2022. I now hand you back to Philippe for some concluding remarks.

Thank you, Esther. Please turn to Slide 36. After lockdown measures eased in the mid-May 2020, we saw a continuous improvement in our activities. However, as the second wave of lockdowns hit Europe in October, we saw that COVID-19 will continue to create persistent uncertainty in the coming months. The recovery in economic activity is expected to be gradual and bumpy throughout 2021 and at varying rates depending on how the pandemic plays out in the countries where Elior operates. Based on all known variables at this point, the assumption for 2021 that Elior is using to plan and make decision are as follows: Business and industry had a good recovery in September and until mid-October, thanks to white collar representing less than 18% of group revenue being back at the office. Due to recent government measures, we expect a high level of working from home in the first half gradually reducing in the second half of our fiscal year. Business should accelerate as vaccines programs are rolled out. In this context, we are maintaining a constant dialogue with our clients to adjust our catering offering as their needs evolve. The education market should remain near pre-COVID levels as primary, middle and high school K-12 remains open in Europe and varies across the U.S.A. K-12 education accounts for the vast majority of Elior's revenue in this segment. The health and welfare market should remain near pre-COVID-19 levels. The cancellation of nonemergency surgeries and closing of hospital cafeterias will have some impact on our results in the first half of the year. Services continue to perform well and remains resilient. While it is possible, we will continue to use thorough programs and will further adapt our cost structure to protect our profitability. Cost discipline, tight cash management and reinforced SG&A discipline will continue in full force with already launched restructuring measures. We will be well positioned to take advantage of our renewed agility and will fully leverage our innovative foodservice solutions. To conclude, let's have a look on the next slide. We are coming to the end of this presentation, and I would like to conclude by stressing the following 4 messages: Firstly, as you have seen, since March, we have managed to maintain a high level of liquidity with our financing capacity, thanks to our agility, our flexible organization and a strict cost management. Secondly, we have increased customer goodwill, thanks to the outstanding commitment of our teams on the ground, while thoroughly monitoring and renegotiating our contracts. Thirdly, our business mix is today far less exposed to the impact of the crisis and the second wave lockdown COVID-19 measures. And last but not least, perfectly in line with the 5 value-creation drivers that we defined last year when we launched our new Elior strategic plan, we are today more flexible and more agile. We are reinforcing our differentiating levers in all our markets. We are accelerating our transformation and the rollout of our innovations to emerge from this crisis more competitive in an even stronger position. The opportunities in our market remain numerous. Our teams, both in contract catering and in services, are more mobilized than ever, ready to take up the change ahead of us. I am very confident in the future of our businesses because we now have the talent, know-how and organization to make the most of the recovery that is on the horizon. In the medium term, the anticipated rebound after the crisis and the additional revenues generated by our new offerings will enable us to return to a solid level of growth and improve our precrisis margins. With that, we conclude our presentation and ready now to answer your questions.

[Operator Instructions] This first question comes from the line of Jaafar Mestari calling from Exane BNP Paribas.

I've got 2 questions, please. The first one would be on cash generation. Are you able to reiterate maybe commitments that from October, you're going to be cash neutral? And then maybe if you could give us a little bit of color on the different countries there. I think, for example, the U.S., you said continued to be cash breakeven throughout the crisis. I'm now looking at France ending the year down only 15%. Is that also close to cash breakeven? And then second question would be on client retention. Client retention has improved this year, but that's also something that most of your competitors have said. In your own improvements, are you able to maybe break down how much is just contract delays and clients not going for renewals during the crisis and how much you think is underlying improvements in your contract retention?

Well, on cash, yes, we reiterate our objective of being cash neutral this year -- operational cash flow neutral this year. And since beginning of the fiscal year, I think we are well in line with this objective. As far as client retention is concerned, first, you can only retain what has come for renewal. So this ratio remains valid even if contracts retention has been delayed. So it should not have an impact on this ratio, I think.

So maybe just to follow up on that retention. Maybe we're not looking at the same definition. But your percentage retention, is it correct to think that it's a percentage of total revenue, and therefore, if contracts do not come up for renewal, you'll be mechanically higher? And then just on the cash points, if you're able to comment on whether France, for example, is getting closer to cash breakeven itself.

I won't give you the breakdown by country on cash. I think what we do is manage cash all across the group. Just as an example, we have a negative working cap in France when we have a positive working cap in the U.S. So the way to look at it, obviously, is not the same. Okay.

But we have the same pressure on every country. So there's no difference on the way we are managing them.

And furlough mechanism or deferred payment of social charges varies from country to country. So beauty of our organization is that we have a full-fledged empowered management team in every country using, obviously, all levers they have in hand to reach our objective on cash.

And just on retention, please. So when you say it's improved 140 basis points, if I'm not mistaken, that's as a percentage of total revenue. So it looks like contracts not coming up for renewal could just make a...

No. We can only retain what has come for renewal. So we have improved on what has come for renewal. We have retained more than we did last year. And the absolute value, EUR 77 million.

The next question comes from the line of James Ainley calling from Citi.

Yes. Two questions, please. The first is I understand the revenue outlook is uncertain. How should we think about the drop-through to profitability as revenues start to recover? If I'm correct, the second half drop-through was close to 22%. Is that the right metric to think about? One, first question. And then the second question is your competitors are talking a lot about new business growth and a good pipeline of first-time outsources appearing. Are you seeing that as well? And do you think we can expect stronger new business growth in 2021?

Okay. Well, as far as growth is concerned, yes, H2 was 22%, which led to an average for the year of fiscal year '19-'20 at 27%. But as now, we are anticipating revenue to increase, we won't talk any more about drop-through but fall-through. So how any additional euro of revenue will translate into an additional EBITDA. As far as outsourcing is concerned, it's clear that what happened during the pandemic will somehow motivate self-operated players to contemplate outsourcing their services -- any services, by the way, because they will be under cost pressure. And they have realized that they were not COVID-19 proof during the crisis. So we have started to see self-operated players coming to us to outsource their services, whether, by the way, contract catering or cleaning or other services we are providing.

So 22% is the right ratio to think about for the fall-through from here.

22% has been the fall-through for H2, but we are in a seasonal business. H2 includes Q4, and Q4, as you all know, is a month where we have a low level of activity because part of the business is closed, not starting with schools in July and August. So the reading, obviously, has -- obviously, to take this into account.

The next question comes from the line of Sabrina Blanc calling from Societe Generale.

I have 3 questions, if I may. The first one is regarding the working-from-home new trends. Have you made any assumption of the potential impact? As you said, the 18% of the revenues are coming from white collar. And linked to this question, can you disclose margin per segment or otherwise difference between the B&I, education and so on and the difference of CapEx? And the second key question is regarding the new offer that you have mentioned: delivery, connected fridge. You said that you are not expecting more CapEx, but could we have an idea of potential margin of this business? The -- we could expect further logistic cost in a sense. And thirdly, and also linked to this question, could we have an idea of the weight of those new solutions compared to traditional canteen?

Thank you for your questions. Yes, working from home, as I explained, I think less than 18% of our group revenue in '18-'19 was composed of, yes, lunch meals we were providing to white collars who could work from home. Just to give a sense of our exposure to the work-from-home phenomena. We have launched, as an example, in France, a restructuring plan, explaining that we do it because we anticipate that 20% of the people that used to come to the office will not come anymore to the office and will stay at home. Okay. So we anticipate 20% attendance -- potential attendance in our sites and cafeterias from people working more from home than at the office. So if you take 20% of 18%, you end up with a little bit than 3% of that -- of our revenue that could be disappearing. And I said could be, because it's obvious that we are not going to wait and see and do nothing. Our objective, and that's the reason why we have -- and we are communicating on our existing solutions, is to come with foodservice solutions to compensate this loss of revenue. You remember that before COVID-19 crisis, our capitation rate in B&I offices was slightly less than 50%, which means that for 100 people coming to work, having the opportunity to eat with us, only 50 or less than 50 of them were doing it. If we manage to increase this ratio post lockdown, we could compensate part of what we may lose because we will not have 100 people coming to office but only 80. And that's exactly the purpose of all these new foodservice solutions. And these new foodservice solutions are not just on PowerPoints. They are reality. They have already started to be deployed with existing customers. And what we observe is that it works. It works. Where there are foodservice solutions that meet guest needs, we increase our capitation rate, and we have more people eating with us. The other beauty of this new foodservice solutions is that margin is relative to our traditional cafeteria B&I margin. And why? Because they are less labor-intensive. Service is simplified. And you mentioned about logistic cost. But again, don't take us wrong. We are still making meals available at the office. So we are not -- we have not entered into business models where we deliver one meal at a time to get somewhere in the cities. It's not the business we are in, not the business we are in. So this reinvention of the B&I business, which is well underway as far as Elior is concerned, make us in a very good position when people come back to the office to have them eating with us with, yes, a wider range of foodservice solution: click-to-collect, click-to-serve, click-to-delivery. And as far as the weight is concerned, our ultimate goal is to fully compensate with this new foodservice solution the potential revenue we may lose from the increase of working from home. And the other reason why we think it's possible is because as -- you remember, in this industry, this industry didn't use to address the less than 150 meals a day customers. With this new foodservice solutions, we can do it. We can offer a viable -- economically viable foodservice solutions to clients with far less than 150 meals a day. That's already what we do with a few customers. We have started long time in Italy. And we have customers with 20, 30 meals a day, and we have a viable foodservice solution, which is economically relative to our operational capital. As far as CapEx, there is no CapEx. We use our existing assets. We use our existing assets. Restaurants, we already operate; or kitchens, which have been used in the past to serve different segments to address this new -- this B&I segment. And digital, as I mentioned, used to be the territories of the food tech of the world, but it's a fallacy, I think. We have digital solutions, which are at par with the one of this food bank. And just as a proof in the pudding, we gave you the rating of our apps, which are rating coming from our guests using this app. So there is no specific barriers to entry around digital. We fully master this part of this foodservice solutions. And today, the guest experience we are proposing is at par, if not better, than many other food tech that have tried to capture our business. Plus we have the advantage that we know how to prepare a healthy meal for people having lunch at work. Did I answer your question?

Okay.

The next question comes from the line of Leo Carrington calling from Crédit Suisse.