埃尔іс投資者關係日解讀：北美制服行業整合（CTAS/UNF/VSTS）+全球害蟲防治（ROL）+法國製造業（MAN）

Elis IR Day Read-Thru's: Insightson N.A. Uniform industryconsolidation (CTAS/UNF/VSTS) +Global Pest (ROL) + Frenchmanufacturing (MAN) U.S. Business & Professional ServicesNEUTRALUnchanged U.S. Business & Professional Services Manav Patnaik+1 212 526 2983manav.patnaik@barclays.comBCI, US At its CMD yesterday, Elis said that 1) the N.A. UniformServices market “situation is not simple” & entering it “is notfor tomorrow,” indicating current industry dynamics make anacquisition (almost) impossible; 2) they also see the GlobalPest Control market as highly attractive... Ronan Kennedy, CPA+1 212 526 2912ronan.kennedy@barclays.comBCI, US Elis SA (ELIS) is not under coverage by Barclays Research. Information about this company is beingprovided for information purposes only and is not an investment recommendation by BarclaysResearch. …Albeit expensive, valuation wise (in terms of acquisition multiples); and 3) re: MAN – there wasalso some mixed commentary on French manufacturing, with immigration reform potentiallypressuring blue collar jobs and making the market tighter. To elaborate a bit on each: •Recall last fall that Elis (not covered) made waves by confirming its ambitions to acquireeither VSTS or UNF.In terms of potential industry consolidation insights, we see the keytakeaway being that Elis noted "nothing is on the table for the U.S." °This included the view that potentially acquiring UNF is "dead for us.”Elis said CTAScould pay significantly more for UNF than it could feasibly muster – as a function of CTAS’scapital, scale, and the synergies CTAS could achieve. And while the CEO acknowledged anelement of surprise that CTAS took what Elis saw as an anti-trust risk – it was for uniformrental only. °Not surprisingly, Elis also doesn’t sound super interested in VSTS, saying its “financialand operational performance is every day worse and worse and worse.”Even at ~ $6/share “it is not an option for us" (vs. the $13.68 VSTS closed at on 9/4/24 - the day beforeReuters broke news of Elis’s interest in VSTS).We remind you that VSTS’s F2’Q25 was anotherdisappointing quarter that had us going From 'lost me' to 'at a loss for words', 05/08/25. °Acquiring a regional Uniform rental player is “impossible – there is absolutely nochance” for Elisbecause without the cost synergies the U.S. companies could create, theacquisition price Elis would have to pay, and therefore related returns, would be non-competitive. Also, the quality of assets and financial performance for flat linen companiesmakes Elis concerned about paying too much because they think the multiples PE hasrecently paid are too expensive. °Note: We have written extensively on potential consolidation in the industry – see theAppendix for recent/relevant notes. °From a fundamental perspective, Elis pointed out two things of note:1) the strengthand opportunity presented by the health care end-market was emphasized by Elis and issomething CTASoftenspeaks to (and is now ~8% of CTAS's revenues, growing DD); and2) Global Cleanroom was highlighted as a $1.5B global (and $700M US) opportunity forUniform companies with strong demand in Life Sciences, Pharma, Biotech, and Micro-Electronics – supporting whatECLhas said about relative strength in these end markets.Cleanroom is relatively smaller for the US uniform co.’s but of strategic importancenonetheless (for more see BIPS of Info: Interphex '24 takeaways, Manav Patnaik, 04/19/24). •Elis also commented on the Global Pest Control market, calling it fast growing, withgood profitability and low maturity, and with accelerated M&A trends and increasinginterest from investment funds.Elis estimates a $27B TAM (~45% of the market in N.A.) thatwill grow at a 6% CAGR to $34B in ’30 from $27B in ’25. Elis referenced the following structuraltrends driving market growth: global warming, urbanisation, globalisation, regulation, e-reputation, vector-borne diseases, business pressure, growing middle class, rise of pests andinvasive species, and sustainability. °Note that while Elis’ Pest Control revenues are only ~2% of total company revenues, theyhave grown at a +28% CAGR since 2015. Elis has 400k potential clients in its existingportfolio and is accelerating expansion into new areas. And like ECL and ROL, ELIS isaccelerating the roll-out of innovation and IT-driven solutions. •And lastly, re: MAN - there was some mixed commentary on French manufacturing, withimmigration reform potentially pressuring blue collar jobs.France is ~30% of Elis'revenues; and as they noted: "We have a lack of workforce in Europe, all the geopoliticalevolution with less and less willingness to welcome some foreigners in our countries will alsoincrease the pressure regarding the sourcing of blue collar. It puts pressure on the marketwith increase of labor force, and of course, it is always a key reason why we ask for priceincrease with our customers." Appendix - Recent/relevant notes •Vestis Corp.: From 'lost me' to 'at a loss for words', Man