Sodexo Group Presentation April, 2018

Transcription

1 Sodexo Group Presentation April, 2018

2 FORWARD-LOOKING INFORMATION This presentation contains statements that may be considered as forward-looking statements and as such may not relate strictly to historical or current facts. These statements represent management s views as of the date they are made and Sodexo assumes no obligation to update them. Figures have been prepared in thousands of euro and published in millions of euro. Alternative Performance Measures: please refer to Appendix 6 for definitions 2

3 AGENDA 1. First Half Fiscal 2018 highlights 2. Fiscal 2017 Highlights 3. Sodexo at a glance 4. Shareholder & Investor relations 5. Appendices 3

4 FISCAL 2018 FIRST HALF HIGHLIGHTS

5 FIRST HALF FISCAL 2018: SUMMARY H1 18 Organic revenue growth of +1.9%, excluding 53 rd week, for the First half of Fiscal 2018, and underlying margin of 6.1% were below expectations Clear set of action plans in place, both short and medium term The Group continues to generate substantial cash flow and the balance sheet remains strong The Group remains well-positioned in structurally attractive global growth market 5

6 MODEST GROWTH First Half Fiscal 2018 highlights H1 18 ORGANIC GROWTH +1.7% +1.9% Excl. 53 rd week impact -1.5% North America ON-SITE SERVICES +1.6% +4.4% excl. North America BENEFITS & REWARDS SERVICES -2.0% Latin America +2.9% +7.1% excl. Latin America Good momentum in Business & Administrations Ramp-ups in Energy & Resources modest pick-up in France Strong dynamic in developing economies Health Care & Seniors soft in North America and Europe but very strong in developing economies Education suffering from prior year net losses in Universities Benefits & Rewards Services strong growth in Europe. Brazil impacted by interest rate decline 6 * Please refer to Appendix 6 for Alternative Performance Measures definitions

7 DECREASE OF UNDERLYING OPERATING PROFIT First Half Fiscal 2018 highlights H1 18 Underlying Operating profit -15.0% -7.4% TOTAL GROWTH EXCLUDING CURRENCY* Underlying Operating profit margin -80 bps -70 bps TOTAL GROWTH EXCLUDING CURRENCY* Expected in H1 Lower interest rates in Brazil Deconsolidation of certain activities Additional savings generated by the Adaptation and Simplification Program, reinvested to enhance growth Unplanned incremental factors in H1 Delays in implementation of performance enhancement leading to margin deterioration in North America mainly in Education and Health Care Significant contracts ramp up not yet at expected level of profitability 7 * Please refer to Appendix 6 for Alternative Performance Measures definitions

8 STRONG NET PROFIT, BALANCE SHEET AND CASH FLOW H1 18 First Half Fiscal 2018 highlights Tax rate down 32.6% 25.9% H1 FY17 H1 FY18 Solid Balance sheet 1.1x 49% NET DEBT RATIO GEARING Increased Net Acquisitions 674m spent 1.3% net contribution to revenues Group Net profit growth +6.9% +13.9% TOTAL GROWTH EXCLUDING CURRENCY* Strong free cash flow 125m Share buyback program 300m 8 * Please refer to Appendix 6 for Alternative Performance Measures definitions

9 PERFORMANCE IN THE P&L First Half Fiscal 2018 Financial Performance millions H1 FY 2018 H1 FY 2017 At current exchange rates CHANGE Excluding currency effect Revenues 10,293 10, % +3.0% Underlying Operating profit % -7.4% Underlying Operating margin 6.1% 6.9% -80 bps -70 bps Other Operating income and expenses (73) (153) Operating profit % +4.1% Net financial expense (44) (56) Effective tax rate 25.9% 32.6% Underlying Group net profit % -7.6% Group net profit % +13.9% H1 18 9

10 ROBUST CASH FLOW First Half Fiscal 2018 Financial Performance H1 18 millions H1 FY2018 H1 FY2017 Operating cash flow Change in working capital 1 (402) (388) Net capital expenditure (123) (105) Free cash flow Net acquisitions (674) (165) Share buy-backs/ Treasury stock (49) (302) 2 Dividends paid to parent company shareholders (411) (359) Other changes (including change in Financial Assets, scope and exchange rates) (43) (31) (Increase)/decrease in net debt (1,052) (827) 1 Excluding change in financial assets in Benefits & Rewards of (73)m in H1 FY 18 and (38)m in H1 FY 17. Total Change in working capital as reported in Consolidated Cash Flow statement: H1 FY 18 of (475)m = (402)m + (73)m and H1 FY 17 of (426)m = (388)m + (38)m 2 including 300m of the 2017 share buy-back program 10

11 ROBUST BALANCE SHEET AND RATIOS H1 18 First Half Fiscal 2018 Financial Performance millions February 28, 2018 February 28, 2017 February 28, 2018 February 28, 2017 Non-current assets 7,981 7,916 Shareholders equity 3,343 3,574 Current assets excluding cash 5,207 5,532 Non-controlling interests Restricted cash Benefits & Rewards Financial assets Benefits & Rewards Cash 1,519 1, Non-current liabilities 3,956 4, Current liabilities 8,335 8,168 Total assets 15,668 16,008 Total liabilities & equity 15,668 16,008 Gross borrowings 4,062 3,758 Operating cash totaled 2,399 million 1, of which 2,002 million related to Benefits and Rewards Services Net debt 1,663 1,234 Gearing ratio 49% 34% Net debt ratio (net debt/ebitda) Cash Bank overdrafts of 81m + Financial assets related to BRS activity 11 * Please refer to Appendix 6 for Alternative Performance Measures definitions

12 ORGANIC GROWTH H1 18 First Half Fiscal 2018 Financial Performance REVENUE GROWTH -3.2% Currency effect -6.2% Scope changes +1.3% ORGANIC GROWTH +1.7% / +1.9% excl. 53 rd week impact On-site Services +1.6% of which: Benefits and Rewards Services +2.9% 12

13 53 rd WEEK WORKING DAYS H1 18 FY16 > 52 weeks x FY17 > 52 weeks x days 370 FY18 > A calendar year 365 Impacts Q1 > 0 H1 > -1 9M > 0 FY > -5 13

14 BUSINESS & ADMINISTRATIONS REVENUES ORGANIC GROWTH H % On-site Services FY 17 millions +2.7% North America Strong growth in Airline lounge activity 24% Organic growth Net acquisition Significant project work in Q1 Increase in comparable unit sales of FY17 B&A 5, % Unfavorable currency effect 5, % Europe Contract openings and continued recovery in tourism in France Energy & Resources -17% 50% of FY17 B&A Solid growth in Government & Agencies +12.4% Africa, Asia, Australia, Latin America & Middle East 26% H1 FY 2017 H1 FY 2018 Strong growth in Corporate driven by strong new business and comparable unit sales Energy & Resources favorable momentum of FY17 B&A 14 * Please refer to Appendix 6 for Alternative Performance Measures definitions

15 HEALTH CARE & SENIORS REVENUES ORGANIC GROWTH H % On-site Services FY 17 millions -1.6% North America Lower than expected new contract wins 66% 2,500 Organic Growth -0.1% Net acquisition Unfavorable currency effect 2, % +16.6% 1 Weak comparable unit growth Europe Selective bidding in France and UK still ongoing; some recent wins in UK Africa, Asia, Australia, Latin America & Middle East of FY17 Health Care & Seniors 29% of FY17 Health Care & Seniors Strong double digit growth in Brazil due to contract wins and increased same site sales 5% H1 FY 2017 H1 FY 2018 Solid comparable growth in Asia of FY17 Health Care & Seniors 15 1 Restated for internal transfers between segments. *Please refer to Appendix 2 for Alternative Performance Measures definitions

16 EDUCATION REVENUES H % On-site Services FY 17 millions ORGANIC GROWTH -4.1% North America 2,483 Organic Growth -2.7% Net disposal Unfavorable currency effect 2, % Poor momentum from last year Steady comparable unit growth Improving retention to date Europe High single digit growth in Schools in UK particularly in the private sector Positive calendar effect (+2 days) in France and Italy 77% of FY17 Education 21% of FY17 Education H1 FY 2017 H1 FY % 1 Africa, Asia, Australia, Latin America & Middle East Very strong growth in Schools in Asia particularly in India and China 2% of FY17 Education 16 1 Restated for internal transfers between segments. *Please refer to Appendix 2 for Alternative Performance Measures definitions

17 ISSUE VOLUME AND REVENUES Benefits & Rewards Services H1 18 ISSUE VOLUME billions REVENUES millions Organic growth Acquisitions Organic growth 9.1 Unfavorable currency effect Net disposal Unfavorable currency effect 413 ORGANIC GROWTH ORGANIC GROWTH +5.6% +2.9% H1 FY 2017 H1 FY 2018 H1 FY2017 H1 FY * Please refer to Appendix 6 for Alternative Performance Measures definitions

18 EUROPE, ASIA, USA Benefits & Rewards Services H % FY 17 BRS revenues ISSUE VOLUME billions 10.0 REVENUES millions 5.1 Organic growth Acquisitions Unfavorable currency effect Organic growth Net disposal Unfavorable currency effect 229 ORGANIC GROWTH ORGANIC GROWTH +5.9% +7.1% H1 FY 2017 H1 FY 2018 H1 FY2017 H1 FY 2018 Robust growth in Central Europe Continued growth in Incentive & Recognition Weakness in India impacted by mandatory transfer from paper to card on January 1 st and a loss of a large contract Disposal of Vivabox US, last year in Q4, impacting H1 strongly due to seasonality 18 * Please refer to Appendix 6 for Alternative Performance Measures definitions

19 LATIN AMERICA Benefits & Rewards Services ISSUE VOLUME billions Organic growth H1 18 REVENUES millions 47% FY 17 BRS revenues 4.0 Unfavorable currency effect Organic growth Acquisitions Unfavorable currency effect 184 ORGANIC GROWTH ORGANIC GROWTH +5.3% -2.0% H1 FY 2017 H1 FY 2018 H1 FY 2017 H1 FY 2018 Weakness in Brazil impacted by lower interest rates and number of beneficiaries slightly offset by increase in average face value Continued growth in Chile and Mexico * Please refer to Appendix 6 for Alternative Performance Measures definitions 19 Note: As per hyperinflation accounting, Fiscal 2018 and Fiscal 2017 Venezuelan bolivars have been converted at the exchange rate as at February 28, 2018 of 1 U.S. dollar = 35,280 VEF relative to the Fiscal 2017 rate of 1 U.S. dollar = 3,250 VEF.

20 DETERIORATION IN UNDERLYING OPERATING PROFIT First Half Fiscal 2018 Financial Performance H1 18 Underlying Operating margin 6.9% -80 bps TOTAL GROWTH -70 bps EXCLUDING CURRENCY EFFECT millions Underlying Operating profit % TOTAL GROWTH -7.4% EXCLUDING CURRENCY EFFECT * 6.1% At current exchange rates 627 H1 FY 2017 H1 FY * Please refer to Appendix 6 for Alternative Performance Measures definitions

21 UNDERLYING OPERATING PROFIT AND MARGIN H1 18 H1 FY 2017 H1 FY 2018 At constant rate Business & Administration 224M +4.3%* 207M +3.9%* -40 bps Loss of several high margin accounts Slower than expected ramp-up in profitability of some recent large contracts Health Care & Seniors 159M +6.4%* 145M +6.1%* -20 bps Delay in SKU rationalization plan Higher labor inflation in North America Lower performance on some large contracts Education 252M +10.1%* 211M +9.5%* -60 bps Delay in delivery of performance improvement plans Higher labor inflation in North America Impact of negative net development from last year Benefits & Rewards 156M +34.1%* 124M +30.0%* -320 bps Decline in interest rates in Brazil Investment in diversification, in particular Mobility Accelerated card migration 21 * % of revenue

22 REVISED FISCAL 2018 OBJECTIVES H1 18 Outlook In H1 Fiscal 2018 Soft growth in revenues Decrease in margins Strong cash flow Low level of signatures since the beginning of the Fiscal Year Continued weakness in North America especially Health Care & Seniors Negative calendar effect in Education in Q3 Government & Agencies impacted by UK Army losses Slow-down in Energy & Resources Compounded effects of delayed efficiency ramp-ups A further deterioration expected in North America Health Care before the delivery of action plans Organic revenue growth of between 1 and 1.5% excluding 53 rd week impact Underlying operating profit margin around at 5.7% (excluding currency effects) 22 * Please refer to Appendix 6 for Alternative Performance Measures definitions

23 IMMEDIATE ACTION PLAN DESIGNED FOR NORTH AMERICA BUT IMPLEMENTED ACROSS REGIONS H1 18 IMPROVING FOOD COST MANAGEMENT Rationalize SKUs Control drop frequency more strictly Further increase supplier and product compliance Accelerate synergies from acquisitions OPTIMIZING SG&A/OUT OF UNITS Introduce Zero base redesign Consolidate back-office including acquisitions Simplify the organization Reduce discretionary spend STRENGTHENED MANAGEMENT TEAM: RIGHT PEOPLE, RIGHT ROLES ENHANCING LABOR PRODUCTIVITY Enhance demand-based scheduling to adapt on site productive hours to better meet needs Improve overtime management Rationalize temporary labor Re-engineer Full time/ Part time mix ADRESSING LOW PERFORMING CONTRACTS Implement detailed action plan for each of the top low performing contracts Enhance claim management and client renegotiations Ensure close monitoring by Executive committee member for each contract EMBEDDED IN A LONG TERM STRATEGIC AGENDA 23

24 THE STRATEGIC AGENDA FOCUS ON GROWTH H1 18 FOCUS ON EXECUTION GROWTH OPERATIONAL EFFICIENCY With a unified and rigorous performance management Program (STEP) FOCUS ON WHAT MAKES A REAL DIFFERENCE TALENT STRENGTHENED MANAGEMENT TEAM: RIGHT PEOPLE, RIGHT ROLES CORPORATE RESPONSIBILITY 24

25 STEP: A UNIFIED AND RIGOROUS PERFORMANCE MANAGEMENT PROGRAM H1 18 Client Sales & Marketing New approach Redefine and track common key operational drivers Align for consistency Use STEP for: Business Reviews Definition of objectives Performance appreciation Consumer Sales & Marketing Labor Efficiency Material Costs Overhead Costs People Social Impact 25

26 THE WAY FORWARD H1 18 Discipline and Accountability for a better execution Sodexo is well placed in attractive, structural growth markets and, with a reinvigorated performance culture and improved execution, will return to delivering strong growth over time program Refocus our people on operational excellence Clear set of immediate action plans Refreshed management team Specific focus on North America 26

27 FISCAL 2017 HIGHLIGHTS

28 GROWTH INDICATORS ONSITE SERVICES Fiscal 2017 highlights FY 17 Client retention 93.1% 93.5% Comparable unit growth Business development 7.2% 6.5% 2.1% Excluding 53 rd week 1.5% Fiscal 2016 Fiscal 2017 Fiscal 2016 Fiscal 2017 Fiscal 2016 Fiscal

29 CENTERPLATE A leading event hospitality provider for North America and the UK FY 17 COMPANY OVERVIEW A WELL DIVERSIFIED PORTFOLIO¹ Food and beverage service provider 40,000 events and 100m guests annually 8% Convention Centers c.250 venues, in North America, the UK and Spain 4 th largest operator by revenues in the US Sports & Leisure market North America 92% 22% 38% 32% Sports Entertainment UK 3 business lines: Convention Centers Sports Entertainment c.30,000 employees 12-months revenues to June 2017: $998 million RECOGNISED EXPERTISE SELECTED AWARDS Best Food and Beverage 5 Years Running, Convene Magazine America s Best Stadium Food Travel + Leisure Magazine ¹ 2016 revenue breakdown #1 NFL Experience Stadium Journey 29

30 CENTERPLATE + SODEXO FY 17 SPORTS & LEISURE TRANSFORMED NORTH AMERICA STRENGTHENED S&L Sodexo S&L Current revenues Doubling revenues Sodexo S&L revenues plus Centerplate From 472 to 700+ sites operated B&A Healthcare B&A S&L Healthcare Business mix Education Education Conference & Convention Centres 21% Cultural destinations 39% Airline lounges 12% Sports 28% From 12,500 to 40,000+ employees 122,500 employees 150,000+ employees 30

31 CENTERPLATE CONTRIBUTION TO SODEXO FINANCIALS A leading event hospitality provider for North America and the UK FY 17 P&L 8 months contribution to revenues (~ 500 million) Brings contribution of external growth to date for Fiscal 2018 = 2.5% Before synergies, slight dilution to margins in Fiscal 2018 Consideration = $675m BALANCE SHEET Brings total Sodexo commitments since YE=~ 650m Doubles Sodexo net debt => net debt ratio including commitments at Fiscal 2017 year end = 0.8 With synergies, margins will be in line with Group North American margins Mild Net profit accretion from Fiscal 2018 CASHFLOW Strong cash generating business, with significant retail operations Expected capex / sales ~3% EV/revenues = 0.7x VALUATION RATIOS EV/pro forma EBIT post synergies = 9-10x 31

32 SODEXO AT A GLANCE

33 SODEXO KEY FIGURES Sodexo at a glance H bn revenues 427,000 employees Founded in 1966 by Pierre Bellon Main Shareholders as 31/08/2017: > Bellon S.A 40.4% of capital (55.8% of voting rights) > International Institutional investors 37.7% 19 th largest employer worldwide 100 million consumers served daily 80 countries 11.8bn market capitalization April 11, 2018 Strong Investment Grade S&P A-/A-1 33

34 AN ENGAGED WORKFORCE Sodexo at a glance FY 17 34% reduction of carbon (2) employee engagement survey 2 Absolute reduction in Scope 1, Scope 2 and Scope 3 carbon emissions, compared to a 2011 base line. 34

35 OUR MAJOR STRENGTHS Sodexo at a glance Independence A unique range of Quality of Life Services particularly well aligned with evolving client demand Significant market potential A global network covering 80 countries Undisputed leadership in developing economies A robust financial model that allows Sodexo to self-finance its development A strong culture and engaged teams 35

36 WORLD LEADER IN QUALITY OF LIFE SERVICES Sodexo at a glance ON-SITE SERVICES An unrivaled array of services : BENEFITS AND PERSONAL AND REWARDS SERVICES HOME SERVICES 8 client segments: 5 service categories: 3 service categories: Corporate Services Energy and Ressources (Remote Sites) Defense Justice Sports & Leisure Health Care & Seniors Education Employee Benefits Incentive and Recognition solutions Mobility and Expense management Public Benefits Childcare In-Home Senior Care Concierge services 36 page 36

37 FISCAL 2017 REVENUE SPLIT: 20.7 BN Sodexo at a glance Revenue by segment Distribution by geographic region 21% Health Care & Seniors 4% Benefits and Rewards Services 51% Business & Administrations 24% Education 96% On-Site Services 4% 37

38 SODEXO S VALUE PROPOSITION Sodexo at a glance Maximizing value added with a unique and differentiating offer DESIGN MANAGE DELIVER adapted to client priorities : Increase people satisfaction, motivation and effectiveness Enhance processes quality, efficiency and productivity Improve infrastructure and equipment utilization, reliability and safety To deliver Enhanced Quality of life to client employees Support for client development and achievement of objectives 38

39 INTEGRATED QUALITY OF LIFE SERVICES OFFER Sodexo at a glance 39

40 BENEFITS AND REWARDS: THE PASS CYCLE Sodexo at a glance SODEXO PASS Payment of the value CLIENTS Reimbursement of the value Presentation of the Pass for reimbursement Delivery of the Pass Distribution of the Pass AFFILIATED MERCHANTS Use of the Pass BENEFICIARIES 40

41 Acquisitions SODEXO S DEVELOPMENT - 50 YEARS OF HISTORY Sodexo at a glance 1966 Sodexo founded by Pierre Bellon International expansion starts Service Vouchers launched 1983 IPO of Sodexo on Paris stock exchange International development: Americas, Russia, South Africa & Asia 2005 Michel Landel becomes CEO, Pierre Bellon remains Chairman of the Board of Directors 2009 Sodexo reviews its strategic positioning 2016 Sophie Bellon becomes Chairwoman of the Board of Directors 1995 Gardner Merchant, UK Partena Sweden Sodexo Marriot Services US 2001 Sogeres France Wood Dining Services US VR Brazil Puras do Brasil, Score Groupe and Crèche Brazil Attitude, France Lenôtre, France Zehnacker, Germany Roth Bros, US Comfort Keepers & MacLellan, India Circles, US RKHS, India Motivcom, UK Inspirus US PSL, UK Centerplate, US Morris, Australia 41

42 REGULAR AND SUSTAINED PERFORMANCE Sodexo at a glance Revenues (in millions) +4.5% CAGR over 10 years Operating Cash flow (in millions) Operating Profit ( in millions) +5.5 % CAGR over 10 years Net Income ( in millions) % CAGR over 10 years +7.6% CAGR over 10 years

43 REGULAR AND SUSTAINED SHAREHOLDER RETURNS Sodexo at a glance 6 5 EPS (in ) +8.1% CAGR over 10 years 5 4 Dividend (in ) +9.1% CAGR over 10 years

44 SHAREHOLDER & INVESTOR RELATIONS

45 SODEXO SHARE OWNERSHIP AS OF AUGUST 31, 2017 Shareholder & Investor Relations OWNERSHIP STRUCTURE AS OF AUGUST 31, 2017 BREAKDOWN OF VOTING RIGHTS AS OF AUGUST 31, % Public 40.4% Bellon SA 37.7% Non- French Institutional shareholders 15% French institutional shareholders 1.1% Employees 1.5% Treasury shares 4.3% Individual shareholders 43.1% Public 1.1% Employees 55.8% Bellon SA 45

46 SODEXO SHARES Shareholder & Investor Relations Sodexo shares are listed on NYSE Euronext Paris Euroclear code: FR ; included in the Next 20 index Sodexo American Depositary Receipts (ADRs) are traded on the over the counter (OTC) market, ticker SDXAY, with five ADRs representing one Sodexo share. Since initial listing in 1983 SHARE PRICE HAS BEEN MULTIPLIED BY 63* * As of August 31, 2017 More than 4.6 times the growth of the CAC 40 46

47 STOCK MARKET PERFORMANCE Shareholder & Investor Relations SODEXO CAC 40 August 2012 August 2013 August 2014 August 2015 August 2016 August 2017 Over the last five fiscal years, Sodexo s share price increased by +55.9%, whereas the CAC 40 index increased by +49.0% during the same period During the last fiscal year, Sodexo s share price decreased by 5.6% whereas the CAC 40 index rose by +14.6% 47

48 REGISTERED SHAREHOLDERS Shareholder & Investor Relations Benefits of being a registered Sodexo shareholder: reduced administration costs (for pure registered shares only); double voting rights for registered shares held for at least four years; and since 2014, a dividend premium of 10% for registered shares held for more than four years (limited to 0.5% of issued capital per shareholder) Contacts for Registered Shareholders: For further information call : Société Générale Nantes (France) : +33(0) or visit the Société Générale website: 48

49 SODEXO ADR PROGRAMME Shareholder & Investor Relations Sodexo offers investors the convenience of investing in American Depositary Receipts (ADRs) For any question about Sodexo ADRs, please contact Citi: New York London Michael O Leary Michael Woods citiadr@citi.com michael.woods@citi.com Tel: +1(212) Tel: Benefits of ADRs to US investors They clear and settle according to normal US standards Stock quotes and dividend payments are in US dollars They can be purchased in the same way as other US stocks via a US broker They provide a cost effective means of building an international portfolio. 49

50 APPENDICES 1. Contracts wins 2. Corporate responsibility distinction 3. Adaptation and simplification program 4. H1 Fiscal 2018 exchange rates 5. Number of shares 6. Alternative Performance Measure definitions and financial ratios 7. Reverse factoring 8. Gross Financial debt 9. Financial calendar 50

51 CONTRACT WINS AND EXTENSIONS First Half Fiscal 2018 highlights Appendix 1 Contract extensions Continued momentum in Energy & Resources Pick up in Food contracts Pierre Fabre Corporate contract in France Ecopetrol Onshore contract in Colombia Renault Corporate contract in Brazil Wellspring Academy Trust Schools contract in the United Kingdom Huawei Corporate contract in 5 countries Vale Onshore contract in Brazil Methodist Hospital North Lake Health Care contract in the US Nissan Corporate contract in Brazil 51

52 CORPORATE RESPONSIBILITY DISTINCTIONS First Half Fiscal 2018 highlights Appendix 2 Named the top-rated company in its sector on the Dow Jones Sustainability Index (DJSI) for the 13 th consecutive year Earnt the highest marks in RobecoSAM s Sustainability Yearbook for 11 th straight year 52

53 ADAPTATION PROGRAM DELIVERING ON TRACK First Half Fiscal 2018 Financial Performance Appendix 3 millions EXCEPTIONAL IMPLEMENTATION COSTS TOTAL over 18 months (Sept Feb. 2017) 108 in FY in H SUSTAINABLE CUMULATED ANNUAL SAVINGS Fiscal Fiscal H1 Fiscal Objective for Fiscal 2018 and each year after ~220 53

54 H1 FISCAL 2018 EXCHANGE RATES Appendix 4 1 = Average rate H1 Fiscal 18 Reference rate Fiscal 17 Change average rates H1 Fiscal 18 vs. Reference Fiscal 17 Closing rate H1 Fiscal 18 at 28/02/2018 Change 28/02/18 vs. 31/08/17 U.S. Dollar % % Pound Sterling % % Brazilian Real % % 54

55 NUMBER OF SHARES Appendix 5 Company s share capital February 28, 2018 August 31, 2017 February 29, 2017 Company s share capital, number of shares 150,830, ,830, ,741,139 Treasury shares 2,529,632 2,205,010 5,814,876 Number of shares for EPS calculation (Basic weighted average number of shares) 148,535, ,998, ,936,978 55

56 ALTERNATIVE PERFORMANCE MEASURE DEFINITIONS Appendix 6 Blended cost of debt The blended cost of debt is calculated at period end and is the weighted blended of financing rates on borrowings, (including derivative financial instruments) and cash pooling balances at period end. Free cash flow Please refer to Consolidated Financial position. Growth excluding currency effect Change excluding currency effect calculated converting H figures at FY 2017 rates, except for countries with hyperinflationary economies. As a result, for Venezuelan Bolivar, H and H figures in VEF have been converted at the exchange rate of USD 1 = VEF 35,280 vs. VEF 3,250 for FY Issue volume Issue volume corresponds to the total face value of service vouchers, cards and digitally-delivered services issued by the Group (Benefits and Rewards Services activity) for beneficiaries on behalf of clients. Net debt Group gross borrowings at the balance sheet less operating cash. Organic growth Organic growth corresponds to the increase in revenue for a given period (the "current period") compared to the revenue reported for the same period of the prior fiscal year, calculated using the exchange rate for the prior fiscal year; and excluding the impact of business acquisitions and divestments, as follows: for businesses acquired (or gain of control) during the current period, revenue generated since the acquisition date is excluded from the organic growth calculation; for businesses acquired (or gain of control) during the prior fiscal year, revenue generated during the current period up until the first anniversary date of the acquisition is excluded; for businesses divested (or loss of control) during the prior fiscal year, revenue generated in the comparative period of the prior fiscal year until the divestment date is excluded; for businesses divested (or loss of control) during the current fiscal year, revenue generated in the period commencing 12 months before the divestment date up to the end of the comparative period of the prior fiscal year is excluded. For countries with hyperinflationary economies all figures are converted at the latest closing rate for both periods. As a result, for the calculation of organic growth, Benefits & Rewards figures for H and H in Venezuelan Bolivar, have been converted at the exchange rate of USD 1 = VEF 35,280 vs. VEF 3,250 for FY

57 ALTERNATIVE PERFORMANCE MEASURE DEFINITIONS Appendix 6 Underlying Operating profit Operating profit excluding other operating income and other operating expenses. Other operating income and expenses include gains or losses related to perimeter changes and on changes of post-employment benefits, restructuring and rationalization costs, M&A costs, amortization and impairment of client relationships and trademarks and impairment of noncurrent assets. Underlying Operating margin Underlying Operating profit divided by Revenues. Underlying Operating margin at constant rate Margin calculated converting H1 Fiscal 2018 figures at FY 2017 rates, except for countries with hyperinflationary economies. Underlying Net Profit Underlying Net profit presents a net income excluding significant unusual and/or infrequent elements. Therefore, it corresponds to the Net Income Group share excluding Other Income and Expense and significant nonrecurring elements in both Net Financial Expense and Income tax Expense. In the first half of Fiscal 2018, the Underlying net profit excludes from the Net Income Group share the following items and the related tax impact where applicable: Other Income and Expense for -73M Interests received in France on tax reimbursements for 7M Reimbursement of the 3% tax on dividends received for 43M One-off impacts resulting from changes in the US tax regulation for -23M. 57

58 APM - FINANCIAL RATIOS Appendix 6 H H Gearing ratio Net debt ratio Gross borrowings 1 - operating cash 2 Shareholders equity and non-controlling interests Gross borrowings 1 - operating cash 2 Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) 3 49 % 34% H H Gross borrowings 2 Operating cash 3 Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) Non-current borrowings 2,978 3,079 + current borrowings excluding overdrafts 1, derivative financial instruments recognized as assets (12) (6) 4,062 3,758 Cash and cash equivalents 1,519 1,698 + financial assets related to the Benefits and Rewards Services activity bank overdrafts (81) (36) 2,399 2,524 Operating profit (last 12 months) 1,157 1,060 + depreciation and amortization (last 12 months) ,453 1,332 58

59 REVERSE FACTORING Appendix 7 Our reverse factoring program has been put in place as part of a supplier support Program which was implemented in the context of the standardization of our P2P process. The objectives of this supplier support program were to: have the opportunity to work with suppliers which in the past had not accepted our terms and conditions; allow our suppliers to gain access to a way to be paid in a fast and secured manner at a low cost of financing; improve the perception of Sodexo as a buyer ; standardize our payment terms in each significant region of the Group; gain in efficiency in Shared Services Centers with an automatic processing of supplier invoices validated by the Group; For the reverse factoring programs that have been implemented in the context of our supplier support program: Suppliers have the choice but not the obligation to sell, invoice by invoice, their approved receivables before the maturity date. Sodexo has no power over the supplier s decision to sell or not sell its receivables. This is not a tri-partite agreement; In instances where payment terms were modified, terms changed for all supplier invoices irrespective of whether supplier financing was or was not utilized; Sodexo does not receive any fees or payment from the factor nor do we make any payment to the factor other than the payment of the original invoice; Suppliers invoices continue to be paid according to the payment terms negotiated with the suppliers. Whether the bills are in the program or not, the payment date remains the same. Such programs have not changed our liabilities towards our suppliers, which is the reason why these liabilities remain as trade payables and are not reclassified as financial debt under IFRS. 59

60 BREAKDOWN OF GROSS FINANCIAL DEBT: 4,062 million Appendix 8 millions BY CURRENCY BY BY MATURITY 51% 3% other 46% $ < 1 year 1,086* INTEREST RATE 1-2 years % Variable 77% Fixed 2-5 years 852 2,481 Blended cost of debt 2.2% at 28/02/2018 > 5 years 1, * Including commercial paper for an amount of 923m

61 FINANCIAL CALENDAR Appendix 9 Nine month revenues, Fiscal 2018 July 5, 2018 Capital Markets Day September 6, 2018 Annual results, Fiscal 2018 November 8, 2018 Annual Shareholders Meeting 2019 January 22, 2019 These dates are purely indicative, and are subject to change without notice. Regular updates are available in the calendar on our website 61

62 INVESTOR RELATION CONTACT Head of Investor Relations Virginia JEANSON Tel: virginia.jeanson@sodexo.com Investor Relations Manager Sarah JAMALI-KLEIN Tel: sarah.jamali@sodexo.com Investor Relations Coordinator Cynthia CATTY Tel: cynthia.catty@sodexo.com Sodexo 255 Quai de la Bataille de Stalingrad Issy-Les-Moulineaux communication.financiere@sodexo.com 62

63 Thank you!