Fiscal 2011 First Half Results April 21, 2011 sodexo.com
Forward-looking information This presentation contains statements that may be considered as forwardlooking 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 we assume no obligation to update them. You are cautioned not to place undue reliance on our forward-looking statements. page 2
Agenda 1. First half Fiscal 2011 summary 2. Financial performance 3. Analysis by activity and geographic zone 4. Financial statements 5. Outlook page 3
First half Fiscal 2011 Increase in revenues of 10.4% ( 8.3 billion) Organic growth of 4.8% Increase in operating profit of 8.5% (at constant exchange rates) to 488 million while continuing transformation and investment Increase in operating margin by 0.2%, from 5.7% to 5.9% Group net income up 11% ( 252 million) Strengthened financial ratios (gearing ratio of 26%) with financing and maturity of borrowings secured page 4
First half Fiscal 2011 A satisfactory new business activity, including: Detroit Public Schools (U.S.) for technical maintenance services, one of the largest contracts awarded to Sodexo in this segment Nokia (China) Current contract extended to technical maintenance services Life Insurance Corporation (India) the largest contract awarded to Sodexo Motivation Solutions in India (115,000 beneficiaries) Emerging markets: Sodexo continues its vigorous organic growth (up 13.4%) page 5
Agenda 1. First half Fiscal 2011 summary 2. Financial performance 3. Analysis by activity and geographic zone 4. Financial statements 5. Outlook page 6
Financial performance Revenues M 7,488-0.1% Change in consolidation scope + 4.8% Organic growth + 5.7% Exchange rate effect 8,269 Total growth + 10.4% H1 FY10 H1 FY11 page 7
Financial performance Organic revenue growth On-site Service Solutions + 4.8% North America + 3.8% UK & Ireland + 1% Continental Europe + 3.6% Rest of the World + 13.4% Motivation Solutions + 5.0% page 8
Financial performance Organic revenue growth for first half Fiscal 2011: + 4.8% On-site Service Solutions Corporate Start-up of new comprehensive service solutions contracts Momentum in Latin America, Asia-Australia and Remote Sites Health Care and Seniors Improved comparable unit growth in North America Education Comparable unit improvement in North America page 9 + 6.5% + 3.4% + 3.3%
Financial performance Consolidated operating profit M 426 488 Exchange rate effect Constant rates + 8.5% Total growth + 14.6% H1 FY10 H1 FY11 5.7% Operating margin 5.9% page 10
Agenda 1. First half Fiscal 2011 summary 2. Financial performance 3. Analysis by activity and geographic zone 4. Financial statements 5. Outlook page 11
On-site Service Solutions North America M 2,911 Revenues 3,256 + 3.8%* H1 FY10 H1 FY11 * Organic growth Positive exchange rate effect Corporate + 1.0% Contribution from comprehensive service solutions contracts Stable patronage levels on foodservices sites Unfavorable base of comparison from Olympics in Fiscal 2010 Health Care and Seniors + 5.5% Excellent client retention in Fiscal 2010 Acceleration in comparable unit growth Education + 3.6% Increased enrollment levels at schools and universities page 12
On-site Service Solutions North America M Operating profit 171 207 Operating margin 5.9% 6.4% + 12.9%* H1 FY10 * Constant rates Positive exchange rate effect H1 FY11 H1 FY10 H1 FY11 Continuation of site productivity initiatives and control of overheads page 13
On-site Service Solutions Continental Europe M Revenues 2,685 H1 FY10 + 3.6%* * Constant rates Positive exchange rate effect 2,808 H1 FY11 Corporate + 5.3% Accelerated development in Germany and Russia Continuing significant impact of Justice contract in France Health Care and Seniors + 1.0% Modest comparable unit growth Education + 1.7% Development in Sweden and Italy in Fiscal 2010 Offset by effects of autumn 2010 strikes in France page 14
On-site Service Solutions Continental Europe M Operating profit 138 141 Operating margin 5.1% 5.0% + 2.2%* H1 FY10 H1 FY11 * Constant rates Positive exchange rate effect H1 FY10 H1 FY11 Difficult environment, in particular in France and the Netherlands page 15
On-site Service Solutions UK & Ireland M Revenues 583 613 + 1.0%* H1 FY10 H1 FY11 * Organic growth Positive exchange rate effect Corporate + 3.0% Increase in Justice and Defense Environment still difficult in foodservices Health Care and Seniors - 6.7% Slower decision-making by clients and prospects for past 12 months Non-renewal of a large contract Education + 2.8% Development in universities (accommodation services) page 16
On-site Service Solutions UK & Ireland M Operating profit 24 21 Operating margin 4.1% 3.4% -16.7%* H1 FY10 H1 FY11 * Constant rates Positive exchange rate effect H1 FY10 H1 FY11 Good improvement in on-site productivity in Health Care and Justice, offset by: - Restructuring linked to cancellation of DTR PPP contract - Preparation of FY2012 sports events (Rugby World Cup, Olympics) page 17
On-site Service Solutions Rest of the World M Revenues 999 H1 FY10 + 13.4%* * Organic growth Positive exchange rate effect 1,249 H1 FY11 Continued excellent momentum, double-digit growth Corporate + 13.5% Increased development in Remote Sites, Latin America and Asia Health Care and Seniors + 12.8% Continued strong development in Latin America and Asia Education + 12.5% Contract wins in Middle East page 18
On-site Service Solutions Rest of the World M Operating profit Operating margin 30 38 3.0% 3.0% + 13.3%* H1 FY10 H1 FY11 * Constant rates Positive exchange rate effect H1 FY10 H1 FY11 Continued investment in Latin America and Asia page 19
Motivation Solutions Bn 6.2 Issue volume 7.0 Strong momentum in Latin America: 3.1 billion Organic growth of 12.4% + 7.9%* H1 FY10 H1 FY11 * Organic growth Positive exchange rate effect Sustained progress in Europe and Asia: 3.9 billion Organic growth of 4.7% page 20
Motivation Solutions M 319 Revenues 351 +5.0%* H1 FY10 H1 FY11 * Organic growth Positive exchange rate effect Growth driven by Latin America + 14% in Latin America ( 179 m): New clients Increased face value A rise of interest rates - 2.6% in Europe and Asia ( 172 m): A still difficult environment in Central Europe Eco-Pass in Belgium: unfavorable basis of comparison Pressure on client commissions in a difficult economic environment page 21
Motivation Solutions M 101 Operating profit 124 Operating margin 31.7% 35.3% * + 15.8%* H1 FY10 * Constant rates Positive exchange rate effect H1 FY11 H1 FY10 * 1.8% in issue volume H1 FY11 Leveraging effect consistent with expectations reflecting major productivity improvements in gross margin and overhead expenses Increase of more than 300bp in operating margin page 22
Agenda 1. First half Fiscal 2011 summary 2. Financial performance 3. Analysis by activity and geographic zone 4. Financial statements 5. Outlook page 23
Financial status Evolution of consolidated results In millions of H1 FY10 H1 FY11 Growth at constant exchange rates Revenues 7,488 8,269 + 4.7% Operating profit 426 488 Operating margin 5.7% 5.9% + 8.5% Financial expense (74) (83) Associated companies 9 6 Income tax (123) (150) Effective tax rate 35.1% 37% Minority interests 11 9 Group net income 227 252 + 4.8% + 11.0% page 24
Financial status Consolidated Cash Flow In millions of H1 FY10 H1 FY11 Operating cash flow 377 414 Net capital expenditure (97) (123) Change in working capital (72) (146) Free Cash Flow 208 145 Net acquisitions 1 (2) Change in shareholders equity (198) (198) Other changes (including exchange rates) (147) 31 Increase in Net debt (147) (34) page 25
Financial status Consolidated balance sheet as of February 28 In millions of 2010 2011 2010 2011 Non-current assets 5,849 6,039 Shareholders equity 2,450 2,616 Current assets excluding cash 3,711 3,912 Minority interests 28 29 Financial assets Motivation Solutions 552 554 Non-current liabilities 3,175 2,995 Cash 1,140 1,175 Current liabilities 5,599 6,040 Total assets 11,252 11,680 Total liabilities 11,252 11,680 Net debt 1,036 690 Gearing 42% 26% page 26
Agenda 1. First half Fiscal 2011 summary 2. Financial performance 3. Analysis by activity and geographic zone 4. Financial statements 5. Outlook page 27
Fiscal 2011 outlook Based on first half performance and despite signs of inflation, Objectives for the current Fiscal year are: Revenue growth of around 4.5% Increase in operating profit of around 10% (excluding exchange rate impacts) page 28
Fully confident in medium term growth Achieve average annual revenue growth of 7% Achieve operating margin of 6% page 29
Questions Answers page 30
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