Sodexo Sa · EURONEXT:SW

Sodexo Sa — FY2024 Earnings Presentation

50 slides from Sodexo Sa's earnings presentation, Oct 24, 2024

  1. Slide 1: Fiscal 2024 results

    Fiscal 2024 results October 24, 2024

  2. Slide 2: Summary

    Summary 01 Fiscal 2024 highlights 02 Financial performance 03 Review of Operations 04 Outlook 05 Figures have been prepared in thousands Q&A of euro and published in millions of euro 06 Please refer to Appendix 13 for Alternative Appendices Performance Measure definitions Fiscal 2024 results - Octob

  3. Slide 3: 1. Fiscal 2024 highlights

    1. Fiscal 2024 highlights Fiscal 2024 results - October 24, 2024 - © Sodexo 2024. All rights Reserved 3

  4. Slide 4: Simplification of the shareholding structure with major steps for further focus

    01 Fiscal 2024 highlights 2 major steps for further focus Simplification of the Spin-off shareholding structure of Pluxee with the sale of the in February 19.6% stake in Bellon SA in August Fiscal 2024 results - October 24, 2024 - © Sodexo 2024. All rights Reserved 4

  5. Slide 5: Strong financial delivery in FY24

    01 Fiscal 2024 highlights Strong financial delivery in FY24 Sodexo continuing activities Organic Growth UOP margin Financial leverage +7.9% 4.7% 1.7x Revenues: €23.8bn +40bps vs LY vs 2.2x in FY23 Food Underlying Free Organic Growth Net income Cash Flow +9.3% +17.6% €661m Fiscal 2024 results - Octob

  6. Slide 6: Refocus on Food and targeted growth in FM

    01 Fiscal 2024 highlights Refocus on Food and targeted growth in FM Food & FM services On-going deployment mix optimized of branded offers 66% of FY24 37% of Food revenues revenues +2 points vs FY23 Scaling innovation Data-driven FM New off-site production & to enhance consumer experience & distribu

  7. Slide 7: Key strategic enablers

    01 Fiscal 2024 highlights Key strategic enablers #1 TECH & DATA #2 COMMERCIAL #3 SUPPLY CHAIN POWER EXCELLENCE • Spend continuing to increase • Strong processes & tools • Rationalizing SKUs and in place improving catalogue compliance • “Move to Cloud” accelerating • Systematic targeting • Growing En

  8. Slide 8: Strengthen our impact as market maker in sustainability

    01 Fiscal 2024 highlights Strengthen our impact as market maker in sustainability People Planet A safer place to work Progress on emissions 0.47 LTIR (-14.5% vs. FY23) -2.5% yoy scope 1, 2 & 3 A better place to work GHG emissions 81.5% employee retention 73% renewable electricity in direct operation

  9. Slide 9: Commercial momentum (1/2)

    01 Fiscal 2024 highlights Commercial momentum (1/2) Solidly positive net new Retention impacted by large FM Record new wins at €1.6bn contract loss for 60bps 95.2% 94.5% 94.2% 7.5% 7.4% 7.0% 93.5% 6.5% 2.0% 2.2% 1.6% 0.1% 2017-19 FY22 FY23 FY24 2017-19 FY22 FY23 FY24 2017-19 FY22 FY23 FY24 average a

  10. Slide 10: Commercial momentum (2/2)

    01 Fiscal 2024 highlights Commercial momentum (2/2) Record development including cross-selling at €1.9bn Increasing share of Food services in new development €1.9bn €1.7bn €1.5bn 32% 26% 26% 0.2 Facilities management 0.3 13% 9% 0.2 13% Cross-selling (€bn) Integrated solutions New sites (€bn) includi

  11. Slide 11: with some examples

    01 Fiscal 2024 highlights with some examples North America Europe Rest of the World Fontainebleau Titans Nashville Stadium Airbus Hospital center Sodexo Live!, sole strategic hospitality Food services for patients, residents Food services for 2,000+ consumers daily partner of the 60,000-seat world-c

  12. Slide 12: Olympics & Paralympics Games, meeting the extraordinary challenge

    01 Fiscal 2024 highlights Olympics & Paralympics Games, meeting the extraordinary challenge Operational Challenge Culinary feat 15,000 athletes 40,000 daily meals at the Village from 200+ delegations Contributing to the environmental 200+ points of sales,14 sites ambition of Paris 2024 Human Feat Re

  13. Slide 13: 2. Financial performance

    2. Financial performance

  14. Slide 14: Underlying Net Profit up +17.6%

    02 Financial performance 1. Underlying Net Profit up +17.6% Pluxee classified as discontinued operations in accordance with IFRS 5 Change at Change at Fiscal 2024 Fiscal 2023 current constant In million € exchange rates exchange rates Revenues 23,798 22,637 +5.1% +7.0% Underlying Operating profit 1,

  15. Slide 15: Gain on Homecare disposal leading to a reduction in OIE

    02 Financial performance Gain on Homecare disposal leading to a reduction in OIE In million € FY 2024 FY 2023 Net scope change impact 90(1) (7) Restructuring and rationalization costs (65) (45) Amortization of purchased intangible assets (35) (36) Other (48)(2) (41) Other operating income and expens

  16. Slide 16: Strong Free cash flow

    02 Financial performance Strong Free cash flow Cash Flow from Continuing activities In million € FY 2024 FY 2023 Operating cash flow(1)(2) 1,338 1,270 Change in working capital (43) (222) • Net capex at 2% of IFRS 16 Leases outflow (165) (186) revenue Net Capex (469) (488) • Disposal of Sodexo's Fre

  17. Slide 17: Net debt / EBITDA ratio of 1.7x, back in the target range of 1-2x

    02 Financial performance Net debt / EBITDA ratio of 1.7x, back in the target range of 1-2x August 31, August 31, August 31, August 31, 2023 2023 2024 2024 In million € (adjusted1) (adjusted1) Non-current assets 8,627 9,406 Shareholders’ equity 3,782 4,542 Current assets excluding cash 4,233 4,044 No

  18. Slide 18: Increase in EBITDA and ROCE

    02 Financial performance Increase in EBITDA and ROCE EBITDA(1) and margin(2) ROCE 6.3% 12.9% 5.9% 5.6% 11.3% 9.9% 1,335 1,489 1,140 2022 2023 2024 2022 2023 2024 Figures in €m unless otherwise stated (1) New definition of EBITDA, refer to Appendix 8 and Alternative Performance Measures in Appendix 1

  19. Slide 19: Accelerated shareholder returns in the last few years

    02 Financial performance Accelerated shareholder returns in the last few years Dividend Total Shareholder Return Dividend per share in € from 2022 to 2024 Annual TSR from 2022 to 2024 Special interim dividend 50% 50% 50% Payout Payout Payout 6.24 33% ratio ratio ratio 29% 2.25 2.65 12% 1.80 (1) 2022

  20. Slide 20: 3. Review of Operations

    3. Review of Operations Fiscal 2024 results - October 24, 2024 - © Sodexo 2024. All rights Reserved 20

  21. Slide 21: Food services driving growth across all regions

    03 Review of Operations Food services driving growth across all regions Sodexo FY 2024 Revenue North America +8.7% €23,798m +5.1% Currency effect Scope Change Europe +7.2% -1.8% -1.0% +6.0% excl. Olympics & RWC Organic growth +7.9% +7.5% excl. Olympics & RWC Rest of the World +7.3% Food services FM

  22. Slide 22: Effective Inflation Management and Pricing Power Driving Growth

    03 Review of Operations 3. 1. 3. 2. Effective Inflation Management and Pricing Power Driving Growth Q4 FY24 slight uptick in food inflation in some regions, with labor inflation still high… ▬ Food inflation still at low to mid-single digit in Q4 • Further easing food inflation in Europe • Slight upt

  23. Slide 23: North America: robust growth with ongoing workplace return

    03 Review of Operations Robust growth with ongoing workplace return and positive net new 47% of FY24 Revenues North America €11,111m +8.7% Business & Healthcare Sodexo Live! Education Administrations* & Seniors Restated Organic Growth +11.8% +23.4% +4.2% +5.1% • Continued return to the office, • Hig

  24. Slide 24: Europe: growth fueled by food volume, pricing and major sports events

    03 Review of Operations Growth Fueled by Food Volume, Pricing and Major Sports Events 35% of FY24 Revenues +6.0% excl. RWC & Europe €8,448m +7.2% Olympics Business & Healthcare Sodexo Live! Education Administrations* & Seniors Restated Organic Growth +5.3% +25.5% +6.6% excl. RWC & Olympics +6.9% +6.

  25. Slide 25: Rest of the World: positive momentum in India and Australia

    03 Review of Operations Ongoing positive momentum fueled by growth in India and Australia 18% of FY24 Revenues Rest of the World €4,239m +7.3% Business & Healthcare Sodexo Live! Education Administrations* & Seniors Restated Organic Growth +6.9% x2 +11.2% +3.6% • Strong growth in India, Australia • S

  26. Slide 26: UOP margin progress driven by operational efficiency and HQ cost reduction

    03 Review of Operations UOP margin progress driven by operational efficiency and HQ cost reduction FY19 FY22 FY23 FY24 +30bps 6.2% 5.6% 5.9% Year-over-year UOP margin 5.3% North progress at +40 bps, driven by: America +30bps • Operating leverage from higher 3.8% 3.9% 3.7% 4.0% revenue Europe • Enhan

  27. Slide 27: 4. Outlook

    4. Outlook * sodexo

  28. Slide 28: Fiscal 2025 guidance

    04 Outlook Fiscal 2025 guidance Organic Growth • Underlying Organic Growth guidance of +6% to +7% (base effect of -0.5% from Olympics, RWC and Leap year in FY24) +5.5% to +6.5% • Pricing expected to average at around +3% • Like-for-like volume growth, fueled by rising demand for new or upgraded serv

  29. Slide 29: 5. Q&A

    5. Q&A

  30. Slide 30: 6. Appendices

    6. Appendices Fiscal 2024 results - October 24, 2024 - © Sodexo 2024. All rights Reserved 30

  31. Slide 31: Modelling details for FY2025

    06 Appendix 1 Modelling details for FY2025 (At constant rates) Scope change effect on Other income Net financial Tax rate Fiscal 2025 revenues and expenses expenses ~-0.5%* ~ €-130m ~ €100m c.27% * Scope change expected to impact Q1 FY25 revenue growth by circa -1% due to the on-going effect of the

  32. Slide 32: Fiscal 2024 Revenue breakdown

    06 Appendix 2 Fiscal 2024 Revenue breakdown REVENUES BY REGION (in million euros) FY 2024 FY 2023 Organic Growth External Growth Currency Effect Total Growth North America 11,111 10,479 +8.7% -0.4% -2.3% +6.0% (1) Europe 8,448 8,071 +7.2% -2.2% -0.3% +4.7% Rest of the World 4,239 4,087 +7.3% +0.1% -

  33. Slide 33: Q4 Fiscal 2024 Revenue breakdown

    06 Appendix 3 Q4 Fiscal 2024 Revenue breakdown REVENUES BY REGION (in million euros) Q4 2024 Q4 2023 Organic Growth External Growth Currency Effect Total Growth North America 2,451 2,322 +5.2% -0.5% +0.8% +5.5% (1) Europe 2,098 2,002 +7.5% -2.9% +0.2% +4.8% (2) Rest of the World 1,074 977 +14.6% +1.

  34. Slide 34: Underlying Net profit from continuing operations

    06 Appendix 4 Underlying Net profit from continuing operations FY 2024 Of which non- FY 2024 In million € REPORTED recurring UNDERLYING Profit before tax excluding share of profit of 983 -58 1,041 companies under equity method Share of profit of companies under equity method 13 13 Profit before tax

  35. Slide 35: Group Net profit (including Discontinued Operations)

    06 Appendix 5 Group Net profit (including Discontinued Operations) Pluxee classified as Discontinued Operations in accordance with IFRS 5 Net profit from Discontinued Operations amounts to -€570m, of which: FY 2024 FY 2023 In million € • €97m from Pluxee's contribution Net profit - continuing operat

  36. Slide 36: Fiscal 2024 exchange rates

    06 Appendix 6 Fiscal 2024 exchange rates Average rate Closing rate Closing rate Closing rate Average rate Average rate FY 24 FY 24 FY 23 08/31/24 1€ = FY 24 FY 23 vs. FY 23 at 08/31/2024 at 08/31/2023 vs. 08/31/23 U.S. Dollar 1.082 1.059 -2.1% 1.109 1.087 -2.0% Pound Sterling 0.857 0.871 +1.6% 0.841

  37. Slide 37: Breakdown of Gross Financial debt: €4,705m

    06 Appendix 7 Breakdown of Gross Financial debt: €4,705m (1) By currency By maturity 6% £ (in million €) 1% Other <1 720 Year € 70% 23% $ 2-3 1,747 Years Average maturity By interest rate 4-5 1,594 of 3.3 years Years at 08/31/2024 94% 6% variable fixed >5 644 Years Blended cost of debt 1.8% at 08/31

  38. Slide 38: Revised definitions and post IFRS 16 metrics (Fiscal 2024)

    06 Appendix 8a Revised definitions and post IFRS 16 metrics (Fiscal 2024) FY24 Previous Client Investments Sodexo New Post IFRS 16 In million € IFRS 16 definitions amortization definitions metrics Operating cash flow (1) 1,203 135 1,338 1,338 Net Capex -334 -135 -469 -469 EBITDA 1,354 135 1,489 189

  39. Slide 39: Revised definitions and post IFRS 16 metrics (Fiscal 2023)

    06 Appendix 8b Revised definitions and post IFRS 16 metrics (Fiscal 2023) FY23 Previous Client Investments Sodexo New Post IFRS 16 In million € IFRS 16 definitions amortization definitions metrics Operating cash flow (1) 1,130 140 1,270 1,270 Net Capex -348 -140 -488 -488 EBITDA 1,195 140 1,334 203

  40. Slide 40: New segment reporting following evolution of the On-site Services organization

    06 Appendix 9 New segment reporting following evolution of the On-site Services organization As part of the streamlining of the organization, from Fiscal 2024, some contracts or operations have been reallocated between segments, with main impacts in Europe from Healthcare & Seniors to Education. Res

  41. Slide 41: Number of shares

    06 Appendix 10 Number of shares Company’s share capital AUGUST 31, 2024 FEBRUARY 29, 2024 AUGUST 31, 2023 Company’s share capital, number of shares 147,454,887 147,454,887 147,454,887 Treasury shares 1,064,010 784,371 1,084,126 Net number of shares 146,390,877 146,670,516 146,370,761 Number of share

  42. Slide 42: Revenue breakdown by significant countries

    06 Appendix 11 Revenue breakdown by significant countries Revenue Fiscal 2023 Revenue Fiscal 2024 France France €2,663m €2,844m 12% 12% Other Other €10,011m €10,386m 44% 44% United States United States €9,963m €10,568m 44% 44% Fiscal 2024 results - October 24, 2024 - © Sodexo 2024. All rights Reserv

  43. Slide 43: Growth indicator definitions

    06 Appendix 12 Growth indicator definitions Client Retention Business development Client retention rate is the percentage of prior fiscal year revenue retained Business development rate is the annualized estimated revenue for in this current fiscal year. It is derived by considering prior fiscal yea

  44. Slide 44: Alternative Performance Measure - Definitions

    06 Appendix 13a Alternative Performance Measure - Definitions Organic growth Underlying operating margin Organic growth corresponds to the increase in revenue for a given period Underlying operating profit margin corresponds to Underlying Operating profit (the "current period") compared to the reven

  45. Slide 45: Alternative Performance Measure - Definitions

    06 Appendix 13b Alternative Performance Measure - Definitions Blended cost of debt Net debt Blended cost of debt is calculated at period end and is the weighted blended of Net debt is defined as Group borrowing at the balance sheet date, less financing rates on borrowings (including derivative finan

  46. Slide 46: APM - Financial ratios definitions & reconciliation

    06 Appendix 14a APM - Financial ratios definitions & reconciliation Fiscal 2024 Fiscal 2023 adjusted Gross borrowings (1) – operating cash (2) Gearing ratio 68.5% 64.1% Shareholders’ equity and non-controlling interests Gross borrowings (1) – operating cash (2) Net debt ratio 1.7x 2.2x Underlying EB

  47. Slide 47: APM - Financial ratios definitions & reconciliation

    06 Appendix 14b APM - Financial ratios definitions & reconciliation Fiscal 2024 Fiscal 2023 adjusted Underlying operating profit 1,109 976 (4) Underlying operating profit after tax Underlying Effective tax rate 26.0% 25.7% UNDERLYING OPERATING PROFIT AFTER TAX 821 725 Property, plant and equipment 5

  48. Slide 48: Financial calendar

    06 Appendix 15 Financial calendar December 17, 2024 January 7, 2025 April 4, 2025 Fiscal 2024 First quarter First half Annual Fiscal 2025 Fiscal 2025 Shareholders Revenues Results Meeting These dates are purely indicative and are subject to change without notice. Regular updates are available in the

  49. Slide 49: Sodexo key figures

    06 Appendix 16 Sodexo key figures As of August 31, 2024 ▬ Founded in 1966 by Pierre Bellon ▬ As at 08/31/2024, Bellon SA holds 42.8% of capital (58.0% of voting rights) €23.8bn revenues ▬ Our purpose is to create a better everyday for everyone to build a better life for all 423,467 employees 80 mill

  50. Slide 50: Investor relations contacts

    06 Appendix 17 Investor relations contacts Head of Investor Relations ▬ Virginia JEANSON Tel: + 33 1 57 75 80 56 virginia.jeanson@sodexo.com Deputy Head of Investor Relations ESG Investor Relations Engagement Lead ▬ Juliette KLEIN ▬ Alina CAZACU Tel: + 33 1 57 75 80 27 Tel: + 33 1 57 75 83 11 juliet

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