Slide 1: Fiscal 2015 Results
FISCAL 2015 RESULTS November 19, 2015
Slide 2: Forward-Looking Information
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 up
Slide 3: Contents
CONTENTS 1. A YEAR OF PROGRESS 2. SOLID FINANCIAL PERFORMANCE 3. REVIEW OF OPERATIONS 3a ON-SITE SERVICES 3b BENEFITS AND REWARDS SERVICES 4. OUTLOOK 5. APPENDICES 3 – Fiscal 2015 Annual Results - November 19, 2015
Slide 4: A Year of Progress
1 A YEAR OF PROGRESS 4 – Fiscal 2015 Annual Results - November 19, 2015
Slide 5: A Year of Progress
AAYEAR YEAROF PROGRESS OF PROGRESS Solid financial performance Contract wins in On-site Services, led by integrated services offer Sustained activity in Benefits and Rewards Services Increased differentiation in Quality of Life Services 5 – Fiscal 2015 Annual Results - November 19, 2015
Slide 6: Solid Financial Performance
A YEAR OF PROGRESS SOLID FINANCIAL PERFORMANCE Reported revenue €19.8 billion +10% Increase in reported operating profit +21.7% Growth in Group net income +42.9% Financial performance boosted by currency effects 6 – Fiscal 2015 Annual Results - November 19, 2015
Slide 7: And Improved Profitability
A YEAR OF PROGRESS AND IMPROVED PROFITABILITY Organic revenue growth +2.5% Operating profit €1,143 million +11.9%* Excluding currency effects Operating margin 5.8% +90 bps* +40 bps* Over two years vs fiscal 2014 excluding currency excluding currency effects effects Group net income €700 million +32.
Slide 8: A Stronger Financial Position
A YEAR OF PROGRESS A STRONGER FINANCIAL POSITION Free cash flow €688 million +14.3% Net debt (as of August 31, 2015) €339 million Gearing 9% vs. 12% As of August 31, 2014 Proposed dividend per share €2.20 +22.2% Payout ratio 50% Total proposed dividend €347 million Share repurchase program €300 mill
Slide 9: Contract Wins
A YEAR OF PROGRESS CONTRACT WINS CORPORATE United States House of Representatives in the United States Vodafone in India Lacoste – Devanlay in France Unilever in Asia REMOTE SITES Shell in the Philippines HEALTH CARE Vidant Medical Center in the United States Östergötland Hospital in Sweden Mater De
Slide 10: Contract Wins
A YEAR OF PROGRESS CONTRACT WINS EDUCATION State University of New York, Stony Brook in the United States Canadian International School, Shenzhen and Beijing in China, Singapore JUSTICE Transforming Rehabilitation Program in the United Kingdom BENEFITS AND REWARDS SERVICES Santa Paula Hospital in Br
Slide 11: Integrated Services Offer Boosted by Investments in Facilities Management
A YEAR OF PROGRESS INTEGRATED SERVICES OFFER BOOSTED BY INVESTMENTS IN FACILITIES MANAGEMENT FM FM as a percentage of revenue as a percentage of revenue 18% Fiscal 2005 31% 57% 29% Fiscal 2015 Continental Europe United Kingdom Gross margin +10% €5.6bn for multi-technical maintenance services 6 Avera
Slide 12: Sustained Demand for Benefits and Rewards Services
A YEAR OF PROGRESS SUSTAINED DEMAND FOR BENEFITS AND REWARDS SERVICES ORGANIC REVENUE GROWTH 13.0% 9.5% 8.5% 8.3% 6.9% 2010-11 2011-12 2012-3 2013-4 2014-5 Acquisition of 4 Motivcom in the United Kingdom, Sodexo becomes 65% Further double digit new countries European leader growth Portugal, Panama,
Slide 13: Recognized Positioning and Leadership in Quality of Life Services
A YEAR OF PROGRESS RECOGNIZED POSITIONING AND LEADERSHIP IN QUALITY OF LIFE SERVICES The Sodexo/Harris Interactive survey revealed that 91% of executives queried believe there is a link between quality of life and their organization's performance Sodexo/Harris Interactive Survey - April 2015 A first
Slide 14: Better Leverage Our Global Consumer Knowledge
A YEAR OF PROGRESS BETTER LEVERAGE OUR GLOBAL CONSUMER KNOWLEDGE Strengthening relations with consumers Partnerships Le Village in Paris Bringing nutritional advice https://mindful.sodexo.com/ Facilitate the flow of information The Camp in Aix-en-Provence Reinforcing ties 14 – Fiscal 2015 Annual Res
Slide 15: Societal Commitments
A YEAR OF PROGRESS SOCIETAL COMMITMENTS SODEXO with PEPSICO First international coalition UNILEVER MCCAIN to combat waste ARDO all along the food chain SCA WWF By 2017, $1 billion in purchases from 5,000 small and mid-sized enterprises in 40 countries, including 1,500 managed by women 15 – Fiscal 20
Slide 16: Recognitions
A YEAR OF PROGRESS RECOGNITIONS Global Sustainability Industry Leader in its sector for the 11th year in a row No.1 among SBF 120 index companies in 2015 for the proportion of women in senior management 43% women on the Group Executive Committee 38% women on the Sodexo Board of Directors Recogni
Slide 17: Solid Financial Performance
2 SOLID FINANCIAL PERFORMANCE 17 – Fiscal 2015 Annual Results - November 19, 2015
Slide 18: Organic Growth
SOLID FINANCIAL PERFORMANCE ORGANIC GROWTH Organic growth of +2.5% of which: On-site Benefits and Rewards Services Services +2.2% +9.5% 18 – Fiscal 2015 Annual Results - November 19, 2015
Slide 19: Increase in Operating Profit
SOLID FINANCIAL PERFORMANCE INCREASE IN OPERATING PROFIT* +40 bps 5.8% Operating 5.4% margin 1,143 966 +11.9% Operating profit EXCLUDING CURRENCY € millions EFFECTS Fiscal 2014 Fiscal 2015 * Excluding currency effects exceptional items in Fiscal 2014 19 – Fiscal 2015 Annual Results - November 19, 20
Slide 20: Improved Consolidated Results
SOLID FINANCIAL PERFORMANCE IMPROVED CONSOLIDATED RESULTS € millions Fiscal 2013 28 ACHIEVED ANNUAL Fiscal 2014 100 SAVINGS Fiscal 2015 170 EXCEPTIONAL Cumulative IMPLEMENTATION over 18 months 166 (Sept. 2012-Feb. 2014) EXPENSES 20 – Fiscal 2015 Annual Results - November 19, 2015
Slide 21: Increased Consolidated Results
SOLID FINANCIAL PERFORMANCE INCREASED CONSOLIDATED RESULTS Fiscal 2015 Fiscal 2014 CHANGE € millions € millions At current At constant exchange rates exchange rates Revenues 19,815 18,016 +10.0% +2.6% Operating profit before exceptional items 1,143 966 +18.3% +11.9% Exceptional items 0 (27) Operatin
Slide 22: Group Net Income and Earnings per Share
SOLID FINANCIAL PERFORMANCE GROUP NET INCOME AND EARNINGS PER SHARE Group net income Earnings per share +42.9% +42.4% €4.60 €490 million €700 million €3.23 Fiscal 2014 Fiscal 2015 Fiscal 2014 Fiscal 2015 22 – Fiscal 2015 Annual Results - November 19, 2015
Slide 23: Exchange Rates
SOLID FINANCIAL PERFORMANCE EXCHANGE RATES Average rate Closing rate 1€ = Fiscal 2015 Change 31/08/15 Change U.S. Dollar 1,16 +17,4% 1,12 +17,6% Pound Sterling 0,75 +10,3% 0,73 +9,3% Brazilian Real 3,30 -6,0% 4,07 -27,2% 23 – Fiscal 2015 Annual Results - November 19, 2015
Slide 24: Consolidated Cash Flow
SOLID FINANCIAL PERFORMANCE CONSOLIDATED CASH FLOW € millions Fiscal 2015 Fiscal 2014 CHANGE Operating cash flow 973 708 +37.4% Net capital expenditure (353) (294) Change in working capital 68 188 Free cash flow 688 602 +14.3% Net acquisitions (49) (50) Change in shareholders’ equity (323) (282) Oth
Slide 25: Consolidated Balance Sheet
SOLID FINANCIAL PERFORMANCE CONSOLIDATED BALANCE SHEET ROBUST RATIOS € millions Aug. 31, Aug. 31, Aug. 31, Aug. 31, 2015 2014 2015 2014 Non-current assets 7,334 6,852 Shareholders’ equity 3,710 3,189 Current assets 4,396 4,120 Non-controlling interests 34 32 excluding cash Financial assets related 7
Slide 26: Proposed Dividend and Share Repurchase Program
SOLID FINANCIAL PERFORMANCE PROPOSED DIVIDEND SHARE REPURCHASE DIVIDEND PROGRAM 50% payout ratio for cancellation €300 million €1.80 +22.2% €2.20 + or ~2.4% of capital Fiscal 2014 Fiscal 2015 Payment date: February 10, 2016 26 – Fiscal 2015 Annual Results - November 19, 2015
Slide 27: Review of Operations
3 REVIEW OF OPERATIONS 27 – Fiscal 2015 Annual Results - November 19, 2015
Slide 28: 3a On-site Services
3a ON-SITE SERVICES 28 – Fiscal 2015 Annual Results - November 19, 2015
Slide 29: Organic Growth of +2.2%
ON-SITE SERVICES ORGANIC GROWTH OF +2.2% United Kingdom and Ireland Continental North +12.8% +0.6% Europe America +1.5% +1.7% Rest of the World 29 – Fiscal 2015 Annual Results - November 19, 2015
Slide 30: Growth Indicators
ON-SITE SERVICES GROWTH INDICATORS Client retention Comparable Business unit growth development 93.4% 93.1% 7.1% 7.5% 2.5% 2.2% Fiscal 2014 Fiscal 2015 Fiscal 2014 Fiscal 2015 Fiscal 2014 Fiscal 2015 including voluntary contract terminations 30 – Fiscal 2015 Annual Results - November 19, 2015
Slide 31: Successful Integrated Offers and Quality of Life Positioning
ON-SITE SERVICES SUCCESSFUL INTEGRATED OFFERS AND QUALITY OF LIFE POSITIONING Corporate Contract start-ups in Justice segment in the United Kingdom Dynamic growth in integrated services in the United States +3.9% Growth in Remote Sites at the start of the year Health Care and Seniors Impact
Slide 32: North America
ON-SITE SERVICES NORTH AMERICA € millions Revenues Corporate +5.4% Favorable currency effect 7,972 Strong growth in facilities management 6,759 Organic growth Health Care and Seniors +1.1% Impact of HCR ManorCare and sale of laundry activities +1.5% Return to growth in fourth quarter ORGANIC G
Slide 33: North America
ON-SITE SERVICES NORTH AMERICA € millions Operating profit 6.3% +100 bps 5.3% Increased focus on standardized 499 contract management Efficiency gains on overheads 358 Favorable Fiscal 2014 basis +18.7% for comparison CHANGE EXCLUDING CURRENCY EFFECT Fiscal 2014 Fiscal 2015 Operating margin 33
Slide 34: Continental Europe
ON-SITE SERVICES CONTINENTAL EUROPE € millions Revenues Corporate +2.9% Higher facilities management revenues 5,702 Organic growth Acquisitions 5,686 Lower food services volumes Unfavorable currency effect Health Care and Seniors -3.4% Lower client retention rate this year 0.6% Contract wins
Slide 35: Continental Europe
ON-SITE SERVICES CONTINENTAL EUROPE € millions Operating profit +10 bps 4.2% 4.1% Favorable impact from program to improve operational efficiency 231 238 and reduce costs, especially 3.9% in the second half CHANGE EXCLUDING CURRENCY EFFECT Fiscal 2014 Fiscal 2015 Operating margin 35 – Fiscal 2015
Slide 36: Rest of the World
ON-SITE SERVICES REST OF THE WORLD* € millions Revenues Corporate +0.6% Sharp slowdown in Brazil End of mining sector contracts Favorable currency effect 3,504 3,327 Organic growth Health Care and Seniors +20.2% +1.7% Further contract wins ORGANIC GROWTH in Latin America and Asia Fiscal 2014 F
Slide 37: Rest of the World
ON-SITE SERVICES REST OF THE WORLD* € millions Operating profit +40bps 4.6% 4.2% Productivity gains in most countries One-off projects in offshore segment 161 140 +7.1% CHANGE EXCLUDING CURRENCY EFFECT Fiscal 2014 Fiscal 2015 Operating margin * Latin America, Middle East, Asia, Africa, Australia
Slide 38: United Kingdom and Ireland
ON-SITE SERVICES UNITED KINGDOM AND IRELAND € millions Revenues Corporate +13.9% Start-up of six Transforming Favorable currency effect 1,832 Rehabilitation contracts Organic growth in the Justice segment 1,483 Solid growth in the Corporate Services segment +12.8% Health Care and Seniors +12.7%
Slide 39: United Kingdom and Ireland
ON-SITE SERVICES UNITED KINGDOM AND IRELAND € millions Operating profit +60bps 5.1% 4.5% Leverage provided by higher business volumes 94 66 +28.8% Improved margins on several contracts that were in the start-up phase CHANGE EXCLUDING in the prior fiscal year CURRENCY EFFECT Fiscal 2014 Fiscal 20
Slide 40: 3b Benefits and Rewards Services
3b BENEFITS AND REWARDS SERVICES 40 – Fiscal 2015 Annual Results - November 19, 2015
Slide 41: Issue Volume and Revenues
BENEFITS AND REWARDS SERVICES ISSUE VOLUME AND REVENUES Issue volume Revenues € billions € millions Organic Organic growth Acquisitions 16.4 growth Acquisitions 827 15.5 751 Unfavorable Unfavorable currency currency effect effect +7.5% +9.5% ORGANIC ORGANIC GROWTH GROWTH Fiscal 2014 Fiscal 2015 Fisc
Slide 42: Issue Volume and Revenues: Latin America
BENEFITS AND REWARDS SERVICES ISSUE VOLUME AND REVENUES Latin America Issue volume Revenues € billions Organic Organic € millions growth Acquisitions growth 431 7.3 7.5 410 Unfavorable Unfavorable currency currency effect effect +11.1% +14.4% ORGANIC ORGANIC GROWTH GROWTH Fiscal 2014 Fiscal 2015 Fis
Slide 43: Issue Volume and Revenues: Europe and Asia
BENEFITS AND REWARDS SERVICES ISSUE VOLUME AND REVENUES Europe and Asia Issue volume Revenues € billions € millions Favorable Favorable currency currency Organic Acquisitions effect 8.9 Acquisitions effect 396 8.2 growth Organic 341 growth +4.3% +3.8% ORGANIC ORGANIC GROWTH GROWTH Fiscal 2014 Fiscal
Slide 44: Operating Profit
BENEFITS AND REWARDS SERVICES OPERATING PROFIT € millions Operating profit 35.7% 35.7% at constant rates 34.5% at current Change rates excluding currency effect 268 285 Productivity gains reinvested in marketing, Unfavorable currency effect innovation and international development +15.3% CHANGE EX
Slide 45: Outlook
4 OUTLOOK 45 – Fiscal 2015 Annual Results - November 19, 2015
Slide 46: Favorable Short-Term Trends and Volatile Macroeconomic Landscape
OUTLOOK FAVORABLE SHORT-TERM TRENDS A VOLATILE MACRO- ECONOMIC LANDSCAPE Continuous growth in demand for facilities management Slower growth in emerging services economies, especially Brazil Contribution of the Rugby Oil and mining sectors hit by lower commodity prices World Cup in the first
Slide 47: Adaptation and Simplification Measures
OUTLOOK ADAPTATION AND SIMPLIFICATION MEASURES Reinforced adaptation of site level operating costs Organizational simplification Increased mutualisation across geographies AROUND €200 MILLION OF AROUND €200 MILLION ANNUAL SAVINGS BY YEAR 3 IN EXCEPTIONAL EXPENSE (100% PAYBACK IN FISCAL 2018) (
Slide 48: Fiscal 2016 Objectives
OUTLOOK FISCAL 2016 OBJECTIVES In light of the current economic environment, the Group is targeting: Organic revenue growth of around 3% An increase in operating profit of around 8% (excluding currency effects and exceptional items) 48 – Fiscal 2015 Annual Results - November 19, 2015
Slide 49: Growth Drivers with High Potential
OUTLOOK GROWTH DRIVERS WITH HIGH POTENTIAL MAJOR WORLDWIDE TRENDS Seniorization of global populations Far-reaching changes to the working environment and strong demand for well-being Role of robotics and the ongoing digital revolution A RELEVANT STRATEGY Growing trend towards outsourcing • i
Slide 50: Growth Drivers with High Potential
OUTLOOK GROWTH DRIVERS WITH HIGH POTENTIAL ALL OF THESE BRING OPPORTUNITIES HAVE THE BEST OF SODEXO INTEGRATED TO ITS CLIENTS QUALITY OF LIFE SERVICES ALL OVER THE WORLD AT THEIR CORE 50 – Fiscal 2015 Annual Results - November 19, 2015
Slide 51: Evolution of the Organization: Global Segments
OUTLOOK EVOLUTION OF THE ORGANIZATION CORPORATE HEALTH CARE ENERGY & SCHOOLS UNIVERSITIES GOVERNMENT SPORTS & SERVICES & SENIORS RESOURCES & AGENCIES LEISURE GLOBAL SEGMENTS 7 GLOBAL SEGMENTS DRIVE GROWTH AND CREATE VALUE THROUGH CLIENT SPECIALIZATION SERVICE OPERATIONS TRANSVERSAL FUNCTIONS 51 – Fi
Slide 52: Medium-Term Objectives
OUTLOOK MEDIUM-TERM OBJECTIVES The Group is confident of achieving its medium-term objectives: average annual growth average annual growth an average annual in revenue of between in operating profit of cash conversion 4% and 7% between 8% and 10% ratio* of around 100% (excluding currency effects) (e
Slide 53: Our Major Strengths
OUTLOOK OUR MAJOR STRENGTHS A unique range of Significant Quality of Life Services Independence market particularly well aligned potential with evolving client demand A robust Undisputed A global network financial model A strong culture leadership in covering that allows Sodexo and engaged developin
Slide 54: Q&A
Q&A 54 – Fiscal 2015 Annual Results - November 19, 2015
Slide 55: Appendices
APPENDICES 1. Revenue growth 2. Fiscal 2015 revenue 3. Free cash flow 4. Financial debt 5. Net debt by currency 6. Financial ratios 7. Sensitivity to exchange rates 8. Impact of principal exchange rates on the statement of financial position 55 – Fiscal 2015 Annual Results - November 19, 2015
Slide 56: Revenue Growth
APPENDIX 1 REVENUE GROWTH € millions +7.4% Favorable +2.5% currency effect 19,815 +0.1% Organic growth* Acquisitions 18,016 +10.0% TOTAL GROWTH Fiscal 2014 Fiscal 2015 * Organic growth: increase in revenues at constant scope of consolidation and exchange rates, with the exception of the Venezuelan b
Slide 57: Fiscal 2015 Revenue
APPENDIX 2 FISCAL 2015 REVENUE Revenue Distribution by activity and client segment by geographic region On-site Services 96% 30% Corporate North Continental America Europe 9% Remote Sites 4% Defense 41% 31% 4% Sports and Leisure 4% Justice Services 18% Health Care 6% Seniors 21% Education United Res
Slide 58: Free Cash Flow
APPENDIX 3 FREE CASH FLOW 44 1,017 Change in 24** working capital 973 Change in financial assets Capex related to Benefits & Rewards Services 688 Net cash from (353)* operating activities Operating (Consolidated cash flow cash flow Operating statement) FCF 92 * (353) = + (302) Tangible and intangibl
Slide 59: Analysis of Financial Debt
APPENDIX 4 ANALYSIS OF FINANCIAL DEBT* AS OF AUGUST 31, 2015 € millions BY CURRENCY BY MATURITY 39% € < 1 year 316 1-2 years 13 61% $ 2-3 years 230 BY INTEREST RATE 3-4 years 200 100% Fixed rate 4-5 years 67 2 average rate of 3.8% as of August 31, 2015 > 5 years 2,254 * Financial debt of €3,080 mill
Slide 60: Financial Debt by Currency
APPENDIX 5 FINANCIAL DEBT BY CURRENCY* AS OF AUGUST 31, 2015 € millions USD £ BRL Cash and cash equivalents, net 699 395 245 Restricted cash and financial assets 2 15 113 (Benefits and Rewards Services) Financial liabilities (1,872) (7) (3) NET DEBT (1,171) 403 355 * Financial debt excluding foreign
Slide 61: Financial Ratios
APPENDIX 6 FINANCIAL RATIOS Gearing ratio Reimbursement capacity Net debt/Shareholders' equity Gross financial debt/ Operating cash flow objective < 75% objective < 4 years 4.1 21% 3.4 16% 3.1 2.8 12% 9% Fiscal 2012 Fiscal 2013 Fiscal 2014 Fiscal 2015 Fiscal 2012 Fiscal 2013 Fiscal 2014 Fiscal 2015
Slide 62: Financial Ratios
APPENDIX 6 FINANCIAL RATIOS Interest cover Net debt ratio Operating profit/ Net debt/EBITDA Net financial expense objective < 2 years 9.0 0.5 0.4 6.6 6.0 5.4 0.3 objective > 5 0.2 Fiscal 2012 Fiscal 2013 Fiscal 2014 Fiscal 2015 Fiscal 2012 Fiscal 2013 Fiscal 2014 Fiscal 2015 62 – Fiscal 2015 Annual
Slide 63: Sensitivity to Exchange Rates
APPENDIX 7 SENSITIVITY TO EXCHANGE RATES € millions Impact of a 10% appreciation of the exchange rate of the following currencies against the euro on Average Closing rate €1 = rate Aug. 31, Operating Shareholders’ Fiscal 2015 Change 2015 Change Revenues profit equity U.S. dollar 1.1594 +17.4% 1.1215
Slide 64: Impact of Principal Exchange Rates on the Balance Sheet
APPENDIX 8 IMPACT OF PRINCIPAL EXCHANGE RATES ON THE BALANCE SHEET AS OF AUGUST 31, 2015 € millions USD £ BRL VEF USD £ BRL VEF Non-current assets 486 79 (227) (1) Shareholders’ equity 234 66 (202) (10) Deferred tax assets 16 2 (11) 0 Provisions 3 1 (12) 0 Change in working Deferred tax liabilities
Slide 65: Thank You
THANK YOU 65 – Fiscal 2015 Annual Results - November 19, 2015