Sodexo SA · EURONEXT:SW
Sodexo SA — H1 FY2013 Earnings Presentation
46 slides from Sodexo SA's earnings presentation, Apr 18, 2013
Slide 1: Fiscal 2013 First Half Results
FISCAL 2013 FIRST HALF RESULTS April 18, 2013
Slide 2: Forward-Looking Information
FORWARD-LOOKING INFORMATION This presentation contains statements that may be considered 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 we assume no obligation to update th
Slide 3: Agenda
AGENDA 1. First Half Fiscal 2013 in brief 2. Financial performance 3. On-site Services 4. Benefits and Rewards Services 5. Outlook 3 – Fiscal 2013 First Half Results - April 18, 2013
Slide 4: First Half Fiscal 2013 in Brief
1 FIRST HALF FISCAL 2013 IN BRIEF 4 – Fiscal 2013 First Half Results - April 18, 2013
Slide 5: First Half Fiscal 2013 in Brief
FIRST HALF FISCAL 2013 IN BRIEF Good overall resilience Modest positive growth in a difficult macro-economic A solid pipeline environment A unique offer Success of facilities management offers A relevant strategy (growth 3 times that of foodservices) Leadership in emerging economies, a gro
Slide 6: Solid Development: Healthcare, Education, Remote Sites
FIRST HALF FISCAL 2013 IN BRIEF SOLID DEVELOPMENT HEALTHCARE & SENIORS Manor Care in the U.S. Foodservices - 290 retirement homes in 32 states – nearly 40,000 residents HCA East Florida in the U.S. Foodservices and maintenance - 9 hospitals – 2,200 people Les Nouvelles Cliniques Nantaises in France
Slide 7: Solid Development: Corporate and Benefits and Rewards
FIRST HALF FISCAL 2013 IN BRIEF SOLID DEVELOPMENT CORPORATE Siemens in Canada Construction and maintenance, electricity, heating, air conditioning - 44 sites IMF in the U.S. Construction and engineering, energy management, external and internal moves – 4,000 people Banco Bradesco S.A. in Brazil Food
Slide 8: First Half Fiscal 2013 in Brief
FIRST HALF FISCAL 2013 IN BRIEF + 4.3% Revenues € 9.5 Billion overall growth + 2.1% Organic revenue growth + 2.7% excl. Rugby World Cup Operating profit before exceptional - 0.9% € 528 Million expenses 8 – Fiscal 2013 First Half Results - April 18, 2013
Slide 9: First Half Fiscal 2013 in Brief
FIRST HALF FISCAL 2013 IN BRIEF An operational efficiency improvement and cost reduction Exceptional charges of € 50 million during 1st Half program underway and being Fiscal 2013 expanded Group net income of 236 million An increase of +1% excluding exceptional items euro and at a constant effec
Slide 10: Financial Performance
2 FINANCIAL PERFORMANCE 10 – Fiscal 2013 First Half Results - April 18, 2013
Slide 11: Revenues
FINANCIAL PERFORMANCE REVENUES € millions Exchange rates Organic growth Acquisitions (1) + 2.1 % + 1.5% 9,463 9,069 + 0.7% + 4.3% OVERALL GROWTH H1 FY 12 H1 FY 13 (1) Roth Bros (U.S.), Atkins (UK), Lenôtre (France), Servi-Bonos (Mexico) and MacLellan (India). 11 – Fiscal 2013 First Half Results - Ap
Slide 12: Organic Growth
FINANCIAL PERFORMANCE ORGANIC GROWTH + 2.1% as reported + 2.7% excluding positive impact of Rugby World Cup* including: On-site Services Benefits and Rewards Services + 2.7% + 4.3% * Fiscal 2012 benefited from Rugby World Cup (€53m) 12 – Fiscal 2013 First Half Results - April 18, 2013
Slide 13: Exceptional Items
FINANCIAL PERFORMANCE EXCEPTIONAL ITEMS H1 FY 12 H1 FY 13 EXCHANGE € millions € millions current rates constant rates Operating profit 533 528 - 0.9% - 1.1% before exceptional items Exceptional items Gross margin (on site) - (30) Overheads - (20) Accounting adjustment for pensions 26 - Total 26 (50)
Slide 14: Operating Profit
FINANCIAL PERFORMANCE D OPERATING PROFIT* € millions 533 528 Positive exchange rate impact - 1.1% AT CONSTANT RATES H1 FY 12 H1 FY 13 Operating margin* 5.9% 5.6% Growth throughout the world, except Continental Europe * Operating profit and margin are before exceptional items from operational efficie
Slide 15: Evolution of Consolidated Results
FINANCIAL PERFORMANCE EVOLUTION OF CONSOLIDATED RESULTS H1 FY 12 H1 FY 13 EXCHANGE € millions € millions current rates constant rates Operating profit before exceptional 533 528 - 0.9% - 1.1% items Exceptional items 26 (50) Operating profit - reported 559 478 - 14.5% - 14.7% Financial expense (91) (
Slide 16: Consolidated Cash Flow
FINANCIAL PERFORMANCE CONSOLIDATED CASH FLOW € millions H1 FY 12 H1 FY 13 Operating cash flow 492 390 Net capital expenditure (151) (113) Change in working capital (227) (307) Free cash flow 114 (30) Net acquisitions (568) (71) Change in shareholders’ equity (201) (255) Other changes (incl. scope an
Slide 17: Consolidated Balance Sheet
FINANCIAL PERFORMANCE CONSOLIDATED BALANCE SHEET € millions February 29, February 28, February 29, February 28, 2012 2013 2012 2013 Non-current assets 6,798 6,815 Shareholders’ equity 2,840 2,898 Current assets 4,242 4,429 Non-controlling interests 34 39 excluding cash Financial assets Benefits and
Slide 18: On-Site Services
3 ON-SITE SERVICES 18 – Fiscal 2013 First Half Results - April 18, 2013
Slide 19: 2.7% Organic Growth (excluding Rugby World Cup)
ON-SITE SERVICES 2.7% ORGANIC GROWTH (excluding Rugby World Cup) North America UK and Ireland + 1.3% - 2.6% (+ 5.6%) Excl.Rugby World Cup Continental Europe + 0.9% Rest of the World + 7.2% 19 – Fiscal 2013 First Half Results - April 18, 2013
Slide 20: Organic Growth by Client Segment
ON-SITE SERVICES ORGANIC GROWTH BY CLIENT SEGMENT Corporate + 3.9% Offers of integrated services offset lower foodservices + 5.1% excl. Rugby World Cup volumes Double digit growth in Latin America and mining sector Health Care and Seniors - 0.4% Loss of a major contract in Fiscal 2012 in North
Slide 21: North America Revenues
ON-SITE SERVICES NORTH AMERICA € millions Revenues 3,602 Corporate + 6.3% 3,420 Increased contribution from facilities management services offers + 1.3% Success at Formula 1 event ORGANIC (Circuit of the Americas) GROWTH Remote Sites development in Canada Health Care and Seniors - 1.6% Stron
Slide 22: North America Operating Profit
ON-SITE SERVICES NORTH AMERICA € millions Operating profit* Operating margin* 244 6.6% 6.8% 226 + 4.9% CHANGE AT CONSTANT RATES H1 FY 12 H1 FY 13 H1 FY 12 H1 FY 13 Positive exchange rate impact Improvement from site productivity gains, particularly in Corporate * Operating profit and margin are befo
Slide 23: Continental Europe Revenues
ON-SITE SERVICES CONTINENTAL EUROPE € millions Revenues Corporate + 1.6% 2,892 2,949 Ramp up of facilities management contracts fully offsets lower foodservices + 0.9% volumes ORGANIC GROWTH Health Care and Seniors - 0.4% Weak existing site growth Education + 0.4% H1 FY 12 H1 FY 13 Pressure on
Slide 24: Continental Europe Operating Profit
ON-SITE SERVICES CONTINENTAL EUROPE € millions Operating profit* Operating margin* 4.5% 131 103 3.5% - 22.1% CHANGE AT CONSTANT RATES H1 FY 12 H1 FY 13 H1 FY 12 H1 FY 13 Positive exchange rate impact Decline in foodservices volumes Strong pressure from clients seeking savings Time lag to adjust fixe
Slide 25: Rest of the World Revenues
ON-SITE SERVICES REST OF THE WORLD € millions Revenues 1,838 Corporate + 7.9% 1,708 Strong contribution from Latin America + 7.2% mining contracts ORGANIC Slowdown of industrial clients activity GROWTH Project completions in Remote Sites Health Care and Seniors + 9.3% Good dynamic in Asia an
Slide 26: Rest of the World Operating Profit
ON-SITE SERVICES REST OF THE WORLD € millions Operating profit* Operating margin* 47 2.6% + 4.7% 2.5% 43 CHANGE AT CONSTANT RATES H1 FY 12 H1 FY 13 H1 FY 12 H1 FY 13 Positive exchange rate impact Continued integration of Puras do Brasil Strong inflation, particularly in Brazil * Operating profit and
Slide 27: UK and Ireland Revenues
ON-SITE SERVICES UK AND IRELAND € millions Revenues Corporate - 4.7% 680 700 + 6.8% excl. Rugby World Cup - 2.6 % Ramp up of contribution from several + 5.6 % integrated services contracts excl. Rugby Contribution from Paralympics ORGANIC in September 2012 GROWTH Health Care and Seniors + 5.8%
Slide 28: UK and Ireland Operating Profit
ON-SITE SERVICES UK AND IRELAND € millions Operating profit* Operating margin* 33 4.7% 30 4.4% 6.7% CHANGE AT CONSTANT RATES H1 FY 12 H1 FY 13 H1 FY 12 H1 FY 13 Positive exchange rate impact On site productivity gains Increased contribution from integrated services contracts * Operating profit and m
Slide 29: Benefits and Rewards Services
4 BENEFITS AND REWARDS SERVICES 29 – Fiscal 2013 First Half Results - April 18, 2013
Slide 30: Issue Volume
BENEFITS AND REWARDS SERVICES ISSUE VOLUME € billions Organic growth 8 7.5 Acquisitions Negative exchange rate impact + 8.2% ORGANIC GROWTH H1 FY 12 H1 FY 13 30 – Fiscal 2013 First Half Results - April 18, 2013
Slide 31: Issue Volume by Geographic Zone
BENEFITS AND REWARDS SERVICES ISSUE VOLUME BY GEOGRAPHIC ZONE € billions Latin America Europe and Asia Organic growth Positive Organic exchange 3.8 4.1 Acquisitions growth rate impact 4.1 Negative 3.4 Acquisitions exchange rate impact + 18% + 0% ORGANIC ORGANIC GROWTH GROWTH H1 FY 12 H1 FY H1 FY 12
Slide 32: Revenues
BENEFITS AND REWARDS SERVICES REVENUES € millions Organic growth 377 Acquisitions 380 Negative exchange rate impact + 4.3% ORGANIC GROWTH H1 FY 12 H1 FY 13 32 – Fiscal 2013 First Half Results - April 18, 2013
Slide 33: Revenues by Geographic Zone
BENEFITS AND REWARDS SERVICES REVENUES BY GEOGRAPHIC ZONE € millions Latin America Europe and Asia Organic growth 174 174 203 Acquisitions 207 Negative - 0.8% exchange rate impact ORGANIC GROWTH + 8.7% ORGANIC GROWTH H1 FY 12 H1 FY 13 H1 FY 12 H1 FY 13 Slightly positive exchange rate impact Acquisit
Slide 34: Operating Profit
BENEFITS AND REWARDS SERVICES OPERATING PROFIT € millions Operating profit* Operating margin* Growth at Constant Rates 39.0% 38.7% 147 147 Negative exchange rate impact + 6.8% CHANGE AT CONSTANT RATES H1 FY 12 H1 FY 13 H1 FY 12 H1 FY 13 Investments in technology and marketing enabled by productivity
Slide 35: Outlook
5 OUTLOOK 35 – Fiscal 2013 First Half Results - April 18, 2013
Slide 36: Fiscal 2013 Outlook
OUTLOOK FISCAL 2013 For Fiscal 2013, Sodexo projects: Organic revenue growth of between 1 and 2% Stable Operating profit *compared to Fiscal 2012 (*) Operating profit excluding currency and before exceptional items from operational efficiency improvement program in Fiscal 2013 and impact from UK
Slide 37: Operational Efficiency Improvement and Cost Reduction Program
OUTLOOK OPERATIONAL EFFICIENCY IMPROVEMENT AND COST REDUCTION PROGRAM ON SITE SAVINGS + 0.6% of revenues in Fiscal 2015 * Synergies following acquisitions New program to reduce purchasing costs Site productivity Review of contract portfolio REDUCTION OF OVERHEADS + 0.4 of revenues % in Fisca
Slide 38: Enlargement of Operational Efficiency and Cost Reduction Program
OUTLOOK ENLARGEMENT OF OPERATIONAL EFFICIENCY IMPROVEMENT AND COST REDUCTION PROGRAM Between € 180 and 200 million EXCEPTIONAL COSTS OF over 18 months (Sept. 2012 - Feb. 2014) IMPLEMENTATION 100% payback in Fiscal 2015 An increase of € 50 million coming from further review of contracts portfolio and
Slide 39: Confidence in Our Medium Term Objectives
OUTLOOK CONFIDENCE IN OUR MEDIUM TERM OBJECTIVES Annual average revenue growth + 7% Operating margin at end of Fiscal 2015 6.3% 39 – Fiscal 2013 First Half Results - April 18, 2013
Slide 40: Thank You!
THANK YOU! 40 – Fiscal 2013 First Half Results - April 18, 2013
Slide 41: Questions & Answers
Questions & Answers 41 – Fiscal 2013 First Half Results - April 18, 2013
Slide 42: Appendices
APPENDICES APPENDICES a) Free cash flow b) Financial debt analysis c) Principal exchange rates used d) Impact of principal exchange rates on balance sheet 42 – Fiscal 2013 First Half Results - April 18, 2013
Slide 43: Free Cash Flow
FREE CASH FLOW Operating cash flow 390 Change in Net cash financial assets provided by related to Benefits operating and Rewards (353) activities Services Free cash flow 37 Change in (30) working capital (113)* 46 ** Capex * (113) CAPEX = (110) Fixed asset acquisition, ** (46) Not included in workin
Slide 44: Analysis of Financial Debt
ANALYSIS OF FINANCIAL DEBT as of February 28, 2013* € millions BY CURRENCY BY MATURITY 1%£ 12% BRL < 1 year 232 1 405 57% € 1-2 years 30% $ 2-3 years 229 BY INTEREST RATE 3-4 years 57 6% Variable 4-5 years 381 94% Fixed > 5 years 498 average interest rate of 5.5% * Financial debt of 2,802 (or 2,818
Slide 45: Principal Exchange Rates Used
PRINCIPAL EXCHANGE RATES USED Closing Average Closing Average 1€ = 28-02-2013 H1 13 31-08-2012 H1 12 Dollar U.S. 1.3129 1.3082 1.2611 1.3484 Pound Sterling 0.8630 0.8189 0.7953 0.8547 Brazilian Real 2.5871 2.6619 2.5804 2.3827 Venezuelan Bolivar 13.3915 13.3915 12.8632 12.6230 45 – Fiscal 2013 First
Slide 46: Impact of Principal Exchange Rates on Balance Sheet
IMPACT OF PRINCIPAL EXCHANGE RATES ON BALANCED SHEET as of February 28, 2013 € millions USD £ BRL USD £ BRL Shareholders’ Fixed assets (112) (61) (2) (78) (50) (1) equity Provisions - - - Deferred tax (3) (1) - assets Deferred tax (2) - - Change in liabilities working capital (30) (17) - Financial d