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19.04.2024 07:00:08 - dpa-AFX: GNW-Adhoc: Sodexo announces solid H1 Fiscal 2024 results
Issy-les-Moulineaux, April 19, 2024
Sodexo (Euronext Paris FR 0000121220-OTC: SDXAY) Sodexo announces solid H1 Fiscal 2024 results
* Organic Revenue growth +8.5%
* Underlying operating profit +16.9% at constant currencies, margin up +40 bps
At the Board of Directors meeting held on April 18, 2024, chaired by Sophie
Bellon, the Board closed the Consolidated accounts for the First half Fiscal
2024 ended February 29, 2024.
First half Fiscal 2024 key figures
-------------------------------------------------------------------------------
Revenues 12,101 11,581 +4.5% +7.8%
-------------------------------------------------------------------------------
Organic
revenue
growth +8.5% +12.9%
-------------------------------------------------------------------------------
UNDERLYING
OPERATING
PROFIT 612 545 +12.3% +16.9%
-------------------------------------------------------------------------------
UNDERLYING
OPERATING
PROFIT MARGIN 5.1% 4.7% +40bps +40bps
-------------------------------------------------------------------------------
Other
operating
income &
expenses 30 (36)
-------------------------------------------------------------------------------
OPERATING
PROFIT 642 509 +26.1% +30.1%
-------------------------------------------------------------------------------
Net financial
expense (46) (43)
-------------------------------------------------------------------------------
Tax charge (99) (122)
-------------------------------------------------------------------------------
Effective tax
rate 16.6% 26.2%
-------------------------------------------------------------------------------
NET PROFIT
FROM
CONTINUING
OPERATIONS 496 339 +46.3% +50.5%
-------------------------------------------------------------------------------
Basic EPS
from
continuing
operations
(in euros) 3.39 2.32
-------------------------------------------------------------------------------
UNDERLYING
NET PROFIT
FROM
CONTINUING
OPERATIONS 427 370 +15.4% +21.0%
-------------------------------------------------------------------------------
Basic
underlying
EPS from
continuing
operations
(in euros) 2.91 2.53
-------------------------------------------------------------------------------
For more detail on the Group Net Profit including discontinued operations,
please refer to section 1.2.6 of the Financial Report.
Sodexo Chairwoman and CEO, Sophie Bellon, said:
"The spin-off of Pluxee has been successfully completed. Sodexo is now a pure-
player in Food and Facilities Management services!
We are making progress in transforming our Food services, developing our branded
offers, boosting our convenience activity and enhancing our purchasing,
particularly in North America. Our organization has been considerably simplified
and streamlined: we are gaining in agility.
The first half performance is solid. Organic growth is robust and the margin is
up +40bps. Net new business momentum is also solid with a further improvement in
retention.
We are progressing towards our ambition to be the world leader in sustainable
food and valued experiences. I would like to thank all our teams, who have
worked so hard to execute the spin-off of Pluxee while delivering a solid
operational performance!"
Solid set of First half Fiscal 2024 Results
linked to the sale of the Homecare activities in October only very partially
project works in a large contract. Excluding this, organic growth of the
constant currencies. The Underlying operating margin was up +40 bps at 5.1%.
mainly due to the non-taxable capital gain on the Homecare disposal, as well
* Free cash flow in the first half was a seasonal negative -102 million euros,
* Net debt increased to 3.4 billion euros up from 2.9 billion euros at the end
Commercial momentum
Leading the way in sustainability
Sodexo has been strengthening its approach by:
* In the United States, Sodexo has massively expanded its DefaultVeg offer
inspiring its chefs and teams to innovate and introduce more sustainable ingredients.
Once again Sodexo's continued progress has been recognized externally as it is
the only Food services company included in:
progress achieved by Sodexo on its climate ambition, both in performance and transparency.
Pluxee spin-off completed successfully
The Pluxee spin-off took place on February 1, 2024 in line with the plans laid
out a year ago.
Sodexo has become a pure-player in Food and FM services. The operating
performance has remained on track throughout the process.
Outlook
Given the solid commercial momentum, some ongoing volume growth, the
contribution of the Paris Olympics and Paralympics Games in the fourth quarter,
and pricing expected at close to +4% for the full year, Fiscal 2024 guidance is:
Conference call
Sodexo willhold a conference call (in English) today at 9:45 a.m. (Paris time),
8:45 a.m. (London time) to comment on its First half Fiscal 2024 results.
Those who wish to connect:
Followed by the access code 07 26 13.
The live audio webcast will be available on www.sodexo.com
(http://www.sodexo.com)
The press release, presentation and webcast will be available on the Group
website www.sodexo.com in both the "Newsroom" section and the "Investors -
Financial Results" section.
Financial calendar
--------------------------------------------------------------
Fiscal 2024 Third quarter Revenues July 2, 2024
--------------------------------------------------------------
Fiscal 2024 Annual Results October 24, 2024
--------------------------------------------------------------
Fiscal 2024 Annual Shareholders Meeting December 17, 2024
--------------------------------------------------------------
These dates are indicative and may be subject to change without notice.
Regular updates are available in the calendar on our website www.sodexo.com
(http://www.sodexo.com)
About Sodexo
Founded in Marseille in 1966 by Pierre Bellon, Sodexo is the global leader in
sustainable food and valued experiences at every moment in life: learn, work,
heal and play. The Group stands out for its independence, its founding family
shareholding and its responsible business model. Thanks to its two activities of
Food and Facilities Management Services, Sodexo meets all the challenges of
everyday life with a dual goal: to improve the quality of life of our employees
and those we serve, and contribute to the economic, social and environmental
progress in the communities where we operate. For Sodexo, growth and social
commitment go hand in hand. Our purpose is to create a better everyday for
everyone to build a better life for all.
Sodexo is included in the CAC Next 20, Bloomberg France 40, CAC 40 ESG, CAC SBT
1.5, FTSE 4 Good and DJSI indices.
Key figures
-------------------------------------------------------------------------------
First half Fiscal 2024 Financial Report
1.1 Changes in financial disclosure from H1 Fiscal 2024
Following the Pluxee spin-off, Sodexo is now a pure player in Food and FM
services. In order to better reflect the Group's performance, to provide more
clarity and to ease the comparability with its main peers, the Group has decided
to make the following changes to its financial disclosure:
1. First half Retention and Development KPIs are now presented on a last 12
months (LTM) basis, previously provided on a six months basis.
2. In the breakdown of revenues by segment within each geography, the Sports &
3. Definitions of Operating cash flow, Net Capex and EBITDA have been adjusted:
* Client Investment amortization, which is accounted for, in the P&L, as a
FIRST HALF FISCAL
-------------------------------------------------------------------------------
Operating Cash Flow 664 75 739
-------------------------------------------------------------------------------
Net Capex (171) (75) (246)
-------------------------------------------------------------------------------
EBITDA - 6M 735 75 810
-------------------------------------------------------------------------------
EBITDA - 12M
Rolling 1,278 150 1,428
-------------------------------------------------------------------------------
Net debt 3,352 3,352
-------------------------------------------------------------------------------
Net debt / EBITDA
(12M Rolling) 2.6x 2.3x
-------------------------------------------------------------------------------
1.2 H1 Fiscal 2024 performance
1.2.1 Consolidated income statement from continuing operations
-------------------------------------------------------------------------------
Revenue 12,101 11,581 +4.5% +7.8%
-------------------------------------------------------------------------------
Organic Growth +8.5% +12.9%
-------------------------------------------------------------------------------
UNDERLYING
OPERATING PROFIT 612 545 +12.3% +16.9%
-------------------------------------------------------------------------------
UNDERLYING
OPERATING PROFIT
MARGIN 5.1% 4.7% +40 bps +40 bps
-------------------------------------------------------------------------------
Other operating
income &
expenses 30 (36)
-------------------------------------------------------------------------------
OPERATING PROFIT 642 509 +26.1% +30.1%
-------------------------------------------------------------------------------
Net financial
expense (46) (43)
-------------------------------------------------------------------------------
Tax charge (99) (122)
-------------------------------------------------------------------------------
Effective tax
rate((1)) 16.6% 26.2%
-------------------------------------------------------------------------------
NET PROFIT FROM
CONTINUING
OPERATIONS((2)) 496 339 +46.3% +50.5%
-------------------------------------------------------------------------------
Basic EPS from
continuing
operations (in
euros) 3.39 2.32
-------------------------------------------------------------------------------
UNDERLYING NET
PROFIT FROM
CONTINUING
OPERATIONS 427 370 +15.4% +21.0%
-------------------------------------------------------------------------------
Basic underlying
EPS from
continuing
operations (in
euros) 2.91 2.53
-------------------------------------------------------------------------------
(1) Pre-tax profit excluding share of profit from Equity method was 595 million
euros in First half Fiscal 2024 and 465 millions euros in First half Fiscal
2023.
(2) Profit attributable to non-controlling interests were 4 million euros in
First half Fiscal 2024 and 5 million euros in First half Fiscal 2023.
1.2.2 Revenues
REVENUES BY ZONES
--------------------
REVENUES
(in
---------------------------------------- -----------------------------------------------
---------------------------------------- -----------------------------------------------
---------------------------------------- -----------------------------------------------
Rest of
----------------------------------------------------------------------------------------
First half Fiscal 2024 Sodexo revenues totaled 12.1 billion euros, up +4.5%
year-on-year including a negative currency impact of -3.3%, resulting from the
appreciation of the euro against most currencies from the start of calendar year
2023, and a net contribution from acquisitions and disposals of -0.7%.
Consequently, First half Fiscal 2024 organic growth was +8.5%.
The underlying dynamic in the second quarter was similar to the first quarter,
with strong activity in all segments and geographies, particularly in North
America, where organic growth reached +10.0%. Europe was up +8.0%, boosted
80bps by the Rugby World Cup in the first quarter. Rest of the World was up
+5.7%, impacted by an accounting change for project works in a large contract.
Excluding this, organic growth of the zone was +8.4%.
The most significant drivers of organic growth continue to be increased
attendance, new business and pricing.
Price adjustments averaged close to +4.5% for the First half, progressively
declining, in line with the softening of food inflation.
Organic growth in the First half was driven by Food services, up +10.7%
organically, whereas FM services were up +4.5%.
Net new development has shown a steady improvement, reaching 2.4% on a last 12
months basis (LTM) as of the end of February:
North America
REVENUES
-----------
-------------------------------------------------------------------------------
Business &
Administrations((1)) 1,470 1,884 +13.2 %
-------------------------------------------------------------------------------
Sodexo Live! 676 - +23.3 %
-------------------------------------------------------------------------------
Healthcare & Seniors 1,687 1,722 +6.3 %
-------------------------------------------------------------------------------
Education 1,923 1,893 +7.0 %
-------------------------------------------------------------------------------
NORTH AMERICA TOTAL 5,756 5,499 +10.0 %
-------------------------------------------------------------------------------
(1) From H1 FY24, Business & Administrations excludes Sodexo Live!, reported
separately.
(2) As part of the streamlining of the organization during Fiscal 2023, some
contracts or operations have been reallocated between segments.
First half Fiscal 2024 North America revenues totaled 5.8 billion euros, up
+10.0% organically. This strong growth was driven by the contribution of new
business and some volume growth as well as a pricing impact of just below +4%.
Restated organic growth in Business & Administrations (excl. Sodexo Live!)
reached +13.2%, driven by the contribution of new business, strong growth in
food services from continued return to office and cross-sales, as well as
project works and strong retail sales growth. Entegra revenue growth was also
accretive.
Sodexo Live! restated organic growth was +23.3%, driven by robust activity in
all venues, and in particular strong per capita spend in sports stadiums.
Airport lounges activity also grew strongly with increased passenger count,
added scope and mobilization of new business.
Healthcare & Seniors restated organic growth was +6.3%, with good performance in
Healthcare through a combination of price increases, volume, retail growth and
favorable net new contribution. This growth was somewhat offset by a negative
contribution in Seniors due to the impact of sites lost at the end of the prior
fiscal year.
Education restated organic revenue growth was +7.0%, benefiting from price
increases as well as growth in meal count, retail and catering events.
Europe
-------------------------------------------------------------------------------
Business &
Administrations((1)) 2,356 2,632 +6.3 %
-------------------------------------------------------------------------------
Sodexo Live! 324 - +25.4 %
-------------------------------------------------------------------------------
Healthcare & Seniors 950 1,009 +7.8 %
-------------------------------------------------------------------------------
Education 624 386 +7.3 %
-------------------------------------------------------------------------------
EUROPE TOTAL 4,254 4,027 +8.0 %
-------------------------------------------------------------------------------
(1) From H1 FY24, Business & Administrations excludes Sodexo Live!, reported
separately.
(2) As part of the streamlining of the organization during Fiscal 2023, some
contracts or operations have been reallocated between segments.
In Europe, First half Fiscal 2024 revenues amounted to 4.3 billion euros, up
+8.0% organically, or +7.2% excluding the Rugby World Cup, driven by increased
food services volume and pricing of around +5%.
Business & Administrations (excl. Sodexo Live!) restated organic growth was
+6.3%. This was supported by Corporate services benefiting from both price
increases and higher attendance, coupled with new business in Government in the
United Kingdom.
Sodexo Live! restated organic growth stood at +25.4%, or +12.5% excluding the
Rugby World Cup. The growth was primarily driven by improved attendance and
pricing in sports and cultural destinations in France, in particular the
restaurants in the Eiffel Tower, by increased volumes in the United Kingdom in
airport lounges, as activity was only just starting to pick-up in early Fiscal
2023 post-pandemic, and stadiums, helped by price increases.
Healthcare & Seniors restated organic growth stood at +7.8%, driven by new
business particularly in Spain and inflation pass-through in the United Kingdom,
as well as favorable volumes and price revisions in Seniors in France.
Education restated organic revenue growth was +7.3%, reflecting the significant
positive impact of price revisions, and a favorable working days impact.
Rest of the World
-------------------------------------------------------------------------------
Business &
Administrations((1)) 1,820 1,839 +5.1 %
-------------------------------------------------------------------------------
Sodexo Live! 22 - +195.6 %
-------------------------------------------------------------------------------
Healthcare & Seniors 170 168 +1.4 %
-------------------------------------------------------------------------------
Education 79 48 +10.5 %
-------------------------------------------------------------------------------
REST OF THE WORLD TOTAL 2,091 2,055 +5.7 %
-------------------------------------------------------------------------------
(1) From H1 FY24, Business & Administrations excludes Sodexo Live!, reported
separately.
(2) As part of the streamlining of the organization during Fiscal 2023, some
contracts or operations have been reallocated between segments.
Rest of the World First half Fiscal 2024 revenues amounted to 2.1 billion euros,
up +5.7% organically, impacted by the change in revenue recognition in Energy &
Resources. Excluding this impact, the organic growth was +8.4%, including
pricing of around +4.5%.
Business & Administrations (excl. Sodexo Live!) restated organic growth was
+5.1%, or +8.3% excluding the accounting change. Growth in food in India has
continued to be very strong, driven by both new and existing business, and in
Australia with a pricing catch-up and new openings in mining. Brazil and Latin
America are still growing high single digit, although with a slight deceleration
in the second quarter due to a lower pricing impact and a slowing market. This
performance was slightly offset by a modest growth in China due to the economic
slowdown leading to restructuring and site closures last year.
Sodexo Live! revenues (principally airport lounges) tripled as Covid
restrictions in airlines were lifted only from January 2023 and due to the
opening of new lounges in Hong Kong.
Healthcare & Seniors restated organic growth was +1.4%, with regular strong
growth in India, a significant pick-up in growth in Latin America, offset byslow growth in China and the impact of the exit of low-performing contracts in
Brazil during the second quarter last year.
Education restated organic growth was +10.5%, fueled by strong growth in China
coming from a lower starting point last year due to school closures, and
sustained growth in Brazil and India, boosted by both new business and ramp ups
in existing sites.
1.2.3 Underlying operating profit
------------------------------------------------------------------------------------------------
North America 395 +8.2% +14.1% 6.9% +30 bps +30 bps
------------------------------------------------------------------------------------------------
Europe 180 +14.6% +16.0% 4.2% +30 bps +30 bps
------------------------------------------------------------------------------------------------
Rest of the
World 80 +12.7% +14.1% 3.8% +30 bps +30 bps
------------------------------------------------------------------------------------------------
UNDERLYING
OPERATING
PROFIT BEFORE
CORPORATE COSTS 655 +10.5% +14.6% 5.4% +30 bps +30 bps
------------------------------------------------------------------------------------------------
Corporate
expenses (43) -10.4% -10.4%
------------------------------------------------------------------------------------------------
UNDERLYING
OPERATING
PROFIT
(continuing
activities) 612 +12.3% +16.9% 5.1% +40 bps +40 bps
------------------------------------------------------------------------------------------------
First half Fiscal 2024 Underlying operating profit was 612 million euros, up
+12.3%, and +16.9% excluding the currency effect. The Underlying operating
margin, including Corporate expenses, was up +40 bps at 5.1%.
This significant improvement stemmed partially from effective management of
inflation through better pricing and continued close management of procurement,
in a decelerating food cost inflation environment.
The margin improvement was also due to enhanced on site productivity notably
attributed to the deployment of branded offers, supply efficiencies,
standardization and optimized staff allocation, as well as healthy net new wins
coming from higher retention rate and quality signatures.
Finally, disciplined above-site cost management contributed to the year-on-year
margin increase.
The performance by zone is as follows:
* North America Underlying operating profit increased +8.2%, or +14.1%
excluding the currency effect, and the margin was up +30 bps at 6.9%, fueled
1.2.4 Net profit from continuing operations
(in million euros) H1 FISCAL 2024 H1 FISCAL 2023 RESTATED
-------------------------------------------------------------------------------
UNDERLYING OPERATING PROFIT 612 545
-------------------------------------------------------------------------------
Net impact related to consolidation
scope changes 83 1
-------------------------------------------------------------------------------
Restructuring and rationalization costs (15) (8)
-------------------------------------------------------------------------------
Amortization of purchased intangible
assets (17) (18)
-------------------------------------------------------------------------------
Other (21) (11)
-------------------------------------------------------------------------------
OTHER OPERATING INCOME AND EXPENSES 30 (36)
-------------------------------------------------------------------------------
OPERATING PROFIT 642 509
-------------------------------------------------------------------------------
Net financial expense (46) (43)
-------------------------------------------------------------------------------
Net income before tax & shares
accounted for equity method 595 465
-------------------------------------------------------------------------------
Tax charge (99) (122)
-------------------------------------------------------------------------------
NET PROFIT FROM CONTINUING OPERATIONS
(GROUP SHARE) 496 339
-------------------------------------------------------------------------------
UNDERLYING NET PROFIT FROM CONTINUING
OPERATIONS (GROUP SHARE) 427 370
-------------------------------------------------------------------------------
Other operating income and expenses amounted to 30 million euros compared to
-36 million euros in the previous year. The main elements of the period were the
83 million euros net gain related to scope changes, principally the disposal of
the Homecare business in October 2023, the spin-off costs of Pluxee for 16
million euros and restructuring costs of 15 million euros.
As a result, the Operating Profit was 642 million euros compared to 509 million
euros in the previous year.
Net Financial expenses in First half Fiscal 2024 were up 3 million euros at 46
million euros. Gross interest on the bonds was more or less neutral as higher
dollar floating rates offset the effect of the reimbursement of two bonds in
November 2023 and January 2024 which were both at very low interest rates.
The First half Fiscal 2024 effective tax rate was at 16.6%, well below the
26.2% in the previous year. This decrease is principally explained by the
capital gain on the sale of the Homecare activity which had no tax impact, as
well as the utilization of previously unrecognized tax assets due to better
results in France.
First half Fiscal 2024 Net profit from continuing activities was up +46.3% to
496 million euros, compared to 339 million euros in the previous year.
Underlying net profit from continuing activities adjusted for Other Operating
income and expenses net of tax amounted to 427 million euros, compared to
370 million euros in the previous year, up +15.4%.
1.2.5 Earnings per share from continuing operations
First half Fiscal 2024 EPS from continuing activities was 3.39 euros against
2.32 euros in the previous year. The weighted average number of shares for
Fiscal 2024 was more or less stable at 146,445,700 compared to 146,147,666
shares for First half Fiscal 2023.
Underlying EPS amounted to 2.91 euros, up +15.0% compared to the previous year.
1.2.6 Net profit from discontinued operations (Pluxee)
(in million euros) H1 FISCAL 2024 H1 FISCAL 2023 RESTATED
-------------------------------------------------------------------------------
Group Net Profit from continuing
operations 496 339
-------------------------------------------------------------------------------
Group Net Profit from discontinued
operations (570) 101
-------------------------------------------------------------------------------
GROUP NET PROFIT (Group share) (74) 440
-------------------------------------------------------------------------------
First half Fiscal 2024 Net profit from discontinued operations amounts to -570
million euros, against +101 million euros in the previous year (restated). This
result is composed of:
iii. The impact of the recycling of the currency translation adjustment
None of these items will impact the Fiscal 2024 dividend as the pay-out ratio
will be based on the Underlying net profit of Sodexo continuing activities only.
1.3 Consolidated financial position
As a consequence of the spin-off, Pluxee's assets and liabilities, including the
cash, have been deconsolidated as of January 31, 2024. The cash flows generated
by Pluxee between the start of the Fiscal Year until the spin-off are reported
as cash flow from discontinued operations.
1.3.1 Cash flows from continuing operations
Cash flows from continuing operations for the period were as follows:
(in million euros) H1 FISCAL 2024 H1 FISCAL 2023
-------------------------------------------------------------------------------
Operating cash flow((1)) 739 733
-------------------------------------------------------------------------------
Change in working capital (513) (624)
-------------------------------------------------------------------------------
IFRS 16 outflow (82) (98)
-------------------------------------------------------------------------------
Net capital expenditure (including new client
investments) (246) (247)
-------------------------------------------------------------------------------
Free cash flow((2)) (102) (236)
-------------------------------------------------------------------------------
Net acquisitions 100 (11)
-------------------------------------------------------------------------------
Share buy-backs (26) (57)
-------------------------------------------------------------------------------
Dividends paid to shareholders (456) (352)
-------------------------------------------------------------------------------
Other changes (including scope and exchange
rates) 50 95
-------------------------------------------------------------------------------
(Increase)/decrease in net debt (434) (561)
-------------------------------------------------------------------------------
(1) The difference with the Operating Cash Flow as presented in the consolidated
cash flow statement (section 2.1.4) comes from the new client investments,
presented in this table within Net Capex (within Operating Cash flow in the cash
flow statement, under "change in client investments").
(2) The Group does not believe the accounting treatment introduced by IFRS 16
modifies the operating nature of its lease transactions. Accordingly, to ensure
the Group's performance measures continue to best reflect its operating
performance, the Group considers repayments of lease liabilities as operating
items impacting the Free cash flow, which integrates all lease payments (fixed
or variable). To be consistent, the lease liabilities are not included in Net
debt (treated as operating items).
First half Fiscal 2024 Free cash outflow was -102 million euros against
-236 million euros in the previous period.
First half Fiscal 2024 Operating cash flow slightly improved at 739 million
euros against 733 million euros in the previous period as a result of the
increase in operating profit, offset by the unfavorable variation of income tax
paid due to significant positive prior year one-offs.The change in working
capital in the first half was a seasonal negative 513 million euros, improved
from the negative 624 million euros in First half Fiscal 2023.
Net capital expenditure, including new client investments, was stable at 246
million euros, or 2% of revenues, with higher capex to sales ratio expected in
the second half due to the timing of investments.
Acquisitions net of disposals amounted to an inflow of 100 million euros
resulting from the disposal of the Homecare business, offset somewhat by some
acquisitions mainly in the Convenience activity in North America.
The Fiscal 2023 dividend payment amounted to 456 million euros compared to 352
million euros in the previous year, reflecting the 29% increase in the dividend
per share.
After taking into account Other changes, consolidated net debt increased by
434 million euros during the First half to reach 3,352 million euros at
February 29, 2024.
1.3.2 Acquisitions and disposals for the period
First half Fiscal 2024 was marked by the spin-off and listing of Pluxee on
February 1, 2024.
Other consolidated scope changes of the First half 2024 included:
* the disposal of non-core activities, mainly the Homecare business, completed
Disposals net of acquisitions amounted to 100 million euros.
1.3.3 Condensed consolidated statement of financial position at February
29, 2024
----------------------------------------------- -----------------------------------------------
----------------------------------------------- -----------------------------------------------
Current
----------------------------------------------- -----------------------------------------------
----------------------------------------------- -----------------------------------------------
Interco
loans /
deposits
with Pluxee 1,215
----------------------------------------------- -----------------------------------------------
----------------------------------------------- -----------------------------------------------
----------------------------------------------- -----------------------------------------------
-----------------------------------------------------------------------------------------------
(1) As of August 31, 2023, in order to project the post spin-off financial
position, in this table intragoup loans and deposits between Sodexo and Pluxee
were not eliminated (on the one hand 1,215 million euros loan from Sodexo to
Pluxee, presented in this table in Assets, into "interco loans / deposits with
Pluxee" with counterpart in "Liabilities held for sale", and on the other hand
deposits from Pluxee in Sodexo cash-pooling for 570 millions euros, presented in
the table in Assets as a reduction of Cash with counterpart in "Assets held for
sale"). These restatements explain the gaps with the Consolidated financial
position in note 4.1.3, in which intragroup loans were eliminated. Moreover,
these intragroup loans were considered as settled as at August 31, 2023, and
thus are part of the net debt calculation, as they havebeen settled just prior
to the listing date of Pluxee.
The decrease in Shareholder's equity is the result of Pluxee's deconsolidation
on February 1, 2024.
Assets and Liabilities held for sale or distribution were nil as of February
29, 2024, following the spin-off of Pluxee and the disposal of the Homecare
entities.
-------------------------------------------------------------------------------
Gross borrowings 4,797 5,588 5,632
-------------------------------------------------------------------------------
Net debt 3,352 2,918 4,069
-------------------------------------------------------------------------------
Gearing ratio 75.7% 64.1% 99.3%
-------------------------------------------------------------------------------
Net Debt ratio (Net
debt/EBITDA(2)) 2.3x 2.2x 3.2x
-------------------------------------------------------------------------------
(1) Net debt as of February 28, 2023 and August 31, 2023 were adjusted to
exclude Pluxee and to reflect the post-spin-off financial position, with
intragroup loans and deposits with Pluxee considered as settled.
(2) For the new definition of EBITDA, please refer to the Alternative
Performance Measure in section 1.3.6
As of February 29, 2024, net debt was 3,352 million euros, up from 2,918 million
euros at the end of Fiscal 2023 (adjusted), reflecting the typical seasonality
of cash flow with dividend payment in the First half and seasonal working
capital requirements. Given the year-on-year increase in EBITDA, the increase in
net debt to EBITDA ratio since year end is limited to 0.1x, at 2.3x, and well
below the levels at the end of First half Fiscal 2023 of 3.2x.
During the period, two bonds were reimbursed: 300 million euros, due May 2025,
carrying an interest rate of 1.125% in November 2023, and 500 million euros due
in January 2024, carrying an interest rate of 0.50%. As a result, the average
interest rate on the bonds at the end of the First half Fiscal 2024 was at
1.9%, against 1.7% at the end of August 2023.
As of February 29, 2024, the Group's gross debt of 4,797 million euros was 67%
euro-denominated, 24% dollar-denominated and 8% sterling-denominated, with an
average maturity of 3.7 years, 94% at fixed rates and 100% covenant free.
Operating cash reached a total of 1,445 million euros.
At the end of the First half Fiscal 2024, the Group had unused credit lines
totaled 1.6 billion euros.
1.3.4 Subsequent events
No major events have occurred since the closing of the period.
1.3.5 Currency effect
Exchange rate fluctuations do not generate operational risks, because each
subsidiary bills its revenues and incurs its expenses in the same currency.
--------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
The negative currency impact for First half Fiscal 2024 of -3.3% results from
the appreciation of the Euro notably compared to the US Dollar, the Australian
Dollar, the Chinese Renminbi, the Indian Rupee and the Chilean Peso.
Sodexo operates in 45 countries. The percentage of total revenues and underlying
operating profit denominated in the main currencies during the First half Fiscal
2024 are as follows:
-------------------------------------------------------
U.S. dollar 45 % 67 %
-------------------------------------------------------
Euro 23 % 4 %
-------------------------------------------------------
UK pound Sterling 8 % 7 %
-------------------------------------------------------
Brazilian real 4 % 4 %
-------------------------------------------------------
The currency effect is determined by applying the previous year's average
exchange rates to the current year figures.
1.3.6 Alternative Performance Measure definitions
Blended cost of debt
The blended cost of debt is calculated at period end and is the weighted blended
financing rate on borrowings (including derivative financial instruments and
commercial papers) and cash-pooling balances at period end.
Financial ratios definition
-------------------------------------------------------------------------------
Gearing ratio -----------------------
-------------------------------------------------------------------------------
Net debt ratio-----------------------
-------------------------------------------------------------------------------
Financial ratios reconciliation
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
(3) Rolling 12-month----------------------------------------------------------
-------------------------------------------------------------------------------
(1) For the sake of simplification, the term EBITDA is used in reference to
Underlying EBITDA.
Note: Rolling 12-month (RTM) EBITDA excluding lease payments would be 1,625
million euros for First half Fiscal 2024, compared to 1,475 million euros for
First half Fiscal 2023.
Free cash flow
Please refer to the section entitled Consolidated financial position.
Growth excluding currency effect
The currency effect is determined by applying the previous year's average
exchange rates to the current year figures except in hyper-inflationary
economies where all figures are converted at the latest closing rate for both
periods when the impact is significant.
Net debt
Net debt is defined as Group borrowing at the balance sheet date, 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 (or gain of control) and
divestments, as follows:
* for businesses divested (or loss of control) during the current fiscal year,
Underlying net profit
Underlying Net profit is defined as Net
Sodexo (Euronext Paris FR 0000121220-OTC: SDXAY) Sodexo announces solid H1 Fiscal 2024 results
* Organic Revenue growth +8.5%
* Underlying operating profit +16.9% at constant currencies, margin up +40 bps
* Fiscal 2024 guidance:
* Organic growth now expected at the top of the +6% to +8% range
* Underlying operating profit margin improvement confirmed at +30 to +40
bps, at constant currencies
At the Board of Directors meeting held on April 18, 2024, chaired by Sophie
Bellon, the Board closed the Consolidated accounts for the First half Fiscal
2024 ended February 29, 2024.
First half Fiscal 2024 key figures
(in million H1 FISCAL 2023 DIFFERENCE euros) H1 FISCAL 2024 RESTATED DIFFERENCE CONSTANT RATES
-------------------------------------------------------------------------------
Revenues 12,101 11,581 +4.5% +7.8%
-------------------------------------------------------------------------------
Organic
revenue
growth +8.5% +12.9%
-------------------------------------------------------------------------------
UNDERLYING
OPERATING
PROFIT 612 545 +12.3% +16.9%
-------------------------------------------------------------------------------
UNDERLYING
OPERATING
PROFIT MARGIN 5.1% 4.7% +40bps +40bps
-------------------------------------------------------------------------------
Other
operating
income &
expenses 30 (36)
-------------------------------------------------------------------------------
OPERATING
PROFIT 642 509 +26.1% +30.1%
-------------------------------------------------------------------------------
Net financial
expense (46) (43)
-------------------------------------------------------------------------------
Tax charge (99) (122)
-------------------------------------------------------------------------------
Effective tax
rate 16.6% 26.2%
-------------------------------------------------------------------------------
NET PROFIT
FROM
CONTINUING
OPERATIONS 496 339 +46.3% +50.5%
-------------------------------------------------------------------------------
Basic EPS
from
continuing
operations
(in euros) 3.39 2.32
-------------------------------------------------------------------------------
UNDERLYING
NET PROFIT
FROM
CONTINUING
OPERATIONS 427 370 +15.4% +21.0%
-------------------------------------------------------------------------------
Basic
underlying
EPS from
continuing
operations
(in euros) 2.91 2.53
-------------------------------------------------------------------------------
For more detail on the Group Net Profit including discontinued operations,
please refer to section 1.2.6 of the Financial Report.
Sodexo Chairwoman and CEO, Sophie Bellon, said:
"The spin-off of Pluxee has been successfully completed. Sodexo is now a pure-
player in Food and Facilities Management services!
We are making progress in transforming our Food services, developing our branded
offers, boosting our convenience activity and enhancing our purchasing,
particularly in North America. Our organization has been considerably simplified
and streamlined: we are gaining in agility.
The first half performance is solid. Organic growth is robust and the margin is
up +40bps. Net new business momentum is also solid with a further improvement in
retention.
We are progressing towards our ambition to be the world leader in sustainable
food and valued experiences. I would like to thank all our teams, who have
worked so hard to execute the spin-off of Pluxee while delivering a solid
operational performance!"
Solid set of First half Fiscal 2024 Results
* First half Fiscal 2024 consolidated revenues were at 12.1 billion euros, up
+4.5% year-on-year. Acquisitions and disposals impacted growth by -0.7%,
linked to the sale of the Homecare activities in October only very partially
offset by some bolt-on acquisitions, particularly in North America
convenience. The negative currency impact amounted to -3.3%. As a result,
organic revenue growth was +8.5%.
* This organic growth was fueled by pricing for about half and net new
business and some volume growth for the other half.
* By geography:
* North America achieved organic growth of +10.0%;
* Europe was up +8.0%, boosted 80bps by the Rugby World Cup, in the first
quarter;
* Rest of the World was up +5.7%, impacted by an accounting change for
project works in a large contract. Excluding this, organic growth of the
zone was +8.4%.
* Food services organic growth, at +10.7%, continued to outperform FM
services, at +4.5%.
* Underlying operating profit was 612 million euros, up +12.3%, or +16.9% at
constant currencies. The Underlying operating margin was up +40 bps at 5.1%.
* Other operating income & expenses amounted to a positive 30 million euros,
with the gain on the sale of the Homecare services more than offsetting
restructuring, spin-off costs and amortization of acquisition-related
assets.
* Operating profit was up +26.1%, or +30.1% at constant currencies, at 642
million euros compared to 509 million euros in the previous year.
* Net financial expense was 46 million euros against 43 million euros in the
previous year.
* The Effective tax rate was at 16.6% against 26.2% in the previous year
mainly due to the non-taxable capital gain on the Homecare disposal, as well
as the utilization of previously unrecognized tax assets due to better
results in France.
* Group net profit from continuing activities was up +46.3% to 496 million
euros. Underlying net profit adjusted for Other Operating income and
expenses net of tax amounted to 427 million euros, up +15.4%.
* Free cash flow in the first half was a seasonal negative -102 million euros,
an improvement relative to the -236 million euros in First half Fiscal
2023. Net capital expenditure(()(1)()) was stable at 246 million euros,
representing 2% of revenues.
* Net debt increased to 3.4 billion euros up from 2.9 billion euros at the end
of Fiscal 2023(()(2)()) due to the seasonality of cash movements. Given the
year-on-year increase in EBITDA, the Net debt to EBITDA ratio((1)) is 2.3x,
up only 0.1x since year end, and well below the level at the end of First
half Fiscal 2023 of 3.2x.
Commercial momentum
* During First half Fiscal 2024, last-12-months (LTM) net new development
signed increased to 2.4%, up from 2.2% at year end Fiscal 2023 due to:
* LTM client retention of 95.5%, another record for Sodexo;
* LTM development of 6.8%, slightly short of the 7-8% expected range for
the year due to phasing.
Leading the way in sustainability
Sodexo has been strengthening its approach by:
* Accelerating the global deployment of its Zero Harm Mindset Program with
already more than 6,000 employees trained (representing 38,000 hours of
training).
* Progressing on client adoption of its low carbon meals strategy:
* In the United States, Sodexo has massively expanded its DefaultVeg offer
at college dining halls, encouraging students to choose one of the two
plant-based meal options.
* NYC Health + Hospitals and Sodexo celebrated over 1.2 million plant-
based meals served since March 2022, beneficial for patient health and
the environment.
* Following the successful pilots in Continental Europe, Sodexo is
accelerating the deployment of its Sustainable Culinary Masterclass,
inspiring its chefs and teams to innovate and introduce more sustainable ingredients.
Once again Sodexo's continued progress has been recognized externally as it is
the only Food services company included in:
* the "2024 World's Most Ethical Companies(®)" by Ethisphere, a global leader
in defining and advancing the standards of ethical business practices,
acknowledging companies demonstrating business integrity through best-in-
class policies and practices;
* the prestigious A-list of the CDP climate ranking, which confirms the
progress achieved by Sodexo on its climate ambition, both in performance and transparency.
Pluxee spin-off completed successfully
The Pluxee spin-off took place on February 1, 2024 in line with the plans laid
out a year ago.
Sodexo has become a pure-player in Food and FM services. The operating
performance has remained on track throughout the process.
Outlook
Given the solid commercial momentum, some ongoing volume growth, the
contribution of the Paris Olympics and Paralympics Games in the fourth quarter,
and pricing expected at close to +4% for the full year, Fiscal 2024 guidance is:
* Organic revenue growth now expected at the top of the +6% to +8% range.
* Underlying operating profit margin improvement confirmed at +30 to +40 bps,
at constant currencies.
Conference call
Sodexo willhold a conference call (in English) today at 9:45 a.m. (Paris time),
8:45 a.m. (London time) to comment on its First half Fiscal 2024 results.
Those who wish to connect:
* From the UK: +44 121 281 8004, or * From France: +33 1 70 91 87 04, or * From the US: +1 718 705 8796,
Followed by the access code 07 26 13.
The live audio webcast will be available on www.sodexo.com
(http://www.sodexo.com)
The press release, presentation and webcast will be available on the Group
website www.sodexo.com in both the "Newsroom" section and the "Investors -
Financial Results" section.
Financial calendar
--------------------------------------------------------------
Fiscal 2024 Third quarter Revenues July 2, 2024
--------------------------------------------------------------
Fiscal 2024 Annual Results October 24, 2024
--------------------------------------------------------------
Fiscal 2024 Annual Shareholders Meeting December 17, 2024
--------------------------------------------------------------
These dates are indicative and may be subject to change without notice.
Regular updates are available in the calendar on our website www.sodexo.com
(http://www.sodexo.com)
About Sodexo
Founded in Marseille in 1966 by Pierre Bellon, Sodexo is the global leader in
sustainable food and valued experiences at every moment in life: learn, work,
heal and play. The Group stands out for its independence, its founding family
shareholding and its responsible business model. Thanks to its two activities of
Food and Facilities Management Services, Sodexo meets all the challenges of
everyday life with a dual goal: to improve the quality of life of our employees
and those we serve, and contribute to the economic, social and environmental
progress in the communities where we operate. For Sodexo, growth and social
commitment go hand in hand. Our purpose is to create a better everyday for
everyone to build a better life for all.
Sodexo is included in the CAC Next 20, Bloomberg France 40, CAC 40 ESG, CAC SBT
1.5, FTSE 4 Good and DJSI indices.
Key figures
* 22.6 billion euros Fiscal 2023 consolidated revenues
* 430,000 employees as at August 31, 2023
* #1 France-based private employer worldwide
* 45 countries
* 80 million consumers served daily
* 11.4 billion euros in market capitalization
(as at April 18, 2024)
-------------------------------------------------------------------------------
Contacts
Analysts and Investors Media
Mathieu Scaravetti
Virginia Jeanson +33 6 28 62 21 91
+33 1 57 75 80 56 mathieu.scaravetti@sodexo.com
virginia.jeanson@sodexo.com (mailto:mathieu.scaravetti@sodexo.c
(mailto:virginia.jeanson@sodexo.com) om)
First half Fiscal 2024 Financial Report
1.1 Changes in financial disclosure from H1 Fiscal 2024
Following the Pluxee spin-off, Sodexo is now a pure player in Food and FM
services. In order to better reflect the Group's performance, to provide more
clarity and to ease the comparability with its main peers, the Group has decided
to make the following changes to its financial disclosure:
1. First half Retention and Development KPIs are now presented on a last 12
months (LTM) basis, previously provided on a six months basis.
2. In the breakdown of revenues by segment within each geography, the Sports &
Leisure segment, operated under the Sodexo Live! brand, previously grouped
within the Business & Administrations segment, is now presented separately.
3. Definitions of Operating cash flow, Net Capex and EBITDA have been adjusted:
* Client Investment amortization, which is accounted for, in the P&L, as a
reduction to Revenue (as per IFRS15), previously neutralized in Free
Cash Flow within Net Capex, is now is neutralized within Operating cash
flow and EBITDA;
* New definition of Net Capex includes (i) acquisition of PPE and
intangible assets, (ii) new Client Investments and (iii) Disposal of
assets, as before, but no longer includes the neutralization of client
investment amortization;
* EBITDA is now defined as Underlying operating profit excluding both
underlying Depreciation & amortization and Client investment
amortization, and including Lease payments.
FIRST HALF FISCAL
2024 Client Investments (in million euros) PREVIOUS DEFINITIONS amortization NEW DEFINITIONS
-------------------------------------------------------------------------------
Operating Cash Flow 664 75 739
-------------------------------------------------------------------------------
Net Capex (171) (75) (246)
-------------------------------------------------------------------------------
EBITDA - 6M 735 75 810
-------------------------------------------------------------------------------
EBITDA - 12M
Rolling 1,278 150 1,428
-------------------------------------------------------------------------------
Net debt 3,352 3,352
-------------------------------------------------------------------------------
Net debt / EBITDA
(12M Rolling) 2.6x 2.3x
-------------------------------------------------------------------------------
1.2 H1 Fiscal 2024 performance
1.2.1 Consolidated income statement from continuing operations
(in million H1 FISCAL 2023 DIFFERENCE euros) H1 FISCAL 2024 RESTATED DIFFERENCE CONSTANT RATES
-------------------------------------------------------------------------------
Revenue 12,101 11,581 +4.5% +7.8%
-------------------------------------------------------------------------------
Organic Growth +8.5% +12.9%
-------------------------------------------------------------------------------
UNDERLYING
OPERATING PROFIT 612 545 +12.3% +16.9%
-------------------------------------------------------------------------------
UNDERLYING
OPERATING PROFIT
MARGIN 5.1% 4.7% +40 bps +40 bps
-------------------------------------------------------------------------------
Other operating
income &
expenses 30 (36)
-------------------------------------------------------------------------------
OPERATING PROFIT 642 509 +26.1% +30.1%
-------------------------------------------------------------------------------
Net financial
expense (46) (43)
-------------------------------------------------------------------------------
Tax charge (99) (122)
-------------------------------------------------------------------------------
Effective tax
rate((1)) 16.6% 26.2%
-------------------------------------------------------------------------------
NET PROFIT FROM
CONTINUING
OPERATIONS((2)) 496 339 +46.3% +50.5%
-------------------------------------------------------------------------------
Basic EPS from
continuing
operations (in
euros) 3.39 2.32
-------------------------------------------------------------------------------
UNDERLYING NET
PROFIT FROM
CONTINUING
OPERATIONS 427 370 +15.4% +21.0%
-------------------------------------------------------------------------------
Basic underlying
EPS from
continuing
operations (in
euros) 2.91 2.53
-------------------------------------------------------------------------------
(1) Pre-tax profit excluding share of profit from Equity method was 595 million
euros in First half Fiscal 2024 and 465 millions euros in First half Fiscal
2023.
(2) Profit attributable to non-controlling interests were 4 million euros in
First half Fiscal 2024 and 5 million euros in First half Fiscal 2023.
1.2.2 Revenues
REVENUES BY ZONES
--------------------
REVENUES
(in
million ORGANIC EXTERNAL CURRENCY euros) H1 FY 2024 H1 FY 2023 GROWTH GROWTH EFFECT TOTAL GROWTH
---------------------------------------- -----------------------------------------------
North +10.0 - - +4.7 America 5,756 5,499 % 0.1 % 5.2 % %
---------------------------------------- -----------------------------------------------
+8.0 - - +5.6 Europe 4,254 4,027 % 1.7 % 0.7 % %
---------------------------------------- -----------------------------------------------
Rest of
the +5.7 - - +1.7
World 2,091 2,055 % 0.7 % 3.3 % %---------------------------------------- -----------------------------------------------
+8.5 - - +4.5
SODEXO 12,101 11,581 % 0.7 % 3.3 % %
----------------------------------------------------------------------------------------
First half Fiscal 2024 Sodexo revenues totaled 12.1 billion euros, up +4.5%
year-on-year including a negative currency impact of -3.3%, resulting from the
appreciation of the euro against most currencies from the start of calendar year
2023, and a net contribution from acquisitions and disposals of -0.7%.
Consequently, First half Fiscal 2024 organic growth was +8.5%.
The underlying dynamic in the second quarter was similar to the first quarter,
with strong activity in all segments and geographies, particularly in North
America, where organic growth reached +10.0%. Europe was up +8.0%, boosted
80bps by the Rugby World Cup in the first quarter. Rest of the World was up
+5.7%, impacted by an accounting change for project works in a large contract.
Excluding this, organic growth of the zone was +8.4%.
The most significant drivers of organic growth continue to be increased
attendance, new business and pricing.
Price adjustments averaged close to +4.5% for the First half, progressively
declining, in line with the softening of food inflation.
Organic growth in the First half was driven by Food services, up +10.7%
organically, whereas FM services were up +4.5%.
Net new development has shown a steady improvement, reaching 2.4% on a last 12
months basis (LTM) as of the end of February:
* LTM client retention reached a new record of 95.5%;
* LTM development of 6.8%, slightly short of the 7-8% expected range for the
year due to phasing.
North America
REVENUES
-----------
REVENUES BY SEGMENT RESTATED ORGANIC (in million euros) H1 FY 2024 H1 FY 2023 GROWTH((2))
-------------------------------------------------------------------------------
Business &
Administrations((1)) 1,470 1,884 +13.2 %
-------------------------------------------------------------------------------
Sodexo Live! 676 - +23.3 %
-------------------------------------------------------------------------------
Healthcare & Seniors 1,687 1,722 +6.3 %
-------------------------------------------------------------------------------
Education 1,923 1,893 +7.0 %
-------------------------------------------------------------------------------
NORTH AMERICA TOTAL 5,756 5,499 +10.0 %
-------------------------------------------------------------------------------
(1) From H1 FY24, Business & Administrations excludes Sodexo Live!, reported
separately.
(2) As part of the streamlining of the organization during Fiscal 2023, some
contracts or operations have been reallocated between segments.
First half Fiscal 2024 North America revenues totaled 5.8 billion euros, up
+10.0% organically. This strong growth was driven by the contribution of new
business and some volume growth as well as a pricing impact of just below +4%.
Restated organic growth in Business & Administrations (excl. Sodexo Live!)
reached +13.2%, driven by the contribution of new business, strong growth in
food services from continued return to office and cross-sales, as well as
project works and strong retail sales growth. Entegra revenue growth was also
accretive.
Sodexo Live! restated organic growth was +23.3%, driven by robust activity in
all venues, and in particular strong per capita spend in sports stadiums.
Airport lounges activity also grew strongly with increased passenger count,
added scope and mobilization of new business.
Healthcare & Seniors restated organic growth was +6.3%, with good performance in
Healthcare through a combination of price increases, volume, retail growth and
favorable net new contribution. This growth was somewhat offset by a negative
contribution in Seniors due to the impact of sites lost at the end of the prior
fiscal year.
Education restated organic revenue growth was +7.0%, benefiting from price
increases as well as growth in meal count, retail and catering events.
Europe
REVENUES BY SEGMENT RESTATED ORGANIC (in million euros) H1 FY 2024 H1 FY 2023 GROWTH(()(2))
-------------------------------------------------------------------------------
Business &
Administrations((1)) 2,356 2,632 +6.3 %
-------------------------------------------------------------------------------
Sodexo Live! 324 - +25.4 %
-------------------------------------------------------------------------------
Healthcare & Seniors 950 1,009 +7.8 %
-------------------------------------------------------------------------------
Education 624 386 +7.3 %
-------------------------------------------------------------------------------
EUROPE TOTAL 4,254 4,027 +8.0 %
-------------------------------------------------------------------------------
(1) From H1 FY24, Business & Administrations excludes Sodexo Live!, reported
separately.
(2) As part of the streamlining of the organization during Fiscal 2023, some
contracts or operations have been reallocated between segments.
In Europe, First half Fiscal 2024 revenues amounted to 4.3 billion euros, up
+8.0% organically, or +7.2% excluding the Rugby World Cup, driven by increased
food services volume and pricing of around +5%.
Business & Administrations (excl. Sodexo Live!) restated organic growth was
+6.3%. This was supported by Corporate services benefiting from both price
increases and higher attendance, coupled with new business in Government in the
United Kingdom.
Sodexo Live! restated organic growth stood at +25.4%, or +12.5% excluding the
Rugby World Cup. The growth was primarily driven by improved attendance and
pricing in sports and cultural destinations in France, in particular the
restaurants in the Eiffel Tower, by increased volumes in the United Kingdom in
airport lounges, as activity was only just starting to pick-up in early Fiscal
2023 post-pandemic, and stadiums, helped by price increases.
Healthcare & Seniors restated organic growth stood at +7.8%, driven by new
business particularly in Spain and inflation pass-through in the United Kingdom,
as well as favorable volumes and price revisions in Seniors in France.
Education restated organic revenue growth was +7.3%, reflecting the significant
positive impact of price revisions, and a favorable working days impact.
Rest of the World
REVENUES BY SEGMENT RESTATED ORGANIC (in million euros) H1 FY 2024 H1 FY 2023 GROWTH((2))
-------------------------------------------------------------------------------
Business &
Administrations((1)) 1,820 1,839 +5.1 %
-------------------------------------------------------------------------------
Sodexo Live! 22 - +195.6 %
-------------------------------------------------------------------------------
Healthcare & Seniors 170 168 +1.4 %
-------------------------------------------------------------------------------
Education 79 48 +10.5 %
-------------------------------------------------------------------------------
REST OF THE WORLD TOTAL 2,091 2,055 +5.7 %
-------------------------------------------------------------------------------
(1) From H1 FY24, Business & Administrations excludes Sodexo Live!, reported
separately.
(2) As part of the streamlining of the organization during Fiscal 2023, some
contracts or operations have been reallocated between segments.
Rest of the World First half Fiscal 2024 revenues amounted to 2.1 billion euros,
up +5.7% organically, impacted by the change in revenue recognition in Energy &
Resources. Excluding this impact, the organic growth was +8.4%, including
pricing of around +4.5%.
Business & Administrations (excl. Sodexo Live!) restated organic growth was
+5.1%, or +8.3% excluding the accounting change. Growth in food in India has
continued to be very strong, driven by both new and existing business, and in
Australia with a pricing catch-up and new openings in mining. Brazil and Latin
America are still growing high single digit, although with a slight deceleration
in the second quarter due to a lower pricing impact and a slowing market. This
performance was slightly offset by a modest growth in China due to the economic
slowdown leading to restructuring and site closures last year.
Sodexo Live! revenues (principally airport lounges) tripled as Covid
restrictions in airlines were lifted only from January 2023 and due to the
opening of new lounges in Hong Kong.
Healthcare & Seniors restated organic growth was +1.4%, with regular strong
growth in India, a significant pick-up in growth in Latin America, offset byslow growth in China and the impact of the exit of low-performing contracts in
Brazil during the second quarter last year.
Education restated organic growth was +10.5%, fueled by strong growth in China
coming from a lower starting point last year due to school closures, and
sustained growth in Brazil and India, boosted by both new business and ramp ups
in existing sites.
1.2.3 Underlying operating profit
DIFFERENCE
UNDERLYING IN MARGIN
UNDERLYING DIFFERENCE OPERATING (EXCLUDING
OPERATING (EXCLUDING PROFIT CURRENCY
(in million PROFIT CURRENCY MARGIN H1 DIFFERENCE MIX
euros) H1 FISCAL 2024 DIFFERENCE EFFECT) FISCAL 2024 IN MARGIN EFFECT)
------------------------------------------------------------------------------------------------
North America 395 +8.2% +14.1% 6.9% +30 bps +30 bps
------------------------------------------------------------------------------------------------
Europe 180 +14.6% +16.0% 4.2% +30 bps +30 bps
------------------------------------------------------------------------------------------------
Rest of the
World 80 +12.7% +14.1% 3.8% +30 bps +30 bps
------------------------------------------------------------------------------------------------
UNDERLYING
OPERATING
PROFIT BEFORE
CORPORATE COSTS 655 +10.5% +14.6% 5.4% +30 bps +30 bps
------------------------------------------------------------------------------------------------
Corporate
expenses (43) -10.4% -10.4%
------------------------------------------------------------------------------------------------
UNDERLYING
OPERATING
PROFIT
(continuing
activities) 612 +12.3% +16.9% 5.1% +40 bps +40 bps
------------------------------------------------------------------------------------------------
First half Fiscal 2024 Underlying operating profit was 612 million euros, up
+12.3%, and +16.9% excluding the currency effect. The Underlying operating
margin, including Corporate expenses, was up +40 bps at 5.1%.
This significant improvement stemmed partially from effective management of
inflation through better pricing and continued close management of procurement,
in a decelerating food cost inflation environment.
The margin improvement was also due to enhanced on site productivity notably
attributed to the deployment of branded offers, supply efficiencies,
standardization and optimized staff allocation, as well as healthy net new wins
coming from higher retention rate and quality signatures.
Finally, disciplined above-site cost management contributed to the year-on-year
margin increase.
The performance by zone is as follows:
* North America Underlying operating profit increased +8.2%, or +14.1%
excluding the currency effect, and the margin was up +30 bps at 6.9%, fueled
by operating leverage from higher revenue, focus on labor efficiency and
Entegra volume growth. Margin was also helped by a more favorable operating
environment characterized by much lower food inflation.
* Europe Underlying operating profit was up +14.6%, or +16.0% excluding the
currency effect, and the margin was up +30bps at 4.2%. This was due to
inflation mitigation measures and SKU reduction combined with the softening
of cost inflation and price revisions, particularly in the public sector in
France, Belgium and Italy.
* Rest of the World Underlying operating profit was up +12.7% or +14.1%
excluding the currency effect, and the margin was up +30 bps at 3.8%, with
improvements in all geographies driven by higher revenues and cost control,
as well as successful price negotiations especially in Australia, and
turnaround and/or exit of underperforming contracts in Brazil and in the
Middle-East.
1.2.4 Net profit from continuing operations
(in million euros) H1 FISCAL 2024 H1 FISCAL 2023 RESTATED
-------------------------------------------------------------------------------
UNDERLYING OPERATING PROFIT 612 545
-------------------------------------------------------------------------------
Net impact related to consolidation
scope changes 83 1
-------------------------------------------------------------------------------
Restructuring and rationalization costs (15) (8)
-------------------------------------------------------------------------------
Amortization of purchased intangible
assets (17) (18)
-------------------------------------------------------------------------------
Other (21) (11)
-------------------------------------------------------------------------------
OTHER OPERATING INCOME AND EXPENSES 30 (36)
-------------------------------------------------------------------------------
OPERATING PROFIT 642 509
-------------------------------------------------------------------------------
Net financial expense (46) (43)
-------------------------------------------------------------------------------
Net income before tax & shares
accounted for equity method 595 465
-------------------------------------------------------------------------------
Tax charge (99) (122)
-------------------------------------------------------------------------------
NET PROFIT FROM CONTINUING OPERATIONS
(GROUP SHARE) 496 339
-------------------------------------------------------------------------------
UNDERLYING NET PROFIT FROM CONTINUING
OPERATIONS (GROUP SHARE) 427 370
-------------------------------------------------------------------------------
Other operating income and expenses amounted to 30 million euros compared to
-36 million euros in the previous year. The main elements of the period were the
83 million euros net gain related to scope changes, principally the disposal of
the Homecare business in October 2023, the spin-off costs of Pluxee for 16
million euros and restructuring costs of 15 million euros.
As a result, the Operating Profit was 642 million euros compared to 509 million
euros in the previous year.
Net Financial expenses in First half Fiscal 2024 were up 3 million euros at 46
million euros. Gross interest on the bonds was more or less neutral as higher
dollar floating rates offset the effect of the reimbursement of two bonds in
November 2023 and January 2024 which were both at very low interest rates.
The First half Fiscal 2024 effective tax rate was at 16.6%, well below the
26.2% in the previous year. This decrease is principally explained by the
capital gain on the sale of the Homecare activity which had no tax impact, as
well as the utilization of previously unrecognized tax assets due to better
results in France.
First half Fiscal 2024 Net profit from continuing activities was up +46.3% to
496 million euros, compared to 339 million euros in the previous year.
Underlying net profit from continuing activities adjusted for Other Operating
income and expenses net of tax amounted to 427 million euros, compared to
370 million euros in the previous year, up +15.4%.
1.2.5 Earnings per share from continuing operations
First half Fiscal 2024 EPS from continuing activities was 3.39 euros against
2.32 euros in the previous year. The weighted average number of shares for
Fiscal 2024 was more or less stable at 146,445,700 compared to 146,147,666
shares for First half Fiscal 2023.
Underlying EPS amounted to 2.91 euros, up +15.0% compared to the previous year.
1.2.6 Net profit from discontinued operations (Pluxee)
(in million euros) H1 FISCAL 2024 H1 FISCAL 2023 RESTATED
-------------------------------------------------------------------------------
Group Net Profit from continuing
operations 496 339
-------------------------------------------------------------------------------
Group Net Profit from discontinued
operations (570) 101
-------------------------------------------------------------------------------
GROUP NET PROFIT (Group share) (74) 440
-------------------------------------------------------------------------------
First half Fiscal 2024 Net profit from discontinued operations amounts to -570
million euros, against +101 million euros in the previous year (restated). This
result is composed of:
i. Pluxee's contribution to the Group's Net income under IFRS 5 for 97
million euros, reflectingPluxee's performance over the five-month period
leading up to the spin-off, spanning from September 1, 2023 to
January 31, 2024, adjusted for IFRS 5 impacts (in particular, the
neutralization of depreciation).
ii. A provision related to the anti-trust fine (fully paid before the end of
Fiscal 2023) following the decision of the Paris Court of Appeal in
November 2023, of -127 million euros.
iii. The impact of the recycling of the currency translation adjustment
reserves linked to Pluxee for -540 million euros as of January 31, 2024.
Sodexo has elected to account for the demerger using Pluxee's Net Book
Value. Therefore, the deconsolidation does not generate any loss or gain
in the consolidated income statement as of February 29, 2024, except for
the negative impact of the recycling of the currency translation
adjustment reserves, mainly from the Brazilian Real and Venezuelan
Bolivar. This non-cash loss was purely technical, with no impact on
Sodexo's equity, cashflow or dividend distribution capacity.
None of these items will impact the Fiscal 2024 dividend as the pay-out ratio
will be based on the Underlying net profit of Sodexo continuing activities only.
1.3 Consolidated financial position
As a consequence of the spin-off, Pluxee's assets and liabilities, including the
cash, have been deconsolidated as of January 31, 2024. The cash flows generated
by Pluxee between the start of the Fiscal Year until the spin-off are reported
as cash flow from discontinued operations.
1.3.1 Cash flows from continuing operations
Cash flows from continuing operations for the period were as follows:
(in million euros) H1 FISCAL 2024 H1 FISCAL 2023
-------------------------------------------------------------------------------
Operating cash flow((1)) 739 733
-------------------------------------------------------------------------------
Change in working capital (513) (624)
-------------------------------------------------------------------------------
IFRS 16 outflow (82) (98)
-------------------------------------------------------------------------------
Net capital expenditure (including new client
investments) (246) (247)
-------------------------------------------------------------------------------
Free cash flow((2)) (102) (236)
-------------------------------------------------------------------------------
Net acquisitions 100 (11)
-------------------------------------------------------------------------------
Share buy-backs (26) (57)
-------------------------------------------------------------------------------
Dividends paid to shareholders (456) (352)
-------------------------------------------------------------------------------
Other changes (including scope and exchange
rates) 50 95
-------------------------------------------------------------------------------
(Increase)/decrease in net debt (434) (561)
-------------------------------------------------------------------------------
(1) The difference with the Operating Cash Flow as presented in the consolidated
cash flow statement (section 2.1.4) comes from the new client investments,
presented in this table within Net Capex (within Operating Cash flow in the cash
flow statement, under "change in client investments").
(2) The Group does not believe the accounting treatment introduced by IFRS 16
modifies the operating nature of its lease transactions. Accordingly, to ensure
the Group's performance measures continue to best reflect its operating
performance, the Group considers repayments of lease liabilities as operating
items impacting the Free cash flow, which integrates all lease payments (fixed
or variable). To be consistent, the lease liabilities are not included in Net
debt (treated as operating items).
First half Fiscal 2024 Free cash outflow was -102 million euros against
-236 million euros in the previous period.
First half Fiscal 2024 Operating cash flow slightly improved at 739 million
euros against 733 million euros in the previous period as a result of the
increase in operating profit, offset by the unfavorable variation of income tax
paid due to significant positive prior year one-offs.The change in working
capital in the first half was a seasonal negative 513 million euros, improved
from the negative 624 million euros in First half Fiscal 2023.
Net capital expenditure, including new client investments, was stable at 246
million euros, or 2% of revenues, with higher capex to sales ratio expected in
the second half due to the timing of investments.
Acquisitions net of disposals amounted to an inflow of 100 million euros
resulting from the disposal of the Homecare business, offset somewhat by some
acquisitions mainly in the Convenience activity in North America.
The Fiscal 2023 dividend payment amounted to 456 million euros compared to 352
million euros in the previous year, reflecting the 29% increase in the dividend
per share.
After taking into account Other changes, consolidated net debt increased by
434 million euros during the First half to reach 3,352 million euros at
February 29, 2024.
1.3.2 Acquisitions and disposals for the period
First half Fiscal 2024 was marked by the spin-off and listing of Pluxee on
February 1, 2024.
Other consolidated scope changes of the First half 2024 included:
* the disposal of non-core activities, mainly the Homecare business, completed
in October 2023;
* some targeted acquisitions, of which three in North America in the
convenience business, and one in urban food services in Sweden.
Disposals net of acquisitions amounted to 100 million euros.
1.3.3 Condensed consolidated statement of financial position at February
29, 2024
AUGUST AUGUST (in million 31, 2023 (in million 31, 2023 euros) FEBRUARY 29, 2024 ADJUSTED ((1)) euros) FEBRUARY 29, 2024 ADJUSTED( (1))
----------------------------------------------- -----------------------------------------------
Non-current Shareholders' assets 9,470 9,406 equity 4,413 4,542
----------------------------------------------- -----------------------------------------------
Current
assets Non- excluding controlling cash 4,672 4,044 interests 17 12
----------------------------------------------- -----------------------------------------------
Non-current
liabilities 6,159 6,440
----------------------------------------------- -----------------------------------------------
Interco
loans /
deposits
with Pluxee 1,215
----------------------------------------------- -----------------------------------------------
Cash & cash Current equivalent 1,454 1,455 liabilities 5,007 5,481
----------------------------------------------- -----------------------------------------------
Assets held Liabilities for sale or held for sale for or for distribution 5,889 distribution 5,534
----------------------------------------------- -----------------------------------------------
TOTAL
LIABILITIES
AND
SHAREHOLDERS'
TOTAL ASSETS 15,596 22,009 EQUITY 15,596 22,009
-----------------------------------------------------------------------------------------------
(1) As of August 31, 2023, in order to project the post spin-off financial
position, in this table intragoup loans and deposits between Sodexo and Pluxee
were not eliminated (on the one hand 1,215 million euros loan from Sodexo to
Pluxee, presented in this table in Assets, into "interco loans / deposits with
Pluxee" with counterpart in "Liabilities held for sale", and on the other hand
deposits from Pluxee in Sodexo cash-pooling for 570 millions euros, presented in
the table in Assets as a reduction of Cash with counterpart in "Assets held for
sale"). These restatements explain the gaps with the Consolidated financial
position in note 4.1.3, in which intragroup loans were eliminated. Moreover,
these intragroup loans were considered as settled as at August 31, 2023, and
thus are part of the net debt calculation, as they havebeen settled just prior
to the listing date of Pluxee.
The decrease in Shareholder's equity is the result of Pluxee's deconsolidation
on February 1, 2024.
Assets and Liabilities held for sale or distribution were nil as of February
29, 2024, following the spin-off of Pluxee and the disposal of the Homecare
entities.
AUGUST 31, 2023 FEBRUARY 28, 2023 (in million euros) FEBRUARY 29, 2024 ADJUSTED(1) ADJUSTED(1)
-------------------------------------------------------------------------------
Gross borrowings 4,797 5,588 5,632
-------------------------------------------------------------------------------
Net debt 3,352 2,918 4,069
-------------------------------------------------------------------------------
Gearing ratio 75.7% 64.1% 99.3%
-------------------------------------------------------------------------------
Net Debt ratio (Net
debt/EBITDA(2)) 2.3x 2.2x 3.2x
-------------------------------------------------------------------------------
(1) Net debt as of February 28, 2023 and August 31, 2023 were adjusted to
exclude Pluxee and to reflect the post-spin-off financial position, with
intragroup loans and deposits with Pluxee considered as settled.
(2) For the new definition of EBITDA, please refer to the Alternative
Performance Measure in section 1.3.6
As of February 29, 2024, net debt was 3,352 million euros, up from 2,918 million
euros at the end of Fiscal 2023 (adjusted), reflecting the typical seasonality
of cash flow with dividend payment in the First half and seasonal working
capital requirements. Given the year-on-year increase in EBITDA, the increase in
net debt to EBITDA ratio since year end is limited to 0.1x, at 2.3x, and well
below the levels at the end of First half Fiscal 2023 of 3.2x.
During the period, two bonds were reimbursed: 300 million euros, due May 2025,
carrying an interest rate of 1.125% in November 2023, and 500 million euros due
in January 2024, carrying an interest rate of 0.50%. As a result, the average
interest rate on the bonds at the end of the First half Fiscal 2024 was at
1.9%, against 1.7% at the end of August 2023.
As of February 29, 2024, the Group's gross debt of 4,797 million euros was 67%
euro-denominated, 24% dollar-denominated and 8% sterling-denominated, with an
average maturity of 3.7 years, 94% at fixed rates and 100% covenant free.
Operating cash reached a total of 1,445 million euros.
At the end of the First half Fiscal 2024, the Group had unused credit lines
totaled 1.6 billion euros.
1.3.4 Subsequent events
No major events have occurred since the closing of the period.
1.3.5 Currency effect
Exchange rate fluctuations do not generate operational risks, because each
subsidiary bills its revenues and incurs its expenses in the same currency.
AVERAGE RATE CLOSING RATE
H1 FY 2024 02/29/2024
AVERAGE RATE AVERAGE RATE VS. H1 FY CLOSING RATE CLOSING RATE VS.
1EUR= H1 FY 2024 H1 FY 2023 2023 AT 02/29/24 AT 08/31/23 08/31/2023
--------------------------------------------------------------------------------------------
U.S. - +0.4 dollar 1.082 1.031 4.7 % 1.083 1.087 %
--------------------------------------------------------------------------------------------
Pound +1.2 +0.1 Sterling 0.864 0.874 % 0.857 0.857 %
--------------------------------------------------------------------------------------------
Brazilian +1.0 - real 5.364 5.417 % 5.405 5.308 1.8 %
--------------------------------------------------------------------------------------------
The negative currency impact for First half Fiscal 2024 of -3.3% results from
the appreciation of the Euro notably compared to the US Dollar, the Australian
Dollar, the Chinese Renminbi, the Indian Rupee and the Chilean Peso.
Sodexo operates in 45 countries. The percentage of total revenues and underlying
operating profit denominated in the main currencies during the First half Fiscal
2024 are as follows:
% OF UNDERLYING H1 FISCAL 2024 % OF REVENUES OPERATING PROFIT
-------------------------------------------------------
U.S. dollar 45 % 67 %
-------------------------------------------------------
Euro 23 % 4 %
-------------------------------------------------------
UK pound Sterling 8 % 7 %
-------------------------------------------------------
Brazilian real 4 % 4 %
-------------------------------------------------------
The currency effect is determined by applying the previous year's average
exchange rates to the current year figures.
1.3.6 Alternative Performance Measure definitions
Blended cost of debt
The blended cost of debt is calculated at period end and is the weighted blended
financing rate on borrowings (including derivative financial instruments and
commercial papers) and cash-pooling balances at period end.
Financial ratios definition
FIRST HALF FISCAL RESTATED FIRST HALF
2024 FISCAL 2023
-------------------------------------------------------------------------------
Borrowings (1) -
operating cash (2)
Gearing ratio -----------------------
Shareholders' equity
and non-controlling
interests 75.7% 99.3%
-------------------------------------------------------------------------------
Borrowings (1) -
operating cash (2)
Net debt ratio-----------------------
Rolling 12-month
(Underlying) EBITDA
(3) 2.3 3.2
-------------------------------------------------------------------------------
Financial ratios reconciliation
FIRST HALF RESTATED FIRST HALF
FISCAL 2024 FISCAL 2023
-------------------------------------------------------------------------------
Long-term borrowings 4,748 5,086
----------------------------------------------------------
+ Short-term
borrowings 52 548
(1) Borrowings ----------------------------------------------------------
- Derivative financial
instruments recognized
as assets (3) (3)
----------------------------------------------------------
BORROWINGS 4,797 5,632
-------------------------------------------------------------------------------
Cash and cash
equivalents 1,454 1,457
----------------------------------------------------------
Pluxee deposits (490)
----------------------------------------------------------
(2) Operating cash + Internal
loans/deposits with
Pluxee 603
----------------------------------------------------------
Bank overdrafts (9) (7)
----------------------------------------------------------
OPERATING CASH 1,445 1,563
-------------------------------------------------------------------------------
Underlying operating
profit (RTM) 1,043 928
----------------------------------------------------------
+ Depreciation and
amortization (RTM) 431 419
(3) Rolling 12-month----------------------------------------------------------
(Underlying) + Client investments
EBITDA((1)) amortization (RTM) 150 127
----------------------------------------------------------
* Lease payments
(RTM) (197) (204)
----------------------------------------------------------
Rolling12-month
(UNDERLYING) EBITDA 1,428 1,271
-------------------------------------------------------------------------------
(1) For the sake of simplification, the term EBITDA is used in reference to
Underlying EBITDA.
Note: Rolling 12-month (RTM) EBITDA excluding lease payments would be 1,625
million euros for First half Fiscal 2024, compared to 1,475 million euros for
First half Fiscal 2023.
Free cash flow
Please refer to the section entitled Consolidated financial position.
Growth excluding currency effect
The currency effect is determined by applying the previous year's average
exchange rates to the current year figures except in hyper-inflationary
economies where all figures are converted at the latest closing rate for both
periods when the impact is significant.
Net debt
Net debt is defined as Group borrowing at the balance sheet date, 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 (or gain of control) 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.
Underlying net profit
Underlying Net profit is defined as Net
| Name | WKN | Börse | Kurs | Datum/Zeit | Diff. | Diff. % | Geld | Brief | Erster | Schluss | |
|---|---|---|---|---|---|---|---|---|---|---|---|
 |
SODEXO S.A. INH. EO 4 | 870935 | Frankfurt | 86,200 | 25.06.24 21:49:54 | +0,850 | +1,00% | 0,000 | 0,000 | 85,650 | 85,350 |
