Sodexo Group Presentation - April, 2018
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Sodexo
Group Presentation
April, 2018
FORWARD-LOOKING INFORMATION
This presentation contains statements that may be considered as
forward-looking statements and as such may not relate strictly to
historical or current facts.
These statements represent management’s views as of the date
they are made and Sodexo assumes no obligation to update them.
Figures have been prepared in thousands of euro and published
in millions of euro.
Alternative Performance Measures:
please refer to Appendix 6 for definitions
2 Sodexo Group Presentation, April 2018
AGENDA
1. First Half Fiscal 2018 highlights
2. Fiscal 2017 Highlights
3. Sodexo at a glance
4. Shareholder & Investor relations
5. Appendices
3 Sodexo Group Presentation, April 2018
FISCAL 2018 FIRST HALF HIGHLIGHTS
FIRST HALF FISCAL 2018: SUMMARY H1 18
Organic revenue growth of +1.9%, excluding 53rd week, for the First half of Fiscal 2018,
and underlying margin of 6.1% were below expectations
Clear set of action plans in place, both short and medium term
The Group continues to generate substantial cash flow
and the balance sheet remains strong
The Group remains well-positioned in structurally attractive global growth market
5 Sodexo Group Presentation, April 2018
MODEST GROWTH H1 18
First Half Fiscal 2018 highlights
ORGANIC GROWTH ON-SITE BENEFITS & REWARDS
SERVICES SERVICES
+1.7% +1.6% +2.9%
+1.9% -1.5% +4.4% -2.0% +7.1%
Excl. 53rd week impact North America excl. North America Latin America excl. Latin America
▪ Good momentum in Business & Administrations ▪ Education suffering from prior year net losses in
• Ramp-ups in Energy & Resources Universities
• modest pick-up in France
• Strong dynamic in developing economies
▪ Benefits & Rewards Services strong growth
▪ Health Care & Seniors soft in North America and in Europe. Brazil impacted by interest rate decline
Europe but very strong in developing economies
6 Sodexo Group Presentation, April 2018 * Please refer to Appendix 6 for Alternative Performance Measures definitions
DECREASE OF UNDERLYING OPERATING PROFIT H1 18
First Half Fiscal 2018 highlights
Underlying Operating profit Underlying Operating profit margin
-15.0% -7.4% -80 bps -70 bps
TOTAL EXCLUDING TOTAL EXCLUDING
GROWTH CURRENCY* GROWTH CURRENCY*
▪ Expected in H1
• Lower interest rates in Brazil
• Deconsolidation of certain activities
• Additional savings generated by the Adaptation and Simplification Program, reinvested to enhance growth
▪ Unplanned incremental factors in H1
• Delays in implementation of performance enhancement leading to margin deterioration in North America
mainly in Education and Health Care
• Significant contracts ramp up not yet at expected level of profitability
7 Sodexo Group Presentation, April 2018 * Please refer to Appendix 6 for Alternative Performance Measures definitionsSTRONG NET PROFIT, BALANCE SHEET AND CASH FLOW H1 18
First Half Fiscal 2018 highlights
Tax rate down Solid Balance sheet Increased
Net Acquisitions
32.6% 25.9% 1.1x 49% €674m spent
H1 FY17 H1 FY18 NET DEBT
RATIO
GEARING 1.3%
net contribution to revenues
Group Net profit growth Strong Share buyback program
free cash flow
+6.9% +13.9% €300m
€125m
TOTAL EXCLUDING
GROWTH CURRENCY*
8 Sodexo Group Presentation, April 2018 * Please refer to Appendix 6 for Alternative Performance Measures definitionsPERFORMANCE IN THE P&L H1 18
First Half Fiscal 2018 Financial Performance
CHANGE
At current Excluding
€ millions H1 FY 2018 H1 FY 2017 exchange rates currency effect
Revenues 10,293 10,634 -3.2% +3.0%
Underlying Operating profit 627 738 -15.0% -7.4%
Underlying Operating margin 6.1% 6.9% -80 bps -70 bps
Other Operating income and expenses (73) (153)
Operating profit 554 586 -5.4% +4.1%
Net financial expense (44) (56)
Effective tax rate 25.9% 32.6%
Underlying Group net profit 397 458 -13.4% -7.6%
Group net profit 372 348 +6.9% +13.9%
9 Sodexo Group Presentation, April 2018ROBUST CASH FLOW H1 18
First Half Fiscal 2018 Financial Performance
€ millions
H1 FY2018 H1 FY2017
Operating cash flow 650 523
Change in working capital1 (402) (388)
Net capital expenditure (123) (105)
Free cash flow 125 30
Net acquisitions (674) (165)
Share buy-backs/ Treasury stock (49) (302) 2
Dividends paid to parent company shareholders (411) (359)
Other changes (including change in Financial Assets, scope and exchange rates) (43) (31)
(Increase)/decrease in net debt (1,052) (827)
1 Excluding change in financial assets in Benefits & Rewards of €(73)m in H1 FY’18 and €(38)m in H1 FY’17.
Total Change in working capital as reported in Consolidated Cash Flow statement: H1 FY’18 of €(475)m = €(402)m + €(73)m and H1 FY’17 of €(426)m = €(388)m + €(38)m
2 including 300m€ of the 2017 share buy-back program
10 Sodexo Group Presentation, April 2018ROBUST BALANCE SHEET AND RATIOS H1 18
First Half Fiscal 2018 Financial Performance
€ millions
February 28, 2018 February 28, 2017 February 28, 2018 February 28, 2017
Non-current assets 7,981 7,916 Shareholders’ equity 3,343 3,574
Current assets
5,207 5,532 Non-controlling interests 34 39
excluding cash
Restricted cash
495 486 Non-current liabilities 3,956 4,227
Benefits & Rewards
Financial assets
465 376 Current liabilities 8,335 8,168
Benefits & Rewards
Cash 1,519 1,698
Total assets 15,668 16,008 Total liabilities & equity 15,668 16,008
Gross borrowings 4,062 3,758
Net debt 1,663 1,234
Operating cash totaled €2,399 million1, Gearing ratio 49% 34%
of which €2,002 million related to
Benefits and Rewards Services Net debt ratio 1.1 0.9
(net debt/EBITDA)
1 Cash – Bank overdrafts of €81m + Financial assets related to BRS activity
11 Sodexo Group Presentation, April 2018 * Please refer to Appendix 6 for Alternative Performance Measures definitionsORGANIC GROWTH H1 18
First Half Fiscal 2018 Financial Performance
REVENUE GROWTH
-3.2%
Currency effect Scope changes
-6.2% +1.3%
ORGANIC GROWTH
+1.7% / +1.9% excl. 53rd week impact
of which:
On-site Services Benefits and Rewards Services
+1.6% +2.9%
12 Sodexo Group Presentation, April 201853rd WEEK WORKING DAYS H1 18
FY16 > 52 weeks x 7 364
FY17 > 52 weeks x 7 + 6 days 370
FY18 > A calendar year 365 Impacts
Q1 > 0
H1 > -1
9M > 0
FY > -5
13 Sodexo Group Presentation, April 2018H1 18
BUSINESS & ADMINISTRATIONS – REVENUES 54%
On-site
Services
FY 17
ORGANIC GROWTH
€ millions +2.7% North America 24%
▪ Strong growth in Airline lounge activity
Net ▪ Significant project work in Q1 of FY17
B&A
Organic acquisition
growth ▪ Increase in comparable unit sales
Unfavorable
+1.2% Europe
50%
currency 5,295 ▪ Contract openings and continued recovery
effect
5,196 +4.5% in tourism in France of FY17
B&A
▪ Energy & Resources -17%
▪ Solid growth in Government & Agencies
+12.4% Africa, Asia, Australia, Latin America
& Middle East 26%
▪ Strong growth in Corporate driven
by strong new business and comparable unit sales of FY17
B&A
▪ Energy & Resources favorable momentum
H1 FY 2017 H1 FY 2018
14 Sodexo Group Presentation, April 2018 * Please refer to Appendix 6 for Alternative Performance Measures definitionsH1 18
HEALTH CARE & SENIORS – REVENUES 25%
On-site
Services
FY 17
ORGANIC GROWTH
€ millions
-1.6% North America
66%
▪ Lower than expected new contract wins
▪ Weak comparable unit growth of FY17
Health Care
Organic Net & Seniors
Growth acquisition
-0.2% Europe
2,500 -0.1%
Unfavorable ▪ Selective bidding in France and UK still ongoing; 29%
currency some recent wins in UK
effect 2,359 of FY17
Health Care
& Seniors
+16.6%1 Africa, Asia, Australia, Latin America
& Middle East
▪ Strong double digit growth in Brazil due to
contract wins and increased same site sales 5%
▪ Solid comparable growth in Asia of FY17
Health Care
& Seniors
H1 FY 2017 H1 FY 2018
15 Sodexo Group Presentation, April 2018 1 Restated for internal transfers between segments.
*Please refer to Appendix 2 for Alternative Performance Measures definitionsH1 18
EDUCATION – REVENUES 21%
On-site
Services
FY 17
ORGANIC GROWTH
€ millions
-4.1% North America
▪ Poor momentum from last year 77%
▪ Steady comparable unit growth
Organic
Growth ▪ Improving retention to date of FY17
Education
Net disposal
2,483
-2.7% +2.7% Europe 21%
Unfavorable
currency ▪ High single digit growth in Schools in UK
effect 2,228 particularly in the private sector of FY17
Education
▪ Positive calendar effect (+2 days)
in France and Italy
2%
+15.8%1 Africa, Asia, Australia, Latin America
& Middle East
of FY17
▪ Very strong growth in Schools in Asia Education
H1 FY 2017 H1 FY 2018
particularly in India and China
1 Restated for internal transfers between segments.
16 Sodexo Group Presentation, April 2018
*Please refer to Appendix 2 for Alternative Performance Measures definitionsISSUE VOLUME AND REVENUES H1 18
Benefits & Rewards Services
ISSUE VOLUME REVENUES
€ billions € millions
Organic growth Acquisitions Organic growth
Unfavorable
9.1 457 Net disposal
9.1 currency effect
Unfavorable
currency effect 413
ORGANIC GROWTH ORGANIC GROWTH
+5.6% +2.9%
H1 FY 2017 H1 FY 2018 H1 FY2017 H1 FY 2018
17 Sodexo Group Presentation, April 2018 * Please refer to Appendix 6 for Alternative Performance Measures definitionsH1 18
EUROPE, ASIA, USA 53%
FY 17 BRS
revenues
Benefits & Rewards Services
ISSUE VOLUME 10.0 REVENUES
€ billions € millions
Organic growth Acquisitions Organic growth Net disposal
Unfavorable
5.1 currency effect 5.4 Unfavorable
241 currency effect
229
ORGANIC GROWTH ORGANIC GROWTH
+5.9% +7.1%
H1 FY 2017 H1 FY 2018 H1 FY2017 H1 FY 2018
▪ Robust growth in Central Europe
▪ Continued growth in Incentive & Recognition
▪ Weakness in India impacted by mandatory transfer from paper to card on January 1st and a loss of a large contract
▪ Disposal of Vivabox US, last year in Q4, impacting H1 strongly due to seasonality
18 Sodexo Group Presentation, April 2018 * Please refer to Appendix 6 for Alternative Performance Measures definitionsH1 18
LATIN AMERICA 47%
FY 17 BRS
revenues
Benefits & Rewards Services
ISSUE VOLUME REVENUES
€ billions € millions
Organic growth
Acquisitions
4.0 Organic growth
Unfavorable
currency effect
215 Unfavorable
currency effect
3.7 184
ORGANIC GROWTH ORGANIC GROWTH
+5.3% -2.0%
H1 FY 2017 H1 FY 2018 H1 FY 2017 H1 FY 2018
▪ Weakness in Brazil impacted by lower interest rates and number of beneficiaries slightly offset by increase in average face value
▪ Continued growth in Chile and Mexico
* Please refer to Appendix 6 for Alternative Performance Measures definitions
19 Sodexo Group Presentation, April 2018 Note: As per hyperinflation accounting, Fiscal 2018 and Fiscal 2017 Venezuelan bolivars have been converted at the exchange rate as at February 28, 2018
of 1 U.S. dollar = 35,280 VEF relative to the Fiscal 2017 rate of 1 U.S. dollar = 3,250 VEF.DETERIORATION IN UNDERLYING OPERATING PROFIT H1 18
First Half Fiscal 2018 Financial Performance
-80 bps -70 bps
TOTAL GROWTH EXCLUDING
Underlying Operating margin CURRENCY
EFFECT
6.9%
6.1% At current exchange rates
738 -15.0% -7.4%
€ millions TOTAL
GROWTH
EXCLUDING
CURRENCY
627
Underlying EFFECT *
Operating profit
H1 FY 2017 H1 FY 2018
20 Sodexo Group Presentation, April 2018 * Please refer to Appendix 6 for Alternative Performance Measures definitionsUNDERLYING OPERATING PROFIT AND MARGIN H1 18
At constant rate
H1 FY 2017 H1 FY 2018
224M€ 207M€ ▪ Loss of several high margin accounts
Business &
Administration ▪ Slower than expected ramp-up
+4.3%* +3.9%* -40 bps in profitability of some recent large contracts
▪ Delay in SKU rationalization plan
Health Care
159M€ 145M€
& Seniors
▪ Higher labor inflation in North America
+6.4%* +6.1%* -20 bps
▪ Lower performance on some large contracts
▪ Delay in delivery of performance improvement plans
252M€ 211M€
Education ▪ Higher labor inflation in North America
+10.1%* +9.5%* -60 bps
▪ Impact of negative net development from last year
▪ Decline in interest rates in Brazil
Benefits
156M€ 124M€
& Rewards
▪ Investment in diversification, in particular Mobility
+34.1%* +30.0%* -320 bps
▪ Accelerated card migration
21 Sodexo Group Presentation, April 2018 * % of revenueREVISED FISCAL 2018 OBJECTIVES H1 18
Outlook
▪ Low level of signatures since the beginning
of the Fiscal Year
▪ Continued weakness in North America Organic revenue growth
especially Health Care & Seniors
of between 1 and 1.5%
▪ Negative calendar effect in Education in Q3
In H1 Fiscal 2018 ▪ Government & Agencies impacted by excluding 53rd week impact
▪ Soft growth in revenues UK Army losses
▪ Decrease ▪ Slow-down in Energy & Resources
in margins
▪ Strong cash flow
▪ Compounded effects of delayed efficiency Underlying operating
ramp-ups
profit margin around
▪ A further deterioration expected
in North America Health Care
at 5.7%
before the delivery of action plans (excluding currency effects)
22 Sodexo Group Presentation, April 2018 * Please refer to Appendix 6 for Alternative Performance Measures definitionsIMMEDIATE ACTION PLAN H1 18
DESIGNED FOR NORTH AMERICA BUT IMPLEMENTED ACROSS REGIONS
IMPROVING FOOD COST MANAGEMENT ENHANCING LABOR PRODUCTIVITY
› Rationalize SKUs › Enhance demand-based scheduling to adapt on site
› Control drop frequency more strictly productive hours to better meet needs
› Further increase supplier › Improve overtime management
and product compliance
STRENGTHENED
› Rationalize temporary labor
› Accelerate synergies from acquisitions MANAGEMENT › Re-engineer Full time/ Part time mix
TEAM:
OPTIMIZING SG&A/OUT OF UNITS RIGHT PEOPLE, ADRESSING LOW PERFORMING CONTRACTS
RIGHT ROLES
› Introduce Zero base redesign › Implement detailed action plan for each of the top
low performing contracts
› Consolidate back-office including acquisitions
› Simplify the organization › Enhance claim management
and client renegotiations
› Reduce discretionary spend › Ensure close monitoring by Executive committee
member for each contract
EMBEDDED IN A LONG TERM STRATEGIC AGENDA
23 Sodexo Group Presentation, April 2018THE STRATEGIC AGENDA H1 18
FOCUS ON GROWTH
GROWTH OPERATIONAL
FOCUS ON EFFICIENCY With a unified and rigorous
EXECUTION performance management
Program (STEP)
TALENT CORPORATE
FOCUS ON RESPONSIBILITY
WHAT MAKES STRENGTHENED
MANAGEMENT
A REAL TEAM:
RIGHT PEOPLE,
DIFFERENCE RIGHT ROLES
24 Sodexo Group Presentation, April 2018STEP: A UNIFIED AND RIGOROUS PERFORMANCE MANAGEMENT
PROGRAM H1 18
Client Sales & Marketing
Consumer Sales & Marketing
New approach
Labor Efficiency
▪ Redefine and track common
key operational drivers
Material Costs
▪ Align for consistency
▪ Use STEP for: Overhead Costs
› Business Reviews
› Definition of objectives People
› Performance appreciation
Social Impact
25 Sodexo Group Presentation, April 2018THE WAY FORWARD H1 18
Sodexo is well placed in attractive,
Discipline and structural growth markets and,
Accountability for with a reinvigorated performance culture
a better execution and improved execution, will return program
to delivering strong growth over time
Refocus our people Clear set
Refreshed Specific focus on
on operational of immediate
management team North America
excellence action plans
26 Sodexo Group Presentation, April 2018FISCAL 2017 HIGHLIGHTS
GROWTH INDICATORS ONSITE SERVICES FY 17
Fiscal 2017 highlights
Client retention Comparable Business
unit growth development
93.1% 93.5%
7.2% 6.5%
Excluding
53rd week
2.1% 1.5%
Fiscal 2016 Fiscal 2017 Fiscal 2016 Fiscal 2017 Fiscal 2016 Fiscal 2017
28 Sodexo Group Presentation, April 2018CENTERPLATE FY 17
A leading event hospitality provider for North America and the UK
COMPANY OVERVIEW A WELL DIVERSIFIED PORTFOLIO¹
▪ Food and beverage service provider
Convention Centers
8%
▪ 40,000 events and 100m guests annually
32% Sports
▪ c.250 venues, in North America, 22%
the UK and Spain North America
92% Entertainment
▪ 4th largest operator by revenues
in the US Sports & Leisure market 38% UK
▪ 3 business lines: ¹ 2016 revenue breakdown
• Convention Centers
RECOGNISED EXPERTISE – SELECTED AWARDS
• Sports
• Entertainment
“Best Food and Beverage” #1 NFL Experience
5 Years Running, Convene Magazine Stadium Journey
▪ c.30,000 employees
“America’s Best Stadium Food”
▪ 12-months revenues to June 2017: $998 million Travel + Leisure Magazine
29 Sodexo Group Presentation, April 2018CENTERPLATE + SODEXO FY 17
SPORTS & LEISURE TRANSFORMED NORTH AMERICA STRENGTHENED
S&L
Doubling
revenues
S&L
From 472 to
Sodexo S&L Sodexo S&L revenues
B&A
Current revenues plus Centerplate
700+ Healthcare
B&A Healthcare
sites operated
Business mix Education Education
Airline
Conference lounges
& Convention 12%
From 12,500 to 122,500
Centres
21%
150,000+
Sports 40,000+ employees employees
28% employees
Cultural
destinations
39%
30 Sodexo Group Presentation, April 2018CENTERPLATE CONTRIBUTION TO SODEXO FINANCIALS
A leading event hospitality provider for North America and the UK FY 17
P&L BALANCE SHEET
▪ 8 months contribution to revenues (~€500 million) ▪ Consideration = $675m
▪ Brings contribution of external growth to date for ▪ Brings total Sodexo commitments since YE=~€650m
Fiscal 2018 = 2.5%
▪ Doubles Sodexo net debt => net debt ratio including
▪ Before synergies, slight dilution to margins in Fiscal commitments at Fiscal 2017 year end = 0.8
2018
▪ With synergies, margins will be in line
with Group North American margins
▪ Mild Net profit accretion from Fiscal 2018
CASHFLOW VALUATION RATIOS
▪ Strong cash generating business, ▪ EV/revenues = 0.7x
with significant retail operations ▪ EV/pro forma EBIT post synergies = 9-10x
▪ Expected capex / sales ~3%
31 Sodexo Group Presentation, April 2018SODEXO AT A GLANCE
SODEXO KEY FIGURES H1 18
Sodexo at a glance
▪ Founded in 1966 by Pierre Bellon
€20.7bn revenues
▪ Main Shareholders as 31/08/2017:
> Bellon S.A 40.4% of capital (55.8% of voting rights)
427,000 employees > International Institutional investors 37.7%
19th largest employer
worldwide
million consumers
100 served daily
80 countries
€11.8bn market
capitalization
Strong Investment
Grade S&P “A-/A-1”
April 11, 2018
33 Sodexo Group Presentation, April 2018AN ENGAGED WORKFORCE FY 17
Sodexo at a glance
34%
reduction of
carbon (2)
1 2016 employee engagement survey
2 Absolute reduction in Scope 1, Scope 2 and Scope 3 carbon emissions, compared to a 2011 base line.
34 Sodexo Group Presentation, April 2018OUR MAJOR STRENGTHS
Sodexo at a glance
A unique range of
Significant
Quality of Life Services
Independence market
particularly well aligned
potential
with evolving client demand
A robust
Undisputed
A global network financial model A strong culture
leadership in
covering that allows Sodexo and engaged
developing
80 countries to self-finance its teams
economies
development
35 Sodexo Group Presentation, April 2018WORLD LEADER IN QUALITY OF LIFE SERVICES
Sodexo at a glance
An unrivaled array of services :
ON-SITE BENEFITS AND PERSONAL AND
SERVICES REWARDS SERVICES HOME SERVICES
8 client segments: 5 service categories: 3 service categories:
Corporate Services Employee Benefits Childcare
Energy and Incentive and In-Home Senior
Ressources (Remote Care
Sites) Recognition solutions
Concierge services
Defense Mobility and Expense
Justice management
Sports & Leisure Public Benefits
Health Care & Seniors
Education
36 Sodexo Group Presentation, April 2018 page 36FISCAL 2017 REVENUE SPLIT: €20.7 BN
Sodexo at a glance
Distribution
Revenue by segment
by geographic region
21% Health Care 4% Benefits and Rewards
Services
& Seniors
51% Business &
Administrations
24%
Education 96% On-Site Services
4%
37 Sodexo Group Presentation, April 2018SODEXO’S VALUE PROPOSITION
Sodexo at a glance
➢ Maximizing value added with a unique and differentiating offer…
DESIGN MANAGE DELIVER
… adapted to client priorities :
Increase people Enhance processes Improve infrastructure
satisfaction, motivation quality, efficiency and equipment utilization,
and effectiveness and productivity reliability and safety
To deliver
▪ Enhanced Quality of life to client employees
▪ Support for client development and achievement of objectives
38 Sodexo Group Presentation, April 2018INTEGRATED QUALITY OF LIFE SERVICES OFFER
Sodexo at a glance
39 Sodexo Group Presentation, April 2018BENEFITS AND REWARDS: THE PASS CYCLE
Sodexo at a glance
Payment of
the value
SODEXO PASS CLIENTS
Delivery
of the Pass
Presentation Distribution
Reimbursement
of the Pass for of the Pass
of the value
reimbursement
AFFILIATED
MERCHANTS Use
BENEFICIARIES
of the Pass
40 Sodexo Group Presentation, April 2018SODEXO’S DEVELOPMENT - 50 YEARS OF HISTORY
Sodexo at a glance
1966 1983 2005 2016
Sodexo 1971 - 1978 Michel Landel Sophie Bellon
IPO of Sodexo on Paris
founded by International becomes CEO, Pierre becomes
stock exchange
Pierre expansion Bellon remains Chairwoman of
starts 1985 - 1993 Chairman of the Board the Board of
Bellon
Service International of Directors 2009 Directors
Vouchers development: Sodexo reviews its
launched Americas, Russia, strategic positioning
South Africa & Asia
1998-2001
2007-2010 2011-2013 2014-2017
Sodexo Marriot Services
Acquisitions
1995 VR Brazil Motivcom, UK
US Puras do Brasil,
Gardner Score Groupe and Crèche Inspirus US
Brazil
Merchant, UK 2001 Attitude, France Lenôtre, France PSL, UK
Sogeres France Zehnacker, Germany Roth Bros, US Centerplate, US
Partena
Wood Dining Services US Comfort Keepers & MacLellan, India Morris, Australia
Sweden
Circles, US
RKHS, India
41 Sodexo Group Presentation, April 2018REGULAR AND SUSTAINED PERFORMANCE
Sodexo at a glance
Revenues (in € millions) Operating Profit ( in € millions)
1 200
25 000 +5.5 % CAGR over 10 years
+4.5% CAGR over 10 years 1 000
20 000
800
15 000 600
10 000 400
5 000 200
0
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Net Income ( in € millions)
Operating Cash flow (in € millions) 800
1 200
+6.7% CAGR over 10 years +7.6% CAGR over 10 years
1 000 600
800
600 400
400
200
200
0 0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
42 Sodexo Group Presentation, April 2018REGULAR AND SUSTAINED SHAREHOLDER RETURNS
Sodexo at a glance
EPS (in €) Dividend (in €)
6 5
+8.1% CAGR over 10 years +9.1% CAGR over 10 years
5 4
4
3
3
2
2
1 1
0 0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
43 Sodexo Group Presentation, April 2018SHAREHOLDER & INVESTOR RELATIONS
SODEXO SHARE OWNERSHIP AS OF AUGUST 31, 2017
Shareholder & Investor Relations
OWNERSHIP STRUCTURE AS OF AUGUST 31, 2017 BREAKDOWN OF VOTING RIGHTS AS OF AUGUST 31, 2017
57%
Public
40.4% Bellon SA
43.1% 55.8%
37.7% Non- Public
Bellon SA
French
Institutional
shareholders
1.1% Employees
1.5% Treasury shares
15% 4.3% Individual 1.1%
French institutional
shareholders shareholders Employees
45 Sodexo Group Presentation, April 2018SODEXO SHARES
Shareholder & Investor Relations
▪ Sodexo shares are listed on NYSE Euronext Paris
Euroclear code: FR 0000121220; included in the Next 20 index
▪ Sodexo American Depositary Receipts (ADRs) are traded on the over the counter
(OTC) market, ticker SDXAY, with five ADRs representing one Sodexo share.
Since initial listing in 1983
SHARE PRICE HAS BEEN MULTIPLIED BY 63*
* As of August 31, 2017
More than 4.6 times
the growth of the CAC 40
46 Sodexo Group Presentation, April 2018STOCK MARKET PERFORMANCE
Shareholder & Investor Relations
● SODEXO
● CAC 40
August 2012 August 2013 August 2014 August 2015 August 2016 August 2017
▪ Over the last five fiscal years, Sodexo’s share price increased by +55.9%, whereas the CAC 40 index increased by
+49.0% during the same period
▪ During the last fiscal year, Sodexo’s share price decreased by 5.6% whereas the CAC 40 index rose by +14.6%
47 Sodexo Group Presentation, April 2018REGISTERED SHAREHOLDERS
Shareholder & Investor Relations
Benefits of being a registered Sodexo shareholder:
• reduced administration costs (for pure registered shares only);
• double voting rights for registered shares held for at least four years;
• and since 2014, a dividend premium of 10% for registered shares held for more than four years (limited to 0.5% of issued capital per
shareholder)
Contacts for Registered Shareholders: For further information call :
Société Générale Nantes (France) : +33(0)2 51 85 67 89
or visit the Société Générale website: www.sharinbox.societegenerale.com
48 Sodexo Group Presentation, April 2018SODEXO ADR PROGRAMME
Shareholder & Investor Relations
Sodexo offers investors the convenience of investing in American Depositary Receipts (ADRs)
Benefits of ADRs to US investors
▪ They clear and settle according to normal US
standards
▪ Stock quotes and dividend payments are in US
dollars
▪ They can be purchased in the same way as
other US stocks via a US broker
▪ They provide a cost effective means of building
an international portfolio.
For any question about Sodexo ADRs, please contact Citi:
New York London
Michael O’Leary Michael Woods
citiadr@citi.com michael.woods@citi.com
Tel: +1(212) 723-5435 Tel: +44 20 7500 2030
49 Sodexo Group Presentation, April 2018APPENDICES
1. Contracts wins
2. Corporate responsibility distinction
3. Adaptation and simplification program
4. H1 Fiscal 2018 exchange rates
5. Number of shares
6. Alternative Performance Measure definitions
and financial ratios
7. Reverse factoring
8. Gross Financial debt
9. Financial calendar
50 Sodexo Group Presentation, April 2018CONTRACT WINS AND EXTENSIONS Appendix 1
First Half Fiscal 2018 highlights
Continued momentum in
Contract extensions Pick up in Food contracts
Energy & Resources
Pierre Fabre Ecopetrol Renault Wellspring
Academy Trust
Onshore contract Corporate contract
Corporate contract
in Colombia in Brazil Schools contract in
in France
the United Kingdom
Huawei Vale Methodist Hospital Nissan
North Lake Corporate contract
Corporate contract Onshore contract
in Brazil
in 5 countries in Brazil Health Care contract
in the US
51 Sodexo Group Presentation, April 2018CORPORATE RESPONSIBILITY DISTINCTIONS Appendix 2
First Half Fiscal 2018 highlights
Named the top-rated company in its sector Earnt the highest marks in RobecoSAM’s
on the Dow Jones Sustainability Index (DJSI) “Sustainability Yearbook” for 11th straight year
for the 13th consecutive year
52 Sodexo Group Presentation, April 2018ADAPTATION PROGRAM DELIVERING ON TRACK Appendix 3
First Half Fiscal 2018 Financial Performance
€ millions
EXCEPTIONAL TOTAL
IMPLEMENTATION over 18 months 108 in FY 2016 137 in H1 2017 245
COSTS (Sept. 2015-Feb. 2017)
Fiscal 2016 32
SUSTAINABLE Fiscal 2017
CUMULATED
150
ANNUAL H1 Fiscal 2018 195
SAVINGS Objective for
Fiscal 2018
and each year after
~220
53 Sodexo Group Presentation, April 2018H1 FISCAL 2018 EXCHANGE RATES Appendix 4
Change average rates Closing rate
1€ = Average rate H1 Reference rate H1 Fiscal 18 H1 Fiscal 18 Change 28/02/18
Fiscal 18 Fiscal 17 vs. Reference Fiscal 17 at 28/02/2018 vs. 31/08/17
U.S. Dollar 1.195 1.099 -8.1% 1.221 -3.2%
Pound Sterling 0.885 0.867 -2.0% 0.884 +4.0%
Brazilian Real 3.864 3.526 -8.7% 3.961 -5.6%
54 Sodexo Group Presentation, April 2018NUMBER OF SHARES Appendix 5
Company’s share capital February 28, 2018 August 31, 2017 February 29, 2017
Company’s share capital, number of shares 150,830,449 150,830,449 153,741,139
Treasury shares 2,529,632 2,205,010 5,814,876
Number of shares for EPS calculation
(Basic weighted average number of shares) 148,535,880 148,998,961 149,936,978
55 Sodexo Group Presentation, April 2018ALTERNATIVE PERFORMANCE MEASURE DEFINITIONS Appendix 6
Blended cost of debt Organic growth
The blended cost of debt is calculated at period end and is the weighted Organic growth corresponds to the increase in revenue for a given period
blended of financing rates on borrowings, (including derivative financial (the "current period") compared to the revenue reported for the same period
instruments) and cash pooling balances at period end. of the prior fiscal year, calculated using the exchange rate for the prior fiscal
year; and excluding the impact of business acquisitions and divestments, as
Free cash flow follows:
Please refer to Consolidated Financial position.
▪ for businesses acquired (or gain of control) during the current period,
revenue generated since the acquisition date is excluded from the organic
Growth excluding currency effect
growth calculation;
Change excluding currency effect calculated converting H1 2018 figures at
FY 2017 rates, except for countries with hyperinflationary economies. As a ▪ for businesses acquired (or gain of control) during the prior fiscal year,
result, for Venezuelan Bolivar, H1 2018 and H1 2017 figures in VEF have revenue generated during the current period up until the first anniversary
been converted at the exchange rate of USD 1 = VEF 35,280 vs. VEF 3,250 date of the acquisition is excluded;
for FY 2017.
▪ 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
Issue volume divestment date is excluded;
Issue volume corresponds to the total face value of service vouchers, cards
and digitally-delivered services issued by the Group (Benefits and Rewards ▪ for businesses divested (or loss of control) during the current fiscal year,
Services activity) for beneficiaries on behalf of clients. revenue generated in the period commencing 12 months before the
divestment date up to the end of the comparative period of the prior fiscal
Net debt year is excluded.
Group gross borrowings at the balance sheet less operating cash. For countries with hyperinflationary economies all figures are converted at
the latest closing rate for both periods.
As a result, for the calculation of organic growth, Benefits & Rewards figures
for H1 2018 and H1 2017 in Venezuelan Bolivar, have been converted at the
exchange rate of USD 1 = VEF 35,280 vs. VEF 3,250 for FY 2017.
56 Sodexo Group Presentation, April 2018ALTERNATIVE PERFORMANCE MEASURE DEFINITIONS Appendix 6
Underlying Operating profit Underlying Net Profit
Operating profit excluding other operating income and other operating Underlying Net profit presents a net income excluding significant unusual
expenses. Other operating income and expenses include gains or losses and/or infrequent elements. Therefore, it corresponds to the Net Income
related to perimeter changes and on changes of post-employment benefits, Group share excluding Other Income and Expense and significant non-
restructuring and rationalization costs, M&A costs, amortization and recurring elements in both Net Financial Expense and Income tax Expense.
impairment of client relationships and trademarks and impairment of non-
current assets. In the first half of Fiscal 2018, the Underlying net profit excludes from
the Net Income Group share the following items and the related tax impact
Underlying Operating margin where applicable:
Underlying Operating profit divided by Revenues.
▪ Other Income and Expense for -73M€
Underlying Operating margin at constant rate ▪ Interests received in France on tax reimbursements for 7M€
Margin calculated converting H1 Fiscal 2018 figures at FY 2017 rates, except
for countries with hyperinflationary economies. ▪ Reimbursement of the 3% tax on dividends received for 43M€
▪ One-off impacts resulting from changes in the US tax regulation for -23M€.
57 Sodexo Group Presentation, April 2018APM - FINANCIAL RATIOS Appendix 6
H1 2018 H1 2017
Gross borrowings1 - operating cash2
Gearing ratio 49 % 34%
Shareholders’ equity
and non-controlling interests
Gross borrowings1 - operating cash2
Net debt ratio Earnings before Interest, Taxes, Depreciation 1.1 0.9
and Amortization (EBITDA)3
H1 2018 H1 2017
Non-current borrowings 2,978 3,079
+ current borrowings excluding overdrafts 1,095 685
1 Gross borrowings
- derivative financial instruments
recognized as assets (12) (6)
4,062 3,758
Cash and cash equivalents 1,519 1,698
+ financial assets related to the
2 Operating cash Benefits and Rewards Services activity 960 862
- bank overdrafts (81) (36)
2,399 2,524
3 Earnings before Interest, Taxes, Operating profit (last 12 months) 1,157 1,060
Depreciation and Amortization + depreciation and amortization (last 12 months) 296 272
(EBITDA) 1,453 1,332
58 Sodexo Group Presentation, April 2018REVERSE FACTORING Appendix 7
Our reverse factoring program has been put in place as part of For the reverse factoring programs that have been implemented
a “supplier support Program” which was implemented in the context in the context of our supplier support program:
of the standardization of our P2P process. The objectives of this supplier
▪ Suppliers have the choice but not the obligation to sell, invoice by invoice,
support program were to:
their approved receivables before the maturity date.
▪ have the opportunity to work with suppliers which in the past
▪ Sodexo has no power over the supplier’s decision to sell or not sell its
had not accepted our terms and conditions;
receivables. This is not a tri-partite agreement;
▪ allow our suppliers to gain access to a way to be paid in a fast
▪ In instances where payment terms were modified, terms changed for all
and secured manner at a low cost of financing;
supplier invoices irrespective of whether supplier financing was or was not
▪ improve the perception of Sodexo as a “buyer”; utilized;
▪ standardize our payment terms in each significant region of the Group; ▪ Sodexo does not receive any fees or payment from the factor nor do we
make any payment to the factor other than the payment of the original
▪ gain in efficiency in Shared Services Centers with an automatic processing
invoice;
of supplier invoices validated by the Group;
▪ Suppliers invoices continue to be paid according to the payment terms
negotiated with the suppliers. Whether the bills are in the program or not,
the payment date remains the same.
▪ Such programs have not changed our liabilities towards our suppliers,
which is the reason why these liabilities remain as trade payables
and are not reclassified as financial debt under IFRS.
59 Sodexo Group Presentation, April 2018BREAKDOWN OF GROSS FINANCIAL DEBT: Appendix 8
€4,062 million
€ millions
BY CURRENCY BYBY
MATURITY
MATURITY
51% €
< 1 year 1,086*
3% other 46% $
1-2 years 131
INTEREST RATE
2-5 years 852
23% 77%
Variable Fixed 2,481
Blended cost of debt 2.2% at 28/02/2018 > 5 years 1,992
60 Sodexo Group Presentation, April 2018 * Including commercial paper for an amount of €923mFINANCIAL CALENDAR Appendix 9
Nine month revenues, Fiscal 2018 July 5, 2018
Capital Markets Day September 6, 2018
Annual results, Fiscal 2018 November 8, 2018
Annual Shareholders’ Meeting 2019 January 22, 2019
These dates are purely indicative, and are subject to change without notice.
Regular updates are available in the calendar on our website www.sodexo.com
61 Sodexo Group Presentation, April 2018INVESTOR RELATION CONTACT
www.sodexo.com
Head of Investor Relations
▪ Virginia JEANSON
Tel: + 33 1 57 75 80 56
virginia.jeanson@sodexo.com
Investor Relations Manager
▪ Sarah JAMALI-KLEIN
Tel: + 33 1 57 75 83 68
sarah.jamali@sodexo.com
Investor Relations Coordinator
▪ Cynthia CATTY
Tel: + 33 1 57 75 80 54
cynthia.catty@sodexo.com
Sodexo
255 Quai de la Bataille de Stalingrad
92130 Issy-Les-Moulineaux
Email: communication.financiere@sodexo.com
62 Sodexo Group Presentation, April 2018Thank you!
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