At the Board of Directors meeting held on November 6, 2019 and chaired by Sophie Bellon, the Board closed the Consolidated and Company accounts for the fiscal year ended August 31, 2019.

• Revenue growth of +7.6%
• Organic growth revitalized and above guidance at +3.6%
• Underlying Operating Margin stable, in line with objectives
• Strong cash conversion1 at 136%
• Fiscal 2020 Guidance: Around 4% organic growth and stable Underlying operating margin, excluding impact of currencies and IFRS 16 implementation

Financial performance for Fiscal 2019:

Financial performance for Fiscal 2019

Commenting on the performance of the year, Sodexo CEO Denis Machuel said:

Our Focus on Growth strategic agenda is working with revenue growth exceeding our expectations in nearly all regions, particularly in North America. This year we have invested in sales, marketing, training, digital and IT, reinvesting productivity gains for the greatest impact to structure solid and recurring top line growth. We have also enhanced execution on certain large contracts and our targeting and signing discipline is improving. Renewed management vigor at all levels coupled with some key recruitments have helped to positively evolve our culture and further embed discipline throughout the organisation.

Although our global retention and development KPIs are not where we would like them to be, I am convinced that we are on the right path to better growth over the next few years.


Highlights of the period

  • Organic revenue growth for the year, at +3.6%, is above the original guidance range of +2 to +3% given in November 2018 and the revised guidance of “around +3%” in July 2019. The underlying operating profit margin was in line with our comments in July and at the lower end of the original guidance range (5.5% to 5.7%, excluding currency impact) at 5.5%.
  • On-site Services organic revenue growth of +3.3% has significantly improved relative to previous years, reflecting:

• A return to growth in revenue in North America, at +1.8% for the full year, and sustained growth of +4.6% in all other regions.

• Mixed performance on key indicators:
- Client retention rate has decreased 50 bps to 93.3% due to losses in Healthcare in the second half. Excluding the one large contract exited, retention was up 10bps. All other regions and segments are stable or improved;
- New sales development was down 50 bps to 6.3%, due to stricter selectivity in the bidding process;
- Same site sales growth was +3.1%, up from +2.6% in Fiscal 2018, reflecting a combination of more inflation pass-through, solid cross-selling, offset somewhat by a net negative impact from IFRS 15 implementation of about 20bps.
- With the award of the Summer 2020 Olympics hospitality contract, the two major sports events in Japan (the Rugby World Cup and the Olympics) should contribute approximately 100 bps of comparable site growth for Fiscal 2020.

  • Benefits & Rewards Services organic revenue growth was +8.5%, well balanced between Europe, Asia and USA at +8.6% and Latin America at +8.3%.
  • The underlying operating margin was stable at 5.5% as published and excluding the currency impact. Productivity gains compensated investments in growth.
  • Other operating income and expenses reached 141 million euro, compared to 131 million euro the previous year. Restructuring costs amounted to 46 million euro in Fiscal 2019 compared to 42 million euro in Fiscal 2018. Lower acquisition costs and higher gains on the sale of assets nearly offset higher amortisation and depreciation of acquired intangible assets.
  • Reported net profit was 665 million euro, up +2.2%. Basic EPS was 4.56€ up +3.6%, helped by a lower average share count following the share buy-back program in Fiscal 2018.
  • Underlying Net profit totaled 765 million euro, up +8.3%, with underlying EPS at 5.25€, up +10.1%.
  • The dividend to be proposed at the Shareholders meeting on January 21, 2020, is 2.90€, up +5.5% on the previous year, compared to an EPS up +3.6%. As a result, the pay-out is at 64%, or 55% relative to Underlying EPS.
  • Free cash flow reached 907 million euro, representing a strong performance following an exceptional performance in Fiscal 2018 at 1,076 million euro1 and despite a significant increase in net capex at 415 million, or 1.9% of revenues, against 298 million euro in the previous year. As a result, cash conversion remained high at 136% vs 165% in Fiscal 2018.
  • After taking into account acquisitions and dividends, consolidated net debt at the end of the period was down slightly to 1,213 million euro compared to 1,260 million euro at August 31, 2018. As a result, the Group’s financial position remained strong, with a net debt ratio at 0.9, just below the target level of 1-2.
  • Acquisitions, net of disposals, amounted to 301 million euro for the year, including:

• In On-site food services, Novae and Alliance in Partnership, strengthening the Group’s presence in high end Corporate Services in Switzerland and public-sector Education in the United Kingdom,

• In Homecare, several companies, strengthening the Group’s positions in North America, France, and the United Kingdom, and entering the Brazilian market and Asia,

• In Childcare, with the acquisition of Crèche de France, doubling our presence in the French market and entering the German market with Elly & Stoffl,

• During the year, the Group also acquired minority stakes in the digital/tech companies Meican in China and Zeta in India, which were already providing On-site and Benefits & Rewards operations with technology platforms in their home countries. The strategy is to deploy these platforms in other countries around the world.

  • Sodexo’s engagement in Corporate Responsibility continues to be recognised within the investment community, by remaining the top-rated company in its sector within the Dow Jones Sustainability Index (DJSI) for the 15th consecutive year, and the highest marks in SAMs “Sustainability Yearbook” for the 12th consecutive year in 2018.
  • Evolution in Governance:

At the next Shareholders meeting, on the recommendation of the Nominating Committee, the Board will propose, as independent Directors:

• The following appointments:
> Véronique Laury, the former Chief Executive Officer of Kingfisher, a UK retail FTSE100 company, with the Castorama and B&Q brands. She will bring to the Board her strong consumer knowledge, as well as sales and marketing expertise in a B to C environment.  
> Luc Messier has both Canadian and American citizenships. He will bring significant international operational experience, notably in the energy sector, through executive management positions held with large French and American multinational companies (ConocoPhilips, Technip, Bouygues, Pomerleau).

• The following reappointments:
> Sophie Stabile, notably for her experience in operations and finance in the services sector as well as her expertise in mergers and acquisitions.
> Cécile Tandeau de Marsac, notably for her experience in marketing and in human resources in an international group undergoing significant organisational changes.

In addition, the Board offers its sincere thanks for their tremendous contributions to the Board to:
> Robert Baconnier, whose mandate expires at the Annual shareholders meeting to be held on January 21, 2020, and who has announced his intention to retire as Director, which he has been since February 8, 2005.
> Astrid Bellon who has expressed her wish to no longer be a Board director from January 21, 2020, which she has been since July 26, 1989, to fully devote herself to her role on the Orientation Committee of the Pierre Bellon Foundation as well as to her personal projects.

Should these appointments and renewals be approved by shareholders at the General meeting on January 21, 2020, the Board would be composed of 12 members, including 2 employee representatives. Amongst the 10 elected members, 7 are independent, 6 are female and the average age is 55 years old.


The Focus on Growth strategic agenda has delivered growth of more than 3% this year. There are many action plans around the group with initiatives to enhance quality of new and renewed contracts, operational efficiency and growth.

For Fiscal 2020, while growth in North America remains challenging as the Healthcare contract losses fall out of revenues and with net new business being only neutral in Education, growth in all other areas and segments should continue to accelerate.

This year also benefits from two major sports events in Japan, with the Rugby World Cup in the first quarter and the 2020 Summer Olympics in the fourth quarter.

The Group is continuing to identify new Fit for the Future initiatives to generate SG&A savings. This will complement the operational productivity coming through due to more discipline and STEP implementation. These savings will continue to be reinvested in accelerating growth.

As a result, for Fiscal 2020 the Group is expecting:

  • organic revenue growth of around 4%, including the major sports events.
  • Stable underlying operating profit margin for the year, excluding the currency impact and any impact from IFRS 16 implementation.

Mid-term, the Group aims to deliver market leading profitable growth. Current Group investments, activity mix and geographic presence provide us with the opportunities to capture this growth. Sodexo is capable of accelerating organic growth over the years to come while ensuring a sustainable and inclusive business model.

As organic growth increases, growth investments will be kept under control, so that the effects of enhanced discipline and efficiency gains will feed margin expansion.

Denis Machuel and the Board extend their sincere thanks to the 470,000 employees who have each in their own way, contributed to the improved financial performance in Fiscal 2019 while at the same time making the quality of life of others part of their daily work.

Conference call

Sodexo will hold a conference call (in English) today at 9:00 a.m. (Paris time), 8:00 a.m. (London time) to comment on its results for Fiscal 2019. Those who wish to connect from the UK may dial +44 2071 928 000 or from France + 33 1 76 70 07 94, or from the USA +1 631-510-7495, followed by the passcode 52 72 754.
The press release, presentation and webcast will be available on the Group website in both the "Latest News" section and the "Finance - Financial Results" section.

Fiscal 2020 financial calendar

Fiscal 2020 financial calendar

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