Sodexo Sa · EURONEXT:SW
Sodexo Sa — H1 2016 Earnings Presentation
44 slides from Sodexo Sa's earnings presentation, Apr 14, 2016
Slide 1: First-half Fiscal 2016 Results
FIRST-HALF FISCAL 2016 RESULTS April 14, 2016
Slide 2: Forward-looking information
FORWARD-LOOKING INFORMATION This presentation contains statements that may be considered as forward-looking statements and as such may not relate strictly to historical or current facts. These statements represent management's views as of the date they are made and Sodexo assumes no obligation to up
Slide 3: Contents
CONTENTS 1. A DYNAMIC FIRST HALF FISCAL 2016 2. FIRST-HALF FISCAL 2016 PERFORMANCE 3. ON-SITE SERVICES 4. BENEFITS AND REWARDS SERVICES 5. OUTLOOK 6. APPENDICES 3 – First-half Fiscal 2016 Results - April 14, 2016
Slide 4: A dynamic first half fiscal 2016
A DYNAMIC FIRST HALF FISCAL 2016 4 – First-half Fiscal 2016 Results - April 14, 2016
Slide 5: Highlights of the period
HIGHLIGHTS OF THE PERIOD Continuity in governance Sophie Bellon succeeds Pierre Bellon as Chairwoman of the Board of Directors Recognized strategy and performance Sodexo joins the CAC 40 Signature of a major contract for the Group Rio Tinto Renewed recognition of Sodexo's societal commitments Robeco
Slide 6: Performance in line with objectives
PERFORMANCE IN LINE WITH OBJECTIVES +6.7% +3.7% +2.5% Reported revenue €10.6bn Total growth Organic growth Organic growth excluding Rugby Operating profit* €658m + 7.9% Excluding currency effects Operating margin* 6.2% + 30 bps Excluding currency effects Exceptional expenses €37m * Excluding excepti
Slide 7: Solid net profit and cash position
SOLID NET PROFIT AND CASH POSITION Group net profit €383m + 11.7% + 11.2% Excluding currency Before exceptionals* effects + 4.7% + 4.6% €359m Excluding currency effects After exceptionals* Free cash flow €54m + 5.9% * Exceptional expenses (net of taxes) related to the adaptation and simplification p
Slide 8: First-half fiscal 2016 performance
FIRST-HALF FISCAL 2016 PERFORMANCE 8 – First-half Fiscal 2016 Results - April 14, 2016
Slide 9: Dynamic growth
DYNAMIC GROWTH Revenue growth + 6.7% Currency effect Scope changes + 2.9% + 0.1% Organic growth + 3.7% of which: On-site Services Benefits and Rewards Services + 3.6% + 6.3% 9 – First-half Fiscal 2016 Results - April 14, 2016
Slide 10: Growth in operating profit
GROWTH IN OPERATING PROFIT* + 30 bps EXCLUDING CURRENCY EFFECTS 6.5% At constant exchange rates 6.2% Operating 6.2% At current exchange rates margin* 658 620 + 7.9% Operating profit* EXCLUDING CURRENCY € millions EFFECTS H1 2015 H1 2016 * Excluding exceptional expenses related to the adaptation and
Slide 11: Launch of adaptation and simplification program
LAUNCH OF ADAPTATION AND SIMPLIFICATION PROGRAM Faster alignment of on-site operating expenses Organizational simplification Increased international pooling of resources ANNUAL SAVINGS OF AROUND EXCEPTIONAL EXPENSES €200M IN FISCAL 2018 OF AROUND €200M Gradual increase in savings September 2015 to F
Slide 12: Growth in consolidated income
GROWTH IN CONSOLIDATED INCOME H1 2016 H1 2015 CHANGE € millions At current Excluding exchange rates currency effect Revenues 10,596 9,931 +6.7% +3.8% Operating profit before exceptional expenses 658 620 +6.1% +7.9% Operating margin 6.2% 6.2% = +30 bps Exceptional expenses (37) - Operating profit 621
Slide 13: Consolidated cash flow
CONSOLIDATED CASH FLOW € millions H1 2016 H1 2015 CHANGE Operating cash flow 587 483 +21.5% Change in working capital* (314) (248) Net cash provided by operating activities 273 235 +16.2% Net capital expenditure (176) (160) Less change in financial assets (43) (24) related to the Benefits and Reward
Slide 14: Consolidated balance sheet
CONSOLIDATED BALANCE SHEET ROBUST RATIOS € millions February 29, February 28, February 29, February 28, 2016 2015 2016 2015 Non-current assets 7,357 7,447 Shareholders’ equity 3,562 3,514 Current assets 4,855 5,000 Non-controlling interests 45 40 excluding cash Financial assets related to the Benefi
Slide 15: On-Site Services
ON-SITE SERVICES 15 – First-half Fiscal 2016 Results - April 14, 2016
Slide 16: Success of integrated quality of life services offers
ON-SITE SERVICES SUCCESS OF INTEGRATED QUALITY OF LIFE SERVICES OFFERS H1 organic growth Corporate 53% Contribution of Rugby World Cup contract +5.0% Ramp-up of integrated service contracts, especially in North America and the United Kingdom Steep decline in Remote Sites activity Health Care and Sen
Slide 17: 3.6% organic growth
ON-SITE SERVICES 3.6% ORGANIC GROWTH United Kingdom and Ireland Continental North + 27.0% + 1.6% Europe America + 3.6% + 12.2% excluding Rugby Rest of - 4.4% the World + 7.2% excluding Remote Sites 17 – First-half Fiscal 2016 Results - April 14, 2016
Slide 18: North America revenues
ON-SITE SERVICES NORTH AMERICA € millions Revenues Favorable currency Corporate +7.5% effect 4,602 Organic 26% 4,014 growth Acquisitions Robust growth in the Corporate segment Health Care and Seniors +4.6% 36% Compelling contract wins +3.6% Q1 impact of withdrawal ORGANIC GROWTH from ManorCare contr
Slide 19: North America operating profit
ON-SITE SERVICES NORTH AMERICA € millions Operating profit * +40 bps 7.5% 7.1% Optimized food purchases 344 cost savings +9.6% 284 Increased offer and menu CHANGE standardization EXCLUDING CURRENCY EFFECT Lower overheads H1 2015 H1 2016 Operating margin * Excluding exceptional expenses related to th
Slide 20: Continental Europe revenues
ON-SITE SERVICES CONTINENTAL EUROPE € millions Revenues Corporate +3.3% Changes 61% Organic in scope Contribution of integrated services 2,926 growth of consolidation 2,943 contracts Unfavorable currency Solid growth at existing Corporate sites effect +1.6% ORGANIC Health Care and Seniors -3.1% GROW
Slide 21: Continental Europe operating profit
ON-SITE SERVICES CONTINENTAL EUROPE € millions Operating profit * +30 bps 4.6% 4.3% Productivity gains at existing sites 127 136 Efficient management of food costs +7.5% CHANGE EXCLUDING CURRENCY EFFECT H1 2015 H1 2016 Operating margin * Excluding exceptional expenses related to the adaptation and s
Slide 22: United Kingdom and Ireland revenues
ON-SITE SERVICES UNITED KINGDOM AND IRELAND € millions Revenues Corporate +35.9% 73% Favorable Contribution of €131m Rugby World Cup currency Organic effect 1,103 contract in Q1 2016 growth Acquisitions End of ramp-up phase for Justice contracts Other (launched in February 2015) and Corporate 821 Ru
Slide 23: United Kingdom and Ireland operating profit
ON-SITE SERVICES UNITED KINGDOM AND IRELAND € millions Operating profit * +160 bps 6.0% Favorable basis of comparison (high contract start-up costs in Fiscal 2015) 4.4% Efficiency gains on overheads 66 Optimized management 36 +74.3% of food purchases CHANGE EXCLUDING Contribution of Rugby World Cup
Slide 24: Rest of the World revenues
ON-SITE SERVICES REST OF THE WORLD* € millions Revenues Corporate -6.1% 1,745 90% Organic 1,558 Sharp 18% decline in Remote Sites Acquisitions growth Unfavorable revenues currency effect Strong business development dynamic +7.2% Health Care and Seniors +20.6% -4.4% excluding Remote Sites 6% Continue
Slide 25: Rest of the World operating profit
ON-SITE SERVICES REST OF THE WORLD € millions Operating profit * 4.2% -140 bps Challenging economic environment in Latin America and mining and oil and gas industries 2.8% Significant operating cost reductions, 74 not sufficient to offset sharply lower -44.9% volumes 43 CHANGE EXCLUDING CURRENCY EFF
Slide 26: Benefits and Rewards Services
BENEFITS AND REWARDS SERVICES 26 – First-half Fiscal 2016 Results - April 14, 2016
Slide 27: Issue volume and revenues
BENEFITS AND REWARDS SERVICES ISSUE VOLUME AND REVENUES Issue volume Revenues € billions € millions Organic Organic Acquisitions growth Acquisitions growth 8.6 428 8.2 393 Unfavorable Unfavorable currency currency effect effect +6.5% +6.3% ORGANIC ORGANIC GROWTH GROWTH H1 2015 H1 2016 H1 2015 H1 201
Slide 28: Issue volume and revenues: Latin America
BENEFITS AND REWARDS SERVICES ISSUE VOLUME AND REVENUES Latin America € billions Issue volume € millions Revenues 52% Fiscal 2015 Organic Organic growth Acquisitions growth Acquisitions 4.0 229 186 3.3 Unfavorable Unfavorable currency currency effect effect +9.6% +9.5% ORGANIC ORGANIC GROWTH GROWTH
Slide 29: Issue volume and revenues: Europe and Asia
BENEFITS AND REWARDS SERVICES ISSUE VOLUME AND REVENUES Europe and Asia € billions Issue volume € millions Revenues 48% Fiscal 2015 Favorable currency Organic Acquisitions effect 4.9 Changes Favorable currency 4.6 growth 199 Organic growth in scope of consolidation effect 207 +3.8% +2.8% ORGANIC ORG
Slide 30: Operating profit
BENEFITS AND REWARDS SERVICES OPERATING PROFIT € millions Operating profit * 37.8% 36.9% at constant rates 33.8% at current rates Change excluding Unfavorable Negative impact of exchange rates currency effect currency effect 158 (mainly BRL) 133 Tight control of overheads and operating costs +13.1%
Slide 31: Outlook
OUTLOOK 31 – First-half Fiscal 2016 Results - April 14, 2016
Slide 32: Fiscal 2016 objectives
FISCAL 2016 OBJECTIVES The objectives for Fiscal 2016 are as follows: Organic revenue growth of around 3% Growth in operating profit of around 8% (excluding currency effects and exceptional items related to the adaptation and simplification program) Reminder, the negative effect of the Brazilian rea
Slide 33: Medium-term objectives
MEDIUM-TERM OBJECTIVES The Group remains confident of achieving its medium-term objectives: average annual growth average annual growth in in revenue of between 4% and 7% operating profit of between 8% (excluding currency effects) and 10% (excluding currency effects) 33 – First-half Fiscal 2016 Resu
Slide 34: Recognizing our expertise
A MAJOR CONTRACT IN THE GROUP’S HISTORY: RIO TINTO RECOGNIZING OUR EXPERTISE 34 – First-half Fiscal 2016 Results - April 14, 2016
Slide 35: Unparalleled value for the client
THE GROUP'S LARGEST EVER CONTRACT: RIO TINTO UNPARALLELED VALUE FOR THE CLIENT Technical expertise and global experience Sophisticated services in a variety of complex environments • 1.7bn euros over 10 years • 500,000 sq.km • ports, towns, aerodromes, operational sites, houses, etc. Sustainable ene
Slide 36: Better quality of life in extreme environments
THE GROUP'S LARGEST EVER CONTRACT: RIO TINTO BETTER QUALITY OF LIFE IN EXTREME ENVIRONMENTS A “home away from home” Comfort, well-being and safety for teams working in extreme conditions • transportation between and on sites • aerodrome management • building maintenance Every-day services hundreds o
Slide 37: Q&A
Q&A 37 – First-half Fiscal 2016 Results - April 14, 2016
Slide 38: Appendices
APPENDICES 1. Revenue growth 2. Financial debt analysis 3. €300M share repurchase program 4. H1 2016 exchange rates 5. Principal currency effects on Balance Sheet 38 – First-half Fiscal 2016 Results - April 14, 2016
Slide 39: Revenue growth
APPENDIX 1 REVENUE GROWTH € millions +2.9% Favorable +3.7% currency effect 10,596 +0.1% Organic growth Acquisitions 9,931 +6.7% TOTAL GROWTH H1 2015 H1 2016 39 – First-half Fiscal 2016 Results - April 14, 2016
Slide 40: Financial debt analysis
APPENDIX 2 FINANCIAL DEBT ANALYSIS* AT FEBRUARY 29, 2016 € millions BY CURRENCY BY MATURITY 41% € < 1 year 50 59% $ 1-2 years 6 2-3 years 301 INTEREST RATE 3-4 years 140 0.5% Variable 99.5% 4-5 years 16 Fixed Average interest rate 3.4% > 5 years 2,289 at February 29, 2016 (vs. 3.8% at August 31, 201
Slide 41: €300M share repurchase program
APPENDIX 3 €300M SHARE REPURCHASE PROGRAM 2,672,340 shares repurchased between September 1, 2015 and March 11, 2016, representing 1.7% of the capital • Average price €88.57 • Program 79% complete (€237m out of €300m) • Of which 2,198,788 shares purchased before February 29, 2016 At August 31, 2015 P
Slide 42: H1 2016 exchange rates
APPENDIX 4 H1 2016 EXCHANGE RATES € millions Impact of exchange rates vs. the euro on H1 2016 Period-end Operating Average rates profit rates February 29, €1 = H1 2016 Change 2016 Change Revenues before exceptional costs U.S. Dollar 1.0939 + 11.5% 1.0888 + 3.2% + 457 + 34 Pound Sterling 0.7353 + 5.5
Slide 43: Principal currency effects on balance sheet
APPENDIX 5 PRINCIPAL CURRENCY EFFECTS ON BALANCE SHEET AT FEBRUARY 29, 2016 € millions USD £ BRL USD £ BRL Non-current assets 98 (65) (38) Shareholders’ equity 50 (63) (36) Deferred tax assets 3 (1) (2) Provisions - (1) (2) Change in working Deferred tax liabilities 1 (1) (4) capital and other 30 (2
Slide 44: Thank you
THANK YOU 44 – First-half Fiscal 2016 Results - April 14, 2016