SODEXO : Announces + 7.7% Revenue Growth with + 5.2% Organic Growth for the First Nine Months of Fiscal 2011
07/06/2011| 01:05am US/Eastern
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Regulatory News:
Sodexo (PARIS:SW) (OTCBB:SDXAY) (NYSE Euronext Paris FR0000121220 - SW
OTC:SDXAY), global leader in Quality of Life services, today announced
revenues for the first nine months of Fiscal 2011, which ended May 31,
2011.
Revenue by activity and geographic region
In millions of euro
9 months Fiscal 2010
9 months Fiscal 2011
Organic growth
Currency impact
Acquisitions
Total change
On-site Service Solutions
-- North America
4,512
4,801
+ 4.0%
+ 2.4%
-
+ 6.4%
-- Continental Europe
4,073
4,257
+ 3.8%
+ 0.8%
- 0.1%
+ 4.5%
-- UK and Ireland
887
908
- 0.2%
+ 2.6%
-
+ 2.4%
-- Rest of the World
1,577
1,922
+ 15%
+ 7.5%
- 0.6%
+ 21.9%
Total
11,049
11,888
+ 5.1%
+ 2.6%
- 0.1%
+ 7.6%
Motivation Solutions
489
532
+ 6.2%
+ 2.7%
-
+ 8.9%
Intra-group eliminations
- 13
- 12
Consolidated total
11,525
12,408
+ 5.2%
+ 2.6%
- 0.1%
+ 7.7%
Organic growth: increase in revenues at constant scope and
excluding exchange rate effects.
Commenting on the figures, Sodexo CEO Michel Landel said:
"Since the beginning of the fiscal year, our activities have
accelerated, with double-digit growth in emerging markets. This good
performance gives us confidence in our ability to achieve organic growth
of 4.5% for the full fiscal year. While we remain vigilant in the
current macroeconomic environment, our teams continue to have multiple
opportunities for differentiation through the development of our Quality
of Life services."
Analysis of Group organic growth
In millions of euro
Nine months Fiscal 2010
Nine months Fiscal 2011
Organic growth
Corporate
5,251
5,764
+ 6.7%
Health Care and Seniors
2,946
3,104
+ 3.4%
Education
2,852
3,020
+ 3.9%
On-site Service Solutions - total
11,049
11,888
+ 5.1%
Motivation Solutions
489
532
+ 6.2%
Eliminations
- 13
- 12
TOTAL
11,525
12,408
+ 5.2%
On-site Service Solutions
Organic growth in Corporate was + 6.7%, reflecting Sodexo's
momentum in emerging markets and the significant impact from the ramp-up
of comprehensive service solutions contracts in Justice Services and
Defense and with corporate clients. Sodexo achieved 20% organic growth
in Justice Services and 16% in Defense for the first nine months of the
fiscal year.
In Education and in Health Care and Seniors, Sodexo
continued its steady progression during the past quarter in line with
previous quarters.
Motivation Solutions
Organic revenue growth in Motivation Solutions was + 6.2% for the nine
months, a result of increased business development in Brazil and France
during the 3rd Quarter.
Currency impact evolution
There was a positive currency impact of + 2.6% for the first nine months
of the year, mainly from the strengthening of the U.S. Dollar, the Pound
Sterling and the Brazilian Real against the Euro.
Analysis of organic growth: On-site Service Solutions
North America
In millions of euro
Nine months Fiscal 2010
Nine months Fiscal 2011
Organic growth
Corporate
925
961
+ 1.1%
Health Care and Seniors
1,653
1,783
+ 5.5%
Education
1,934
2,057
+ 4.1%
TOTAL
4,512
4,801
+ 4.0%
Organic growth in Corporate was driven by the start-up of
comprehensive service solutions contracts for clients such as
GlaxoSmithKline, Henkel, British Aerospace and Colgate. Patronage levels
on foodservices sites remained comparable to the same period last year,
reflecting the absence of a true recovery in terms of hiring by clients.
Recent contract wins include General Electric Aviation (Ohio), Discover
Financial Services and Guardian Life Insurance Company of America.
In Health Care and Seniors, organic growth accelerated to + 5.5%,
reflecting excellent client retention in Fiscal 2010 and higher
comparable unit growth, driven by an expanded offer on some contracts
and slight inflation.
Among recently won contracts are Jackson Memorial Hospital (Florida),
Crozer Chester Medical Center (Pennsylvania), and Bethesda Memorial
Hospital (Florida).
Organic revenue growth in Education is mainly a result of
increasing enrollment on university campuses and in schools. During the 3rd
Quarter, Sodexo also started a major new contract for the 136 public
schools of the city of Detroit (Michigan) to provide technical
maintenance services, cleaning services and maintenance of buildings and
green spaces. This is one of the largest Education contracts ever won by
Sodexo in the United States.
Continental Europe
In millions of euro
Nine months Fiscal 2010
Nine months Fiscal 2011
Organic growth
Corporate
2,287
2,431
+ 5.3%
Health Care and Seniors
1,031
1,047
+ 1.1%
Education
755
779
+ 2.8%
TOTAL
4,073
4,257
+ 3.8%
Revenues in Corporate for the 3rd Quarter reflect
improved comparable unit growth, partly a result of rising inflation
which offset the end of the positive effect from the ramp-up of the
French Ministry of Justice contract.
Contract wins during the 3rd Quarter included, in particular,
the major Public Private Partnership project to construct, equip,
operate and maintain the future Paris headquarters of the French Defense
Ministry on a 400,000 m² site (to be operational December 2014). Sodexo
will be responsible for foodservices, management of accommodations,
reception services, security, cleaning services, concierge services (new
stands and hair salon), maintenance of green spaces and waste treatment.
Sodexo also won contracts with Kraft Foods in Belgium, Atlas Copco Rock
Drills and Bombardier Transportation Sweden AB in Sweden and The M. Pire
building complex in Germany.
In Health Care and Seniors, organic growth reflects moderate
comparable unit volumes and weak development in the unfavorable economic
environment.
Recently signed contracts include the Association for Youth and Adults
with Disabilities (APAJH) of Val d'Oise (6 sites) in France and Tilkka
Hospital in Finland.
In Education, organic growth continued in France and Italy and
benefited from recent contract wins in Sweden, including schools in the
cities of Helsingborg and Katrineholm. Among Sodexo's many other recent
successes were a major contract for 314 schools in the city of
Marseilles and a contract with OSEKK (Oulu Regional Education Authority)
in Finland.
UK and Ireland
In millions of euro
Nine months Fiscal 2010
Nine months Fiscal 2011
Organic growth
Corporate
618
640
+ 1.1%
Health Care and Seniors
177
170
- 6.5%
Education
92
98
+ 3.1%
TOTAL
887
908
- 0.2%
In Corporate, organic growth essentially reflects the
contribution of contracts with the ministries of Defense and Justice but
also in Corporate for clients such as Johnson & Johnson and
GlaxoSmithKline.
The decline in Health Care and Seniors is a result of the
non-renewal last year of some of the services provided at Kings Hospital
as well as weak business development.
Organic revenue growth in Education reflects successful
development at universities, particularly in the management of
accommodation services on the Solent, Medway, Lincoln and Southampton
campuses. Recently signed contracts include Birmingham City University.
Rest of the World (Latin America, Middle East, Asia, Africa,
Australia and Remote Sites)
In millions of euro
Nine months Fiscal 2010
Nine months Fiscal 2011
Organic growth
Corporate
1,421
1,732
+ 15.2%
Health Care and Seniors
85
104
+ 12.5%
Education
71
86
+ 13.9%
TOTAL
1,577
1,922
+ 15.0%
Growth in Latin America and Asia continued to accelerate during the
first nine months, a result in particular of strong development in
Brazil (Natura, Petrobras Fafen, Vale Norte), Chile (Excon SQM), Peru
(Plus Petrol Norte and Southern Peru Copper Corp. / Cuajone-Toquepala)
and Australia (Karara Mining, Western Turner). Among the numerous new
contract wins in India and China, where Sodexo holds uncontested
leadership positions, were Shimano Bicycle Parts in China and Renault
Nissan in India.
Analysis of organic growth: Motivation Solutions
Issue volume for Motivation Solutions increased 10.5% compared to the
same period last year reaching nearly 10.4 billion euro. Organic growth
was + 8% and there was a positive currency effect of + 2.4%, a result in
particular of the Brazilian Real's appreciation.
Revenue was 532 million euro with organic growth of + 6.2%:
+ 13.7% in Latin America (which represents 52% of revenues),
reflecting increases in the number of beneficiaries and in face value,
contracts won by Sodexo teams and a slight positive impact from
interest rate changes;
a slight decrease of -0.9% in Europe. The situation remains difficult
in Central Europe and lower sales of Eco-Pass(1) in Belgium
(the prior period having benefited from its launch) were almost fully
offset by improved performance in France, in particular from the CESU
contract signed with the General Council of Hautes-Pyrenees.
The difference between issue volume and revenue growth results from the
strong increase in issue volume from the ONEM contract in Belgium
(universal services vouchers similar to the CESU in France). This trend
does not translate into an equivalent increase in revenues, given the
size and model of this contract.
Recent contract wins include for Restaurant Pass, Audi Motor in Hungary,
Santander Consumer Bank in Germany, BBVA Comercializadora in Chile, for
Food Pass, Servicio Nacional Integrado de Administración Aduanera y
Tributaria in Venezuela, and for Incentive Pass, Anhanguera Educacional
in Brazil.
(1) Eco-Pass is an employer-provided voucher that employees can use to
purchase environmentally-friendly products or services such as
insulating materials, low-energy consumption light bulbs and bicycles.
Human Resources
We continue to make progress in developing our human resources. We
carefully follow our action plans to improve the retention, internal
promotion and engagement of our employees.
The engagement of our employees is a reflection of their confidence in
Sodexo's strategy and future.
Financial situation
Aside from the refinancing of 600 million U.S. dollars at the end of
March 2011 as part of a private placement with U.S. investors, noted in
the interim financial report published on April 21, there was no
significant change in the financial structure or the level of Group debt
as of May 31, 2011.
Fiscal 2011 outlook
Sodexo confirms its full year Fiscal 2011 objectives:
organic revenue growth of around 4.5%.
an increase in operating profit of around 10%, excluding currency
effects.
About Sodexo
Sodexo, world leader in Quality of Daily Life Solutions
Quality of Life services play an important role in the progress of
individuals and the performance of organizations. Based on this
conviction, Sodexo serves as the strategic partner for companies and
institutions that place a premium on performance and well-being, as it
has since Pierre Bellon founded the company in 1966. Sharing the same
passion for service, Sodexo's 380,000 employees, in 80 countries,
design, manage and deliver an unrivaled range of On-site Service
Solutions and Motivation Solutions. Sodexo has created a new form of
service business that contributes to the economic, social and
environmental development of the communities, regions and countries in
which it operates and to the fulfillment of its employees.
Sodexo key figures (as of August 31, 2010)
Sodexo in the world
15.3 billion euro consolidated revenue
380,000 employees
34,000 sites
50 million consumers served daily
80 countries
21stlargest employer worldwide
8.5 billion euro market capitalization (as of July 5, 2011)
Conference call and Internet webcast
Sodexo will hold a conference call (in English) today at 8:30 a.m.
(Paris time), to comment on revenue for the first nine months of Fiscal
2011. The presentation can be followed via webcast at www.sodexo.com.
The press release and the presentation will be available on the Group
website:www.sodexo.com
under the "latest news" section beginning at 7:00 a.m. A recording of
the conference will be available by dialing +44 (0) 1452 550 000,
followed by the pass code 77 53 41 56 #.
Availability of information
Sodexo's quarterly financial information is available on Sodexo's
website: www.sodexo.com
A selection of awards and recognitions received by Sodexo throughout the
world is available on Sodexo
website.
Financial communications calendar
Fiscal 2011 results: November 9, 2011. Publication by press release
prior to the opening of Paris Euronext, followed by a briefing for
analysts and journalists.
This date is indicative only and remains subject to change.
This press release 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 we assume no obligation to update
them. You are cautioned not to place undue reliance on our forward
looking statements.
Appendix 1
Consolidated quarterly revenues
First Quarter (September to November)
In millions of euro
Fiscal 2011
Fiscal 2010
On-site Service Solutions
4,108
3,701
North America
1,733
1,522
Continental Europe
1,436
1,373
UK and Ireland
315
295
Rest of the World
623
511
Motivation Solutions
164
166
Eliminations
- 4
- 5
TOTAL
4,268
3,862
Second Quarter (December to February)
In millions of euro
Fiscal 2011
Fiscal 2010
On-site Service Solutions
3,819
3,477
North America
1,523
1,389
Continental Europe
1,372
1,311
UK and Ireland
298
288
Rest of the World
626
488
Motivation Solutions
187
154
Eliminations
- 4
- 4
TOTAL
4,001
3,626
Third Quarter (March to May)
In millions of euro
Fiscal 2011
Fiscal 2010
On-site Service Solutions
3,961
3,871
North America
1,545
1,601
Continental Europe
1,449
1,388
UK and Ireland
294
304
Rest of the World
673
578
Motivation Solutions
182
170
Eliminations
- 4
- 5
TOTAL
4,139
4,036
9 months Fiscal 2011
In millions of euro
Fiscal 2011
Fiscal 2010
% Variation
Current rates
Constant rates
On-site Service Solutions
11,888
11,049
+ 7.6%
+ 5.0%
North America
4,801
4,512
+ 6.4%
+ 4.0%
Continental Europe
4,257
4,073
+ 4.5%
+ 3.7%
UK and Ireland
908
887
+ 2.4%
- 0.2%
Rest of the World
1,922
1,577
+ 21.9%
+ 14,4%
Motivation Solutions
532
489
+ 8.9%
+ 6.2%
Eliminations
- 12
- 14
TOTAL
12,408
11,525
+ 7.7%
+ 5.1%
Appendix 2
Average exchange rates for principal currencies
1? =
Average rate 9 months Fiscal 2011
Average rate 9 months Fiscal 2010
US Dollar
1.3743
1.4017
Pound Sterling
0.8623
0.8871
Brazilian Real
2.292
2.498
It should be noted that, contrary to exporting companies, the revenue
and expenses of Sodexo subsidiaries are denominated in the same
currency. Consequently, foreign exchange variations do not have
operational risk.
Fiscal 2011 - Nine months
Appendix 3
Selected new clients
On-site Service Solutions
Corporate
Maersk Container Industry Dongguan Ltd., Dongguan, China
(2,800 people)
Shimano Bicycle Parts (Tianjin) Co., Ltd., Tianjin, China
(1,100 people) and Kunshan, China (2,500 people)
Discover, Financial Services, multiple sites (Arizona,
Ohio, Illinois and Delaware), USA (10,047 people)
GE Aviation, Evendale, Ohio, USA (7,200 people)
RIE Quadrants, Guyancourt, France (600 people)
Bombardier Transportation Sweden AB, Vasteras, Sweden
(1,200 people)
JANSSEN CILAG Gmbh, Neuss, Germany (900 people)
The M.PIRE, Munich, Germany (2,000 people)
Kraft Foods LU, Herentals, Belgium
Atlas Copco Rock Drills AB, Orebro, Sweden (1,700 people)
Upplands Väsby kommun (Multihuset), Stockholm, Sweden
Aéroport de Paris Immobilier, Paris, France (750,000 m²)
Knesset, Israel
Renault Nissan, Oragadam, India (5,000 people)
Edison International, Rosemead, CA, USA (4,500 people)
The Guardian Life Insurance Company of America, multiple
sites (New York, NY; Bethlehem, PA; Pittsfield, MA; Appleton, WI;
Spokane, WA) USA (4,825 people)
Plaza Indonesia Mall, Indonesia
Health Care and Seniors
Crozer Chester Medical Center, Upland, Pennsylvania, USA
(653 beds)
St. Bernard Hospital, Chicago, Illinois, USA (198 beds)
Bethesda Memorial Hospital, Boynton Beach, Florida, USA
(362 beds)
Augusta Health, Fishersville, Virginia, USA (255 beds)
Bayou Manor, Houston, Texas, USA (227 beds)
Présence Verte Services, Région de Poitiers, France (800
people)
Région Skane, Lund, Sweden
Lunds kommun, Lund, Sweden
Tilkka Hospital - Etera - Esperi, Helsinki, Finland (400
beds)
Association APAJH 95, 6 sites, Val d'Oise, France (350 beds)
CAS de Paris, Paris, France (28,000 meals per month)
Henry Mayo Newhall Memorial Hospital, Valencia, California,
USA (167 beds)
Education
The International School of Macau (TIS), Hong Kong, China
(935 students)
Dalian Maple Leaf Educational Systems, Dalian, China (316
students)
Lewisville Independent School District, Lewisville,
Arkansas, USA (1,000 students)
Belvidere Community United School District 100 - K-12 Nutrition,
Belvidere, Illinois, USA, (8,800 students)
Oconee County School District - K-12 Nutrition, Walhalla,
South Carolina, USA (10,729 students)
Rogers State University - Campus Dining, Oklahoma, USA
(4,154 students)
OSEKK, Oulu, Finland (3,500 students)
City of Marseilles, France (2,065,760 meals/year)
NSW Police College, Goulburn, Australia (3,000 students)
Birmingham City University, United Kingdom (25,000 students)
Harris Academy Falconwood, London, United Kingdom
Remote Sites
EXCON (SQM), Antofagasta, Chile (650 people)
Campamento Sierra Gorda, Antofagasta, Chile (6,250 people)
Pluspetrol Norte, Iquitos, Peru (2,300 people)
SERPETBOL FLOWLINE, Cusco, Peru (720 people)
SOUTHERN Peru Copper Company, Cuajone-Toquepala, Peru
(1,500 people)
AZUCA HOCHSCHILD, Arequipa, Peru (500 people)
Polyus Gold Natalkinskoe mining field, Magadan, Russia
The Floatel Jascon 31 (TOTAL), Angola (460 people)
Ocean Rig - Leiv Eriksson, Denmark (120 people)
Evans Landing, Australia (210 people)
Defense
Defense Ministry Headquarters, Site Balard, Paris, France
(9,600 people; 400,000 m²)
Motivation Solutions
Europe
Santander Consumer Bank, Germany (Meal Pass, 770
beneficiaries)
AZ Turnout Sint Elizabeth Campus, Belgium (Meal Pass, 800
beneficiaries)
EVN Bulgaria Elektrorazpredelenie AD, Bulgaria (Food Pass,
3,300 beneficiaries)
Audi Motor, Hungary (Meal Pass, 5,800 beneficiaries)
"Police" Chemical Plant, Poland (Gift Pass, 3,000
beneficiaries)
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