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
- 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 euros) |
H1 FISCAL 2024 |
H1 FISCAL 2023 RESTATED |
DIFFERENCE |
DIFFERENCE CONSTANT RATES |
Revenues |
12,101 |
11,581 |
+4.5% |
+7.8% |
Organic revenue growth |
+8.5% |
+12.9% |
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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) |
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OPERATING PROFIT |
642 |
509 |
+26.1% |
+30.1% |
Net financial expense |
(46) |
(43) |
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Tax charge |
(99) |
(122) |
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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 |
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|
UNDERLYING NET PROFIT FROM CONTINUING
OPERATIONS |
427 |
370 |
+15.4% |
+21.0% |
Basic underlying EPS from continuing operations (in euros) |
2.91 |
2.53 |
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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 will hold 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
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
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)
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Contacts |
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Analysts
and Investors |
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Media |
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Virginia Jeanson
+33 1 57 75 80 56 virginia.jeanson@sodexo.com |
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Mathieu
Scaravetti +33 6 28 62 21 91
mathieu.scaravetti@sodexo.com |
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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:
- First half Retention and Development
KPIs are now presented on a last 12 months (LTM) basis, previously
provided on a six months basis.
- 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.
- 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(in million euros) |
PREVIOUS DEFINITIONS |
Client Investments 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 euros) |
H1 FISCAL 2024 |
H1 FISCAL 2023 RESTATED |
DIFFERENCE |
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 |
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(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(in million euros) |
H1 FY 2024 |
H1 FY 2023 |
|
ORGANIC GROWTH |
EXTERNAL GROWTH |
CURRENCY EFFECT |
TOTAL GROWTH |
North America |
5,756 |
5,499 |
|
+10.0 % |
-0.1 % |
-5.2 % |
+4.7 % |
Europe |
4,254 |
4,027 |
|
+8.0 % |
-1.7 % |
-0.7 % |
+5.6 % |
Rest of the World |
2,091 |
2,055 |
|
+5.7 % |
-0.7 % |
-3.3 % |
+1.7 % |
SODEXO |
12,101 |
11,581 |
|
+8.5
% |
-0.7
% |
-3.3 % |
+4.5
% |
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 BY SEGMENT(in million euros) |
H1 FY 2024 |
H1 FY 2023 |
RESTATED ORGANIC 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(in million euros) |
H1 FY 2024 |
H1 FY 2023 |
RESTATED ORGANIC
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(in million euros) |
H1 FY 2024 |
H1 FY 2023 |
RESTATED ORGANIC 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 by slow
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
(in million euros) |
UNDERLYING OPERATING PROFIT
H1 FISCAL 2024 |
DIFFERENCE |
DIFFERENCE (EXCLUDING CURRENCY EFFECT) |
UNDERLYING OPERATING PROFIT MARGIN H1 FISCAL
2024 |
DIFFERENCE IN MARGIN |
DIFFERENCE IN MARGIN (EXCLUDING CURRENCY MIX
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% |
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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:
- Pluxee's contribution to the Group's
Net income under IFRS 5 for 97 million euros, reflecting Pluxee'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).
- 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.
- 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
(in million euros) |
FEBRUARY 29, 2024 |
AUGUST 31, 2023 ADJUSTED (1) |
|
(in million euros) |
FEBRUARY 29, 2024 |
AUGUST 31, 2023 ADJUSTED (1) |
Non-current assets |
9,470 |
9,406 |
|
Shareholders’ equity |
4,413 |
4,542 |
Current assets excluding cash |
4,672 |
4,044 |
|
Non-controlling interests |
17 |
12 |
|
|
|
|
Non-current liabilities |
6,159 |
6,440 |
Interco loans / deposits with Pluxee |
|
1,215 |
|
|
|
|
Cash & cash equivalent |
1,454 |
1,455 |
|
Current liabilities |
5,007 |
5,481 |
Assets held for sale or for distribution |
|
5,889 |
|
Liabilities held for sale or for distribution |
|
5,534 |
TOTAL ASSETS |
15,596 |
22,009 |
|
TOTAL LIABILITIES AND SHAREHOLDERS’ 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 have been 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.
(in million euros) |
FEBRUARY 29, 2024 |
AUGUST 31, 2023 ADJUSTED1 |
FEBRUARY 28, 2023 ADJUSTED1 |
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/EBITDA2) |
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.
1€= |
AVERAGE RATEH1 FY 2024 |
AVERAGE RATEH1 FY 2023 |
AVERAGE RATEH1 FY 2024VS.
H1 FY 2023 |
CLOSING RATEAT 02/29/24 |
CLOSING RATE AT 08/31/23 |
CLOSING RATE02/29/2024VS.
08/31/2023 |
U.S. dollar |
1.082 |
1.031 |
-4.7 % |
1.083 |
1.087 |
+0.4 % |
Pound Sterling |
0.864 |
0.874 |
+1.2 % |
0.857 |
0.857 |
+0.1 % |
Brazilian real |
5.364 |
5.417 |
+1.0 % |
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:
H1 FISCAL 2024 |
% OF REVENUES |
% OF UNDERLYING 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 2024 |
RESTATED FIRST HALF FISCAL 2023 |
Gearing ratio |
Borrowings (1) – operating cash (2) |
75.7% |
99.3% |
Shareholders’ equity and non-controlling interests |
Net debt ratio |
Borrowings (1) – operating cash (2) |
2.3 |
3.2 |
Rolling 12-month (Underlying) EBITDA (3) |
Financial ratios reconciliation
|
|
FIRST HALF FISCAL 2024 |
RESTATED FIRST HALF FISCAL 2023 |
(1) Borrowings |
Long-term borrowings |
4,748 |
5,086 |
+ Short-term borrowings |
52 |
548 |
- Derivative financial instruments recognized as assets |
(3) |
(3) |
BORROWINGS |
4,797 |
5,632 |
(2) Operating cash |
Cash and cash equivalents |
1,454 |
1,457 |
Pluxee deposits |
|
(490) |
+ Internal loans/deposits with Pluxee |
|
603 |
Bank overdrafts |
(9) |
(7) |
OPERATING CASH |
1,445 |
1,563 |
(3) Rolling 12-month (Underlying) EBITDA(1) |
Underlying operating profit (RTM) |
1,043 |
928 |
+ Depreciation and amortization (RTM) |
431 |
419 |
+ Client investments amortization (RTM) |
150 |
127 |
|
(197) |
(204) |
Rolling 12-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 profit excluding
significant unusual and/or infrequent elements and corresponds to
the Net Income Group share excluding Other Income and Expense after
tax, as well as significant non-recurring elements in both Net
Financial Expense and Income Tax Expense where relevant.
Underlying net profit per share
Underlying Net profit per share presents the Underlying net
profit divided by the average number of shares.
Underlying operating profit margin
The underlying operating profit margin corresponds to Underlying
operating profit divided by revenues.
Underlying operating profit margin at constant
rates
The Underlying operating profit margin at constant rates
corresponds to Underlying operating profit divided by revenues,
calculated by converting 2024 figures at Fiscal 2023 rates,
except for countries with hyperinflationary economies.
New segment reporting following evolution of the
organization
As part of the streamlining of the organization, from Fiscal
2024, some contracts or operations have been reallocated between
segments, with main impacts in Europe from Healthcare & Seniors
to Education.
Restated revenue breakdown for Fiscal 2023:
REVENUES(in million euros) |
Fiscal 2023 |
Q1 2023 |
Q2 2023 |
Q3 2023 |
Q4 2023 |
Published |
Restated |
Published |
Restated |
Published |
Restated |
Published |
Restated |
Published |
Restated |
North America |
10,479 |
10,479 |
2,992 |
2,992 |
2,506 |
2,506 |
2,658 |
2,658 |
2,322 |
2,322 |
Business & Administrations |
3,865 |
2,723 |
1,009 |
699 |
874 |
641 |
959 |
679 |
1,023 |
704 |
Sodexo Live!(1) |
-- |
1,184 |
-- |
327 |
-- |
248 |
-- |
296 |
-- |
312 |
Healthcare & Seniors |
3,440 |
3,399 |
877 |
866 |
844 |
831 |
856 |
844 |
863 |
858 |
Education |
3,173 |
3,173 |
1,106 |
1,100 |
788 |
786 |
844 |
839 |
436 |
448 |
Europe |
8,071 |
8,071 |
2,047 |
2,047 |
1,980 |
1,980 |
2,042 |
2,042 |
2,002 |
2,002 |
Business & Administrations |
5,337 |
4,464 |
1,337 |
1,125 |
1,296 |
1,110 |
1,324 |
1,115 |
1,380 |
1,114 |
Sodexo Live!(1) |
-- |
599 |
-- |
141 |
-- |
118 |
-- |
138 |
-- |
202 |
Healthcare & Seniors |
2,026 |
1,950 |
504 |
470 |
505 |
481 |
531 |
498 |
487 |
500 |
Education |
708 |
1,059 |
206 |
311 |
179 |
271 |
187 |
291 |
136 |
185 |
Rest of the World |
4,087 |
4,087 |
1,057 |
1,057 |
998 |
998 |
1,055 |
1,055 |
978 |
978 |
Business & Administrations |
3,659 |
3,546 |
941 |
914 |
898 |
871 |
946 |
916 |
874 |
845 |
Sodexo Live!(1) |
-- |
23 |
-- |
3 |
-- |
5 |
-- |
6 |
-- |
9 |
Healthcare & Seniors |
337 |
376 |
87 |
95 |
81 |
92 |
83 |
93 |
87 |
96 |
Education |
91 |
142 |
29 |
45 |
19 |
30 |
26 |
39 |
17 |
28 |
Sodexo |
22,637 |
22,637 |
6,097 |
6,097 |
5,484 |
5,484 |
5,755 |
5,755 |
5,301 |
5,301 |
(1) From H1 FY24, Business & Administrations excludes Sodexo
Live!, reported separately.
First half Fiscal 2024 Condensed consolidated financial
statements
2.1 Consolidated financial
statements
The comparative period presented in the
consolidated income statement and in the consolidated cash flow
statement disclosed in the document has been restated to reflect
the classification as discontinued operations of Pluxee
(ex-Benefits & Rewards Services activity) in accordance
with IFRS 5 “Assets held for sale and discontinued
operations”. Restatements of previously published information are
disclosed in note 3.1.
2.1.1 Consolidated income
statement
(in million euros) |
NOTES |
FIRST HALF FISCAL 2024 |
FIRST HALF FISCAL 2023 IFRS 5 restated |
Revenues |
4.1 |
12,101 |
11,581 |
Cost of sales |
4.2 |
(10,626) |
(10,168) |
Gross profit |
|
1,475 |
1,413 |
Selling, General and Administrative costs |
4.2 |
(864) |
(869) |
Share of profit of companies accounted for using the equity method
that directly contribute to the Group’s business |
|
1 |
1 |
Underlying operating profit |
4.1 |
612 |
545 |
Other operating income |
4.2 |
83 |
1 |
Other operating expenses |
4.2 |
(53) |
(37) |
Operating profit |
|
642 |
509 |
Financial income |
8.1 |
50 |
38 |
Financial expenses |
8.1 |
(96) |
(81) |
Share of profit of other companies accounted for using the equity
method |
|
3 |
— |
Profit for the period before tax |
|
599 |
466 |
Income tax expense |
9.1 |
(99) |
(122) |
Net profit of the period from continuing
operations |
|
500 |
344 |
Net profit of the period from discontinued
operations |
3.1 |
(568) |
104 |
Net profit for the period |
|
(68) |
448 |
Of which: |
|
|
|
Profit attributable to non-controlling interests |
|
6 |
8 |
Net profit of the period from continuing operations – Attributable
to non-controlling interests |
|
4 |
5 |
Net profit of the period from discontinued operations –
Attributable to non-controlling interests |
|
2 |
3 |
ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT |
|
(74) |
440 |
Net profit of the period from continuing operations –
Attributable to equity holders of the parent |
|
496 |
339 |
Net profit of the period from discontinued operations –
Attributable to equity holders of the parent |
|
(570) |
101 |
Basic earnings per share (in euro) |
7.2 |
(0.50) |
3.01 |
Net profit of the period from continuing operations, Group share
per share (in euros) |
|
3.39 |
2.32 |
Net profit of the period from discontinued operations, Group share
per share (in euros) |
|
(3.89) |
0.69 |
Diluted earnings per share (in euro) |
7.2 |
(0.50) |
2.98 |
Net profit of the period from continuing operations, Group share
diluted per share (in euros) |
|
3.35 |
2.30 |
Net profit of the period from discontinued operations, Group share
diluted per share (in euros) |
|
(3.85) |
0.68 |
2.1.2 Consolidated statement of
comprehensive income
(in million euros) |
FIRST HALF FISCAL 2024 |
FIRST HALF FISCAL 2023 IFRS 5 restated |
NET PROFIT FOR THE PERIOD |
(68) |
448 |
Components of other comprehensive income that may be
reclassified subsequently to profit or loss |
502 |
(384) |
Change in fair value of cash flow hedge instruments |
— |
— |
Change in fair value of cash flow hedge instruments reclassified to
profit or loss |
— |
— |
Currency translation adjustment |
(31) |
(385) |
Currency translation adjustment reclassified to profit or loss |
533 |
— |
Tax on components of other comprehensive income that may be
reclassified subsequently to profit or loss |
— |
— |
Share of other components of comprehensive income (loss) of
companies accounted for using the equity method, net of tax |
— |
1 |
Components of other comprehensive income that will not be
reclassified subsequently to profit or loss |
12 |
20 |
Remeasurement of defined benefit plan obligation |
(12) |
(101) |
Change in fair value of financial assets revalued through other
comprehensive income |
22 |
98 |
Tax on components of other comprehensive income that will not be
reclassified subsequently to profit or loss |
2 |
23 |
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), AFTER TAX FOR THE
PERIOD |
514 |
(365) |
COMPREHENSIVE INCOME FROM CONTINUING
OPERATIONS |
474 |
31 |
COMPREHENSIVE INCOME FROM DISCONTINUED
OPERATIONS |
(28) |
51 |
Comprehensive income for the period |
446 |
82 |
Of which: |
|
|
Attributable to equity holders of the parent |
440 |
75 |
Comprehensive income from continuing operations – Attributable to
equity holders of the parent |
469 |
25 |
Comprehensive income from discontinued operations – Attributable to
equity holders of the parent |
(29) |
50 |
Attributable to non-controlling interests |
6 |
7 |
Comprehensive income from continuing operations – Attributable to
non-controlling interests |
4 |
6 |
Comprehensive income from discontinued operations – Attributable to
non-controlling interests |
2 |
1 |
2.1.3 Consolidated statement of
financial position
Assets
(in million euros) |
NOTES |
FEBRUARY 29, 2024 |
AUGUST 31, 2023 |
Goodwill |
|
5,603 |
5,568 |
Other intangible assets |
|
439 |
448 |
Property, plant and equipment |
|
543 |
510 |
Right-of-use assets relating to leases |
|
721 |
787 |
Client investments |
|
695 |
687 |
Investments in companies accounted for using the equity method |
|
70 |
66 |
Non-current financial assets |
8.3 |
1,109 |
1,071 |
Other non-current assets |
|
70 |
77 |
Deferred tax assets |
|
220 |
192 |
NON CURRENT ASSETS |
|
9,470 |
9,406 |
Current financial assets |
8.3 |
79 |
74 |
Inventories |
|
321 |
324 |
Income tax receivable |
|
164 |
84 |
Trade and other current operating assets |
4.3 |
4,108 |
3,562 |
Cash and cash equivalents |
8.2 |
1,454 |
2,025 |
Assets held for sale or for distribution |
3.1 |
— |
5,319 |
CURRENT ASSETS |
|
6,126 |
11,388 |
TOTAL ASSETS |
|
15,596 |
20,794 |
Shareholders’ equity and
liabilities
(in million euros) |
NOTES |
FEBRUARY 29, 2024 |
AUGUST 31, 2023 |
Share capital |
|
590 |
590 |
Additional paid-in capital |
|
248 |
248 |
Reserves and retained earnings |
|
3,575 |
3,704 |
EQUITY ATTRIBUABLE TO EQUITY HOLDERS OF THE
PARENT |
|
4,413 |
4,542 |
NON-CONTROLLING INTERESTS |
|
17 |
12 |
SHAREHOLDER’S EQUITY |
7 |
4,430 |
4,554 |
Long-term borrowings |
8.4 |
4,748 |
5,056 |
Long-term lease liabilities |
|
625 |
683 |
Employee benefits |
|
268 |
265 |
Other non-current liabilities |
4.3 |
182 |
174 |
Non-current provisions |
6.1 |
131 |
110 |
Deferred tax liabilities |
|
205 |
152 |
NON CURRENT LIABILITIES |
|
6,159 |
6,440 |
Bank overdrafts |
8.2 |
9 |
— |
Short-term borrowings |
8.4 |
52 |
537 |
Short-term lease liabilities |
|
148 |
148 |
Income tax payable |
|
221 |
177 |
Current provisions |
6.1 |
71 |
79 |
Trade and other payables |
4.3 |
4,506 |
4,540 |
Liabilities directly associated with assets held for sale or for
distribution |
3.1 |
— |
4,319 |
CURRENT LIABILITIES |
|
5,007 |
9,800 |
TOTAL SHAREHOLDER’S EQUITY AND LIABILITIES |
|
15,596 |
20,794 |
2.1.4 Consolidated cash flow
statement
(in million euros) |
NOTES |
FIRST HALF FISCAL 2024 |
FIRST HALF FISCAL 2023 IFRS 5 restated |
Operating profit |
|
642 |
509 |
Depreciation, amortization and impairment of intangible assets,
property, plant and equipment and right-of-use assets(1) |
|
235 |
228 |
Change in client investments(2) |
|
(5) |
(37) |
Provisions |
|
(18) |
(23) |
(Gains) losses on disposals |
|
(74) |
(2) |
Other non-cash items |
|
16 |
19 |
Dividends received from companies accounted for using the equity
method |
|
2 |
2 |
Net interest expense paid |
|
(17) |
(6) |
Interests paid on lease liabilities |
|
(11) |
(8) |
Income tax paid |
|
(111) |
(51) |
Operating cash flow |
|
659 |
631 |
Change in inventories |
|
3 |
(8) |
Change in trade and other current operating assets |
|
(543) |
(544) |
Change in trade and other payables |
|
27 |
(72) |
Change in working capital from operating
activities |
|
(513) |
(624) |
Net cash provided by operating activities from continuing
operations |
|
146 |
7 |
Net cash provided by operating activities from discontinued
operations |
3.1 |
172 |
254 |
NET CASH PROVIDED BY OPERATING ACTIVITIES |
|
318 |
261 |
Acquisitions of property, plant and equipment and intangible
assets |
|
(181) |
(162) |
Disposals of property, plant and equipment and intangible
assets |
|
15 |
17 |
Change in financial assets and share of companies accounted for
using the equity method |
|
3 |
(28) |
Business combinations |
|
(54) |
(12) |
Disposals of activities |
3.1 |
148 |
1 |
Net cash used in investing activities from continuing
operations |
|
(69) |
(184) |
Net cash used in investing activities from discontinued
operations |
3.1 |
(1,740) |
(58) |
NET CASH USED IN INVESTING ACTIVITIES |
|
(1,809) |
(242) |
Dividends paid to Sodexo S.A. shareholders |
7.1 |
(456) |
(352) |
Dividends paid to non-controlling shareholders of consolidated
companies |
|
(1) |
(4) |
Purchases of treasury shares |
7.1 |
(26) |
(57) |
Sales of treasury shares |
7.1 |
(2) |
— |
Change in non-controlling interests |
|
— |
— |
Proceeds from borrowings |
8.4 |
326 |
267 |
Repayment of borrowings |
8.4 |
(1,133) |
(272) |
Repayments of lease liabilities |
|
(82) |
(98) |
Net cash provided by/(used in) financing activities from
continuing operations |
|
(1,374) |
(516) |
Net cash provided by/(used in) financing activities from
discontinued operations |
3.1 |
1,065 |
(7) |
NET CASH PROVIDED BY/(USED IN) FINANCING
ACTIVITIES |
|
(309) |
(523) |
NET EFFECT OF EXCHANGE RATES AND OTHER EFFECTS ON
CASH |
|
15 |
(100) |
Net effect of exchange rates and other effects on cash from
continuing operations |
|
41 |
(70) |
Net effect of exchange rates and other effects on cash from
discontinued operations |
|
(26) |
(30) |
CHANGE IN NET CASH AND CASH EQUIVALENTS |
|
(1,785) |
(604) |
NET CASH AND CASH EQUIVALENTS, BEGINNING OF THE
PERIOD |
|
3,230 |
3,217 |
Net cash and cash equivalents, Beginning of the period from
continuing operations |
|
2,025 |
3,217 |
Net cash and cash equivalents, Beginning of the period from
discontinued operations |
|
1,205 |
|
NET CASH AND CASH EQUIVALENTS, END OF THE
PERIOD |
8.2 |
1,445 |
2,613 |
of which Net cash and cash equivalents from continuing operations,
end of the period |
|
1,445 |
1,450 |
of which Net cash and cash equivalents from discontinued
operations, end of the period |
|
— |
1,163 |
(1) Including 91 million euros
corresponding to the right-of-use assets depreciation recognized in
First half Fiscal 2024 pursuant to IFRS 16 (93 million euros
recognized for First half Fiscal 2023).(2) Since the First half
Fiscal 2024, the change in client investments previously classified
in net cash used in investing activities is presented within the
cash flow provided by operating activities in the consolidated cash
flow statement. This change of presentation has been included in
the comparative information of the First half Fiscal 2023.
2.1.5 Consolidated statement of changes
in shareholders’ equity
(in million euros) |
NUMBER OF SHARES OUTSTANDING |
SHARE CAPITAL |
ADDITIONAL PAID-IN CAPITAL |
RESERVES AND COMPREHENSIVE INCOME |
CURRENCY TRANSLATION ADJUSTMENT |
TOTAL SHAREHOLDERS’ EQUITY |
ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT |
NON-CONTROLLING INTERESTS |
TOTAL |
Notes |
7.1 |
|
|
|
|
|
|
|
Shareholders’ equity as of AUGUST 31,
2023 |
147,454,887 |
590 |
248 |
4,514 |
(811) |
4,542 |
12 |
4,554 |
Net profit for the period |
|
|
|
(74) |
|
(74) |
6 |
(68) |
Other comprehensive income (loss), net of tax |
|
|
|
12 |
502 |
514 |
— |
514 |
Comprehensive income |
|
|
|
(62) |
502 |
440 |
6 |
446 |
Dividends paid |
|
|
|
(456) |
|
(456) |
(1) |
(457) |
Distribution of Pluxee shares |
|
|
|
(96) |
|
(96) |
(7) |
(103) |
Treasury share transactions |
|
|
|
(28) |
|
(28) |
|
(28) |
Share-based payment (net of income tax) |
|
|
|
18 |
|
18 |
|
18 |
Change in ownership interest without any change of control |
|
|
|
(7) |
|
(7) |
(1) |
(8) |
Other |
|
|
|
1 |
|
— |
8 |
8 |
SHAREHOLDERS’ EQUITY AS OF
FEBRUARY 29, 2024 |
147,454,887 |
590 |
248 |
3,884 |
(309) |
4,413 |
17 |
4,430 |
(in million euros) |
NUMBER OF SHARES OUTSTANDING |
SHARE CAPITAL |
ADDITIONAL PAID-IN CAPITAL |
RESERVES AND COMPREHENSIVE INCOME |
CURRENCY TRANSLATION ADJUSTMENT |
TOTAL SHAREHOLDERS’ EQUITY |
ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT |
NON-CONTROLLING INTERESTS |
TOTAL |
Notes |
7.1 |
|
|
|
|
|
|
|
Shareholders’ equity as of August 31,
2022 |
147,454,887 |
590 |
248 |
3,992 |
(415) |
4,415 |
10 |
4,425 |
Net profit for the period |
|
|
|
440 |
|
440 |
8 |
448 |
Other comprehensive income (loss), net of tax |
|
|
|
19 |
(384) |
(365) |
(1) |
(366) |
Comprehensive income |
|
|
|
459 |
(384) |
75 |
7 |
82 |
Dividends paid |
|
|
|
(352) |
|
(352) |
(3) |
(355) |
Treasury share transactions |
|
|
|
(57) |
|
(57) |
|
(57) |
Share-based payment (net of income tax) |
|
|
|
24 |
|
24 |
|
24 |
Change in ownership interest without any change of control |
|
|
|
(10) |
|
(10) |
(10) |
(20) |
Other |
|
|
|
1 |
|
1 |
— |
1 |
SHAREHOLDERS’ EQUITY AS OF FEBRUARY 28, 2023 |
147,454,887 |
590 |
248 |
4,056 |
(799) |
4,096 |
4 |
4,100 |
2.2 Notes to the consolidated financial
statements
- Sodexo is a
société anonyme (a form of limited liability company) registered in
France, with its headquarters located in Issy-les-Moulineaux.
Sodexo’s condensed interim consolidated
financial statements for the six-month period from
September 1, 2023 to February 29, 2024 were
approved by the Board of Directors on April 18, 2024.
The numbers shown in the tables were prepared in
thousands of euros and are presented in million euros (unless
otherwise indicated).
NOTE 1.
SIGNIFICANT EVENTS
1.1 Spin-off
of Pluxee (ex-Benefits & Rewards
Services)
The project to separate the two business units
of Sodexo by spinning-off and listing Pluxee (ex-Benefits &
Rewards Services activity) announced on April 5, 2023 by
the Group, and was unanimously approved by the Board of Directors
on October 25, 2023. The resolution proposed by the Board
of Directors to approve the exceptional distribution in kind of one
Pluxee share for every Sodexo share held was adopted by a very
large majority of the Shareholders Meeting held on
January 30, 2024. The spin-off has been implemented
according to the defined schedule, with the detachment and first
listing of Pluxee shares on Euronext Paris on
February 1, 2024 and the delivery of the Pluxee shares to
shareholders on February 5, 2024.
As the transaction is carried out under common
control, it is excluded from the scope of IFRIC 17
“Distributions of non-cash assets to owners”. The Group has elected
to recognize the demerger using Pluxee’s Net Book Value. This
operation does not generate any capital gain or loss in the
consolidated income statement, with the exception of the negative
impact of the recycling of the currency translation adjustment
reserves, mainly coming from the Brazilian Real and the Venezuelan
Bolivar, for an amount -540 million euros as of
January 31, 2024 (see the detailed accounting treatment
in note 3).
NOTE 2.
BASIS OF PREPARATION OF THE FINANCIAL
STATEMENTS
2.1 Accounting
policies
2.1.1 General
principles
The condensed interim consolidated financial
statements for the six months ended February 29, 2024
have been prepared in accordance with IAS 34 "Interim Financial
Reporting", as published by the IASB and endorsed by the European
Union. They do not include all the disclosures required for a
complete set of annual financial statements and should be read in
conjunction with the consolidated financial statements of the
Sodexo Group for the fiscal year ended
August 31, 2023.
The accounting policies applied by the Group in
the condensed interim consolidated financial statements for the six
months ended February 29, 2024 are the same as those used
in the annual consolidated financial statements for the fiscal year
ended August 31, 2023, with the exception of the specific
requirements of IAS 34 (see note 2.2). The texts effective as
of September 1, 2023 did not have a material impact on
the interim consolidated financial statements of the Group, in
particular IAS 12 amendment regarding the exemption from the
recognition of deferred tax assets and liabilities linked to taxes
on the result arising from the Pillar 2 rules based on estimates
made to date by the Group.
Based on the preliminary work performed, the
Group does not expect any significant impact from the Pillar 2
reform on its interim consolidated financial statements.
The Group has not applied any IFRSs that had not
yet been approved by the European Union as of
February 29, 2024. The Group has not elected to early
adopt any standards or interpretations whose application is not
mandatory in Fiscal 2024.
2.2 Specific
interim reporting requirements
Income tax expense
Income tax expense (current and deferred) in the
condensed interim consolidated financial statements is computed by
applying an estimated average annual tax rate for the current
fiscal year to each tax reporting entity's pre-tax profit for the
first half of the year as adjusted, where applicable, for the tax
effect of any specific events that may have occurred during the
period. The resulting deferred and current tax charge or benefit is
recognized in deferred tax assets or deferred tax liabilities and
in income tax assets or payable in the consolidated statement of
financial position as required by IAS 12 amendment.
Post-employment and other long-term employee
benefits
The expense for post-employment and other
long-term employee benefits is computed as one half of the annual
charge estimated as of August 31, 2023. The actuarial
projections are updated to take into account any material changes
to assumptions or one-off impacts (discount rates, applicable
legislation...) during the six-month period.
2.3 Use of
estimates
The preparation of the condensed interim
consolidated financial statements requires the management of Sodexo
and its subsidiaries to make estimates and assumptions that may
affect the amounts reported for assets, liabilities and contingent
liabilities as of the date of preparation of the financial
statements, and of revenues and expenses for the period.
These estimates and judgments are updated
continuously based on past experience and on various other factors
considered reasonable in view of the situation prevailing as of
February 29, 2024 and are the basis for the assessments
of the carrying amount of assets and liabilities.
Final amounts may differ substantially from
these estimates if assumptions or circumstances change.
Significant items subject to such estimates and
assumptions are the same as those described in the consolidated
financial statements for the year ended August 31, 2023
(valuation of current and non-current assets, assessment of
deferred tax assets recoverability, valuation of financial assets
measured at fair value, provisions – including uncertain tax
treatments – and litigations, assessment of the lease term in
measuring the lease liabilities and related right-of-use assets,
post-employment defined benefit plan assets and liabilities, and
share-based payments).
NOTE 3. MAIN
CHANGES IN SCOPE OF CONSOLIDATION
3.1 Disposed
and held for sale or distribution activities
The Group continued its portfolio
rationalization by disposing of a certain numbers of its
activities, resulting in a net gain on disposal of
83 million euros recognized in other operating expenses
and income during the First half Fiscal 2024 (cf. note 4.2.2 “Other
operating expenses and income”), corresponding mainly to the net
gain on disposal of 77 million euros for the disposal of its
worldwide Homecare services including mainly subsidiaries in the
United States, in the United Kingdom, and in Scandinavian countries
at the end of October 2023, disposed for a net selling price
of 146 million euros.
The completion of the spin-off of Pluxee
(ex-Benefits & Rewards Services activity) has occurred on
February 1, 2024, its contribution to the net result and
to the cash flows over 5 months (from September 1, 2023
to January 31, 2024) as well as the negative impact of
the recycling of the currency translation adjustment reserves
mainly from the Brazilian Real and Venezuelan Bolivar for -540
million euros are presented on separate lines in the consolidated
income statement (line "Net income from discontinued operations")
and in the consolidated cash flow statement (separate lines within
each category cash flow). Moreover,this activity met the definition
of a discontinued operation as of August 31, 2023 as set
out by IFRS 5 (separate major line of business, the net assets
of which are available for immediate distribution in their present
condition, and the distribution of which is highly probable),
non-current assets classified as such are no longer subject to
depreciation from this date. In accordance with this standard, the
comparative consolidated income statement and consolidated cash
flow statement are restated as if the activity had met the criteria
for a discontinued operation as of the opening of the comparative
period.
Choice of the accounting method for the
deconsolidation
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
related to Pluxee, mainly from the Brazilian Real and Venezuelan
Bolivar, amounting to -540 million euros as of
January 31, 2024. This non-cash loss is purely technical,
and will not have any impact on Sodexo’s equity, cashflow or
dividend distribution capacity.
Impact of the in-kind distribution on free
shares grants
On January 30, 2024, the resolution
proposed by the Board of Directors to approve the exceptional
distribution in kind of one Pluxee share for every Sodexo share
held was adopted by a very large majority.
As a result of the in-kind distribution, it was
proposed to Sodexo shareholders, to acknowledge that the rights of
beneficiaries of free share plans whose Sodexo shares have not been
delivered on the completion date of the spin-off in accordance with
the relevant plan rules (the “Performance Shares”) will be
preserved. For free share plans under which Sodexo shares are to be
delivered after the completion date of the spin-off in accordance
with the relevant plan rules, the Sodexo Board of Directors will
make adjustments to the rights of beneficiaries of Performance
Shares referring to the principles stipulated in Article R. 228-91
of the Commercial Code, to be delivered after the completion date
of the spin-off by multiplying the number of each Performance
Shares by the following ratio:
Value of the Sodexo share before the In-Kind
Distribution / (Value of the Sodexo share before the In-Kind
Distribution - Amount of the In-Kind Distribution per share),
giving an adjustment ratio of 138,14%.
The 1,308,936 Sodexo shares initially granted
and to be acquired were adjusted and amount to 1,806,562 Sodexo
Shares following the in-kind distribution.. This adjustment did not
result in granting an additional benefit to employees and therefore
had no impact on the group's IFRS 2 expense.
3.1.1
Financial statements of discontinued
operations
Net profit from discontinued
operations
The key consolidated income statement items of
Pluxee (ex-Benefits & Rewards Services activity)
classified as discontinued operations including the deconsolidation
effects are the following:
(in million euros) |
FIRST 5 MONTHS FISCAL 2024 |
FIRST HALF FISCAL 2023 |
Revenue |
508 |
508 |
Cost of sales |
(149) |
(159) |
Gross profit |
359 |
349 |
Underlying operating profit |
190 |
164 |
Net other operating income/(expenses) |
(158) |
(8) |
Recycling of currency translation adjustment
reserves |
(540) |
|
Operating profit |
(508) |
156 |
Financial income (expense) |
(8) |
(8) |
Profit for the period before tax |
(516) |
148 |
Income tax expense |
(52) |
(44) |
Net profit of the period |
(568) |
104 |
Cash flow statement from discontinued
operations
The key consolidated cash flow statement items
of Pluxee (ex-Benefits & Rewards Services activity)
classified as discontinued operations, including the
deconsolidation effects are the following:
(in million euros) |
FIRST 5 MONTHS FISCAL 2024 |
FIRST HALF FISCAL 2023 |
Operating profit |
(508) |
156 |
Adjustments |
78 |
(16) |
Recycling of currency translation adjustment reserves |
540 |
|
Operating cashflow |
110 |
140 |
Change in vouchers payables |
409 |
277 |
Change in financial assets related to the Benefits &
Rewards Services activity |
(111) |
7 |
Other components of net change in working capital from operating
activities |
(236) |
(170) |
Net cash provided by operating activities |
172 |
254 |
Net capital expenditure |
(57) |
(53) |
Other investing activities |
64 |
(5) |
Net cash and cash equivalents of the Benefits & Rewards
Services activity at date of distribution |
(1,747) |
|
Net cash used in investing activities |
(1,740) |
(58) |
Dividends paid |
— |
(140) |
Net proceed of borrowings(1) |
1,071 |
— |
Other financial activities |
(6) |
133 |
Net cash provided by (used in) financing
activities |
1,065 |
(7) |
Net effect of exchange rates and other effects on cash |
(26) |
(30) |
Net effect on cash from internal transactions(2) |
(676) |
61 |
Change in cash and cash equivalents |
(1,205) |
220 |
Net cash and cash equivalents, beginning of the
period |
1,205 |
943 |
Net cash and cash equivalents, end of the
period |
— |
1,163 |
(1) Of which a bridge loan of 1.1 billion euros used to
refinance the debt to the Group before the spin-off, existing as of
August 31, 2023.(2) Corresponds mainly to the repayment
of the loans and borrowings to Sodexo.
3.1.2
Restatement of consolidated financial statements
2023
Impact on the 2023 consolidated income statement of the
IFRS 5 restatement applied
(in million euros) |
FIRST HALF FISCAL 2023 Published |
IFRS 5 RESTATEMENT |
FIRST HALF FISCAL 2023 IFRS 5 restated |
Revenues |
12,085 |
(504) |
11,581 |
Cost of sales |
(10,326) |
158 |
(10,168) |
Gross profit |
1,759 |
(346) |
1,413 |
Selling, General and Administrative costs |
(1,056) |
187 |
(869) |
Share of profit of companies accounted for using the equity method
that directly contribute to the Group’s business |
1 |
— |
1 |
Underlying operating profit |
704 |
(159) |
545 |
Other operating income |
1 |
— |
1 |
Other operating expenses |
(43) |
6 |
(37) |
Operating profit |
662 |
(153) |
509 |
Financial income |
39 |
(1) |
38 |
Financial expenses |
(87) |
6 |
(81) |
Share of profit of other companies accounted for using the equity
method |
— |
— |
— |
Profit for the year before tax |
614 |
(148) |
466 |
Income tax expense |
(166) |
44 |
(122) |
Net profit from continuing operations |
448 |
(104) |
344 |
Net profit from discontinued operations |
— |
104 |
104 |
Net profit for the period |
448 |
— |
448 |
Of which: |
|
|
|
Profit attributable to non-controlling interests |
8 |
— |
8 |
Net profit of the period from continuing operations - Attributable
to non-controlling interests |
8 |
(3) |
5 |
Net profit of the period from discontinued operations -
Attributable to non-controlling interests |
|
3 |
3 |
PROFIT ATTRIBUTABLE TO EQUITY HOLDERS OF THE
PARENT |
440 |
— |
440 |
Net profit of the period from continuing operations -
Attributable to equity holders
of the parent |
440 |
(101) |
339 |
Net profit of the period from discontinued operations -
Attributable to equity holders of the parent |
— |
101 |
101 |
Impact on the First half Fiscal 2023
consolidated cash flow statement of the IFRS 5
restatement
(in million euros) |
FIRST HALF FISCAL 2023 Published |
IFRS 5 RESTATEMENT |
FIRST HALF FISCAL 2023 IFRS 5 restated |
Operating profit |
662 |
(153) |
509 |
Depreciation, amortization and impairment of intangible assets,
property, plant and equipment and right-of-use assets |
263 |
(35) |
228 |
Change in client investments |
(37) |
— |
(37) |
Provisions |
(23) |
— |
(23) |
(Gains) losses on disposals |
(2) |
— |
(2) |
Other non-cash items |
22 |
(3) |
19 |
Dividends received from companies accounted for using the equity
method |
2 |
— |
2 |
Net interest expense paid |
(10) |
4 |
(6) |
Interests paid on lease liabilities |
(9) |
1 |
(8) |
Income tax paid |
(97) |
46 |
(51) |
Operating cash flow |
771 |
(140) |
631 |
Change in inventories |
(11) |
3 |
(8) |
Change in trade and other current operating assets |
(812) |
268 |
(544) |
Change in trade and other payables |
29 |
(101) |
(72) |
Change in vouchers payable |
277 |
(277) |
— |
Change in financial assets related to the Benefits & Rewards
Services activity |
7 |
(7) |
— |
Change in working capital from operating
activities |
(510) |
(114) |
(624) |
Net cash provided by operating activities from continuing
operations |
261 |
(254) |
7 |
Net cash provided by operating activities from discontinued
operations |
— |
254 |
254 |
NET CASH PROVIDED BY OPERATING ACTIVITIES |
261 |
— |
261 |
Acquisitions of property, plant and equipment and intangible
assets |
(215) |
53 |
(162) |
Disposals of property, plant and equipment and intangible
assets |
17 |
— |
17 |
Change in financial assets and share of companies accounted for
using the equity method |
(37) |
9 |
(28) |
Business combinations |
(12) |
— |
(12) |
Disposals of activities |
5 |
(4) |
1 |
Net cash used in investing activities from continuing
operations |
(242) |
58 |
(184) |
Net cash used in investing activities from discontinued
operations |
— |
(58) |
(58) |
NET CASH USED IN INVESTING ACTIVITIES |
(242) |
— |
(242) |
Dividends paid to Sodexo S.A. shareholders |
(352) |
— |
(352) |
Dividends paid to non-controlling shareholders of consolidated
companies |
(5) |
1 |
(4) |
Purchases of treasury shares |
(57) |
— |
(57) |
Proceeds from borrowings |
267 |
— |
267 |
Repayment of borrowings |
(272) |
— |
(272) |
Repayments of lease liabilities |
(104) |
6 |
(98) |
Net cash provided by/(used in) financing activities from
continuing operations |
(523) |
7 |
(516) |
Net cash provided by/(used in) financing activities from
discontinued operations |
— |
(7) |
(7) |
NET CASH PROVIDED BY/(USED IN) FINANCING
ACTIVITIES |
(523) |
— |
(523) |
NET EFFECT OF EXCHANGE RATES AND OTHER EFFECTS ON
CASH |
(100) |
— |
(100) |
Net effect of exchange rates and other effects on cash from
continuing operations |
(100) |
30 |
(70) |
Net effect of exchange rates and other effects on cash from
discontinued operations |
— |
(30) |
(30) |
CHANGE IN NET CASH AND CASH EQUIVALENTS |
(604) |
— |
(604) |
NET CASH AND CASH EQUIVALENTS, BEGINNING OF THE
PERIOD |
3,217 |
— |
3,217 |
NET CASH AND CASH EQUIVALENTS, END OF THE
PERIOD |
2,613 |
— |
2,613 |
of which Net cash and cash equivalents, end of the period from
continuing operations |
2,613 |
(1,163) |
1,450 |
of which Net cash and cash equivalents, end of the period from
discontinued operations |
|
1,163 |
1,163 |
NOTE 4.
SEGMENT INFORMATION AND OTHER OPERATING
ITEMS
4.1 Segment
information and revenue information
The segment information presented below has been
prepared based on internal management data as monitored by the
Group Leadership Team, which is Sodexo’s chief operating
decision-maker.
Revenue and Underlying operating profit are
followed by regions. These regions meet the definition of operating
segments in IFRS 8.
Sodexo’s operating segments and groups of
operating segments are as follows:
- North
America;
- Europe, which
includes the Continental Europe, France and United Kingdom &
Ireland regions;
- Rest of the
World, including Asia-Pacific/Middle East/Africa, Latin America
(without Brazil) and Brazil.
The operating segments that have been aggregated
carry out similar operations – both in terms of type of services
rendered and processes and methods used to deliver the services –
and have similar economic characteristics (notably in terms of
margins they generate).
Segment assets and liabilities are not presented
as they are not included in the chief operating decision-maker’s
measurement of segment performance.
No single Group client or contract accounts
contribute for more than 2% of the consolidated revenues.
4.1.1 Segment
information
FIRST HALF FISCAL 2024(in million
euros) |
NORTH AMERICA |
EUROPE |
REST OF THE WORLD |
CORPORATE EXPENSES |
GROUP TOTAL |
Revenues |
5,756 |
4,254 |
2,091 |
|
12,101 |
Underlying operating profit(1) |
395 |
180 |
80 |
(43) |
612 |
(1) Including Group’s share of profit of companies accounted for
using the equity method that directly contribute to the Group’s
business and excluding other operating income and expenses.
FIRST HALF FISCAL 2023 restated(in
million euros) |
NORTH AMERICA |
EUROPE |
REST OF THE WORLD |
CORPORATE EXPENSES |
GROUP TOTAL IFRS 5 restated |
Revenues |
5,499 |
4,027 |
2,055 |
|
11,581 |
Underlying operating profit(1) |
365 |
157 |
71 |
(48) |
545 |
(1) Including Group’s share of profit of companies accounted for
using the equity method that directly contribute to the Group’s
business and excluding other operating income and expenses.
4.1.2 Revenue
by significant country
The Group’s operations are spread across 45 countries,
including two that each represent over 10% of consolidated revenues
in First half Fiscal 2024: France (the Group’s registration
country) and the United States. Revenues in these countries are as
follows:
If not visible, this visual representation is available in the
Financial Report of Sodexo H1 Results Fiscal 2024 on
https://www.sodexo.com/en/investors/financial-results-and-publications/financial-results
4.1.3 Revenue
by line of service
Revenues by line of service are as follows:
(in million euros) |
FIRST HALF FISCAL 2024 |
FIRST HALF FISCAL 2023 IFRS 5 restated |
Food services |
8,033 |
7,469 |
Facilities Management services |
4,068 |
4,112 |
TOTAL SODEXO |
12,101 |
11,581 |
4.2 Operating
expenses by nature and other operating income and
expenses
4.2.1
Operating expenses by nature
(in million euros) |
FIRST HALF FISCAL 2024 |
FIRST HALF FISCAL 2023 IFRS 5 restated |
Employee costs |
(5,762) |
(5,496) |
|
(4,536) |
(4,329) |
|
(1,226) |
(1,167) |
Purchases of consumables and change in inventory |
(3,385) |
(3,262) |
Depreciation, amortization, and impairment losses(2) |
(235) |
(228) |
- Amortization of
intangible assets and property, plant and equipment and
right-of-use assets relating to leases
|
(235) |
(228) |
- Impairment of
intangible assets and property, plant and equipment and
right-of-use assets relating to leases
|
— |
— |
Rent and attached charges(3) |
(273) |
(257) |
Other operating expenses(4) |
(1,805) |
(1,830) |
TOTAL NET OPERATING EXPENSES |
(11,460) |
(11,073) |
(1) Other employee costs include primarily
payroll taxes, but also costs associated with defined benefit
plans, defined contribution plans and restricted share plans.(2)
Including the depreciation of right-of-use assets relating to lease
contracts of 91 million euros recognized in accordance with
IFRS 16 (93 million euros in First half Fiscal 2023).(3)
Corresponds to rent not included in the measurement of the lease
liabilities, primarily variable lease payments (commissions based
on performance indicators of locations operated under concession
arrangements), as well as lease expenses relating to short-term
lease contracts and lease contracts of low value assets. The
increase observed over the period relates mainly to the variable
part of commissions due under concession arrangements.(4) Other
expenses mainly include professional fees, other purchases used for
operations, sub-contracting costs and travel expenses.
4.2.2 Other
operating income and expenses
(in million euros) |
FIRST HALF FISCAL 2024 |
FIRST HALF FISCAL 2023 IFRS 5 restated |
Gains related to consolidation scope changes(1) |
83 |
1 |
Gain on disposals of non-current assets |
— |
— |
Gains on changes of post-employment benefits |
— |
— |
Other |
— |
— |
OTHER OPERATING INCOME |
83 |
1 |
Restructuring and rationalization costs(2) |
(15) |
(8) |
Losses related to consolidation scope changes |
— |
— |
Amortization of purchased intangible assets |
(17) |
(18) |
Impairment of goodwill and non-current assets |
— |
— |
Acquisition-related costs |
(1) |
— |
Losses on changes of post-employment benefits |
(3) |
(2) |
Losses on disposals of non-current assets |
— |
— |
Other(3) |
(17) |
(9) |
OTHER OPERATING EXPENSES |
(53) |
(37) |
TOTAL OTHER OPERATING INCOME AND EXPENSES |
30 |
(36) |
(1) During First half Fiscal 2024, gains related
to consolidation scope changes correspond mainly to the disposal of
Homecare entities.(2) The costs recognized in First half fiscal
2024 mainly correspond to rationalization costs following the
reorganization of the Group.(3) The other costs recognized in First
half fiscal 2024, mainly correspond to the costs related to the
spin-off project of Pluxee (ex-Benefits & Rewards Services
activity) and the costs related to the disposal of the Homecare
entities (see note. 3.1).
4.3
Working capital
4.3.1 Trade
and other current operating assets
(in million euros) |
FEBRUARY 29, 2024 |
AUGUST 31, 2023 |
GROSS AMOUNT |
IMPAIRMENT |
CARRYING AMOUNT |
GROSS AMOUNT |
IMPAIRMENT |
CARRYING AMOUNT |
Advances to suppliers |
10 |
— |
10 |
12 |
— |
12 |
Trade receivables |
3,587 |
(118) |
3,469 |
3,108 |
(107) |
3,001 |
Other operating receivables |
394 |
(3) |
391 |
349 |
(9) |
340 |
Prepaid expenses |
236 |
— |
236 |
211 |
— |
211 |
Non-operating receivables |
2 |
— |
2 |
2 |
(4) |
(2) |
TOTAL TRADE AND OTHER CURRENT OPERATING
ASSETS |
4,229 |
(121) |
4,108 |
3,682 |
(120) |
3,562 |
The maturities of trade receivables as of
February 29, 2024 and August 31, 2023
respectively were as follows:
(in million euros) |
FEBRUARY 29, 2024 |
AUGUST 31, 2023 |
GROSS AMOUNT |
IMPAIRMENT |
CARRYING AMOUNT |
GROSS AMOUNT |
IMPAIRMENT |
CARRYING AMOUNT |
Less than 3 months past due |
369 |
(6) |
363 |
362 |
(5) |
357 |
More than 3 months and less than 6 months past due |
74 |
(11) |
63 |
62 |
(11) |
51 |
More than 6 months and less than 12 months past due |
49 |
(19) |
30 |
45 |
(23) |
22 |
More than 12 months past due |
72 |
(63) |
9 |
56 |
(50) |
6 |
TOTAL TRADE RECEIVABLES DUE |
564 |
(99) |
465 |
525 |
(89) |
436 |
Total trade receivables not yet due |
3,023 |
(19) |
3,004 |
2,583 |
(18) |
2,565 |
TOTAL TRADE RECEIVABLES |
3,587 |
(118) |
3,469 |
3,108 |
(107) |
3,001 |
During the periods presented, the Group was not affected by any
significant change resulting from proven client failures. In
addition, given the geographic dispersion of the Group’s activities
and the wide range of client industries, there is no material
concentration of risk in individual receivables due but not written
down.
4.3.2 Trade
and other payables
(in million euros) |
FEBRUARY 29, 2024 |
AUGUST 31, 2023 |
Operating payables |
134 |
123 |
Non-operating payables |
48 |
51 |
OTHER NON-CURRENT LIABILITIES |
182 |
174 |
Trade payables |
2,580 |
2,502 |
Employee-related liabilities |
1,111 |
1,200 |
Advances from clients |
351 |
379 |
Tax liabilities |
235 |
223 |
Other operating payables |
93 |
95 |
Deferred revenues |
105 |
105 |
Non-operating payables |
31 |
36 |
TRADE AND OTHER CURRENT PAYABLES |
4,506 |
4,540 |
TOTAL TRADE AND OTHER PAYABLES |
4,688 |
4,714 |
As of February 29, 2024, the total
amount of receivables transferred by Sodexo’s suppliers through the
reverse factoring programs is 418 million euros
(253 million euros as of August 31, 2023). The
relating trade payables are still classified as trade payables and
included in the total of trade payables.
NOTE 5.
IMPAIRMENT OF NON-CURRENT
ASSETS
During the first half of the year, the Group
carried out a review of impairment triggers likely to lead to a
decrease in the recoverable value of its tangible and intangible
assets.
In particular, Sodexo analyzed the performance
of its operating segments (groups of CGUs at which goodwill is
monitored) during the First half compared to the estimates used
during the Fiscal 2023 annual closing for impairment testing.
The Group has also analyzed the evolution since
August 31, 2023 of the main financial parameters
(discount rate and long-term growth rate).
The Group’s management has concluded that there
was no evidence of triggers indicating a decrease in the
recoverable value of its operating segments as of
February 29, 2024 compared to August 31, 2023.
The annual review of the carrying amount of goodwill and other
intangible assets will be realized during the Second half Fiscal
2024.
NOTE 6.
PROVISIONS, LITIGATION AND CONTINGENT
LIABILITIES
6.1
Provisions
(in million euros) |
AUGUST 31, 2023 |
INCREASES/CHARGES |
REVERSALS WITH UTILIZATION |
REVERSALS WITHOUT UTILIZATION |
CURRENCY TRANSLATION ADJUSTMENT AND
OTHER(1) |
CHANGES IN SCOPE OF CONSOLIDATION |
FEBRUARY 29, 2024 |
Contract termination and loss-making contracts |
25 |
— |
(1) |
(2) |
39 |
— |
61 |
Employee claims and litigation |
42 |
2 |
(4) |
(2) |
2 |
— |
40 |
Tax and social security exposures |
29 |
— |
(1) |
(1) |
— |
— |
27 |
Client/supplier claims and litigation |
23 |
1 |
— |
— |
(3) |
— |
21 |
Reorganization costs |
19 |
3 |
(8) |
(1) |
— |
— |
13 |
Negative net assets of associates(2) |
7 |
— |
— |
— |
1 |
— |
8 |
Other provisions |
44 |
5 |
(7) |
(2) |
(8) |
— |
32 |
TOTAL PROVISIONS |
189 |
11 |
(21) |
(8) |
31 |
— |
202 |
(1) Reclassification of provisions for contract termination
related to healthcare activity previously shown as accrued
payables.(2) Investments in companies accounted for using the
equity method that have negative net assets.
6.2 Litigation
and contingent liabilities
DISPUTES WITH THE BRAZILIAN TAX
AUTHORITIES
During Fiscal 2021, the subsidiary Sodexo do
Brasil Comercial received a tax reassessment notice mainly linked
to the tax deductibility of the amortization of goodwill recognized
on the purchase of Puras. The reassessment covers the period from
2015 to 2017 and amounts to 225 million Brazilian real to date,
i.e., 42 million euros as of February 29, 2024 (of which
9 million euros in principal and 33 million euros in penalties
and late payment interests). In August 2021, the competent
administrative Court ruled in favor of Sodexo do Brasil Comercial
but the Brazilian tax authorities appealed this first instance
decision. In March 2024, the Administrative Court (CARF) has
unanimously confirmed the first instance decision in favor of
Sodexo do Brasil Comercial. Tax authorities can appeal again but
the Group considers that the risks of a change the decision are
low, considering, on the one hand, that it has strong arguments to
contest the tax reassessment and, on the other hand, the recent
favorable decision of the CSRF ending the dispute between Sodexo
Pass do Brasil and the Brazilian tax authorities on the same
issue.
The goodwill amount has been fully amortized.
The tax savings generated by this tax depreciation were offset in
the consolidated accounts of the Group by a deferred tax expense of
the same amount for each of the related financial periods, in
accordance with the IFRS rules. The balance of the related deferred
tax liability amounts to 27 million euros as of February 29,
2024.
In addition, Sodexo and its main competitors
have a different interpretation from that of the Brazilian tax
administration on the deductibility of PIS/COFINS on certain
purchases made at a zero rate. Several proceedings are underway,
either at the initiative of the tax authorities, which have
notified Sodexo do Brasil Comercial of an adjustment in respect of
credits recognized in 2016 of 10 million euros (including penalties
and interest for late payment), or at the initiative of the
company, which has filed several claims in the courts. One of these
proceedings initiated by Sodexo do Brasil Comercial was suspended,
on the initiative of the judge, until the Supreme Court's decision
on another company's case. In February 2023, the Supreme Court
issued its decision, which was unfavorable to the company
concerned: the judges essentially ruled that ordinary law may
provide for limitations on the use of PIS/COFINS credits, provided
that such law respects all constitutional principles, in particular
equality of treatment of taxpayers and free competition. This
decision, which should not be considered automatically unfavorable
for the individual cases of each taxpayer, does not affect the
appeals filed by Sodexo, which will continue to follow their
respective courses. The company believes that it has different and
strong enough arguments to ultimately succeed in court on this
issue. After consultation with its advisors, Sodexo considers that
its chances of success in these proceedings are good and that to
date the risk of an outflow of resources associated with the
PIS/COFINS credits deducted since 2016 remains unlikely; therefore,
no provision has been recorded in the consolidated financial
statements as of February 29, 2024.
DISPUTE WITH THE FRENCH COMPETITION
AUTHORITY
On October 9, 2015, the company Octoplus filed a
complaint with the French Competition Authority (Autorité de la
concurrence) concerning several French meal voucher issuers,
including Sodexo Pass France (Pluxee France).
On December 17, 2019, the French Competition
Authority ruled against the meal voucher issuers and fined Sodexo
Pass France, jointly and severally with Sodexo S.A., 126 million
euros. This amount was fully paid by Sodexo Pass France (Pluxee
France) during the past fiscal years. An asset was recognized as a
counterpart of the sums paid (126 million euros), reclassified as
of August 31, 2023 in “Assets held for sale or for
distribution”.
Sodexo filed an appeal against the decision with
the Paris Court of Appeal and the hearing was held on November 18,
2021. On November 16, 2023, the Paris Court of Appeal confirmed the
conviction issued by the French Competition Authority. Contesting
this decision, Sodexo then filed an appeal in cassation, therefore
the proceedings are still ongoing.
Taking in consideration all the above-mentioned
elements the entity Pluxee France recorded a provision of 126
million euros during first half of fiscal year 2024 that was
reclassified in net profit from discontinued operations as of
February 29, 2024.
The separation agreement entered into in
relation to the spin-off of Pluxee includes an undertaking of
Pluxee to indemnify and hold harmless Sodexo for losses in
connection with any matter and any legal action relating to,
arising out of, or resulting from the above dispute.
FRENCH TAX REASSESSMENT
Sodexo S.A. received in December 2021 a
notification for a proposed tax reassessment concerning fiscal
years 2016, 2017 and 2018. Another proposed adjustment notice was
issued by the French tax authorities in December 2022 for fiscal
years 2019, 2020 and 2021 in order to replicate certain adjustments
it had initiated during the previous tax audit.
The Company has assessed the risk associated
with these procedures and, after review with its tax advisors,
considers that it has strong arguments to contest the proposed
reassessments.
OTHER DISPUTES
Group subsidiaries can also be subject to tax
audits certain of which may result in reassessments. Main dispute
are described above. In each case, the risk is assessed by
management and its advisors and any charges deemed probable are
recorded as provisions or tax liabilities.
The Group is not aware of any other
governmental, judicial or arbitral proceedings which are
outstanding or threatened and which may have, or have had in the
past 12 months, material effects on the Group’s financial
position or profitability.
Sodexo is also involved in other legal
proceedings arising in the normal course of its business. The Group
does not anticipate that any potential related liabilities will in
the aggregate be material to its activities or to its consolidated
financial position.
NOTE 7.
EQUITY AND EARNINGS PER SHARE
7.1
Equity
7.1.1
Statement of changes in shareholders’
equity
Composition of share capital and treasury
shares
(number of shares) |
FEBRUARY 29, 2024 |
AUGUST 31, 2023 |
Share Capital(1) |
147,454,887 |
147,454,887 |
Treasury shares(2) |
784,371 |
1,084,126 |
Outstanding shares |
146,670,516 |
146,370,761 |
(1) With a par value of 4 euros each.(2) Treasury shares
value of 66 million euros as of February 29, 2024
(93 million euros as of August 31, 2023).
Dividends
|
FIRST HALF FISCAL 2024 |
FIRST HALF FISCAL 2023 |
Dividends paid (in million euros) |
456 |
352 |
Dividend per share paid (in euros) |
3.10 |
2.40 |
7.2 Earnings
per share
The table below presents the calculation of basic and diluted
earnings per share:
|
FIRST HALF FISCAL 2024 |
FIRST HALF FISCAL 2023 IFRS 5 restated |
Profit for the period attributable to equity holders of the parent
(in million euros) |
(74) |
440 |
Profit for the period from continued operations attributable to
equity holders of the parent (in million euros) |
496 |
339 |
Profit for the period from discontinued operations attributable to
equity holders of the parent (in million euros) |
(570) |
101 |
Basic weighted average number of shares |
146,445,700 |
146,147,666 |
Basic earnings per share (in
euros)(1) |
(0.50) |
3.01 |
Net profit of the period from continuing operations, Group
share per share (in euros) |
3.39 |
2.32 |
Net profit of the period from discontinued operations,
Group share per share (in euros) |
(3.89) |
0.69 |
Average dilutive effect of free share plans |
1,669,742 |
1,577,120 |
Diluted weighted average number of shares |
148,115,442 |
147,724,786 |
Diluted earnings per share (in
euros)(1) |
(0.50) |
2.98 |
Net profit of the period from continuing operations, Group share
diluted per share (in euros) |
3.35 |
2.30 |
Net profit of the period from discontinued operations, Group share
diluted per share (in euros) |
(3.85) |
0.68 |
(1) Basic and diluted earnings per share do not
reflect the effect of the dividend premium to be paid on certain
registered shares.
NOTE 8.
CASH AND CASH EQUIVALENTS, FINANCIAL ASSETS AND
LIABILITIES, AND FINANCIAL INCOME AND EXPENSE
8.1 Financial
income and expense
(in million euros) |
FIRST HALF FISCAL 2024 |
FIRST HALF FISCAL 2023 IFRS 5 restated |
Gross borrowing cost(1)(3) |
(75) |
(68) |
Interest income from short-term bank deposits and equivalent |
34 |
32 |
NET BORROWING COST |
(41) |
(36) |
Interest on financial lease liabilities IFRS 16(2) |
(11) |
(8) |
Net foreign exchange gains/(losses) |
3 |
(1) |
Net interest cost on net defined benefit plan obligation |
(1) |
1 |
Interest income from loans and receivables at amortized cost |
8 |
3 |
Other financial income |
5 |
4 |
Other financial expense |
(9) |
(6) |
NET FINANCIAL EXPENSE |
(46) |
(43) |
Of which Financial income |
50 |
38 |
Of which Financial expense |
(96) |
(81) |
(1) Gross borrowing cost represents interest
expense on financial liabilities at amortized cost and interest
expense on hedging instruments.(2) Interest on lease liabilities
recognized in accordance with IFRS 16.(3) 45 million euros of
gross borrowing costs relates to the Group’s EUR, GBP and USD bonds
and other committed banking facilities, and 30 million euros
relates to cash pool mechanism costs - the cash pool income is
included in Interest Income.
8.2 Cash and
cash equivalents
(in million euros) |
FEBRUARY 29, 2024 |
FIRST HALF FISCAL 2023 IFRS 5 restated |
Marketable securities(1) |
41 |
34 |
Cash(2) |
1,413 |
1,991 |
CASH AND CASH EQUIVALENTS |
1,454 |
2,025 |
Bank overdrafts |
(9) |
— |
CASH AND CASH EQUIVALENTS NET OF BANK
OVERDRAFTS |
1,445 |
2,025 |
(1) Marketable securities correspond to term deposits as of
February 29, 2024 and as of August 31, 2023.(2)
Including 12 million euros allocated to the liquidity contract
signed with an investment services provider, which complies with
the Code of conduct drawn up by the French financial markets
association (Association française des marchés financiers – AMAFI)
and approved by the French securities regulator (Autorité des
marchés financiers – AMF), for the purpose of improving the
liquidity of Sodexo shares and the regularity of the
quotations.
8.3 Financial
assets
PRINCIPAL INVESTMENTS IN NON-CONSOLIDATED
COMPANIES
Measurement of Bellon SA
Securities
The Group holds, through its wholly owned
subsidiary Sofinsod, a 19.61% stake in Bellon SA, a company that
controls Sodexo SA with 42.75% of its shares and 57.5% of its
voting rights exercisable on February 29, 2024. This
shareholding does not give the Group significant influence over
Bellon SA, as voting rights attached to Bellon SA shares cannot be
exercised by Sofinsod, in accordance with the provisions of Article
L. 233-31 of Code de Commerce.
There are no potential conflicts of interest
between the duties to Sodexo of members of the Board of Directors
or senior management and their private interests. In particular the
Pierre and Danielle Bellon Family controls 72.6% of the family
holding company Bellon SA. Mr. and Mrs. Pierre
Bellon and their children entered into an agreement in
June 2015 to prevent their direct descendants from freely
disposing of their Bellon SA shares for 50 years.
In accordance with IFRS 9, this investment is
measured at its fair value, determined in accordance with IFRS 13.
The valuation of the fair value of the investment depends, among
other things, on the revalued net asset value (NAV) of Bellon SA
which has limited debt and now holds two assets, shares of Sodexo
S.A. and shares of Pluxee N.V.. These shares are valued at their
closing share price as of February 29, 2024, for the
calculation of the NAV of Bellon SA. Furthermore, the valuation
method used by management (Level 3 of the hierarchy defined by
IFRS 13) incorporates the illiquidity implied by the
characteristics of the holding's ownership structure (discount to
net asset value of Bellon SA estimated at 40% as of
February 29, 2024 and August 31, 2023.
As of February 29, 2024, the fair
value of the investment is assessed at 751 million euros (722
million euros as of August 31, 2023), and its change
since the opening of the period has been recorded in other
non-recyclable items of comprehensive income (OCI).
8.4
Borrowings
Changes in borrowings during First half Fiscal 2024 were as
follows:
(in million euros) |
AUGUST 31, 2023 |
INCREASES |
REPAYMENTS |
DISCOUNTING EFFECTS AND OTHER |
CURRENCY TRANSLATION ADJUSTMENT |
CHANGES IN SCOPE OF CONSOLIDATION |
FEBRUARY 29, 2024 |
Bond |
5,501 |
39 |
(817) |
2 |
5 |
— |
4,730 |
Commercial paper and bank borrowings(1) |
— |
304 |
(301) |
— |
— |
— |
3 |
Other borrowings |
51 |
— |
(10) |
(14) |
— |
— |
27 |
TOTAL BORROWINGS EXCLUDING DERIVATIVE FINANCIAL
INSTRUMENTS |
5,552 |
343 |
(1,128) |
(12) |
5 |
— |
4,760 |
Net fair value of derivative financial instruments |
36 |
5 |
(5) |
1 |
— |
— |
37 |
TOTAL BORROWINGS |
5,588 |
348 |
(1,133) |
(11) |
5 |
— |
4,797 |
(1) Commercial paper was drawn short term in
First half Fiscal 2024 but all was fully repaid by
February 29, 2024.
If not visible, this visual representation is available in the
Financial Report of Sodexo H1 Results Fiscal 2024 on
https://www.sodexo.com/en/investors/financial-results-and-publications/financial-results
In order to comply with the Group’s financing policy,
substantially all borrowings are long term and at fixed interest
rates.
As of February 29, 2024, 94% of the Group’s borrowings
were at fixed rate. The average rate of interest as of the same
date was 1.86%.
As of August 31, 2023, 95% of the Group’s borrowings
were at fixed rate. The average rate of interest as of the same
date was 1.70%.
The bond issues and borrowings from financial
institutions described above include customary early redemption
clauses. These clauses include cross-default and change-in-control
clauses which apply to all of the borrowings.
None of the bond issues have a financial
covenant.
July 2011 multicurrency
confirmed credit facility
On July 18, 2011, Sodexo S.A.
contracted a multicurrency credit facility for a maximum of 600
million euros plus 800 million U.S. dollars, with an original
maturity date of July 18, 2016. This facility has been
amended on a number of occasions with the most recent amendment
being in July 2019 with a new maturity date of July 2024,
with two options to extend the maturity by one year each, up to
July 2026. The first option to extend this facility was
executed during Fiscal 2020 and the second was executed during
Fiscal 2021. The facility maturity date is now July 2026.
The maximum available limits under this facility now are 589
million euros plus 785 million U.S. dollars.
The most recent amendment also incorporates an
updated sustainability clause that links the credit facility cost
to Sodexo’s ability to comply with its public commitment to reduce
its food waste by 50% by 2025 and also an update to the referenced
indices.
Amounts drawn on this facility carry floating
interest indexed on the SOFR, SONIA, ESTR and EURIBOR rates. This
credit facility is not subject to any covenant.
No amounts had been drawn down on the facility
as of either February 29, 2024 nor as of
August 31, 2023.
Bilateral confirmed credit
facility
On December 18, 2019, the Group obtained
two 150 million euros bilateral confirmed credit facilities.
Both facilities expired in December 2023 and were replaced by
two €100 million euros bilateral credit facilities with expiry
dates of December 29, 2025.
On February 13, 2020, the Group obtained a
third 150 million euros bilateral confirmed credit facility
expiring in February 2024. On December 21, 2023,
this facility was replaced by a 100 million euros bilateral
credit facility with an expiry date of
December 29, 2025.
No amounts had been drawn down on any of these
facilities as of either February 29, 2024 nor as of
August 31, 2023.
Commercial
papers
Borrowings under the Sodexo S.A. and Sodexo
Finance commercial paper programs are nil either as of
February 29, 2024 nor of August 31, 2023.
NOTE 9.
OTHER INFORMATION
9.1 Income
tax
The 26.2% effective tax rate for First half
Fiscal 2023 decreased to 16.6% in First half Fiscal 2024. The
decrease in the effective tax rate is explained in particular by
the better results in France which are offset by using of
previously unrecognized tax assets, as well as to the capital gain
on the disposal of the worldwide Homecare services which had no
impact on the income tax expenses in most countries.
9.2 Free share
grants
On February 22, 2024 the Board of Directors
decided to grant free shares to certain Group employees. The shares
granted under this plan will only vest if the beneficiaries are
still working for the Group on the vesting date and some are
subject to a performance condition. The shares granted under this
plan sum up to 834,387 shares.The impact of this plan for the first
semester is not material.
9.3 Members of
the Board of Directors and the Leadership
Team
There were no significant changes from the
fiscal year ended August 31, 2023 in relation to the
nature of compensation, advances and commitments for pensions or
similar benefits granted to members of Sodexo's Board of Directors
or Leadership Team.
9.4 Related
parties information
Non-consolidated companies
In addition to the transactions with
non-consolidated companies are similar in nature to those described
in note 14.3, "Related parties" to the consolidated financial
statements for the fiscal year ended August 31, 2023, the
Group has carried out since February 1, 2024,
transactions with the entities of Pluxee (ex-Benefits & Rewards
Services activity). The flows and amounts in the consolidated
financial statements for the transactions are not material for the
First half Fiscal 2024.
Principal
shareholder
As of February 29, 2024, Bellon SA
held 42.75% of the capital of Sodexo and 57.5% of the exercisable
voting rights.
The expense recognized in First half Fiscal 2024
under an assistance and advisory services contract between Bellon
SA and Sodexo S.A. amounts to 2.5 million euros (2.3 million
euros in First half Fiscal 2023).
Sodexo S.A. paid to Bellon SA 196 million euros
of dividends.
The Group didn't received any dividends from
Bellon SA in First half Fiscal 2024. They will be paid in the
second semester.
9.5 Subsequent
events
No major events have occurred since the closing of the
period.
9.6 Changes in
principal currency exchange rates
The following table presents changes in exchange rates for the
main currencies used to convert the financial statements of
subsidiaries compared with the first half of the prior fiscal
year:
Currency |
CLOSING RATE AS OF
FEBRUARY 29, 2024 |
AVERAGE RATE FOR FIRST HALF FISCAL 2024 |
CLOSING RATE AS OF FEBRUARY 29, 2024 |
CLOSING RATE AS OF
FEBRUARY 28, 2023 |
AVERAGE RATE FOR FIRST HALF FISCAL 2023 |
U.S. dollar |
1.083 |
1.082 |
1.087 |
1.062 |
1.031 |
Pound Sterling |
0.857 |
0.864 |
0.857 |
0.877 |
0.874 |
Brazilian real |
5.405 |
5.364 |
5.308 |
5.528 |
5.417 |
Statutory Auditors' Report
KPMG S.A. |
ERNST & YOUNG Audit |
Tour Eqho 2, avenue Gambetta CS 60055 92066 Paris-La Défense cedex
S.A. au capital de € 5 497 100 775 726 417 R.C.S. Nanterre |
Tour First TSA 14444 92037 Paris-La Défense cedex S.A.S. à capital
variable 344 366 315 R.C.S. Nanterre |
Commissaire aux ComptesMembre de la compagnierégionale de
Versailles et du Centre |
Commissaire aux ComptesMembre de la compagnierégionale de
Versailles et du Centre |
This is a free translation into English of the statutory
auditors’ review report on the half-yearly financial information
issued in French and is provided solely for the convenience of
English-speaking users. This report includes information relating
to the specific verification of information given in the Group’s
half-yearly management report. This report should be read in
conjunction with, and construed in accordance with, French law and
professional standards applicable in France.
Sodexo
Period from September 1, 2023, to February 29,
2024
Statutory auditors’ review report on the half-yearly
financial information
To the Shareholders,
In compliance with the assignment entrusted to us by your annual
general meetings and in accordance with the requirements of article
L. 451-1-2 III of the French Monetary and Financial Code ("Code
monétaire et financier"), we hereby report to you on:
- the review of the accompanying
condensed half-yearly consolidated financial statements of Sodexo,
for the period from September 1, 2023, to February 29, 2024;
- the verification of the information
presented in the half-yearly management report.
These condensed half-yearly consolidated financial statements
are the responsibility of the Board of Directors. Our role is to
express a conclusion on these financial statements based on our
review.
- Conclusion on the financial
statements
We conducted our review in accordance with professional
standards applicable in France.
A review of interim financial information consists of making
inquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with professional standards applicable in
France and consequently does not enable us to obtain assurance that
we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit
opinion.
Based on our review, nothing has come to our attention that
causes us to believe that the accompanying condensed half-yearly
consolidated financial statements are not prepared in accordance
with IAS 34 – standard of the IFRSs as adopted by the European
Union applicable to interim financial information.
- Specific
verification
We have also verified the information presented in the
half-yearly management report on the condensed half-yearly
consolidated financial statements subject to our review. We have no
matters to report as to its fair presentation and consistency with
the condensed half-yearly consolidated financial statements.
Paris-La Défense, April 18, 2024
The Statutory Auditors French original signed
by
KPMG S.A. |
ERNST & YOUNG Audit |
Caroline
Bruno-Diaz |
Aymeric de
La Morandière Soraya Ghannem |
Statement of responsibility
for the Interim Financial Report
Group Chief Executive Officer
Responsibility for the Half Year Financial
Report
Issy-les-Moulineaux, April 19, 2024
I hereby affirm that to the best of my knowledge the condensed
financial statements presented for the half-year just ended have
been prepared in accordance with the applicable accounting
standards and provide a fair view of the assets, financial
position, and profits of Sodexo, and of all the companies included
within the consolidation scope, and that the half year activity
review included in the attached report presents a true view of the
significant events which took place during the first six months of
the full year period and of their impact on the half year financial
statements; the principle transactions between related parties; and
describes the main risks and uncertainties for the remaining six
months of the year.
Sophie Bellon
Chairwoman of the Board of Directors and Chief Executive
Officer
(1) New definitions of Net Capital expenditure and EBITDA,
please refer to section 1.1 of the Financial Report.(2) Net debt as
of August 31, 2023, was adjusted to reflect the post spin-off
situation, please refer to section 1.3.3 of the Financial
Report.
- PR Sodexo H1 Fiscal 2024 results OK
Sodexo (EU:SW)
Gráfica de Acción Histórica
De Ago 2024 a Sep 2024
Sodexo (EU:SW)
Gráfica de Acción Histórica
De Sep 2023 a Sep 2024