Sodexho Reports Revenue for First Nine Months Of Fiscal 2006

05/07/2006 - 11:27

Sodexho Alliance (NYSE:SDX) (PARIS:SW):
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Organic growth accelerating: +5.9%

-- Confirmed leadership in Food Services and Facilities
Management Services:

-- Excellent performance in the Rest of the World: +14%
(Remote Sites, Latin America and Asia-Australia)

-- Strong momentum maintained in Healthcare and Seniors:
+8.1%

-- Continuing rapid growth in Service Vouchers & Cards: +16.9%
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SODEXHO ALLIANCE (PARIS:SW) (NYSE:SDX), the leading global
provider of food and facilities management services, today announced
consolidated revenues for the first nine months of Fiscal 2006, ended
May 31, 2006.
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Revenue by activity
(in IFRS)

In millions of euro 9 months 9 months Organic
Fiscal 2005 Fiscal growth(1)
2006
----------------------------------------------------------------------
Food and Management Services : 8,705 9,605 5.7 %
-- North America 3,891 4,360 4.3 %
-- Continental Europe 3,005 3,193 5.8 %
-- United Kingdom and Ireland 960 996 3.1 %
-- Rest of the World 849 1,056 14.0 %
----------------------------------------------------------------------
Service Vouchers and Cards 216 273 16.9 %
----------------------------------------------------------------------
Elimination of intragroup revenues -4 -5
----------------------------------------------------------------------
TOTAL 8,917 9,873 5.9 %
----------------------------------------------------------------------

In millions of euro Currency Acquisitions Total
impact(2) change
----------------------------------------------------------------------
Food and Management Services : 4.5 % 0.1 % 10.3 %
-- North America 7.7 % - 12.1 %
-- Continental Europe - 0.5 % 6.3 %
-- United Kingdom and Ireland 0.6 % - 3.7 %
-- Rest of the World 10.4 % - 24.4 %
----------------------------------------------------------------------
Service Vouchers and Cards 9.0 % 0.3 % 26.2 %
----------------------------------------------------------------------
Elimination of intragroup revenues
----------------------------------------------------------------------
TOTAL 4.6 % 0.2 % 10.7 %
----------------------------------------------------------------------

(1) Organic growth: increase in revenues at constant consolidation
scope and exchange rates.

(2) Currency impact is calculated by applying the average exchange
rate for the prior year to the current fiscal year figures
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For the first nine months of Fiscal 2006, the Group's organic
revenue growth reflects:

-- demonstrated expertise in Healthcare and Seniors markets in
all geographies (+8.1%)

-- the strength of the Group's international presence: Rest of
the World (+14%),

-- continuing innovation and excellent development in the Service
Voucher and Cards activity (+16.9%).

Sodexho CEO Michel Landel said: "Our ongoing efforts to improve
client retention and increase sales on existing sites, alongside a
continuing dynamic sales effort, are at the heart of our long term
strategy of organic growth. We are confident that we will slightly
exceed our organic growth objective for the current year, Fiscal 2006.
Organic growth should be above 5.5%."

Organic growth revenue analysis

(See table in Annex 2 and a selection of new clients in Annex 3)

Food and Management Services

-- North America: + 4.3%. Organic growth benefited from last
year's commercial development in Healthcare and Seniors and
from good revenue growth from existing sites in Education.

-- Continental Europe: + 5.8%. Continuing positive trend in
Healthcare and Seniors and leisure activities in Paris area.

-- United Kingdom and Ireland: + 3.1 %. Increase in line with the
Group's recovery strategy.

-- Rest of the World: +14%. Double-digit growth driven by strong,
dynamic sales.

In North America, revenues in Business & Industry increased by
1.9% resulting, in particular, from improved client retention. In
Defense, discussions are continuing with the US Marine Corps.
The excellent organic growth of almost 7% in Healthcare and
Seniors can be attributed to the following factors:

-- Ramping-up of contracts signed last year, notably those
concluded with New York City and with Hermann Memorial
(Texas);

-- The strength of the Seniors segment:

-- Continuous expansion of the range of services, particularly
the management and maintenance of sophisticated clinical
technology equipment.

In Education, satisfactory sales development on existing sites,
including in Facilities Management, helped increase revenue growth by
+3.6%.
In Continental Europe, the +6.6% increase in Business & Industry
revenue resulted from the signature of new contracts, especially in
Central Europe, Spain and France, as well as very satisfactory
development of leisure and tourism activities in the Paris region.
In Healthcare and Seniors (+8%), growth reflects the ramping up of
several major contracts signed during the previous fiscal year, as
well as retention rate improvement.
Slower growth in Education (+1%) reflects Sodexho's continued
selective approach, particularly in public sector markets.
In the United Kingdom and Ireland, revenue increased thanks in
particular to the strong sales efforts of the Correctional Services
and Defense teams. In defense markets, Sodexho strengthened its
leadership during the year following the award of several major new
contracts.
The growth rate in Healthcare and Seniors (+19.4%) is largely
attributable to the ramp-up of previously signed Private Finance
Initiative contracts.
In the Rest of the World, organic growth in food and facilities
management accelerated to + 14%.
In Latin America, robust development has largely been driven by
strong demand in the mining sector and continuing improvement in
client retention.
In Remote Sites, solid sales team initiatives, in light of
favorable business conditions in the oil, gas and mining sectors,
resulted in the signing of new contract awards, in particular in
Australia and Africa.
Finally, in China and India, the Group continues to rapidly expand
its activities.

Service Vouchers and Cards

Organic growth: +16.9 %

Sales for the nine months increased to 273 million euro, resulting
from an issue volume (face value multiplied by the number of service
vouchers and cards) of 4.8 billion euro.
Traditional service offerings (Restaurant Pass and Food Pass)
achieved new success as a result of:

-- Sales force dynamism in all countries,

-- An increase in the par value of services in several Latin
American countries,

-- Demonstrated synergies with Food service activities.

Innovative new service offerings are also growing rapidly:
Childcare Pass has started well in the United Kingdom as has Flexipass
in the Czech Republic. This latter innovation enables Czech companies
to propose to their employees customized options for social benefits.

Outlook

Revenue growth for the first nine months of Fiscal 2006
demonstrates the pertinence of Sodexho's strategy :

-- To reinforce its global leadership position in Food Services

-- To accelerate development in Facilities Management Services

-- To become the global leader in Service Vouchers and Cards

Following the first nine months' accelerated revenue growth, the
Group today revises upwards its organic revenue growth outlook for
Fiscal 2006, to a level above 5.5%.

Conference call

SODEXHO ALLIANCE will hold a conference call today to discuss
third quarter revenues for fiscal 2006. The call will begin at 8:30
a.m. (Paris time). The call-in access number is + 33 1 72 26 01 65.
A slideshow presentation will be available by clicking on the link
www.sodexhoalliance.com, under the "latest news" section, beginning at
7:30 a.m. To access the replay of the conference call, please dial +
33 1 72 28 01 49, code: 182972#.

Financial communications calendar

-- Fiscal 2006 revenues

Wednesday, October 4, 2006, conference call.

-- Fiscal 2006 results

The press release for Fiscal 2006 results will be published on
November 16. A presentation for analysts and journalists will be held
the same day, at Etoile-St-Honore, 23, rue Balzac, 75008 Paris.
The above dates are provided for information only and are subject
to change.

This press release contains 'forward-looking statements' within
the meaning of the United States Private Securities Litigation Reform
Act of 1995. These include, but are not limited to, statements
regarding anticipated future events and financial performance with
respect to our operations. Forward-looking statements can be
identified by the fact that they do not relate strictly to historical
or current facts. They often include words like 'believe,' 'expect,'
'anticipate,' 'estimated' , 'project ' , 'plan' 'pro forma,' and
'intend' or future or conditional verbs such as 'will,' 'would,' or
'may.' Factors that could cause actual results to differ materially
from expected results include, but are not limited to, those set forth
in our Registration Statement on Form 20-F, as filed with the
Securities and Exchange Commission (SEC), the competitive environment
in which we operate, changes in general economic conditions and
changes in the French, American and/or global financial and/or capital
markets. Forward-looking statements represent management's views as of
the date they are made, and we assume no obligation to update any
forward-looking statements for actual events occurring after that
date. You are cautioned not to place undue reliance on our
forward-looking statements.

About Sodexho Alliance

SODEXHO ALLIANCE, founded in 1966 by Pierre Bellon, is the leading
global provider of Food and Management services, with more than
324,000 employees on 26,700 sites in 76 countries. For Fiscal 2005,
which closed August 31, 2005, SODEXHO ALLIANCE had sales of 11.7
billion euro. Listed on Euronext Paris and on the New York Stock
Exchange, the Group's current market capitalization is 6.0 billion
euro.
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Annex 1 : Comparison of Consolidated Revenues

2004/2005 2004/2005 2005/2006
as published IFRS
new presentation
----------------------------------------------------------------------
FIRST QUARTER (Sept. to Nov.)
----------------------------------------------------------------------
- Food and management services
----------------------------------------------------------------------
- North America 1,403,189 1,403,189 1,527,658
----------------------------------------------------------------------
- Continental Europe 1,018,804 1,019,724 1,076,643
----------------------------------------------------------------------
- United Kingdom and Ireland 324,287 324,287 332,971
----------------------------------------------------------------------
- Rest of World 278,114 280,223 340,191
----------------------------------------------------------------------
- Service Vouchers and Cards 61,123 64,492 82,525
----------------------------------------------------------------------
- Elimination of intragroup
Revenues 0 -1,344 -1,758
----------------------------------------------------------------------
3,085,517 3,090,571 3,358,230
----------------------------------------------------------------------
SECOND QUARTER (Dec. to Feb.)
----------------------------------------------------------------------
- Food and management services
----------------------------------------------------------------------
- North America 1,182,564 1,182,564 1,390,868
----------------------------------------------------------------------
- Continental Europe 962,463 963,923 1,034,727
----------------------------------------------------------------------
- United Kingdom and Ireland 315,760 315,760 330,433
----------------------------------------------------------------------
- Rest of World 274,258 274,542 337,770
----------------------------------------------------------------------
- Service Vouchers and Cards 70,193 75,722 95,812
----------------------------------------------------------------------
- Elimination of intragroup
Revenues 0 -1,385 -1,524
----------------------------------------------------------------------
2,805,238 2,811,126 3,188,086
----------------------------------------------------------------------
THIRD QUARTER (March to May)
----------------------------------------------------------------------
- Food and management services
----------------------------------------------------------------------
- North America 1,304,920 1,304,920 1,441,063
----------------------------------------------------------------------
- Continental Europe 1,020,959 1,021,406 1,082,213
----------------------------------------------------------------------
- United Kingdom and Ireland 320,428 320,428 332,960
----------------------------------------------------------------------
- Rest of World 290,756 293,826 377,757
----------------------------------------------------------------------
- Service Vouchers and Cards 71,622 75,955 94,505
----------------------------------------------------------------------
- Elimination of intragroup
Revenues 0 -1,386 -1,780
----------------------------------------------------------------------
3,008,685 3,015,149 3,326,718
----------------------------------------------------------------------
In thousands of euro

TOTAL NINE MONTHS % Variations

- Food and management services
----------------------------------------------------------------------
at at
current constant
exchange exchange
- North America rates rates
----------------------------------------------------------------------
- Continental Europe 3,890,673 3,890,673 4,359,589 12.1% 4.3%
----------------------------------------------------------------------
- United Kingdom and
Ireland 3,002,226 3,005,053 3,193,583 6.3% 6.3%
----------------------------------------------------------------------
- Rest of World 960,475 960,475 996,364 3.7% 3.1%
----------------------------------------------------------------------
- Service Vouchers
and Cards 843,128 848,591 1,055,718 24.4% 14.1%
----------------------------------------------------------------------
- Elimination of
intragroup Revenues 202,938 216,169 272,842 26.2% 17.2%
----------------------------------------------------------------------
0 -4,115 -5,062
----------------------------------------------------------------------
TOTAL 8,899,440 8,916,846 9,873,034 10.7% 6.1%
----------------------------------------------------------------------

Growth breakdown :

-- Organic growth 5.9%

-- Acquisitions (a) 0.2%

-- Currency effect (b) 4.6%

(a)net of divestitures

(b)currency impact is calculated by applying the average
exchange rate for the prior year to the current fiscal
year figures

Annex 2: Food and management services revenues by segment

Consolidated Group

In millions of euro 9 months 9 months Organic
Fiscal 2005 Fiscal 2006 growth (1)
----------------------------------------------------------------------
-- Business and Industry 4,155 4,572 6.0%
-- Healthcare 2,162 2,448 8.1%
-- Education 2,388 2,585 2.8%
----------------------------------------------------------------------
TOTAL 8,705 9,605 5.7%
----------------------------------------------------------------------

North America

In millions of euro 9 months 9 months Organic
Fiscal 2005 Fiscal 2006 growth(1)
----------------------------------------------------------------------
-- Business and Industry 935 1,025 1.9%
-- Healthcare 1,309 1,503 6.9%
-- Education 1,647 1,832 3.6%
----------------------------------------------------------------------
TOTAL 3,891 4,360 4.3%
----------------------------------------------------------------------

Continental Europe

In millions of euro 9 months 9 months Organic
Fiscal 2005 Fiscal 2006 growth (1)
----------------------------------------------------------------------
-- Business and Industry 1,741 1,869 6.6%
-- Healthcare 681 737 8.0%
-- Education 583 587 1.0%
----------------------------------------------------------------------
TOTAL 3,005 3,193 5.8%
----------------------------------------------------------------------

United Kingdom and Ireland

In millions of euro 9 months 9 months Organic
Fiscal 2005 Fiscal 2006 growth (1)
----------------------------------------------------------------------
-- Business and Industry 702 717 1.5%
-- Healthcare 134 161 19.4%
-- Education 124 118 -5.8%
----------------------------------------------------------------------
TOTAL 960 996 3.1%
----------------------------------------------------------------------

(1) Organic growth: increase in revenues at constant consolidation
scope and exchange rates
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-- Annex 3 : Selection of new clients

Food & Management Services

North America

Business & Industry

Pfizer, 9 sites (26,000 employees, food service), Sanofi-Aventis,
9 sites (5,020 employees, food service); Toys R Us, Wayne, New Jersey
(1,600 employees, food service)

Healthcare and Seniors

Victory Memorial Hospital, Illinois (facilities management); Boca
Raton Community Hospital, Inc., Florida (food service); Mary Black
Memorial Hospital, South Carolina (food service, facilities
management); St. John's Hospital, Illinois (food service)

Education

Bishops University, Montreal, Canada (2,100 students, food
service); Adrian College, Adrian, Michigan (972 students, food
service); Bethel College, Mishawaka, Indiana (2,000 students, food
service); Hiram College, Hiram, Ohio (900 students, food service);
Minnesota State University Mankato, Mankato, Minnesota (14,000
students, food service); Saint Cloud State University, Saint Cloud,
Minnesota (15,500 students, food service, convenience store); George
Washington University, Washington, D.C. (2,350 students, food
service); Hollins University, Roanoke, Virginia (800 students, food
service) University of Tampa, Tampa, Florida (5,100 students,
Facilities Management)

Continental Europe

Business & Industry

Arvidsjaur + Boden, Sweden, (4 military bases, food service), CEA
Grenoble, France (1 500 employees, food service), Pierre et Vacances
(14 sites, food service), Johnson Controls Burscheid, Germany (1 500
employees, food service)

Healthcare and Seniors

Clinique des Cedres, Grenoble, France (195 beds, food service and
facilities management), Albert Schweitzer Ziekenhuis Zwijndrecht,
Netherlands, (260 beds, food service and facilities management), Villa
Maria Luigia Parma, Italy, (200 beds, food service)

Education

Primary schools of Ville-d'Avray, (800 students, food service),
International School of Munich, (930 students, food service), Steiner
School Espoo in Finland, (300 students, food service)

United Kingdom & Ireland

Business & Industry

Reckitt Benckiser (Facilities Management)

Defense

Allenby Connaught (17,000 people, 8 sites, Multi-activity
contract)

Correctional Facilities

Addiewell, Scotland (700 inmates, Facilities Management)

Rest of the World

Business & Industry

Cosan and Santander, Brazil (food service), Ericsson, Brazil
(facilities management), Bridgestone, Argentina (food service);
Goldman Sachs, Singapore, (food service) ; Shanghai Huizhong
Automotive Manufactory (5,000 people, food service); Shanghai
Changning District Government Office, China, (1,200 employees);
Danfoss China, Tianjin, China (800 employees), Baiyunshan
Pharmaceutical, Guangzhou, China (1,300 employees)

Healthcare and Seniors

Hopital Santa Barbara, Brazil ; (250 beds, food service) ;
Shanghai N(degree)1 Hospital Songjiang Branch (600 beds, food service)

Remote Sites

Total, Angola; BP, Indonesia Tangguh Project

Service Vouchers and Cards

-- Traditional service offerings:

Brazil : Iesa Oleo e Gas (2,040 beneficiaries, Meal Pass) ;
Secretariat of Public Works and Waste Management of the City of Manaus
(1,880 beneficiaries, Restaurant Pass) ; Usina Moemar acurar e alcool
(5,050 beneficiaries, Meal Pass) ; Mexico : Gobierno del Estado de
Puebla (4,000 vehicles, Mobility Pass) ; Argentina : Universidad
Argentina de la Empresa (400 beneficiaries Pass Repas) ; Gillette
Argentina (170 beneficiaries, Restaurant Pass) ; Peru : Sony (840
beneficiaries, Meal Pass) ; Venezuela : IUT Alonso Coro (710
beneficiaires, Meal Pass) ; India : Airport Authority of India (19,480
beneficiaries, Gift Pass) ; Hindustan Lever (7,900 beneficiaries, Gift
Pass) ; Lucent Technologies (270 beneficiaries, Restaurant Pass) ;
Czech Republic : ABN AMOR Bank (120 beneficiaries, Restaurant Pass) ;
E.ON Ceska Republika (160 beneficiaries, Restaurant Pass) ; Poland :
Can-Pack (1,440 beneficiaries, Gift Pass) ; Romania : CEC (6,700
beneficiaries, Meal Pass) ; Alstom (1,460 beneficiaries, Meal Pass) ;
Butan Gas Romania (10,960 vouchers for Gift Pass) ; Belgium :
Pharmacies Populaires Liegeoises (230 beneficiaries, Restaurant Pass)
; Turkey : Tepe Savunma (1,030 beneficiaries, Restaurant Pass).

-- New services:

Venezuela : Seguridad Codigo Uno (120 beneficiaries, Tarjeta
Sodexho Pass) ; Bulgaria : TEC Bobov Dol (1,000 beneficiaries, Meal
Pass) ; HP (100 beneficiaries, Restaurant Pass and Meal Pass) ; Czech
Republic : Opavia Lu (FlexiPass) ; Slovakia : U.S. Steel Kosice (170
beneficiaries, Holiday Pass) ; UK : Metronet Rail (120 beneficiaries,
Education Pass)

-- Cross-selling:

Brazil : Siemens Building Technologies (340 beneficiaries,
Restaurant Pass) ; Transportadora Binotto (1,100 beneficiaries,
Mobility Pass) ; China : Industrial and Commercial Bank of China (180
beneficiaries, Restaurant Pass) ; Slovakia : Czechoslovak Trade Bank
(1,400 beneficiaries, Flexi Voucher)