SODEXHO ALLIANCE (Euronext Paris FR0000121220) (NYSE:SDX)
(Paris:SW), the leading global provider of Food and Facilities
Management services, today announced consolidated revenues for the
first quarter Fiscal 2007, ended November 30, 2006.
Revenue by activity
-0-
*T
In millions of Q1 Q1 Organic Currency Total
euro Fiscal Fiscal growth impact(2) Acquisitions change
(in IFRS) 2006 2007 (1)
-------------- ------- ------- ------- ---------- ------------ -------
Food and
Facilities
Management
Services: 3,277 3,455 8.7 % - 3.3 % - 5.4 %
-- North
America 1,527 1,541 7.8 % - 6.3 % - 0.6 % 0.9 %
-- Continental
Europe 1,077 1,151 6.0 % - 0.9 % 6.9 %
-- United 333 366 8.8 % 1.0 % - 9.8 %
Kingdom and
Ireland
-- Rest of the
World 340 397 22.0% - 5.4 % - 16.6%
-------------- ------- ------- ------- ---------- ------------ -------
Service
Vouchers and
Cards 83 98 20.3 % - 3.8 % 2.6 % 19.1%
-------------- ------- ------- ------- ---------- ------------ -------
Elimination of
intragroup
revenues -2 -2
-------------- ------- ------- ------- ---------- ------------ -------
TOTAL 3,358 3,551 9.0 % - 3.3 % 0.1 % 5.8 %
-------------- ------- ------- ------- ---------- ------------ -------
(1) Organic growth : increase in revenues at constant consolidation
scope and exchange rates.
(2) The currency impact is - 3.3 %, however, Sodexho subsidiaries'
income and expenses are expressed in the same currency ; hence,
contrary to exporting companies, currency variations carry no
operating risk.
*T
Commenting on the first quarter revenues, Sodexho CEO Michel
Landel said, "I am very satisfied with the level of growth in all of
our activities for the beginning of the year. It is a result of the
work of our teams throughout the world to improve client retention,
increase sales on existing sites and sign new contracts. In this
regard, the recent wins of the Facilities Management contract with KLM
and the Foodservices concession at the Eiffel Tower illustrate the
breadth and competitiveness of our offer. This performance gives us
confidence in our medium term objective to achieve annual average
organic revenue growth of 7%."
Organic Revenue Growth Analysis
(See table in Annex 2 and a selection of new clients in Annex 3)
Food and Facilities Management Services
-- North America: organic growth of 7.8 % driven by continuing
dynamism in Healthcare, Seniors and Education and by renewed
activity in Business and Industry
-- Continental Europe: continuing momentum (+ 6.0 %), in
particular in Healthcare and Seniors
-- United Kingdom and Ireland: return to growth confirmed (+ 8.8
%)
-- Rest of the World: sustained double digit growth across all
geographies (+ 22.0 %)
In North America, the growth in revenue in Business and Industry
benefited from good comparable unit growth, continued demand for
catering services and from a recovery in business development,
including in Facilities Management.
With organic growth at +8.4%, the performance in Healthcare and
Seniors continues to be particularly solid, boosted especially by:
-- the expansion of service offerings on existing sites
-- application of contractual indexation clauses
Three principal factors explain the 8.7% organic growth in
Education:
-- Improved client retention in the prior fiscal year,
-- strong demand in Facilities Management, particularly for
project work (for example, existing facilities renovations)
-- strong comparable unit sales, notably with an expanded food
offering in schools.
In Continental Europe, client retention efforts during the
previous year as well as strong comparable unit sales growth, drove an
increase in revenue in Business and Industry.
In Healthcare and Seniors, the growth momentum was sustained as
result of Sodexho's broad Facilities Management offering and its
successful commercial efforts.
Growth in Education can be attributed to improved client retention
rates and ongoing selectivity in public markets.
In the United Kingdom and Ireland, new contracts start-ups,
notably in Defense, together with strong comparable unit sales growth
and development in leisure-related activities, were the primary
drivers in the 10% increase in Business and Industry.
In Healthcare and Seniors, the ramp up of Private Finance
Initiative (<< PFI >>) contracts contributed to the 13.8% growth.
This substantial improvement in the first quarter confirms that
the action plans implemented over the past three years are proving
effective in bringing Sodexho's subsidiary back to growth.
In the Rest of the World, organic growth in Food and Facilities
Management services remained buoyant at 22%.
In Latin America, the Group holds a significant position in the
mining sector thanks to the strength of its sales efforts.
The strength of raw materials prices continues to benefit activity
levels in Remote Sites. This helped lead to new contract awards in the
Middle East and Africa and higher demand in the construction of new
camps.
In China and in India, Sodexho's expansion continues at a rapid
pace.
Service Vouchers and Cards
Organic growth: +20.3 %
The issue volume totalled 1.9 billion euros, up 24.7% (at constant
consolidation scope and exchange rates), fuelled, particularly, by
activity in Latin America.
This strong progression can be primarily attributed to:
-- solid growth in traditional services
-- a successful campaign for year-end holiday season vouchers,
and
-- to a lesser extent, the increase in voucher face values in a
number of countries.
Revenue organic growth is slightly below that of issue volume
mainly because of the timing of several large orders at the very end
of the quarter which remain to be reimbursed.
-- Conference call
SODEXHO ALLIANCE will hold a conference call today to discuss
first quarter revenues for Fiscal 2007. The call will begin at 8:30 am
(Paris time). The call-in access number is + 33 1 72 28 01 65.
The press release and the slideshow will be available on the
internet by clicking on the link www.sodexhoalliance.com, under "the
latest news" section, beginning at 7 am. To access the replay of the
conference call, please dial + 33 1 72 28 01 49, code: 191186#.
-- Financial communications calendar
-- Annual Shareholders' Meeting
Tuesday, January 30, 2007 at 4:30 pm (Paris time) at the Palais
des Congres (Porte Maillot in, Paris).
-- First half revenues
Wednesday, April 4, 2007, conference call.
-- First half Fiscal 2007 results
Thursday, April 26, 2007. A presentation for analysts and
journalists will be held the same day.
The above dates are provided for information only and are subject
to change.
-- About SODEXHO ALLIANCE
SODEXHO ALLIANCE, founded in 1966 by Pierre Bellon, is the leading
global provider of Food and Facilities Management services, with more
than 332,000 employees on 28,300 sites in 80 countries. For Fiscal
2006, which closed August 31, 2006, SODEXHO ALLIANCE had sales of 12.8
billion euro. Listed on Euronext Paris and on the New York Stock
Exchange, the Group's current market capitalization is 7.6 billion
euro.
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.
Annex 1
Comparison of Consolidated Revenues
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Fiscal Fiscal % Variations
2006 2007
--------------------------------------
FIRST QUARTER at at
(Sept to Nov) current constant
exchange exchange
rates rates
Food and Facilities Management
services
- North America 1,527,658 1,541,151 0.9 % 7.1 %
- Continental Europe 1,076,643 1,151,281 6.9 % 6.9 %
- United Kingdom and Ireland 332,971 365,713 9.8 % 8.8 %
- Rest of World 340,191 396,810 16.6 % 22.0 %
. Service Vouchers and Cards 82,525 98,321 19.1 % 22.9 %
. Elimination of intragroup - 1 758 - 1 765
Revenues
--------------------------------------
3,358,230 3,551,511 5.8 % 9.1 %
--------------------------------------
*T
Growth breakdown:
- Organic growth 9.0 %
- Acquisitions (*) 0.1 %
- Currency effect - 3.3 %
(*) net of divestitures
Annex 2: Food and Facilities Management services revenue by
segment
Consolidated Group
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*T
In millions of euro 3 months 3 months Fiscal Organic growth
Fiscal 2006 2007 (1)
----------------------------------------------------------------------
-- Business & Industry 1,518 1,632 9.6 %
-- Healthcare 795 836 8.9 %
-- Education 964 987 7.2 %
----------------------------------------------------------------------
TOTAL 3,277 3,455 8.7 %
----------------------------------------------------------------------
*T
North America
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*T
In millions of euro 3 months 3 months Fiscal Organic growth
Fiscal 2006 2007 (1)
----------------------------------------------------------------------
-- Business & Industry 346 334 5.0 %
-- Healthcare 486 496 8.4 %
-- Education 695 711 8.7 %
----------------------------------------------------------------------
TOTAL 1,528 1,541 7.8 %
----------------------------------------------------------------------
*T
Continental Europe
-0-
*T
In millions of euro 3 months 3 months Fiscal Organic growth
Fiscal 2006 2007 (1)
----------------------------------------------------------------------
-- Business & Industry 627 672 5.7 %
-- Healthcare 243 265 8.9 %
-- Education 207 214 3.4 %
----------------------------------------------------------------------
TOTAL 1,077 1,151 6.0 %
----------------------------------------------------------------------
*T
United Kingdom and Ireland
-0-
*T
In millions of euro 3 months 3 months Fiscal Organic growth
Fiscal 2006 2007 (1)
----------------------------------------------------------------------
-- Business & Industry 238 264 10.0 %
-- Healthcare 52 59 13.8 %
-- Education 43 42 -4.2 %
----------------------------------------------------------------------
TOTAL 333 366 8.8 %
----------------------------------------------------------------------
*T
(1) Organic growth: increase in revenues at constant consolidation
scope and exchange rates.
-- Annex 3: Selection of new clients
Foodservices & Facilities Management
North America
Business & Industry
Alcatel, Canada, (2,000 employees, foodservices); General Electric
Nuclear Energy, Wilmington, North Carolina, (1,970 employees,
foodservices); USAA, multiple sites, (20,000 employees, foodservices)
Healthcare and Seniors
Pincecrest Community, Mount Morris, Illinois, (215 beds,
foodservices); Sheppard Pratt Health System, Baltimore, Maryland (322
beds, foodservices); Miriam Hospital Providence, Rhode Island, (208
beds, foodservices); Landmark Medical Center, Woonsocket, Rhode
Island, (255 beds, facilities management)
Education
Clayton University, Morrow, Georgia, (5,600 students,
foodservices); State University of New York-Buffalo, New York, (27,000
students, facilities management); National Heritage Academy, Grand
Rapids, Michigan, (52 schools, 26,000 students, foodservices and
facilities management); Gary Community School Corporation, Gary,
Indiana, (34 schools, 17,000 students, foodservice); Mariposa County
USD, Mariposa, California, (14 schools, 2,600 students, foodservices);
Lafayette Academy, New Orleans, Louisiana, (750 students,
foodservices)
Continental Europe
Business & Industry
Alcatel Montaigne, France (2,000 employees, foodservices); IBM
Brondby, Denmark (900 employees, foodservices); BPS Westpoint,
Netherlands (600 employees, foodservices)
Healthcare and Seniors
Clinique Saint Jean Languedoc, France (300 beds, foodservices);
Grand Hotel Philadelphia, Netherlands (100 people, foodservices)
Education
University of Milan, Italy (200 customers, foodservices); Lidingo
Stad, Sweden (2,500 people, foodservices)
UK & Ireland
Business & Industry
Royal Horticultural Society (Hampton Court Palace Flower Show),
Hampton, (170,000 visitors, food services); ING Bank, London, (1,300
employees, facilities management); United Biscuits, head office in
Hayes and 11 manufacturing sites, (7,500 employees, food services);
GlaxoSmithKline, five R&D sites (laboratory services)
Rest of the World
Business & Industry
CMPC Celulosa , three sites, Chile (1,300 employees, foodservices
and facilities management); Rio Tinto, Madagascar (750 employees, camp
construction and camp management services); BP Shorebase Camp,
Indonesia (150 employees, camp construction and maintenance services);
Fluor O&M, Quatar (3,700 employees, camp operation and maintenance
services); Unilever China Head Office, Shanghai, China (1,000
employees, foodservices); Tianjin Faw Toyota Motor, China (2,300
employees, foodservices); No 3 bund, Shanghai, China (700 employees,
foodservices); Rittal Electro-Mechanical Technology, Shanghai, China
(800 employees, foodservices)
Healthcare and Seniors
Hospital Sao Lutz, Brazil (250 beds, foodservices), Caritas
Medical Centre, Hong Kong (1,000 beds, foodservices)
Service Vouchers and Cards
Latin America :
Argentina: Philip Morris (Meal Pass, 60 beneficiaries); Torneos y
Competencias (Food Pass, 350 beneficiaries), Brazil: ADP (Food Pass,
780 beneficiaries), Banco de eventos (Meal Pass, 790 beneficiaries),
Casa Bahia Comercial (Meal Pass, 1,770 beneficiaries), Instituto Paulo
Freire (Food Pass, 3,970 beneficiaries), Colombia: Teledatos (Mobility
Pass, 525 beneficiaries); Telmex (Motivation Pass, 50 beneficiaries),
Mexico: Skyworks (Food Pass, 2,01O beneficiaries); Conagua (Mobility
Pass, 165 beneficiaries); Peru: Caja Sur (Food Pass, 150
beneficiaries); Venezuela: M G H Proteccion Integral (Food Pass, 1,260
beneficiaries), Venevision (Food Pass, 1,700 beneficiaries), Orinoco
Iron (Food Pass, 755 beneficiaries)
Asia :
India: Bhillai Steel Plant (Gift Pass, 37,450 beneficiaries), Ford
(Gift Pass, 2,800 beneficiaries), JP Morgan Chase (Meal Pass, 1,950
beneficiaries); Indonesia: Honda (Gift Pass, 12,100 beneficiaries);
Philippines: Accenture (Gift Pass, 5,000 beneficiaries), Siemens(Gift
Pass, 300 beneficiaries)
Central Europe:
Bulgaria: Bulyard (Food Pass, 1,300 beneficiaries); Danone (Food
Pass, 400 beneficiaries); Piccadilly (Gift Pass, 1,600 beneficiaries);
Hungary: MAV (Gift Pass, 3,000 beneficiaries); Poland: Kopalnia
Wegla Kamiennego "Boleslaw Smialy" (Gift Pass, 1,460 beneficiaries),
SAP (Education & Leisure Pass, 170 beneficiaries), Lidl (Gift Pass,
7,660 beneficiaries), Mittal Steel (Gift Pass, 800 beneficiaries);
Romania: Centrul de transfuzie sanguina (Food Pass, 2,450
beneficiaries), Sind Romania (Food Pass, 1,475 beneficiaries),
Slovakia: T-mobile (Holiday Pass, 1,200 beneficiaries), Yazaki (Gift
Pass, 1,700 beneficiaries)
Western Europe:
Belgium: Kristelijke Medico-Sociale Institut (Meal Pass, 780
beneficiaries); France: Adecco (Gift Pass, 12,630 beneficiaries);
Volvo Europa Truck (Sport et culture, 2,425 beneficiaries); KBC bank
(Meal Pass, 2,000 beneficiaries);
Italy: Ferrovie Nord (Meal Pass, 1,500 beneficiaries); LENORD
(Meal Pass, 2,000 beneficiaries); Spain: Motor Press (Meal Pass, 375
beneficiaries)
Turkey: Sosyal Yardimlasma ve Dayanisma Vakfi (Assistance Pass,
1,760 beneficiaries)
