PARIS--(BUSINESS WIRE)--Regulatory News:
Sodexo (PARIS:SW) (OTCBB:SDXAY), world leader in Quality of Life Services, today announced consolidated revenues for the first Quarter of Fiscal 2012, which ended November 30, 2011.
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Revenue by activity and geographic region |
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| In millions of euro |
Q1 Fiscal |
Q1 Fiscal |
Organic |
Currency |
Acquisitions |
Total change |
||||||||||||||||||||||
| -- North America | 1,771 | 1,733 | + 4.9 | % | - 2.7 | % |
|
+ 2.2 | % | |||||||||||||||||||
| -- Continental Europe | 1,466 | 1,436 | + 1.5 | % | - 0.2 | % | + 0.8 | % | + 2.1 | % | ||||||||||||||||||
| -- UK and Ireland | 357 | 315 | + 14.3 | % | -1 | % | + 0.1 | % | + 13.4 | % | ||||||||||||||||||
| -- Rest of the World | 847 | 623 | + 19.3 | % | - 3.6 | % | + 20.0 | % | + 35.7 | % | ||||||||||||||||||
| On-site Service Solutions | 4,441 | 4,108 | + 6.6 | % | - 1.8 | % | + 3.3 | % | + 8.1 | % | ||||||||||||||||||
| Motivation Solutions | 175 | 164 | + 12 | % | - 5 | % | 7 | % | ||||||||||||||||||||
| Intra-group eliminations | - 4 | - 4 | ||||||||||||||||||||||||||
| Consolidated total | 4,612 | 4,268 | + 6.8 | % | - 1.9 | % | + 3.2 | % | + 8.1 | % | ||||||||||||||||||
Organic growth: increase in revenues at constant consolidation scope and excluding exchange rate effects.
Commenting on the figures Sodexo CEO Michel Landel said:
"While the global economic environment remains volatile, revenues for the first three months of Fiscal 2012 reflect dynamic sales activity and are in line with our objectives for the year. This growth is mainly a result of the excellent performance of the Motivation Solutions activity and in On-site Service Solutions, of the solid efforts of our teams in Latin America, Asia, Australia and Remote Sites. In addition, for the third consecutive time, we contributed to the success of the recent Rugby World Cup with the delivery of all hospitality services."
Acquisitions
For the first quarter of Fiscal 2012, two acquisitions made at the beginning of the year increased revenue by 3.2%.
Sodexo completed the acquisition of Puras do Brasil on September 6, 2011, becoming number one in Brazil’s fast growing On-site Service Solutions market.
On September 22, the Group also completed the acquisition in France of Lenôtre, which will enable Sodexo to expand its Prestige business portfolio in France and abroad, as well as its expertise in the luxury gastronomy business.
Finally Sodexo acquired Roth Bros on 30 November 2011, a company based in the U.S. that designs, manages and implements facility management services such as HVAC, energy management, building automation and control and maintenance of fluids and energy. Roth Bros will be consolidated in the group financial statements beginning December 1, 2011.
The integration of these acquisitions is proceeding in line with expectations.
Financing for the three acquisitions represents less than one year of operating cash flow for Sodexo.
Exchange rate fluctuations
The total revenue increase was 8.1% compared with the same period last year and reflects a negative currency impact of 1.9%. The negative currency impact is primarily related to the weakening of the U.S. dollar and Brazilian real against the euro.
It should be noted that, unlike exporting companies, revenues and operating expenses of Sodexo subsidiaries are denominated in the same currency; consequently, foreign exchange fluctuations do not create operational risk.
Organic growth analysis
| In millions of euro |
First quarter |
First quarter |
Organic growth | ||||||||||
| Corporate | 2,227 | 1,928 | + 9.9 | % | |||||||||
| Health Care and Seniors | 1,053 | 1,035 | + 3.8 | % | |||||||||
| Education | 1,161 | 1,145 | + 3.6 | % | |||||||||
| Total On-site Service Solutions | 4,441 | 4,108 | + 6.6 | % | |||||||||
| Motivation Solutions | 175 | 164 | + 12 | % | |||||||||
| Eliminations | - 4 | - 4 | |||||||||||
| TOTAL | 4,612 | 4,268 | + 6.8 | % | |||||||||
On-site Service Solutions
Organic growth in On-site Service Solutions was + 6.6%.
Organic growth of nearly 10% in Corporate reflects the contribution of the hospitality contract for the Rugby World Cup, held in September and October 2011 in New Zealand, and an excellent rate of development in the Rest of the World (Latin America, Asia and Remote Sites), where organic growth was close to 20%.
Organic growth in Health Care and Seniors and in Education, + 3.8% and + 3.6% respectively, was slightly higher than the growth rate for the previous year.
Motivation Solutions
For the first time since the fourth quarter of Fiscal 2009, organic revenue growth achieved double-digits, at + 12%, reflecting the excellent performance of teams in Latin America as well as a return to growth in Europe, thanks to favorable development in France.
Organic growth in On-site Service Solutions
|
North America |
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| In millions of euro |
First quarter |
First Quarter |
Organic growth | ||||||||||
| Corporate | 339 | 331 | + 5.1 | % | |||||||||
| Health Care and Seniors | 609 | 595 | + 4.9 | % | |||||||||
| Education | 823 | 807 | + 4.7 | % | |||||||||
| TOTAL | 1,771 | 1,733 | + 4.9 | % | |||||||||
At + 5.1%, organic growth in Corporate remains solid. This performance notably reflects the success of comprehensive service solution offerings in a market where conditions remained unfavorable for foodservices, as well as the success of Remote Sites in Canada. New contracts signed include Bombardier Recreational Products in Canada.
In Health Care and Seniors, organic growth was + 4.9% with growth on existing sites driven by construction projects and extension of services such as the maintenance of medical imaging equipment. Among the new contracts won by Sodexo were Chilton Hospital (New Jersey), Huntington Memorial Hospital (Indiana), Parkview Regional Medical Center (Indiana) and Rapides Regional Medical Center (Louisiana).
Organic growth of + 4.7% in Education reflects the impact of public school contracts won during the previous year, such as the City of Detroit (Michigan) and Lewisville (Texas). Among new contracts signed during the first Quarter were Floyd County Consolidated School District (Indiana) and Saginaw Public Schools (Michigan).
|
Continental Europe |
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| In millions of euro |
First quarter |
First quarter |
Organic growth | ||||||||||
| Corporate | 848 | 817 | + 2.2 | % | |||||||||
| Health Care and Seniors | 351 | 348 | + 1.6 | % | |||||||||
| Education | 267 | 271 | - 0.7 | % | |||||||||
| TOTAL | 1,466 | 1,436 | + 1.5 | % | |||||||||
Organic growth in Corporate was + 2.2%, despite a particularly difficult economy and mainly resulted from comprehensive service offerings to large companies; as a recent example, the award of technical maintenance services to the Alcatel Group in France, Poland and Hungary.
In Health Care and Seniors, organic revenue growth was + 1.6%, and as in the previous year, reflected a modest increase on existing sites and low commercial development. However, the sale of new services to existing customers contributed to better on site growth in France. New contracts recently won include IRCCS Fondazione Don Gnocchi Firenze in Italy.
In Education, revenues declined slightly by 0.7% with the gain of the major contract for 314 schools in the city of Marseilles not fully offsetting the termination of the contract with the schools of the city of Nice, which is returning to self-operation. Commercial development, however, remained active and led to new contracts such as with the Universidad Politecnica de Cataluna (Spain).
|
UK and Ireland |
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| In millions of euro |
First quarter |
First Quarter |
Organic growth | ||||||||||
| Corporate | 266 | 222 | + 20.7 | % | |||||||||
| Health Care and Seniors | 56 | 58 | - 0.9 | % | |||||||||
| Education | 35 | 35 | - 0.5 | % | |||||||||
| TOTAL | 357 | 315 | + 14.3 | % | |||||||||
During the first quarter, Sodexo, in partnership with Mike Burton Group (specialist in sporting events management and travel packages), generated revenues of around 52 million euro from the hospitality contract for the Rugby World Cup held in September and October 2011 in New Zealand. This contributed significantly to the 20.7% increase in Corporate. Excluding this event, the pattern of activity remained unchanged compared with the previous year.
The decrease of 0.9% in Health Care and Seniors mainly reflects the lack of commercial development linked to slower decision-making by public sector clients at the beginning of last year.
Finally, revenue in Education declined slightly by 0.5%.
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Rest of the World |
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| In millions of euro |
First quarter |
First quarter |
Organic growth | ||||||||||
| Corporate | 773 | 557 | + 19.8 | % | |||||||||
| Health Care and Seniors | 38 | 34 | + 14.9 | % | |||||||||
| Education | 36 | 32 | + 15.8 | % | |||||||||
| TOTAL | 847 | 623 | + 19.3 | % | |||||||||
At 19.3%, growth in the Rest of the World (Latin America, Africa, Middle East, Asia, Australia and Remote Sites) continued to accelerate, driven in particular by the very solid activity in Brazil, China and India and by Sodexo’s strong position in the mining sector in Australia, Africa and Latin America. Sodexo won several contracts including Siemens in Colombia and ACC-POSCO and Samsung in the UAE.
Finally, Sodexo's expertise in Health Care and Education resulted in several new contract awards including Clinica Manquehue in Chile, Fuxing Hospital in China, National University Hospital in Singapore and International School of Macau in China.
Motivation Solutions
| Issue volume | |||||||||||||
| In millions of euro |
First quarter |
First quarter |
Organic growth | ||||||||||
| Latin America | 1,643 | 1,483 | + 17.8 | % | |||||||||
| Europe and Asia | 2,016 | 1,892 | + 8.5 | % | |||||||||
| TOTAL | 3,659 | 3,375 | + 12.6 | % | |||||||||
| Revenues | |||||||||||||
| In millions of euro |
First quarter |
First quarter |
Organic growth | ||||||||||
| Latin America | 95 | 86 | + 17.7 | % | |||||||||
| Europe and Asia | 80 | 78 | + 5.7 | % | |||||||||
| TOTAL | 175 | 164 | + 12 | % | |||||||||
Organic revenue growth for Motivation Solutions was 12%, a result of the achievements of Sodexo teams in Latin America as well as an improvement in Europe and Asia.
In Latin America, face value (especially in Brazil and Venezuela) continued to be a positive factor but growth resulted primarily from the increase in the number of beneficiaries, driven by the level of economic activity and job creation, particularly in Brazil. The recent drop in interest rates in Brazil had no impact on first quarter performance.
In Europe, the recovery in activity over the previous year reflected a particularly strong performance in France linked to the timing of gift voucher sales for Christmas and to commercial successes of the previous year.
Recent commercial successes include the Bulgarian Post Office and Railways, BASF in Brazil and Empresas La Polar in Chile.
Social and environmental responsibility
During the last months of 2011, Sodexo was integrated into the Vigeo ASPI Index that recognizes the best performances in terms of sustainable development and which includes the 120 top-rated listed companies in the euro zone based on Vigeo ratings in six assessment areas: Environment, Human Rights, Human Resources, Societal Commitment, Market Behaviors and Corporate Governance.
In addition, Sodexo signed an international framework agreement on December 12, 2011 with the IUF (International Union of Food Workers) confirming Sodexo’s commitments to respecting fundamental rights at work and, specifically, the right of association and collective bargaining. This agreement is unique in the Group’s industry sector, providing a framework for ongoing relations with the IUF and Sodexo employee representatives. It tangibly illustrates Sodexo's commitment to respect employee rights of association and expression, an essential factor for promoting dialogue, internal cohesion and progress. This agreement does not replace national negotiations or pre-existing agreements.
Principal risks and uncertainties
The principal risks and uncertainties identified by the Group in the "Risk factors" section of the Fiscal 2011 Reference Document filed with the AMF on November 10, 2011 have not undergone any significant change.
Confirmation of objectives for Fiscal 2012
The Group confirms the objectives for Fiscal 2012 set last November:
- Organic revenue growth between 5% and 8%.
- To this growth should be added an approximate 4% contribution to consolidated revenues from recent acquisitions (Puras do Brasil, Lenôtre and Roth Bros);
- Operating profit growth of around 10%, excluding currency changes and the positive exceptional impact on the accounting treatment of pensions (1).
(1) In conformity with new regulations in effect in the United Kingdom, the Group decided at the end of October to calculate future price indexation using the consumer price index (CPI), thus replacing the retail price index, in determining retirement benefits that Sodexo UK will be required to pay to certain members of its retirement plan. The retrospective effect of this change will result in a favorable adjustment to operating profit in the first half of Fiscal 2012.
Upcoming financial communications
- General Shareholders Meeting: January 23, 2012
- Payment of dividend for Fiscal Year 2011: February 6, 2012
- First Half Fiscal 2012 results: April 19, 2012.
- Fiscal 2012 first nine months revenues: July 10, 2012
Conference call and Internet webcast
Sodexo will hold a conference call (in English) today at 8:30 a.m. (Paris time), to comment on revenue for the first three months of Fiscal 2012. The presentation can be followed via webcast at www.sodexo.com. The press release and the presentation will be available on the Group website: www.sodexo.com under the "latest news" section beginning at 7:00 a.m. A recording of the conference will be available by dialing +44 (0) 1452 550 000, followed by the pass code 40 60 26 84 #.
About Sodexo
Sodexo, world leader in Quality of Life Services
Quality of Life plays an important role in the progress of individuals and the performance of organizations. Based on this conviction, Sodexo acts as a partner for companies and institutions that place a premium on performance and employee well-being, as it has since Pierre Bellon founded the company in 1966. Sharing the same passion for service, Sodexo’s 413,000 employees in 80 countries design, manage and deliver an unrivaled array of Quality of Life Services. Sodexo has created a new form of service business that contributes to the fulfillment of its employees and the economic, social and environmental development of the communities, regions and countries in which it operates.
Key figures (as of August 31, 2011)
16 billion euro consolidated revenue
413,000 employees (including acquisitions made between August 31 and December 31, 2011)
22nd largest employer worldwide (ranking as of August 31, 2011)
80 countries
33,400 sites
50 million consumers served daily
8.8 billion euro market capitalization (as of January 10, 2012)
Appendix 1
Selection of new clients
On-site Service Solutions
Corporate
AGA AB, Stockholm, Sweden (750 people)
Agilent Technologies International Pvt. Ltd, Gurgaon, Haryana, India (1,100 people)
Alcatel, France (10 sites), India, Eastern Europe
Bayer Materialscience, Shanghai, China (2,000 people)
Bombardier Recreational Products, Quebec, Canada (2,500 people)
Citibank, Hong Kong, China (450 people)
Concor Buropark, Aschheim, Germany (1,300 people)
Ernst and Young, Courbevoie, France (2,500 people)
GE Aviation, Southampton, United Kingdom (900 people)
Generali, Berlin and Hamburg, Germany
Lilly Deutschland, Bad Homburg, Giess, Germany (650 people)
Mattel Toys Technical Consultancy, Shenzhen, China (1,000 people)
Renault Nissan Technology & Business Centre India Private Ltd, Tamil Nadu, India (1,500 people)
Sanofi Aventis, Paris, France (1,000 people, 650 meals/day)
Siemens, 2 sites in Bogota, Colombia (1,700 people)
Technopolis Ruoholahti & Galaksi, Helsinki & Oulu, Finland (800 people)
Telenor, Copenhagen and Aalborg, Denmark (800 people)
Tresmontes Lucchetti, 4 sites (Casablanca, Valparaíso and 2 in Santiago), Chile (1,150 people)
Health Care and Seniors
Beijing Anding Hospital, Beijing, China (900 people)
Chilton Hospital, Pompton Plains, New Jersey, USA (260 beds)
Clinica Manquehue Oriente, Vitacura, Chile (100 beds, 300 meals)
Clinique Lambert, Garenne Colombes, Paris, France (170 beds)
Fuxing Hospital, Beijing, China (900 people)
Huntington Memorial Hospital, Huntington, Indiana, USA (500 beds)
IRCCS Firenze Fondazione Don Gnocchi, Florence, Italy (170 beds)
Mont Fleuri Maison de Sainte Grasse, Grasse, France (170 beds)
Parkview Regional Medical Center, Fort Wayne, Indiana, USA (500 beds)
Rapides Regional Medical Center, Alexandria, Louisiana (325 beds)
Welsh Purchasing Consortium, South Wales, United Kingdom (6 local authorities)
Education
Floyd County Consolidated School District, New Albany, Indiana, USA (11,350 people)
International School of Macau, Hong Kong, China (935 people)
Saginaw Public Schools, Saginaw, Michigan, USA (9,500 people)
Universidad Politecnica de Cataluna, Barcelona, Spain (950 people)
Remote Sites
Aban Offshore LTD, Arabian Gulf (7 sites), UAE (530 people)
ACC – POSCO, Liwa, UAE (1,800 people)
Aceriaz Paz del Rio Belencito – Bog, Belencito (3 sites), Colombia (1,450 people)
Astaldi Ozkar, Bid-bid/Sur, Oman (1,600 people)
Bloom Lake Iron Ore Mine, Québec, Canada (800 people)
Constructora Belfi – Punta Arenas, Chile (400 people)
Ensco 5001, Offshore, Angola (180 people)
La Romaine Project KM 84, Québec, Canada (250 people)
RIGS-PL (POSEIDON), Offshore, Tanzania (180 people)
Rio Tinto, Simandou Mountains, Prefecture of Beyla, Guinea (600 people)
SAIPAR Karashaganak Project, Aksai, North West of Kazakhstan (220 people)
Samsung, Abu Dhabi, UAE (4,500 people)
Scarabeo 8, Norway (420 people)
Songa Eclipse, Angola (160 people)
West Elara, Norway (330 people)
Sports and Leisure
Almac Group, Craigavon, Ireland (1,200 people)
Department of Finance and Personnel (Clare House), Belfast, Ireland (1,200 people)
Headingley (Leeds Cricket Football and Athletic Company), Leeds, United Kingdom (28,000 spectator capacity per cricket match)
La Grotte Chauvet, Privas, France (over time 300,000 to 400,000 visitors/year)
Motivation Solutions
Europe
BT Services, Paris La Défense, France (970 beneficiaries)
Bulgarian Posts EAD, Sofia, Bulgaria (13,000 beneficiaries)
CE Adecco Nord Ouest, Villeurbanne, France
National Railway Infrastructure Company, Sofia, Bulgaria (14,000 beneficiaries)
SAN Ouest Provence, Istres, France (2,170 beneficiaries)
Latin America
BASF, Sao Paulo, Brazil (4,500 beneficiaries)
Companhia do Saneamento do Paraná, Curitiba, Brazil (6,825 beneficiaries)
Empresas La Polar, Santiago, Chile (4,450 beneficiaries)
Appendix 2
Exchange rate
The principal average exchange rates for the 1st Quarter Fiscal 2012 are:
- USD / Euro: 1.38
- Pound / Euro: 0.87
- Brazilian Real / Euro: 2.413