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Sodexho announces strong improvement in results for Fiscal 2007
11/15/2007
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- Acceleration in organic revenue growth, with an increase in organic growth from 4.3% to 8.4% over the last two fiscal years
- Operating profit up: + 14.5% versus Fiscal 2006, at constant exchange rates and excluding the gain of 21 million euro on Spirit Cruises divestiture and release of the 7 million euro provision for U.S. litigation that improved Fiscal 2006 results
- Net cash provided by operating activities improves from 488 to 753 million euro
- Proposed increase of 21% in the dividend per share
- Fiscal 2008 objectives: Organic revenue growth exceeding 7% and an operating profit increase of around 12% at constant exchange rates
Paris, Nov. 15, 2007 - The Sodexho Alliance (Euronext Paris FR0000121220 - SDXAY- OTC) Board of Directors met on November 13, 2007 under the chairmanship of Pierre Bellon to close the accounts for the year ended August 31, 2007.
Key financial performance indicators
IFRS accounting standards (in millions of euro) | Fiscal year ended August 31 | |||
2007 | 2006 | % change (current exchange rates) | % change (constant exchange rates) (1) | |
Income statement highlights | ||||
Revenue | 13,385 | 12,798 | 4.6% | 8.3% |
Organic growth | + 8.4% | + 6.4% | ||
Operating profit | 640 | 605 | 5.7% | 9.2% |
Operating profit (excluding Spirit and US litigation) | 640 | 577 | 10.9% | 14.5% |
Operating margin (excluding Spirit and US litigation) | 4.8% | 4.5% | ||
Net income | 347 | 323 | 7.5% | 11.0% |
Earnings per share (in euros) | 2.22 | 2.07 | 7.5% | 11.0% |
Financial structure highlights | ||||
Net cash provided by operating activities | 753 | 488 | ||
Reduction of net debt (2) | (331) | (234) | ||
Borrowings / operating cash flow (years) | 3.4 | 4.2 | ||
(1) The currency impact is calculated by applying the average exchange rates for the previous fiscal year to the current fiscal year figures. In Fiscal 2007, the effect of movements in the exchange rate of the US dollar against the euro was (434) million euro on revenue, (17) million euro on operating profit and (9) million euro on profit attributable to equity holders of the parent.
(2) Borrowings less cash and cash equivalents (restricted cash and financial assets related to the Service Vouchers and Cards activity).
Sodexho CEO, Michel Landel, said: "Our teams can be proud of these good results achieved in Fiscal 2007 which reflect the efforts of all employees throughout the world. This solid performance shows the relevance of our strategic choices and efficiency in their implementation. We intend to reinforce our position as a global expert in both Food and Facilities Management services and in Service Vouchers and Cards. To associate our employees with our growth, we intend to launch during 2008 a new international employee share ownership plan in 25 countries. The diversity of our teams and their strong motivation, the considerable potential of our markets and the strength of our financial model, make me particularly confident in our future.”
Acceleration in organic revenue growth in two years
Sodexho's consolidated revenue increased in Fiscal 2007 by 587 million euro over the previous year to reach 13,385 million euro. Development intensified in Food and Facilities Management services, illustrated by:
- An uplift in organic growth in North America (+ 8.8%) reflecting acceleration across all segments;
- Continued growth in Continental Europe (+ 5.1%);
- Confirmation of a return to growth in the UK (+ 6.1%)
- Further strong activity in the Rest of the World (+ 15.3%), with double-digit growth in Latin America, Asia-Australia and Remote Sites.
In addition, Service Vouchers and Cards confirmed its dynamic growth profile with organic revenue growth of 20.1%.
Improvement in performance indicators
During the year, the Group continued to implement its strategy:
- A client retention rate of 93.9%, in line with Fiscal 2006 (+ 0.1%); with good progress in North America, where the Group's 95% target was exceeded;
- Revenue growth on existing sites exceeded 5%;
- Business development (new contract wins) remained above 9%, reflecting good performance in all geographies.
Results from our most recent employee engagement survey, conducted every two years with employees worldwide, shows:
- Over 80% of our employees identify with Sodexho's values (Service Spirit, Team Spirit and Spirit of Progress)
- 83% would not hesitate to recommend Sodexho to a friend looking for a job.
Increase in operating profit
Operating profit increased 5.7% from the prior year to 640 million euro. It should be noted that operating profit from the previous year included a gain of 21 million on the divestiture in the U.S. of the river and harbor cruise business, Spirit Cruises and release of the 7 million euro provision for U.S. litigation following final resolution of the case;
Excluding these items, operating profit rose 10.9% at current exchange rates and 14.5% at constant exchange rates, surpassing the Group's objectives set at the beginning of the fiscal year.
The operating margin reached 4.8%, compared with 4.7% for Fiscal 2006, or 4.5% excluding the gain from Spirit Cruises and the effect of the US litigation provision release during the previous year.
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About Sodexho Alliance
SODEXHO ALLIANCE, founded in 1966 by Pierre Bellon, a world leader in Food and Facilities Management services, with more than 342,000 employees on 29,000 sites in 80 countries. For Fiscal 2007, which closed August 31, 2007, SODEXHO ALLIANCE had revenues of 13.4 billion euro. Listed on Euronext Paris, the Group's current market capitalization is more than 7.5 billion euro.
This press release contains statements that may be considered as forward-looking statements and as such may not relate strictly to historical or current facts. These statements represent management's views as of the date they are made and we assume no obligation to update them. You are cautioned not to place undue reliance on our forward looking statements.
