- Revenue growth +21.2%,
organic growth +16.9%, Q4 returned to pre-Covid level
- Underlying operating profit
margin +170 bps
- Retention at all-time high
and Development improving
- Fiscal 2023
guidance:
- Organic growth: +8 to +10%
- Underlying operating profit margin
close to 5.5%, at constant rates
Issy-les-Moulineaux, October 26, 2022 - Sodexo
(NYSE Euronext Paris FR 0000121220-OTC: SDXAY). At the Board of
Directors meeting held on October 25, 2022, chaired by Sophie
Bellon, the Board closed the Consolidated accounts for
Fiscal 2022, ended August 31, 2022.
Financial performance Fiscal 2022
(in millions of euro) |
FISCAL 2022 |
FISCAL 2021 |
DIFFERENCE |
DIFFERENCE CONSTANT RATES |
Revenue |
21,125 |
17,428 |
+21.2% |
+15.7% |
Organic growth |
+16.9% |
-5.6% |
|
|
UNDERLYING OPERATING PROFIT |
1,059 |
578 |
+83.3% |
+73.5% |
UNDERLYING OPERATING PROFIT MARGIN |
5.0% |
3.3% |
+170 bps |
+170 bps |
Other operating expenses |
(5) |
(239) |
|
|
OPERATING PROFIT |
1,054 |
339 |
+210.9% |
+199.1% |
Net financial expense |
(87) |
(106) |
|
|
Tax charge |
(264) |
(101) |
|
|
Effective tax rate |
27.5% |
43.9%1 |
|
|
NET PROFIT GROUP SHARE |
695 |
139 |
x5 |
x5 |
EPS (in euro) |
4.75 |
0.95 |
x5 |
|
UNDERLYING NET PROFIT |
699 |
346 |
x2 |
x2 |
UNDERLYING EPS (in euros) |
4.78 |
2.37 |
X2 |
|
Commenting the performance, Sodexo Chairwoman and CEO
Sophie Bellon said:
“All our activities delivered a strong recovery in Fiscal 2022.
Growth in Benefits & Rewards Services accelerated and On-site
Services margins improved, despite the inflationary backdrop. Net
new business was strong, and retention was at an all-time high. Our
balance sheet has also been strengthened significantly.
Good progress has been made on the priorities I set out at the
beginning of the year: North America generated strong growth,
improved profitability and its retention and development improved
significantly. We accelerated the transformation of our food models
through several organic and external investments while also
actively managing our portfolio of activities. The transfer of
P&L responsibility to regions and countries, fully effective
from October 1, 2022, will simplify the organization.
I warmly thank our teams for their impressive engagement and
performance in the field with our clients and our suppliers in
these challenging times.
We expect that our financial performance will return to Fiscal
2019 levels this year. I am confident that for Fiscal 2023, we can
achieve +8 to +10% organic growth and a margin close
to 5.5%.”
Highlights of Fiscal 2022
- Fiscal 2022 consolidated revenues
reached 21.1 billion euros, up +21.2% year-on-year, driven by
organic growth of +16.9%, a net contribution from acquisitions and
disposals of -1.2% and a strong positive currency impact of
+5.5%.
- On-site
Services organic revenue growth was up +17.0%. The
recovery continued sequentially throughout the year, leading to a
return to 99% of Fiscal 2019 level in the fourth quarter, with
Business & Administrations back to over 100%. The key elements
of the year were:
- In Business
& Administrations, organic growth was
+22.7%. This was driven by ongoing growth in
Energy & Resources and Government & Agencies, the recovery
of Sports & Leisure in the second half as events and
conventions picked up strongly and Corporate Services benefiting
from a solid return to the office. The trend in the last two months
of the year was in line with our Work from Home estimates made in
2020 and we anticipate further improvement.
- In
Healthcare & Seniors, organic growth was
+4.0%. Our performance was driven by pricing,
cross-selling and the progressive recovery of hospital retail sales
and Seniors’ occupancy. This was partially offset by the early
closure of the Testing centers in the UK at the end of March.
- In
Education, organic growth was
+22.0%, following the strong post-Covid recovery
in activity in Universities and Schools in North America, China and
India.
- Significant
improvement in key performance indicators:
- Client
retention rate was 94.5%, +140 bps higher than the
previous year. This record performance was the result of an
improvement in almost all regions, especially in North America. In
France, difficult inflation negotiations, particularly in public
sector Schools, led to some contract exits.
- New sales
development was up +150 bps at 7.5%, with a solid
contribution from all segments. Total development, including
cross-selling, was 1.5 billion euros. The year ended strongly with
the win of the Ardent healthcare services contract to supply
patient and staff dining, nutrition counselling, retail and
environmental services (incl. Protecta®) to 50 locations
across six States, employing 1,500 Sodexo employees.
- As a result, the
net new business signed during the year was
positive for the first time in several years.
- Benefits
& Rewards Services delivered organic growth of +14.2%.
Employee benefits organic growth was +18.7% and accelerated
sequentially through the year, reaching +23.1% in the fourth
quarter. Issue volume increased +16.2%, boosted by strong net new
business leveraging digital products and enhanced sales efficiency,
as well as face value increases. Financial revenues were also up
strongly supported by rising interest rates, particularly in Latin
America and Eastern Europe.
- Underlying
operating profit was 1,059 million euros, up +83.3%.
- Underlying
operating margin was 5.0%, up +170 bps. This significant
improvement was a result of the strong recovery in volumes, the
benefit of the GET efficiency program, and effective actions to
mitigate inflation through indexation, contract renegotiations and
productivity. The improvement was across both On-Site, up +160 bps
to 4.6%, and Benefits & Rewards up +370 bps to 28.6%.
- Other
operating expenses (net) amounted to 5 million euros in
Fiscal 2022, compared to 239 million euros in the previous year.
Restructuring costs fell to 10 million euros and gains on the sale
of assets more than off-set losses.
- The
Effective tax rate returned to a more normal level
of 27.5% compared to 43.9% in the previous year.
- Net income
Group share multiplied by five to reach 695 million euros,
versus 139 million euros in Fiscal 2021. EPS was
4.75 euros versus 0.95 euro in Fiscal 2021.
- Underlying
net profit doubled to 699 million euros, compared to
346 million euros in Fiscal 2021. Underlying EPS was 4.78
euros, double the previous year.
- The Board of
Directors has proposed a dividend of 2.40€, up
+20% compared to Fiscal 2021, in line with our policy of a pay-out
ratio of 50% of Underlying net profit.
- Free cash
flow was strong at 631 million euros compared to
483 million euros in Fiscal 2021, despite some non-recurring
elements including the unwinding of government payment delays,
significant restructuring costs, reimbursement of Tokyo Olympics
hospitality packages and an exceptional contribution to the United
Kingdom pension funds. Cash conversion was 91%, below the normal
level of 100%, but including 363 million euros of negative
non-recurring elements.
- Net
debt reduced to 1.3 billion euros from 1.5 billion
euros at end Fiscal 2021. Gearing2 fell to 28.7% and the net
debt ratio2 fell to 1.0x compared to 1.7x at the end of Fiscal
2021. Our debt ratios have now returned to the bottom end of our
target range.
- In Fiscal 2022,
further progress has been made towards our 2025 CSR
objectives. In particular,
- The
business value benefiting SMEs rose +13% to 7.8
billion euros; we are well on track to reach the 10 billion euros
target for 2025.
-
Food waste reduction was -41.5%
lower. While the reduction is lower than in Fiscal 2021, this
indicator is now managed and measured across 1,873 sites compared
to 878 last year. The Group remains on track to reduce food
waste by 50% on 85%3 of our sites by 2025.
- As a people company,
Lost time incident rate (LTIR) is an important indicator which we
monitor closely. In Fiscal 2022, the LTIR reached 0.65, down by
-8.5% year-on-year.
- Progress on our
Strategic priorities:
- Boost US
growth: We delivered a strong improvement in operational
execution and sales development in North America
- Improved retention to over 96%, up +400
basis points, our best performance in 10 years
- Improved development by +400 basis
points
- Strong
Cross-selling
- Increased first-time outsourcing
contracts: 44% of signatures in Fiscal 2022
-
Accelerate the food model transformation:
- Deployed more new
food model brands and offers with targeted investments
- Developed new client relationships
with high-end brands
- Acquired companies to develop
convenience offer, such as Frontline Food services and
VendEdge.
- Transformed production &
logistics with off-site production units.
- Advanced Food Models represented 6% of
Global Corporate Services food revenues in 2022.
-
Manage our portfolio more actively:
- Completed several strategic
acquisitions and investments in key activities:
- in North America and China to
accelerate Advanced Food Model capabilities;
- In GPOs, to strengthen Entegra
Europe;
- In Asia-pacific, Technical equipment
management services to develop the range of services.
- Continued the disposal of non-core
activities and geographies which reduced the Group’s presence from
56 countries to 53.
-
Enhance the effectiveness of our organization:
- In On-Site Services, the process to
transfer end-to-end P&L management to the regions and the
countries regrouped into three geographic zones (North America,
Europe and the Rest of the World) was fully effective from October
1, 2022.
- In Benefits & Rewards Services, a
dedicated governance process has been put in place to closely
monitor the implementation of the new strategic plan and provide
guidance. For the first time, Benefits & Rewards Services now
has its own published objectives.
- Changes in
the Board of Directors
- The renewal of
Véronique Laury, Luc Messier and Cécile Tandeau de Marsac, as
independent directors, will be proposed at the next Shareholders
Meeting.
- Sophie Stabile’s
mandate will not be renewed at the next Shareholders Meeting. The
Board warmly thanks Sophie Stabile for her extensive contribution
to the Board’s discussions over the past four years, in particular
for her active participation as Chairwoman of the Audit Committee
and member of the Compensation Committee.
- Jean-Baptiste
Chasseloup de Chatillon, independent director who joined the Board
and the Audit Committee in 2021, will become Chairman of the Audit
Committee. Luc Messier will also join the Audit committee which
will ensure that independent members comprise 75% of its
membership.
- Federico J.
González Tejera, independent director, will join the Compensation
Committee. As a result, the Committee will remain 100%
independent.
- Patrice de Talhouët
will be proposed as a new member of the Board. Patrice de Talhouët
joined Bellon SA as Managing Director earlier this year. He has
more than 20 years of international experience and has had senior
finance roles at significant family-controlled businesses such as
Mars, Coty and JAB. Recently he was Finance Director of Coty, the
cosmetics group quoted in New York and subsequently, European
Director for JAB’s consumer fund, Coty’s holding company.
- Should all the
resolutions concerning the appointment and reelection of Board
members be approved at the Shareholders Meeting, the Board will be
made up of six women and six men and 60% of its elected members
will be independent.
Outlook
For the Group, given that On-Site activity in the fourth
quarter was in line with pre-pandemic levels, we expect revenues
and margins for Fiscal 2023 to return to Fiscal 2019
levels.
As a result,
- Fiscal 2023
organic revenue growth expected to be between +8 and +10%
driven by:
- Further recovery in Corporate Services
and Sports & Leisure;
- Positive net new business momentum
including expected further improvement in retention;
- Inflationary pricing at 4-5%;
- Partially offset by the impact of the
end of the Testing centers contract in the UK (-100 bps).
- Fiscal 2023
Underlying operating profit margin close to 5.5%, at constant
rates, supported by:
- Continued price increases and inflation
mitigation action plans;
- Operational excellence including supply
chain efficiencies;
- Further ramp-up in volume;
- Increased investment to sustain
growth.
For the first time, we are providing specific guidance
for Benefits & Rewards Services:
- Organic growth of +12 to
+15% for Fiscal 2023, driven by:
- Further progress in new business,
cross-selling and retention;
- Strong demand in all regions;
- Benefits from inflation and higher
interest rates.
- Underlying operating profit
margin around 30% at constant rates for Fiscal 2023,
supported by:
- The benefits of the topline growth
flow-through;
- Increased investment in technology,
digital offers, brand and sales & marketing.
Conference call
Sodexo will hold a conference call in (English) today at
9:00 a.m. (Paris time), 8:00 a.m. (London time) to comment on its
Fiscal 2022 results.
- If you are calling from the UK /
International, please dial: +44 (0) 121 281 8004
- If you are calling from France, please
dial: +33 (0) 1 70 91 87 04
- If you are calling from the USA, please
dial: +1 718 705 8796Access Code: 90 44 11
A live audio webcast is also available
on www.sodexo.com
The press release, presentation and webcast will be available on
the Group website www.sodexo.com in both the “Latest News” section
and the “Finance – Financial Results”
Fiscal 2023 financial calendar
2022 Capital Markets Day |
November 2, 2022 |
Fiscal 2022 Annual Shareholders Meeting |
December 19, 2022 |
Fiscal 2023 First quarter Revenues |
January 6, 2023 |
Fiscal 2023 First half Results |
April 5, 2023 |
Fiscal 2023 Third quarter Revenues |
June 30, 2023 |
Fiscal 2023 Annual Results |
October 26, 2023 |
Fiscal 2023 Annual Shareholders Meeting |
December 15, 2023 |
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 Quality of Life Services, an essential factor in
individual and organizational performance. Operating in 53
countries, our 422,000 employees serve 100 million consumers
each day. Sodexo Group stands out for its independence and its
founding family shareholding, its sustainable business model and
its portfolio of activities including Food Services, Facilities
Management Services and Employee Benefit Solutions. We provide
quality, multichannel and flexible food experiences, but also
design attractive and inclusive workplaces and shared spaces,
manage and maintain winfrastructure in a safe and environmentally
friendly way, offer personalized support for patients or students,
or even create programs fostering employee engagement. From Day 1,
Sodexo has been focusing on tangible everyday gestures and actions
through its services in order to have a positive economic, social
and environmental impact over time. For us, growth and social
commitment go hand in hand. Creating a better everyday for everyone
to build a better life for all is our purpose.
Sodexo is included in the CAC Next 20, CAC 40 ESG, FTSE 4 Good
and DJSI indices.
Key figures
- 21.1 billion euros in Fiscal 2022
consolidated revenues
- 422,000 employees as at August 31,
2022
- #2 France-based private employer
worldwide
|
- 53 countries
- 100 million consumers served daily
- 12.8 billion euro in market
capitalization (as at October 25, 2022)
|
Contacts
Analysts
and Investors |
Media |
Virginia
Jeanson+33 1 57 75 80 56virginia.jeanson@sodexo.com |
Mathieu
Scaravetti+33 6 28 62 21 91mathieu.scaravetti@sodexo.com |
_________________
1 Underlying ETR 28.3%
2 See Alternative Performance Measures definitions
3 Based on raw material costs
1
|
Fiscal 2022 Activity
Report |
1 Fiscal year performance
1.1 Consolidated income
statement
(in million euros) |
FISCAL 2022 |
FISCAL 2021 |
DIFFERENCE |
DIFFERENCE CONSTANT RATES |
Revenue |
21,125 |
17,428 |
+21.2% |
+15.7% |
UNDERLYING OPERATING PROFIT |
1,059 |
578 |
+83.3% |
+73.5% |
UNDERLYING OPERATING PROFIT MARGIN |
5.0% |
3.3% |
+170 bps |
+170 bps |
Other operating expenses |
(5) |
(239) |
|
|
OPERATING PROFIT |
1,054 |
339 |
+210.9% |
+199.1% |
Net financial expense |
(87) |
(106) |
|
|
PRE-TAX PROFIT excluding share of profit from Equity method
companies |
960 |
229 |
|
|
Tax charge* |
(264) |
(101) |
|
|
NET INCOME GROUP SHARE |
695 |
139 |
+400.0% |
+380.2% |
EPS (in euro) |
4.75 |
0.95 |
+398.9% |
|
UNDERLYING NET PROFIT |
699 |
346 |
+102.0% |
+92.0% |
Underlying EPS (in euro) |
4.78 |
2.37 |
+101.8% |
|
* Fiscal 2022 effective tax rate is 27.5%, compared to an
ETR of 43.9% or an underlying ETR of 28.3% in Fiscal 2021.
1.2 Currency effect
Exchange rate fluctuations do not generate operational risks,
because each subsidiary bills its revenues and incurs its expenses
in the same currency. However, given the weight of the
Benefit & Rewards activity in Brazil, and the high level
of its margins relative to the Group, when the Brazilian real
declines against the euro, it has a negative effect on the
Underlying operating margin due to a change in the mix of margins.
Conversely, when the Brazilian real strengthens Group margins
increase.
1€= |
AVERAGE RATE FY 2022 |
AVERAGE RATE FY 2021 |
AVERAGE RATE FY 2022VS. FY
2021 |
CLOSING RATE AT 08/31/2022 |
CLOSING RATE AT 08/31/21 |
CLOSING RATE 08/31/2022 VS.
08/31/2021 |
U.S. dollar |
1.101 |
1.197 |
+8.7% |
1.000 |
1.183 |
+18.3% |
Pound Sterling |
0.846 |
0.878 |
+3.7% |
0.860 |
0.859 |
-0.2% |
Brazilian real |
5.772 |
6.441 |
+11.6% |
5.148 |
6.139 |
+19.2% |
The +5.5% positive impact of currencies on Fiscal 2022 revenues
is linked to the weakness of the euro against most currencies. In
particular, the U.S. dollar, which was up +8.7% and the Brazilian
real up +11.6%. The impact of currency mix on the Underlying
operating margin was negligible.
Sodexo operates in 53 countries. The percentage of total
revenues and Underlying operating profit denominated in the main
currencies are as follows:
FISCAL 2022 |
% OF REVENUES |
% OF UNDERLYING OPERATING PROFIT |
U.S. dollar |
40% |
47% |
Euro |
24% |
-2% |
UK pound Sterling |
10% |
10% |
Brazilian real |
5% |
17% |
The currency effect is determined by applying the previous
year’s average exchange rates to the current year figures.
1.3 Revenues
REVENUES BY ACTIVITY |
REVENUES(in million euros) |
FISCAL 2022 |
FISCAL 2021 |
|
RESTATED ORGANIC GROWTH* |
|
ORGANIC GROWTH |
EXTERNAL GROWTH |
CURRENCY EFFECT |
TOTAL GROWTH |
Business & Administrations |
11,167 |
8,884 |
|
+22.7% |
|
+22.7% |
-1.8% |
+4.8% |
+25.7% |
Healthcare & Seniors |
5,459 |
4,762 |
|
+4.0% |
|
+8.1% |
+0.5% |
+6.0% |
+14.6% |
Education |
3,637 |
3,041 |
|
+22.0% |
|
+14.3% |
-2.5% |
+7.7% |
+19.6% |
ON-SITE SERVICES |
20,263 |
16,687 |
|
+17.0% |
|
+17.0% |
-1.3% |
+5.7% |
+21.4% |
BENEFITS & REWARDS SERVICES |
865 |
745 |
|
+14.2% |
|
+14.2% |
-0.6% |
+2.6% |
+16.2% |
Elimination |
(3) |
(3) |
|
|
|
|
|
|
|
TOTAL GROUP |
21,125 |
17,428 |
|
+16.9% |
|
+16.9% |
-1.2% |
+5.5% |
+21.2% |
* As part of the streamlining of the organization in certain
regions, some contracts or operations have been reallocated between
segments, with main impacts being in Europe from Education to
Healthcare & Seniors. |
Fiscal 2022 consolidated revenues reached 21.1 billion euros, up
+21.2% year-on-year, driven by organic growth of +16.9%, a net
contribution from acquisitions and disposals of -1.2% and a strong
positive currency impact of +5.5%.
ON-SITE SERVICES
Fiscal 2022 On-site Services organic revenue growth was up
+17.0%. The recovery continued throughout the year quarter by
quarter. By the fourth quarter, Business & Administrations were
back up over 100% of the 2019 level. Corporate Services has
substantially recovered in the last two quarters of the year, since
the end of the Omicron wave, with a major return to the office.
Sports & Leisure also had a significant recovery in the Second
half Fiscal 2022 as events and conventions picked up very strongly.
Schools was impacted by the sale of the Childcare activities since
March 2022 and some contract losses.
The performance of the main segments relative to Fiscal 2019
revenues is as follows:
AT CONSTANT RATES |
% of Fiscal 2019 revenues, at constant
currencies |
Q3FY2021 |
Q4FY2021 |
Q1FY2022 |
Q2FY2022 |
Q3FY2022 |
Q4FY2022 |
Business & Administrations |
78% |
82% |
91% |
91% |
97% |
101% |
Of which Corporate Services |
75% |
79% |
87% |
89% |
93% |
98% |
Of which Sports & Leisure |
22% |
43% |
64% |
61% |
83% |
90% |
Education |
79% |
85% |
92% |
88% |
90% |
85% |
Of which Schools |
88% |
99% |
104% |
92% |
88% |
79% |
Of which Universities |
72% |
71% |
84% |
84% |
91% |
91% |
Healthcare & Seniors |
96% |
100% |
105% |
104% |
102% |
102% |
On-site Services |
83% |
87% |
95% |
94% |
97% |
99% |
Benefits & Rewards Services |
96% |
97% |
107% |
106% |
111% |
115% |
Group |
83% |
87% |
95% |
94% |
97% |
100% |
In Fiscal 2022, Facilities Management services were up +2.9%,
having been particularly resilient during the crisis, and well up
on Fiscal 2019 levels at 108% in the Fourth quarter. Food services
were up strongly at +29.3%, as the recovery came through, reaching
94% of Fiscal 2019 in the Fourth quarter Fiscal 2022.
Key performance indicators improved significantly in Fiscal
2022:
- client retention rate was 94.5%, up
+140 bps compared to the previous year. This record
performance was the result of an improvement in almost all regions,
and particularly in North America. In France, difficult inflation
negotiations, particularly in public sector Schools led to some
contract exits.
- new sales development was up
+150 bps at 7.5%, with a solid contribution from all segments.
Total development, including cross-selling, was 1.5 billion
euros.
- As a result, the net new business
signed during the year was more than 300 million euros. The in-year
net new business contribution remained slightly negative.
- Same site sales
growth was strong at +21.0% due to the progressive post-Covid
recovery, as well as a solid contribution from cross-selling.
ON-SITE SERVICES REVENUES BY REGION |
REVENUES BY REGION(in million euros) |
FISCAL 2022 |
FISCAL 2021 |
ORGANIC GROWTH |
North America |
8,828 |
6,514 |
+24.0% |
Europe |
7,774 |
7,002 |
+13.0% |
Asia-Pacific, Latam, Middle East and Africa |
3,661 |
3,171 |
+11.5% |
ON-SITE SERVICES TOTAL |
20,263 |
16,687 |
+17.0% |
- Organic growth in North America was
strong at +24.0%, resulting in revenues picking back up to 96% of
Fiscal 2019 level in the Fourth quarter. Sports & Leisure
is back up to 96% of Fiscal 2019 level in the fourth quarter, while
the return to the office, schools and universities was slower than
in other regions. All other segments are strong, boosted also by
price inflation. As a result, North America represented 44% of
On-site Services revenues, back up to the pre-Covid level.
- Europe (representing 38% of On-site
Services revenues) achieved solid growth in Fiscal 2022, up +13.0%,
to 94% of pre-Covid level in the Fourth quarter. Growth slowed
progressively during the year. This was due to a higher comparative
base each quarter as the Covid recovery had come through earlier in
Europe, as well as the end of the Testing Centers in the UK from
the end of March.
- Asia-Pacific, Latin America, Middle
East and Africa (18% of On-site Services revenues) ended the year
up +11.5%, with strong post-Covid recovery in India and solid
demand and new business in Energy & Resources, in particular in
the mining sector in Latin America. The impact of the multiple
lockdowns in China was relatively limited as activity tended to be
higher on industrial sites partially compensating the effect of the
closure of tertiary offices. By the end of the year, the whole
region was at 118% of Fiscal 2019 levels, excluding any currency
impacts.
Business & Administrations
REVENUES |
REVENUES BY REGION(in million euros) |
FISCAL 2022 |
FISCAL 2021 |
RESTATED ORGANIC GROWTH |
North America |
2,983 |
1,859 |
+45.1% |
Europe |
4,898 |
4,200 |
+20.3% |
Asia-Pacific, Latam, Middle East and Africa |
3,285 |
2,825 |
+11.6% |
BUSINESS & ADMINISTRATIONS TOTAL |
11,167 |
8,884 |
+22.7% |
Fiscal 2022 Business & Administrations
revenues totaled 11.2 billion euros, growing
+22.7% organically. This is the result of ongoing growth in Energy
& Resources and Government & Agencies, the recovery to
pre-Covid levels of Sports & Leisure events and a solid return
to office in all countries. The trend in the last two months of the
year confirms our WFH estimates made in 2020, even though we are
convinced that there is still further improvement to come.
Organic growth in North America was +45.1%,
with a progressive return to the office quarter on quarter and a
strong recovery in all the Sports & Leisure activities,
firstly in the stadiums and then in the convention centers. The
Government & Agencies and Energy & Resources
segments were both up thanks to new business and a gradual return
of office workers on-site, neither having been significantly
impacted by the pandemic. Although slower than in other regions,
the return to the office gathered pace during the year. Many
clients chose to enhance their on-site food services to attract
their staff back into the office. The new food offers, providing
more flexible, more healthy and sustainable meals grew
significantly.
In Europe, revenues were up +20.3% organically,
driven by the progressive return to the office, strong recovery in
the Sports & Leisure activities, first in the sporting
events, and then in corporate entertaining and tourism in the
second half. Government & Agencies and Energy &
Resources were flat on the year, due to respectively the end of the
significant Transforming Rehabilitation contract in the UK and weak
activity in the Energy sector.
In Asia-Pacific, Latam, Middle East and Africa,
organic revenue growth was +11.6%. Growth in Corporate Services
segment remained solid across all regions, particularly in India,
where the Covid-related recovery was strong. Energy &
Resources continued to achieve very solid growth, against a
backdrop of double digit growth in Fiscal 2020 and Fiscal 2021. New
business ramp-ups in Latin America, and particularly in the mining
sector, more than offset the lack of new oil & gas projects and
some contract losses in the Asia-Pacific region.
Healthcare & Seniors
REVENUES BY REGION(in million euros) |
FISCAL 2022 |
FISCAL 2021 |
RESTATED ORGANIC GROWTH |
North America |
3,047 |
2,642 |
+6.1% |
Europe |
2,106 |
1,838 |
+0.7% |
Asia-Pacific, Latam, Middle East and Africa |
305 |
281 |
+8.5% |
HEALTHCARE & SENIORS TOTAL |
5,459 |
4,762 |
+4.0% |
Healthcare & Seniors revenues amounted
to 5.5 billion euros, up +4.0%
organically.
In North America, organic growth was +6.1%,
boosted by cross-selling, progressive recovery in hospital retail
sales and Senior occupancy and pricing, particularly in the last
two quarters. The contribution of net new business remained
slightly negative, as the signings during the year have not yet fed
through into revenues.
In Europe, organic growth was +0.7% impacted by
the early closure of the Testing Centers in the UK at the end of
March. This shortfall was compensated by the combination of
pricing, new contracts in Seniors in France and some increase in
volumes, especially in retail sales.
In Asia-Pacific, Latam, Middle East and Africa,
organic revenue growth was a solid +8.5%, resulting from increased
volumes, pricing and some new business.
Education
REVENUES BY REGION(in million euros) |
FISCAL 2022 |
FISCAL 2021 |
RESTATED ORGANIC GROWTH |
North America |
2,798 |
2,013 |
+27.9% |
Europe |
769 |
963 |
+6.5% |
Asia-Pacific, Latam, Middle East and Africa |
70 |
65 |
+24.0% |
EDUCATION TOTAL |
3,637 |
3,041 |
+22.0% |
Fiscal 2022 revenues in Education were
3.6 billion euros, up +22.0% organically.
In North America, organic growth was +27.9%,
reflecting the reopening of schools and universities from the
beginning of the 2021 academic year. However, events and special
catering activities remained restricted due to staff shortages and
ongoing fears of the pandemic. In the fourth quarter, summer camp
and conference activity was solid and the 2022 start of the
academic year was helped by an extra day and higher levels of
staffing.
In Europe, revenue was up +6.5% organically.
All schools and Universities were fully opened. However, meal
volumes were impacted by high levels of absenteeism due to Covid-19
waves.
In Asia-Pacific, Latam, Middle East and Africa,
organic growth was +24.0% reflecting reopening of schools and
universities in China and India.
BENEFITS & REWARDS SERVICES
Fiscal 2022 Benefits & Rewards
Services revenue amounted to 865 million
euros, up +16.2%, helped by a +2.6% impact from
currencies, offset somewhat by the impact of net disposals of
-0.6%. As a result, organic growth was +14.2%.
REVENUES BY ACTIVITY(in million euros) |
FISCAL 2022 |
FISCAL 2021 |
ORGANIC GROWTH |
Employee Benefits |
711 |
577 |
+18.7% |
Services Diversification* |
154 |
168 |
-1.3% |
BENEFITS & REWARDS SERVICES |
865 |
745 |
+14.2% |
* Including Incentive & Recognition, Mobility &
Expenses and Public Benefits.
Employee Benefits organic growth was +18.7%,
accelerating quarter by quarter, and reaching +23.1% in the Fourth
quarter. Issue volume amounted to 14.3 billion euros for the year
and was up +16.2% organically, boosted by strong net new business
leveraging digital products and enhanced sales efficiency, as well
as face value increases. Financial revenues were also up strongly
supported by rising interest rates, particularly in Latin America
and Eastern Europe.
Services Diversification was down -1.3%
organically for the year. Public Benefits fell back significantly
during the year after a very strong Covid-linked performance,
offsetting the solid growth in Mobility solutions in Latin
America.
REVENUES BY REGION(in million euros) |
FISCAL 2022 |
FISCAL 2021 |
ORGANIC GROWTH |
Europe, USA and Asia |
558 |
499 |
+14.4% |
Latin America |
307 |
246 |
+13.8% |
BENEFITS & REWARDS SERVICES |
865 |
745 |
+14.2% |
Organic revenue growth was strong across all geographies,
respectively +14.4% in Europe, USA and Asia, and
+13.8% in Latin America, accelerating quarter by
quarter.
This performance was due to strong net new business in all key
markets as well as sustained increase in face values. In addition,
financial revenues were also up strongly thanks to increasing
interest rates.
REVENUES BY NATURE(in million euros) |
FISCAL 2022 |
FISCAL 2021 |
ORGANIC GROWTH |
Operating Revenues |
804 |
701 |
+12.4% |
Financial Revenues |
61 |
43 |
+43.7% |
BENEFITS & REWARDS SERVICES |
865 |
745 |
+14.2% |
The increase in Operating revenues of +12.4%
reflects strong growth in issue volumes due to face value increases
and significant net new business in most countries and in most
services, except Public Benefits.
Financial revenues were up +43.7% due to the
progressive effect of the increase in interest rates.
1.4 Underlying operating
profit
Fiscal 2022 Underlying operating profit was 1,059 million euros,
up +83.3%, or +73.5% excluding the currency effect. The Underlying
operating profit margin reached 5.0%, up +170 bps. The
currency mix effect was negligible.
(in million euros) |
UNDERLYING OPERATING PROFIT FISCAL
2022 |
DIFFERENCE |
DIFFERENCE (EXCLUDING CURRENCY EFFECT) |
UNDERLYING OPERATING PROFIT MARGIN FISCAL
2022 |
DIFFERENCE IN MARGIN |
DIFFERENCE IN MARGIN
(EXCLUDING CURRENCY MIX EFFECT) |
Business & Administrations |
391 |
+279.2% |
+263.7% |
3.5% |
+230 bps |
+230 bps |
Healthcare & Seniors |
352 |
+14.2% |
+7.6% |
6.5% |
0 bps |
-10 bps |
Education |
183 |
+144.5% |
+122.6% |
5.0% |
+250 bps |
+240 bps |
On-site Services |
926 |
+90.4% |
+79.4% |
4.6% |
+170 bps |
+160 bps |
Benefits & Rewards Services |
248 |
+33.2% |
+30.5% |
28.6% |
+360 bps |
+370 bps |
Corporate expenses & Intragroup eliminations |
(115) |
-21.1% |
-20.5% |
|
|
|
UNDERLYING OPERATING PROFIT |
1,059 |
+83.3% |
+73.5% |
5.0% |
+170 bps |
+170 bps |
The traditional seasonal gap between the first and second half
Underlying operating profit margin, particularly in Education, has
now reasserted itself, with a margin of 4.8% in the Second half
Fiscal 2022, versus 5.2% in the First half.
The recovery in the margin is due to the flow-through from the
progressive post-Covid recovery in revenues combined with continued
tight cost control, contract management to pass-through inflation
in the On-site Services activities, including price increases and
mitigation actions, more active portfolio management, and the
contribution from the GET efficiency program.
On-site Services Underlying operating profit
was up +90.4%, or +79.4% excluding the positive impact of
currencies. The margin came out at 4.6% up +170 bps or +160 bps
excluding currencies, helped by the strong dollar particularly in
Healthcare and Education where the weight of North American
revenues is the highest. The performance by segment at
constant rates is as follows:
- Business &
Administrations Underlying operating profit was multiplied
by nearly four times, up +263.7%. As a result, the margin was up
+230 bps to 3.5%. This improved performance reflects the
flow-through of the significant improvement in the activity levels
in Corporate Services and Sports & Leisure, operational
efficiencies and strong price increases and mitigation to offset
inflation.
- In Healthcare &
Seniors, the +7.6% increase in Underlying operating profit
resulted in a margin of 6.5%, down -10 bps, in a highly
inflationary environment, particularly in North America. Pricing
has also been strong in this segment; the teams have been very
active in rolling out their mitigation actions and the results of
the portfolio clean-up of the preceding years is now coming
through.
- In Education,
Underlying operating profit was up +144.5% and the margin up
+250 bps to 5.0% thanks to the flow-through of the revenue
recovery, particularly in North America. High inflation and staff
shortages have been offset by very significant mitigation efforts
on the ground, as well as pricing in North America. Pricing has
been more difficult in France where the national inflation index
used in the Schools contracts has underperformed our input cost
increases.
Benefits & Rewards Services Underlying
operating profit was up +33.2%, or +30.5% excluding the positive
impact of currencies. The margin increased to 28.6% up +360 bps or
+370 bps excluding currencies, helped by the strong acceleration in
volumes and, in particular, the financial revenues from quarter to
quarter throughout the year. While processing costs have remained
stable relative to revenues, all other cost increases have been
contained.
The GET efficiency program has provided a significant
improvement in profitability in Fiscal 2021 and Fiscal 2022. Half
of the initiatives were aimed at protecting the gross profit margin
by adapting on-site costs to the new post-Covid levels of activity
and to compensate for the end of government aid. The other half of
the program was aimed at structurally reducing SG&A for the
long-term by simplifying the structures in the Group, to free up
capacity to invest in growth and to enhance margins.
Fiscal 2022 results benefited from the final tranche of cost
savings of 164 million euros, of which 98 million euros in cost
avoidance and 66 million euros in SG&A. The cash impact for the
year was 73 million euros.
|
GET PROGRAM |
|
FISCAL 2020 |
FISCAL 2021 |
FISCAL 2022 |
TARGET |
(in million euros) |
CUMULATED NUMBERS |
Total exceptional costs |
158 |
312 |
322 |
350 |
Cash impact |
(75) |
(217) |
(290) |
(315) |
SG&A savings |
— |
91 |
157 |
175 |
Gross profit cost avoidance |
— |
127 |
225 |
175 |
Total savings |
— |
218 |
382 |
350 |
Savings/Costs |
|
|
119% |
100% |
Cumulated, the GET program has cost 322 million euros,
generated 382 million euros of annual savings, with a cash
impact of 290 million euros. As a result, the program exceeded
the target cost savings by 32 million euros with a ratio of savings
to costs of 119%, also above the target of 100%.
1.5 Group net profit
Other operating income and expenses amounted to 5 million
euros compared to 239 million euros in the previous year.
This significant reduction is due to the end of the GET program,
with only 10 million euros of restructuring costs, a spill-over
from Fiscal 2021, compared to 153 million euros in the
previous year, and 117 million euros of gains related to the
disposals program.
As a result, the Operating Profit recovered to 1,054 million
euros compared to 339 million euros in the previous year.
(in million euros) |
FISCAL 2022 |
FISCAL 2021 |
UNDERLYING OPERATING PROFIT |
1,059 |
578 |
Net scope change impacts |
50 |
(32) |
Restructuring and rationalization costs |
(10) |
(153) |
Amortization of purchased intangible assets |
(46) |
(33) |
Other |
1 |
(21) |
Other Operating income and expenses |
(5) |
(239) |
OPERATING PROFIT |
1,054 |
339 |
Fiscal 2022 Net financial expenses decreased to 87 million euros
against 106 million euros in the previous year. The reduction
came from the net effect of the debt reimbursements and issuance in
Fiscal 2021 and Fiscal 2022, an increase in interest income related
to higher levels of activity and some positive currency impacts.
The blended cost of debt at Fiscal 2022 year end was stable at
1.6% relative to year end Fiscal 2021.
The tax charge was up significantly to 264 million euros,
reflecting the higher pre-tax profit. However, the Effective tax
rate on Pre-tax profit (excluding the share of profit of companies
accounted for using the equity method) of 960 million euros
was 27.5%, back down to a more normal rate, against 43.9% last
year.
The share of profit of other companies accounted for using the
equity method was stable at 8 million euros. Profit attributed
to non-controlling interests was 9 million euros compared to
the previous year amount of -2 million euros.
As a result, Group net income was multiplied by five to reach
695 million euros, compared to 139 million euros in
Fiscal 2021. Underlying net profit adjusted for Other
operating income and expenses net of tax doubled to reach
699 million euros, compared to 346 million euros in
Fiscal 2021.
1.6 Earnings per share
Published EPS was 4.75 euros against 0.95 euro in
Fiscal 2021. The weighted average number of shares for
Fiscal 2022 was more or less stable at
146,295,576 compared to 146,004,484 shares for
Fiscal 2021. As a result of much lower Other income and
expenses, Underlying EPS was very close to the published number,
amounting to 4.78 euros, double the previous year.
1.7 Proposed dividend
The Board of Directors has proposed a dividend of 2.40€, up +20%
compared to Fiscal 2021, in line with our policy of a pay-out ratio
of 50% of Underlying net profit.
2 Consolidated financial
position
2.1 Cash flows
Cash flows for the period were as follows:
(in million euros) |
FISCAL 2022 |
FISCAL 2021 |
Operating cash flow |
1,243 |
766 |
Change in working capital excluding change in BRS financial
assets(1) |
(63) |
171 |
IFRS 16 outflow |
(208) |
(242) |
Net capital expenditure |
(341) |
(211) |
Free cash
flow(2) |
631 |
483 |
Net acquisitions |
14 |
(42) |
Share buy-backs |
(13) |
(11) |
Dividends paid to shareholders |
(294) |
— |
Other changes (including scope and exchange rates) |
(128) |
(40) |
(Increase)/decrease in net debt |
210 |
390 |
(1) Excluding change in financial assets related to
the Benefits & Rewards Services activity of
-145 million euros in Fiscal 2022 versus 45 million euros
in Fiscal 2021.Total change in working capital as reported in
consolidated accounts: in Fiscal 2022: -208 million euros
= -63 million euros - 145 million euros and in
Fiscal 2021: 216 million euros = 171 million euros
+ 45 million euros.
(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).
Free cash flow, adjusted for IFRS 16, was 631 million euros
against 483 million euros in Fiscal 2021.
Operating cash flow of 1,243 million euros improved
significantly compared to the previous year at 766 million
euros, boosted by the strong recovery in Underlying operating
profit and by the Benefits & Rewards Services indemnity from
the Hungarian government related to closure of the business for 34
million euros.
The Working capital outflow in Fiscal 2022 of 63 million euros
was due to some significant exceptional items such as restructuring
costs, a cash contribution to the UK pension found for 71 million
euros, the unwinding of government Covid-linked payment delays for
117 million euros, the reimbursement of the Tokyo Olympics
hospitality packages for 55 million euros and the Benefits &
Rewards fine related to the dispute with the French competition
authorities which is being paid monthly.
Net capital expenditure, including client investments, increased
to 341 million euros, and 1.6% of revenues, compared to
211 million euros in the preceding year, at 1.2% of revenues.
Gross capex was 478 million euros, or 2.3% of revenues. Digital and
IT investments accounted for 30% of the gross spend, with the
remainder focused on client facing investments.
Benefits & Rewards Services continued to invest
heavily, at a rate of 9.1% of revenues, with 93% of its investments
in IT and digital. The Business & Administrations gross
capital expenditure to revenues ratio was at 1.3%, nearly double
last year, linked to the recovery in Sports & Leisure
activity. Healthcare was also at 1.5%, the highest level in many
years, due to some significant investments in several hospitals in
North America and Continental Europe. On the other hand, in
Education, capex to sales was down -60 bps this year at 2.7% of
revenues even though the euro amount remained stable.
Cash conversion was 91%, below the normal level of 100%, but
including 363 million euros of negative non-recurring elements.
M&A activity restarted in Fiscal 2022 with acquisition
spend of 70 million euros but was more than offset by
disposals of 84 million euros.
After taking into account Other changes, consolidated net debt
decreased by 210 million euros ending the year to
1,268 million euros at August 31, 2022.
2.2 Acquisitions and disposals for the
period
Fiscal 2022 has been an active year for closing numerous
disposals of non-core activities and geographies:
- the On-site Services activities in
Morocco, the Congo and Russia;
- Lido in France;
- Non-strategic account portfolios in
Australia and the Czech Republic;
- Benefits & Rewards activities in
Russia in December 2021, followed by the On-site activities in the
second half;
- Benefits & Rewards sports cards in
Germany, Romania and Spain;
- The Childcare activities, completed
mid-March.
On the other hand, further strategic acquisitions &
investments have also been made:
- In the Advanced Food Model, Sodexo has
acquired Frontline Food Services and VendEdge in North America and
an off-site production unit in China. Sodexo has also increased its
participation in the digital food services company, Meican.
- In the GPO space, three investments
have been made to strengthen the position of Entegra Europe.
- In the Healthcare segment, we have
acquired a technical equipment management activity in
Asia-Pacific.
Overall disposals net of acquisitions amounted to
14 million euros.
2.3 Condensed consolidated statement of
financial position at August 31, 2022
(in million euros) |
AUGUST 31, 2022 |
AUGUST 31, 2021 |
|
(in million euros) |
AUGUST 31, 2022 |
AUGUST 31, 2021 |
Non-current assets |
10,785 |
9,360 |
|
Shareholders’ equity |
4,415 |
3,168 |
Current assets excluding cash |
5,653 |
5,030 |
|
Non-controlling interests |
10 |
7 |
Restricted cash Benefits & Rewards |
960 |
773 |
|
Non-current liabilities |
7,223 |
6,962 |
Financial assets Benefits & Rewards |
297 |
289 |
|
Current liabilities |
9,272 |
8,854 |
Cash |
3,225 |
3,539 |
|
|
|
|
TOTAL ASSETS |
20,920 |
18,991 |
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
20,920 |
18,991 |
|
|
Borrowings |
5,742 |
6,072 |
Net debt |
1,268 |
1,478 |
Gearing |
28.7% |
46.6% |
Net debt ratio |
1.0x |
1.7x |
The increase in shareholders’ equity was due to several factors:
the currency translation adjustment of some currencies such as US
dollar and the Brazilian real, as well as the revaluation of
financial assets under IFRS 9.
As of August 31, 2022, net debt fell to 1,268 million
euros, representing a gearing of 28.7%, and a net debt ratio of 1x,
at the bottom of the target range of between 1x
and 2x.
In October 2021, Sodexo reimbursed by anticipation a 600
million euros bond due to mature in January 2022.
At year end, the Group's gross debt of 5.7 billion euros
was 71% euro-denominated, 22% dollar-denominated and 6% sterling
denominated, with an average maturity of 4.8 years, 96% at
fixed rates and 100% covenant-free.
By the end of Fiscal 2022, Operating cash reached a total
of 4,474 million euros, including 960 million euros of
restricted cash and 297 million euros of financial assets of
Benefits & Rewards Services. The Benefits &
Rewards Services activity asset to liability coverage is at 121%
compared to 113% as at August 31, 2021, with operating cash of
2,764 million euros and client receivables of
1,482 million euros, compared to voucher liabilities of
3,509 million euros. The rest of the Group also had a
significant operating cash position of 1,710 million
euros.
At the year end, unused credit lines totaled 2.0 billion
euros.
2.4 Subsequent events
No major events have occurred since the closing of the
accounts.
2.5 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.
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.
Issue volume
Issue volume corresponds to the total face value of service
vouchers, cards and digitally delivered services issued by
Benefits & Rewards Services for beneficiaries on behalf of
clients.
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 presents a net income excluding
significant unusual and/or infrequent elements. Therefore, it
corresponds to the Net Income Group share excluding Other Income
and Expense and 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 2022 figures at Fiscal 2021 rates,
except for countries with hyperinflationary economies.
2
|
Fiscal 2022 Consolidated financial
statements Notes to the Financial Statements will
be found in the Universal Registration Document to
be published on November 9, 2022 |
1. Consolidated income
statement
(in million euros) |
FISCAL 2022 |
FISCAL 2021 |
Revenues |
21,125 |
17,428 |
Cost of sales |
(18,088) |
(15,006) |
Gross profit |
3,037 |
2,422 |
Selling, General and Administrative costs |
(1,985) |
(1,849) |
Share of profit of companies accounted for using the equity method
that directly contribute to the Group’s business |
7 |
4 |
Underlying operating profit |
1,059 |
578 |
Other operating income |
153 |
56 |
Other operating expenses |
(158) |
(295) |
Operating profit |
1,054 |
339 |
Financial income |
37 |
18 |
Financial expenses |
(124) |
(124) |
Share of profit of other companies accounted for using the equity
method |
1 |
4 |
Profit for the year before tax |
968 |
237 |
Income tax expense |
(264) |
(101) |
Net profit for the year |
704 |
137 |
Of which: |
|
|
Attributable to non-controlling interests |
9 |
(2) |
PROFIT ATTRIBUTABLE TO EQUITY HOLDERS OF THE
PARENT |
695 |
139 |
Basic earnings per share (in euro) |
4.75 |
0.95 |
Diluted earnings per share (in euro) |
4.69 |
0.94 |
2. Consolidated statement of
comprehensive income
(in million euros) |
FISCAL 2022 |
FISCAL 2021 |
NET PROFIT FOR THE YEAR |
704 |
137 |
Components of other comprehensive income that may be
reclassified subsequently to profit or
loss |
715 |
121 |
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 |
686 |
117 |
Currency translation adjustment reclassified to profit or loss |
29 |
1 |
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 |
— |
3 |
Components of other comprehensive income that will not be
reclassified subsequently to profit or loss |
129 |
110 |
Remeasurement of defined benefit plan obligation |
87 |
14 |
Change in fair value of financial assets revalued through other
comprehensive income |
65 |
98 |
Tax on components of other comprehensive income that will not be
reclassified subsequently to profit or loss |
(23) |
(2) |
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), AFTER
TAX |
844 |
231 |
Comprehensive income |
1,548 |
368 |
Of which: |
|
|
Attributable to equity holders of the parent |
1,534 |
369 |
Attributable to non-controlling interests |
14 |
(1) |
3. Consolidated statement of financial
position
Assets
(in million euros) |
AUGUST 31, 2022 |
AUGUST 31, 2021 |
Goodwill |
6,611 |
5,811 |
Other intangible assets |
678 |
631 |
Property, plant and equipment |
510 |
461 |
Right-of-use assets relating to leases |
895 |
903 |
Client investments |
667 |
560 |
Investments in companies accounted for using the equity method |
73 |
63 |
Non-current financial assets |
1,025 |
734 |
Other non-current assets |
172 |
31 |
Deferred tax assets |
154 |
165 |
NON-CURRENT ASSETS |
10,785 |
9,360 |
Financial assets |
57 |
55 |
Inventories |
352 |
256 |
Income tax receivable |
171 |
158 |
Trade and other receivables |
5,068 |
4,271 |
Restricted cash and financial assets related to the Benefits &
Rewards Services activity |
1,257 |
1,062 |
Cash and cash equivalents |
3,225 |
3,539 |
Assets held for sale |
5 |
290 |
CURRENT ASSETS |
10,135 |
9,632 |
TOTAL ASSETS |
20,920 |
18,991 |
Shareholders’ equity and liabilities
(in million euros) |
AUGUST 31, 2022 |
AUGUST 31, 2021 |
Share capital |
590 |
590 |
Additional paid-in capital |
248 |
248 |
Reserves and retained earnings |
3,577 |
2,330 |
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE
PARENT |
4,415 |
3,168 |
NON-CONTROLLING INTERESTS |
10 |
7 |
SHAREHOLDERS’ EQUITY |
4,425 |
3,175 |
Long-term borrowings |
5,709 |
5,453 |
Long-term lease liabilities |
759 |
763 |
Employee benefits |
282 |
357 |
Other non-current liabilities |
197 |
181 |
Non-current provisions |
115 |
106 |
Deferred tax liabilities |
161 |
101 |
NON-CURRENT LIABILITIES |
7,223 |
6,962 |
Bank overdrafts |
8 |
7 |
Short-term borrowings |
35 |
635 |
Short-term lease liabilities |
184 |
176 |
Income tax payable |
207 |
188 |
Current provisions |
99 |
148 |
Trade and other payables |
5,230 |
4,429 |
Voucher liabilities |
3,509 |
3,133 |
Liabilities directly associated with assets held for sale |
— |
138 |
CURRENT LIABILITIES |
9,272 |
8,853 |
TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES |
20,920 |
18,991 |
4. Consolidated cash flow
statement
(in million euros) |
FISCAL 2022 |
FISCAL 2021 |
Operating profit |
1,054 |
339 |
Depreciation, amortization and impairment of intangible assets,
property, plant and equipment and right-of-use assets(1) |
523 |
601 |
Provisions |
(52) |
(1) |
(Gains) losses on disposals |
(48) |
27 |
Other non-cash items |
31 |
20 |
Dividends received from companies accounted for using the equity
method |
6 |
9 |
Net interest expense paid |
(54) |
(63) |
Interests paid on lease liabilities |
(17) |
(20) |
Income tax paid |
(200) |
(145) |
Operating cash flow |
1,243 |
766 |
Change in inventories |
(68) |
— |
Change in trade and other receivables |
(563) |
(263) |
Change in trade and other payables |
390 |
449 |
Change in vouchers payable |
178 |
(16) |
Change in financial assets related to the Benefits & Rewards
Services activity |
(145) |
45 |
Change in working capital from operating
activities |
(208) |
216 |
NET CASH PROVIDED BY OPERATING ACTIVITIES |
1,035 |
982 |
Acquisitions of property, plant and equipment and intangible
assets |
(345) |
(296) |
Disposals of property, plant and equipment and intangible
assets |
17 |
72 |
Change in client investments |
(13) |
13 |
Change in financial assets and share of companies accounted for
using the equity method |
(58) |
(19) |
Business combinations |
(64) |
(62) |
Disposals of activities |
77 |
(11) |
NET CASH USED IN INVESTING ACTIVITIES |
(386) |
(303) |
Dividends paid to Sodexo S.A. shareholders |
(294) |
— |
Dividends paid to non-controlling shareholders of consolidated
companies |
(5) |
(14) |
Purchases of treasury shares |
(13) |
(11) |
Sales of treasury shares |
4 |
— |
Change in non-controlling interests |
— |
(14) |
Proceeds from borrowings |
106 |
1,075 |
Repayment of borrowings |
(699) |
(5) |
Repayments of lease liabilities |
(208) |
(242) |
NET CASH PROVIDED BY/(USED IN) FINANCING
ACTIVITIES |
(1,109) |
789 |
NET EFFECT OF EXCHANGE RATES AND OTHER EFFECTS ON
CASH |
145 |
44 |
CHANGE IN NET CASH AND CASH EQUIVALENTS |
(315) |
1,511 |
NET CASH AND CASH EQUIVALENTS, BEGINNING OF
YEAR |
3,532 |
2,021 |
NET CASH AND CASH EQUIVALENTS, END OF YEAR |
3,217 |
3,532 |
(1) Including 208 million euros corresponding to the
depreciation of right-of-use assets recognized in Fiscal 2022
pursuant to IFRS 16 (253 million euros recognized in Fiscal
2021).
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 |
11.1 |
|
|
11.1 |
|
|
|
|
Shareholders’ equity as of August 31,
2021 |
147,454,887 |
590 |
248 |
3,455 |
(1,125) |
3,168 |
7 |
3,175 |
Impact of changes in accounting principles (1) |
|
|
|
(21) |
|
(21) |
|
(21) |
Shareholders’ equity as of September 1,
2021 |
147,454,887 |
590 |
248 |
3,434 |
(1,125) |
3,147 |
7 |
3,154 |
Net profit for the year |
|
|
|
695 |
|
695 |
9 |
704 |
Other comprehensive income (loss), net of tax |
|
|
|
129 |
710 |
839 |
5 |
844 |
Comprehensive income |
|
|
|
824 |
710 |
1,534 |
14 |
1,548 |
Dividends paid |
|
|
|
(294) |
|
(294) |
(11) |
(305) |
Treasury share transactions |
|
|
|
(9) |
|
(9) |
|
(9) |
Share-based payment (net of income tax) |
|
|
|
38 |
|
38 |
|
38 |
Change in ownership interest without any change of control |
|
|
|
1 |
|
1 |
(1) |
— |
Other |
— |
— |
— |
(1) |
|
(1) |
1 |
— |
SHAREHOLDERS’ EQUITY AS OF AUGUST 31,
2022 |
147,454,887 |
590 |
248 |
3,992 |
(415) |
4,415 |
10 |
4,425 |
(1) See note 2.1.2 "New accounting standards and
interpretations applied".
(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 |
11.1 |
|
|
11.1 |
|
|
|
|
Shareholders’ equity as of August 31,
2020 |
147,454,887 |
590 |
248 |
3,162 |
(1,242) |
2,758 |
15 |
2,773 |
Net profit for the year |
|
|
|
139 |
|
139 |
(2) |
137 |
Other comprehensive income (loss), net of tax |
|
|
|
113 |
117 |
230 |
1 |
231 |
Comprehensive income |
|
|
|
252 |
117 |
369 |
(1) |
368 |
Dividends paid |
|
|
|
— |
|
— |
(9) |
(9) |
Treasury share transactions |
|
|
|
(11) |
|
(11) |
|
(11) |
Share-based payment (net of income tax) |
|
|
|
32 |
|
32 |
|
32 |
Change in ownership interest without any change of control |
|
|
|
(1) |
|
(1) |
2 |
1 |
Other |
|
|
|
21 |
|
21 |
— |
21 |
SHAREHOLDERS’ EQUITY AS OF AUGUST 31,
2021 |
147,454,887 |
590 |
248 |
3,455 |
(1,125) |
3,168 |
7 |
3,175 |
6. Financial ratios
|
|
FISCAL 2022 |
FISCAL 2021 |
Gearing ratio |
Borrowings (1) – operating cash (2) |
28.7% |
46.6% |
Shareholders’ equity and non-controlling interests |
Net debt ratio |
Borrowings (1) – operating cash (2) |
1.0 |
1.7 |
Underlying EBITDA (underlying operating profit before Interest,
Taxes, Depreciation and Amortization) (3) |
Debt coverage |
Borrowings |
4,6 years |
8 years |
Operating cash flow |
Financial independence |
Long-term borrowings |
128.3% |
171.7% |
Shareholders’ equity and non-controlling interests |
Return on equity |
Profit attributable to equity holders of the parent |
18.7% |
4.6% |
Equity attributable to equity holders of the parent (before profit
for the period) |
ROCE (Return on capital employed) |
Underlying operating profit after tax (4) |
17.2% |
9.9% |
Average capital employed (5) |
Interest cover |
Operating profit |
13.9 |
4.1 |
Net borrowing cost |
Financial ratios have been computed based on the following key
indicators:
(in million euros) |
|
FISCAL 2022 |
FISCAL 2021 |
(1) Borrowings (1) |
Long-term borrowings |
5,709 |
5,453 |
+ Short-term borrowings |
35 |
635 |
- Derivative financial instruments recognized as assets |
(2) |
(17) |
BORROWINGS |
5,742 |
6,072 |
(2) Operating cash |
Cash and cash equivalents |
3,225 |
3,539 |
+ Restricted cash and financial assets related to the Benefits
& Rewards Services activity |
1,257 |
1,062 |
- Bank overdrafts |
(8) |
(7) |
OPERATING CASH |
4,474 |
4,594 |
(3) Underlying EBITDA |
Underlying operating profit |
1,059 |
578 |
+ Depreciation and amortization |
477 |
537 |
- Lease payments |
(225) |
(260) |
UNDERLYING EBITDA (UNDERLYING OPERATING PROFIT
BEFORE DEPRECIATION AND AMORTIZATION) |
1,311 |
854 |
(4) Underlying operating profit after tax |
Underlying operating profit |
1,059 |
578 |
Underlying Effective tax rate (4) |
27.5% |
28.3% |
UNDERLYING OPERATING PROFIT AFTER TAX |
768 |
414 |
(5) Average capital employed (2) |
Property, plant and equipment |
485 |
513 |
+ Right-of-use assets relating to leases |
899 |
1,112 |
+ Leases liabilities |
(942) |
(1,148) |
+ Goodwill |
6,211 |
5,787 |
+ Other intangible assets |
655 |
652 |
+ Client investments |
614 |
568 |
+ Working capital excluding restricted cash and financial assets of
the Benefits & Rewards Services activity |
(3,452) |
(3,391) |
+ Impact of assets held for sale net of liabilities (3) |
3 |
78 |
AVERAGE CAPITAL EMPLOYED |
4,473 |
4,172 |
(1) 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). Consistently, the lease
liabilities are not included in Net debt.
(2) Average capital employed between the beginning
and the end of the period.
(3) Reinstatement of the capital employed of
Childcare activity which gave rise to classification in assets and
liabilities held for sale.
(4) Below the underlying effective tax rate
calculation:
(in million euros) |
AUGUST 31, 2022 |
AUGUST 31, 2021 |
PROFIT BEFORE TAX EXCLUDING SHARE OF
PROFIT OF COMPANIES ACCOUNTED FOR USING THE EQUITY
METHOD |
INCOME TAX |
RATE |
PROFIT BEFORE TAX EXCLUDING SHARE OF PROFIT OF COMPANIES
ACCOUNTED FOR USING THE EQUITY METHOD |
INCOME TAX |
RATE |
EFFECTIVE |
960 |
(264) |
27.5% |
229 |
(101) |
43,9% |
Adjustments: |
|
|
|
|
|
|
Restructuring costs |
14 |
(4) |
|
153 |
(39) |
|
Impairment |
46 |
(12) |
|
60 |
(15) |
|
Non recognition of non-recurrent deferred taxes |
— |
20 |
|
— |
31 |
|
Others |
(56) |
(5) |
|
25 |
(8) |
|
UNDERLYING |
964 |
(265) |
27.5% |
467 |
(132) |
28.3% |
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