- Fiscal
2020 Revenue organic
growth of
-12%,
of which +3.2% in H1 and
-27.5% in
H2
- Better than
expected Q4 organic growth
at
-24.9% relative to
hypotheses of -27%
- H2
Underlying Operating profit
flow-through of
21.2%,
at constant rates, within expected
range
- Strong H2
positive Free cashflow despite the
crisis
Issy-les-Moulineaux,
October 29, 2020
- Sodexo (NYSE Euronext Paris FR 0000121220-OTC:
SDXAY). At the Board of Directors meeting held on October 28, 2020
and chaired by Sophie Bellon, the Board closed the
Consolidated and Company accounts for the fiscal year ended
August 31, 2020.
Financial performance for Fiscal
2020
(in millions of euro) |
AUGUST 31, 2020 |
AUGUST 31, 2019 |
DIFFERENCE |
DIFFERENCE CONSTANT RATES |
Revenue |
19,321 |
21,954 |
-12.0% |
-11.2% |
UNDERLYING OPERATING PROFIT |
569 |
1,200 |
-52.6% |
-49.6% |
UNDERLYING OPERATING PROFIT MARGIN |
2.9% |
5.5% |
- 260 bps |
- 240 bps |
Other operating expenses |
(503) |
(141) |
|
|
OPERATING PROFIT |
65 |
1,059 |
-93.8% |
-91.1% |
Net financial
expense |
(291) |
(100) |
|
|
Tax charge |
(98) |
(277) |
|
|
GROUP NET PROFIT |
(315) |
665 |
-147.3% |
-144.3% |
EPS (in euro) |
(2.16) |
4.56 |
-147.3% |
|
UNDERLYING NET PROFIT |
306 |
765 |
-60.1% |
-57.1% |
UNDERLYING EPS (in euro) |
2.10 |
5.25 |
-60.1% |
|
Proposed dividend per share (in euro) |
0.00 |
2.90 |
|
|
Free cash flow |
72 |
907 |
|
|
Net Debt Ratio |
2.1 |
0.8 |
|
|
Commenting on the performance of the year, Sodexo CEO
Denis Machuel
said: “Fiscal 2020 was a tale of two
halves. Up to the end of February, we were on track with our Focus
on Growth strategic agenda in terms of growth and productivity with
enhanced execution on large contracts and increased signing
discipline. We were on track to meet our guidance of +4% organic
growth in revenues.The Covid-19 crisis interrupted this positive
momentum.I am proud of the way the teams reacted, fast and
efficiently, to protect our people and consumers, and secure our
cash in what has become the most severe downturn the Group has ever
experienced. Clients have said that they valued very highly the
support that we have given them to operate, reopen or ramp-up their
sites in a safe and welcoming environment. Rise with Sodexo,
combining all our services in an agile way, backed up by our
Medical Advisory Council and Bureau Veritas certification of our
protocols, is creating the necessary confidence of our people, our
clients and our consumers.We are confident that the resilience of
our broad portfolio of services, the investments in marketing and
digital, and responsible sourcing, our strong sense of
responsibility to our stakeholders and our strong cash positive
business model, will ensure that we come out of this crisis in
better shape, despite ongoing market disruption." |
Highlights
- Fiscal 2020 Organic
revenue decline was -12%, with On-site Services at -12.1% and
Benefits & Rewards Services at -7.8%. While the first half
organic growth was +3.2%, the second half was down -27.5%, impacted
by the Covid-19 pandemic. Details of the full year organic growth
figures by activity and by geography are available in the
management report.
- Second half Fiscal
2020 organic revenue growth was in line with the hypotheses
published by the Group.
- The organic trend
did improve in the fourth quarter, at -24.9%, relative to the -36%,
adjusted for the first two weeks of the third quarter before
lockdown.
- Second half
On-site Services organic revenue growth was -27.8%:
- By
segment, Healthcare & Seniors was relatively protected, down
only -11.1%, while Education and Business & Administrations
were down -47.2% and -29.2% respectively. Within Business &
Administrations, Government & Agencies and Energy &
Resources combined were up +1.3% while Sports & Leisure and
Corporate Services were down -88% and -26% respectively.
- By
geography, while there were significant declines in North America
and Europe at -35.9% and -28.4% respectively,
the performance in the Asia-Pacific, Latin America, Middle East and
Africa region was much more resilient at -5.2%.
- All key indicators
were impacted:
-
Client retention rate at the end of the year was solid at 93.5%, up
+20 bps, or up +110bps, excluding voluntary exits with, in
particular, a +230 bps improvement in North America. Gross profit
retention was higher at 95.7%.
- New
sales development was down -140 bps at 4.9%, as new projects were
delayed, but margin discipline was maintained with a 50 bps
improvement in signed contracts.
-
Same site sales decline was -11.9% reflecting the significant
volume falls in many segments, particularly in Sports &
Leisure, Education and Corporate Services, while Healthcare &
Seniors, Government & Agencies and Energy & Resources
remained much more resilient. Only the Energy & Resources
segment and the Asia-Pacific region achieved same site sales growth
in the second half.
- Second half
Benefits & Rewards Services organic revenue growth was
-18.8%, with an improving trend in Q4 at -15.1% relative to the
-22.8% posted in Q3. This reflected a catch-up in activity
following the end of lockdown in Europe, as restaurants re-opened
and, to a lesser extent, the distribution of paper vouchers
resumed. However, the trend deteriorated in Latin America as the
pandemic spread across the region, particularly in Brazil, with
competitive pressures increasing and interest rates continuing to
fall.
- The
underlying operating profit margin for the year
was 2.9%. While the 1st half underlying operating margin was stable
year on year at 5.9%, the 2nd half underlying operating profit
margin fell to -1.5%, reflecting a flow-through of the revenue
reduction of 20.4%. Excluding the currency impact, the flow-through
was 21.2%, close to the most optimistic hypothesis published in
July, and the second half margin was -0.9%.
- Other
operating income and expenses amounted to -503 million
euro, compared to -141 million euro in the previous year.
Restructuring costs increased significantly to 191 million euro in
Fiscal 2020 from 46 million euro in Fiscal 2019. This exceptional
amount reflects proactive measures to protect margins as government
support schemes come to an end, to anticipate the structural
reduction in the post-Covid revenues and to be more agile as
volumes ramp back up again. Impairment of certain brands and assets
impacted by the substantial decline in volumes, mostly in Sports
& Leisure and Education, was 249 million euro.
- Net
financial expenses for the year rose to 291 million euro
from 100 million euro last year, due principally to the 150 million
euro make-whole payment for the USPP reimbursement and the IFRS 16
adjustments of 25 million euro. As a result of this reimbursement,
the Group’s blended cost of debt at year end is 1.6% against 2.6%
in August 2019.
- The tax
charge amounted to 98 million euro compared to a pre-tax
loss of 230 million euro. The Group has not recognized deferred tax
assets for Fiscal 2020 of 122 million euro, mainly related to tax
losses in France where the Group restricted the recognition of
deferred tax assets to the amount of the deferred tax liabilities.
Excluding exceptional elements, the underlying effective tax rate
would have been 30.8% against 29.0% in the previous year.
- Reported
net loss was 315 million euro, against a net
profit of 665 million euro in the previous year. Basic EPS was
-2.16€ compared to 4.56€ last year.
- Corrected for Other
operating income and expenses including the higher restructuring
costs and impairment, the make-whole on the USPP reimbursement in
financial expenses and the exceptional non-recognition of tax
losses, Underlying Net profit totaled
306 million euro down -60.1% compared to 765 million euro
in the previous year. Underlying EPS was 2.10€, down from
5.25€.
- To protect the
balance sheet given the severity of the Covid-19 downturn in
activity, and the uncertainty as to the timing of recovery, and in
solidarity with the teams, the Board has decided not to
propose a dividend for Fiscal 2020 even if the Underlying
net profit was positive.
- Free cash
flow for the year reached 72 million euro, with positive
cash inflow of 315 million euro in the second half, or 465 million
euro excluding the make-whole payment, compensating the traditional
first half outflow. This performance is the result of proactive
cash management and Government support programs, partially
offsetting the impact of the make-whole payment. In order to
protect our cash positions, capex projects were either cut or
pushed back, thereby reducing second half capex by 53% compared to
the first half. As a result, annual capex amounted to 393 million
euro, or 2% of revenues, against 415 million euro, or 1.9% of
revenues, in Fiscal 2019.
- Consolidated
net debt at the end of Fiscal 2020 was 1,868
million euro, down 206 million euro compared to the level at the
end of the first half, but up 655 million euro compared to August
31, 2019. Given the decline in EBITDA, the Group’s net debt
ratio was 2.1x, against 1.3x at the end of the first half Fiscal
2020 and 0.8x at the end of Fiscal 2019.
- In line
with its roadmap
Better Tomorrow 2025, Sodexo works to
strengthen its commitment and performance to
corporate responsibility. Sodexo is thus the
first global foodservices company to
connect its financing to action to prevent food
waste. With a renewed partnership with WWF, Sodexo
continues to work toward its sector-leading 34% Sciences-based
carbon emissions reduction target by 2025 (compared to a 2017
baseline) by committing to eliminate deforestation from its supply
chain by 2030. Sodexo continues to be recognized within the
financial community, with the highest marks in
SAM’s “Sustainability Yearbook” for the 13th
consecutive year, as well as gold class recognition
by EcoVadis. Sodexo also remains
the leading company in its sector within the Dow Jones
Sustainability Index (DJSI), for the 15th consecutive year
and was included in the 2020 Bloomberg Gender-Equality
Index, recognizing commitment to advancing women in the
workplace. Sodexo also join Euronext® Eurozone ESG Large 80
Index family, recognizing its ability to reduce its
emissions and to adapt the business model to address the risks and
opportunities tied to the transition to a low carbon economy.
- Changes to
the Board of Directors:
-
Soumitra Dutta, whose term of office expires at the close of the
January 12, 2021 Annual Shareholders Meeting, has stated that he
does not wish to stand for reappointment. Independent director of
Sodexo's Board of Directors since January 19, 2015, Soumitra Dutta
has made a significant contribution to the discussions of the Board
and the Audit Committee, notably in the fields of technology,
digital and strategy.
-
Consequently, the Board proposes to the Shareholders Meeting the
nomination of Federico González Tejera as independent board member
for a three-year term. Federico González Tejera, of Spanish
nationality, is President and Chief Executive Officer of Radisson
Hospitality AB. He will bring to the Board his strategic vision as
well as his solid expertise in consumer culture gained notably in
the hotel sector, where he held executive positions in several
multinationals.
-
During the January 12, 2021 Annual Shareholders Meeting,
shareholders will also be asked to renew the mandates of Sophie
Bellon, Nathalie Bellon-Szabo and Françoise Brougher:
-
Sophie Bellon has been a non-independent director of Sodexo’s Board
of Directors since July 26, 1989 and Chairwoman of the Board of
Directors since January 26, 2016. She brings to the Board and the
Group her in-depth knowledge of Sodexo. As Sodexo’s most prominent
ambassador, she promotes the Company, its Quality of Life services
and its mission. Sophie Bellon is committed to ensuring good
governance for the Group, and is fully dedicated to the work of the
Board of Directors, with an attendance rate at Board meetings of
100% for over ten years.
-
Nathalie Bellon-Szabo has been a non-independent director of
Sodexo’s Board of Directors since July 26, 1989, a member of the
Group Executive Committee and Chief Executive Officer Sports &
Leisure Worldwide since June 19, 2018. She brings to the Board her
in-depth knowledge of Sodexo and its operations as well as her
experience in and contribution to Quality of Life services.
During her current term of office her attendance rate at Board
meetings has been 97% on average.
-
Françoise Brougher has been an independent director of Sodexo’s
Board of Directors since January 23, 2012. She brings to the Board
her international experience – particularly in the United States –
as well her strategic vision and expertise as an executive of
publicly traded U.S.-headquartered companies in the digital space.
Her expertise is important to help Sodexo adapt to the new
behaviors of consumers, customers, employees and suppliers. During
her current term of office her attendance rate has been 94% on
average.
-
Véronique Laury will be appointed to the Audit Committee to replace
Soumitra Dutta.
-
Cathy Martin was renewed for a three-year term as Director
representing employees starting on January 12, 2021
Commenting on these changes, Sophie Bellon, Chairwoman of
the Board, said:“All the members of the Board sincerely
thank Soumitra Dutta for his individual input to the work of the
Board and the Audit committee. We welcome Federico González Tejera
onto the Board and look forward to benefiting from his vision and
experience. Should all the resolutions be approved at the
Shareholders Meeting, the diversity of the Board remains intact
with 70% of its members being independent and 60% being women. I
want to thank all the members of the Board for their ideas and
support which has been very precious during the worst crisis that
the Group has ever seen.” |
Outlook
In the next few quarters, given the high level
of uncertainty which we are currently experiencing the effects of
the Covid-19 pandemic will continue to be significant for the
Group.
The Government & Agencies and Energy &
Resources segments will continue to be resilient. Healthcare &
Seniors are progressively returning to pre-Covid level. Clearly,
some segments, such as Sports & Leisure will not recover until
the pandemic is over. Others, such as Corporate Services and
Education will see activity improving progressively.
Benefits & Rewards employee benefits issue
volumes will return progressively to growth as digitalization and
penetration continue to progress, strengthened by working from home
trends. This progression could be impacted somewhat by the rising
level of unemployment. On the revenue side, the progression is
linked to reimbursement patterns and impacted negatively by
extremely low interest rates.
At this stage, we see an improvement in first
half Fiscal 2021 relative to the second half Fiscal 2020, with an
organic decline between -20% and -25%.
-
The slow ramp up in S&L we experienced from July to September,
mostly in France, is slowing down;
-
Education is trending well in Europe but remains volatile in the US
with activities varying a lot from one week to another;
-
Corporate Services was on a very encouraging trend from July to
September in Europe but there are signs that it will be more
difficult in the next few months. North America remains very
impacted in food services with very slow improvement;
-
Energy & Resources, Government & Agencies, Healthcare &
Seniors are progressively stabilizing and bring us resilience.
Until activity levels return to more normal
levels, the Group is still using all available furlough programs.
Strong restructuring measures have and continue to be taken to
protect margins going forward, as government support falls away.
Detailed work is being conducted across the board in all segments
and activities to reduce SG&A.
Our hypothesis for the first half Fiscal 2021
Group underlying operating margin is between 2 and 2.5%.
The free cash flow for the first half Fiscal
2021 will be impacted by the expensing of restructuring costs, cash
outflows linked to some payment delays obtained in second half
Fiscal 2020 and the reimbursement of the 2020 Olympic Games
hospitality packages. We estimate the sum of those three factors to
weigh for -250 million euro on our free cash flow. On top of this,
the recurrent free cash flow is usually weaker in the first half
than the second and we are working with a recurrent free cash flow
hypothesis of about -100 million euro for first half Fiscal
2021.
Looking further out, on the basis that the
pandemic will be over by 2021 calendar year end, the Group aims to
return to sustained growth and to rapidly increase the underlying
operating margin back over the pre-Covid level.
The Board and the Executive Committee extend
their sincere thanks to the 420,000 employees for their dedication
to serving their consumers in a very difficult period for all.
Please note that Sodexo is organizing a virtual
Investor Day on November 2, 2020. In a period
where visibility is particularly reduced, the meeting will provide
insight into how the Group adapted to the crisis and some of the
most significant trends coming out of the pandemic. During this
event, we will highlight and reaffirm the resilience and pertinence
of our business model today and in the future, the progress we have
made in the last two years and how, in a much more complex
operating environment, the Group is well positioned to leverage
future opportunities.
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 results for Fiscal 2020.
Please find below the numbers to connect from the
UK |
+44 2071 928
338 |
France |
+33 1 70 70 07
81 |
USA |
+1 877-870-9135 |
followed by the passcode 63 29
034.
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" section.followed by the
passcode 63 29 034.
Fiscal 2021 financial
calendar
Investor Day |
November 2, 2020 |
Publication of Fiscal 2020 Universal Registration Document |
November 23, 2020 |
1st quarter revenues |
January 8, 2021 |
Fiscal 2020 Annual Shareholders' Meeting |
January 12, 2021 |
1st half results |
April 1, 2021 |
Nine-month revenues |
July 1, 2021 |
Fiscal 2021 Annual results |
October 28, 2021 |
Fiscal 2021 Annual Shareholders’ Meeting |
December 14, 2021 |
About Sodexo
Founded in Marseille in 1966 by
Pierre Bellon, Sodexo is the global leader in services that
improve Quality of Life, an essential factor in individual and
organizational performance. Operating in 64 countries, Sodexo
serves 100 million consumers each day through its unique
combination of On-site Services, Benefits & Rewards Services
and Personal & Home Services. Sodexo provides clients an
integrated offering developed over more than 50 years of
experience: from foodservices, reception, maintenance and cleaning,
to facilities and equipment management; from services and programs
fostering employees’ engagement to solutions that simplify and
optimize their mobility and expenses management, to in-home
assistance, child care centers and concierge services. Sodexo’s
success and performance are founded on its independence, its
sustainable business model and its ability to continuously develop
and engage its 420,000 employees throughout the world.
Sodexo is included in the CAC Next 20, ESG 80, FTSE 4 Good and
DJSI indices.
|
Key
figures19.3 billion euro in Fiscal 2020
consolidated revenues420,000 employees as at
August 31, 2020N°1 France-based private employer
worldwide64 countries100 million
consumers served daily8.1 billion euro in market
capitalization (as at October 28, 2020) |
Contacts
Analysts and Investors |
Press |
Virginia JeansonTel: +33 1 57 75 80
56virginia.jeanson@sodexo.com |
Mathieu ScaravettiTel: +33 6 28 62 21
91mathieu.scaravetti@sodexo.com |
FINANCIAL REPORT
FISCAL 2020 Fiscal year ended August 31, 2020
|
1
|
|
|
|
FISCAL 2020
ACTIVITY REPORT |
|
|
|
|
FISCAL 2020 YEAR
HIGHLIGHTS – a year of two halves
First half Fiscal 2020 on
track with
“Focus on
Growth” strategic agenda
and
objectives
First half Fiscal 2020 organic growth was a solid
+3.2%. On-site sales were up +3.2%, with stable retention and new
sales development, and strong same site sales growth, helped by the
Rugby World Cup. Benefits & Rewards organic growth was up +4%,
with a strong European performance being offset by weakness in
Brazil. The Underlying operating margin was stable at 5.9% and the
balance sheet remained solid despite an increase in Capex and the
traditional 1st half cash outflow.
The first half performance was in line with the
Group’s Full year objectives of +4% organic growth, to include the
Olympic Games in the summer, and stable Underlying operating profit
margin at 5.5%.
The Focus on Growth strategic agenda was being
deployed in all its dimensions, with strong focus on enhancing
operational efficiency, thus providing the capacity to continue to
invest in growth. Projects to become more client and consumer
centric became a reality, with a new CRM system in place,
reinvigorated sales teams, and the first MSDC (Marketing &
Sales Distribution Centre) launched in North America. Aspire was
deployed with strong uptake by the 50,000 managers involved as part
of the Nurturing talent program. The Group-wide WasteWatch program
was deployed across 291 sites, the WWF partnership, providing
technical support to our corporate responsibility programs, was
renewed, and the Group continued to be recognized by different
publics, such as our presence in the Bloomberg Gender-Equality
index, Industry leader in the DJ Sustainability Index for the
15th consecutive year and joining The Valuable 500 initiative
to place disability on the business agenda.
Then came Covid-19, firstly in China, where Sodexo
was immediately mobilized. The experience acquired with this
first-hand exposure in the region was rapidly transferred to
Europe, and then North America as the pandemic spread across the
world.
2nd half Fiscal 2020
significantly impacted by
Covid-19
As the pandemic moved across the world, the
priority was to ensure the security of all our people, and then to
put in place a set of rigorous actions to protect the results
focusing on:
- Proactively
managing the workforce, by using all available furlough
dispositions and adapting numbers of employees where there were
none.
- Strictly
controlling the cash positions by maintaining ongoing dialogue with
clients, postponing capex, projects and M&A, monitoring cash
positions daily and ensuring strict compliance with cash-pooling
policies.
- Monitoring our
supply chain in order to secure critical supplies of Personal
Protective Equipment and rapidly reduce inventories where
necessary.
Second half Fiscal 2020 Revenues were down -27.5%
organically, with a 3rd quarter at -36%, adjusted for the first two
weeks of the third quarter before lockdown, and a fourth quarter at
-24.9%, showing a significantly improving trend going into
September 2020.
Underlying operating profit flow-through at 21.2%,
at constant rates, was in the 20 to 23% hypotheses range provided
by the Group in July 2020.
Free cashflow was solid at 465 million euro,
excluding the USPP make-whole, during the second half, well above
the hypotheses range of -200 million euro to +200 million euro.
Rise with Sodexo
Having put in place the necessary actions to
protect our people, our consumers and our cash, and drawing on the
lessons learned from the experience in restarting business in Asia,
Sodexo teams and experts quickly identified the key elements to
help clients provide a safe and welcoming environment for their
employees as they came out of lockdown. This “rise with Sodexo”
program is based on the seamless integration of services across
On-site services, Benefits & Rewards Services and Personal
& Home Services, integrating over 40 essential service
offerings, customized specifically to the needs of each client.
These services include deep cleaning, disinfection, air control,
diversified restaurant services, space management to ensure social
distancing for those coming back onsite, and meal cards, digital
concierge services and food delivery for those who remain working
at home.
To ensure that all its protocols were safe and at
the same time provide that assurance to clients and consumers,
Sodexo has:
- created a Medical Advisory Council, comprised
of experts from around the world in epidemiology, family medicine,
nutrition, occupational health and behavioral health, as well as
pandemic planning and operations, to support the development of new
protocols and standards, including Covid-19 related services
delivered worldwide. This Council provides technical guidance and
validation of health & safety protocols.
- joined forces with Bureau Veritas to introduce
a hygiene certification label for Sodexo procedures and
services, giving quality assurance to our clients and
consumers that all necessary health steps have been taken when
organizations reopen post-lockdown
To support “rise with Sodexo”, Sodexo has reaffirmed
five key sustainability commitments for a more
resilient and green economic recovery:
- continuing the deployment of our
WasteWatch food waste reduction program,
- maintaining efforts to reduce
single-use items and plastic waste,
- providing access to sustainable eating
and “low-carbon” meals,
- promoting sustainable and responsible
sourcing,
- enhancing environmental training for
our employees.
Chart available on
https://www.sodexo.com/home/finance.htmlSodexo Q3 Fiscal 2020
Revenues - Slide n° 10
FISCAL 2020 PERFORMANCE
Consolidated income statement
(in millions of euro) |
AUGUST 31, 2020 |
AUGUST 31, 2019 |
DIFFERENCE |
DIFFERENCE CONSTANT RATES |
Revenue |
19,321 |
21,954 |
-12.0% |
-11.2% |
UNDERLYING OPERATING PROFIT |
569 |
1,200 |
-52.6% |
-49.6% |
UNDERLYING OPERATING PROFIT MARGIN |
2.9% |
5.5% |
- 260 bps |
- 240 bps |
Other operating expenses |
(503) |
(141) |
|
|
OPERATING PROFIT |
65 |
1,059 |
-93.8% |
-91.1% |
Net financial expense |
(291) |
(100) |
|
|
Tax charge1 |
(98) |
(277) |
|
|
GROUP NET PROFIT |
(315) |
665 |
|
|
EPS (in euro) |
(2.16) |
4.56 |
|
|
UNDERLYING NET PROFIT |
306 |
765 |
-60.1% |
-57.1% |
UNDERLYING EPS (in euro) |
2.10 |
5.25 |
-60.1% |
|
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 business in Brazil, and the high level
of the 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 improves, Group margins
increase.
1€= |
AVERAGE RATEFY20 |
AVERAGE RATEFY19 |
AVERAGE RATE FY20 VS. FY19 |
CLOSING RATE FY20 AT
31/08/2020 |
CLOSING RATE FY19 AT 31/08/19 |
CLOSING RATE 31/08/20 VS. 31/08/19 |
U.S. DOLLAR |
1.115 |
1.134 |
+1.7% |
1.194 |
1.104 |
-7.6% |
POUND STERLING |
0.876 |
0.885 |
+1.0% |
0.896 |
0.906 |
+1.1% |
BRAZILIAN REAL |
5.255 |
4.384 |
-16.6% |
6.474 |
4.588 |
-29.1% |
The major impact of currencies this year is the
decline in the Brazilian Real of 16.6% over the year, but with a
particularly sharp drop in the second half of the year. This has
had a relatively small impact on Group revenues, compared to the
impact on Underlying operating profit due to the higher
profitability of the Benefits & Rewards activities, and
particularly in Brazil.
Sodexo operates in 64 countries. The
percentage of total revenues and underlying operating profit
denominated in the main currencies are as follows:
Fiscal 2020 |
% OF REVENUES |
% OF UNDERLYING OPERATING PROFIT |
U.S. DOLLAR |
40% |
59% |
EURO |
24% |
-38% |
UK POUND STERLING |
9% |
14% |
BRAZILIAN REAL |
5% |
30% |
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.
As a result, for the calculation of organic
growth of the On-site Services activities in Argentina, Peso
figures for Fiscal 2020 and Fiscal 2019 have been converted at the
exchange rate of 1€ = 87.865 vs 63.975 ARS for Fiscal 2019.
Revenues
Revenues by activity
REVENUES BY SEGMENT(in millions of
euro) |
FY2020 |
FY2019 |
RESTATED ORGANICGROWTH |
|
ORGANIC GROWTH |
EXTERNALGROWTH |
CURRENCYEFFECT |
TOTALGROWTH |
Business & Administrations |
10,265 |
11,577 |
-12.1% |
|
-10.3% |
+0.4% |
-1.4% |
-11.3% |
HealthCare & Seniors |
4,815 |
5,210 |
-6.6% |
|
-9.4% |
+1.7% |
+0.1% |
-7.6% |
Education |
3,475 |
4,280 |
-18.9% |
|
-20.4% |
+0.5% |
+1.0% |
-18.8% |
On-site Services |
18,554 |
21,067 |
-12.1% |
|
-12.1% |
+0.7% |
-0.5% |
-11.9% |
Benefits & Rewards Services |
773 |
892 |
-7.8% |
|
-7.8% |
+0.2% |
-5.8% |
-13.4% |
Elimination |
-5 |
-4 |
|
|
|
|
|
|
TOTAL GROUP |
19,321 |
21,954 |
-12.0% |
|
-12.0% |
+0.7% |
-0.8% |
-12.0% |
Fiscal 2020 consolidated revenues totaled 19.3
billion euro, down -12% year-on-year. This is the combination of
solid first half revenue growth of +3.2%, followed by a -27.5%
decline in the second half as the Covid-19 pandemic spread across
the world, impacting most of the Group’s operating sites, in
particular in Schools and Universities and the Corporate Services
and Sports & Leisure sub-segments in Business &
Administrations, particularly in North America and Europe.
REVENUES BY
SEGMENT(in
millions of euro) |
H1 FY20 |
H1 FY19 |
RESTATED ORGANICGROWTH |
H2 FY20 |
H2 FY19 |
RESTATED ORGANICGROWTH |
Business & Administrations |
6,186 |
5,645 |
+5.7% |
4,079 |
5,932 |
-29.2% |
HealthCare & Seniors |
2,538 |
2,552 |
-2.0% |
2,276 |
2,658 |
-11.1% |
Education |
2,528 |
2,420 |
+2.4% |
947 |
1,860 |
-47.2% |
On-site Services |
11,252 |
10,617 |
+3.2% |
7,302 |
10,450 |
-27.8% |
Benefits & Rewards Services |
443 |
430 |
+4.0% |
330 |
462 |
-18.8% |
Elimination |
-3 |
-2 |
|
-2 |
-2 |
|
TOTAL GROUP |
11,692 |
11,045 |
+3.2% |
7,629 |
10,909 |
-27.5% |
Most segments and activities were impacted by the pandemic in
the second half, depending upon the number of site closures.
However, some more than others.
|
ACTUALS |
Revenue organic growth |
Q3 |
Q3 trend |
Q4 |
H2 |
Business & Administrations |
-28.5% |
-34% |
-29.8% |
-29.2% |
Of which Corporate Services |
-27% |
-32% |
-25% |
-26% |
Of which Sports & Leisure |
-84% |
-100% |
-91% |
-88% |
Education |
-53.9% |
-65% |
-35.7% |
-47.2% |
Of which Schools |
-48% |
-58% |
-23% |
-39% |
Of which Universities |
-59% |
-71% |
-48% |
-55% |
Healthcare & Seniors |
-12.9% |
-15% |
-9.1% |
-11.1% |
On-site Services |
-30.1% |
-36% |
-25.4% |
-27.8% |
Benefits & Rewards Services |
-22.8% |
-27% |
-15.1% |
-18.8% |
Group |
-29.9% |
-36% |
-24.9% |
-27.5% |
On-site Services
On-site Services revenues declined by -12.1%
for the year, with the second half being down -27.8%, the deepest
downturn ever registered, severely impacted by the effects of site
closures during lockdown and a progressive recovery since.
Despite this significant loss of revenues, the
strategic choices and investments that the Group has made over the
years, have provided some resilience during this crisis.
In the second half:
- Facilities
Management services were down only -1.4% (40% of total On-site
Services revenues) and global Integrated FM accounts were flat (10%
of On-site Services revenues), while Food services were down
-42.2%.
- While North
America and Europe were down -35.9% and -28.4% respectively,
Asia-Pacific, Latin America, Middle East and Africa (17% of On-site
Services revenues) was down only -5.2%.
- In Business
& Administrations,
- The Energy &
Resources and Government & Agencies segments together (14% of
On-site Services revenues) were up +1.3% in the second half.
- The decline in
Corporate Services (25% of On-site services revenues) was limited
to -26% due to the 50/50 mix between FM and Food services and white
and blue-collar consumers.
- Sports &
Leisure segment activity closed down rapidly from mid-March, with
sales down -88%.
- In Education,
despite being closed, Schools were more resilient than Universities
due to many local authorities, particularly in North America,
providing meals to families in need.
- In Corporate
Services, our mix of one third cost plus contracts, two thirds
P&L contracts, also helped to ensure against rapid revenue
corrections.
- Healthcare
& Seniors remained resilient, down only -11.1% (26% of On-site
services revenues)
- All key indicators
were impacted:
- Client retention
rate at the end of the year was solid at 93.5%, up +20 bps, or up
+110 bps, excluding a significant number of voluntary exits, with
gross profit retention higher at 95.7%. Retention recovered in
North America by 230 bps.
- New sales
development was down -140 bps at 4.9%, as fewer new projects came
up for tender, but margin discipline was maintained with a +50 bps
improvement in signed contracts.
- Same site sales
decline was -11.9% reflecting the significant food volume falls in
many segments, particularly in Sports & Leisure, Education and
Corporate Services. Healthcare & Seniors, Government &
Agencies and Energy & Resources remained much more resilient
due to some offset from cross-selling in particular of specialist
hygiene and cleaning services. Only the Energy & Resources
segment and the Asia-Pacific region achieved same site sales growth
in the second half.
On-site Services Revenues by Region
REVENUES BY REGION(in millions of euro) |
FY2020 |
FY2019 |
RESTATED ORGANIC GROWTH |
North America |
8,036 |
9,572 |
-17.4% |
Europe |
7,308 |
8,129 |
-11.9% |
Asia-Pacific, Latam, Middle East and Africa |
3,210 |
3,366 |
+2.5% |
ON-SITE SERVICES TOTAL |
18,554 |
21,067 |
-12.1% |
For the second half only
REVENUES BY REGION (in millions of euro) |
H2 FY20 |
H2 FY19 |
RESTATED ORGANIC GROWTH |
North America |
2,936 |
4,635 |
-35.9% |
Europe |
2,919 |
4,063 |
-28.4% |
Asia-Pacific, Latam, Middle East and Africa |
1,447 |
1,752 |
-5.2% |
ON-SITE SERVICES TOTAL |
7,302 |
10,450 |
-27.8% |
Brexit: In June 2016, the United Kingdom voted to
leave the European Union. Sodexo has been present in the United
Kingdom since 1988 and has around 31,000 employees there today. The
United Kingdom's exit from the European Union should not
significantly impact the Group's activities. The Group is a local
player, working with local suppliers and employees, and very often
for Government authorities and Government services. In the UK,
traditionally, a large part of the services have been FM Services,
which have demonstrated their resilience in the current Covid
crisis. Action plans have been put in place to limit the impact of
a no deal Brexit on food prices and availability. As usual, growth
in activity will remain dependent upon outsourcing trends, growth
in GDP and employment in the country. |
Business & AdministrationsRevenues
REVENUES BY REGION (in millions of euro) |
FY2020 |
FY2019 |
RESTATED ORGANIC GROWTH |
North America |
2,518 |
3,263 |
-24.1% |
Europe |
4,904 |
5,371 |
-13.3% |
Asia-Pacific, Latam, Middle East and Africa |
2,843 |
2,942 |
+3.4% |
BUSINESS & ADMINISTRATIONS TOTAL |
10,265 |
11,577 |
-12.1% |
Fiscal 2020 Business
& Administrations revenues totaled
10.3 billion euro, down -12.1% organically. This
was a combination of organic growth of +3.2% in the first half and
a decline of -29.2% in the second half.
For the second half only
REVENUES BY REGION (in millions of euro) |
H2 FY20 |
H2 FY19 |
RESTATED ORGANIC GROWTH |
North America |
860 |
1,693 |
-48.5% |
Europe |
1,920 |
2,715 |
-31.6% |
Asia-Pacific, Latam, Middle East and Africa |
1,299 |
1,524 |
-3.4% |
BUSINESS & ADMINISTRATIONS TOTAL |
4,079 |
5,932 |
-29.2% |
Second half organic growth in North
America was -48.5%. The region was particularly impacted
by a very severe decline in Sports & Leisure due to the closure
of stadiums, convention centers and museums from March. Energy
& Resources was also impacted by the closing down of many
production sites due to the sharp fall in energy prices. Corporate
Services was more resilient due to the share of FM services and
blue-collar consumers who did not stop working during lockdown.
Government & Agencies was also resilient as the military bases
remained active throughout the crisis, requiring more services.
In Europe,
second half revenues were down -31.6% organically, driven by the
significant decline in Sports & Leisure and, to a lesser
extent, Corporate Services, which have started to see a progressive
return to work from May. The Government & Agencies and Energy
& Resources segments were very resilient boosted by solid FM
activity.
In Asia-Pacific,
Latam, Middle East and Africa
organic revenue growth was -3.4%. Corporate Services activity was
down due to the spreading of the pandemic progressively into Latin
America and India. Activity in China was back to growth on a
monthly basis by the end of the second half. Energy & Resources
benefited from strong cross selling of FM services and in
particular cleaning and disinfection services to protect consumers
from the pandemic, particularly in the mining sector, where sites
remained open throughout the period.
Healthcare & Seniors
REVENUES BY REGION (in millions of euro) |
FY2020 |
FY2019 |
RESTATED ORGANIC GROWTH |
North America |
2,950 |
3,211 |
-9.7% |
Europe |
1,579 |
1,678 |
-1.7% |
Asia-Pacific, Latam, Middle East and Africa |
286 |
321 |
+1.8% |
HEALTHCARE & SENIORS TOTAL |
4,815 |
5,210 |
-6.6% |
Healthcare & Seniors
revenues amounted to 4.8 billion
euro, down -6.6% organically. The first half was down -2%
due to some significant contract losses and a large contract exit.
In the second half, the lower level of elective surgery and retail
sales in hospitals and one further major contract exit led to a
decline of -11.1%, even though Senior revenues were more or less
stable.
For the second half only
REVENUES BY REGION (in millions of euro) |
H2 FY20 |
H2 FY19 |
RESTATED ORGANIC GROWTH |
North America |
1,394 |
1,639 |
-14.6% |
Europe |
760 |
842 |
-3.9% |
Asia-Pacific, Latam, Middle East and Africa |
122 |
177 |
-9.4% |
HEALTHCARE & SENIORS TOTAL |
2,276 |
2,658 |
-11.1% |
In North America, second half
organic growth was -14.6%, impacted by lower elective surgery and
retail sales in hospitals and some contract losses and exits,
including a new contract exit in the fourth quarter. Seniors
activity was stable.
In Europe, organic growth was
more resilient, down -3.9%. Food services were down significantly
and showed no signs of recovery during the period. However, growth
came back in the fourth quarter, due to solid cross-selling of new
Covid-related hygiene services and a large contract for the Rapid
Testing Centers in the UK. Seniors activity was resilient in both
quarters and improving in July and August.
In Asia-Pacific,
Latam, Middle East and
Africa, organic revenue growth was -9.4%,
deteriorating throughout the second half, as the pandemic spread in
Latin America and India.
Education
REVENUES BY REGION (in millions of euro) |
FY2020 |
FY2019 |
RESTATED ORGANIC GROWTH |
North America |
2,569 |
3,098 |
-18.5% |
Europe |
824 |
1,079 |
-20.1% |
Asia-Pacific, Latam, Middle East and Africa |
81 |
102 |
-20.3% |
EDUCATION TOTAL |
3,475 |
4,280 |
-18.9% |
Fiscal 2020 revenues in
Education were 3.5 billion euro,
down -18.9% organically. While the first half was up +2.4%, the
second half was down -47.2%, impacted very significantly by the
closure of most sites around the world. Food sales were cut by more
than a half, the remainder being principally linked to local
authority efforts to provide meals to families despite the school
closures. FM services were much more resilient.
For the second half only
REVENUES BY REGION (in millions of euro) |
H2 FY20 |
H2 FY19 |
RESTATED ORGANIC GROWTH |
North America |
681 |
1,303 |
-46.5% |
Europe |
239 |
506 |
-49.2% |
Asia-Pacific, Latam, Middle East and Africa |
26 |
51 |
-45.3% |
EDUCATION TOTAL |
947 |
1,860 |
-47.2% |
In the second half, North
America was down -46.5%. Although some universities
remained open for foreign students who could not get home, most
universities and schools were closed from the end of March. Schools
were much more resilient than Universities due to a higher share of
FM Services and the substantial number of packed meals produced for
the local authorities for families in need.
In Europe, revenue was down
-49.2% organically. Schools were closed in all
countries from the outset of the crisis. Although 80% of schools
were reopened in France in June, attendance remained very low.
Summer camp activity helped in certain countries even though it was
much more limited in the UK. Some cross-selling of cleaning and
disinfection services helped to offset the very significant
reduction in food services activity.
In Asia-Pacific,
Latam, Middle East and Africa,
organic growth was -45.3%, with the progressive closing of schools
across Asia. Some schools started opening in China before the
summer break.
Benefits & Rewards
Services
Fiscal year 2020 Benefits & Rewards
Services revenue amounted to 773 million euro, down
-13.4%. Currencies had a negative impact of -5.8%, due principally
to the weakness of the Brazilian real and the Turkish lira. The
scope change was negligible. Organically revenues were down -7.8%,
split up +4% in the first half and down -18.8% in the second half.
While the first half was impacted by lower interest rates and
competitive pressures in Brazil, the second half was impacted by
the Covid-19 crisis, particularly in Europe in the third quarter
and in Latin America in the fourth quarter as the pandemic
spread.
REVENUES BY ACTIVITY(in millions of euro) |
FY2020 |
FY2019 |
ORGANIC GROWTH |
Employee benefits |
607 |
709 |
-7.5% |
Services Diversification* |
166 |
183 |
-8.7% |
BENEFITS & REWARDS SERVICES |
773 |
892 |
-7.8% |
For the second half only
REVENUES BY ACTIVITY(in millions of euro) |
H2 FY20 |
H2 FY19 |
ORGANIC GROWTH |
Employee benefits |
259 |
367 |
-17.5% |
Services Diversification* |
70 |
95 |
-23.5% |
BENEFITS & REWARDS SERVICES |
329 |
462 |
-18.8% |
*Including Incentive & Recognition, Mobility
& Expenses and Public Benefits
In the second half, Employee
Benefit revenues were down -17.5%
organically, compared to an organic decline in issue
volume (13.5 billion euro) of only -8.4%, showing the resilience of
these services. The discrepancy of the performance between revenues
and issue volumes is due to the strong fall in interest rates in
Brazil and lower merchant revenue due to lower utilization linked
to the closure of restaurants during the crisis. As reimbursement
was lower, the float grew during the period.
Services Diversification was
down -23.5% organically,
resulting from a very significant decline in travel since the
outbreak of the pandemic, interrupting the rapid development of
Mobility & Expense of the last year. Other services such as the
home employee services in Belgium, Corporate Health & Wellness
offers, and public benefits were also down strongly in Q3 and
gradually recovered in Q4.
REVENUES BY NATURE(in millions of euro) |
FY2020 |
FY2019 |
ORGANIC GROWTH |
Operating Revenues |
718 |
818 |
-6.8% |
Financial Revenues |
54 |
74 |
-18.4% |
BENEFITS & REWARDS SERVICES |
773 |
892 |
-7.8% |
For the second half only
REVENUES BY NATURE(in millions of euro) |
H2 FY20 |
H2 FY19 |
ORGANIC GROWTH |
Operating Revenues |
306 |
424 |
-18.3% |
Financial Revenues |
23 |
38 |
-25.2% |
BENEFITS & REWARDS SERVICES |
329 |
462 |
-18.8% |
In the second half, Operating
revenues were down
-18.3%.
While the fourth quarter in Europe showed a marked improvement, in
Latin America, the reverse was true, with a strong competitive
environment in Brazil and significant reductions in volumes in Peru
and Chile for employee benefits. Financial
revenues were down
-25.2% largely due to the
persistent decline in Brazilian interest rates.
REVENUES BY REGION(in millions of euro) |
FY2020 |
FY2019 |
ORGANIC GROWTH |
Europe, USA and Asia |
482 |
508 |
-4.8% |
Latin America |
290 |
384 |
-11.7% |
BENEFITS & REWARDS SERVICES |
773 |
892 |
-7.8% |
For the second half only
REVENUES BY REGION(in millions of euro) |
H2 FY20 |
H2 FY19 |
ORGANIC GROWTH |
Europe, USA and Asia |
213 |
264 |
-18.0% |
Latin America |
117 |
198 |
-19.9% |
BENEFITS & REWARDS SERVICES |
329 |
462 |
-18.8% |
In Europe, Asia and
USA, the organic revenue decline
was -18.0%, with the third quarter heavily
impacted by Covid-19, interrupting paper voucher production in most
countries during lockdown and with restaurants closed, impacting
merchant reimbursements. In the fourth quarter, the trend improved
in Europe as restaurants reopened and there was a catch-up in paper
voucher issuance and a move to digital solutions. This was slightly
offset by a downturn in India due to the spread of the
pandemic.
In Latin
America, the decline was
-19.9%, with issue volumes deteriorating through
the second half, as the pandemic spread, and amplified by falling
interest rates and a very competitive environment in Brazil,
particularly in the last quarter. Several markets in the region
remained positive, helped by strong sales of Covid-related public
and private benefits.
Underlying operating profit
Fiscal 2020 Underlying operating profit was 569
million euro, down -52.6% relative to the 1.2 billion euro,
generated in Fiscal 2019. The Underlying operating margin was 2.9%,
down -260 bps or -240 bps excluding the currency mix effect. The
On-site Services margin was down -240 bps at 2.6% and the Benefits
& Rewards Services margin at 26.2% was down -480 bps, or -300
bps excluding the currency mix effect of the weakness of the
Brazilian Real principally.
(in millions of euro) |
UNDERLYING OPERATING PROFIT
FISCAL 2020 |
DIFFERENCE |
DIFFERENCE (EXCLUDING CURRENCY EFFECT) |
UNDERLYING OPERATING PROFIT
MARGIN FISCAL 2020 |
DIFFERENCE IN MARGIN |
DIFFERENCE IN MARGIN (EXCLUDING CURRENCY MIX EFFECT) |
Business & Administrations |
110 |
-77.5% |
-74.8% |
1.1% |
-310 bps |
-300 bps |
Healthcare
& Seniors |
293 |
-14.4% |
-15.2% |
6.1% |
-50 bps |
-60 bps |
Education |
75 |
-65.7% |
-66.7% |
2.2% |
-290 bps |
-300 bps |
ON-SITE SERVICES |
478 |
-54.5% |
-53.7% |
2.6% |
-240 bps |
-240 bps |
BENEFITS & REWARDS SERVICES |
202 |
-26.9% |
-16.6% |
26.2% |
-480 bps |
-300 bps |
Corporate expenses& Intragroup eliminations |
(111) |
+12.2% |
+12.4% |
|
|
|
UNDERLYING OPERATING PROFIT |
569 |
-52.6% |
-49.6% |
2.9% |
-260 bps |
-240 bps |
While first half Fiscal 2020 margins were flat
year-on-year at 5.9%, second half margins were impacted heavily by
the flow-through of the revenue decline due to Covid-19. The
flow-through in underlying operating profit was 20.4%, or 21.2% at
constant rates. As a result, the second half margin was -1.5%, or
-0.9% excluding the currency mix impact.
(in millions of euro) |
UNDERLYING OPERATING PROFIT |
|
H1 FISCAL 2020 |
H2 FISCAL 2020 |
|
UOP |
MARGIN |
UOP |
MARGIN |
FLOW-THROUGH |
Business & Administrations |
245 |
4.0% |
(135) |
-3.3% |
22.6% |
Healthcare & Seniors |
160 |
6.3% |
133 |
5.8% |
12.3% |
Education |
211 |
8.4% |
(136) |
-14.3% |
15.5% |
ON-SITE SERVICES |
616 |
5.5% |
(138) |
-1.9% |
19.3% |
BENEFITS & REWARDS SERVICES |
134 |
30.2% |
69 |
20.8% |
62.3% |
Corporate expenses & Intragroup eliminations |
(64) |
|
(47) |
|
|
UNDERLYING OPERATING PROFIT |
685 |
5.9% |
(116) |
-1.5% |
20.4% |
At current rates, Fiscal 2020
On-site Services
underlying operating profit was down -54.5% and the margin fell to
2.6%, down 240 bps. This was made up of a solid operating margin of
5.5% in the first half and a negative margin of 1.9% in the second
half. The flow-through was 19.3%.
The performance by segment is as follows:
- Business
& Administrations underlying operating profit
decreased by -77.5% and the operating margin was down -310 bps at
1.1%. This decline in margins is entirely attributed to the
Covid-related decline in revenues. The flow-through in the second
half was 22.6%. Where sites were closed, food stocks were
transferred to other entities, sold off or given to NGOs. Staff
costs were reduced as quickly as possible, using Government
furlough schemes where available. Where there was no alternative,
staff were transferred into different segments or let go.
- In
Healthcare &
Seniors, the reduction in underlying operating profit was
-14.4%. The margin fell -50 bps to 6.1%. While the first half
margins were stable, the second half margins were down
100 bps, due to a flow-through of 12.3%. The relative
resilience in Healthcare & Seniors margins reflects the exit of
underperforming contracts and strict cost management during the
crisis.
- In
Education, underlying operating profit fell by
-65.7% and the margin by -290 bps. The first half margin was down
60 bps due to strikes, and increased health benefit cost increases.
The flow-through of the Covid-related decline in revenues in the
second half was 15.5%, thanks to strong and early action on staff
costs, with the immediate termination of all hourly labor and
temporary staff, particularly in North America, the use of all
furlough schemes where available and some redundancies.
In Benefits & Rewards
Services, underlying operating profit was down -26.9%, or
-16.6% excluding currency impacts. At 26.2%, the margin was down
-480 bps and -300 bps excluding the currency mix effect of the
weakness in the Brazilian real. In the first half, the margin had
started to recover strongly in the first half, as digital
investments had started to plateau, and costs were being managed
very strictly. The second half margin was impacted very
significantly due to the lower merchant revenues generally due to
the closure of restaurants, and the very competitive environment
and falling interest rates in Brazil. As reimbursement was lower
the float grew during the period.
Group net profit
Other operating income and expenses amounted to
503 million euro compared to 141 million euro in the previous
year.
As part of the rigorous measures implemented
during the sanitary crisis, the Group has taken pro-active actions
in anticipation of the end of government support programs in
several countries, to reinforce its agility to adapt to the new
business environment and to seize the related market opportunities.
As a result, restructuring costs were increased substantially in
the second half to 158 million euro, to reach a total of 191
million euro for the year, versus 46 million euro in the previous
year.
Additionally, given the deterioration in the
short and mid-term performance of some assets due to Covid-19,
impairment of acquired intangible assets, goodwill and non-current
assets in the second half were 249 million euro, principally linked
to assets in the Sports & Leisure and Education segments.
(in millions of euro) |
H1 |
H2 |
FISCAL 2020 |
FISCAL 2019 |
Underlying Operating profit |
685 |
(116) |
569 |
1,200 |
Other operating income |
5 |
2 |
7 |
11 |
Gains related to consolidation scope changes |
2 |
|
2 |
9 |
Gains on changes of post-employment benefits |
4 |
(2) |
2 |
1 |
Other |
- |
3 |
3 |
1 |
Other operating expenses |
(71) |
(439) |
(510) |
(152) |
Restructuring and rationalization costs |
(33) |
(158) |
(191) |
(46) |
Acquisition-related costs |
(5) |
(4) |
(9) |
(11) |
Losses related to consolidation scope changes |
(1) |
(13) |
(14) |
- |
Losses on changes of post-employment benefits |
(2) |
(2) |
(4) |
(4) |
Amortization of acquired intangible assets and impairment of
goodwill and non-current assets |
(20) |
(253) |
(273) |
(85) |
Other |
(11) |
(8) |
(19) |
(6) |
Other Operating income and expenses |
(66) |
(437) |
(503) |
(141) |
Operating Profit |
619 |
(553) |
65 |
1,059 |
As a result, the Operating Profit was 65
million euro compared to 1,059 million euro in the previous
year.
Net financial expenses for the
year rose to 291 million euro compared to 100 million euros in the
previous year. The increase is principally due to 150 million euro
make-whole for the reimbursement of the 1.4 billion euro USPP
in the fourth quarter, first implementation of IFRS16 for a total
of 25 million euro in the year, a decline in interest income due to
lower rates and some currency fluctuations. As a result of the two
bond issues in euro in April and July (raising 2.5 billion euro)
and the USPP reimbursement, the blended cost of debt at year end
was 1.6% against 2.6% at the end of Fiscal 2019, and the average
debt maturity is 5.7 years.
The tax charge
amounted to 98 million euro compared to a pre-tax loss of 230
million euro. The Group has not recognized deferred tax assets for
Fiscal 2020 of about 122 million euro, mainly related to tax losses
in France where the Group restricted the recognition of deferred
tax assets to the amount of the deferred tax liabilities. Excluding
this, the underlying effective tax rate would have been 30.8%
against 29.0% in the previous year.
The share of profit of other companies
consolidated by the equity method was
5 million euro. Profit attributed to non-controlling
interests was -4 million euro compared to the previous year amount
of 21 million euro.
As a result, Group net
loss was 315 million euro, compared to a net
profit of 665 million euro in Fiscal 2019. Excluding Other
Operating income and expenses, the make-whole in financial expenses
and the exceptional tax write-offs,
Underlying net profit amounted to 306 million
euro, compared to 765 million euro in Fiscal 2019.
Earnings per share
Published EPS was -2.16 euro, against 4.56 euro
in Fiscal 2019. The weighted average number of shares for Fiscal
2020 was more or less stable at 145,778,963 compared to 145,721,534
shares for Fiscal 2019.
Underlying EPS
amounted to 2.10 euro, down -60.1% compared to the previous
year.
Proposed dividend
To protect the balance sheet given the severity of
the Covid-19 downturn in activity, and the uncertainty as to the
timing of recovery, and in solidarity with the teams, the
Board has decided not to propose a dividend for Fiscal
2020 even if the Underlying net profit was positive.
Consolidated financial position
Cash flows
Cash flows for the period were as follows:
(in millions of euro) |
H1 |
H2 |
FISCAL 2020 |
FISCAL 2019 |
Operating cash flow |
791 |
(122) |
670 |
1,139 |
Change in working capital excluding change in BRS financial
assets* |
(647) |
702 |
55 |
182 |
IFRS 16 outflow |
(120) |
(140) |
(260) |
- |
Net capital expenditure |
(268) |
(125) |
(393) |
(415) |
Free cash flow |
(243) |
315 |
72 |
907 |
Net acquisitions |
(13) |
(5) |
(18) |
(301) |
Share buy-backs |
(39) |
- |
(39) |
(7) |
Dividends paid to shareholders |
(425) |
- |
(425) |
(403) |
Other changes (including scope and exchange rates) |
(140) |
(105) |
(245) |
(150) |
(Increase)/decrease in net debt |
(860) |
205 |
(655) |
47 |
* Excluding change in financial assets related to the Benefits
and Rewards Services activity of 55 m€ in Fiscal 2020 versus (53)m€
in Fiscal 2019 Total change in working capital as reported in
consolidated accounts: in Fiscal 2020: €(373)m = €(428)m + €55 and
in Fiscal 2019: 129 m€ = 182m€-53m€ |
Operating cash flow was down significantly year
on year, at 670 million euro compared to
1,139 million euro, reflecting the second half operating
losses. The IFRS 16 adjustment of 260 million euro, which comes out
below, has no net effect on free cash flow. The positive inflow
from working capital in the second half more than offset the
outflow in the first half of 647 million euro. This was due to
strict cashflow management, with a rapid return to positive cash
generation from April, after the significant outflow in March due
to the brutal reduction in cash sales, linked to Covid-19 lockdown,
and government aid in the form of delayed payment terms.
As the crisis started, net capital expenditure,
including client investments, was pushed back resulting in a 50%
reduction in the second half, compared to the first half. As a
result, capex was down from 415 million euro to 393 million euro,
representing 2% of revenues compared to 1.9% in Fiscal 2019. While
contract-linked capex in some segments was difficult to stop and IT
spend was maintained in line with the plan, the capex to sales
ratio was up +20 bps in Business & Administrations at 1.6% and
+10 bps in Healthcare at 0.8%, and down -130 bps in Education at
1%. Capex to sales was 9.1% in Benefits & Rewards as
investments were maintained. As previously announced, this rate is
expected to increase over the next few years to around 2.5%, as
retention and development improve in Education and Sports &
Leisure, the two biggest segments in terms of capex, and spend
progresses on the new food model.
Free cash flow for the full year reached 72
million euro, with the second half inflow more than covering the
first half outflow.
Having paused all M&A activity from March
due to the Covid-19 crisis, net acquisitions and disposals of
subsidiaries was negligible for the year.
The dividend payment of 425 million euro,
approved by the Annual General Meeting on January 21, 2020 and paid
on February 3, 2020, well before the Covid-19 crisis arrived,
reflected the +5.5% increase in the dividend per share.
After taking into account Other changes,
principally linked to currency impacts and consolidation scope
changes, consolidated net debt increased during the year by 655
million euro to 1,868 million euro at August 31, 2020.
Acquisitions for the period
Fiscal 2020 was a year of integration for the
large number of acquisitions signed in 2019. However, from the
onset of the pandemic, M&A activity was put on pause in order
to protect the financial structure of the Group. Some investments
were nevertheless signed during the period reflecting the need to
invest in the evolving food model.
Condensed consolidated statement of financial
positionat August 31,
2020
(in millions of euro) |
AUGUST
31, 2020 |
AUGUST 31, 2019 |
|
(in millions of euro) |
AUGUST 31,
2020 |
AUGUST 31,
2019 |
Non-current assets |
9,730 |
9,455 |
|
Shareholders' equity |
2,758 |
4,456 |
Current assets excluding cash |
4,493 |
5,111 |
|
Non-controlling interests |
15 |
42 |
Restricted cash Benefits and Rewards |
770 |
678 |
|
Non-current liabilities |
6,834 |
4,722 |
Financial assets Benefits and Rewards |
333 |
442 |
|
Current liabilities |
7,745 |
8,247 |
Cash |
2,027 |
1,781 |
|
|
|
|
Total assets |
17,353 |
17,467 |
|
Total liabilities and shareholders’
equity |
17,353 |
17,467 |
|
|
|
|
Gross debt |
4,992 |
4,079 |
|
|
|
|
Net debt |
1,868 |
1,213 |
|
|
|
|
Gearing |
67% |
27% |
|
|
|
|
Net debt ratio |
2.1 |
0.8 |
The decrease in shareholders’ equity was
due to several factors: the currency translation adjustment
due to the weakness of some currencies such as the US dollar and
the Brazilian real, the revaluation of some financial assets under
IFRS9, the first time adoption of IFRIC23, the reported net loss
and the payment of the Fiscal 2019 dividend.
As of August 31, 2020, net debt was
1,868 million euro, representing a gearing of 67%, and a net
debt ratio of 2.1. This compares to 50% and 1.3 respectively as at
February 29, 2020 and 27% and 0.8 as of
August 31, 2019.
As soon as the Covid-19 crisis emerged in
Europe, cash was very strictly controlled, second half investments
were pushed back and means to increase liquidity were identified.
In April, the Group issued 1.5 billion euro of bonds at an average
rate of just below 1% and a maturity split in two tranches, of
which 700 million euro maturing in April 2025 and 800 million euro
in April 2029.
Given the extent of the crisis, and in order to
maintain its independence of action, Sodexo decided in June to
reimburse the USPP of 1.4 billion euro, thus resolving the issue of
the covenant thresholds which were limiting the Group’s capacity to
restructure and continue to invest in the future. As a result, the
Group has no more covenants on its debt. To maintain a high level
of liquidity, a further 1 billion euro was raised in the bond
market in July at an average rate of less than 0.8%, maturing half
and half in January 2024 and July 2028.
As at the end of Fiscal 2020, Operating cash
totaled 3,124 million euro, including 770 million euro of
restricted cash and 333 million euro of financial assets of
Benefits & Rewards Services and net of overdrafts of
6 million euro. The share of operating cash related to
Benefits & Rewards Services is 2,082 million euro. With this
operating cash and client receivables of 1,274 million euro,
compared to voucher liabilities payable of
3,117 million euro, the Benefits & Rewards Services
activity asset to liability coverage is at 108%.
At year end, having increased the Group’s lines
of credit in May by 250 million euro, the yearend total unused
lines reached 1.9 billion euro, of which 250 million euro
is maturing by May 2021.
As a result, despite the significant decline in
revenues and profits in the second half, Group liquidity was solid
at nearly 5.1 billion euro at year end.
Chart available on https://www.sodexo.com/home/finance.html -
Sodexo FY2020 Annual Results - Slide n° 18
Subsequent events
Significantly impacted by the Covid-19 pandemic, Sodexo France
announced on October 27, 2020 an Employment Protection Plan which
would involve the reduction of 7% of its workforce, i.e. 2,083
positions mostly in the Corporate Services segment. Discussions
with employee representatives are just starting. Sodexo intends to
propose all possible measures to maintain employment for its
employees and thus limit the impact of these reorganizations, in
particular through a project to support the transfer of its
employees, on a voluntary basis, to other activities of the Group
in France.
Alternative Performance Measure
definitions
Financial ratios
|
|
FISCAL 2020 |
FISCAL 2019 |
Gearing ratio |
Borrowings (1) – operating cash (2) |
67% |
27% |
Shareholders’ equity and non-controlling interests |
Net debt ratio (1) |
Borrowings (1) – operating cash (2) |
2.1 |
0.8 |
Underlying EBITDA (underlying operating profit before Interest,
Taxes, Depreciation and Amortization) (3) |
Debt coverage |
Borrowings |
7.5 years |
3.6 years |
Operating cash-flow |
Financial independence |
Non-current borrowings |
179.4% |
86.8% |
Shareholders’ equity and non-controlling interests |
Return on equity |
Profit attributable to equity holders of the parent |
-10.3% |
17.6% |
Equity attributable to equity holders of the parent (before profit
for the period) |
ROCE (Return on capital employed)
(1) |
Underlying operating profit after tax (4) |
8.6% |
18.3% |
Average capital employed (5) |
Interest cover |
Operating profit |
0.6 |
11.6 |
Net borrowing cost |
Due to IFRS 16 adoption, the Group adjusted the calculation of
its performance measures, in particular EBITDA and ROCE. The Group
considers the Underlying EBITDA as determined in (3) gives a better
understanding as it follows the internal performance measures used
by management. For the same reasons, the ROCE calculation uses the
Underlying operating profit after tax and not the operating profit
after tax, and divided by the average capital employed. The
comparative period for Fiscal 2019 is determined on the same
calculation basis.
Financial ratios have been computed based on the following
key indicators:
|
|
FISCAL 2020 |
FISCAL 2019 |
(1) Borrowings
|
Non-current borrowings |
4,975 |
3,902 |
+ Non-current derivative financial instrument liabilities |
13 |
7 |
+ Current borrowings |
21 |
182 |
+ Current derivative financial instrument liabilities |
6 |
0 |
- Derivative financial instruments recognized as assets |
(22) |
(12) |
Borrowings |
4,992 |
4,079 |
(2) Operating cash |
Cash and cash equivalents |
2,027 |
1,781 |
+ Restricted cash and financial assets related to the Benefits
& Rewards Services activity |
1,103 |
1,120 |
- Bank overdrafts |
(6) |
(35) |
Operating cash |
3,124 |
2,866 |
(3) Underlying EBITDA |
Underlying operating profit |
569 |
1,200 |
+ Depreciation and amortization |
622 |
302 |
- Lease payments (1) |
(285) |
- |
Underlying EBITDA (Underlying operating profit before Interest,
Taxes, Depreciation and Amortization) |
905 |
1,502 |
(4) Underlying operating profit after tax
|
Underlying operating profit |
569 |
1,200 |
Underlying Effective tax rate (6) |
31.0% |
29.0% |
Underlying operating profit after tax |
392 |
852 |
(5) Average capital employed (2)
|
Property, plant and equipment |
625 |
652 |
+ Right-of-use assets relating to leases (3) |
1,406 |
- |
+ Leases liabilities (3) |
(1,424) |
- |
+ Goodwill |
5,961 |
5,911 |
+ Other intangible assets |
737 |
75 |
+ Client investments |
600 |
592 |
+ Working capital excluding restricted cash and financial assets of
the Benefits & Rewards Services activity |
(3,343) |
(3,256) |
Average capital employed |
4,563 |
4,651 |
- As described in note 2.1.2.1, the Group applied IFRS 16
“Leases” from September 1, 2019 using the simplified retrospective
approach, without restating the comparative periods. As a
consequence, all rents for Fiscal 2019 were recognized in
underlying operating profit.
- Average capital employed between the beginning and the end of
the period.
- In Fiscal 2020, average of the IFRS16 first time application
position as of 1st of September 2019 and of the Fiscal 20 closing
balance.
6) Below the underlying effective tax rate
calculation:
|
AUGUST 31, 2020 |
|
AUGUST 31, 2019 |
(in millions of euro) |
Profit before tax excluding share of profit of companies
consolidated by the equity method |
Income tax |
Rate |
|
Profit before tax excluding share of profit of companies
consolidated by the equity method |
Income tax |
Rate |
Effective |
(230) |
(98) |
-43% |
|
957 |
(277) |
-29% |
Adjustments: |
|
|
|
|
|
|
|
Restructuring costs |
191 |
(44) |
|
|
|
|
|
Impairment |
273 |
(57) |
|
|
|
|
|
USPP
allowance |
150 |
(42) |
|
|
|
|
|
Non
recognition of non-recurrent deferred taxes |
- |
122 |
|
|
|
|
|
Others |
38 |
(11) |
|
|
|
|
|
Underlying |
422 |
(131) |
30,8% |
|
957 |
(277) |
-29,0% |
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.
As a result, for the calculation of organic
growth of the On-site Services activities in Argentina, Peso
figures for Fiscal 2020 and Fiscal 2019 have been converted at the
exchange rate of 1€ = 87.865 vs 63.975 ARS for Fiscal 2019.
Issue volume
Issue volume corresponds to the total face value
of service vouchers, cards and digitally delivered services issued
by the Group (Benefits and Rewards Services activity) 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.
- For countries with hyperinflationary economies all figures are
converted at the latest closing rate for both periods. As a result,
for the calculation of organic growth of the On-site Services
activities in Argentina, Peso figures for Fiscal 2020 and Fiscal
2019 have been converted at the exchange rate of 1€ = 87.865 vs
63.975 ARS for Fiscal 2019.
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 2020 figures at Fiscal 2019
rates, except for countries with hyperinflationary economies.
2
|
|
|
|
CONSOLIDATED FINANCIAL STATEMENTS AS OF AUGUST 31, 2020 |
|
|
|
|
Consolidated income
statement
(in millions of euro) |
FISCAL 2020 |
FISCAL 2019 |
REVENUES |
19,321 |
21,954 |
Cost of sales |
(16,842) |
(18,756) |
GROSS PROFIT |
2,479 |
3,198 |
Selling, General and Administrative costs |
(1,914) |
(2,000) |
Share of profit of companies consolidated by the equity method that
directly contribute to the Group’s business |
4 |
2 |
UNDERLYING OPERATING PROFIT |
569 |
1,200 |
Other operating income |
7 |
11 |
Other operating expenses |
(510) |
(152) |
OPERATING PROFIT |
65 |
1,059 |
Financial income |
30 |
44 |
Financial expense |
(321) |
(144) |
Share of profit of other companies consolidated
by the equity method |
5 |
4 |
PROFIT FOR THE YEAR BEFORE TAX |
(221) |
963 |
Income tax expense |
(98) |
(277) |
NET PROFIT FOR THE YEAR |
(319) |
686 |
Of which: |
|
|
Attributable to non-controlling interests |
(4) |
21 |
PROFIT ATTRIBUTABLE TO EQUITY HOLDERS
OF THE PARENT |
(315) |
665 |
BASIC EARNINGS PER SHARE (in euro) |
(2.16) |
4.56 |
DILUTED EARNINGS PER SHARE (in euro) |
(2.16) |
4.50 |
Consolidated statement of comprehensive
income
(in millions of euro) |
FISCAL 2020 |
FISCAL 2019 |
NET PROFIT FOR THE YEAR |
(319) |
686 |
Components of other comprehensive income that may be
reclassified subsequently to profit or loss |
(500) |
180 |
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 |
(502) |
190 |
Currency translation adjustment reclassified to profit or loss |
- |
(3) |
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 consolidated by the equity method, net of
tax |
2 |
(7) |
Components of other comprehensive income that will not
be reclassified subsequently to profit or loss |
(344) |
174 |
Remeasurement of defined benefit plan obligation |
30 |
4 |
Change in fair value of financial assets revalued through other
comprehensive income |
(383) |
175 |
Tax on components of other comprehensive income that will not be
reclassified subsequently to profit or loss |
9 |
(5) |
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), AFTER
TAX |
(844) |
354 |
COMPREHENSIVE INCOME |
(1,163) |
1,040 |
Of which: |
|
|
Attributable to equity holders of the parent |
(1,159) |
1,021 |
Attributable to non-controlling interests |
(4) |
19 |
Consolidated statement
of financial position
Assets
(in millions of euro) |
AUGUST 31, 2020 |
AUGUST 31, 2019 |
Goodwill |
5,764 |
6,158 |
Other intangible assets |
673 |
801 |
Property, plant and equipment |
566 |
684 |
Right-of-use assets relating to leases |
1,321 |
- |
Client investments |
575 |
626 |
Companies consolidated by the equity method |
60 |
62 |
Financial assets |
601 |
999 |
Derivative financial instrument assets |
11 |
5 |
Other non-current assets |
22 |
20 |
Deferred tax assets |
137 |
99 |
NON-CURRENT ASSETS |
9,730 |
9,455 |
Financial assets |
40 |
58 |
Derivative financial instrument assets |
11 |
7 |
Inventories |
259 |
294 |
Income tax receivable |
113 |
125 |
Trade and other receivables |
4,070 |
4,626 |
Restricted cash and financial assets related to
the Benefits & Rewards Services activity |
1,103 |
1,120 |
Cash and cash equivalents |
2,027 |
1,781 |
CURRENT ASSETS |
7,623 |
8,012 |
TOTAL ASSETS |
17,353 |
17,467 |
Shareholders’ equity and liabilities
(in millions of euro) |
AUGUST 31, 2020 |
AUGUST 31, 2019 |
Share capital |
590 |
590 |
Additional paid-in capital |
248 |
248 |
Reserves and retained earnings |
1,920 |
3,618 |
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE
PARENT |
2,758 |
4,456 |
NON-CONTROLLING INTERESTS |
15 |
42 |
SHAREHOLDER’S EQUITY |
2,773 |
4,498 |
Borrowings |
4,975 |
3,902 |
Derivative financial instrument liabilities |
13 |
7 |
Long-term lease liabilities |
1,126 |
- |
Employee benefits |
344 |
403 |
Other non-current liabilities |
196 |
171 |
Non-current provisions |
84 |
88 |
Deferred tax liabilities |
97 |
151 |
NON-CURRENT LIABILITIES |
6,834 |
4,722 |
Bank overdrafts |
6 |
35 |
Borrowings |
21 |
182 |
Derivative financial instrument liabilities |
6 |
0 |
Short-term lease liabilities |
231 |
- |
Income
tax payable |
174 |
99 |
Current provisions |
171 |
58 |
Trade and other payables |
4,020 |
4,892 |
Vouchers payable |
3,117 |
2,981 |
CURRENT LIABILITIES |
7,745 |
8,247 |
TOTAL SHAREHOLDER’S EQUITY AND LIABILITIES |
17,353 |
17,467 |
Consolidated cash flow statement
(in millions of euro) |
FISCAL 2020 |
FISCAL 2019 |
Operating profit |
65 |
1,059 |
Elimination of non-cash and non-operating
items |
|
|
Depreciation, amortization and impairment of intangible assets and
property, plant and equipment (1) |
896 |
365 |
Provisions |
122 |
(39) |
Disposal (gains) losses and other non-cash items |
59 |
35 |
Dividends received from companies consolidated by the equity
method |
4 |
10 |
Interest paid (2) |
(291) |
(129) |
Interests paid on lease liabilities |
(25) |
- |
Interest received |
43 |
42 |
Income tax paid |
(202) |
(204) |
Operating cash flow |
670 |
1,139 |
Change in inventories |
21 |
(3) |
Change in trade and other receivables |
317 |
(384) |
Change in trade and other payables |
(625) |
406 |
Change in vouchers payable |
343 |
164 |
Change in financial assets related to the Benefits & Rewards
Services activity |
(93) |
(53) |
Change in working capital from operating
activities |
(38) |
129 |
NET CASH PROVIDED BY OPERATING ACTIVITIES |
632 |
1,268 |
Acquisitions of property, plant and equipment and intangible
assets |
(398) |
(400) |
Disposals of property, plant and equipment and intangible
assets |
17 |
17 |
Change in client investments |
(12) |
(31) |
Change in financial assets and share of companies consolidated by
the equity method |
(20) |
(94) |
Acquisitions of subsidiaries |
(20) |
(308) |
Disposals of subsidiaries |
3 |
7 |
NET CASH USED IN INVESTING ACTIVITIES |
(430) |
(809) |
Dividends paid to parent company shareholders |
(425) |
(403) |
Dividends paid to non-controlling shareholders of consolidated
companies |
(10) |
(19) |
Purchases of treasury shares |
(39) |
(11) |
Sales of treasury shares |
- |
4 |
Increase in share capital |
- |
1 |
Change in non-controlling interests |
(22) |
(1) |
Proceeds from borrowings |
3,265 |
278 |
Repayment of borrowings |
(2,310) |
(257) |
Repayments of lease liabilities |
(260) |
- |
NET CASH PROVIDED
BY/(USED IN) FINANCING
ACTIVITIES |
198 |
(408) |
NET EFFECT OF EXCHANGE RATES AND OTHER EFFECTS ON
CASH |
(123) |
58 |
CHANGE IN NET CASH AND CASH EQUIVALENTS |
275 |
109 |
NET CASH AND CASH EQUIVALENTS, BEGINNING OF
YEAR |
1,746 |
1,638 |
NET CASH AND CASH EQUIVALENTS, END OF YEAR |
2,021 |
1,746 |
(1) Including 278 million euro corresponding to the depreciation
and impairment of the right-of-use assets recognized in Fiscal 2020
pursuant to IFRS 16.
(2) Including 150 million euro allowance due to anticipated
refund of USPP (Note 12.4.3.3).
Consolidated statement of changes in
shareholders’ equity
(in millions of euro) |
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 |
Shareholders’ equity as of August 31,
2019 |
147,454,887 |
590 |
248 |
4,358 |
(740) |
4,456 |
42 |
4,498 |
Restatement due to IFRIC 23 first application (1) |
|
|
|
(96) |
- |
(96) |
- |
(96) |
Shareholders’ equity as of September 1, 2019 |
147,454,887 |
590 |
248 |
4,262 |
(740) |
4,360 |
42 |
4,402 |
Net
profit for the year |
|
|
|
(315) |
- |
(315) |
(4) |
(319) |
Other
comprehensive income (loss), net of tax |
|
|
|
(342) |
(502) |
(844) |
- |
(844) |
Comprehensive income |
|
|
|
(657) |
(502) |
(1,159) |
(4) |
(1,163) |
Dividends paid |
|
|
|
(425) |
- |
(425) |
(19) |
(444) |
Treasury share transactions |
|
|
|
(40) |
- |
(40) |
- |
(40) |
Share-based payment (net of income tax) |
|
|
|
38 |
- |
38 |
- |
38 |
Change
in ownership interest without any change of control |
|
|
|
(20) |
- |
(20) |
(4) |
(24) |
Other |
|
|
|
3 |
- |
3 |
- |
3 |
SHAREHOLDERS’ EQUITY AS OF AUGUST 31,
2020 |
147,454,887 |
590 |
248 |
3,162 |
(1,242) |
2,758 |
15 |
2,773 |
(1) See note 2.1.2
“New accounting standards and interpretations required
to be applied”. |
(in millions of euro) |
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 |
Shareholders’ equity as of August 31,
2018 |
147,454,887 |
590 |
248 |
3,375 |
(930) |
3,283 |
45 |
3,328 |
Impact
of IFRS 9 & IFRS 15 first-time application (1) |
|
|
|
530 |
- |
530 |
- |
530 |
Shareholders’ equity as of September 1, 2018 |
147,454,887 |
590 |
248 |
3,905 |
(930) |
3,813 |
45 |
3,858 |
Net
profit for the year |
|
|
|
665 |
- |
665 |
21 |
686 |
Other
comprehensive income (loss), net of tax |
|
|
|
166 |
190 |
356 |
(2) |
354 |
Comprehensive income |
|
|
|
831 |
190 |
1,021 |
19 |
1,040 |
Dividends paid |
|
|
|
(403) |
- |
(403) |
(22) |
(425) |
Treasury share transactions |
|
|
|
(7) |
- |
(7) |
- |
(7) |
Share-based payment (net of income tax) |
|
|
|
33 |
- |
33 |
- |
33 |
Change
in ownership interest without any change of control |
|
|
|
(5) |
- |
(5) |
0 |
(5) |
Other
(2) |
|
|
|
4 |
- |
4 |
0 |
4 |
SHAREHOLDERS’ EQUITY AS OF AUGUST 31,
2019 |
147,454,887 |
590 |
248 |
4,358 |
(740) |
4,456 |
42 |
4,498 |
(1) Mainly
includes the revaluation at fair value of the 19.61% of Bellon SA,
held by Sodexo S.A., in application of IFRS 9 (previously accounted
at historical value) (2) Including the effects of
hyperinflation, recognition of commitments to repurchase
non-controlling interests. |
_________________________________1 FY 2020 Underlying effective
tax rate is at 30.8% which compares to the 29% effective tax rate
in FY 2019
- PR - Sodexo FY 2020 Annual Results ENG
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