Sodexho Alliance (NYSE:SDX)
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SODEXHO ALLIANCE (Paris: SW) (NYSE:SDX), the leading global provider of
Food and Facilities Management services, today announced consolidated
revenues for first-half Fiscal 2007, ended February 28, 2007.
Revenue by activity
In millions of euro
First Half Fiscal 2006
First Half Fiscal 2007
Organic growth(1)
Currency impact(2)
Acquisitions
Total change
Food and Facilities Management Services:
6,371
6,612
7.9%
- 4.2%
0.1%
3.8 %
North America
2,919
2,890
7.6%
- 8.1%
- 0.5%
- 1.0 %
Continental Europe
2,111
2,236
4.9%
0.1%
0.9%
5.9 %
United Kingdom and Ireland
663
720
6.9%
1.6%
-
8.5 %
Rest of the World
678
766
19.4%
- 6.5%
0.1%
13.0%
Service Vouchers and Cards
178
211
20.5%
- 4.5%
2.4%
18.4%
Elimination of intragroup revenues
(3)
(4)
TOTAL
6,546
6,819
8.2%
- 4.2%
0.2%
4.2 %
1) Organic growth: increase in revenues at constant consolidation
scope and exchange rates.
2) The current impact is (-4.2)%. However, Sodexho subsidiaries’
income and expenses are expressed in the same currency; hence,
contrary to exporting companies, currency variations carry no
operating risk.
Commenting on the first-half revenues, Michel Landel, Chief Executive
Officer, said: “The acceleration in organic
growth during the first six months, resulting particularly from
comparable unit growth, is very encouraging. The scope of our global
network and the emphasis we have given over the past few years to
constant innovation in our quality of life services offers are
significant sources of competitive advantage. These lend support to our
strategy and Sodexho’s leadership position in
the fast-growing Facilities Management market. Our good first-half
performance leads us today to anticipate organic growth exceeding 7% for
Fiscal 2007, in line with our medium term objective of annual average
organic growth of 7%.”
Organic Revenue Growth Analysis
(See table in Annex 2 and a selection of new clients in Annex 3)
Food and Facilities Management Services
North America: organic growth of 7.6% with a confirmation of a
return to growth in Business & Industry
Continental Europe: + 4.9%, with sustained momentum in Healthcare
and Seniors
United Kingdom and Ireland: + 6.9%, a result of strong performance
in Healthcare and Defense
Rest of the World: + 19.4%, with double-digit growth across all
geographies
In North America, Business and Industry (+ 5.8%) benefited from a
number of growth drivers: improvement in client retention, increase in
comparable unit growth. New sales activity accelerated, particularly in
Facilities Management. New contract wins include Pfizer, USAA Insurance
in Texas and the Houston Zoo.
Organic growth of 7.9% in Healthcare and Seniors reflects mainly a solid
increase in revenues on existing sites driven by continued innovation in
Facilities Management service offerings. New contract wins include Moses
Cone in North Carolina, Stanford University Hospital in California and
Tulsa Regional Hospital in Oklahoma.
Organic growth of 8.2% in Education was led by a number of factors,
including:
sustained demand for Facilities Management services, especially for
construction and renovation projects
strong comparable unit foodservice revenues for both schools and
universities, and
the positive effect of the improvement in client retention achieved in
fiscal 2006.
In North America, Sodexho also received several recognitions:
Sodexho received the Most Innovative Recruiting and Staffing
Initiative award from the International Quality and Productivity
Center for best practices in workforce management.
Sodexho Canada was re-certified at the Gold level of Progressive
Aboriginal Relations for its continued commitment to evolution and
progress in aboriginal communities.
Sodexho was named a “Top Company for
Latinas” by LATINA Style Magazine for
the fifth time and as a “Top Corporation for
Supplier Diversity” by Hispanic Trends.
In Continental Europe, the increase in revenues in Business &
Industry (+ 3.8%) reflected varying performance by countries:
good continued sales growth in Central Europe
strong growth of existing site sales, in Spain, for example
mixed performance in other countries (particularly, Italy and the
Netherlands), linked to the economic environment and the focus by
Sodexho’s local teams on profitable
contractual terms.
Growth of 7.1 % in Healthcare and Seniors reflects the extensive service
offerings and high level of prior year sales. Among recent contract wins
are the University Hospital of Gand in Belgium and Fourvières
Hospital in France.
The growth rate in Education (+ 5.5%) can be attributed to improved
client retention rates and continued selectivity, particularly in public
markets. New clients include the schools of Dresden Fraichaud in Germany
and Sigtuna and Atvidaberg in Sweden.
The period also saw recognition for the work of Sodexho’s
teams in Continental Europe including:
In France, Sodexho received the 2006 Corporate Diversity Award for
Innovation.
In Belgium, Sodexho was the first company in its industry sector given
the right to use the government-sponsored National Nutrition and
Health Plan designation, an effort to combat unhealthy eating habits.
In the Netherlands, all Sodexho’s
Facilities Management sites received ISO 9001 certification as of
January, 2007.
In the United Kingdom and Ireland, the growth of close to 7%
confirms Sodexho’s return to growth. This
increase results particularly from Healthcare, Correctional Facilities
and, to a lesser extent, Defense. Private Finance Initiative (PFI)
contracts have been ramped up to normal operating levels. Sales activity
in the leisure market accelerated as illustrated by the contract
recently awarded for the World Scouts Jamboree.
Sodexho was recognized by the Edge Foundation, for providing outstanding
learning opportunities through its apprenticeship and vocational
programs.
In the Rest of the World, organic growth in Food and Facilities
Management services remained buoyant at 19.4%.
The strength of raw material prices contributed to good revenue growth
in Remote Sites, particularly in the Mideast, Africa and Australia and,
in the mining sector, in Latin America. Sodexho won new contracts with
PlusPetrol and Norsemont in Peru, Petrobras in Argentina, Ensco in Qatar
and Red Sea Housing in Saudia Arabia.
Finally, in China and India, Sodexho’s
expansion continues at a rapid pace, particularly with an important
contract in Facilities Management and Service Vouchers and Cards with
IBM.
Among the distinctions received by Sodexho:
Sodexho Mexico received a social responsibility award for the third
consecutive year for its emphasis on quality of life for employees,
business ethics, community involvement and environmental protection.
In Brazil, Sodexho was recognized as a best employer by HR
professionals from 800 of Brazil's most important companies.
Service Vouchers and Cards
Organic growth: +20.5%
Fueled particularly by Latin America, especially Venezuela, issue volume
totaled 3.7 billion euros, up 18.4% (at constant consolidation scope and
exchange rates).
This remarkable organic revenue growth can be attributed principally to:
innovative offers in several countries for year-end holiday season
gift vouchers
increases in voucher face values and the number of potential
beneficiaries in certain countries, such as Argentina and Venezuela
continued strong sales force performance.
At the initiative of the Center for Public-Private Sector Studies,
Sodexho Service Vouchers and Cards received in France the first
Public-Private award for innovative service offers to meet the needs of
local authorities.
-- Conference call
SODEXHO ALLIANCE will hold a conference call today to discuss
first-half revenues for Fiscal 2007. The call will begin at 8:30am
(Paris time). The call-in access number is +33 (0)1 72 26 01 65.
The press release and the slideshow will be available on the
internet by clicking on the link www.sodexho.com, under the
"Latest News" section, beginning at 7:00 am. To access the
rebroadcast of the conference call, please dial
+ 33 (0)1 72 28 01 39, code: 196024#.
-- Financial communications calendar
-- First half Fiscal 2007 results
Thursday, April 26, 2007. A presentation for analysts and
journalists will be held the same day.
-- Revenues for the first nine months of Fiscal 2007
Wednesday, July 4, 2007. The announcement will be followed by a
conference call.
The above dates are provided for information only and are
subject to change.
About Sodexho Alliance
SODEXHO ALLIANCE, founded in 1966 by Pierre Bellon, is the leading
global provider of Food and Facilities Management services, with more
than 332,000 employees on 28,300 sites in 80 countries. For Fiscal 2006,
which closed August 31, 2006, SODEXHO ALLIANCE had sales of 12.8 billion
euro. Listed on Euronext Paris and on the New York Stock Exchange, the
Group’s current market capitalization is 8.7
billion euro.
This press release contains 'forward-looking statements' within the
meaning of the United States Private Securities Litigation Reform Act of
1995. These include, but are not limited to, statements regarding
anticipated future events and financial performance with respect to our
operations. Forward-looking statements can be identified by the fact
that they do not relate strictly to historical or current facts. They
often include words like 'believe,' 'expect,' 'anticipate,' 'estimated,'
'project,' 'plan,' 'pro forma,' and 'intend' or future or conditional
verbs such as 'will,' 'would,' or 'may.' Factors that could cause actual
results to differ materially from expected results include, but are not
limited to: those set forth in our Registration Statement on Form 20-F,
as filed with the Securities and Exchange Commission (SEC), the
competitive environment in which we operate, changes in general economic
conditions and changes in the French, American and/or global financial
and/or capital markets. Forward-looking statements represent management’s
views as of the date they are made, and we assume no obligation to
update any forward-looking statements for actual events occurring after
that date. You are cautioned not to place undue reliance on our
forward-looking statements.
Annex 1: Consolidated Revenues
In thousands of euro
2005/2006
2006/2007
FIRST QUARTER (Sept. to Nov.)
. Food and management services
- North America
1 527 658
1 541 151
- Continental Europe
1 076 643
1 151 281
- United Kingdom and Ireland
332 971
365 713
- Rest of World
340 191
396 810
. Service Vouchers and Cards
82 525
98 321
. Elimination of intragroup Revenues
-1 758
-1 765
3 358 230
3 551 511
SECOND QUARTER (Dec. to Feb.)
. Food and management services
- North America
1 390 868
1 348 714
- Continental Europe
1 034 727
1 084 770
- United Kingdom and Ireland
330 433
354 209
- Rest of World
337 770
369 136
. Service Vouchers and Cards
95 812
112 899
. Elimination of intragroup Revenues
- 1 524
-2 106
3 188 086
3 267 622
% Variations
at current
at constant
exchange
exchange
. Food and management services
rates
rates
- North America
2 918 526
2 889 865
-1.0%
7.1%
- Continental Europe
2 111 370
2 236 051
5.9%
5.8%
- United Kingdom and Ireland
663 404
719 922
8.5%
6.9%
- Rest of World
677 961
765 946
13.0%
19.5%
. Service Vouchers and Cards
178 337
211 220
18.4%
22.9%
. Elimination of intragroup Revenues
- 3 282
-3 871
TOTAL
6 546 316
6 819 133
4.2%
8.4%
Growth breakdown :
- Organic growth : 8.2 %
- Acquisitions (*) : 0.2 %
- Currency effect : -4.2 %
(*) net of divestitures
Annex 2: Food and Facilities Management services revenue by
segment
Consolidated Group
In millions of euro
First half Fiscal 2006
First half Fiscal 2007
Organic Growth(1)
Business & Industry
3,008
3,184
8.2%
Healthcare
1,619
1,660
7.8%
Education
1,744
1,768
7.3%
TOTAL
6,371
6,612
7.9%
North America
In millions of euro
First half Fiscal 2006
First half Fiscal 2007
Organic Growth(1)
Business & Industry
677
649
5.8%
Healthcare
997
995
7.9%
Education
1,245
1,246
8.2%
TOTAL
2,919
2,890
7.6%
Continental Europe
In millions of euro
First half Fiscal 2006
First half Fiscal 2007
Organic Growth(1)
Business & Industry
1,239
1,308
3.8%
Healthcare
481
516
7.1%
Education
391
412
5.5%
TOTAL
2,111
2,236
4.9%
United Kingdom and Ireland
In millions of euro
First half Fiscal 2006
First half Fiscal 2007
Organic Growth(1)
Business & Industry
476
522
8.1%
Healthcare
106
119
9.6%
Education
81
79
-3.5%
TOTAL
663
720
6.9%
(1) Organic growth: increase in revenues at constant scope of
consolidation and exchange rates.
Annex 3: Selection of new clients
Foodservices and Facilities Management
North America
Business & Industry
USAA Insurance, Texas (foodservices), Houston Zoo, Houston,
Texas (1.4 million visitors, foodservices); American Family, multiple
sites (4,200 employees, foodservices and facilities management);
Cafe St. Barts, St. Bartholomew’s Church,
New York (1,000 customers per day, foodservices, special events)
Healthcare and Seniors
Stanford University Medical Center, Palo Alto, California, (430
beds, plant operations and maintenance); Moses Cone Health Center, Greensboro,
North Carolina, (535 beds, foodservices and facilities management);
Nova Gold, British Columbia, Canada, (1,000 beds,
foodservices and facilities management)
Education
Stevens Institute of Technology, Hoboken, New Jersey, (4,500
students, foodservices); Recovery School District, New Orleans,
Louisiana, (8,500 students, foodservices and facilities management);
Blue Springs School District, Blue Spring, Missouri,(14,000
students, foodservices)
Continental Europe
Leisure
Eiffel Tower, France (6 million visitors annually, foodservices),
Business & Industry
KLM, Netherlands (foodservices and facilities management), BMW
Bistro, Belgium (restaurant); C.E.A Biii, France (2,300
employees, foodservices)
Healthcare and Seniors
UZ Gent, Belgium (1,050 beds, foodservices); Hopital de Fourvière,
France (265 beds, foodservices) Leonardo da Vinci
hospitals, France, (400 beds, foodservices and facilities management)
Education
Dresden Fraichaud CCS, Germany (20,000 meals/day, foodservices); Schools
in Atvidaberg, Sweden (2,000 students, foodservices)
United Kingdom and Ireland
Prestige
World Scouts Jamboree, Chelmsford, (10 days, 40,000 people,
foodservices);
Education
Abingdon School, Oxford, (800 students, foodservices and
facilities management); University of Nottingham, Nottingham, (1,000
employees, foodservices); University of Bedfordshire, Luton,
(12,500 students, foodservices)
Rest of the World
Business & Industry
IBM, India (foodservices, facilities management and Service
Vouchers and Cards); Johnson Health Tech. Co.,Ltd., Shanghai,
China (5,000 employees, foodservices); Suzhou Industrial Park Xinhai
School, Suzhou, China, (2,400 employees, foodservices); Henkel
(China) Co., Ltd., Shanghai, China, (650 employees, foodservices); Ensco,
Quatar, (100 employees, foodservices and facilities management); Caroil,
Congo, (100 people, facilities management); Red Sea Housing,
Saudia Arabia, (4 camps, 400 people, foodservices and facilities
management); PlusPetrol, Peru (facilities management); Embraer
Neiva, Brazil, (2,500 meals/day, foodservices)
Service Vouchers and Cards
Argentina: Aceitera General
Deheza (Food Pass, 1,600 beneficiaries): Coca-Cola (Food
Pass, 2,160 beneficiaries); Brazil:
Banese (Food Pass, 1,330 beneficiaries); Secretaria Municipal de
Saúde (Gift Pass, 12,770 vouchers); Chile:
BBVA (Mobility Pass, 3,000 vouchers); Royal & SunAlliance (Meal
Pass, 200 beneficiaries); Colombia:
Fondo Nacional del Ahorro (Mobility Pass, 130 vouchers); Castrol
(Gift Pass, 1,200 vouchers); Mexico:
Asamblea Legislativa del Distrito Federal (Meal Pass, 700
beneficiaries); Banco de Mexico (Meal Pass); Venezuela:
Alcaldia Municipal del Distrito Sotillo (Food Pass, 830
beneficiaries); Cargill (Food Pass, 670 beneficiaries)
India: Air Liquide (Gift
Pass, 240 vouchers); Calyon (Meal Pass, 150 beneficiaries); Prudential
(Meal Pass, 630 beneficiaries)
Bulgaria: Petrol (Food
Pass, 2,900 beneficiaries); Société
Générale (Food
Pass, 1,200 beneficiaries); Czech Republic:
Telefónica (Holiday Pass); E.ON (Flexi
Pass); Poland: ThyssenKrupp
(Gift Pass, 1,660 vouchers); Romania:
University of Pitesti (Food Pass, 780 beneficiaries); Slovakia:
Telefónica (Meal Pass, 120 beneficiaries)
France: Mainguy (Meal Pass,
1,200 beneficiaries; Areva (CESU); Total (CESU, 1,200
beneficiaries); Région Basse-Normandie
(Assistance Pass, 55,000 beneficiaries); Région
Auvergne (Assistance Pass, 46,000 beneficiaries); Spain:
Altran (Meal Pass, 120 beneficiaries); Caixa (Assistance
Pass, 100,000 families) ; UK: Citigroup
(Education Pass)