Sodexho announces strong growth in Fiscal 2006 results.PARIS Paris, in Greek mythology Paris or Alexander, in Greek mythology, son of Priam and Hecuba and brother of Hector. Because it was prophesied that he would cause the destruction of Troy, Paris was abandoned on Mt. -- SODEXHO ALLIANCE (NYSE NYSE See: New York Stock Exchange :SDX (1) See AIT. (2) (Storage Data Acceleration) An earlier technique from Western Digital that improved performance of IDE CD-ROM drives. SDX-compliant drives used a special 10-pin cable, but the method never took off. ) (PARIS:SW): * Acceleration in organic revenue growth: +6.4% * Operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. up: +34.4% * Substantial rise in Group net income: +51.8% * Proposed dividend increase: + 27 % to 0.95 euro per share * Robust financial model: net cash provided by operating activities of 488 million euros * Confirmation of medium term perspectives The Sodexho Alliance (NYSE:SDX) (PARIS:SW) Board of Directors met under the chairmanship of Pierre Bellon to close the accounts for the year ended August 31, 2006.
[TABLE OMITTED]
(1) The transition to IFRS standards is effective on September 1,
2005 ; Fiscal 2005 and Fiscal 2006 figures are stated in IFRS
standards
(2) Borrowings less cash and cash equivalents, Restricted cash and
financial assets related to the Service Vouchers and Cards
activity
(3) Currency impact is now calculated by applying the average exchange
rate for the prior year to the current fiscal year figures
Michel Landel, SODEXHO ALLIANCE CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , said: "The strong growth of our Fiscal 2006 earnings demonstrates the dedication of all of our teams worldwide. This solid performance shows the relevance of our strategic choices and efficiency in their implementation. Going forward, we intend to reinforce our position as a global expert in both Food and Facilities Management The management of a user's computer installation by an outside organization. All operations including systems, programming and the datacenter can be performed by the facilities management organization on the user's premises. services and in Service Vouchers and Cards. The diversity of our teams and their strong motivation, the considerable potential of our markets and the strength of our financial model, make me particularly confident in our future." Acceleration in organic growth During Fiscal 2006, Sodexho Alliance revenues increased by more than [euro]1.1 billion as compared to the prior year, to reach [euro]12.8 billion. The Group continued to implement its strategy and organic growth accelerated from a rate of 4.3% in Fiscal 2005 to 6.4% in Fiscal 2006. In Food and Facilities Management services, Sodexho made substantial progress on several fronts: * Organic growth accelerated in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. (5.0%) and in Continental Europe Continental Europe, also referred to as mainland Europe or simply the Continent, is the continent of Europe, explicitly excluding European islands and, at times, peninsulas. (5.2%), driven in particular by development rates in Healthcare and Seniors * The United Kingdom and Ireland returned to positive organic growth for the first time in three years, posting an increase of 4.8% * Organic revenue growth was a robust 16.1% in the Rest of the World (Remote Sites, Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. and Asia-Australia). The Service Vouchers and Cards activity also continued its dynamic organic growth recording a rise of 15.9%. Growth in operating profit Operating profit of [euro]605 million progressed year on year by 34.4%. Fiscal 2006 operating profit includes: * a gain of [euro]21 million on the sale of Spirit Cruises, a U.S.-based river and harbor cruise company(4);
(4) This company, acquired in September 1992, achieved 44 MEUR
revenues in Fiscal 2006.
* the [euro]7 million favorable impact of a provision release related to resolution of the U.S. litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. (for which a provision of [euro]62 million was recorded in Fiscal 2005) Excluding these two items, operating profit rose by 12.6% at current exchange rates and by 9.7% at constant exchange rates, thereby exceeding the objectives set by Sodexho at the start of Fiscal 2006. On the same basis, operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: increased to 4.5%, compared with 4.4% in Fiscal 2005. Operating profit in the Service Vouchers and Cards activity was [euro]113 million. This represents particularly strong growth at 45.1%, or 38.8% (excluding currency impact) and reflects a marked rise in issue volume(5), especially in Latin America. As costs in this activity are largely fixed, operating margin improved to reach 30.4%, or 1.8% of issue volume. (5) Face value multiplied by the number of vouchers and cards issued. Highlights of operating profit performance in the different operating entities in Food and Facilities Management are as follows: * In North America, operating profit reached [euro]277 million (up 73.6%). Excluding the impact of the U.S. litigation and the capital gain on the divestment of Spirit Cruises, the increase was 7.9%, at constant exchange rates. This performance reflects:
-- strong improvement in the Education segment following
deployment of new-generation technology tools to assist
productivity management on sites;
-- continued success of the extensive Facilities Management
offer in Healthcare and Seniors.
In Fiscal 2006 Sodexho also continued to invest in human resources The fancy word for "people." The human resources department within an organization, years ago known as the "personnel department," manages the administrative aspects of the employees. (marketing, client retention and diversity), information systems and internal control. * In Continental Europe, operating difficulties in Turkey and the start-up costs of major new contracts weighed on operating profit. However, substantial productivity gains and ongoing efficiency improvements resulted in operating profit growth of 2.0% to reach [euro]203 million. * Sodexho returned to positive growth in the United Kingdom and in Ireland. Operating profit rose 158.7% to reach 42 million euros reflecting the effectiveness of measures adopted in recent years: renegotiating contracts, tighter site management rigor rigor /rig·or/ (rig´er) [L.] chill; rigidity. rigor mor´tis the stiffening of a dead body accompanying depletion of adenosine triphosphate in the muscle fibers. and control and success in driving comparable unit revenue growth. * In the Rest of the World, operating profit was [euro]28 million, a 22.1% decrease year on year largely explained by two factors:
-- an asset write-down related to the Sydney Olympic Stadium
contract in Australia;
-- the expiration of a major logistics contract in the
Middle East.
Nevertheless, and thanks to its leading positions in Asia, Remote Sites and Latin America, Sodexho was able to strengthen its development rate, capitalizing on increased demand driven by high worldwide raw material prices. Substantial rise in Group net income At [euro]323 million, net income rose to 51.8%, or 47.3% excluding currency impact. This substantial increase was principally the result of: * strong growth in operating profit, including the gain on the sale of Spirit Cruises; * a positive contribution from associates, reflecting the ramp-up effect of public-private contracts signed in previous periods. The effective tax rate was 34.1% and financial expense decreased by 4 million euros. Proposed dividend increase To demonstrate its confidence in the outlook for the Group, the Board of Directors will ask the shareholders to approve a 27% dividend increase, at 0.95 euro per share, at the next Annual General Shareholders Meeting of January 30, 2007. Robust financial model: net cash provided by operating activities Net cash provided by operating activities totalled [euro]488 million in Fiscal 2006. This included a payment of [euro]58 million in connection with the resolution of the U.S. litigation, which had been fully provided for in the financial statements for Fiscal 2005. The Group also sought to earn a higher return on the cash surplus generated by the Service Vouchers and Cards activity choosing to substantially increase the volume of long-term cash investments. The cash generated from operations was used to finance: * capital expenditures and client investments of [euro]207 million, representing 1.61% of revenues; * acquisitions for [euro]51 million, primarily 55% of the Paris Lido, 100% of Ticket Total (no.3 in the Service Vouchers and Cards market in Argentina), and the buyout of the minority investors in Altys (France). Net cash flow used in investing activities of 210 million euros also includes the proceeds from the sale of Spirit Cruises and existing cash in companies acquired. Net cash used in financing activities includes the dividend payment of 127 million euros and a reduction in borrowings of 48 million euros. Outlook for Fiscal 2007 Based on the progress achieved in Fiscal 2006, the Board approved the following objectives for Fiscal 2007: * organic revenue growth of between 6% and 7%; * around 10% operating profit growth (excluding changes in exchange rates and consolidation scope), or approximately 635 million euros. These objectives quantify the impact of the implementation of the Group's strategic imperatives and action plans prepared by each of our 28,300 sites. Confirmation of medium term objectives Sodexho's market potential is vast, and is estimated to be worth more than [euro]710 billion: [euro]250 billion for Foodservices, [euro]400 billion for Facilities Management and more than [euro]60 billion for Service Vouchers and Cards. Sodexho has a number of key competitive advantages to exploit this potential: * an unrivalled global network covering over 80% of the world's population and over 92% of world Gross Domestic Product; * world leader status in its principal markets, especially in those segments offering the greatest growth potential: Healthcare, Seniors, Education and Defense; * since its creation the Group has chosen to be a growth company, based on:
-- its values of service spirit, team spirit and spirit
of progress
-- its high ethics: transparency, loyalty, and respect
for people.
The philosophy and values that the Group has fostered since its creation is a binding force that helps guide the 332,000 employees of the Group in their daily work. * a highly effective financial model, based on activities requiring substantial human resources but little financial capital (net capital expenditures average less than 2% of revenues), leading to the generation of recurring cash to fund growth, repay debt and remunerate re·mu·ner·ate tr.v. re·mu·ner·at·ed, re·mu·ner·at·ing, re·mu·ner·ates 1. To pay (a person) a suitable equivalent in return for goods provided, services rendered, or losses incurred; recompense. 2. shareholders; * a stable share ownership structure, which guarantees the Group's independence and provides continuity in its long-term strategy. "By enhancing its market leadership in Foodservices and accelerating our expansion in Facilities Management and Service Vouchers and Cards, Sodexho intends to become the premier global outsourcing expert in quality of life services. Our objective is to achieve a medium-term average annual organic revenue growth target of 7%," concluded Michel Landel. Analyst and journalist meeting SODEXHO ALLIANCE will hold briefings today for analysts and journalists at Espace Etoile-St-Honore, 23, rue Balzac, 75008 Paris. The analysts' briefing will be webcast and will begin at 8:30 am (Paris time). A slideshow presentation will be available on the following link www.sodexho.com, under the "latest news" section, beginning at 7:00 a.m. The audio proceedings of the analysts' briefing also can be followed by dialing + 33 1 72 26 01 65. An audio recording will be available by dialing: +33 (0)1 72 28 01 49 and entering the code : 187595#. Financial communications calendar * First quarter revenue for Fiscal 2007: press release published on January 10, 2007, followed by a conference call. * Annual General Meeting of Shareholders for Fiscal 2006: January 30, 2007 at 16:30 (Paris time). The meeting will take place at the Palais des Congres (Porte Maillot, Paris). The above dates are provided for information only and are subject to change. This press release contains 'forward-looking statements' within the meaning of the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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. 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 Euronext Paris is France's securities market, formerly known as the Paris Bourse, which merged with the Amsterdam and Brussels exchanges in September 2000 to form Euronext NV, which is the second largest exchange in Europe behind the London Stock Exchange. and on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. , the Group's current market capitalization Market Capitalization A measure of a public company's size. Market capitalization is the total dollar value of all outstanding shares. It's calculated by multiplying the number of shares times the current market price. This term is often referred to as market cap. is 6.9 billion euro. Annex 1: New contracts
Food & Facilities Management Services
North America
Business & Industry Amgen, multiple sites (2,200 employees, foodservices, vending) ; Novartis (6 sites, 5,500 employees, foodservices, Facilities Management) ; Sanofi-Aventis (10 sites, 5,020 employees, foodservices, vending) ; Schlumberger Ltd., Sugarland and Austin, Texas (3,000 employees, foodservices, vending) ; Sears Towers (12,000 employees, foodservices) ; Unilever (900 employees, mailroom, foodservices, vending) Healthcare DePaul Health Center, MO (200 beds, foodservices, Facilities Management) ; Henry Medical Center, Stockbridge, GA, (200 beds, foodservices, environmental services The various combinations of scientific, technical, and advisory activities (including modification processes, i.e., the influence of manmade and natural factors) required to acquire, produce, and supply information on the past, present, and future states of space, atmospheric, ) ; HHS HHS Department of Health and Human Services. Henderson General Hospital, Canada (environmental services, foodservices) ; Hollywood Presbyterian Medical Center Hollywood Presbyterian Medical Center, formerly known as Queen of Angels-Hollywood Presbyterian Medical Center, is a hospital in Los Angeles, California, USA. The hospital has 434 beds. History Hollywood Presbyterian Medical Center was founded in 1924. , Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. , CA (422 beds, environmental services, engineering, patient transportation) ; Lutheran Care, Clinton, NY (280 beds, foodservices); Morris View Nursing Home, NJ (430 beds, Facilities Management) ; Northwest Texas Healthcare System), Amarillo, TX (393 beds, environmental services) ; PBI PBI protein-bound iodine. PBI abbr. protein-bound iodine PBI, n See iodine, protein-bound. PBI protein-bound iodine. Regional Medical Center, Passaic, NJ (223 beds, foodservices, environmental services); Windsor Regional Hospital, Canada (647 beds, foodservices) Education Francis Howell Francis Howell (1625 – 1679) was Principal of Jesus College, Oxford from 1657 to 1660. Howell was White's Professor of Moral Philosophy between 1654 and 1657. He was a Fellow of Exeter College, Oxford and was appointed to position of Principal of Jesus College by School District, MO (18 schools, 18,200 students, foodservices) ; Valdosta State University Valdosta State University is a public university located in the city of Valdosta, Georgia, in the United States, and is part of the University System of Georgia. Degree levels offered at VSU include: Associate's, Bachelor's, Master's, Education Specialist, and Doctoral. , GA (10,500 students, foodservices) ; University of Tampa The University of Tampa, or UT, is a private, co-educational university in downtown Tampa, Florida. It is accredited by the Southern Association of Colleges and Schools. In 2006, the University celebrated its 75th anniversary. , FL (5,100 students, Facilities Management, facilities design and build)
Continental Europe
Business & Industry BP Cergy, France (Facilities Management) ; CEA CEA carcinoembryonic antigen. CEA abbr. carcinoembryonic antigen CEA (Carcinoembryonic antigen) , France, (1,500 employees, foodservices) ; Huntsman, Netherlands, (650 employees, foodservices) ; Telekom Center ME-nchen, Germany (2,500 employees, foodservices) ; Deutsche Post Deutsche Post AG (ISIN: DE0005552004, LSE: DPO) is a German post, logistics and courier headquartered in Bonn, previously the German state-owned mail monopoly. It has 520,000 employees in more than 220 countries and territories worldwide and generated revenue of € 60. (3,000 employees, foodservices) ; Bristol Myers Squibb, France (Facilities Management) ; Finance Ministry, Netherlands, (1,040 employees, foodservices) ; US Steel Kosice, Slovakia, (30,000 employees, foodservices) ; US Steel Kosice, Slovakia (30,000 employees, foodservices) ; BMW BMW in full Bayerische Motoren Werke AG German automaker. Founded as an aircraft engine manufacturer in 1916, the company assumed the name Bayerische Motoren Werke and became known for its high-speed motorcycles in the 1920s. Group Iberia, Spain (700 employees, foodservices) ; Finnair, Finland (1,000 employees, foodservices) Healthcare Clinique Saint Charles Saint Charles. 1 City (1990 pop. 22,501), Kane co., NE Ill., on the Fox River, a suburb of Chicago; inc. 1850. Located in an agricultural area (corn and soybeans), the city has food-processing, aluminum and plastic products, and communications equipment , La Roche La Roche may refer to:
n. A plural of crux. , Spain, (940 employees, foodservices) ; Centre Hospitalier Lucien Hussel, France (630 beds, foodservices) ; GGNet, Netherlands, (375 beds, foodservices) ; Hospinvest Hospital, Hungary (1,060 beds) Education Borsod-Abauj-Zemplen County, Hungary, (5,800 students, foodservices) ; Vantaa Keskinen Koulut, Finland, (2,700 students, foodservices) ; Politecnico di Torino, Italia, (20,000 students, foodservices) ; Ecoles primaires, Perpignan, France, (foodservices)
United Kingdom & Ireland
Business & Industry Allenby Connaught, (Defense, 8 sites, 17,000 people, multi-activity contract); BAA, Gatwick (36,000 customers per day, foodservices); Catterick Garrison Coordinates: Catterick Garrison is a major Army base located in Northern England. It is the largest British Army garrison in the world with a population of around 12,000, plus a large temporary population of soldiers, and is larger than its older (Defense, multiple sites, 7,600 people, Facilities Management); GSK GSK GlaxoSmithKline plc (pharmaceutical company) GSK Glycogen Synthase Kinase GSK Gruppentraining Sozialer Kompetenzen (Germany) GSK Greenland Shark (FAO fish species code) HPLC HPLC high-performance liquid chromatography. HPLC high performance liquid chromatography. HPLC High-performance liquid chromatography Lab instrumentation A highly sensitive analytic method in which analytes are placed , Ware (6 sites, 10,000 people, laboratory equipment) Healthcare Leicester, Leicestershire & Rutland Facilities Consortium, Leicester (14 sites, 760 beds, foodservices); Salvation Army Salvation Army, Protestant denomination and international nonsectarian Christian organization for evangelical and philanthropic work. Organization and Beliefs The Salvation Army has established branches in 100 countries throughout the world. (2 sites, 450 employees, Facilities Management) Education Bradford University (8,000 students, foodservices); West Sussex West Sussex, nonmetropolitan county (1991 pop. 692,800), 768 sq mi (1,990 sq km), S England. A chalk ridge runs from the county's east to west edge. In the south the land flattens into a gentle plain. After early Roman invasions, the Saxons moved across Sussex. Secondary Schools (12 schools, 13,000 students, foodservices)
Rest of world
Business & Industry Cargill Group, Argentina/Brazil (6 sites, foodservices, Facilities Management) ; Mercedes Benz Mercedes Benz expensive automobile and status symbol. [Trademarks: Crowley Trade, 368] See : Luxury Center, Singapore (150 employees, foodservices) ; Ministry of Defense, Chile (foodservices) ; Mobil, Peru (Facilities Management) ; Shanghai Diesel Engine Co. Ltd, China (4,500 employees, foodservices) Shanghai Huizhong Automotive Manufactory, China (5,000 employees, foodservices) ; Toyota, Cumana, Venezuela (Facilities Management) ; Hitachi, Thailand (8,000 employees, foodservices) ; United Nations, Asian Head Quarters, Thailand, (1,200 people, foodservices) Healthcare Hospital Santa Barbara, Brazil ; (250 beds, foodservices) ; Hospital Naval, Talcahuano y ViEa, Chile (2 sites, 520 beds, foodservices, retail) ; Bangkok General Hospital, Thailand (540 beds, foodservices, technical maintenance services) ; Shanghai N1 Hospital Songjiang Branch, China (600 beds, foodservices) Education University Andres Bello, Santiago, Chile (cleaning services); Garden International School, Malaysia (1,800 students, foodservices) ; Lecong Middle School, China (3,200 students, foodservices) Remote Sites DFS (Distributed File System) An enhancement to Windows NT/2000 and 95/98 that allows files scattered across multiple servers to be treated as a single group. With Dfs, a network administrator can build a hierarchical file system that spans the organization's LANs and Nakheel Camp, United Arab Emirates United Arab Emirates, federation of sheikhdoms (2005 est. pop. 2,563,000), c.30,000 sq mi (77,700 sq km), SE Arabia, on the Persian Gulf and the Gulf of Oman. (3,000 people) ; Exxon Mobil, Jose, Venezuela (foodservices); Exxon Mobil, Australia (320 people, cleaning, administration services) ; Goro Nickel, New Caledonia (4,000 people) Service Vouchers and Cards * Traditional service offerings: Germany : Fujitsu (200 beneficiaries, Meal Pass) ; Argentina : Grupo Penaflor (1,180 beneficiaries, Food Pass) ; Belgium : Alliance Nationale des Mutualites Chretiennes (5,500 beneficiaries, Meal Pass) ; Vlaamse Radio-Televisiomroep (2,300 beneficiaries, Leisure Pass) ; Brazil : Prefecture de Colatina (5,000 beneficiaries, Food Pass) ; Ford Motor (4,000 beneficiaries, Gift Pass) ; Telsul Servicos (1,600 beneficiaries, Mobility Pass) ; Usina Moemar acurar e alcool (5,050 beneficiaries, Meal Pass) ; China : Swatch Group (200 beneficiaries, Meal Pass) ; Chile : Entel (1,000 beneficiaries, Mobility Pass) ; Hungary : Herend Porcelain Manufactory (800 beneficiaries, Food Pass) ; India : Airport Authority of India (19,480 beneficiaries, Gift Pass) ; Reliance Energy (1,200 beneficiaries, Meal Pass) ; Mexico : Casa Saba (5,200 beneficiaries, Food Pass) ; Poland : Multibank-BRE Bank (3 780 beneficiaries, Gift Pass) ; Kompania Weglowa (77,800 beneficiaries, Gift Pass) ; Romania : Metro Cash & Carry (5,000 beneficiaries, Meal Pass) ; Slovakia : Czechoslovak Trade Bank (1,400 beneficiaries, Education & Leisure Pass) ; Venezuela : Manpa (1,890 beneficiaries, Food Pass) * New services : Germany : UBS UBS Union Bank of Switzerland UBS United Bible Societies UBS United Blood Services UBS United Buying Service UBS Used Bookstore UBS University Business Services UBS Universal Building Society (UK) UBS Ulaanbaatar Broadcasting System (620 beneficiaries, Meal Pass) ; Bulgaria : Coca-Cola (1,100 beneficiaries, Gift Pass) ; India : Honda Motorcycle and Scooters (1,500 beneficiaries, Meal Pass) ; Philippines : Hewlett Packard (20 000 beneficiaries, Gift Pass), Philippines Ports Authority (2,000 beneficiaries, Gift Pass) ; UK : EADS EADS European Aeronautic Defence and Space Company N.V. EADS Expeditionary Air Defense System (USMC) EADS Extended Air Defense Systems EADS Environmental Assessment Data System EADS Echelons Above Division Study (120 beneficiaries, Childcare Pass) ; Slovakia : U.S. Steel Kosice (170 beneficiaries, FlexiPass) Annex 2 [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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