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2004-2005 Revenues
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- Organic growth in line with objectives: + 4.3 % increase
- + 4.1 % increase in Food and Management Services, driven by Healthcare
- Rapid growth in Service Vouchers and Cards: + 13.2 %
Paris, October 5, 2005. SODEXHO ALLIANCE (Euronext Paris FR0000121220 - SW / NYSE:SDX), the leading global provider of food and management services, today announced revenues for the 2004-2005 fiscal year ended August 31, 2005.
Revenues by activity
French GAAP (1)
In millions of euro | 2003-2004 | 2004-2005 | Organic growth(2) | Currency impact(3) | External growth | Total change |
Food and Facilities Management services | 11,248 | 11,392 | 4.1% | -2.4% | -0.4% | 1.3% |
North America | 5,031 | 5,006 | 4.4% | -4.9% | - | -0.5% |
Continental Europe | 3,760 | 3,919 | 4.1% | 0.1% | 0.1% | 4.3% |
United Kingdom and Ireland | 1,351 | 1,303 | -2.6% | -1.0% | - | -3.6% |
Rest of the World | 1,106 | 1,164 | 10.4% | -1.2% | -3.9% | 5.3% |
Service Vouchers and Cards | 246 | 280 | 13.2% | 0.7% | -0.4% | 13.5% |
Total | 11,494 | 11,672 | 4.3% | -2.4% | -0.4% | 1.5% |
(1) The transition to International Financial Reporting Standards (IFRS) will begin in FY 2005-2006, effective as of September 1, 2005
(2) Organic growth: increase in revenues at constant consolidation scope and exchange rates
(3) The US dollar declined by 5.3 % against the euro during FY 2004-2005
Fiscal 2004-2005 was a mixed year. In North America, the trend of outsourcing of services in the Healthcare and Education market continued. Some European economies deteriorated further. In the rest of the world, the Group's markets enjoyed a more favorable climate.
At + 4.3 %, organic growth exceeded the - 2.4 % negative impact from exchange rate fluctuations, for the first time in three years.
Organic growth in Food and Management Services reflects a sharp increase in the Healthcare segment (+6.2 %), particularly in North America. Progress in the Education segment (+ 4.5 %), benefited from the robustness of the North American university market, while in Europe, the Group favored a more selective development. Organic growth was +2.8 % in the Business & Industry segment.
In the Rest of the World, growth was strong in Asia, Latin America and in Remote Sites. Additionally, development of Service Vouchers and Cards accelerated significantly.
Commenting on Fiscal 2004-2005 growth, Michel Landel, Chief Executive Officer of SODEXHO ALLIANCE, said: « Organic growth is in line with our objective for 2004-2005. We are well-positioned to move forward in our chosen global markets and segments that have strong potential. To accelerate annual growth to 7 % on average in the medium term, we will continue to focus our efforts on client retention, on increasing revenues at existing sites and on developing our multiservice offering.”
Organic growth analysis
(See Appendix 1 for details and Appendix 2 for a selection of new clients)
Food and Management Services
- North America: acceleration of organic growth at + 4.4 % (+ 3.7 % in 2003-2004)
- Continental Europe: + 4.1 %
- United Kingdom and Ireland: 2.6 % decline; improvement expected in 2005-2006
- Rest of the World : + 10.4 %
In North America, revenues in Business & Industry for fiscal 2004-2005 declined slightly from the previous year, despite enhanced progress in retail food services on existing sites and new contract awards. Furthermore, the decline in customers on US military bases and the longer than expected discussions with the US Marine Corps have weighed on the year's performance.
Strong organic growth in the Healthcare segment (+7.3 %) has been driven by the expansion of services to existing clients and customers and by successful new sales.
In the Education segment, the university market contributed to solid year-on-year performance (+ 5.8 %).
In Continental Europe, revenues in Business & Industry grew through rapid expansion in Central Europe, Germany and Spain, largely as a result of new contract wins. In other European countries, progress was limited, reflecting the decline in the number of customers due to headcount reductions at certain client sites.
In Healthcare, both in acute care and senior markets, the Group accelerated its development, while maintaining a focused market approach.
Growth in Education reflected our selectivity in the public sector.
In the United Kingdomand Ireland, the Group was able to capitalize on its multiservice offering in Defense and Correctional markets. Good progress was achieved in improving the client retention rate. The Group is now targeting a return to slightly positive growth during fiscal 2005-2006.
In the Rest of the World, Group activities recorded double-digit growth rates in Latin America, in Asia and in Remote Sites. Excluding the impact of the Rugby World Cup in fiscal 2003-2004, organic growth would have been 15.6 %.
Service Vouchers and Cards
Organic growth: + 13.2 %
Organic growth was driven by issue volumes totalling 5.3 billion euros, up 8.9 % (excluding the impact of scope and of currency fluctuations). Demand for Restaurant, Grocery and Gift Pass vouchers was robust. Several large orders were received at the end of the year from public sector clients, both in Central Europe and Latin America. In addition, a slightly more favorable interest rate environment contributed to the solid growth in revenues.
Downlaod appendix 1 in pdf
Download appendix 2 in pdf
About SODEXHO ALLIANCE
SODEXHO ALLIANCE is the leading global provider of Food and Management services, with more than 313,000 employees on 24,900 sites in 76 countries. Listed on Euronext Paris and on the New York Stock Exchange, the Group's current market capitalization is 5.1 billion euros.
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.
