Sodexo S/Adr

Good morning. Thank you for standing by and welcome to Sodexo's first How Fiscal 2022 Results conference call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. I advise you that this conference is being recorded today on Wednesday, the 5th of April, 2023. At this time, I would like to hand the conference over to the Sodexo team. Please go ahead.

Thank you. Good morning, everyone. Welcome to our first half fiscal year 2023 results conference call. I'm here with Sophie Belland, our chairwoman and CEO, and Mark Rolland, our CFO. They'll go through the presentation and then take your questions. The slides and press releases are available on our site, and you'll be able to access this call on our website for the next 12 months. The call is being recorded, but may not be reproduced or transmitted without our consent. I need to warn you that certain information included in this presentation are forward-looking statements, including in relation to the proposed spinoff, and listing of benefits and rewards. These forward-looking statements are based on current beliefs, expectations, and assumptions, including, without limitation, assumptions regarding present and future business strategies and the environment in which Sodexo Group operates, and involve known and unknown risks, uncertainties, and other factors, which may cause actual results, performance, or achievements, or industry results or other events to be materially different from those expressed or implied by these forward-looking statements. Forward-looking statements speak only as of the date of this presentation, and Sodexo Group expressly disclaims any obligation or undertaking to release any update or revisions to any forward-looking statements included in this presentation to reflect any change in expectations or any change in events, conditions, or circumstances in which these forward-looking statements are based. For the full disclaimer, please look at the last page of the press release or the presentation. Please get back to the IR team if you have any further questions after the call, and I now hand you over to Sophie.

Thank you, Virginia. Good morning, everyone. Thanks for being with us today. This morning, I'm really pleased to be able to announce not only a great set of H1 numbers, but also the launching of the project to spin off BRS and create two pure players. I shall come back to this at the end. Let's first go through the numbers. On slide four, group organic revenue growth for the first half was 13.4%, and as we expected, we have seen the final step up post-COVID of the recovery in the return to the office and a strong increase in convention centers and sporting events activity. The underlying operating margin was up 60 basis points at 5.8%, or 50 basis points excluding currencies, so perfectly in line with our guidance for the year. On-site services were up 12.9%, with a margin back up at 5.1%. And benefits and rewards achieved much better growth than expected at 24.2%, with a margin up 510 basis points on constant currencies at 31.9%. We have won some exciting contracts this last quarter. A couple of highlights. Integra won the contract for the purchasing of all Accor hotels in North America for a minimum of five years. This is a big new contract for Integra and has already started seamlessly. We want this contract based on our data-driven focus, flexibility, detailed and customized reporting, strategic growth partnership focus, understanding of their sector, and our capacity to provide custom contracting and enhanced productivity. We have a commitment also to support their sustainability efforts. In case you had forgotten, Accor was a founding member of the Avendra GPO, and we do already serve Accor hotels in some European countries. Another example is the Czech Republic, where we have expanded our relationship with Coda. We are now leveraging our employee benefit and engagement platform by proposing leisure benefits in addition to a wide range of existing benefits. We are also very proud of the way we have been able to extend our relationship with Corian into Spain. In a three-year contract, we will be servicing 57 sites including senior and mental health sites, with food service and cleaning service, including procurement, on-site food, and chilled delivery. Finally, I would just like to highlight the renewal and extension of the Unilever contract. We will be providing IFM services to 82 sites in Europe, North America, and Asia Pacific in their headquarter offices, research and development, and manufacturing sites. Having in the last decade driven IFM standardization for Unilever in this new contract, we are being asked to enhance user experience in a more flexible, more digital post-COVID world. Now let's turn to our growth indicators. Retention in the first half was 97.8%. We have not had any surprises losses this semester. So we're on track to reach our objective of 95% for the year. New development was 3.6%, representing more than 800 million euros, including cross-selling, which is a record level for an H1. On slide seven, you can see that the organic growth of food service was plus 20%, reflecting the full recovery post-COVID, compared to the 2% FM organic growth or plus 6% excluding the impact of the testing center's contract. The result is that the mix of our revenue has changed with 65% coming from food in the first half of the year and 35% from FM services. When we look at the new development sign during the same period, the share of pure food services has also increased by 4 points to 59%. Integrated services, where we are selling food and FM services, has also increased its share. As I said at the Capital Markets Day, we are focusing more and more on food services and integrated services, where there is a high perceived value for clients. I now pass on to Mark for the details of our first half numbers.