FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: SODEXHO ALLIANCE SA
CENTRAL INDEX KEY: 0001169715
STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MANAGEMENT SERVICES [8741]
IRS NUMBER: 000000000
FISCAL YEAR END: 0831
FILING VALUES:
FORM TYPE: 6-K
SEC ACT: 1934 Act SEC
FILE NUMBER:
FILM NUMBER:
BUSINESS ADDRESS:
STREET 1: 3 AVENUE NEWTON
STREET 2: 78180 MONTIGNY-LE-BRETONNEUX
CITY: FRANCE
STATE:
ZIP: 00000
BUSINESS PHONE: 0113313085
6-K
FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
February 12, 2003
SODEXHO ALLIANCE SA
3, avenue Newton
78180 Montigny-le-Bretonneux
France
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b):
Contents: Chairman's Message to the Annual Meeting of Shareholders on February
4, 2003
EXHIBIT LIST
Exhibit Description
99.1 Chairman's Message to the Annual Meeting of Shareholders on February
4, 2003
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SODEXHO ALLIANCE SA
By: /s/ Sian Herbert-Jones
-------------------------------
Name: Sian Herbert-Jones
Title: Chief Financial Officer
Date: February 12, 2003
Exhibit 99.1
Chairman's Message to the Annual Meeting of Shareholders on February
4, 2003
Code EURONEXT : EXHO.PA / Code NYSE : SDX
Ladies and Gentlemen,
Please find below the text of my message to shareholders at the Annual Meeting
of Sodexho Alliance on February 4, 2003.
I would like to talk a moment about the past, the present and the future.
The Past
In 35 years, our revenues have increased by a factor of 20,000 for four reasons:
our desire to grow, our steady focus on client needs, the importance of our
people and solid mastery of our development in activities that are not capital-
intensive and that generate free cash flow. Our successful performance has been
led by this strategy, which we've been pursuing for the past eight years.
During that period revenues have been multiplied by seven, Group net income by
six and earnings per share by 3.8.
But for the past two years, our performance has fallen short of our ambition. In
a less challenging global economic and stock market environment, our successes
have caused us to rest on our laurels. We didn't foresee the US and global
recession soon enough and we have been slow to respond and to adapt to our
clients' emerging needs.
Our size is our overriding strength but also our greatest weakness. Let me give
you two examples:
- Sodexho is a powerful social elevator, but sometimes when promoting people
within the Company, we lack the courage to choose the best over those with
more seniority. As a result, we risk becoming a bureaucracy instead of a
federation of entrepreneurs.
- Overheads for Sodexho Alliance and its subsidiaries have increased faster
than revenues, which is entirely unproductive. We have begun to remedy the
situation.
The Present
Although our fiscal 2002 performance did not meet objectives, the Group is in
good shape: Group net income increased by 33%, and our excellent financial model
enables us to finance organic growth, reimburse debt and increase dividends.
We benefit from the following competitive advantages:
- We are the world leader in Food and Management Services, as well as in the
Education, Healthcare and Senior segments, which have the greatest growth
potential. A new market segment, Defense, is opening up and on October 1
we started an 8-year, 967-million-euro contract with the US Marine Corps,
the largest food service contract ever awarded by the US military.
- We are the world's second-largest issuer of Service Vouchers and Cards.
Over the past four years, the business has expanded by nearly 20% a year
on average and will continue to grow.
- We have an outstanding international network that enables us to serve
prestige clients anywhere around the world and to benefit from the best
possible terms from our global suppliers.
- We rank first or second in nearly all our host countries, and our
geographic risks are well balanced.
- Lastly, our stable shareholder structure is an additional strength.
The Future
After the past and the present, let's look to the future. Regarding the economic
situation in the US, most experts, investors and analysts doubt there will be a
recovery in 2003, even if the Congress approves President Bush's proposed tax
cuts.
In Europe, economic growth will be weak or flat, depending on the country. The
same is true for South America. In Asia, with the exception of Japan, economic
growth will be particularly good, especially in China and India. But even if
the environment does not improve, our growth potential is enormous, both in
Food and Management Services and in Service Vouchers and Cards.
In order to continue to increase our net income and accelerate organic growth in
revenues, we must reduce our overheads while focusing clearly on our clients in
order to:
- Keep existing clients and improve retention rates.
- Increase revenues generated on existing sites.
- Gain new clients with our innovative and value-creating service offerings,
particularly organizations that have not yet outsourced the services we
provide.
Three months ago, Albert George created an Operational Committee, which includes
the 17 senior executives of the Group.
We are on the right path. Recent changes in our management and the creation of
the Operational Committee have made us very confident in the Group's future.
Corporate Governance
We are also continuing to develop good Corporate Governance practices.
The Board of Directors
The Board of Directors comprises twelve members, including one Canadian and one
British Director. At the present time, the term "independent director" does not
have a legal definition in French law. The Bouton report states the following
"for the sake of simplicity, the definition of independent director is set forth
as follows: "a director is independent when he or she has no relationship of any
nature with the Company, the Group or its management, which could compromise the
exercise of his or her free judgment.""
In the spirit of this definition, the Board of Directors considers that all of
Sodexho Alliance's directors are independent. Our Board of Directors is a
cohesive authority which collectively represents all of our shareholders and
requires each Director to act in all circumstances in the interests of all of
our shareholders and in the interests of the business.
Nonetheless, in order to conform to other definitions and with the advice of the
Selection Committee, the Board of Directors suggests that the following
directors should be considered independent directors: Mr. Edouard de Royere, Mr.
Francois Perigot, and Mr. Mark Tompkins.
In addition to their expertise, experience and understanding of strategic
challenges in markets where the Group operates, Directors are chosen for their
ability to take the interests of all shareholders into account, as well as for
their thus demonstrating an in-depth knowledge of our businesses.
To support its decision-making process, the Board has created three specialized
committees:
o The Selection Committee for Board members and corporate officers,
chaired by Mr. Francois Perigot, examines the Chairman's proposals
concerning the re-election of Board members and prepares recommendations to
present to the Board. It also keeps an up-to-date, confidential list of
potential replacements in case a position becomes vacant.
o The Compensation Committee, chaired by Mr. Remi Baudin, proposes
compensation packages for corporate officers and senior executives, and
recommends executive compensation and incentive policies.
o The Audit Committee, chaired by Mr. Edouard de Royere ensures that the
Group's financial, legal and accounting policies and procedures are
properly applied and recommends any changes it considers necessary. It may
operate independently of Sodexho Alliance management but request that
management provide relevant information.
Re-election and election of members of the Board of Directors
You have been asked to re-elect Mr. Bernard Bellon, whose term is expiring, for
a new three-year term.
We are also asking you to elect a new director, Mr. Charles Milhaud, Chairman
of the Executive Board of Caisse Nationale des Caisses d'Epargne et de
Prevoyance, for a three-year term.
In addition, the Board of Directors would like to thank Patrice Douce for his
strong contribution to the Group's development over the past 30 years and for
his participation on the Board for the past 15 years.
Internal Control
We are also strengthening our internal control. In fiscal 2002, for example, we
launched a number of major projects:
Mapping risks
The Group's Chief Financial Officer has presented the Audit Committee with a map
of the Company's risks and recommended an action plan to improve risk
management. Given Sodexho's business, the main action to date involves
reviewing and updating as needed the delegations of authority and procedures
concerning sales contracts.
Assessing exchange rate and interest rate risks
Because of the Group's extensive global presence, Senior Management has
assessed the risks related to exchange rates and interest rates in its
businesses. The findings were presented to the Audit Committee at the end of the
fiscal year.
Strengthening internal audit
Sodexho currently has approximately 30 auditors who carry out a variety of
missions. To guarantee their independence within the organization, in mid-year
the Group Internal Audit began reporting to the Chairman and Chief Executive
Officer. This ensures that their objectives, assignments and priorities are
defined at the highest level.
A new Internal Audit Director has just been hired.
Relations with outside auditors
Last year, Senior Management, at the request of the Audit Committee, defined
the missions of outside auditors and determined the number of hours needed to
complete them. This process is also underway for fiscal 2003. Relations with
auditors are now centralized.
Appointment of a new co-auditor and alternate auditor
Mr. Olivier Belnet, statutory auditor, and Mrs. Andree Boyer, alternate auditor,
have informed the Company of their resignation as co-auditors, effective as of
this Annual Meeting. The Board of Directors has proposed that shareholders
appoint KPMG SA as statutory auditor. Sodexho thanks Mr. Belnet and Mrs. Boyer
for their cooperation during their eight years of serving as co-auditors.
Transparency
The Group maintains its commitment to transparency and will strengthen its
communication with shareholders.
Sustainable development
The Group will continue to be actively involved in the area of sustainable
development:
I would like to emphasize four points:
o Our philosophy, indeed our purpose, is to meet the expectations of our
clients, our employees and our shareholders. That's why, even before I
created Sodexho, I preferred organic growth.
o Organic growth has made us a powerful social elevator. We provide jobs and
promote our best employees. All Sodexho employees with similar
qualifications enjoy equal opportunity regardless of their race, gender,
culture, or creed.
o Our mission is to improve the quality of daily life for schoolchildren,
students, patients, senior citizens, and employees in factories and offices
and on major onshore and offshore sites. We are also committed to
participating in the economic and social development of the 74 countries in
which we operate.
o Among our many sustainable development initiatives, the most outstanding is
S.T.O.P. Hunger, a program dedicated to combating all forms of malnutrition.
Every year, 30 million people around the world--two-thirds of them
children--die of hunger and some 800 million suffer from malnutrition.
For fiscal 2003:
- Our objective for organic growth in revenues is between 4 and 6%; in the
United Kingdom, we are focusing on profitability rather than growth; and
further, the prospect of war with Iraq is making our clients hesitate
before investing and hiring.
- Our EBITA margin should return to 4.7%.
- Our objective for fiscal 2003 Group net income, at constant exchange rates
and excluding exceptional items, is 210 million euro. It will be difficult,
but we will do our best to meet this objective.
In closing, I would like, on behalf of the Board of Directors, to thank all our
clients for their continued trust, our people who maintain their professionalism
and efficiency every day to ensure our success around the world, and our
shareholders for their loyalty.
Pierre Bellon
Chairman and Chief Executive Officer
This document 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.