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
June 21, 2004
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: Financial Statements for the First Half of 2003-2004
EXHIBIT LIST
Exhibit Description
99.1 Financial Statements for the First Half of 2003-2004
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: June 21, 2004
Exhibit 99.1
Financial Statements for the First Half of 2003-2004
Code EURONEXT : EXHO.PA / Code NYSE : SDX
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.
Sodexho Group
Management Review
February 29, 2004
1. Financial performance for the first half of 2003-2004
Six months Six months % change Currency
ended ended excluding effects % change
February 28, February 29, currency
2003 2004 effects
Revenues 6,198 5,890 +3.9% -8.4% -4.5%
EBITA 294 281 +4.0% -8.7% -4.7%
Group net
income 86 97 +24.3% -11.6% +12.7%
o The organic growth in revenues, at constant consolidation scope and
excluding currency effects, was 3.9%, compared to 2.9% for the prior
comparable period.
o The euro's sharp appreciation against other currencies, notably the US
dollar, led to a translation effect in the consolidated accounts which
reduced reported revenues by 8.4%, EBITA by 8.7% and Group net income by
11.6%. However, unlike exporting companies, our subsidiaries' revenues and
expenses are denominated in the same currency. Consequently, currency
fluctuations do not create operating risks for Sodexho.
o Excluding currency effects:
o EBITA increased by 4%, which represents an EBITA margin of 4.8%
o Group net income after goodwill amortization increased by 24.3%.
Food and Management Services
North America
The organic growth in revenues in the first-half of 2003/2004 was 4.1%, as
compared to 3.3% for the prior comparable period. With organic growth rates
of 5.8% in the Education segment and 4% in the Healthcare and Seniors
segments, the Sodexho teams continue to implement the development strategy
of the Group - client retention, increasing sales on existing sites and the
conversion of self-operated accounts. In the Business and Industry segment,
revenues decreased by 0.7%, mainly due to the impact of delocalizations and
the absence, as of today, of any sign of increased employment in large
businesses. The Defense segment benefited from one additional month of
activity in the 55 sites for the US Marine Corps as compared to the prior
comparable period. From the beginning, this contract has required great
flexibility from our local teams to adapt to the client's frequently
changing needs.
During the first-half of 2003/2004, we achieved commercial successes such
as Novartis Research Center, Harley Davidson, the World Bank Conference
Center, the public schools of Saint-Louis, the University of Concordia
(Wisconsin) and the University of Tulsa (Oklahoma). In Canada, Sodexho
signed the largest contract ever in the public healthcare sector with the
Vancouver Coastal Health and Providence Authority. This 10-year contract
valued at CAD 405 million (EUR 240 million) includes 22 hospital and
retirement home sites.
EBITA was EUR 146 million, with an EBITA margin of 5.5% after taking into
account the additional amortization costs in connection with our
investments in information systems implemented during the prior fiscal
year.
Continental Europe
Organic growth of revenues in the first-half of 2003/2004 was 3.3%, as
compared to 4.9% in the prior comparable period, mainly due to:
- a difficult economic environment in the Business and Industry segment in
France and in Northern Europe, and
- a more competitive market for public contracts in Scandinavia and in
Southern Europe.
In this environment, the Business and Industry segment achieved an organic
growth of 2.6%. The organic growth in the Education and Healthcare and
Senior segments was 3.6% and 4.9%, respectively.
A number of major contracts were signed during the first-half of 2003/2004,
such as Alcatel Space and Generali in France, Sambacy Group in Turkey and
Gavle in Sweden, the school systems of Frankfurt, Milan, Sienna and
Budapest, the University of Utrecht, 20 centers for the disabled in Fejer,
Hungary and the Fremap clinic in Spain.
EBITA was EUR 87 million with an EBITA margin of 4.6%. The first half
results reflected difficulties and subsequent reorganization in the meals
delivery activity in Education, in metropolitan Paris, which weighed
temporarily on the operating margin.
United Kingdom and Ireland
Revenues decreased by 7.2% due to the termination of loss-making contracts
in the Business and Industry and Healthcare segments during the prior
comparable period.
In recent months, two long-term contracts, each valued at EUR 19 million
annually, were signed: the Colchester Garrison in the Defense segment and
the Havering Hospital in Healthcare.
EBITA was EUR 5 million, or an EBITA margin of 0.8%. These results do not
include EBITA profit of EUR 6 million earned by our British teams, for the
Rugby World Cup in Australia.
The action plan begun 18 months ago to return the subsidiary to
profitability is well underway, and is focused on the following: better
control over costs on each site, the renegotiation or termination of
unprofitable contracts, the training and motivation of the teams, and
reductions in overhead costs. Progress made in this area is partially
offset by increases in pension fund contributions.
The team in the United Kingdom and Ireland, is reinforcing the action plans
in order to restore profitability to a level in line with that of the rest
of the Group.
Rest of the world
In Sodexho's other regions, organic growth was 21.5%, of which almost half
resulted from the hospitality package contract for the Rugby World Cup in
Australia. During the first half, we experienced commercial successes in
the Remote Sites segment with the signing of new contracts such as Chiyoda
in the Sakhalin Islands, the residential complex in Al Khor for Qatargas
and the extension of Shell Rabi in Gabon. The Food and Management Services
activity continues its development in China with the signature of contracts
such as Shanghai Automotive Industry Corporation and Saint Gobain. In Latin
America, growth accelerated as illustrated by numerous commercial successes
such as Siemens and Anglo-American in Brazil and Leonisa in Colombia, and
margins are improving.
EBITA was EUR 19 million with an EBITA margin of 3.4%.
Service Vouchers and Cards
Revenues in the Service Vouchers and Cards activity include client and
affiliate commissions and investment income. Although organic growth for
this activity was only 4.1% for the first half, issue volume of EUR 2.5
billion represents an approximate 10% increase as compared to the prior
comparable period, excluding currency effects.
The general decline in interest rates, notably in Latin America, and the
labor force reductions in businesses, mainly in Germany, have held back
growth.
In Great Britain, revenues for the first half of the prior year included
exceptional billings to the Home Office pertaining to the shift from paper
vouchers to smart cards. This new system improves the reliability and the
security of the service while reducing the client's distribution costs.
New contracts continue to be signed, for example, the Aldi Group in
Belgium, a savings bank in Romania, Philip Morris and Unilever in Hungary,
Adecco in France and Ipostel in Venezuela.
EBITA was EUR 37 million with a margin of 29% as compared to 33% in the
prior comparable period. This change resulted mainly from lower interest
rates on financial investments.
Net financial expense
The net financial expense of EUR 65 million improved by EUR 17 million due
to the reduction in debt-related expenses.
Net exceptional expense
Net exceptional expense of EUR 11 million mainly includes:
o the provision recorded for the sale of the subsidiary Medcheque in
Brazil for EUR 6 million, and
o provisions totaling EUR 4 million related to stock options and
losses on treasury shares acquired in connection with existing stock
option plans.
Income tax
The effective tax rate decreased from 41% for the first-half 2002/2003 to
35% for the first-half 2003/2004, mainly as a result of realizing tax
deductions on items which were previously considered non-deductible.
Group net income
Group net income after amortization of goodwill was EUR 97 million, an
increase of 24.3% excluding currency effects.
2. Outlook
In November 2003, the Board of Directors fixed minimum objectives for
2003-2004. Today, based on current information, we confirm :
- organic growth in revenues of at least 3.1%,
- EBITA of approximately EUR 550 million,
- Group net income, excluding exceptional items, of EUR 170 million.
These figures are based on the exchange rates used in the fiscal year
2002-2003 financial statements.
Based on current exchange rates, we estimate that the variations in
exchange rates will have a negative impact at around 7% to 8% on Group Net
Income for the fiscal year.
The Board of Directors has expressed its confidence in the Group's future
because Sodexho's strengths are numerous:
- Sodexho's values: service spirit, team spirit, and spirit of progress;
- Sodexho's mission: "Improve the quality of daily life", which gives
meaning to all of our team members;
- Sodexho's worldwide network and its presence in 76 countries;
- Sodexho's strong competitive positions;
- Sodexho's excellent financial model.
SODEXHO Group
Consolidated Financial Statements
February 29, 2004
1. Consolidated Income Statement
(in millions of euro) 6 months ended % revenues Change 6 months ended Year ended
February 29, February 28, August 31,
2004 2003 2003
REVENUES 5,890 100% (4.5%) 6,168 11,687
Other income 21 21 37
Purchases (2,048) (34.8%) (2,121) (3,955)
Employee costs (2,695) (45.8%) (2,874) (5,519)
Other
external charges (743) (12.6%) (779) (1,482)
Taxes, other
than income taxes (41) (0.7%) (36) (79)
Depreciation and
increase in
provisions (103) (1.7%) (85) (175)
----------- ----------- ---------- ----------- ------------
EARNINGS BEFORE
INTEREST, EXCEPTIONAL
ITEMS, INCOME TAXES,
INCOME FROM EQUITY
METHOD INVESTEES,
GOODWILL AMORTIZATION
AND MINORITY INTERESTS
(EBITA) 281 4.8% (4.7%) 294 514
Financial expense, net (65) (1.1%) 20.8% (82) (152)
----------- ----------- ---------- ----------- ------------
INCOME BEFORE EXCEPTIONAL
ITEMS, INCOME TAXES,
INCOME FROM EQUITY
METHOD INVESTEES,
GOODWILL AMORTIZATION
AND MINORITY INTERESTS 216 3.7% 1.5% 212 362
Exceptional (expense)
income, net (11) (7) 1
Income taxes (71) 1.2% 14.7% (83) (134)
----------- ----------- ---------- ----------- ------------
INCOME BEFORE INCOME
FROM EQUITY METHOD
INVESTEES, GOODWILL
AMORTIZATION AND
MINORITY INTERESTS 134 2.3% 9.6% 122 229
Net income (loss)
from equity method
investees 1 2 4
Goodwill amortization (29) (0.5%) 9.1% (32) (62)
----------- ----------- ---------- ----------- ------------
GROUP NET INCOME BEFORE
MINORITY INTERESTS 106 1.8% 15.6% 92 171
Minority interests in
net income of consolidated
subsidiaries 9 0.2% 6 9
----------- ----------- ---------- ----------- ------------
GROUP NET INCOME 97 1.6% 12.7% 86 162
=========== =========== ========== =========== ============
EARNINGS PER SHARE
(in euro) 0.61 12.7% 0.54 1.02
DILUTED EARNINGS PER
SHARE (in euro) 0.59 12.1% 0.53 1.00
2. Consolidated Balance Sheet
ASSETS (in millions of euro) February 29, 2004 August 31, 2003 February 28, 2003
FIXED AND INTANGIBLE ASSETS, NET
Goodwill 1,402 1,492 1,505
Intangible assets 2,486 2,686 2,732
Property, plant and equipment 365 379 358
Financial investments 62 64 78
Equity method investees 19 19 9
---------- ---------- ---------
o Total fixed and
intangible assets, net 4,334 4,640 4,682
CURRENT AND OTHER ASSETS
Inventories 172 170 178
Accounts receivable, net 1,589 1,383 1,603
Prepaid expenses, other
receivables and other assets 565 637 612
Marketable securities 632 542 544
Restricted cash 150 166 152
Cash 394 570 593
---------- ---------- ---------
o Total current and other assets 3,502 3,468 3,682
---------- ---------- ---------
TOTAL ASSETS 7,836 8,108 8,364
========== ========== =========
SHAREHOLDERS' EQUITY AND LIABILITIES
(in millions of euro)
SHAREHOLDERS' EQUITY
Common stock 636 636 636
Additional paid in capital 1,186 1,186 1,191
Consolidated reserves 251 427 365
---------- ---------- ---------
o Total Shareholders' Equity 2,073 2,249 2,192
MINORITY INTERESTS 70 66 68
PROVISIONS FOR CONTINGENCIES
AND LOSSES 86 89 85
LIABILITIES
Borrowings 2,370 2,488 2,616
Accounts payable 1,041 1,128 1,245
Vouchers payable 852 794 763
Other liabilities 1,344 1,294 1,395
---------- ---------- ---------
o Total Liabilities 5,607 5,704 6,019
---------- ---------- ---------
TOTAL SHAREHOLDERS' EQUITY
AND LIABILITIES 7,836 8,108 8,364
========== ========== =========
3. Consolidated Cash Flow Statement
(in millions of euro) 6 months ended 6 months ended Year ended
February 29, 2004 February 28, 2003 August 31, 2003
OPERATING ACTIVITIES
Consolidated net income
before income (loss)
from equity method
investees and minority
interests 104 90 167
o Non cash items
Depreciation and provisions 124 96 215
Deferred taxes (4) 6 (9)
Losses (gains) on disposal
and other, net of tax (2) 15 14
---------- ---------- ---------
o Cash provided by operating
activities 222 207 387
Dividends received from
equity method investees 3 1 3
Change in working capital
from operating activities (188) (86) 100
---------- ---------- ---------
o Net cash provided by
operating activities 37 122 490
INVESTING ACTIVITIES
Tangible and intangible fixed assets (81) (121) (241)
Fixed asset disposals 3 9 15
Acquisitions, net of dispositions,
of consolidated subsidiaries (14) (4) (33)
Change in working capital from
investing activities 3 (7) (19)
---------- ---------- ---------
o Net cash used in investing
activities (89) (123) (278)
FINANCING ACTIVITIES
Dividends paid to parent
company shareholders (97) (98) (94)
Dividends paid to minority
shareholders of consolidated
companies (3) (6) (11)
Increase in shareholders' equity 0 0 0
Proceeds from borrowings 126 130 104
Repayment of borrowings (133) (90) (178)
Change in working capital
from financing activities 89 89 (23)
---------- ---------- ---------
o Net cash provided by
(used in) financing activities (18) 25 (202)
---------- ---------- ---------
INCREASE / (DECREASE) IN NET CASH,
CASH EQUIVALENTS AND MARKETABLE
SECURITIES (70) 24 10
========== ========== =========
Cash, cash equivalents, and
marketable securities, as
of beginning of period 1,278 1,307 1,307
Add: provisions as of
beginning of period 8 23 23
Cash, cash equivalents,
and marketable securities,
as of end of period 1,176 1,289 1,278
Add: provisions as of end of period 1 12 8
Net effect of exchange rates on cash 39 53 54
---------- ---------- ---------
INCREASE / (DECREASE) IN NET CASH,
CASH EQUIVALENTS, AND MARKETABLE
SECURITIES (70) 24 10
========== ========== =========
Notes to the consolidated
Financial Statements
I SIGNIFICANT EVENTS
The Group, through its subsidiary Sodexho Pass Do Brazil, decided to sell the
Medcheque subsidiary. Medcheque was formed in 1997 and specialized in the
marketing and selling of healthcare cards in Brazil. A provision of EUR 6
million (EUR 3.6 million after taxes), relating to the loss on this disposal,
was recorded as an exceptional expense during the period ended February 29,
2004. The disposal occurred on March 11, 2004.
II SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, VALUATION AND CONSOLIDATION
METHODS, AND PRIOR YEAR COMPARATIVES
The Group financial statements have been prepared in accordance with accounting
principles established by the Comite de la Reglementation Comptable No 99-02
("CRC Regulation 99-02") and the Opinion of the Conseil National de la
Comptabilite in relation to Interim Financial Statements in France.
The interim consolidated financial statements have been prepared in accordance
with the same accounting principles as the year end financial statements,
including the tax calculation, which, given the nature of our activities, could
be calculated with sufficient accuracy.
There have been no changes in accounting methods during the 6 months ended
February 29, 2004.
Amounts in tables are expressed in millions of euro.
1. Revenue recognition
In the Food and Management Services, revenue is recognized in the period in
which services are provided pursuant to the terms of the contractual
relationships with clients.
Revenues for the service voucher segment include commissions received from
customers, commissions received from affiliates and investment income realized
on the nominal value of the vouchers during the period from their issuance
through redemption.
2. Retirement benefits
For funded plans to which the subsidiary makes a contribution, the amount of the
contribution is recorded as the expense of the plan. Otherwise the Group's
benefit obligations relating to defined benefit pension and retirement indemnity
plans are recorded in the balance sheet.
3. Stock options
Sodexho Alliance has acquired treasury shares in connection with its stock
option plans which are recorded in marketable securities. A liability (and
corresponding expense) is recorded if at the closing date of the period, the
acquisition cost of the shares acquired is superior to the exercise price of the
options awarded.
If the number of treasury shares acquired is less than the number of options
awarded, a liability (and corresponding expense) is recorded for the difference
between the market price at the end of the period and the exercise price,
multiplied by the number of remaining shares to be acquired for the applicable
tranche of stock options.
4. Exceptional Items
Exceptional income and expenses are recorded for significant items which, due to
their unusual character and non-recurring nature, are not considered to be
inherent to the operating activities of the Group. In general, such costs relate
to gains or losses on asset dispositions, restructuring costs, exceptional
depreciation of fixed and intangible assets, or provisions or expenses recorded
in connection with stock option plans.
5. Earnings per share
Earnings per share and diluted earnings per share are calculated using methods
recommended by Advice No. 27 of the Ordre des Experts Comptables.
Earnings per share is calculated by dividing group net income by the average
number of shares outstanding during the year.
In the calculation of diluted earnings per share, the denominator is increased
by the number of potential shares outstanding, and the numerator is increased by
the net-of-tax interest income (calculated at the Taux Moyen Mensuel du Marche
Monetaire Euro) on the proceeds which would have resulted from the issuance of
these shares.
The potential shares included in diluted earnings per share relate to stock
options awarded but not yet exercised and warrants outstanding from the 1996
bond issuance, which are exercisable prior to June 2004.
6. Foreign currency transactions and translation
For subsidiaries located in countries with stable currencies, assets and
liabilities are translated using the end of period exchange rate.
Income statement and cash flow statement line items are translated using the
average exchange rate for the year, calculated using monthly averages.
The monthly average exchange rates are calculated as the average of the end of
month rate and the rate for the prior month.
Exchange rates used are obtained from Euronext Paris and other international
financial markets.
The difference between the translation of the income statement at average and
period end rates, as well as the difference between the opening balance sheet
accounts as translated at beginning and end of period rates is recorded in
shareholders' equity.
Foreign exchange gains and losses resulting from intragroup transactions in
foreign currencies during the year are recorded in the income statement.
The financial statements of the following subsidiaries reflect currency
devaluations as required by local regulations:
- Sodexho Chile (sub-consolidation) - Siges Chile
- Sodexho Pass Chile - BAS (Chile)
- Sodexho Colombia - Sodexho Sitios Remotos de Peru
- Sodexho Pass de Colombia - Sodexho Peru
- Promocupon (Mexico) - Prestaciones Mexicanas SA de CV
- Sodexho Servicios de Personal (Mexico) - Sodexho Servicios Operativos (Mexico)
- Sodexho Mantenimiento y Servicios (Mexico) - Sodexho Mexico
- Sodexho Restoran Servisleri (Turkey) - Sodexho Toplu Yemek (Turkey)
- Sodexho Argentina - Luncheon Tickets (Argentina)
The inclusion of monetary corrections imposed by local regulators on these
subsidiaries in the consolidated financial statements had no impact on the
income statement.
Foreign currency translation differences for these subsidiaries are recorded in
the currency translation adjustment account in shareholders' equity in the same
manner as for the subsidiaries in countries with stable currencies.
For subsidiaries located in highly inflationary countries (Venezuela),
differences between net income translated at average and period-end rates are
included in net financial expense.
Translation differences on monetary assets and liabilities denominated in
foreign currencies are recorded in the income statement. Translation differences
related to a monetary component of a net investment in a company within a
consolidated foreign subsidiary are recorded in consolidated shareholders'
equity until the sale or liquidation of the net investment.
7. Valuation of assets and liabilities
Assets and liabilities of acquired companies have been recorded at their
respective fair values effective September 1, 2000.
The inclusion in the consolidation scope of Sodexho, Inc., Wood Dining Services,
Sogeres, Sodexho Services Group Ltd, Sodexho Scandinavian Holding AB and
Universal Services at fair value resulted in the recording of intangible assets
relating to the value attributed to the significant market shares inherent in
the portfolios of contracts held by these six companies in their principal
geographic markets (the United States, France, the United Kingdom and Ireland,
the Netherlands, Australia and Sweden).
No deferred taxes are recorded on market shares.
Goodwill represents the excess of acquisition cost over the fair value of the
identified assets and liabilities assumed, as of the initial inclusion of an
acquired company in the consolidation scope. Due to the long-term nature of the
markets in which the Group operates, goodwill is generally amortized over thirty
years (calculated on a pro rata basis in the year of acquisition).
Market share is principally determined based on an average of multiples of
revenues and EBITA achieved by the acquired companies in their main markets and
is reviewed annually for impairment.
Market shares are not amortized in the consolidated financial statements. If
there is a significant diminution in the market share value for more than two
consecutive years, as recomputed based on actual results compared to the
original amounts, an impairment loss is recorded.
As indicated as of August 31, 2003, the impairment test on market shares and
goodwill is further supported by a calculation of the assets' "value in use", as
determined based on discounted future cash flows. The method used to determine
value in use is described below.
In addition, as of February 29, 2004, the Group performed an impairment test on
the intangible assets as required by the "Reglement du CRC number 2002-10"
issued on December 12, 2002 which defines the recoverable value of an asset as
the higher of the market value or value in use.
- The market value is calculated based on criteria determined at the date of the
acquisition corresponding mainly to revenues and EBITA and using multiples of
recent transactions.
- Value in use is determined using the value of future cash flows after taxes
calculated based on operating plans set out by management for a period of three
years. These plans are extended over a longer period, for which the flows are
extrapolated by applying a growth rate specific to the sector of activity and
geographical region concerned. Cash flows are discounted using the average cost
of capital.
- The recoverable value as determined is then compared to the sum of intangible
assets, other fixed assets and working capital.
These impairment tests on intangible assets did not result in an impairment
charge for the period ended February 29, 2004.
The "Reglement du CRC number 2002-10" (in particular with respect to tangible
fixed assets) will be fully implemented by the Group as of August 31, 2004.
8. Property, Plant and Equipment
Leased assets are recorded on the balance sheet as capital leases in instances
where a Group company is deemed to bear substantially all of the risks and
rewards of the leased asset. A corresponding obligation is recorded as a
liability, and the related rental cost is allocated between depreciation and
interest expense in the income statement.
Depreciation of the intangible and tangible fixed assets are, as shown in their
statutory accounts, calculated on a straight-line basis over the estimated
useful lives of the respective assets giving consideration to the local economic
conditions and climate.
The following useful lives are generally used by Group companies:
- Software 25%
- Enterprise resource planning (ERP) systems 20%
- Buildings 3,33% - 5%
- Facilities and fixtures 10%
- Plant and machinery 10% - 50%
- Vehicles 25%
- Office and computer equipment 20% - 25%
- Other fixed assets 10%
Preliminary costs are amortized over a maximum duration of five years.
9. Investment securities
Investment securities are recorded at acquisition cost. If the utility value is
determined to be less than the net book value, investment securities are written
down. Utility value is determined based on various criteria such as market value
or market price, profitability outlook or revalued net assets. Dividends
received from non-consolidated companies are recorded as income when they are
received.
10. Accounts Receivables
Client receivables are recorded at their nominal values.
The allowance for doubtful accounts is estimated based on the risk of the
non-recoverability of certain client receivables.
11. Deferred income taxes
Deferred income taxes are recorded on temporary differences between the tax
basis of assets and liabilities and their carrying values for financial
reporting purposes as well as on consolidation adjustments.
As the pattern of temporary difference reversals is not fixed, deferred taxes
recorded on the balance sheet have not been present valued.
In addition, deferred tax assets pertaining to net operating loss carry-forwards
(net of deferred tax liabilities), are only recorded in cases where recovery is
deemed probable.
12. Vouchers payable
Vouchers payable represents the face value of vouchers in circulation or
presented to Sodexho Alliance but not yet reimbursed to the affiliates.
13. Financial investments
Group policy is to finance acquisitions through borrowings in the acquired
company's currency generally at fixed rates of interest. In most cases where
variable rate debt has been negotiated, the variable rate interest is swapped
into fixed rates through the use of interest-rate swap agreements. Similarly, in
most cases where acquisition financing has been negotiated in a currency other
than that of the acquired company, a currency swap agreement is negotiated.
All such agreements are designated as hedges at contract inception. The Group
does not engage in speculative transactions.
The accounting for swaps is as follows:
- For swaps negotiated on inter-company debt, the difference between the amount
of the debt at the originally negotiated rates and at the swapped rates is
recorded as debt.
- For other swap agreements, the related loans and borrowings are recorded at
the swapped interest rate and currency.
14. Deferred financing charges
Deferred financing costs incurred in connection with bond issuances are
amortized over the maturity of the related debt.
15. Provisions for contingencies and losses
A provision for contingencies and losses is recorded when it is probable that
there exists a legal, equitable, or constructive obligation to sacrifice
economic benefits to a third party in the future without an expectation of
receiving proceeds of a similar amount from the third party. Provisions for
contingencies and losses primarily include payroll and other taxes, client and
supplier litigation, and employee litigation.
III ANALYSIS OF OPERATING ACTIVITIES AND GEOGRAPHIC INFORMATIon
(In millions of Euro) 6 months ended Change 6 months ended
February 29, 2004 February 28, 2003
REVENUES
o By operating activity :
Food and Management Services
North America 2,661 (10.2%) 2,963
Continental Europe 1,898 3.3% 1,837
United Kingdom and Ireland (1) 654 (13.9%) 760
Rest of the World (1) 549 14.1% 481
Service Vouchers and Cards 128 0.7% 127
----------- ---------- ---------
TOTAL 5,890 (4.5%) 6,168
=========== ========== ==========
o By geographic zone:
North America 2,661 (10.2%) 2,964
France 926 2.8% 900
United Kingdom and Ireland (1) 657 (14.4%) 768
Rest of Europe 1,039 3.7% 1,002
Rest of the World (1) 607 13.6% 534
----------- ---------- ---------
TOTAL 5,890 (4.5%) 6,168
=========== ========== ==========
(1) The revenues from the "hospitality package" contract for the Rugby world cup
in Australia, for which the services were performed by subsidiaries located in
the United Kingdom, totaled EUR 49 million and are included in "Rest of the
world".
6 months ended Change 6 months ended
February 29, 2004 February 28, 2003
Net Fixed Assets
o By operating activity :
Food and Management Services
North America 2,399 (13.6%) 2,778
Continental Europe 716 1.5% 705
United Kingdom and Ireland 896 2.0% 879
Rest of the World 152 8.8% 139
Service Vouchers and Cards 138 12.1% 123
Holding Companies 33 (42.6%) 58
---------- ---------- ---------
TOTAL 4,334 (7.4%) 4,682
========== ========== ==========
o By geographic zone:
North America 2,399 (13.6%) 2,778
France 357 (6.0%) 380
United Kingdom and Ireland 897 1.6% 882
Rest of Europe 422 2.7% 412
Rest of the World 259 13.6% 230
---------- ---------- ---------
TOTAL 4,334 (7.4%) 4,682
========== ========== ==========
EBITA (before corporate expenses)
o By operating activity :
Food and Management Services
North America 146 (12.4%) 166
Continental Europe 87 (5.4%) 92
United Kingdom and Ireland (1) 5 27.9% 4
Rest of the World (1) 19 187.0% 6
Service Vouchers and Cards 37 (11.9%) 42
Holding Companies (13) 21.1% (16)
---------- ---------- ---------
TOTAL 281 (4.7%) 294
========== ========== ==========
(1) The EBITA from the "hospitality package" contract for the Rugby world cup in
Australia, for which the services were performed by subsidiaries located in the
United Kingdom, totaled EUR 6 million and is included in "Rest of the world".
IV ANALYSIS OF THE INCOME STATEMENT, BALANCE SHEET AND STATEMENT OF CASH FLOWS
Note 1) - Financial Expense, Net
6 months ended 6 months ended
February 29, 2004 February 28, 2003
o Interest income 15 13
o Net variation in financial provisions (3) (1)
o Net exchange (loss) / gain (3) (7)
o Interest expense (74) (87)
----------- ---------
TOTAL (65) (82)
The improvement in net financial expense of EUR 17 million is mainly the result
of a decrease in foreign exchange losses (EUR 4 million) and in interest expense
(EUR 13 million).
Interest expense primarily included interest of EUR 45 million on the 1996, 1999
and 2002 bond issuances and EUR 17 million on the credit facility arranged in
April 2001 by the Sodexho, Inc. subsidiary.
Note 2) - Exceptional Items
The net exceptional expense of EUR 11 million includes a EUR 6 million provision
relating to the loss on the disposal of a Brazilian subsidiary, Medcheque, which
occurred in March, 2004.
Net exceptional expense also includes EUR 4 million in losses and provisions
pertaining to Sodexho Alliance shares held in connection with the stock option
plans.
Note 3) - Income Tax Provision
Following is a reconciliation of income taxes computed at Sodexho Alliance's
statutory rate to the actual income tax provision for the 6 months ended
February 29, 2004.
6 months ended 6 months ended
February 29, 2004 February 28, 2003
Income before exceptional items,
income taxes, income from equity
method investees and goodwill
amortization 216 212
Exceptional income (11) (7)
----------- ---------
Income before taxes 205 205
Sodexho Alliance tax rate 35.43% 35.43%
Theoretical tax provision (73) (73)
Effect of differing
jurisdictional tax rates (1) (4)
Permanent differences 1 (2)
Other taxes 2 (4)
Net operating loss
carryforwards utilized
in the current year
but generated in
prior years and
not previously recognized 2 4
Current year non-recognition (2) (3)
of net operating loss
carryforwards
----------- ---------
Actual tax provision (71) (82)
Current income taxes (74) (76)
Deferred income taxes 4 (6)
----------- ---------
Sub-total (70) (82)
Withholding taxes (1) (1)
----------- ---------
Total Income taxes (71) (83)
=========== =========
Note 4) - Goodwill
Additions Decreases
August 31, during the during the Translation February 29,
2003 year year adjustments 2004
Sodexho Inc. (including Wood Dining Gross 969.0 1.4 (84.9) 882.7
Services) Amort (90.4) (15.0) (0.1) 6.7 (98.6)
Sodexho Services Group (1) Gross 249.9 8.3 258.2
Amort (71.5) (4.2) (2.5) (78.2)
Sodexho Pass do Brazil Gross 87.6 (1.4) 86.2
Amort (12.5) (1.4) 0.2 (13.7)
Sodexho Management Services Gross 51.4 1.7 53.1
Amort (10.0) (0.8) (0.4) (11.2)
Sogeres Gross 56.5 2.6 53.9
Amort (4.0) (0.7) (4.7)
Sodexho Scandinavian Holding AB Gross 55.8 0.7 56.5
Amort (10.8) (1.0) (11.8)
Sodexho Espana Gross 28.5 28.5
Amort (8.3) (0.5) (8.8)
Sodexho Belgique Gross 22.9 1.2 24.1
Amort (8.7) (0.4) (9.1)
Tillery Valley Foods Gross 20.8 0.7 21.5
Amort (4.8) (0.3) (0.2) (5.3)
Luncheon Tickets Gross 22.5 22.5
Amort (3.7) (0.4) (4.1)
Sodexho Italia Gross 17.7 17.7
Amort (3.1) (0.4) (3.5)
Universal Services Gross 17.2 17.2
Amort (2.1) (0.3) (2.4)
Other goodwill Gross 169.4 12.9 4.8 0.3 177.8
(gross amounts less than EUR 15 Amort (47.1) (3.3) (4.2) 0.0 (46.2)
million)
--------- --------- -------- -------- ------------
Total Gross 1,769.2 14.8 8.8 (75.3) 1,699.9
Amort (277.0) (28.7) (4.3) 3.8 (297.6)
--------- --------- -------- -------- ------------
Net 1,492.2 (13.9) 4.5 (71.5) 1,402.3
========= ========= ======== ======== ============
(1) This line item includes all the international subsidiaries of the Gardner
Merchant Group when acquired, notably in the United Kingdom, Ireland, the
Netherlands, the United States and France.
Note 5) - Intangible Assets
Changes
Additions Decreases in
August 31, during the during consolidation Translation February 29,
2003 year the year scope adjustments 2004
Market Shares
North America (Sodexho Inc.) 1,665.7 (200.0) 1,465.7
North America (Universal Sodexho) 40.0 (4.9) 35.1
United Kingdom, Ireland 540.4 18.2 558.6
Netherlands 86.1 86.1
Sweden 77.4 77.4
Australia 10.7 0.6 11.3
France 137.0 137.0
----------- ---------- --------- ---------- -------- ------------
o Total Cost 2,557.3 0.0 0.0 0.0 (186.1) 2,371.2
Diminutions in value (Australia) (1.0) (1.0)
----------- ---------- --------- ---------- -------- ------------
o Net book value 2,556.3 0.0 0.0 0.0 (186.1) 2,370.2
Other Intangible Assets
Cost 187.3 7.5 0.6 0.4 (11.2) 183.4
Accumulated amortization
and diminutions in value (57.6) (12.8) (0.5) 2.1 (67.8)
----------- ---------- --------- ---------- -------- ------------
o Net book value 129.7 (5.3) 0.1 0.4 (9.1) 115.6
Total
Cost 2,744.6 7.5 0.6 0.4 (197.3) 2,554.6
Accumulated amortization and
diminutions in value (58.6) (12.8) (0.5) 2.1 (68.8)
----------- ---------- --------- ---------- -------- ------------
o Net book value 2,686.0 (5.3) 0.1 0.4 (195.2) 2,485.8
=========== ========== ========= ========== ======== ============
Note 6) - Tangible Assets
Additions Decreases Changes in
August 31, during the during the consolidation Translation February 29,
2003 year year scope adjustments 2004
Cost 948,4 59.3 26.3 2.9 (50.0) 934.3
Accumulated depreciation (569,1) (61.2) (22.7) 0.2 38.2 (569.2)
--------- ---------- ---------- -------- ----------- -------------
Net book value 379,3 (1.9) 3.6 3.1 (11.8) 365.1
========= ========== ========== ======== =========== =============
Capital Leases
Assets recorded under capital lease arrangements totaled EUR 43 million as of
February 29, 2004 (EUR 48 million as of August 31, 2003), which was net of
accumulated amortization of EUR 78 million.
Note 7) - Financial investments
Increases/ Changes
(decreases) in Translation
August 31, during the consolidation adjustments February 29,
2003 year scope 2004
Investment securities
Cost 20,5 0.4 (1.7) 0.2 19.4
Diminutions in value (9,5) (1.0) (0.2) (10.7)
-------- --------- ---------- --------- ----------
Net book value 11,0 (0.6) (1.7) 0.0 8.7
Other investments
Cost 22,2 (1.4) 20.8
Diminutions in value (1,3) 0.9 (0.4)
-------- --------- ---------- --------- ----------
Net book value 20,9 (0.5) 0.0 0.0 20.4
Receivables from investees
Cost 13,7 1.6 0.5 15.8
Diminutions in value 0,0 (0.1) (0.1)
-------- --------- ---------- --------- ----------
Net book value 13,7 1.5 0.0 0.5 15.7
Loans receivable (*)
Cost 6,1 0.1 0.2 (0.2) 6.2
Diminutions in value (0,1) (0.1)
-------- --------- ---------- --------- ----------
Net book value 6,0 0.1 0.2 (0.2) 6.1
Deposits and other (*)
Cost 12,0 (0.5) 0.5 (0.6) 11.4
Diminutions in value 0,0 0.0
-------- --------- ---------- --------- ----------
Net book value 12,0 (0.5) 0.5 (0.6) 11.4
Total financial investments
Cost 74,5 0.2 (1.0) (0.1) 73.6
Diminutions in value (10,9) (0.2) 0.0 (0.2) (11.3)
-------- --------- ---------- --------- ----------
Net book value 63,6 0.0 (1.0) (0.3) 62.3
======== ========= ========== ========= ==========
(*)These items are included in working capital in the cash flow statement.
Principal investment securities
As of February 29, 2004, investment securities principally include a EUR 3
million investment in Stadium Australia Management, in which the Group owns
15.8% of the shares, a EUR 2 million investment in Leoc Japan Co (previously,
Sodex Japan Company Ltd), of which it owns 9.3%, and a EUR 1 million investment
in Societe Privee de Gestion, in which the Group owns 10.7% of the shares.
Note 8) - Equity Method Investees
Current Changes Translation Gross
Gross balance, year net Current in adjustments balance,
August 31, income year consolidation and other February 29,
2003 (loss) distributio scope (*) 2004
Equity method investees 19.3 1.6 (1.8) 0.6 (0.8) 18.9
(*) a provision of EUR 8.3 million was recorded with respect to our negative
investment in three equity method investees.
Note 9) - Inventories and work in progress
Inventories principally comprise food and other consumable items with a high
turnover rate and are valued on a first in first out basis.
As of February 29, 2004, the gross value of inventories amounted to EUR 172
million.
Note 10) - Prepaid Expenses, Other Receivables and Other Assets
Diminutions Diminutions
Gross value, in value, Gross value, in value,
February 29, February 29, August 31, August 31,
2004 2004 2003 2003
Advances 6 8
Other operating receivables 238 (1) 265 (1)
Investment receivables 3 3
Financing receivables 1 2
--------------- -------------- --------------- --------------
Total other receivables 248 (1) 278 (1)
=============== ============== =============== ==============
Prepaid expenses 65 70
Deferred financing charges 19 22
Other deferred charges 142 170
Deferred tax asset 92 98
--------------- -------------- --------------- --------------
Total 566 (1) 638 (1)
=============== ============== =============== ==============
Note 10-1) - Accounts and Other Receivables
Diminutions Net book Net book
Gross values, in value, value, Due Due from value,
February 29, February February 29, within one to Due after August 31,
2004 29, 2004 2004 one year five years five years 2003
Accounts receivable 1,654 (65) 1,589 1,585 4 0 1,383
Other receivables 248 (1) 247 218 26 3 277
Prepaid expenses 65 0 65 64 1 0 70
The allowance for doubtful accounts represents 3.9% of accounts receivable as of
February 29, 2004.
Concentration of credit risk within accounts receivable is limited because of
the large customer base. The Group generally does not require collateral or
specific guarantees.
Note 10-2) - Deferred Charges
Due within Due from one Due after August 31,
February 29, 2004 one year to five years five years 2003
Deferred financing costs 19 6 13 0 22
Deferred charges 142 33 67 42 170
Deferred financing costs are amortized over the maturity period of the related
debt.
Deferred charges, which are included as investment activities in the cash flow
statement, include investments in client facilities in the U.S., which are
amortized over the related contract term, totaling EUR 111 million as of
February 29, 2004 as well as EUR 10 million of bid costs on long term contracts,
which are amortized over the shorter of their estimated useful life and 10
years.
Note 11) - Deferred taxes
February 29, 2004 August 31, 2003
Deferred tax assets 92 98
Deferred tax liabilities (18) (17)
------------ -------------
Net deferred tax assets 74 81
As of February 29, 2004, deferred tax assets which were not recorded because
their realization was not considered probable totaled EUR 27 million of which
EUR 3 million related to deferred taxes originated in certain subsidiaries prior
to their acquisition by the Group and EUR 2 million related to a subsidiary
which was in the process of being sold (Medcheque).
Breakdown of deferred taxes
Temporary differences
- Employee benefits liabilities 83
- Other temporary differences (18)
Net operating loss carry forwards 9
---------
TOTAL 74
- =========
Note 12) - Deposits and marketable securities
Deposits and marketable securities include 2,401,981 shares in Sodexho Alliance
purchased for a total amount of EUR 88 million. These shares are to be used to
fulfill our obligation with respect to several stock option plans within the
Group.
A provision of EUR 0.4 million was recorded to revaluate these shares to the
exercisable price by the beneficiaries.
Other deposits and marketable securities represent short-term cash investments
and are stated at the lower of cost or net realizable value.
The fair values of deposits and marketable securities are shown in note 19.
Note 13) - Restricted cash
Restricted cash consists of funds set aside in order to comply with regulations
governing the issuance of restaurant vouchers in France (EUR 140 million) and as
a guarantee for certain commitments entered into by Mexican affiliates (EUR 10
million).
Note 14) - Cash by type of currency
Cash by type of currency as of February 29, 2004 was as follows:
Euro 735 62%
US Dollars 58 5%
Pounds Sterling 47 4%
Other currencies 336 29%
-------- ---------
Total 1,176 100%
Note 15) - Shareholders' Equity
(in millions of euros except Additional Foreign Group
for number of shares) Shares Common paid-in Retained currency Treasury net Shareholders'
outstanding stock capital earnings translation shares income equity
Shareholders' equity, 159,021,416 636 1,191 495 (76) (31) 183 2,398
August 31, 2002
Share capital increase 149 0
Reclassification (deferred tax
on the charges for an increase (5) 5 0
in share capital)
Dividend payments by the holding
company (net of dividends on 88 (183) (95)
treasury shares)
Net income for the period 162 162
Foreign currency translation (215) (1) (216)
adjustment
Shareholders' equity, 159,021,565 636 1,186 588 (291) (32) 162 2,249
August 31, 2003
Share capital increase 366
Dividend payments by the holding 65 (162) (97)
company (net of dividends on
treasury shares)
Net income for the period 97 97
Foreign currency translation 1 (177) (176)
adjustment and other changes
------------- --------- ---------- ------------ ------------- ----------- ---------- -------------
Shareholders' equity,
February 29, 2004 159,021,931 636 1,186 654 (468) (32) 97 2,073
============= ========= ========== ============ ============= =========== ========== =============
Indirectly Held Treasury shares
As of February 29, 2004, Sofinsod had a 7.13% indirect interest in Sodexho
Alliance through its 18.5% interest in the capital of Bellon SA, which in turn
holds 38.53% of Sodexho Alliance.
Note 16) - Minority Interests
Changes in minority interests are as follows:
February 29, 2004 August 31, 2003
Minority interests, beginning of year 66 73
Share capital increase 0 0
Dividends paid (3) (11)
Net income for the period 9 9
Change in consolidation scope 0 (2)
Currency translation and other (2) (3)
---------- ----------
Minority interests, end of year 70 66
========== ==========
Note 17) - Provisions for Contingencies and Losses
Release
without Translation Change in
August 31, corresponding Differences consolidation February
2003 Increase Release charge and other scope 29, 2004
Sodexho Inc. acquisition provisions 4 (1) 3
Payroll and other taxes 37 3 (4) (1) (6) 29
Contract termination costs 11 (1) (4) 6
Client and supplier litigation 5 1 (1) 5
Employee litigation 16 3 (2) (2) 15
Large repairs 5 (2) 3
Stock options 1 (1) 7 7
Medcheque disposal 6 6
Equity method investees 8 8
Other 3 (1) 2 4
---------- ---------- --------- --------- -------- -------- ---------
Total 89 14 (9) (2) (6) 0 86
========== ========== ========= ========= ======== ======== =========
The following table summarizes the net impact to the income statement line items
of the increases and releases to provisions for contingencies and losses as of
February 29, 2004:
Increase Release
Operating 6 (7)
Financial 0 0
Exceptional 8 (5)
------- ------
Total 14 (12)
======= ======
Note 18) - Borrowings and Financial Debt
Less One to More Year ended Year ended
than one five than five February 29, August 31,
year years years 2004 2003
Bonds
Euro 387 1,300 1,687 1,641
------- ----- ------- ------- --------
Total bonds 387 0 1,300 1,687 1,641
Bank borrowings (1)
US dollars 172 669 1 842 953
Euro (75) (336) 20 (391) (388)
Pounds Sterling 89 (1) 88 85
Other currencies 28 13 41 45
------- ----- ------- ------- --------
Total bank borrowings 214 345 21 580 695
Capital lease obligations
US dollars 3 3 6 7
Euro 11 19 4 34 38
Other currencies 3 3 3
------- ----- ------- ------- --------
Total capital lease obligations 14 25 4 43 48
Other borrowings
Euro 6 2 1 9 4
Other currencies 1 1 1
------- ----- ------- ------- --------
Total other borrowings 7 2 1 10 5
Bank overdraft balances
Euro 41 41 25
US dollars 1 1 0
Pounds Sterling 0 0 70
Other currencies 8 8 4
------- ----- ------- ------- --------
Total bank overdraft balances 50 0 0 50 99
------- ----- ------- ------- --------
Total 672 372 1,326 2,370 2,488
======= ===== ======= ======= ========
(1)Includes impact of swaps; see note 19 for further information.
Note 18-1) - Bond Issues
August Increase Repayments Translation February
31, 2003 differences 29, 2004
1996 bond issue - FRF 2,000,000,000
Principal 305 305
Accrued interest 4 9 13
--------- ----- ----- -------- ----------
Total 309 9 0 0 318
--------- ----- ----- -------- ----------
Number of securities 400,000 400,000
1999 bond issue - EUR 300,000,000
Principal 300 300
Accrued interest 6 7 13
--------- ----- ----- -------- ----------
Total 306 7 0 0 313
--------- ----- ----- -------- ----------
Number of securities 300,000 300,000
2002 bond issue - EUR 1,000,000,000
Principal 1,000 1,000
Accrued interest 26 30 56
--------- ----- ----- -------- ----------
Total 1,026 30 0 0 1,056
--------- ----- ----- -------- ----------
Total 1,641 46 0 0 1,687
========= ===== ===== ======== ===========
EUR 305 million bond issue
On May 22, 1996, Sodexho Alliance issued 400,000 bonds with a nominal value of
FRF 5,000 each (EUR 762.25) representing a total of FRF 2 billion (EUR 305
million).
The bonds are redeemable at par on June 7, 2004 and bear interest at 6 percent
per annum, which is payable on June 7 annually.
Each bond carried a warrant, entitling the bearer to purchase one Sodexho
Alliance share prior to June 7, 2004 for FRF 2,700, with a current exercise
price of EUR 24.71 per share.
EUR 300 million bond issue
On March 16, 1999, Sodexho Alliance issued 300,000 bonds of EUR 1,000 each for
total proceeds of EUR 300 million. The bonds will be fully redeemable at par on
March 16, 2009.
The bonds carry interest at 4.625 percent per annum, which is payable on March
16 annually.
EUR 1 billion bond issue
On March 25, 2002, Sodexho issued bonds totaling EUR 1 billion, maturing on
March 25, 2009, and carrying interest of 5.875 percent payable on March 25
annually.
Note 18-2) - Other Borrowings
As of February 29, 2004, portions of the three tranches of the April 2001 credit
facility negotiated with a syndicate of banks and guaranteed by Sodexho Alliance
have been reimbursed as follows:
- Tranche A totaling EUR 1,932 million, was fully reimbursed ;
- Tranche B totaling US dollars 930 million, with quarterly repayments over the
next five years, was reimbursed for an amount of US dollars 310 million
(pursuant to the swap agreement described in note 20 below the US dollar
variable LIBOR-based rate on this debt has largely been swapped for a fixed
rate) ; and
- Tranche C totaling US dollars 150 million, to be utilized for short-term
financing, working capital needs and for bank guarantees and reimbursable in
full in five years, of which U.S. dollar 47 million was utilized as of February
29, 2004.
Covenants
The EUR 305 million and EUR 300 million bond issues, redeemable on June 7, 2004
and March 16, 2009, respectively, are not subject to any financial covenants.
The credit facilities arranged in April 2001 with a syndicate of banks amounted
to US dollars 667 million as of February 29, 2004 and include accelerated
repayment conditions typical of this type of arrangement.
Also included in the terms are various specific covenants related to the level
of ownership in Sodexho Alliance by Bellon S.A., which is not permitted to be
lower than 33.3%, as well as to ratios pertaining to the Group's consolidated
net debt, its EBITA, and its net financial expense.
These ratios, which are evaluated at each half-year point and calculated based
on a rolling 12 months, are as follows:
February 29, 2004
Net debt / EBITDA* < 2.15
EBITA / financial expense* > 3.75
* These four items are defined in the credit agreement. These definitions differ
in several respects from accounting definitions. For example, in the definition
provided in the covenants, net debt does not include restricted cash. As such,
the financial covenants cannot be recalculated from the published financial
statements.
The Group was in compliance with the above requirements as of February 29, 2004.
Should a covenant requirement not be met, the credit facilities agent or the
banks representing more than two thirds of the credit facilities are authorized
to require accelerated repayment of the balance of the credit facilities.
Accelerated repayment of the credit facilities gives the holders of the EUR 1
billion bond issue the right to demand repayment of the bonds.
Interest rates
In accordance with Group policy, the majority of variable rate borrowings are
swapped to fixed interest rates. If borrowings are arranged other than in local
currency, a currency swap agreement is negotiated.
As of February 29, 2004, 90% of borrowings are at fixed rates and the average
interest rate at this date was 5.50%.
Note 19) - Financial Instruments
The table below summarizes the impact on the financial statements of the
financial instruments described in note 18:
Borrowings in
Borrowings Borrowings Borrowings other
In millions of euro Note in euro in USD in GBP currencies TOTAL
a) Borrowings subject to cross
currency agreements:
- UK borrowings (GBP 60 million) (1)
Due to the bank GBP 60 million 89 89
Due from the bank EUR 93,24 million (93) (93)
- Sodexho Scandinavia swaps (SEK 150
million) (2)
Due to the bank SEK 150 million 16 16
Due from the bank EUR 16,7 million (17) (17)
- Sodexho Inc. swaps (USD 300
million) (3)
Due to the bank USD 309.5 million 249 249
Due from the bank EUR 348.9 million (349) (349)
- other subsidiaries swaps :
Due to the banks SEK 17.3 million 2 2
Due to the bank NOK 23.7 million 3 3
Due to the bank HUF 17.3 million 1 1
Due from the bank EUR 6.6 million (6) (6)
Due to the bank NOK 9.9 million 1 1
Due from the bank GBP 0.756 million (1) (1)
b) Borrowings subject to interest 0 499 0 0 499
rate swap agreements
c) Borrowings not subject to 74 94 0 18 186
hedging arrangements
------------ ----------- ----------- ------------ ---------
Total borrowings (391) 842 88 41 580
============ =========== =========== ============ =========
a) Cross currency swaps
1) In order to match the cash flows on debt repayments with the currency of an
operating subsidiary in the United Kingdom and Ireland, in October 1999, the
Group negotiated a cross currency swap (capped LIBOR in pounds sterling against
5.25% in pounds sterling against euro) on an intercompany loan of EUR 93
million. The decrease in the value of the pound sterling against the euro since
October 1999 decreased borrowings as converted to euro by EUR 4 million related
to this instrument as of February 29, 2004.
2) In June 1999, a cross currency swap was negotiated on a loan of EUR 50.1
million to Sodexho Scandinavia Holding AB (4.15% against a variable interest
rate in Swedish crowns). The related debt at the swapped rate totaled EUR 16.7
million. The swap terminates in August 2004.
3) In March 2002, a cross currency swap was negotiated on an inter-company loan
of US dollar 309 million to Sodexho, Inc. (6.325% against 6.5775% and in euro
against US dollars) reimbursable on March 25, 2007. As of February 29, 2004, the
debt at the swapped rate totaled EUR 349 million. The decrease in the dollar
against the euro, since the negotiation of the swap, led to a decrease in the
debt as converted to euro of EUR 100 million.
b) Interest Rate Swaps
Several interest rate swaps (2.1% to 5.9% against US dollar LIBOR) with the
following maturities were negotiated in order to convert variable rate interest
to fixed on US dollar 620 million (equivalent to EUR 499 million) drawn on
Tranche B of the credit facility described above. Following are the maturities
of the underlying notional amounts.
6 months ended 2004-2005
February 29, 2004
Interest rate swaps (in millions of USD) 250 370
Interest rate swaps (in millions of EUR) 201 298
In October 1999, the Group negotiated an interest rate swap maturing in 2004 on
a notional amount of EUR 68 million, which converted fixed rate debt at 5.2% to
EURIBOR.
Fair Values of Financial Instruments
In Millions of Euro February 29, 2004
ASSETS Net book value Fair value Difference
Financial investments
Investment securities 9 9 0
Receivables from investees 16 16 0
Loans receivable 6 6 0
Other investments 20 20 0
Deposits and other 11 11 0
------- -------- -------
o Total financial investments 62 62 0
o Equity method investees 19 19 0
Market securities and other
Cash 33 33 0
Term deposits 121 121 0
Debt securities 120 120 0
Mutual funds - SICAV 239 239 0
Listed securities 0 0 0
Mutual funds - other 31 31 0
------- -------- -------
o Total 544 544 0
Sodexho Alliance shares (*) 88 60 (28)
------- -------- -------
o Total marketable securities
and other 632 604 (28)
o Restricted cash 150 150 0
------- -------- -------
Total assets 863 835 (28)
======= ======== =======
LIABILITIES
Bonds
2002 EUR 1 billion
bond issuance 1,055 1,124 69
1999 EUR 300 million
bond issuance 313 310 (3)
1996 EUR 305 million
bond issuance 319 319 0
------- -------- -------
o Total 1,687 1,753 66
Bank debt
Sodexho, Inc. borrowings 581 595 14
Swap on intercompany loan
with Sodexho Holdings Ltd (4) (4) 0
Swap on intercompany loan
with Sodexho, Inc. (100) (105) (5)
Other bank debt 103 103 0
------- -------- -------
o Total bank debt 580 589 9
o Bank overdrafts 50 50 0
o Other borrowings 53 53 0
------- -------- -------
o Total borrowings 2,370 2,445 75
o Other liabilities
Debt on acquisition of 53%
of Sodexho, Inc.(*) 39 10 (29)
------- -------- -------
Total Liabilities 2,409 2,455 (46)
======= ======== =======
(*) Part of the acquisition debt for the remaining Sodexho Marriott Services,
Inc. shares acquired in June 2001 was payable in the equivalent of Sodexho
Alliance shares; the debt has been revalued using the price paid by Sodexho to
purchase its own shares on the open market. As of February 29, 2004, the fair
value of the Sodexho Alliance Shares was EUR 28 million lower than its net book
value; the fair value of the related debt was EUR 29 million lower than its net
book value.
Note 20) - Other liabilities
February 29, 2004 August 31, 2003
Advances from clients 152 171
Tax and employee liabilities 947 974
Other operating liabilities 53 59
Other non-operating liabilities 138 38
Deferred revenues 36 35
Deferred tax liabilities 18 17
---------- -----------
Total 1,344 1,294
========== ===========
Note 21) - Statement of Cash Flows - Additional Information
The table below provides additional information on the balance sheet line items
impacting the cash flow statement, excluding exchange rate variations, changes
in consolidation scope, or other variations not impacting cash flows.
Note 21-1) - Changes in Working Capital
Assets Liabilities Total Change
Inventories 10
Accounts receivable, net of
allowance for doubtful accounts 260
Other operating receivables (16)
Advances (3)
Accounts payable (28)
Vouchers payable 90
Taxes and social charges payable 18
Other operating payables (20)
Deferred revenues 3
-------- --------- ---------
Change in working capital
from operating activities 251 63 (188)
Investment related receivables
Investment related payables 3
-------- --------- ---------
Change in working capital from
investment activities 0 3 3
Financing related receivables 8
Financing related payables 97
-------- --------- -----------
Change in working capital from
financing activities 8 97 89
Note 21-2) - Acquisitions and Disposals of Tangible and Intangible Assets and
Subsidiaries
Acquisitions Disposals Net
Tangible and intangible assets (79) 3 (76)
Variation in financial assets (2) (2)
Total change in tangible and intangible assets (81) 3 (78)
Acquisitions (disposals) of subsidiaries (16) 1 (15)
Less: cash in acquired and disposed of companies, net 3 (2) 1
-------- ------- -------
Total change in consolidation scope (13) (1) (14)
-------- ------- -------
Total (94) 2 (92)
======== ======= =======
Note 22 - Commitments
Note 22-1) - Off balance sheet commitments
February 29, 2004 August 31, 2003*
within 1 year from 1 to 5 years after 5 years Total Total
Financial guarantees to third parties 38 27 6 71 59
Performance bonds on operating leases 25 8 7 40 33
Client performance bonds 9 10 26 45 48
Other commitments 6 1 2 9 10
--------- -------- ------ ------ -------
Total 78 46 41 165 150
========= ======== ====== ====== ========
To our knowledge, with respect to the above table, there are no other
significant off balance sheet commitments.
Sureties
In connection with its Service Vouchers and Cards activity, Sodexho Alliance and
its subsidiaries have secured cash amounts with different financial
institutions, totaling EUR 10 million as of February 29, 2004. Other surety
arrangements (security granted over equipment or buildings used for collateral)
agreed to by Sodexho Alliance and its subsidiaries during the first half of
2003/2004 were not significant.
Note 22-2) - Commitments to purchase or sell shares in companies
Commitments made
o Abra (subsidiary of Sodexho Scandinavian Holding AB)
The Group, through itsSodexho Scandinavian Holding AB subsidiary, has entered
into a put agreement with the minority shareholders of Abra (located in Norway)
to acquire the remaining 8% of the shares outstanding by November 2005, at the
latest, for a price based upon a profit multiple. The minimum purchase price
amounts per the agreement is EUR 0.5 million and it is estimated at EUR 1.6
million, based on current projections.
o Altys Multiservice
The Group has entered into a put agreement to acquire 1.5% of the shares of
Altys Multiservice from the minority shareholders between October 1 and November
30, 2007 for a purchase price based on a multiple of the average economic
profits as defined contractually in the year of exercise with an adjustment
based on the following year's results.
o Sodexho Italia
The Group has entered into a put agreement to acquire the remaining 2% of the
shares of Sodexho Italia from the minority shareholders on July 1, 2010 at the
latest for a purchase price based on a multiple of the average economic profits
as defined contractually.
o Baren Menu
The Group has entered into a put agreement to acquire the remaining 5% of the
shares of Baren Menu in Germany from the minority shareholders on December 31,
2005 at the latest for a purchase price estimated at EUR 0.25 million.
o Sodexho MM Catering
The Group has entered into a put agreement to acquire the remaining 9.5% of the
shares of Sodexho MM Catering from the minority shareholders at any time for a
purchase price based on a multiple of the average economic profits as defined
contractually for a minimum amount of EUR 0.2 million.
Commitments received
o Patriot Medical Technologies, Inc.
The minority shareholders of Patriot Medical Technologies, Inc have entered into
a call agreement with the Group, which allows the Group, during the period from
September 3, 2003 and September 3, 2005, to acquire the remaining outstanding
shares of Patriot Medical Technologies, Inc, if any, for the greater of US
dollar 2 million and five times Patriot Medical Technologies, Inc.'s EBITDA,
reduced by adjustments defined in the contract between the parties.
o Abra (subsidiary of Sodexho Scandinavian Holding AB)
The minority shareholders of Abra have entered into a call agreement to sell the
remaining shares to the Group in accordance with the terms described above, in
November, 2005 at the latest.
o Sodexho Italia
The minority shareholder of Sodexho Italia has entered into a call agreement to
sell the remaining shares to the Group in accordance with the terms described
above, on July 1, 2010 at the latest.
o Altys Multiservice
The minority shareholders of Altys Multiservice have entered into a call
agreement to sell the remaining shares to the Group between October 1, 2005 and
November 30, 2005 for a purchase price based on a multiple of the average
economic profits as defined contractually in the year of exercise with an
adjustment based on the following year's results.
Note 22-3) - Other commitments
Securitization
During fiscal 1999 Gardner Merchant Ltd (now Sodexho Ltd) and some of its
subsidiaries in the United Kingdom entered into a long-term agreement to
securitize without recourse a portion of their accounts receivable for a maximum
amount of GBP 75 million.
The amount securitized totaled GBP 48.4 million (EUR 72 million) as of February
29, 2004.
The decrease in securitization of EUR 12 million (excluding foreign exchange
effects) compared to August 31, 2003 is included under the caption "working
capital from financing activities" in the cash flow statement.
Note 22-4) - Commitments for stock options in Sodexho Alliance Shares
The group, through its stock option plans, is committed to deliver 2,301,209
Sodexho Alliance shares to employees of Sodexho, Inc. at an average price of USD
27.20 in connection with the acquisition of 53% of the shares of Sodexho
Marriott Services in June 2001.
Issuance date Exercisable period
From To Subscription price Number of shares
June, 2001 Before February 29, 2004 April, 2011 USD 28.04 1,985,054
June, 2001 2nd semester 2003/2004 April, 2011 USD 25.00 35,324
June, 2001 2004/2005 fiscal year April, 2011 USD 21.52 280,831
-------------
Total 2,301,209
=============
To date, 5,852,922 Sodexho Alliance shares have been granted by the Board of
Directors to employees of the Group in connection with various stock option
plans.
Issuance date Exercisable period
From To Exercise price Number of shares
on February 29, 2004
January, 2000 March, 2004 January, 2005 EUR 39,86 70,459
April, 2000 March, 2004 January, 2005 EUR 39,86 2,251
January, 2001 March, 2005 January, 2006 EUR 48,42 303,017
January, 2002 January, 2006 January, 2007 EUR 47,00 407,140
January, 2002 January, 2006 January, 2008 EUR 47,00 1,124,617
September, 2002 April, 2006 March, 2008 EUR 47,00 12,000
October, 2002 October, 2006 October, 2007 EUR 21,87 3,080
January, 2003 January, 2004 January, 2009 EUR 24,00 2,838,115
June, 2003 January, 2004 January, 2009 EUR 24,00 84,660
January, 2004 January, 2005 January, 2010 EUR 24,50 1,007,583
-------------
TOTAL 5,852,922
=============
(Number of options) 6 months ended
on February 29, 2004
Options outstanding as of September 1, 2003 5,085,838
Options granted 1,009,683
Options exercised (2,775)
Forfeitures due to employee departures (91,485)
Forfeitures due to unmet performance objectives (148,339)
-------------
Options outstanding as of February 29, 2004 5,852,922
=============
In connection with its acquisition of Sogeres, the Group committed to maintain
Sogeres' stock option plan dated August 1, 1997. The Group committed to acquire
the Sogeres shares from the optionees through September 2004 and has recorded a
related liability in its accounts. As of February 29, 2004 this liability totals
EUR 0.7 million.
A second stock option plan was established for which the Group has committed to
increase the capital of Sogeres for the benefit of the optionees and to buy
their shares no later than February 20, 2008. In connection with this agreement,
a provision of EUR 4 million was recorded in the consolidated financial
statements as of February 29, 2004.
Note 22-5) - Commitments for operating leases
The future payment commitments for operating leases are as follows:
- Less than one year : EUR 79 million
- Between one and five years : EUR 144 million
- More than five years : EUR 27 million
Operating lease commitments primarily relate to central kitchens under
tri-partite agreements for EUR 42 million and rent for office space and various
equipment.
Note 23 - Retirement and Other Commitments
The following table presents defined benefit obligations by geographic zones:
United Kingdom and Continental Europe Others February 29, 2004 August 31, 2003
Ireland
Benefit obligation to employees 369 142 5 516 477
Liability recorded 0 78 5 83 80
Fair value of assets 254 46 0 300 269
Obligations recorded in the balance sheet
Obligations recorded as a liability in the balance sheet relate to retirement
indemnities and related payments totaling EUR 83 million.
Other obligations
As of February 29, 2004, obligations which were not recorded as a liability in
the balance sheet totaled EUR 433 million.
United Kingdom and Ireland
In United Kingdom and Ireland, the retirement plan obligations for which there
is an external fund relate to a complementary retirement plan based on a
percentage of ending salary (affected personnel working in the private sector)
or based on comparable payments in the public sector (affected personnel working
in the public sector).
The obligations have been calculated using the projected unit credit valuation
method using the following assumptions:
o Discount rate 5.50%
o Rate of salary increase 4.15%
o Inflation rate 2.90%
o Rate of return on plan assets 6.50%
It was decided during fiscal 2003 to close the plan to new employees effective
July 1, 2003 and to increase the contributions to the funds, which should allow
for full coverage of the obligation at the end of a period of eight years.
Continental Europe
In Continental Europe the main defined benefit plan is in the Netherlands, where
retirement plan indemnities are provided to certain employees.
The obligations are calculated using the projected unit credit valuation method
with the following assumptions:
o Discount rate 5.50%
o Rate of salary increase 3.00%
o Inflation rate 2.00%
o Rate of return on plan assets 5.90%
United States
Our subsidiaries in the United States do not have significant defined benefit
plans. Defined contribution plans are in place for certain members of local top
management.
Note 24 - Other Information
Note 24-1) - Related parties
The subsidiaries of the Sodexho Alliance Group paid Sodexho Alliance SA EUR 31.8
million for management and coordination services provided during the 6 month
period ended February 29, 2004.
Bellon SA holds 38.53% of the capital of Sodexho Alliance.
Pursuant to an agreement between Bellon SA and Sodexho Alliance, Bellon SA
invoiced Sodexho Alliance EUR 1.3 million for consulting and advisory services
during 6 months period ended February 29, 2004.
Note 24-2) - Litigation
Mc Reynolds vs. Sodexho Marriott Services, Inc.
On March 8, 2001, ten current and former employees of Sodexho, Inc., the
majority of whom had worked for Marriott Management Services, Inc. (later known
as Sodexho Marriott Services, Inc., and now known as Sodexho, Inc.) filed a
lawsuit against Sodexho, Inc. in the U.S. District Court for the District of
Columbia, alleging that they and other African-American salaried employees were
discriminated against on the basis of their race. The plaintiffs' complaint
alleges unspecified damages on behalf of a class of approximately 2,600 current
and former employees of Sodexho, Inc. relating to the period commencing March
27, 1998 and ending on July 1, 2001, as well as reimbursement of plaintiffs'
costs and attorney' fees. Sodexho, Inc. has denied the plaintiffs' allegations
and is vigorously defending the lawsuit.
On June 25, 2002, the district court certified the case as a class action for
purposes of determining liability. Sodexho, Inc.'s requests for permission to
appeal this decision have been denied by both the U.S. Court of Appeals for the
District of Columbia and the U.S. Supreme Court.
In accordance with the trial judge's scheduling order, the parties to this
litigation have concluded discovery , and a trial date has been scheduled for
late 2004. A resolution of plaintiffs' claims in their favor could have a
material effect on our net income.
In fiscal year 2002, a provision of USD 10 million (EUR 8 million at the
February 29, 2004 exchange rate) was recorded for defense costs anticipated in
connection with this lawsuit.
To our knowledge at this time, no other exceptional events or legal proceedings
are pending or considered probable of occurring or having occurred, which would
have a material impact on the financial position, the activities, the net worth
or the net income of Sodexho Alliance.
Note 24-3) - Subsequent Events
Other than the disposal of the Medcheque subsidiary on March 11, 2004, there
have been no significant events arising subsequent to February 29, 2004.
V Consolidation scope
The activities of the SODEXHO GROUP are carried out autonomously in different
subsidiaries in each country where the Group has a presence. Under the control
of the Executive Committee, each subsidiary has an independent organizational
structure with its own Board, operating, human resources and financial and
administrative management.
Companies managed by SODEXHO have been fully consolidated. Companies over which
SODEXHO is able to exercise significant influence have been accounted for by the
equity method.
All fully consolidated companies that do not have a February 29 6 months-end are
consolidated on the basis of financial statements prepared as at February 29 and
for the 6 months then ended.
A number of companies having minimal impact on the true and fair view of Group's
consolidated financial statements have been excluded from consolidation, notably
those having revenues of less than EUR 2 million, net income of less of EUR 0.1
million and total assets of less than EUR 2 million.
There have been no significant changes in the consolidation scope during the 6
months period ended on February 29, 2004.
VI Statutory FINANCIAL STATEMENTS of Sodexho Alliance (holding company) FOR SIX
MONTHS ENDED February 29, 2004
6 months ended 6 months ended
February 29, 2004 February 28, 2003
Revenue 27 47
Earnings before exceptional items 61 31
and income taxes
Net income 66 34
As Sodexho Alliance is the holding of the group, then only the consolidated
income is relevant of the group's activity.
VII Exchange rates for the Group's main currencies
Country Currency Closing rate Average rate for Closing rate Closing rate on Average rate for
on February 6 months ended on on August February 29, 6 months ended on
29, 2004 February 29, 2004 31, 2003 2003 February 29, 2003
EUR Euro Zone (1) Euro 1.000000 1.000000 1.000000 1.000000 1.000000
AUD Australia Dollar 0.618850 0.600597 0.587820 0.561293 0.553514
BRL Brazil Peso 0.277108 0.287243 0.307201 0.259977 0.276460
CAD Canada Dollar 0.596730 0.629960 0.655179 0.621581 0.629435
CLP Chile Peso (1000 units) 1.354958 1.335853 1.308524 1.230815 1.350840
CNY China Yuan 0.097292 0.100922 0.110566 0.112047 0.118514
USD United States Dollar 0.805283 0.835315 0.915164 0.927472 0.980948
MXN Mexico Peso 0.072789 0.075130 0.082869 0.084167 0.094651
GBP United Kingdom Pound Sterling 1.492537 1.445129 1.443835 1.461561 1.552227
SEK Sweden Krona 0.108325 0.109978 0.108342 0.109340 0.109438
VEB Venezuela Bolivar (1000 0.417422 0.515934 0.575695 0.581852 0.665538
units)
(1) Germany, Austria, Belgium, Spain, Finland, France, Greece, Ireland, Italy,
Luxemburg, the Netherlands, Portugal
VIII Statutory auditors' REPORT ON THE HALF-YEAR consolidated financial
statements For the six month period ended February 29, 2004 (free translation of
the French original)
In our capacity as statutory auditors of Sodexho Alliance and in accordance with
Article L. 232-7 of French Company Law (Code de commerce), we have performed the
following procedures:
- A review of the accompanying summary of operations and income statement as
they appear in the half year consolidated financial statements, for the six
month period ended February 29, 2004,
- A verification of the information provided in the Company's half year
management report.
These half year consolidated financial statements are the responsibility of the
management board. Our responsibility is to issue a report on these financial
statements based on our review.
We conducted our review in accordance with professional standards applicable in
France. These standards require that we plan and perform limited review
procedures to obtain moderate assurance, lesser than that which would result
from an audit, as to whether the consolidated interim financial statements are
free from material misstatement. A limited review excludes certain audit
procedures and is limited to performing analytical procedures and to obtaining
information which we considered necessary from Company management and other
appropriate sources.
Based on our limited review, nothing has come to our attention that causes us to
believe that the half year consolidated financial statements, prepared in
accordance with accounting principles generally accepted in France, do not
present fairly, in all material respects, the financial position, the assets and
liabilities of the group as at February 29, 2004 and the results of its
operations for the six month period then ended.
We have also reviewed, in accordance with professional standards applicable in
France, the information contained in the half year management report on the half
year consolidated financial statements on which we have based our review.
We have nothing to report with respect to the fairness of such information and
its consistency with the half year consolidated financial statements.
Paris and Paris La Defense, May 5, 2004
PricewaterhouseCoopers Audit KPMG Audit Department of KPMG S.A.
Gerard Dantheny Hubert Toth Patrick-Hubert Petit
Partner Partner Partner
About Sodexho Alliance
Founded in Marseille in 1966 by Chairman and Chief Executive Officer Pierre
Bellon, Sodexho Alliance is the world's leading provider of food and management
services. With more than 308,000 employees on 23,900 sites in 76 countries,
Sodexho Alliance reported consolidated sales of 11.7 billion euros for the
fiscal year that ended on August 31, 2003. The Sodexho Alliance share has been
listed since 1983 on the Euronext Paris Bourse, where its market value totals
3.9 billion euros. The Sodexho Alliance share has been listed since April 3,
2002, on the New York Stock Exchange.
Media Relations: Jerome Chambin
Tel: +33 130 85 74 18
Fax: +33 130 85 52 32
E-mail: jerome.chambin@sodexhoalliance.com
Investor Relations: Jean-Jacques Vironda
Tel: +33 130 85 29 39
Fax +33 130 85 51 81
E-mail: jeanjacques.vironda@sodexhoalliance.com