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Revenues for the First Quarter of Fiscal 2004-2005
5/1/2005
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Sodexho Alliance (Euronext: EXHO.PA / NYSE:SDX) - Au cours du premier trimestre de l'exercice 2004-2005, le chiffre d'affaires consolidé atteint 3,1 milliards d'euros.
For the first quarter of 2004-2005:
Organic growth in revenues, at a constant consolidation scope and excluding exchange rate effects, was 2.8%.
Excluding the hospitality contract for the 2003 Rugby World Cup, organic growth was 4.4%, in line with our fiscal year growth objective of approximately 4%.
Including consolidation and exchange rates, the total change in revenues from the first quarter of 2003-2004 was a negative 1.6%.
REVENUES BY ACTIVITIES
Activity
MANQUE TABLEAU
(1) At a constant consolidation scope and excluding exchange rate effects
(2) 18% excluding the effect of the November 2003 Rugby World Cup
(3) 4.4% excluding the effect of the November 2003 Rugby World Cup
Food Management and Services
In Food and Management Services, organic growth in revenues amounted to 2.7% for the first quarter of 2004-2005, including 0.6% in Business and Industry, 4.7% in Education and 4.4% in Healthcare.
North America , Organic growth in revenues amounted to 3.6%, including 4.7% for the Education segment and 6.2% for the Healthcare segment. Business and Industry (including Defense) declined by 1.2%.
Business and Industry revenues declined by 0.5% since the segment continues to be negatively affected by unsatisfactory client retention rates, notably as a result of site closings during the prior fiscal year. During recent months new clients who have chosen us include General Electric in multiple states, Johnson Space Center (NASA) in Texas and the California Department of Motor Vehicles.
In the Defense segment intensified troop deployments to the Middle East and delays in discussions concerning certain adjustments in connection with the US Marine Corps contract have resulted in a decline in revenues of 7.7%.
In the Education segment strong client retention, increases in revenues on existing sites as well as strong new sales signed at the end of the prior fiscal year including Emory University and South Carolina State University translated into good growth.
In the Healthcare segment excellent client retention, together with an increase in revenues on existing sites contributed to an acceleration of organic growth. In addition, dynamic new sales in the last few months confirm this trend with the signing of contracts such as the University of Alabama Hospital and Mariner Healthcare. We are also pleased to announce the recent signing of one of the most significant food service contracts in healthcare in the United States covering eleven hospitals and four long term care facilities with the New York City Health and Hospital Corporation, valued at an estimated 340 million dollars in revenues over ten years.
Continental Europe , organic revenue growth amounted to 4.2%, including 4.4% in the Business and Industry segment, 5.8% in Education, and 2.1% in Healthcare.
The Business and Industry segment experienced solid growth, notably in France, Spain, Finland and Germany, due to the ramp up of food and multiservice contracts signed during the prior fiscal year. In this segment, a difficult economic environment persists in Scandanavia and the Netherlands. Recent commercial successes include T-mobile in the Netherlands, T-online in Germany, Natexis Banque Populaire in France and Isdemir, the Turkish leader in the steel industry, as well as Toyota in Turkey.
The schools segment benefited from the start up of contracts during the prior fiscal year with the cities of Frankfurt and Budapest. New clients who have joined us include the schools of Linköping in Sweden, Milan, Albeda college in the Netherlands and Ted college in Ankara.
In Healthcare, modest organic growth in revenues reflects our selectivity in choosing clients. Recent developments since the beginning of the fiscal year include the start up of the Military Hospital in Warsaw, the January 2005 opening of the University Hospital Center in Rennes and beginning in March 2005, Public Hospitals in Paris.
In United Kingdom and Ireland , On a constant exchange rate basis, revenues declined by 2.2%, due to the particularly weak prior year client retention rate in the Business and Industry segment. The extension of additional services following the signing of a thirty five year contract under the Private Finance Initiative for the Colchester Garrison contributed to good growth in the Defense segment.
Recovery initiatives continue. For example, Sodexho teams in the United Kingdom and France collaborated to sign hospitality and travel package contracts for the next Rugby World Cup in 2007. Revenues for this contract are estimated to be approximately 140 million euros.
Rest of the World , Latin America, Asia/Australia and the Remote Sites activity all participated in strong growth in organic revenues of 18%, excluding the impact of the November 2003 Rugby World Cup in Australia. Among our recent commercial successes are : Exxon Mobil in Venezuela, Abril and Petrobras in Brazil, Bechtel in Remote Sites in Romania, Pride International in Angola and various drilling companies in the Gulf of Mexico. In Continental China, multiservice sales remain strong with the signature of contracts including Guangzhou Mak Diesel Engine and Shanghai Container Terminal.
Service Vouchers and Cards
The Service Vouchers and Cards activity reported organic growth of 8.7%. The reasons for this growth are :
Good sales in traditional services notably in Latin America, central Europe and in Asia, with new clients such as Bechtel, Siemens and HSBC;
Cross-selling of additional services such as gift vouchers to current clients including Melitta and Chevron in Brazil, La Poste in Belgium and ABN-AMRO in India; and
The creation of new services such as the launch in October 2004 of Surf@home by Sodexho, a joint venture with Belgacom.
Finally, we express our deepest sympathies to all the families touched by the tsunami. As of today, none of the Group's employees has been lost. As we have a strong presence in Southeast Asia, all of our teams are lending their support and their aid to the victims, to the refugees, and to those who are working tirelessly in the rescue effort.
In Phuket, where we manage the Bangkok Phuket hospital, we are implementing a number of initiatives :
meals for employees, rescuers and injured victims at the hospital;
supplying food to the local Red Cross and recruitment of additional personnel to aid them in receiving and distributing the aid coming from other countries;
collecting clothing and essential items from all other countries in Asia where Sodexho is present.
We would like to take this opportunity to thank all of the teams in the area who are working around the clock and to all of those who have expressed their support.
