Sodexo S.A. Annual Report 2018

FY2018 Annual Report · Sodexo S.A.
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Fiscal 2018
Registration
Document

Including the 
Integrated Report

C O N T E N T S 

SODEXO AT A GLANCE 

1

UNLOCKING  OUR  POTENTIAL 

Our fundamentals 
Our value creation model 
Our responsible programs 
Our materiality matrix 
Our risk management 
Message from Sophie Bellon 
Our Board of Directors 
11 Global megatrends 
Message from Denis Machuel 
Our Executive Committee 
Our profession, our markets 
Our evolution 
Our corporate responsibility 
Our key figures 

2

GROWING OUR BUSINESS RESPONSIBLY 

Client and consumer centricity 
Enhancing operational efficiency 
Nurturing talent 
Anchoring corporate responsibility 

1

2

4
6
8
10
11
12
14
16
20
22
24
32
34
36

44

46
54
60
68

Fiscal 2018
Registration
Document

Including the 
Integrated Report

A B O U T   O U R   I N T E G R AT E D   R E P O R T

The chapter 1 of t his Registration D ocument follows Sodexo’s 
decision to adopt the practice of integrated reporting. Based on 
the  recommendations of the International Integrated Reporting 
Council (IIRC), it also reﬂ ects the direction being taken in our 
roadmap for corporate responsibility, Better Tomorrow 2025.

Managers from various departments within the Group took part 
in a series of workshops to jointly create the report, ensuring 
there is a common perspective on Sodexo’s overall economic, 
social and environmental performance.

This second Integrated Report covers the ﬁ scal year 2018 
and draws on information from the Registration Document 
in which it is published. 

3

CONSOLIDATED INFORMATION 

3.1  Fiscal 2018 Activity Report 
3.2  Extra-financial reporting 
3.3  Consolidated financial statements 

as of August 31, 2018 

3.4  Notes to the consolidated financial 

statements 

3.5  Statutory Auditors’ Report on 

the consolidated financial statements 
3.6  Supplemental Information and condensed 

Group organisation chart 

4

INFORMATION ON THE ISSUER 

4.1  Sodexo S.A. Individual Company 

Financial Statements 

4.2  Notes to the Individual Company 

Financial Statements 

4.3  Supplemental Information on the Individual 

Company Financial Statements 

4.4  Statutory Auditors’ Report 

5

CORPORATE GOVERNANCE 

5.1  Shareholding structure 
5.2  Board of Directors 
5.3  Other information 
5.4  Risk management 
5.5  Compensation 

6

SHAREHOLDERS AND SHARE CAPITAL 

6.1  Sodexo Share Performance 
6.2  Financial Communications Policy 
6.3  Shareholders 
6.4  Additional Information about 
the Company’s Share Capital 

6.5  General Information about Sodexo bylaws 

7

COMBINED ANNUAL SHAREHOLDERS’ 
MEETING, JANUARY 22, 2019 

7.1  Agenda 
7.2  Resolutions submitted to the Combined 

73

74
89

104

110

158

163

169

170

172

189
192

201

203
204
229
236
249

271

273
278
280

283
285

289

290

Annual Shareholders’ Meeting of January 22, 
2019 

291

7.3  Statutory Auditors’ report 

on the authorization to grant free existing 
or newly issued shares 

300

8

APPENDICES 

8.1  Glossary 
8.2  Responsibility for the Registration Document 
and the Audit of the Financial Statements 

8.3  Reconciliation Tables 

301

302

305
307

 
S O D E X O 
AT   A   G L A N C E

Founded in 1966 by Pierre Bellon, 
Sodexo is the global leader in Quality of Life services.
Sodexo is the world’s only company off ering On-site Services, 
Beneﬁ ts and Rewards Services and Personal and Home Services. 
Sodexo’s services contribute to the performance of our clients, 
the fulﬁ llment of our teams and the economic, social and environmental 
development of our local communities.

KEY FIGURES(1) AS OF AUGUST 31, 2018

20.4 

billion euro in 
consolidated revenues

460,000

employees

72

countries

100

#1

million consumers 
served daily

France-based private 
employer worldwide(2)

69%

employee engagement 
rate(3)

#1

in its industry sector 
in both the Dow Jones 
Sustainability Index (DJSI)(4) 
and the 2018 RobecoSAM 
Sustainability Yearbook(5)

#3

in its sector 
among the World’s 
Most Admired 
Companies(2 ) 

and #1

for Innovation(2 )

1  Source: Sodexo.

2  2017 Fortune 500 ranking.

3  2018 employee engagement survey sent to 386,262  Sodexo  employees of whom  62% responded. 

4  The Dow Jones Sustainability Indices (DJSI) provide a global ranking of the companies most advanced in the area of sustainable development. They are 

jointly compiled by the Standard & Poor’s Dow Jones Indices and RobecoSAM.

5  The RobecoSAM Sustainability Yearbook is the world’s most comprehensive publication on corporate sustainability performance. More than 3,400 

companies in 59 industries were evaluated according to economic, ﬁ nancial,  social and environmental  indicators. 

The  French  version  of  this  Registration  Document  was  ﬁ led  with  the  french  securities  regulator  (Autorité  des  m archés  ﬁ  nanciers  –  AMF)   on  November  22 ,  2018, 
in  accordance with article 212-13 of its General Regulations. It may be used in support of a ﬁ nancial transaction if it is supplemented by a prospectus approved by the 
AMF . This document has been prepared by the issuer under the liability of the signatories. This document is a free translation from French into English and has no other 
value than an informative one. Should there be any diff erence between the French and the English version, only the text in the French version shall be deemed authentic 
and considered as expressing the exact information published by Sodexo. 
This Registration Document is available on Sodexo’s website, www.sodexo.com and on the website of the AMF , www. amf-france.org.

S O D E X O   -   F I S C A L   2 0 1 8   R E G I S T R AT I O N   D O C U M E N T

1

 
1

UNLOCKING 
OUR 
POTENTIAL

As t he global leader in Quality of Life services, we have developed 

a solid business model and a unique off er of integrated services 

that creates value for our clients. We have leading market positions 

in each of our segments and a clear roadmap and vision for 

the future. Together, we are ready to embark on a new phase 

of growth and proﬁ tability, fueled by the energy and 

professionalism of our 460,000 employees throughout the world.

2

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W W W. S O D E X O . C O M

Our 
responsible 
programs
P. 8

Our 
value creation 
model
P. 6

Our 
fundamentals
P. 4

Our 
materiality 
matrix
P. 10

Key 
ﬁ gures
P. 36

Our risk 
management
P. 11

Message 
from 
Sophie Bellon
P. 12

Our 
B oard 
of D irectors
P. 14

Our 
corporate 
responsibility
P. 34

Our 
evolution
P. 32

Our 
profession, 
our markets
P. 24

Our E xecutive 
C ommittee
P. 22

11 G lobal 
megatrends
P. 16

Message 
from 
Denis Machuel
P. 20

S O D E X O   -   F I S C A L   2 0 1 8   R E G I S T R AT I O N   D O C U M E N T

3

1   U N L O C K I N G   O U R   P O T E N T I A L   

OUR FUNDAMENTALS

A GLOBAL, 
INDEPENDENT, 
PEOPLE-FOCUSED COMPANY 

Sodexo is the community of our consumers, clients, 
employees and shareholders. To meet their expectations, we have built 
a business model based on proﬁ table organic growth in revenues. 
The strength of this model is reﬂ ected in our fundamentals.

Since Sodexo’s inception, our mission, our values and our ethical principles have guided the work of all employees. 

OUR MISSION

Improve the quality of life of Sodexo 
employees and those we serve, 
and contribute to the economic, 
social and environmental 
development of the communities, 
regions and countries in which 
we operate.

OUR VALUES

•  Service spirit
•  Team spirit
•  Spirit of progress 

OUR ETHICAL 
PRINCIPLES

•  Loyalty
•  Respect for people and equal 

opportunity
•  Transparency
•  Business integrity

4

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W W W. S O D E X O . C O M

1   U N L O C K I N G   O U R   P O T E N T I A L   

1

A CONSUMER AND CLIENT-FOCUSED 

CULTURE 
One of the keys to our ability to develop and 
expand a unique range of Quality of 
Life services has been our detailed 
understanding of the needs of clients and 
end-users. To leverage our understanding 
of the challenges faced by our clients and to 
adapt to the globalization of our markets, 
our organization is structured around global 
client segments for our On-site Services. 
This segment-based approach enables us 
to better capitalize on our size and global 
footprint, thereby increasing the value we 
bring to our clients. This model also helps us 
to meet the needs of our consumers, which 
can diff er greatly from segment to segment. 

DEVELOPING OUR EMPLOYEES
Sodexo is one of the world’s largest employers 
and a company of people at the service of 
other people. Our people have been at the 
core of our development in the past but 
will be even more so in the future. Sodexo’s 
continued growth is the result of the 
performance, development, professionalism 
and engagement of its diverse teams. 

Recognizing each individual’s contribution 
to the Group’s success is a priority. We are 
committed to being an employer of choice 
by providing jobs , learning opportunities 
and internal progression for our people 
that will enable them to  thrive within 
the  c ompany.

AN INTEGRATED OFFER THROUGH 

THREE ACTIVITIES 
Through our three activities: On-site 
Services, Beneﬁ ts and Rewards Services, 
and Personal and Home Services, 
we off er a holistic response to client 
needs and provide services that 
enable us to accompany consumers 
throughout their lives. 

We leverage the synergies that exist 
among our three activities, such as 
business development opportunities 
and global brand awareness. 
Shared organizations and infrastructure 
generate cost savings while multiple 
career gateways off er signiﬁ cant 
opportunities for our employees.

A WORLDWIDE COMPANY 

RESPONDING TO MAJOR GLOBAL 

TRENDS
Major global trends are bringing 
new quality of life issues to the surface. 
Demographic changes such as 
aging populations and urbanization 
are leading to an explosion in the need 
for home care services and facilities 
for the elderly. 

Operating in 72 countries and with 
undisputed leadership in developing 
economies, Sodexo’s global network 
enables us to customize our integrated 
off er while delivering a consistently 
high level of services worldwide. 
These services thus create value 
for our clients and improve the daily life 
of our consumers while respecting 
our economic, social and 
environmental commitments. 

INDEPENDENCE ENSURED 

THROUGH FOUNDING 

FAMILY SHAREHOLDING
Independence enables us 
to maintain our values, focus on 
a long-term strategy, maintain 
management continuity and ensure 
our sustainability.

Our independence is ensured through 
the Bellon family shareholding: 
Mr. and Mrs.  Pierre Bellon and their  
children control 72.6% of Bellon SA. 

As of August 31, 2018, our controlling 
holding company, Bellon SA, 
held 42.2% of Sodexo’s capital and 
57.2% of the exercisable voting rights. 
In June 2015, Mr. and Mrs.  Pierre Bellon 
and their    four children entered into an 
agreement for a duration of 50 years 
which prevents his direct descendants 
from freely disposing of their shares 
in Bellon SA. The sole asset of Bellon SA 
is its holding in Sodexo shares 
and Bellon SA does not intend to sell 
this shareholding to third parties. 

The sustained commitment required 
to build a truly international 
organization and a strong 
management team, nurture lasting 
client relationships and develop 
a successful integrated off er, 
reﬂ ects this vision.

S O D E X O   -   F I S C A L   2 0 1 8   R E G I S T R AT I O N   D O C U M E N T

5

1   U N L O C K I N G   O U R   P O T E N T I A L   

OUR VALUE CREATION MODEL

CREATING VALUE  BY 
IMPROVING QUALITY  OF LIFE

R E S O U R C E S 

I M P A C T S

E C O N O M I C

E C O N O M I C

•  Stability of family-controlled capital 
•  Robust financial model
•  Significant market potential 
•  Long-term vision

•  20.4 billion euro in consolidated revenues 
•  +9.7  % Total Shareholder Return per year over 

5 years

•  A- Standard &  Poor’s rating
•  Socially ResponsibIe Investment ratings

H U M A N

I N D I V I D U A L S

•  460,000 engaged employees
•  Diverse workforce
•  Development and training of employees 

(79.3% of employees trained)

•  Strong presence in local communities
•  Eco-system of partnerships 

•  81%  retention rate of total workforce
•  3.5%  internal promotion
•  A wide range of Quality of Life services 

delivered for 100 million consumers every day

•  7.6 billion euro in salaries
•  Stop Hunger: 93,000 committed volunteers
•  Nearly 7.4  million U.S. dollars raised 

for 1,200 partner charities and NGOs(1)

R E L A T I O N S H I P S

C O M M U N I T I E S

•  Improving quality of life and contributing to local 

communities’ development

•  Strong culture and ethical values
•  Innovation insight gained from 100 million 

consumers served everyday worldwide

•  4.4  billion euro spend with the  SMEs(2)
•  Apx. 2.3 billion euro of pay-roll taxes paid
•  7,200  tons of fairly traded coffee purchased
•   180 local community projects

N A T U R A L

T H E   E N V I R O N M E N T

•  Sustainable processes
•  Responsibly-sourced raw materials
•  Responsible use of energy and water

•  95,588  tons CO2 reduction in Scope 1(3) 

and  Scope 2(4) carbon emissions compared to 
baseline year  2011

•  Waste reduction: 87.5 % of sites have 

implemented equipment and process steps to 
reduce organic waste

•  99  million cage free eggs purchased
•  25,313  tons of sustainably sourced seafood
•  2.7  million liters of used cooking oil converted 

to biofuel

1  NGOs: Non-Governmental Organizations.

2  SMEs: Small and Medium sized Enterprises.

3  Scope 1: direct GHG emissions from the combustion of energy sources owned or controlled by the company.

4  Scope 2: indirect emissions of GHG from electricity purchases.

6

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W W W. S O D E X O . C O M

1   U N L O C K I N G   O U R   P O T E N T I A L   

To improve the quality of life of its employees and its consumers, 
and to contribute to the development of communities in which it operates, 
Sodexo makes accelerating growth a central priority. 
Growth increases our capacity for investment and innovation 
to capture the  strong potential of our markets and off ers innovative 
and  increasingly personalized services to our clients and consumers. 
This depends upon  the commitment of our teams, our ability to innovate 
and an in-depth understanding of our consumers.

1

R E N 

IL D

H
C

n
 a
,
s
i
s
y
l
a
n
a
,
n
o
i
t
c
e

d opti m iz e d  r e t u

n

r

RESEARCHING  
client 
and consumer 
needs

OPTIMIZING 
client and consumer 
experience 

l

l

o
c

a

t

a

D

D E N T S 

U
T
S

SELLING 
& DELIVERING 
solutions to client

INNOVATION &
DIFFERENT IATION

DESIGNING  
new 
or modifying 
existing off ers

IMPLEMENTING 
services 
or operating 
processes

PA

T

I

E

N

T
S

R

E

S

P

O

N

S

I

B

L

E

B

U

S

I

N

E

S

S

C

O
N
D
U
C
T

SE

N

I

O

R
S

Y E ES

L O
P
M

E

CIT

I

Z

E

N
S

All ﬁ gures are for Fiscal 2018, unless otherwise stated

S O D E X O   -   F I S C A L   2 0 1 8   R E G I S T R AT I O N   D O C U M E N T

7

 
 
 
 
 
 
 
 
 
 
1   U N L O C K I N G   O U R   P O T E N T I A L   

OUR RESPONSIBLE PROGRAMS

BUILDING SUSTAINABLE 
RELATIONSHIPS

 A S   A N
 E M P L O Y E R

A S   A
S E R V I C E 
P R O V I D E R

A S   A 
C O R P O R A T E 
C I T I Z E N

E M P O W E R M E N T

Improving quality of life of our employees 
increases their engagement and helps shape 
the quality of life experience off  ered by Sodexo.

6,232,374  hours of training 
provided during Fiscal 2018

C A R E

We use our insights to engage our consumers 
and address their unique needs. 
We bring additional expertise that complements 
that of our clients.

93.8% client retention 
rate for Fiscal 2018

R E S P O N S I B I L I T Y

Our actions and objectives have a direct impact 
on individuals, communities and the environment.

#1 in its industry
 in both the Dow Jones Sustainability Index (DJSI)(1) 
and the 2018 RobecoSAM Sustainability Yearbook(2)

Sodexo is part of the FTSE4Good index(3) 

These programs are an operational answer to the issues 
deﬁ ned in the materiality matrix (page 10 ).

Source: Sodexo.

8

S O D E X O   -   F I S C A L   2 0 1 8   R E G I S T R AT I O N   D O C U M E N T

W W W. S O D E X O . C O M

1   U N L O C K I N G   O U R   P O T E N T I A L   

Provider of services, employer, corporate citizen: our activities impact individuals, 
whether clients, consumers, employees, suppliers or shareholders, 
as well as the communities in which we operate. 
Because our success depends on building constructive relationships 
with all of our stakeholders, we are committed each day to taking action 
on numerous programs for responsible action.

1

FUNDAMENTAL 
RIGHTS AT WORK

A ZERO 
ACCIDENT 
HSE(4) CULTURE

GLOBAL EMPLOYEE 
LEARNING, TRAINING 
AND DEVELOPMENT 
PROGRAMS

GLOBAL 
FACILITIES
MANAGEMENT 
ACADEMY 

“SODEXO SUPPORTS ME” 
EMPLOYEE ASSISTANCE 
PROGRAM

DIVERSITY AND 
INCLUSION PROGRAM 
AND NETWORKS

ANNUAL 
BETTER TOMORROW 
SITE SURVEY

FLEXIBLE WORK 
ARRANGEMENTS

RESPECT FOR 
WORKERS’ RIGHTS IN 
THE VALUE CHAIN

FOOD SAFETY 
AND SECURITY

HEALTHY 
LIFESTYLE 
OPTIONS

HEALTHY AND 
SUSTAINABLE MEAL 
OPTIONS

PARTNER 
INCLUSION 
PROGRAM

PERSONAL 
AND HOME SERVICE

ANIMAL WELFARE 
COMMITMENTS

ELIMINATION OF 
PRODUCTS ACCELERATING 
DEFORESTATION FROM OUR 
SUPPLY CHAIN

WASTELESS 
WEEK

LOCAL 
COMMUNITY 
PROJECTS

SUSTAINED 
AND INCLUSIVE 
GROWTH

CARBON 
EMISSION 
REDUCTION 
TARGET

PROGRAMS 
TO OPTIMIZE ENERGY, 
WATER AND WASTE 
CONSUMPTION

RESPONSIBLE 
SEAFOOD 
SOURCING

SOURCING 
OF FAIRLY TRADED 
PRODUCTS

GENDER EQUALITY 
AND EMPOWERMENT

HEALTHY LIVES 
AND WELL-BEING

SUPPORT FOR 
THE UNITED 
NATIONS CHAMPIONS 
12.3 PROGRAM

DRIVING 
RESPONSIBLE 
CONSUMPTION

STOP 
HUNGER

INTERNATIONAL 
FOOD WASTE 
COALITION MEMBER

1  Dow Jones Sustainability Indices (DJSI): The Dow Jones Sustainability indices (DJSI) provide a global ranking of the companies most advanced in the area 

of economic, social and environmental responsibility. They are jointly compiled by the S&P Dow Jones Indices and RobecoSAM.

2  The RobecoSAM Sustainability Yearbook is the world’s most comprehensive publication on corporate sustainability performance. More than 3,400 companies 

in 59 industries were evaluated according to economic, social, environmental and ﬁ nancial indicators.

3  The FTSE4Good international index identiﬁ es socially responsible companies according to environmental, social and governance (ESG) criteria.

4  Health, Safety and Environment (HSE) the scope of Sodexo HSE function includes Occupational Health and Safety, Food Safety and Environment.

S O D E X O   -   F I S C A L   2 0 1 8   R E G I S T R AT I O N   D O C U M E N T

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1   U N L O C K I N G   O U R   P O T E N T I A L   

OUR MATERIALITY MATRIX

SHARING 
A COMMON VISION

Our unique position in the value chain enables us to develop strong 
relationships with multiple stakeholders. To deﬁ ne priorities and structure 
for our corporate responsibility roadmap, we have identiﬁ ed and ranked 
key issues and impacts in consultation with internal and external stakeholders 
with the support of Business for Social Responsibility (BSR)(1). Our methodology 
relies on interviews conducted with our employees, clients and consumers 
as well as market best practices.

H I G H

S
R
E
D
L
O
H
E
K
A
T
S

O
T

E
C
N
A
T
R
O
P
M

I

•  Food quality 
and safety

•  Food resource security 

and sourcing

• Supplier Code of Conduct

• Nutrition and healthy choices

•  Respect for 

Human r  ights

•  Fundamental rights 

at work

•  Occupational 

health and safety

• Food waste at client sites

• Supply chain food waste

•  Supply chain carbon footprint

• Environmentally sustainable menu options

•  Responsible communication 

and promotion

•  Fight hunger 

and malnutrition

•  Employee well-being 

and engagement

•  Supply chain inclusion

• Energy use in client sites

•  Employee training 
and development

•  Water use in client sites

• Diversity and inclusion

•  Responsible food 

practices 
on client sites

•  Dialogue and engagement 
with clients and consumers

•  Non-organic waste 

in client sites

•  Local community access 
to indirect employment

•  Local community access 
to direct employment

• Engagement with external stakeholders

•  Sourcing of equipment and supplies

• Animal welfare

L O W

L O W

I M P O R T A N C E   T O   S O D E X O 

H I G H

• As an employer

• As a service provider

• As a corporate citizen

F U N D A M E N T A L S

Since the publication of our materiality matrix, we have placed stakeholders’ most important issues at the heart of our best 
practices. The result of this progress is detailed in this report(2). The key indicators illustrating the challenges and priority risks 
are presented in the tables of chapter 3.

1  The internal and external analysis were conducted in Fiscal 2016.

2  Chapter 1, c hapter 2 and    Risk management sub-chapter 5.4.

10

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W W W. S O D E X O . C O M

 
 
1   U N L O C K I N G   O U R   P O T E N T I A L   

OUR RISK MANAGEMENT

 RISK MANAGEMENT AND 
INTERNAL CONTROL  MODEL BASED 
ON THREE LINES OF DEFENSE

1

Operational managers are the ﬁ rst line of defense for identifying and managing risks 
in their area of activity. They put in place controls and action plans for the risks identiﬁ ed.
Support and transversal  functions deﬁ ne the procedures and standards and provide 
tools and techniques for operational staff  to implement the appropriate controls.
Internal Audit provides an independent assessment of risk management 
and internal control to the Executive Committee and the Board of Directors. 
It makes recommendations on improving risk management 
to operational teams and support functions.
Each year, a risk assessment is carried out based on the reported results 
and summaries established by the senior management of the main entities. 
Sodexo is thus able to deﬁ ne a risk proﬁ le that integrates both internal and external 
risks. This evaluation is successively validated by the Executive Committee, 
the Audit Committee and the Board of Directors.

SODEXO’S RISK MANAGEMENT AND INTERNAL CONTROL MODEL
The Three Lines of Defense

BOARD / AUDIT COMMITTEE

EXECUTIVE COMMITTEE

Report

Report

Report

Inform

FIRST LINE OF DEFENSE

SECOND LINE OF DEFENSE

THIRD LINE OF DEFENSE

OPERATIONAL
MANAGEMENT

Segment Directors, 

District Managers, 

Site Managers…

SUPPORT &
TRANSVERSAL
FUNCTIONS

Services Operations 

 Finance

Human Resources

Health & Safety

IT Security

Risk Management and Internal Control, 
Legal Affairs...

GROUP
INTERNAL 
AUDIT

E
X
T
E
R
N
A
L

A
U
D

I
T
O
R
S

|

R
E
G
U
L
A
T
O
R
S

Identify and manage risks 

• 
  within their activities 

•  Support our operators 
in risk management 

•  Put controls into place 

•  Provide tools and techniques 

•  Evaluates and makes 

recommendations for the 
improvement of risk management

S O D E X O   -   F I S C A L   2 0 1 8   R E G I S T R AT I O N   D O C U M E N T

11

 
 
 
 
 
 
 
1   U N L O C K I N G   O U R   P O T E N T I A L   

MESSAGE FROM SOPHIE BELLON

SOPHIE BELLON
CHAIRWOMAN OF THE BOARD 
OF DIRECTORS 

This past year was marked by 
important milestones and key 
developments. On January 23, Denis 
Machuel became the third CEO in 
Sodexo’s history, and a new chapter 
opened for our company. Since 
then, Denis and I have been working 
together to make sure the tandem 
we form creates an effi  cient funnel of 
collaboration between the Executive 
Committee and the Board of Directors.

The ﬁ rst work we carried out was 
an assessment of Sodexo’s current 
situation to see where we stand today, 
identifying related short and medium-
term priorities.

Sodexo’s future is ripe with 
possibilities: t he market potential for 
our combined activities is estimated 
at 900 billion euro, nearly 45 times 
current revenues. Global trends 
are also promising: d emand for 
outsourced services is accelerating, 
and the integration of various services 
is set to follow. At the same time, 
the aspiration to improve quality of 
life is one that resonates strongly in 
both Western societies and in those of 
emerging economies. The 100 million 
people we serve every day represent a 
huge asset for the future development 
of our services.

But we have undoubtedly not been 
effi  cient enough in capturing this 
potential lately, partly because we 
have likely taken too long to make 
some decisions.

Sodexo is, and has always been, 
a growth company. From the 
very beginning, we have deﬁ ned 
ourselves as the community of our 

clients, consumers, employees and 
shareholders and we have always 
wanted to build a growth company 
because growth is the best way to 
respond to the expectations of these 
diff erent stakeholders.

Today, accelerating this growth is 
the company ’s top priority. Our 
underperformance in some segments 
and markets required quick and 
decisive corrective action, which is 
now underway.

At the same time, major social, 
demographic and environmental shift  s 
coupled with accelerated technological 
progress continue to profoundly and 
irreversibly impact our markets. The 
changes are aff ecting relationships 
with both our B to B clients and with 
those who consume our services, 
requiring that we redeﬁ ne our markets 
and rethink how we create value.

Looking at these changes, we have 
already taken very clear steps. 
First, we are renewing our focus on 
foodservices, our historical and core 
expertise. The potential in this area 
is huge. We are also strengthening 
the integration of our diff erent 
services to demonstrate our expertise 
in each of our client segments and 
sub-segments. Lastly, we want to 
better understand the needs of our 
consumers in order to be able to meet  
them. As our consumers progressively 
become an important additional 
source of revenue, they also have the 
power to inﬂ uence the decisions of our 
BtoB clients to partner with us.

We will seize these emerging 
opportunities by leveraging the 

“ Our ambition is 
to one day improve 
the q uality of 
l ife of one billion 
individuals around 
the world.”
Sophie Bellon

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1   U N L O C K I N G   O U R   P O T E N T I A L   

“We need to get back to 
the culture   of entrepreneurship that 
has underpinned our success ”

increasing convergence of our 
activities, driven by technological 
progress. In order to succeed, we need 
to ﬁ rst get back to the basics of our 
business: c lient retention, employee 
engagement, and extreme operational 
discipline. Over the years, we have lost 
sight of these basics in some parts of 
the business and we are in the process 
of restoring them.

We also need to get back to the culture 
that has underpinned our success. Our 
company culture, created by the ﬁ rst 
generation of managers, was based on 
an entrepreneurial spirit. This is about 
encouraging each manager to manage 
his or her business as if it was their 
own, while giving them the means to 
do so. With entrepreneurship comes 
accountability. Accountability is about 
facing the facts with humility before 
making decisions, and assuming the 
consequences of our actions.

Lastly, talent is the foundation of 
everything we do. Almost all the 
challenges we have today have their 
roots in wrong people decisions or 
people situations which have gone on 
for too long. Developing our talent, 
constantly building and strengthening 
our talent pipeline, is the key to our 
future.

Provided we work on these 
prerequisites, I believe that we 
are well positioned to capture the 
opportunities created by this new 
world. Today, we have around 
100 million consumers. Our ambition 
is to one day improve the quality of 
life of one billion individuals around 
the world.

As we move forward, the Board will 
have an important role to play in 
supporting and challenging our 
strategic choices and how they are 
executed, as well as evaluating the 
achievement of our objectives towards 
reaching this ambition. The recent 
evolution in the Board’s composition 
has resulted in a new dynamic, and 
I am conﬁ dent that the Board is in 
a strong position to carry out its 
role through open discussions and 
constructive dialogue.

Sodexo today is the result of a long 
and successful history rooted in the 
original vision of its founder. When 
Pierre Bellon created the company  
52 years ago, his personal history had 
led him to believe that companies with 
a strong social purpose are the ones 
that stand the test of time. That is 
why he gave Sodexo powerful values 
- team spirit, service spirit, and a 
spirit of progress – and a particularly 
forward-looking mission for the time. 
This mission was – and remains – to 
improve the quality of life of our 
employees and the people we serve, 
and contribute to the economic, social 
and environmental development of the 
communities, regions and countries 
where we operate.

These fundamentals have not changed 
since 1966 and are still very relevant 
today. For over 50 years, we have 
grown while making sure along the 
way that we are actively contributing 
to foster progress and create social 
value for individuals, communities and 
society. Fulﬁ lling our mission is all 
about growing to improve the quality 
of life of an ever-increasing number of 

1

individuals, both our employees and 
our consumers, and to have a greater 
impact on our communities and the 
environment we all share.

Our ﬁ nancial independence is a 
fundamental cornerstone in this 
ambition. Remaining an independent 
company, a family-controlled 
business, is for us the only way to 
maintain our values and our mission, 
ensure stability in our management, 
focus on the long term, and have 
the freedom to make necessary 
investments in our development.

Rapidly recovering good levels of 
performance while starting to actively 
work towards achieving our ambition 
will take considerable collective eff ort 
and major changes, but I believe we 
have the right levels of discipline and 
courage to rise to the challenge. We 
will do what it takes to make sure 
the most crucial part of who we are 
remains the same.

I would like to thank all Sodexo’s 
employees for their hard work every 
day for our clients, for our consumers, 
for their teams and for their 
communities. It is their engagement 
and dedication that have made Sodexo 
the great company it is today.

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OUR BOARD OF DIRECTORS

SHARING 
A LONG-TERM VISION

A family-controlled company, Sodexo’s stability is one of the keys to its success. 
Under the leadership of Chairwoman Sophie Bellon and inspired by a shared long-
term vision, Sodexo’s Board of Directors, composed of seven women and six men, 
determines the strategic orientations of the company .

   Member of the Audit 

Committee

   Member of 

the Compensation 
Committee

   Member of 

the Nominating 
Committee

For more details on 
Sodexo’s Governance, 
please see Chapter 5.

As of August 31, 2018

SOPHIE BELLON 
Chairwoman of the Board 
of Directors

Nationality: French

Term expires at the Annual 
Shareholders’ Meeting 
approving the Fiscal 2020 
ﬁ nancial statements

Attendance rate: 100%

EMMANUEL BABEAU
Deputy Chief Executive Offi  cer 
of Schneider Electric SE

Independent Director

Chairman of the Audit Committee

Nationality: French

Term expires  at the Annual 
Shareholders’ Meeting 
approving the Fiscal 2018 
ﬁ nancial statements

Attendance rate: 100%

PIERRE BELLON
Chairman Emeritus

Founder of Sodexo and 
Chairman of the supervisory 
Board of Bellon SA

Nationality: French

ROBERT BACONNIER
Independent Director

Nationality: French

Term expires at the Annual 
Shareholders’ Meeting 
approving the Fiscal 2018 
ﬁ nancial statements 
(Proposed reappointment)

Attendance rate: 100%

ASTRID BELLON
Director

Nationality: French

Term expires at the Annual 
Shareholders’ Meeting 
approving the Fiscal 2018 
ﬁ nancial statements 
(Proposed reappointment)

Attendance rate: 69%

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BERNARD BELLON
Director

Nationality: French

Term expires at the Annual 
Shareholders’ Meeting 
approving the Fiscal 2018 
ﬁ nancial statements

Attendance rate: 100%

FRANÇOIS-XAVIER BELLON 
Founder and Chief Executive 
Offi  cer of LifeCarers Ltd

Director

Nationality: French

Term expires at the Annual 
Shareholders’ Meeting 
approving the Fiscal 2018 
ﬁ nancial statements 
(Proposed reappointment)

Attendance rate: 92%

1

NATHALIE BELLON-SZABO
Chief Executive Offi  cer, 
Sodexo Sports & Leisure

Director

Nationality: French

Term expires at the Annual 
Shareholders’ Meeting 
approving the Fiscal 2020 
ﬁ nancial statements

Attendance rate: 92%

PHILIPPE BESSON 
Head of Projects 
and Sponsorship

Employee representative

Nationality: French

Term expires at the Annual 
Shareholders’ Meeting 
approving the Fiscal 2019 
ﬁ nancial statements

Attendance rate: 85%

FRANÇOISE BROUGHER
Chief Operating Offi  cer, Pinterest

Independent Director

Chairwoman of the Nominating 
Committee

Nationality: dual French 
and American

Term expires at the Annual 
Shareholders’ Meeting 
approving the Fiscal 2020 
ﬁ nancial statements 

Attendance rate: 100%

SOUMITRA DUTTA 
Dean and Professor of 
Management, Cornell University

Independent Director

Nationality: Indian

Term expires at the Annual 
Shareholders’ Meeting 
approving the Fiscal 2020 
ﬁ nancial statements

Attendance rate: 100%

CATHY MARTIN 
Regional Manager

Employee representative

Nationality: Canadian

Term expires at the Annual 
Shareholders’ Meeting 
approving the Fiscal 2020 
ﬁ nancial statements

Attendance rate: 85%

SOPHIE STABILE 
Founder and Chairwoman of 
Révérence

Independent Director

Nationality: French

Term expires at the Annual 
Shareholders’ Meeting 
approving the Fiscal 2019 
ﬁ nancial statements

Attendance rate: 100%

CÉCILE TANDEAU 
DE MARSAC
Chief Human Resources, Solvay 
Group

Independent Director

Chairwoman of the 
Compensation Committee

Nationality: French

Term expires at the Annual 
Shareholders’ Meeting 
approving the Fiscal 2019 
ﬁ nancial statements 

Attendance rate: 100%

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1   U N L O C K I N G   O U R   P O T E N T I A L   

11 GLOBAL MEGATRENDS

ADAPTING 
OUR OFFERS TO BUILD 
THE FUTURE

Preparing the future means being aware of   the world’s great 
transformations. By deﬁ ning and analyzing 11 major megatrends 
with demographic, social, economic and technological implications, 
we are ﬁ ne-tuning  our strategy and adapt our off ers.

Half of the world’s top 500 companies did not exist 25 years ago. 

This speaks volumes about the pace and magnitude of the changes we are going 

through, from Europe to Asia, from the Americas to Africa and Australia. 

Whether social, environmental, economic or technological, 

these changes are occurring at an unprecedented speed and scale. 

Attentive to these changes, we are adapting our off ers to respond 

to the expectations of our consumers and users. The world’s accelerated 

transformation is profoundly reshaping our life, work and leisure environments, 

our behaviors and our modes of consumption.

Understanding these 11 megatrends allows us to invest the right resources 

where they are needed, for example, by developing new businesses or expanding 

our global footprint. We are also evolving our off erings to respond 

to new expectations while creating value for our company.

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1 .   D E M O G R A P H I C   S H I F T S

Developed countries are faced with    a rapidly 
aging population and exploding health 
budgets due in part to slow population 
growth estimated at 2.9% between 2015 
and 2030. Meanwhile, developing countries, 
led by India, Nigeria and Pakistan, will 
experience an average population growth 
of 18.5% between 2015 and 2030(1).

1 billion 

humans will be older 
than 65 in 2030, 

13% of the world’s population(2) 

Sodexo responds to these challenges

•  We are developing a range of services 
that enhance quality of life for seniors 
at home, such as Amelis, Comfort Keepers© 
and PrestigeNursing+ Care.

•  We are making life easier for parents through 

childcare services like those off ered by 
Crèche Attitude.

1

2 .   U R B A N I Z A T I O N

Rapid urbanization is contributing to the 
increase in GDP per capita, but the emergence 
of mega-cities (urban areas with more than 
10 million inhabitants) is creating enormous 
economic and social challenges (mobility, 
security, waste and energy management). 
In 2030, megacities will generate 72% 
of global GDP. Meanwhile, mid-tier cities 
in emerging economies will account for 40% 
of GDP growth between 2015 and 2025. These 
cities will gain in economic importance and 
become major drivers of global growth. 

3 .   E M E R G I N G   M I D D L E   C L A S S

24

of the world’s 
31 megacities in 2030

will be in developing  countries(3)

Sodexo responds to these challenges

•  We accompany deployment of public aid 
programs to improve the quality of life 
of citizens and strengthen social ties.
•  We off er foodservices solutions adapted 
to the increased mobility of employees.

•  We are developing mobility solutions, 

including car-sharing solutions adapted 
to the growth of urban populations, which will 
represent 57% of the world’s population in 
2050(2 ).

Education and technologies are transforming 
consumption modes and habits. The middle 
class, whose purchasing power is on the rise 
and which  will represent most of the consumers 
in 2022, are dedicating an increasing 
share of   their budget to leisure and culture. 
In addition,  the future near-elimination 
of extreme poverty should lead to the 
emergence of a  new class of consumers.

60% 

of the world’s population 
will be part of the middle 
class in 2030, 

compared to 27% in 2009(4 )

Sodexo responds to these challenges

•  We are strengthening our expertise in the ﬁ eld 
of sporting and cultural events and facilitating 
access to leisure activities.

•  We off er services focused on sports, wellness 

and quality of life to meet the rising 
aspirations of the growing middle class.

4 .   G L O B A L   E C O N O M Y

Capital, information and talent are now 
interconnected and trade is growing, 
providing companies with new sources of 
growth. At the same time, consumers prefer 
locally-sourced products, especially for food 
and beverages.

The share of exports 
in GDP will increase 

from  26% in 2010 to 

33%

 in 2030(5 ) 

Sodexo responds to these challenges

•  We encourage innovations from the front line 
and share best practices among our sites.
•  We source responsibly and give preference to 

fair trade-certiﬁ ed products.

1  Roland Berger Trend Compendium, UN DESA.

2  United Nations, Population Division.

3  GCIF Working Paper No. 4: Population predictions of the 101 largest cities in the 21st century.

4   The unprecedented rise of the middle class : Homi Khara.

5   McKinsey Global Institute, Boston Consulting Group RB Trend Compendium 2030.

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1   U N L O C K I N G   O U R   P O T E N T I A L   

About

57%

of global GDP will be 
generated by develop ing 
countries in 2030(1) 

Sodexo responds to these challenges

•  We are positioning ourselves as a strong 

provider of services in the developing 
economies.

•  We are contributing to the economic and 

social development of local communities in 
all countries where we operate.

5 .   D E V E L O P I N G    M A R K E T S

Developing markets are creating wealth 
for millions of people. Their weight in 
the world economy is increasing due to 
rapid population growth seven times 
faster than that of developed countries, 
combined with the rise of the middle class. 
With their aggressive internationalization 
and increased competitiveness abroad, 
half of the world’s Fortune 500 companies 
will be based in emerging market countries 
by 2025.

6 .   P U B L I C   D E F I C I T S

The weight of public debt is leading 
governments to consider more effi  cient ways 
to provide public services and to outsource 
certain services. Between now and 2030, 
rising public deﬁ cits and persistent youth 
unemployment will strongly impact public 
policies and taxation.

Public debt will amount to 

Sodexo responds to these challenges

98% 

of world GDP in 2035(2)

•  We partner with local authorities to create and 

operate Public-Private Partnerships (PPP).

•  We are developing solutions that allow 

public authorities to control expenses while 
improving the service provided to citizens.

7 .   E N V I R O N M E N T A L   I S S U E S   A N D   R E S O U R C E   S C A R C I T Y

8.6 billion inhabitants in 2030, 9.7 billion 
inhabitants in 2050: the demographic boom 
is weighing on natural resources, heightening 
global warming and disrupting traditional 
consumption patterns. As a result, government 
actions and the focus on environmental and 
ethical standards is increasing. Energy, water 
and food consumption will increase by 50%, 
40% and 20% respectively by 2030(3). 

2,216 

million tons of urban 
waste will be produced 
in 2025, 

a doubling of volume since 
2012 (4) 

Sodexo responds to these challenges

•  We share with our employees a culture 

of environmental responsibility.

•  We are deploying facilities management 
services to help reduce carbon emissions 
from the sites we manage.

•  We advocate for sustainable use of resources.

8 .   E M P O W E R E D   C O N S U M E R S

Consumers and clients now have unlimited 
access to information and expect personalized 
services and experiences. The niche culture is 
growing and B to  B is naturally following in the 
footsteps of B to  C, which is leading the way.

78% 

of millennials consider 
the customer experience 
more important than 
the product(5)

Sodexo responds to these challenges

•  We promote work-life balance by optimizing 

mobility for employees.

•  We create comfortable, safe and healthy 

working environments.

•  We deploy nutrition education programs.
•  We develop Incentive and Recognition programs.
•  We improve quality of life through innovations 
like click-and-collect(6), delivery of meals and 
subscriptions (7)…

1  United Nations, Population Division.

2  Joseph Gagnon with Marc Hinterschweiger, June 2011.  The Global Outlook for Government Debt Over the Next 25 Years. Implications for the Economy and 

Public Policy.

3  PwC megatrends.

4  EY Age of Digital Disruption, KPMG Future State 2030, World Bank, PwC megatrends, Roland Berger Trend Compendium.

5  Poll conducted by Harris Group.

6  Click-and-collect enables online reservations and collection of purchases at the point of sale.

7  Digital platforms allow subscribers to receive basic products and ingredients at a special rate to make their own meals.

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9 .   D I G I T A L   T R A N S F O R M A T I O N

Technology disrupts the relationship 
between companies and users and responds 
to their new expectations. As the value 
of data grows, off ering new insights and 
usages, companies are able to increasingly 
personalize their off ers. The digital 
revolution is creating value.

Between 2009 and 2020, 
the production of digital 
data will have multiplied 
by 

44(1)

Sodexo responds to these challenges

•  We are using innovative technologies (including 
big data) to design increasingly personalized 
off ers and gain operational effi  ciency.
•  We are leveraging internal and external 

ecosystems to accelerate our transformation.
•  Staying abreast of changing consumer needs, 
we are able to off er solutions such as menu 
information, restaurant patronage, available 
balances on user accounts, identiﬁ cation 
of restaurants and shops accepting Sodexo 
payment methods, management of electronic 
wallets for high school students and 
reservations at childcare centers.

1

1 0 .   O W N E R S H I P   V S .   U S E

Why buy if you can subscribe or 
rent? Collaborative platforms are 
revolutionizing business models and buying 
behaviors. With their lower capital intensity, 
these business models can generate much 
more rapid growth than traditional ones. Just 
as promising: accessible, fast and aff ordable 
home delivery of groceries or meals.

Online shipments will 
increase by 

25% 

per year 
through 2020 and by 15% 
beginning in 2021(2) 

Sodexo responds to these challenges

•  We are developing concierge and car-sharing 

options.

•  We manage resources that include employees, 

consultants and freelancers.

•  We off er work space booking platforms like Neo-
Nomade or Wx, which provide companies with 
the ﬂ exibility they need while contributing to 
the work-life balance of employees.

1 1 .   F U T U R E   O F   W O R K

Disruptive technologies such as artiﬁ cial 
intelligence, robotics or the Internet of 
Things… all are profoundly transforming the 
world of work. To succeed, companies must 
support employability and attract talent.

Automation could lead to 

375 million

workers switching 
occupations in 2030(3)

Sodexo responds to these challenges

•  We off er Corporate Services clients workplace 
management solutions to meet new working 
habits, such as increasing ﬂ exibility and 
collaboration.

•  We will train employees and help them re-skill 

to adapt to new requirements and the 
automatization of the work environment.

•  We will use new technologies to remove risky 

and repetitive tasks for employees.

1  PWC global megatrends.

2  Statista, Roland Berger Trend Compendium 2030, McKinsey Institute: A future that works, UN Population Division, Accenture: Harnessing Revolution.

3  McKinsey Institute: A Future that Works, BCG, PWC: Will robots really steal our jobs?

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MESSAGE FROM DENIS MACHUEL

DENIS MACHUEL
CHIEF EXECUTIVE OFFICER

As I complete my ﬁ rst year as CEO, 
I can not help but feel proud of 
the company Sodexo has become: 
we started off  as a traditional 
foodservices player, and over the past 
ten years, facilities management 
has grown to make up almost 
a third of our On-site Services 
revenues. Today nearly half of our 
client contracts are multiservice. 
The results for our clients speak for 
themselves: seamlessly integrated 
services, optimized costs and energy 
management, and high-standard 
services across locations.  

Beyond the Group’s achievements, 
I am disheartened by this year’s 
results: our performance is not where 
its needs to be. This became clear in 
March when we were required to issue 
a proﬁ t warning.  

We met our revised guidance with 
organic growth of 2%, excluding the 
53rd week impact in North America, 
and an underlying proﬁ t margin of 
5.7% excluding the currency impact, 
down from 6.5% the previous year. 
The underperformance in North 
America, particularly in Education 
and Health Care, was partially 
compensated by solid 4.5% organic 
growth outside North America and 
5.1% organic growth from Beneﬁ ts 
and Rewards Services. We also 
generated record free cashﬂ ow. 
However, margins were impacted 
by the fall in revenue and associated 
execution issues in North America, 
lower than expected proﬁ tability 
of a few very large contracts 
and increased investments in 
Beneﬁ ts and Rewards, coupled with 
lower interest rates in Brazil.

We have been proactive in addressing 
our areas of underperformance. New 
leaders are in place in North America 
Health Care and in Education, and 
they are implementing effi  ciency 
plans on labor productivity and food 
cost reduction. We reviewed our sales 
processes and changed our sales 
teams’ incentive structures. In order 
to regain market share, we have 
refocused resources to reassert 
our excellence in food services. And 
issues around the ramp-up of a few 
of our very large contracts are being 
addressed as well. 

We are thus unwavering in our 
determination to accelerate our growth. 
Our new strategic agenda, Focus on 
Growth, is designed to establish the 
right operational discipline at all levels 
to manage the business more effi  ciently 
and build the key capabilities required 
to conquer our future. This agenda has 
four pillars:

•  Client and consumer centricity
This means being obsessed with client 
retention and the consumers we serve. 
We are reviving our client retention 
program to bring our retention rate 
above 95%. Through insights from 
strategy, marketing and digitalization, 
we are also developing innovative 
consumer-centric services adapted to 
new lifestyles and habits.

•  Enhanced operational efficiency
We are reassessing our operations 
in order to reduce costs, rationalize 
processes and reallocate savings 
to business-driving activities such 
as sales and marketing and focus 
the attention of our teams on growth 
markets.

“We are 
unwavering in 
our determination 
to accelerate our 
growth.”
Denis Machuel

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•  Nurturing talent
Talent is key as our 460,000 people 
are the essence of our services, 
our development, and of our 
success. To foster intrapreneurship, 
empowerment and accountability 
throughout Sodexo, we are focusing 
on performance management, high 
performer pool management and 
training.

•  Anchoring corporate 

responsibility in our business

Sodexo ranked ﬁ rst in our sector 
for the 14th year in a row in 
the globally-renown Dow Jones 
Sustainability Index. Our clients 
and customers are increasingly 
interested in how our services can 
support their own sustainability 
eff orts, through healthy and 
sustainable food options, our growth 
model that promotes inclusive 
partnerships with local businesses 
and by tackling waste. All these 
actions are crucial as they reduce 
carbon emissions and support our 
clients’ transition to a low carbon 
economy and avoid the worst impacts 
of climate change. 

To support this strategic agenda, 
we are implementing a uniﬁ ed and 
rigorous Group-wide performance 
management framework called 
STEP (Sodexo Targets for Enhanced 
Performance) to reinforce 
accountability and align all our 
teams on the same key performance 
indicators and targets. 

This agenda is also supported by 
a broadened Executive Committee, 
with representation from all of 
Sodexo’s segments and activities, 

“ Sodexo is well-placed  
to take on the great challenges 
that lie ahead ”

1

the acquisition of Centerplate, 
which partners with over 300 premier 
event venues. In addition, we are 
evolving our space in food through 
acquisitions, such as French online 
restaurant FoodChéri or English 
high-end workplace dining boutique, 
the Good Eating Company. We are 
also investing in start-ups like Klaxit, 
a pioneer in home-to-work carpooling, 
and incubating our own “corp-ups” 
like Rydoo which is streamlining 
business travel management. 

Looking ahead, I am convinced that 
Sodexo is well-placed to take on 
the challenges that lie ahead. I am 
highly conﬁ dent in the value of the 
services we provide, and our ability 
to deliver on our strategy. I would 
like to thank all our employees who 
remain committed and engaged in 
our mission day-to-day, our clients 
who continue to trust us, and the 
consumers we serve as we open up 
this new chapter in the life of Sodexo.

as well as our geographic regions 
and global functions. This entire 
management team is resolutely 
focused on executing our strategic 
agenda. 

As we roll out our strategic agenda, 
we are also starting to see the impact 
of digital technology and new lifestyle 
and sustainability trends on our 
clients and our services. We have 
traditionally partnered with clients 
to serve their “communities” of 
consumers on their sites, such as 
employees in companies, patients 
and staff  in hospitals, and students 
in universities. Today, the lines 
that have typically deﬁ ned these 
communities are increasingly blurred, 
as is the distinction between what is 
traditionally called on-site and off -
site: employees leave the workplace 
to work remotely, patients no longer 
stay as long in hospitals, students 
will do more and more e-learning 
outside of the classroom. Clients are 
asking us for solutions that respond 
to the new needs of their community 
of consumers, through multi-choice, 
digitally-driven, personalized and 
sustainable solutions. 

Entering in this new era, we 
continue to develop our footprint 
and build capacity in key segments. 
For example, we doubled our 
Sports & Leisure activities through 

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1   U N L O C K I N G     O U R     P O T E N T I A L

        OUR EXECUTIVE COMMITTEE

DRIVING 
THE GROUP’S GROWTH

As of August 31, 2018

Nathalie Bellon-Szabo

Chief Executive Offi  cer, 
Sports & Leisure Worldwide, 
On-site Services

Nationality: French

Johnpaul Dimech

Region Chair, 
Asia Paciﬁ c

Nationality: Australian

Denis Machuel

Group 
Chief Executive Offi  cer

Chairman of 
the Executive Committee

Nationality: French

Cathy Desquesses

Group Chief People Offi  cer

Nationality: French

Lorna Donatone

Chief Executive Offi  cer 
of Geographic Regions 
and Region Chair for 
North America

Nationality: American

Sean Haley

Group 
Chief Executive Offi  cer 
of Service Operations

Region Chair, 
UK & Ireland

Nationality:  British

Nicolas Japy

Chief Executive Offi  cer, 
Energy & Resources 
Worldwide, 
On-site Services

Nationality: French

Satya-Christophe Menard

Chief Executive Offi  cer, 
Schools & Universities 
Worldwide, On-site Services

Nationality: French

Tony Leech

Chief Executive Offi  cer, 
Government & Agencies 
Worldwide, On-site Services

Nationality: Australian

Sylvia Metayer

Chief Executive Offi  cer, 
Corporate Services 
Worldwide, On-site Services

Triple nationality: French, 
British and Canadian

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The Executive Committee, newly widened, supports 
Sodexo’s growth and development. This new Executive Committee, 
diversiﬁ ed and integrating key expertise, represents all 
of the Group’s activities, segments and geographical areas 
where it operates, reinforcing the focus on clients and consumers 
and maximizing the effi  ciency of local execution.

1

Anna Notarianni

Region Chair, 
France

Nationality: French

Belen Moscoso Del Prado

Group Chief Digital 
& Innovation Offi  cer

Nationality: Spanish

Marc Plumart

Chief Executive Offi  cer, 
Health Care & Seniors 
Worldwide, On-site Services

Nationality: French

Marc Rolland

Group 
Chief Financial Offi  cer

Nationality: French

Dianne Salt

Group Chief 
Communications Offi  cer

Nationality: Canadian

Didier Sandoz

Chief Executive Offi  cer, 
Personal and Home 
Services

Nationality: French

Bruno Vanhaelst

Group Chief 
Marketing Offi  cer

Nationality: Belgian

Aurélien Sonet

Chief Executive Offi  cer, 
Beneﬁ ts and Rewards 
Services

Nationality: French

Damien Verdier

Group Chief Strategy 
and Corporate 
Responsibility Offi  cer

Nationality: French

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1   U N L O C K I N G     O U R     P O T E N T I A L

OUR PROFESSION, OUR MARKETS

WE ARE THE GLOBAL 
LEADER IN QUALITY 
O F LIFE SERVICES

Around the world, our 460,000 employees are driven by the same mission: 
improving quality of life. An essential partner for companies and organizations, 
our unmatched off er of On-site Services helps them to better serve consumers 
and increase their effi  ciency. Our Beneﬁ ts and Rewards Services and Personal 
and Home Services complete our off er to help ensure a better tomorrow for all.

On-site 
Services 

Beneﬁ ts 
and Rewards
Services

Personal 
and Home Services

• BUSINESS & 

ADMINISTRATIONS

- Corporate Services
- Energy & Resources
- Government & Agencies
- Sports & Leisure

• HEALTH CARE & SENIORS

• EDUCATION

- Health Care
- Seniors

- Schools
- Universities

• EMPLOYEE EXPERIENCE

• MOBILITY AND EXPENSE

• CONCIERGE SERVICES

• HOME CARE

• CHILDCARE

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On-site Services

Increase a company’s effi  ciency, reassure patients 

in the hospital, promote academic growth, provide safety 

and comfort on a remote site: our services delivered directly on site 

improve quality of life for millions of consumers and enable 

our clients to improve their performance. From the design 

of workplaces to reception services, sterilization of medical 

equipment, cleaning services and foodservices, our customized, 

innovative solutions are adapted to our clients’ needs, 

organized into three segments: Business & Administrations, 

Health & Seniors and Education.

1

CONSIDERABLE GROWTH POTENTIAL

REVENUES BY CLIENT SEGMENT

On-site Services activity market 
potential(1) is estimated at 

900 

B I L L I O N 
EURO(2)

Sodexo estimate.

KEY FIGURES(1)

96% 

of Group revenues

Source: Sodexo.

BUSINESS &
ADMINISTRATIONS
56% 

HEALTH CARE & 
SENIORS
24%

EDUCATION
20%

19.6 

billion euro 
in consolidated 
revenues

445,673 

employees

1 

Including Personal and Home Services.

2  Note: Market estimates are likely to evolve over time, given the growing reliability of information sources in various countries.

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1   U N L O C K I N G     O U R     P O T E N T I A L

On-site Services

BU SIN ESS  & 
ADMINI STRAT IONS

REVENUES BY 
CLIENT SUB-SEGMENT

ENERGY &
RESOURCES
13%

CORPORATE
SERVICES
48%

GOVERNMENT & 
AGENCIES
11% 
SPORTS &
LEISURE
12%

OTHERS 
16%

KEY FIGURES

56% 

of Group 
revenues

10,938 

million euro 
in revenues

276,572 

employees

Source: Sodexo.

Corporate Services – Enhancing quality
of life at work

Professional growth and employee quality of life 
are drivers of individual and collective performance 
for companies as well as key diff erentiators 
in the competition for talent. Sodexo conceives 
and implements customized solutions to help clients 
create an environment contributing to the well-being 
of employees and visitors while reinforcing their 
attractiveness and competitiveness. From food 
to facilities management services ... our solutions 
respond to the challenges of employee motivation 
and operational performance.

Energy & Resources – Ensuring safety, comfort 
and performance in harsh environments

Working and living conditions of employees 
in onshore and off shore oil and gas, mining, 
engineering and construction companies are oft  en 
extreme. Sodexo consistently delivers integrated, 
innovative services to its clients throughout the world, 
from a remote location’s design to its demobilization. 
Hospitality, accommodation, site management, 
logistics, transportation and leisure: all services that 
ensure residents’ quality of life, safety and comfort. 
While contributing to the development of local 
communities, our solutions optimize our clients’ 
operational effi  ciency and ability to attract 
and retain talent despite cyclical, volatile markets.

Government & Agencies – Honored to serve 
the public interest

Ensuring high-quality services while responding 
to budgetary constraints: this is a major challenge 
for our clients, whether they are armed forces, local 
authorities, national and international institutions 
or prisons. Sodexo serves government personnel, 
military communities, off enders, and those who 
are reintegrating  society aft  er prison. From technical 
maintenance to foodservices, to the management 
of complex logistics in peacekeeping operations 
abroad, to training and reintegration assistance 
to reduce the recidivism rate of off enders upon release, 
this wide range of services requires ﬂ exibility, rigor 
and reliability.

Sports & Leisure – Delivering unique experiences 
and exceptional moments

Recognized partner of organizers of major sporting 
and cultural events and manager of exceptional 
places for more than 20 years, Sodexo develops 
solutions that meet the expectations of a demanding 
clientele worldwide. Combining technique and 
creativity, our turnkey solutions cover ticketing, 
travel, foodservices, safety, logistics, marketing 
and technical and artistic organization. In the 
digital age, Sodexo helps clients to integrate new 
technologies into their events by off ering innovative 
and personalized services. Multiple beneﬁ ts that 
contribute to the success of prestigious events such 
as Royal Ascot, the  Super Bowl , the Tour de France 
and the Rugby World Cup, and make exceptional 
places shine like Lido  of Paris, La Maison Lenôtre, 
Le  Pré Catelan, Bateaux  Parisiens, Yachts de Paris 
as well as Bateaux  London and the National Gallery 
in the  United  Kingdom.

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On-site S ervices

Health Care - Supporting quality care

HEALTH CA RE  & 
SEN IOR S

REVENUES BY 
CLIENT  SUB-SEGMENT

SENIORS

22% 

HEALTH CARE 
78%

KEY FIGURES

24% 

of Group 
revenues

4,768 

million euro 
in revenues

82,384 

employees

Source: Sodexo.

1

A market leader for more than 20 years, 
Sodexo contributes to the quality of life, well-being 
and safety of patients, visitors and healthcare 
facility staff . We lead our clients through the changing 
health care landscape. By providing our clients with 
professional and standardized services, we respond 
to their challenges of patient satisfaction and 
improving their performance. In developing countries, 
Sodexo also helps clients meet the rigorous standards 
required by international accreditation agencies. 
Faced with the growing number of patients being 
treated in day hospitals or outpatient units, Sodexo 
is leveraging its ability to deliver home-based services 
to develop services outside the traditional hospital 
care environment.

Seniors - Responding to the challenges 
of an aging population

The demographic weight of seniors and the increase 
in life expectancy are raising signiﬁ cant societal 
challenges. With many seniors remaining independent 
longer, the demand for home care services is growing. 
At the same time, the progression of chronic diseases 
in the elderly is increasing the workload in nursing 
homes. These developments require more and 
more solutions to support the seniors community . 
To  meet  these challenges,  Sodexo off ers a range 
of  high value- added integrated services designed 
to  improve the quality of life  for seniors in residences 
or in a health facility.  Adapted for all ages and degrees 
of dependence,  these services are dedicated to their 
physical,  moral and social well-being. They also 
relieve families, while enhancing the attractiveness 
and performance of institutions. With the shortage 
of  healthcare staff , Sodexo deploys specialized 
processes and training  to provide its clients with 
motivated, qualiﬁ ed employees who perform their 
job  with kindness.

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On-site S ervices

ED UCATION

REVENUES BY 
CLIENT  SUB-SEGMENT

UNIVERSITIES
58%

SCHOOLS
42%

Schools - Providing a fulfilling 
educational environment

Sodexo supports schools around the world in providing 
students with a balanced diet while creating a healthy, 
welcoming and safe learning environment that 
promotes education and reinforces the engagement 
of faculty and staff . Our service off ering is organized 
around three main trends: solutions to help schools 
optimize their learning environment; the provision 
of digital tools to meet the growing use of new 
technologies in schools; and, responsible and positive 
solutions for communities in terms of procurement, 
employment and waste management. Sodexo 
implements innovative programs to help schools adopt 
good environmental practices, educate students about 
waste and combat unhealthy eating habits. All these 
actions reinforce schools’ attractiveness.

Universities - Improving the quality of life 
on campus

With its integrated service off ering, Sodexo promotes 
the well-being of entire university communities 
around the world while maximizing the effi  ciency 
and attractiveness of universities in a highly 
competitive market. Our off er includes supporting 
clients with their infrastructure design and renovation 
projects, foodservices and facilities management 
services. Sodexo also supports universities in 
their sustainable development approach through 
the implementation of waste recycling programs 
and energy management systems.

KEY FIGURES

20%

of Group 
revenues

3,855

million euro 
in revenues

86,717

employees

Source: Sodexo.

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Benefits and Rewards Services  

Sodexo believes no asset is more valuable to any business than 

its people and that improving their quality of life is key to lasting 

performance. With its range of nearly 250 services, Sodexo Beneﬁ ts 

and Rewards Services (BRS) seeks to unlock the potential of people and 

to keep businesses moving forward. Its off ers strengthen  employee experience 

and ease  mobility and expense management. Driven by technological 

innovation , BRS’s Quality of Life solutions go beyond its widely recognized 

vouchers and cards and the workplace. Today, it is creating services 

that improve engagement, recognition, work-life balance, travel 

and expense management, health and well-being. Through its customized 

guidance and bespoke off ers, BRS is responding to the main human resource 

challenge companies and organizations are facing today: increasing 

employee engagement to contribute to business success.

1

KEY FIGURES

17.8 
B I L L I O N 
EURO 

in issue volume 
(of which  73% is paperless)

4% 

of Group 
revenues

430,000 

clients (excluding 
individuals)

850 

million euro 
in revenues

35 

4,380 

employees

1.3 

million beneﬁ ciaries 
and consumers

million 
affi  liated partners

Source: Sodexo.

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1   U N L O C K I N G     O U R     P O T E N T I A L

Benefits and Rewards Services

EMPL OYEE 
EXPE RI ENCE

MO BIL ITY  A ND 
EXPEN SE

In a particularly competitive environment, companies 
must diff erentiate themselves to attract and retain 
talent. Today, wages are no longer enough: quality 
of life at work, recognition, the work environment and 
work-life balance have become critical determinants 
in companies’ attractiveness. Sodexo off ers clients 
innovative and personalized solutions to facilitate 
daily quality of life for their employees and reinforce 
 engagement and motivation, thereby contributing 
to improved company performance. From Meal Pass 
to the Sport  Pass, our solutions encourage healthier 
lifestyles, promote a better work-life balance and 
facilitate personal development. 

Sodexo also off ers companies services designed 
to enhance the eff orts of their employees: 
gift   programs; professional development tools such 
as training, mentoring and coaching; incentive 
and recognition programs. These solutions help unite 
teams around common objectives, recognize their 
work and reward their eff orts.

Business travel, the associated expenses and daily 
commutes can be complex for businesses to manage. 
For employees, these mobility issues are oft  en 
stressful, with potential impacts on their effi  ciency, 
motivation and even their health. Sodexo off ers simple 
and easy-to-access solutions via unique platforms 
including fuel cards, Mobility Pass, which covers travel 
expenses between home and work, booking travel  and 
management of business expenses.

Adva ntageous  solutions for companies to help them 
better manage their employees’ travel and business 
expenses by ensuring real-time visibility but also for 
employees in helping to simplify their movements and 
improve their quality of life.

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Personal  and 
Home Services

Sodexo offers a range of Personal and Home Services 

that respond to demographic trends and contemporary 

lifestyles. Present at each key stage of life, our services 

cover three areas: Childcare services, designed to take 

care of the youngest children while making life easier 

for parents; Concierge services, to enhance the development 

and well-being of our clients’ employees in the workplace; 

Home care services, to make life easier for seniors and adults 

who want to maintain their independence while enjoying 

the comfort of their home.

1

Childcare

Through  Crèche Attitude, Sodexo responds to one of the main concerns of parents: ﬁ nding care for their pre-school 
children. Real alternatives to traditional childcare facilities that are oft  en saturated and poorly adapted to the 
time constraints of active parents, our structures have been designed to improve the quality of life of children and 
their parents.

Concierge Services

With its corporate concierge services provided through  Circles, Sodexo helps companies to make their employees’ 
daily life easier. Booking a restaurant, running errands, ﬁ nding a plumber... employees of our corporate clients can 
beneﬁ t from a broad range of services at their workplace that improve  their well-being, helping to strengthen their 
commitment and performance.

Home Care

With their population increasing around the world, seniors today are healthier and want to stay at  home as 
long as possible. To enhance their independence and quality of life at home, Sodexo off ers personal assistance 
solutions through Comfort Keepers© and Amelis such as carrying groceries, preparing balanced meals or assisting 
with travel, which oft  en involves technological tools.

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1   U N L O C K I N G     O U R     P O T E N T I A L

OUR EVOLUTION

SUSTAINABLE  AND 
PROFITABLE GROWTH

Since 1966, Sodexo has been dedicated to the goal of improving 
quality of life, convinced of its contribution to both higher 
organizational performance and societal progress. This consistent 
focus has enabled us to grow proﬁ tably and sustainably while 
providing continuous development opportunities for our employees.

I NTERNATIONAL

DE VELOPMENT &

ACQUISITIONS 

35 countries 
Development in Belgium, 
Italy, Spain, Africa 
and the Middle East 

40 countries
Development in North America, 
South America, Russia 
and South Africa

QU ALITY

OF  LIFE

OF F ERS AND

SE R VICES 

1967 
First multi-service contract 
for the management of CNES 
(French Space Agency) 
in Guyana

Opening of 
foodservices 
in schools 
and hospitals

KE Y MOMENTS

1976 
1st meal voucher 

1 , 0 0 0

€9 . 3  m

1966 
Sodexo founded 
by Pierre Bellon

3 6 , 0 0 0

1 5 , 0 0 0

€2 1 3  m  

1983 
Initial public offering on 
the Paris Stock Exchange

€1 . 2  b n

1992
1992 
Creation 
of the Sodexo 
Management 
Institute

1965

1970

1975

1980

1985

1990

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3 8 0 , 0 0 0

72 countries
Including Brazil, 
China, India

Acquisitions 
1995: 
Gardner Merchant (UK)
Partena (Sweden)

1998-2001: 
Marriott Management 
Services (U.S.)

4 6 0 , 0 0 0

E M P L OY E E S

Sodexo becomes a leader 
in the Sports & Leisure segment 
globally with the acquisition 
of Centerplate

Sodexo’s acquisition 
of Inspirus reinforces our 
global leadership in the 
high-growth employee 
incentive and 
recognition 
market 

C O N S O L I D AT E D 
R E V E N U E S

€2 0 . 4 b n

1

2 8 6 , 0 0 0

€1 5 . 3  b n

Acquisitions (2000-2010) 
Sogeres and Score Group (France), 
Wood Dining Services, Circles, 
Comfort Keepers (U.S.), 
Zehnacker (Germany), 
Radhakrishna Hospitality 
Services Group (India), VR (Brazil)

S H A R E   P R I C E *

€8 9 . 7 2

€1 0 . 5  b n

New Quality of Life 
services: facilities 
management services, 
vouchers and cards services

Rapid growth in new markets: 
technical maintenance, energy 
and water consumption 
efficiency, spatial planning

Development of integrated Quality 
of Life services, for key global accounts. 
Explosion in need for in-home services 
and offers

2018
•  Denis Machuel takes over 
as CEO on January 23

2016  
•  Appointment 
of Sophie Bellon as 
Chairwoman of the Board 
of Directors, 
on January 26
•  Launch of the Sodexo 
Ventures fund

2017 
•  Launch of Ambition 2025, 
to guide Sodexo’s future 
development in a changing 
environment
•  Better Tomorrow 2025, 
renewing our corporate 
responsibility commitments

2005 
Appointment 
of Michel Landel as
Chief Executive Officer 

2007
Sarbanes–Oxley 
Act conformity, 
Section 404

2009 
Launch of our corporate 
responsibility roadmap

2000

2005

2010

2015

2018

* As of August 31, 2018

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OUR CORPORATE RESPONSIBILITY

BETTER TOMORROW 2025: 
OUR CORPORATE RESPONSIBILITY 
ROADMAP

Adapted to the challenges of today and tomorrow 
and comprised of nine commitments, Better Tomorrow 2025 drives 
the deployment of our corporate responsibility actions and measures 
their impact in the 72 countries where we operate.

Our mission is to improve quality of life for our employees 

and all who we serve while contributing to the economic, social and environmental 

development of the communities, regions and countries in which we operate.

As a global business, we have three diff erent, but connected roles: we are an employer, 

a service provider and a corporate citizen. Better Tomorrow 2025 is helping us 

anticipate stakeholder expectations and produce outcomes that make a tangible 

diff erence. An industry  reference, fully engaged in promoting diversity, 

the development of small and medium local business and waste management, 

we are committing the resources to improve quality of life for all. 

Responsibility is at the heart of our business model.

Our nine commitments are based on tangible and measurable objectives 

that allow all of our entities to monitor and drive progress.

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OUR 9 COMMITMENTS 
AND OBJECTIVES BY 2025

1

OUR I MPACT ON 
INDIVIDUAL S

OUR IMPACT  ON 
COMMUNITI ES

OUR IMPACT  ON THE 
ENVIR ONMENT

Improve 
the Quality of Life 
of our employees safely

80%  
Employee 
Engagement Rate

Ensure a diverse workforce 
and inclusive culture that 
reﬂ ects and enriches 
communities we serve

Foster a culture 
of environmental responsibility 
within our workforce 
and workspaces

100% 
of our employees work 
in countries that have 
gender balance 
in their management 
populations

100% 
of our employees 
are trained 
on sustainable practices

Provide and encourage our 
consumers to access healthy 
lifestyle choices

Promote local development 
fair, inclusive and sustainable 
business practices

Source responsibly and provide 
management services that 
reduce carbon emissions

OU R RO LE AS AN 
EMPLOYER

OU R RO LE AS A 
SERVI CE PROVIDER

OUR  ROLE AS A 
CORPORATE CITIZEN

100% 
of our consumers 
are off ered healthy 
lifestyle options 
every day

Fight hunger 
and malnutrition

100 million  
Stop Hunger 
beneﬁ ciaries

10 billion euro 
of our business 
value will 
beneﬁ t SMEs

34%
reduction 
of carbon emissions(1)

Drive diversity and 
inclusion as a catalyst 
for societal change

500, 000 
women in communities 
educated through job 
training centers

Champion sustainable 
resource usage

50%  
reduction  in 
our food waste

(1) Absolute reduction in Scope 1, Scope 2 and Scope 3 carbon emissions, compared to a 2011 base line.

Better Tomorrow 2025 was developed in accordance with  the United Nations Sustainable Development Goals (SDGs).The SDGs 
are a set of global goals in 17 key areas, requiring action by governments, businesses and society to achieve a more just and 
sustainable world by 2030. All our commitments are aligned with these goals.

S O D E X O   -   F I S C A L   2 0 1 8   R E G I S T R AT I O N   D O C U M E N T

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1   U N L O C K I N G     O U R     P O T E N T I A L

OUR KEY FIGURES

MEASURING 
OUR PERFORMANCE

As well as a negative currency eff ect in Fiscal 2018, 
Sodexo’s performance has been impacted by some execution issues 
and a lack of  growth in North America, particularly in the Education 
and Health Care segments. Growth is an essential ingredient in 
the Group’s business model,  providing  the means to satisfy 
all stakeholders and we are determined to return to better growth.

FISCAL 2018

20.4 

651

billion euro 
in consolidated revenues

 million euro 
in Group net income

460,000 

engaged employees

81% 

93.8% 

 employee  retention rate

client retention rate

Source: Sodexo.

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Our ﬁ nancial key ﬁ gures

EVOLUTION OF CONSOLIDATED REVENUES 
(IN MILLIONS OF EURO)

Fiscal 2018

20,407

Fiscal 2017

20,698

Fiscal 2016

20,245

Fiscal 2015

19,815

Fiscal 2014

18,016

20.4 

BILLION EURO

Consolidated revenues

5.5%

Underlying o perating margin 

1

REVENUES BY ACTIVITY AND CLIENT SEGMENT 
(FISCAL 2018)

CONSOLIDATED REVENUES BY REGION 
(FISCAL 2018)

96%

56%

24%

On-site Services(1) 

Business & Administrations

Health Care & Seniors

EUROPE
39%

7,919 million euro

NO R TH
A MER IC A 
43%
8,741 million euro

20%

Education 

4%

Beneﬁts and Rewards Services

1 

Including Personal and Home Services.

AFRICA,
ASIA,
AUSTRALIA,
LATIN AMERICA
& MIDDLE EAST
18%
3,747 million euro

REVENUES AND ISSUE VOLUME, BENEFITS AND REWARDS SERVICES 
(FISCAL 2018)

FACILITIES MANAGEMENT SER-
VICES’ SHARE OF REVENUES

17.8

B I L L I O N   E U R O
Issue volume

LATIN
AMERICA
41% 

EUROPE,
ASIA,
UNITED
STATES
59%

850

M I L L I O N   E U R O
Revenues

LATIN
AMERICA
44% 

EUROPE,
ASIA,
UNITED
STATES
56%

18 %

Fiscal 2005

31%

Fiscal 2018

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1   U N L O C K I N G     O U R     P O T E N T I A L

RESULTS AND RATIOS

UNDERLYING OPERATING PROFIT

1,340

1,165

1,226

1,128

976

5.4%

5.9%

6.1%

6.5%

5.5%

Fiscal 
2014

Fiscal 
2015

Fiscal 
2016

Fiscal 
2017

Fiscal 
2018

Underlying operating 
proﬁt in millions of euro
Underlying operating 
margin %

GROUP NET INCOME 
(IN MILLIONS OF EURO)

Fiscal 2018

651

Fiscal 2017

723

Fiscal 2016

637

Fiscal 2015

700

Fiscal 2014

490

UNDERLYING NET  INCOME  
(IN MILLIONS OF EURO)

 DIVIDEND 
(IN MILLIONS OF EURO)

Fiscal 2018

706

Fiscal 2018*

407

Fiscal 2017

822

Fiscal 2017

411

Fiscal 2016

721

Fiscal 2015

700

Fiscal 2016

371

Fiscal 2015

335

Fiscal 2014

508

Fiscal 2014

276

*  Subject to approval at the Annual Shareholders’ 

Meeting of January 22, 2019.

NET DEBT AS A PERCENTAGE OF SHAREHOLDERS’ 
EQUITY * 

RATING

Fiscal 2018

38%

Fiscal 2017

17%

Fiscal 2016

11%

Fiscal 2015

9%

Fiscal 2014

12%

*  Debt net of cash and cash equivalents, restricted cash and 
financial assets related to Benefits and Rewards Services 
activity, less bank overdrafts.

Standard & Poor’s
(long-term)

A- 

38

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1   U N L O C K I N G     O U R     P O T E N T I A L

SODEXO SHARE 

SHAREHOLDERS AS OF AUGUST 31, 2018

A controlling family shareholding:

•  Our independence is ensured through the Bellon 

family shareholding: Mr. and Mrs. Pierre Bellon and 

their  children control 72.6% of  Bellon SA.

•  As of August 31, 2018, Bellon SA, held 42.2% 

of Sodexo’s capital and 57.2% of the exercisable 

voting rights.

56%
PUBLIC

43%
FOREIGN
INSTITUTIONAL
SHAREHOLDERS

12%
FRENCH
INSTITUTIONAL
SHAREHOLDERS

1%
INDIVIDUALS

42%
BELLON SA

1%
EMPLOYEES (1)

1%
TREASURY
SHARES

1

Source: Nasdaq.
1 

Including  the  free   share  grant s   held  in  registered  form  by 
employees and still subject to a lock-up period.

EARNINGS PER SHARE (IN EURO)

DIVIDEND PER SHARE (IN EURO)

Fiscal 2018

4.40

Fiscal 2018*

2.75

Fiscal 2017

4.85

Fiscal 2017

2.75

Fiscal 2016

4.21

Fiscal 2016

2.40

Fiscal 2015

4.60

Fiscal 2015

2.20

Fiscal 2014

3.23

Fiscal 2014

1.80

*  Dividend  subject  to  approval  at  the  January  22,  2019 

Shareholders’ Meeting. 

 SODEXO SHARE PRICE TREND  FROM SEPTEMBER 1, 2017 
THROUGH TO AUGUST 31, 2018

TSR (TOTAL SHAREHOLDER RETURN)

Sodexo -8.5%

Cac 40 +6.3%

Over the past ﬁ ve ﬁ scal years: 
+9.7 % per year

Market price at the end of the period

– market price at the beginning of the period 

+ dividends paid over the period

Market price at the beginning of the period

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1   U N L O C K I N G     O U R     P O T E N T I A L

Our extra-ﬁ nancial key ﬁ gures

Adapted to the challenges of today and tomorrow and comprised 

of nine commitments, Better Tomorrow 2025 tracks the deployment 

of our corporate responsibility actions and measures their impact 

in the countries where we operate.

1.  Improve quality of life for our employees safel y

As the number one France-based private employer worldwide(1), employing over 460,000 people from diverse 
backgrounds, we are committed to being an employer of choice.

ENGAGED EMPLOYEES

69%

Employee 
engagement rate 

(+1 point)(2)

 EMPLOYEES WORLDWIDE

73% 

of employees feel 
that their personal 
values are aligned 
with the values 
of Sodexo

80%

of employees feel that 
Sodexo is a socially 
and environmentally 
responsible 
organization 

END OF YEAR WORKFORCE

WORKFORCE BY GEOGRAPHICAL REGION

Fiscal 2018

460,663

Fiscal 2017

427,268

Fiscal 2016

425,594

Fiscal 2015

422,844

Fiscal 2014

419,317

36.0%
165,622
EMPLOYEES

29.9%
137,952
EMPLOYEES

34.1%  
157,089
EMPLOYEES

AFRICA, ASIA, AUSTRALIA,
LATIN AMERICA, MIDDLE EAST 

NORTH AMERICA 

EUROPE

1  2018 Fortune 500 ranking.

2  2018 employee engagement survey sent to 386,262  Sodexo  employees of whom  62% responded.

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1   U N L O C K I N G     O U R     P O T E N T I A L

WORKFORCE BY ACTIVITY AND BY CLIENT SEGMENT 
(FISCAL 2018)

GENDER DISTRIBUTION OF THE WORKFORCE 
(FISCAL 2018)
(Excluding Centerplate, acquired during fiscal year 2018)

1.0%
BENEFITS AND
REWARDS SERVICES

2.3%
GROUP HEADQUARTERS AND 
SHARED STRUCTURES

18.8%
EDUCATION

17.9%
HEALTH CARE
& SENIORS

60.0%
BUSINESS &
ADMINISTRATIONS

96.7%
ON-SITE
SERVICES (1)

Employees: 383,224

215,678

167,546

Management: 49,743

21,277

28,466

Total: 432,967

236,955

196,012

WOMEN

MEN

1

1 

Including Personal and Home Services.

RETENTION RATE(1)
(Excluding Centerplate, acquired during fiscal year 2018)

80.9 %

for total workforce

86 .6 %

for site managers

1  During Fiscal 2017, the following modiﬁ cations 

were made to the indicators: retention rate is now calculated 
on resignation  aft  er more than 3 months of service.

INVESTMENT IN EMPLOYEE DEVELOPMENT
(Excluding Centerplate, acquired during fiscal year 2018)

Retention rate 
for site managers

Countries

>90%

Argentina, Belgium, Brazil, Chile, Finland, 
France, Germany, Italy, Netherlands, 
Spain, Sweden

80%-90%

Canada, China, Colombia, UK, U.S. 

<80%

 India, Russia

•  14.6  average hours of training  provided annually per employee

•  79.3% of total workforce participated  in at least  one training during the ﬁ scal year

INTERNAL PROMOTION RATES BY CATEGORY 
(Excluding Centerplate, acquired during fiscal year 2018)

ABSENTEEISM
(Excluding Centerplate, acquired during fiscal year 2018)

On-site employees

2.9%

On-site managers

8.7%

Off-site employees

5.2%

Off-site managers

6.6%

Sodexo’s employees were absent for an average 
of 8.3 days,  due to  occupational accidents or 

sickness and/or personal accidents or sickness during  

Fiscal  2018.

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1   U N L O C K I N G     O U R     P O T E N T I A L

2.   Ensure a diverse workforce 

3.   Foster a culture 

and inclusive culture 
that reflects and enriches 
communities we serve

37 %

of women 

on the Executive Committee

54 %

of women 

on the Board of Directors

4.   Provide and encourage 

our consumers to access 
healthy lifestyle choices

65.6 % 

of client  sites 

implementing actions that proactively 
address Sodexo’s 10 Golden Rules 
of Nutrition, Health and Wellness 

of environmental 
responsibility 
within our workforce 
and workspaces

96.9 % 

of Group revenues 

of countries employing 
environmental experts 

47  

countries 

participated in waste 
prevention campaigns such 
as WasteLESS week, with 
actions focused on reducing 
water, food, energy, and paper 
waste as well as encouraging 
recycling 

5.   Promote local development, fair, inclusive and sustainable 

business practices

93.6 % of spend with contracted suppliers having signed 

Sodexo’s Supplier Code of conduct 

4.4    billion  euro of our business value beneﬁ ting SMEs

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1

1   U N L O C K I N G     O U R     P O T E N T I A L

6.   Source responsibly and provide management services that reduce 

carbon emissions

80.7 %  of sustainable ﬁ sh and seafood as a total of ﬁ sh and seafood

7.   Fight hunger and malnutrition

More than1   million euro 

invested in programs to empower women working 
to end hunger in their communities 

93,000 volunteers committed
1 U.S. dollar given is 1 U.S. dollar invested in the ﬁ ght against hunger 

8.   Drive diversity and inclusion 

9.   Champion sustainable 

as a catalyst for societal change

resource usage

89.1 %

of Group revenues 

of countries with initiatives 
to improve the quality of life 
of women

65.9 %

of Group revenues 

of countries working to deliver 
on the United Nations’ food 
waste objective

 Source: Sodexo.

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2

GROWING 
OUR BUSINESS 
RESPONSIBLY

With the size of our potential markets and our leadership 

in multiple domains – including foodservices and facilities 

management, our commitment to social and environmental 

responsibility, innovation and the leveraging of digital 

technologies – the opportunities for growth are considerable. 

To  capture these opportunities, our strategic agenda is focused 

on  four pillars: client and consumer centricity, enhancing 

operational effi  ciency, nurturing talent and anchoring 

corporate  responsibility in everything we do.

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Client  
and consumer 
centricity 
P. 46

Enhancing 
operational 
efficiency 
P. 54

GROWING

OUR BUSINESS

RESPONSIBLY

Empowerment 
and
Accountability  

Nurturing 
talent 
P. 60

Anchoring 
corporate 
responsibility 
P. 68

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Client  and 
consumer 
centricity

Sodexo has adopted a focused approach to client and

consumer centricity to achieve its growth and profitability objectives. 

Understanding and anticipating their needs is essential and this centricity 

also helps to better understand our markets and therefore to diff erentiate our services 

from those of our competitors. Through constant innovation, the Group develops 

and reﬁ nes its service off ers to respond to client challenges, whether local or global, 

throughout the world and across all of its segments and activities. Sodexo’s broad range 

of Quality of Life services helps clients improve their performance, optimize costs, achieve 

operational effi  ciencies and drive employee engagement. Successes in Fiscal 2018 reﬂ ect 

Sodexo’s ability to capitalize on its strengths, retaining clients, winning new 

contracts  and positioning itself to accelerate growth .

93.8%

Sodexo client  
retention rate

100

31%

million
number of consumers 
served by Sodexo teams 
worldwide each day

portion of On-site Services 
revenues generated through 
facilities management 
services

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SERVING CLIENTS AND CONSUMERS 
IN GROWTH MARKETS

Capturing dynamic growth in Brazil, 
China and India

Over the last 10 years, the Group has 
progressively strengthened its roots 
in economically dynamic countries like 
Brazil, China and India.
Present in Brazil since 1977, the Group 
now employs more than 40,000 people 
and serves 7.5 million consumers. 
Sodexo has become the leader in 
Brazil’s highly competitive Beneﬁ ts 
and Rewards Services market, with 
the country’s broadest portfolio of 
services.
In China, Sodexo has grown at the 
same pace as its clients since its arrival 
in 1995, through its comprehensive 
range of o n-site services. Each 
day, 2,000 clients and their 

735,000 consumers beneﬁ t from 
the services delivered by 16,600 Group 
employees.
Sodexo has operated since 1997 in 
India, which has doubled its GDP over 
the past decade to become the world’s 
ﬁ ft  h largest economic power in 2018, 
according to the World Bank. The Group 
employs more than 40,000 people in 
India, serving 3.8 million consumers.
With the attractiveness to clients 
of its historical positions in these 
high-potential markets and its 
economic, social and environmental 
commitments, Sodexo is 
well-positioned to meet the emerging 
needs of a growing middle-class.

SUCCESS STORY IN INDIA

Leveraging  competitive advantage 
in an enormous market

In India, Sodexo Beneﬁ ts and 
Rewards Services further extended 
its position as the market leader 
in the employee beneﬁ ts market, 
strongly diff erentiating itself from 
its competitors and reinforcing 
its value proposition for clients. 
Through the equity built over 21 years 
in the market, Sodexo has become 
the gold-standard in the category, 
reﬂ ected in its extensive portfolio and 
unique proprietary network of more 
than 100,000 merchants. In Fiscal 

2018, Sodexo became a 100% digital 
company in India, making it a 
signiﬁ cant part of the government’s 
Digital India movement. In a ﬁ ve-
month period, Sodexo teams migrated 
more than 1 million consumers 
from paper voucher transactions to 
digital, despite a highly complex IT 
and operational environment. The 
move has opened new opportunities 
of partnership for the Group with large 
companies and more than 1 million 
small and medium sized enterprises.

DRIVING   GROWTH 
IN  THRIVING 
MARKETS

Enhanced digital food 
experience in Israel

In Israel, Sodexo Beneﬁ ts and 
Rewards Services is driving growth 
using an innovative business model 
that keeps technology and consumer  
focus at the heart of its business. 
Sodexo’s renewed digital ecosystem 
and an app with features such as 
pay-at-table, delivery and one-
click orders support the full food 
experience, including cafeterias, 
vending machines, restaurants, 
delivery and carry out. Enhanced 
with multiple payment options, 
including mobile payment and 
credit card top-up, this renewed 
digital ecosystem provides  clients 
and  consumers with a seamless 
and  state- of- the-  art experience. 
This  focus and deep consumer 
understanding  has enabled Sodexo 
Beneﬁ ts and Rewards to gain a 60% 
share of a  market  where consumers 
have the choice  among several 
players.

+22%

increase in  Sodexo 
Beneﬁ ts and Rewards 
Services revenues 
in Israel for Fiscal 2018

2

+60%

Sodexo Beneﬁ ts and
Rewards Services share 
of India’s meal beneﬁ ts market

5 billion euro 

untapped meal beneﬁ ts market 
in India

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IDENTIFYING KEY WORKPLACE TRENDS

Harnessing collective intelligence for improved performance

Gen Z, the Internet of Things and 
gender balance are among the forces 
shaping tomorrow’s workplace explored 
in Sodexo’s 2018 Global Workplace 
Trends. Seven critical factors are 
identiﬁ ed that aff ect the future of 
work and contribute to an improved 
workplace experience, enhancing 

company performance and, ultimately, 
employee engagement. Among the 
insights is the need to foster collective 
intelligence across all workplace 
domains by creating an emotionally 
intelligent workplace. Other trends 
include the increasing role of employees 
in companies’ corporate responsibility 

strategies, the sharing economy and 
the impact of technologies through 
Human Capital Management 3.0. By 
understanding and anticipating these 
trends, Sodexo is able to focus its 
human-centered and experience-based 
solutions to most eff ectively boost 
client performance.

AGILE, 
INNOVATIVE 
APPROACH IN 
TURKEY

Sodexo Beneﬁ ts and 
Rewards Services focuses 
on SMEs

A renewed emphasis on small and 
medium sized clients (SMEs) is paying 
off  in Turkey for Sodexo Beneﬁ ts and 
Rewards Services. By improving sales 
eff ectiveness, leveraging digital and 
building a simpliﬁ ed customer journey, 
Sodexo  is transforming its sales and 
marketing approach to drive growth, 
strengthen retention, accelerate 
development and reduce costs. In 
Turkey, enhancements to Sodexo’s 
digital marketing capabilities, sales 
organization and loyalty programs has 
helped double the number of contracts 
and increased revenues.

70%

portion of SMEs 
in Sodexo Beneﬁ ts and Rewards 
Services client portfolio

2x

Beneﬁ ts and Rewards 
Services contracts doubled 
in Turkey as a result of additional 
actions focused on SMEs

EUROPEAN INVESTMENTS 
DIVERSIFY BENEFITS AND REWARDS 
SERVICES’ OFFER

Focusing on rising client and consumer interest in health 
and wellness

As part of the Beneﬁ ts and Rewards 
Services activity’s continuing 
diversiﬁ cation and transition from 
providing employee beneﬁ ts to 
delivering an employee experience, 
Sodexo strengthened its health 
and wellness off ering through new 
investments in Europe. In France, the 
Group took a minority stake in the 
startup Gymlib, which off ers access 
to more than 200 sports activities 
in 2,000 partner clubs. In Spain, 
Sodexo acquired GymForLess, another 
startup that facilitates sports and 
well-being in companies through an 
online platform off ering access to over 
1,000 gyms and ﬁ tness centers for 
more than 200,000 consumers and 
company employees. The moves are a 
response to rising consumer interest 
in healthier lifestyles and the growing 
client awareness in the bottom-line 

impact of healthier employees through 
reduced absenteeism and increased 
productivity, loyalty and engagement.

86 billion euro

estimated size 
of Incentive & Recognition market 
(Poland, UK, U.S. )

37 billion euro

estimated size 
 of Corporate Health & Wellness 
market

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SUPPORTING THE FAST-GROWING PHARMA SECTOR

Shared focus on 
quality of life

Sodexo continues to make inroads 
in the pharmaceuticals sector, 
implementing a targeted strategy 
begun in 2009. With its focus on 
patient outcomes and quality of 
human life, the pharmaceutical 
industry’s mission statement 
resonates with Sodexo’s DNA. As 
it has grown alongside big p harma 
companies, Sodexo has established 
leading positions in Belgium, France 
and the UK, enabling it to develop 
speciﬁ c capabilities such as quality 
and compliance with the most 
rigorous standards, lab services and 
critical environment engineering. 
These assets are being leveraged to 
drive further growth by increasing 
Sodexo’s presence in markets such as 
China and the U.S. and by focusing on 
fast- growing pharma business areas 
such as biotech.

2

15,000

number of Sodexo employees 

providing daily support to pharma
clients on drug research , patient 
safety and talent retention

SERVING THOSE WHO SERVE

Major contract extended with U.S. Marine Corps

Sodexo is increasingly using digital 
food process control technologies 
to ensure consistent food safety 
and quality standards, as well as 
seeking certiﬁ cation where possible.  
An example is the successful piloting 
of the “iCertainty” app at multiple 
U.S. Marine Corps (USMC) mess halls. 
Sodexo teams serve 29 million meals 

at 47 USMC mess halls in the U.S. each 
year. The renewal of this contract this 
year demonstrated USMC conﬁ dence in 
Sodexo’s ability to meet its demanding 
standards. The major win reﬂ ects 
Sodexo’s solid 15-year track record with 
the U.S. Marines and its expertise and 
experience serving troops in the ﬁ eld 
and on military bases around the world.

47

number of U.S. Marine 
Corps mess  halls 
served by Sodexo

38 

countries 
representing 

98.5 %

of On-site Services 
revenues, 
 hold either ISO 9001 or ISO 22000 
certiﬁ cation for food safety

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DEVELOPMENT 
OF APPLICATIONS 
FOR THE AUTONOMY 
OF DEPENDENT 
PERSONS

Technology serving 
seniors

Technology is a key driver in quality 
care, so Home Care is piloting 
AI (Artiﬁ cial Intelligence) and 
AR  (Augmented Reality) toolsets as 
care enhancers. Elli-Q is an AI- driven 
social robot designed to engage 
elders through activities, interactions  
and family connections. Embodied 
Labs provides a powerful experience 
by using virtual reality (VR) to help 
users understand what it means 
to have dementia, hearing loss  or 
macular degeneration. Mya is an AI 
hiring tool that engages caregiver 
candidates to improve the applicant 
experience.
For the third year, Home Care 
North America was awarded Aon 
Hewitt’s “Best Employer ” award 
and earned an NPS (1) of 79 based on 
client feedback. Home Care Ireland 
ranked third in Indeed’s “Top 25 
Places to Work in Ireland.” Home 
Care Ireland and France have rolled 
out a caregiver app to engage and 
increase satisfaction.

CONTINUING TO BENEFIT FROM STRONG 
GROWTH IN THE CHINESE MARKET

Sodexo signs with Daye hospital

In China, the rapid emergence of the middle class and economic and social 
transformation are creating new aspirations in Chinese society. For Sodexo, operating 
in China since 1995, these developments represent new opportunities. With its 
comprehensive service off ering in the Corporate segment, Sodexo is particularly focused 
today on the hospital foodservices market. In Fiscal 2018, the Group signed a contract 
with the hospital of the city of Daye in Hubei Province to serve meals for patients and 
staff  in the 900-bed public hospital. Sodexo has received numerous awards in recent 
years, recognizing its contribution to the Chinese economy. For example, in 2017 and 
2018, Sodexo received the “Gold Medal of the Top 10 Restaurant Brands in China.” 

ACQUISITION STRENGTHENS LEADERSHIP 
IN MINING SECTOR

Extending service delivery in Australia

Sodexo reinforced its position as the leading provider of facilities management 
services to mining sites with the acquisition of contracts and certain assets of 
Morris Corporation in Australia. Morris Corp has 50 years of experience providing 
quality remote village and asset management services to the country’s mining and 
oil & gas ﬁ rms. The deal, announced in November 2017, complements Sodexo’s 
existing footprint in Australia’s western region with Morris’ presence in the east of 
the country. The common commitment to safety, sustainability and quality of life 
helped facilitate a successful integration.

Since November 2017:

+13%

increase in revenues

97.5%

client retention rate

1  The NPS (Net Promoter Score) indicator is widely used by companies to track the loyalty of their customers and the customer/brand relationship by 
asking them a single question: “What is the probability that you would recommend company/brand/product X to a friend/colleague/family member?”

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HEALTHCARE LEADER CHOOSES SODEXO

Facilitating patient services in Santiago

In Latin America, Sodexo was chosen 
by British United Provident Association 
(BUPA) to provide culinary services for 
patients and staff , as well as retail and 
cleaning services at Clinica BUPA in 

Santiago, Chile. Sodexo was selected 
on the basis of its strong reputation 
and its ability to deliver an app, fully 
integrated with the hospitals’ back offi  ce 
systems for patient meal ordering, 

transportation and other services. 
The clinic in Santiago is the largest in 
BUPA’s global system, which extends to 
190 countries around the world.

2

SODEXO BECOMES ONE 
OF  THE WORLD LEADERS IN 
SPORTS &   LEISURE

Acquisition of Centerplate Inc. 
on January 1, 2018

This acquisition signiﬁ cantly strengthens Sodexo’s position in the North American 
market and makes the Group a leader in the sports and leisure market in the United 
States and around the world.
In the United Kingdom, it supports the development strategy of its portfolio 
of stadiums, cultural destinations and convention and conference centers. 
The acquisition also positions Sodexo as a leading player in the sports and leisure 
sector, doubling its global presence and sales. 
Centerplate provides food and hospitality services at sports, convention and 
entertainment facilities in the U.S., Canada and the UK, as well as Spain. It has been 
chosen to deliver services at events such as the American Super Bowl and other major 
sports’ championship games, U.S. presidential inaugural balls and many of North 
America’s most highly renowned conventions.
In the UK, Centerplate operates on more than 50 premium sites and some of 
the nation’s leading national monuments and tourist attractions.

Sodexo Sports & Leisure  
worldwide:

Nearly   

39 ,000 

employees

Nearly 

700 

sites

More than 

150 

professions: captains, costume 
designers, Michelin-starred chef , 
Meilleur Ouvrier de France, etc.

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DELIVERING THE DIGITAL RESTAURANT EXPERIENCE

New solutions respond 
to rapidly evolving 
consumer expectations

85% 

share of revenues 
from repeat customers

Responding to new consumer expectations, Sodexo is making targeted acquisitions, 
partnering with startups and adding digital capabilities to create the meal 
experience of the future – today. In the U.S., Sodexo invested in a partnership with 
EAT Club, the fastest-growing provider of corporate lunches. Employees of EAT 
Club member companies are provided with the option to choose from a diverse, 
sophisticated menu of food options through EAT Club’s website or mobile app. 
Meals can be ordered in advance and are prepared fresh by the local culinary team 
before being delivered to each individual offi  ce. In France, Sodexo’s acquisition of 
Food Chéri enables it to respond to the needs of both companies and individuals. 
Using an app or Food Chéri’s online portal, consumers can order chef-prepared meal 
options that are chilled and ready to reheat and consume upon delivery. Meals are 
prepared using local and seasonal ingredients, emphasizing organic ingredients and 
sustainable practices. Through these and other initiatives, Sodexo is responding 
to the rapidly changing demands for ﬂ exibility, nomadism, simplicity and hyper-
responsiveness in creating  digital restaurant experience platforms.

SIMPLIFYING MANAGEMENT OF BUSINESS TRIPS

Sodexo revolutionizes business travel with Rydoo

Business trips and the associated 
expenses can be complex for 
companies to manage and create 
stress for employees. To make it 
easier for business travelers, Sodexo 
has launched Rydoo, a new platform 
dedicated to business travel. An 
innovative and complete solution, 
Rydoo, covers everything business 
travelers need, from: planning and 
booking travel to car rental, hotel 
reservations and managing expense 
reports. Rydoo is organized around 
two totally integrated modules: the 

Travel module is a booking platform, 
covering ﬂ ights, hotels (more than 
80,000 hotels worldwide), car rental 
and rail; and the Expense module, which 
facilitates the management of expense 
reports. Compatible with all mobile 
devices, Rydoo greatly facilitates the 
user experience. For expense reports, 
for example, travelers take a picture 
of their receipt and send it to the 
appropriate department. With this 
innovative solution, Sodexo off ers 
simpliﬁ cation for companies, especially 
smaller ones ill-equipped to manage 

820 billion euro

estimated size 
of Travel and Expenses market

business travel. Rydoo already has 
6,500 clients in 60 countries and more 
than 500,000 active users.

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HELPING HOSPITALS STAY INFECTION-FREE 
FOR PATIENTS

Protecta  combines 
processes, technologies 
and human factor

Based on its decades of expertise 
in hospitals, Sodexo is providing 
hospitals with a global infection control 
process through its Protecta off er. The 
off er responds to the growing risk of 
hospital-acquired infections, which 
aff ect an estimated one in 25 patients. 
Up to 200,000 people around the 
world die each year from pathogen-
related infections like MRSA(1), C.diff  (2) 
or Staphylococci, oft  en contracted 
in a hospital. Protecta is focused on 
three key priorities – skilled people, 
rigorous standardized processes 
and superior technologies. Because 
keeping infections at bay involves a 
great deal of dedicated human eff ort, 
Sodexo’s approach is underpinned by 
comprehensive training, meaningful 
recognition and a caring culture to 
ensure that every member of the team 
is an expert in controlling infections.

15 %

healthcare portion of total 
expenditures 
in OECD countries the direct 
result of adverse eff ects, including 
infections (3)

EXTENDING A HIGH-QUALITY 
CHILDCARE NETWORK

Crèches de France joins 
Crèche Attitude

Crèche Attitude, a major player in 
childcare, strengthened its position 
in the French market with the 
acquisition of Crèches de France in 
September 2018. The transaction 
is fully in line with the Group’s 
strategy to be a leader in the 
private childcare sector, ensuring a 
high level of childcare services and 
supporting well-being at work and 
quality of life for parents of children 
aged 0-12 years. The 97 childcare 
centers of Crèches de France 
complete the Sodexo network, which 
now totals 257 facilities off ering a 
quality welcome for children and 
families.

2

LOVING  FOOD – 
AND THE PLANET

WWF partnership 
emphasizes healthy, 
sustainable meals

Responding to growing consumer 
demand for healthier meal 
options that taste great and are 
responsibly sourced, Sodexo 
focused its long term partnership  
with World Wildlife Fund (WWF) 
to create and implement criteria 
for providing dishes that are 
better for consumers and for the 
environment. The “Love of food” 
project emphasizes production 
of nutritious food by minimizing 
sugar, salt and saturated fat 
and serving more whole grains 
and vegetables. Innovative new 
sustainable menu options are 
increasing the volume of plant-
based ingredients, contributing 
to meeting Sodexo’s health and 
wellness commitments and its 
carbon reduction target by reducing 
greenhouse gas emissions. 
Following a successful pilot 
program in 2017, the project is 
being rolled out throughout the UK 
while learnings from the experience 
are being shared with Sodexo’s 
global food development network.

34%

Sodexo 2025 carbon 
emissions reduction target (4)

65.6 %

of client sites 
implementing actions that 
proactively address Sodexo’s 
10 Golden Rules of Nutrition, 
Health and Wellness

1  MRSA: Methicillin Resistant Staphylococcus Aureus.

2  Clostridium difficile is the main etiologic agent of nosocomial diarrhea in patients on antibiotic therapy.

3  According to the World Health Organization.

4  Absolute reduction in Scope 1, Scope 2 and Scope 3 carbon emissions, compared to a 2011 base line. 

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Enhancing 
operational 
effi  ciency

To reinvigorate growth, efficient execution is key. 

Sodexo has launched initiatives across all of its businesses and segments 

to enhance food and labor productivity and simplify the organization, 

in order  to free  up ﬁ nancial capacity to accelerate the launch of new off ers, digital 

solutions and sales and marketing eff orts.

At the heart of the Group’s strategy is the STEP ( for “Sodexo Targets 

for Enhanced Performance”) framework, designed  to drive operational performance 

at  site, country, regional and global levels through consistent language and 

common  operational indicators. STEP is aimed at providing  the tools 

to not only identify performance issues faster, but also to better  understand 

the reasons for any underperformance in order to implement 

the most eff ective corrective actions.

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“STEP”: 
FOCUSING ON 
OPERATIONAL  
EFFICIENCY

Driving Group-wide 
improvements

Sodexo is implementing a performance 
management framework called STEP 
(for ‘Sodexo Targets for Enhanced 
Performance’) to support its “Focus on 
Growth” strategic agenda and achieve 
solid, proﬁ table growth. STEP covers 
seven speciﬁ c areas, which support 
all four pillars of the Group’s Strategic 
Agenda.
The implementation of STEP, which is 
currently being rolled out across the 
Group, requires action on three levels. 
First, building a consistent language 
and culture of performance shared 
across all segments and geographies. 
Second, deﬁ ning key performance 
indicators that are meaningful to 
all levels of the company . And last, 
providing a dashboard that will provide 
the teams with quick and easy access 
to information.
Improving operational effi  ciency 
is one of STEP’s major short-term 

Step implementation 
phases:

•  2018: Operational KPI deﬁ nition

•  Beginning February 2019: 

STEP dashboard building and 
sharing

•  Beginning September 2019: 
Training and implementation

•  Beginning September 2020: 

Full performance management

2

priorities. It is essential to be able 
to invest in the development of new 
business capabilities. To achieve this, 
STEP focuses initially on three areas: 
labor effi  ciency and material costs, 
which impact gross margin, and 
overhead costs, which most directly 
aff ect operating proﬁ t. Other priorities 
this ﬁ scal year include client sales 
and marketing to increase sales to 
support growth. In each of these areas, 
key operational levers are identiﬁ ed 
on which teams can act to impact 
operational performance, thereby 
improving ﬁ nancial performance.
In terms of labor effi  ciency, for 

example, by acting on operational 
levers like number of hours worked, 
overtime and temporary labor, on-site 
teams can directly inﬂ uence two key 
operational performance indicators: 
labor productivity (revenue per hour 
worked) and the cost of labor (average 
cost per hour worked). Activating these 
levers positively impacts ﬁ nancial 
performance.
Successfully tested in several countries, 
the STEP initiative on labor effi  ciency is 
the ﬁ rst to be deployed throughout the 
Group during Fiscal 2019.

OPTIMIZING FOOD SERVICES OFFER AND 
PROCESSES

“Evolution” kitchen initiative delivering 
multiple beneﬁ ts

Evolution program results:

30%

reduction of electricity and 
water consumption

20%

reduction in cooking time

90% 

reduction in injuries

In an increasingly competitive 
environment, Sodexo launched 
the Evolution kitchen initiative to 
transform the way it delivers food 
services through innovation. A 
comprehensive approach to renew the 
Group ’s value proposition, Evolution 
maximizes effi  ciency and productivity 
while improving the quality of life 
experience, in particular for Sodexo 
employees due to less heat, noise and 
manipulation of dishes, and therefore 
accidents in the kitchen. Evolution 
impacts the preparation and process of 
meal recipes, implementation of new 
technologies in kitchens and dining 
halls and standardization of production 
processes. In its onsite kitchens, Sodexo 
has created a new generation of high-
quality product preparations, called 
“Culinary Basics,” to increase ﬂ exibility 

and effi  ciency. Improvements achieved 
through the initiative are enabling 
Sodexo to continue to retain clients 
and strengthen its leading position 
in Latin America. Launched in Peru in 
2014, the Evolution program has  been 
applied on 217 sites in Latin America, 
is being actively tested in India, as of 
March 2018, and is being evaluated 
for possible implementation in other 
regions.

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DEVELOPING CROSS-SEGMENT APPS

WASTELESS WEEK

From SoHappy@school to SoHappy@work

The launch of the SoHappy app for 
School food services and its adaptation 
to the Corporate segment illustrates 
Sodexo’s ability to apply its off erings and 
share costs across its segments. To meet 
the increased demands of consumers 
for on-site foodservices and enrich their 
experience, Sodexo is developing apps 
that off er menu, calorie and allergen 
information. New features such as 
click and collect or click and deliver 
improve ease of use. Launched  in  France 
in  September 2016,  SoHappy@school 
was the ﬁ rst mobile app for school 
foodservices. It enables families to use 
their smartphone to directly consult 
the menu at their children’s school, 

pay their cafeteria bill, ﬁ nd recipe 
ideas for the evening and beneﬁ t from 
daily information. Deployed today in 
over 2,500 schools around the world, 
SoHappy has been adapted for corporate 
employees using the same technical 
platform. The result is SoHappy@work, 
providing employees with menus, news, 
frequency levels at their corporate 
restaurant as well as the ability to pay 
with their rechargeable badge. The 
app’s new features transform it into a 
true quality of life platform, integrating 
Sodexo’s partners such as FoodChéri 
delivery services and Ne o- Nomade for 
managing meeting rooms and access 
to  shared work spaces.

Engaging clients, 
consumers and teams to 
protect the planet

In Fiscal 2018, more than 3,500   Sodexo 
sites in 47  countries took  part in the 
WasteLESS Week annual campaign, 
an  eff ort to promote the importance 
of reducing the waste of resources and 
simple actions all can take. Conducted 
each year in October, the ﬁ ve-day 
campaign engages Sodexo teams, 
clients and consumers to participate 
in waste prevention actions such as 
reducing water, food, energy and paper 
waste and encouraging recycling. 
Education and training activities 
such as WasteLESS Week are helping 
to ensure that integrated waste 
management will be a core part of each 
site’s overall management practices.

2025 objective: 

50% 

reduction in Sodexo’s global 
food waste

38.8 % 

of client sites 
participating in WasteLESS Week or 
equivalent campaign

REINFORCING AGILITY THROUGH OPEN INNOVATION

Creation of the Sodexo Ventures investment fund

In a rapidly evolving market, it is 
essential to combine the agility of 
young pioneering companies with 
Sodexo’s investment capacity and 
experience. By forming partnerships 
with startups and collaborating with 
its entire ecosystem, the Group is able 
to better understand the evolution 

of its markets, increase its capacity 
for innovation and thereby evolve its 
services. This is why Sodexo Ventures, 
a 50  million  euro strategic investment 
fund, was launched in 2016. Over the 
past two years, Sodexo Ventures has 
been involved in a number of startups: 
Wynd (a SaaS(1)  provider of order 

management soft  ware for restaurants 
and retail businesses), Neo-Nomade 
(France’s leader in shared workspace 
reservations), Klaxit (a car-sharing app 
for commuters) and Life Dojo (a digital 
coaching platform).

1  Soft  ware as a Service.

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SHRINKING OUR  CARBON FOOTPRINT

Partnership with WWF helps drive continued progress

include more sustainable products, 
supplies and equipment. For its 
clients, the c ompany provides Energy 
Management Services that track and 
reduce energy consumption and carbon 
emissions. Sodexo’s off er includes 
deploying energy effi  ciency interventions 
and integrating low-carbon renewable 
sources into the client c ompany’s energy 
mix. Sodexo also works to facilitate 
universal implementation of its best 
practices that reduce carbon emissions 
at both its own and client sites. In 
addition, ongoing eff orts are aimed at 
improving meal production processes 
and reducing food waste along with the 
energy and water used to produce the 
food. To continue its progress toward 
its commitment, Sodexo worked with 
WWF in Fiscal 2018 in selecting I Care 
& Consult and ECO 2 Initiative  for their  
technical and strategic expertises to 
help in establishing, implementing and 
measuring the eff ects of the Group ’s 
carbon reduction actions.

2025 objective :

-34% 

in our greenhouse gas emissions 
by 2025 (1) 

Since 2010, Sodexo has pursued its 
carbon reduction strategy in partnership 
with the World Wildlife Fund (WWF), 
one of the world’s largest and most 
experienced independent conservation 
organizations. The collaboration has 
produced a methodology and tools 
to calculate the carbon emissions 
within Sodexo’s value chain and led to 
the establishment of a science-based 
absolute carbon reduction target for the 
Group: a 34% reduction(1) in greenhouse 
gas emissions by 2025. Actions being 
taken by Sodexo in pursuit of this goal 
include working with its suppliers to 
reduce emissions throughout the supply 
chain and implementing responsible 
behavior and sourcing initiatives that 

NEW APP 
FACILITATES LIFE 
ON REMOTE SITES

Digital platform 
promising for all 

With its new “My Village App,” 
Sodexo is creating an alternative 
access to our services for consumers 
and clients at remote sites around 
the world. The app includes a 
personalized home screen based on 
user preferences and dynamic content 
that is updated throughout the day. 
An array of standard and custom 
features facilitates actions such 
as check-in and check-out, facility 
induction, food ordering, activity 
reservations, maintenance and 
incident reporting and tracking and 
team communications. In developing 
the app’s technical platform, Sodexo 
adopted a consumer-focused 
approach that included design 
thinking to understand key challenges 
for the consumers, workshops 
with clients to generate ideas and 
prototyping and piloting phases prior 
to full roll-out. Launched with global 
Energy & Resources clients in fall 
2018, the app also holds signiﬁ cant 
potential for deployment across all 
segments.

2

COLLABORATING WITH INCUBATORS TO ACCELERATE INNOVATION

Sodexo partners with 
The Camp, Paris&Co, 
The Village by CA in France 
and XNode in China

Collaboration with startup incubators 
and accelerators is another important 
means to accelerate the development 
of innovative quality of life projects. In 
April 2018, Sodexo signed a partnership 
with XNode, one of the leading startup 
incubators and accelerators in China, 

a key market for Sodexo and one of the 
most active in digital transformation. 
In addition to identifying pioneering 
companies in China and Asia that 
meet the Group’s needs, XNode will 
also be able to incubate and help 
develop projects. Another illustration 
of this open innovation strategy is 
the partnership with Thecamp, an 
innovation campus dedicated to the 
smart and sustainable city launched in 
July 2015 in France’s Aix-en-Provence 
region. Sodexo is also a member 

of Paris&Co, an economic development 
and innovation agency in Paris, and 
Le Village by CA, a leading cooperative 
space dedicated to young innovative 
companies launched by  Crédit Agricole. 
These examples illustrate how Sodexo is 
leveraging ecosystems linking startups 
and large companies to accelerate the 
development of innovative projects and 
imagine the Quality of Life services of 
tomorrow.

1  Absolute reduction in Scope 1, Scope 2 and Scope 3 carbon emissions, compared to a 2011 baseline.

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GLOBAL 
PROGRAM 
HELPS CUT FOOD 
WASTE

Demonstrated results 
through “WasteWatch”

Sodexo Group is a global leader in 
ﬁ ghting the food waste crisis. As a 
member of Champions 12.3, initiative 
linked  to the United Nations Sustainable 
Development Goal 12.3, Sodexo has 
joined a global eff ort to reduce food 
waste by 50% by 2030, and has 
committed to tracking food waste 
at all of its sites as one of its Better 
Tomorrow 2025 objectives. Among 
Sodexo’s initiatives to reduce food 
waste is its WasteWatch program. 
The c ompany introduced the next 
generation of waste prevention tools 
(WWxLP) developed through its 
partnership with LeanPath, provider of 
the world’s most advanced automated 
food waste tracking and analytics 
platform. Using this program, Sodexo 
site teams are able to rapidly and easily 
capture food waste data, take action 
based upon intuitive analytics and 
drive cultural and behavioral change to 
help end avoidable food waste, whether 
food waste generated in the kitchen 
or consumer food waste. It has been 
proven, on average, to reduce food 
waste by 50% and to reduce purchases 
by 3%. Sodexo’s objective is to extend 
the program to 70% of its food sites by 
 2020 , rising to 100% by 2025.

87.5 % 

of client sites 
implement equipment  and process 
steps to reduce their organic waste

80.6 %

of client sites 
implement equipment  and process 
steps to reduce their non-organic 
waste

SODEXO SIGNS GLOBAL PARTNERSHIP 
WITH MICROSOFT

Accelerating the Group’s digital transformation

In September 2018, Sodexo signed 
a global agreement with technology 
leader Microsoft  . The partnership 
combines the companies’ unique 
strengths to change the work 
experience delivered by Sodexo globally 
and optimize real-estate management.
To continuously improve and enhance 
its Quality of Life services, the Group 
uses an integrated information 
platform, a key pillar in Sodexo’s digital 
transformation. The platform combines 
diff erent productivity solutions from 
Microsoft  , including Dynamics 365 and 
Azure as well as Microsoft  ’s Artiﬁ cial 

Intelligence and object intelligence 
capabilities. It is a place of work and 
collaboration for all Group teams 
around the world and off ers Sodexo’s 
employees, clients and consumers new 
value-added services.
In addition to improving Sodexo’s own 
facilities management processes, the 
effi  ciency gains will achieve signiﬁ cant 
savings for its  clients. For Microsoft  , 
the partnership provides a key 
opportunity to bring the most value to 
its technologies in becoming part of the 
Sodexo ecosystem.

SMOOTHING THE STAKEHOLDER’S DIGITAL 
JOURNEY

Optimizing processes, payment tools

 Through its strategy of data 
digitization, Beneﬁ ts and Rewards 
Services is bringing additional value 
to clients, consumers and merchants. 
By strengthening its digital platform, 
Sodexo is off ering an improved 
user experience to stakeholders 
while maximizing new business 
opportunities. Digitization of its 
off ers and upscaling its capabilities 
are among the visible steps Sodexo is 
taking. Another key area is digitization 
of tools to ensure a smooth and 
seamless journey for each stakeholder. 
For example, a small or medium 
enterprise entering Sodexo’s website 
is able to understand its off er and buy 
directly thanks to a seamless digital 
journey that answers all their potential 
questions and supports their buying 
decision and ﬁ nal action. Sodexo is also  
helping to reduce costs by accelerating 
the migration of paper toward digital 
transactions, which are 50% less 
expensive than paper vouchers. 
Other digital-related cost savings 
measures include standardizing 
internal processes and revamping 
back-end IT systems.

73%

percentage of Sodexo 
Beneﬁ ts and Rewards 
Services’ issue volume 
generated from digital 
(vs paper vouchers)

95.5 %

percentage of paper 
vouchers recycled

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STRENGTHENING A LONG-TERM PARTNERSHIP WITH SHELL

Standardizing processes, optimizing costs

Since 1973, Sodexo has been 
delivering services to Shell, a 
leading oil and gas multinational. 
Today, it provides a full range of 
facilities management services to 
support 20,000 Shell employees on 
79 sites in 12 countries and across 
diverse environments, from off shore 
platforms and vessels to offi  ce 
sites. A dedicated team ensures the 
continued delivery of industry-leading 
services, which range from s oft  
FM services such as c leaning and 
h ousekeeping, h ospitality s ervices 
and c atering to h ard FM services 

such as p ower d istribution, p lant 
o perations & m aintenance and 
e nergy m anagement. To respond 
to the client’s local, regional and 
global expectations, Sodexo has 
implemented numerous actions 
to optimize costs and standardize 
processes. The Group has also 
co-created innovative technologies 
to enhance the quality of life of 
Shell employees and maintains a 
strong and continuous focus on 
HSE(1)standards. More broadly, 
Sodexo is allowing Shell to focus on 
its core business, while helping to 

More than 

130,000

number of individual pieces 
of equipment 
Sodexo maintains for Shell globally

reduce carbon emissions. This contract, 
built on a common vision, opens the 
way to a promising future.

2

CONTRACT RENEWAL AT PRESTIGIOUS U.S. TECHNICAL SCHOOL

Proactive approach to identify client expectations

to its growing international student 
population. Sodexo’s ultimately winning 
proposal included an enhanced retail 
off er, an elevated catering program with 
special emphasis on top-level events 
and an International Test Kitchen. The 

proactive approach helped to reinforce 
trust with the client at multiple levels, 
demonstrating the importance Sodexo 
places on listening and responding to 
client needs while also enabling it to 
develop additional revenues.

When Rensselaer Polytechnic Institute 
(RPI) in the State of New York decided 
to issue a request for proposals in the 
fall of 2017, Sodexo, which has provided 
services to the prestigious engineering 
school for 26 years, applied its client 
retention program,   seeking feedback 
from the university’s leadership to 
conﬁ rm the client’s expectations. 
The review helped Sodexo to shape 
its contract proposal to off er services 
that complement RPI’s cutting-edge 
education standards and are adapted 

375 million

U.S. dollars 
projected revenues 
over 10 years from new RPI 
contract

1  Health, Safety and Environment (HSE) the scope of Sodexo HSE function includes Occupational Health and Safety, Food Safety and Environment.

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Nurturing 
talent

Sodexo’s employees – designers and providers 

of the c ompany’s services to its clients and consumers – are central 

to its offer, culture, success and future growth.

To maintain excellence in service quality while ensuring long-term growth, 

Sodexo focuses on three major challenges: developing a performance-based culture 

based on shared priorities  and indicators, anticipating needs in terms 

of resources, skills and competencies and off ering training, learning 

and development  opportunities at all levels.

Convinced that a safe, motivating and open work environment 

fosters individual commitment and collective performance, 

the Group is fully committed to diversity and inclusion, integrity 

and the continual reinforcement of health and safety.

Fiscal 2018 initiatives reﬂ ect company ’s commitment 

to nurturing the potential of the talent on which 

it depends and that will shape its future.

6.5  %

Lost Time Injury Rate ( LTIR)  
reduction 

14.6 

 average hours of training 
provided annually 
per employee

10 

consecutive years in which 
Sodexo has been listed by 
DiversityInc as a Top Company 
for Diversity

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PROMOTING QUALITY OF LIFE AT WORK

Our fundamentals

Convinced that quality of life at work is a major source of professional commitment and organizational performance, 
Sodexo guarantees the following fundamentals to all of its employees around the world:

Performance-based 
culture

Talent 
management

Learning  & 
Training 

• A MANAGEMENT CLEARLY STATING 

THE MISSION AND OBJECTIVES

• REGULAR FEEDBACK 

ON INDIVIDUAL PERFORMANCE

• REVIEW OF EMPLOYEE POTENTIAL 

AND CAREER DEVELOPMENT POSSIBILITIES

2

• TRAINING, TOOLS AND EQUIPMENT  TO ENSURE 

CONTINUOUS CAREER DEVELOPMENT AND OPTIMAL 

AND SAFE WORKING CONDITIONS

• RESPECT FOR FUNDAMENTAL RIGHTS AT WORK

• REGULAR AND TIMELY PAYMENT OF WAGES

Integrity

• PROTECTION OF PERSONAL DATA

• THE GUARANTEE THAT ANY REPORT OF 

A VIOLATION OF OUR PRINCIPLES OF INTEGRITY 

WILL NOT RESULT IN RETALIATION.

• EQUAL OPPORTUNITY FOR ALL

• RESPECTFUL WORKING RELATIONSHIPS, 

WITH NO TOLERANCE OF HARASSMENT, 

DISCRIMINATION OR VIOLENCE

Diversity &
Inclusion

Health & Safety

• A SAFE, SECURE AND HEALTHY WORK ENVIRONMENT

• FAIR SCHEDULES, IN ACCORDANCE WITH THE LAW, 

WITH REST DAYS AND BREAKS

77%

percentage of employees 
who say that Sodexo is attentive 
to their health and well-being

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FOSTERING EMPLOYEE ENGAGEMENT

Commitment to improving the workplace

GROUP 2018 EMPLOYEE ENGAGEMENT 

SURVEY RESULTS

The overall level of employee 
engagement increased to 69% 
(from 68% in 2016) according to 
Sodexo’s seventh bi-annual Employee 
Engagement Survey. The employee 
Quality of Life index measured by the 
survey also increased one point to 
74%. Several strong positives were 
identiﬁ ed in employee perceptions 
of their work environment as well as 
areas for improvement. Areas highly 
rated by employees include their 
work environment (83% satisfaction), 
being an intrapreneur (68%), diversity 
and  inclusion (82%), alignment of 
their personal values with those of 
Sodexo (73%) and pride in the c ompany 
for its contribution to quality of life 
(83%) and commitment to c  orporate 
responsibility  (80%). The engagement 

survey highlighted the need to continue 
working on career paths and employee 
development. Sodexo considers the 
employee engagement rate to be a key 
element of employee management 
because of its direct relationship to the 
retention of clients and employees(1).  
Because people work better when they 
work in a professionally fulﬁ lling, stable 
and secure environment, the c ompany 
focuses on employee well-being and 
development and providing a workplace 
in which each person can contribute 
their best.

GROUP 2016 EMPLOYEE ENGAGEMENT 

SURVEY ACTION PLANS

722 action plans aimed at continuous 
improvement were put in place to 
address issues identiﬁ ed in the 2016 
Employee Engagement survey(2).

69%

global employee engagement 
rate (+1 point vs 2016)

62%

participation rate in 2018 
Employee Engagement Survey 
(+5 points)

55

 countries surveyed

1  A 10% increase in engagement translates to +1.6 in client retention rate and +6 points in employee retention. Source: Sodexo Materiality Refresh 

Analysis, 2016.

2  2018 employee engagement survey sent to  386,262  Sodexo employees of which 62% responded.

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PEOPLE-DRIVEN GROWTH

Ensuring required  skills

PREPARING FUTURE GROWTH 

THROUGH THOROUGH WORKFORCE 

MANAGEMENT

Improving labor productivity is key 
to boosting performance, engaging 
employees and delivering strong and 
proﬁ table growth. To achieve this, 
Sodexo is providing managers with 
training, processes and tools to better 
manage their payroll, demand planning 
and scheduling. Following its successful 
deployment in segments such as in 
Universities in North America – where 
front-line labor represents 50% of 
total costs – the technology is being 
progressively implemented at sites 
worldwide.

BRINGING NEW CAPABILITIES 

BY ATTRACTING EXTERNAL HIGHLY 

SKILLED TALENTS

In order to adapt our off ers to a 
moving environment through digital 
solutions, Beneﬁ ts and Reward Services 

(BRS) started to look at new kinds of 
proﬁ les to join the digital adventure. 
So BRS  began  its talent acquisition 
eff orts by mapping key capabilities 
and hiring digital marketing experts, 
Product owners, data specialists, 
scrum masters, user experience 
designers, among others. They push 
BRS to be more agile and develop 
new ways of working across the 
organization. Thanks to their talents 
and new approach, combined with BRS’ 
business acumen, the organization 
is building the BRS of tomorrow, 
improving quality of life of three main 
stakeholders: clients, consumers and 
merchants.

RIGHT PEOPLE, RIGHT SKILLS

Adoption of a unique strengths-based 
recruitment approach has enabled 
Sodexo to improve recruiting for the 
critical position of Prison Custody 
Offi  cer (PCO) in the prisons it manages 
in the UK. Developed by creating a 

strengths-based proﬁ le and adapting 
interviewing techniques, the new 
approach was used to recruit 362 new 
PCO’s in the ﬁ rst 12 months. The 
initiative has contributed to increased 
client satisfaction and the objective 
of safe and decent prisons that 
support prisoner rehabilitation and 
re- integration.

ANTICIPATING SKILL  SHORTAGES 

IN FAST GROWING COUNTRIES

Attracting the right people in the required 
time is key to support the growth in 
developing countries. To respond to its 
human resource needs and to contribute 
to the development of people facing 
barriers to employment (women, conﬂ ict 
victims, immigrants), Sodexo has opened 
 training centers in Chile and Colombia to 
provide qualiﬁ ed and experiential training 
to the general population in basic FM and 
food capabilities, facilitating their entry 
to the workforce. In Fiscal 2018, more 
than 2,600 people were trained.

2

EMPLOYEE VOLUNTEERING  THROUGH STOP HUNGER

Contributing to a hunger-free world 

Stop Hunger is a global non-proﬁ t 
network founded by Sodexo volunteers 
in the U.S. 22 years ago. Since its 
inception, Stop Hunger relies on the 
continued commitment of Sodexo 
employees who share their time 
and experience.  As Stop Hunger 
has grown, this commitment has 
expanded to encompass the eff orts 
of all stakeholders within Sodexo’s 
ecosystem, including clients, 
consumers, suppliers  and the friends 
and families of its employees, who 
remain the backbone of Stop Hunger’s 
actions. They are all committed 
to supporting NGOs and local 
communities in need. To accompany 
them in their eff orts, Sodexo off ers 
employees one paid day per year 
to engage in volunteer activities on 
behalf of Stop Hunger. The  c ompany 
also supports 10 missions each 

year undertaken through the 
YEAH! program – Your Engagement 
Advanced Hub . The two-week missions 
are organized with Stop Hunger’s global 
partner, the World Food Programme(1), 
and leverage the specialized skills 
and talents of individual employees 
to strengthen the infrastructure of 
nonproﬁ ts, helping them build and 
sustain their capacity to successfully 
achieve their missions. In Tunisia, for 
example, Sodexo supply chain experts 
helped a local NGO set up an eff ective 
and cost-effi  cient system to distribute 
hot meals. For employees, these 
missions are the chance to live their 
values and feel useful: “I thank Stop 
Hunger for giving me the opportunity to 
find solutions to help future generations 
in Africa,” said Emmanuel Boo Djon, 
South Africa Procurement Offi  cer, aft  er 
his mission in Kenya. 

93,000

number of volunteers 
in 53 countries

5 million

number of meals distributed

7.4  million

U.S. dollars 

100% of funds collected and 
invested to co-build local and 
innovative programs, including to 
empower women

1  The United Nations leading humanitarian organization ﬁ ghting hunger worldwide.

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   COMMIT  TO DEVELOPING PEOPLE

Enhancing careers and learning

FOCUS ON GLOBAL LEARNING 

AND DEVELOPMENT

Among the global training programs 
through which Sodexo provides 
training and opportunities for internal 
advancement to its employees are its 
academies. At the Sales Academy, for 
example, t raining is given in the Sodexo 
way of selling, including selecting 
the right opportunities, adopting 
a robust methodology for gaining 
client agreement and applying Go-No 
Go decisions. The On-Site Manager 
Academy will provide training to 
1,500 managers in 11 languages in 
Fiscal 2019. The curriculum includes 
driving growth through relationship 
development with clients and 
 identifying opportunities to cross-sell 
and upsell. Other priorities emphasized 
are managing and engaging teams, 
nurturing and developing talent on-site, 
focusing on operational effi  ciency, 
controlling costs and delivering on 
promises to clients.

GLOBAL TRAINING PROGRAMS 

TO INCREASE EMPLOYEE SKILLS 

AND TALENTS

The satisfaction of Sodexo’s clients 
and consumers depends largely 
on the skills and talents of its 
employees. Sodexo is committed to 
providing training for employees that 
increase their knowledge, enabling 
them to better deliver services to 
clients and  consumers as well as 
to advance and grow throughout their 
careers. Learning and development 
also is an important means of 
increasing employee engagement, 

which contributes to improved 
performance and higher employee 
retention. Examples of the Group ’s 
global training programs include the 
“Sodexo Ambassador ” program and 
its specialized academies. More than 
880 professionals have now been 
trained in Sodexo’s robust approach 
and processes in  sales through its 
Sales Academy. The Global Facilities 
Management Academy helps to develop 
the knowledge and skills necessary for 
operational managers to grow Sodexo’s 
Facilities Management business through 
courses on FM strategy to support client 
retention as well as health and safety.

14.6  

average hours of training 
provided annually    per employee   

79.3% 

of total workforce 
participating in at least 
 one training  

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HIGH ETHICAL STANDARDS

Codes of conduct reaffi  rmed

Sodexo issued an updated statement 
of business integrity i n February 2018, 
reaffi  rming its commitment to 
conducting all aspects of its business 
according to the highest ethical 
standards and guided by:
•  statement of Sodexo’s Business 

Integrity principles;

•  Sodexo’s declaration of respect 

for human rights;

•  Sodexo’s corporate responsibility 

action plan.

2

11,467(1) 

number of employees 
trained in  sexual harassment 
prevention

96.8 %

percentage of workforce 
working in countries having 
the Sodexo Statement of Business 
Integrity available in at least 
one offi  cial language

The Statement of Business Integrity 
sets forth Sodexo’s uncompromising 
standards for business integrity, 
which apply to all employees and 
to any persons acting on its behalf. 
The c ompany does not tolerate 
any practice that is not born 
of honesty, integrity and fairness, 
anywhere in the world where it does 
business. Adherence to these standards 
is part of what it means to be an 

employee of an industry-leading, 
best-in-class company and is key 
to Sodexo’s operational conduct.
To ensure that these commitments 
are understood and applied by all, 
Sodexo has set up dedicated training 
for all, including front-line employees, 
and made the principles of business 
integrity part of the integration 
process for all new company 
employees.

1  The sexual harassment prevention training program began in Q4 2018.

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DIVERSITY AND INCLUSION

Continued leadership

Sodexo’s commitment to diversity 
and inclusion is a cornerstone 
of its culture. It embraces the 
promotion of gender diversity 
and the advancement of women, 
the representation of all generations, 
the integration of people with 
disabilities and respect for all cultures, 
as well as sexual orientations and 
gender identity. The company’s  many 
diversity initiatives  are a strength, 
and driver of innovation that enable 
it to better meet the expectations 
of its stakeholders.

SODEXO STUDY REAFFIRMS 

BETTER PERFORMANCE BY 

GENDER- BALANCED TEAMS

Promoting gender diversity and 
the advancement of women is one 
of Sodexo’s ﬁ ve areas of action 
related to diversity and inclusion. 
Among the company ’s initiatives 
focused on gender in Fiscal 2018 
was the release of a ﬁ ve-year internal 
study on the business impacts of 
gender balance. The ﬁ ndings reaffi  rm 
a previous Sodexo study showing 
that teams with a balanced mix of 
men and women are more successful 
across a range of key performance 
indicators, including ﬁ nancial 
performance, employee engagement 
and retention, client retention and 
safety. For example, gender-balanced 
management teams ranked higher 
than others  by an average of eight 
percentage points in employee 
retention rate and 14 percentage points 
in employee engagement. The results 
add a new, compelling dimension 
to a growing body of research that 
demonstrates the business beneﬁ ts 
of gender equity.

executives participated. Among 
other highlights was supporting 
the professional development 
of women through Mentoring Circles, 
with a strong focus on positions 
with P&L(1)  responsibilities and 
facilities roles as well as nurturing 
13 active country  networks and 
a robust International Women’s 
Day campaign with 80 entities  
participating.  Women represent 34% 
of  Sodexo’s Senior Executives and 43% 
of all management positions.
Sodexo also engaged in numerous 
actions to increase awareness and 
to promote an inclusive environment 
for LGBT(2) individuals. Examples 
include raising awareness through 
the global IDAHOT Campaign for 
International Day against Homophobia 
and Transphobia,  strengthening 
the company ’s partnership with 
the U.S. association Out and Equal, 
 partnering with the Dutch foundation 
Workplace Pride, recognizing  Sodexo 
as an employer of choice and leader in 
the LGBT community. 

54 %

proportion of women 
on the Board of Directors

3.4 %

employment rate 
of people with disabilities 
at Sodexo France

45 

 countries have signed 
the Women’s Empowerment 
Principles of the United Nations 

 SO TOGETHER (FORMERLY SWIFT) 

AND PRIDE ACTIVITIES HIGHLIGHT 

COMMITMENTS

 Sodexo continued to lead in multiple 
areas, including supporting greater 
representation of women in leadership 
positions through its SoT ogether 
(formerly SWIFt) Advisory Board. 
Activities during the year included a 
Women’s Leadership Development 
Program in which 100 women 

1  Proﬁ t and Loss.

2  LGBT for Lesbian, Gay, Bisexual, Trans.

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A SAFE AND HEALTHY WORK ENVIRONMENT

Focused daily on well-being

“SODEXO SUPPORTS ME” 

SERVICE HELPS SIMPLIFY LIFE 

FOR EMPLOYEES

Like everyone, Sodexo 
employees must confront the 
challenges of everyday life, whether 
ﬁ nancial issues, family concerns 
or health-related problems. To 
help employees and their families 
work through life’s daily trials, the 
company  off ers a free web and phone 
counseling service, “Sodexo Supports 
Me.” Run by an external organization, 
the conﬁ dential helpline is available 
24 hours a day, 365 days a year in 
33 countries.

“SAFETY NETS” CAMPAIGN 

FOCUSES ON PREVENTION 

Sodexo’s “Safety Nets” campaign is a 
simple, but powerful approach to help 
all of our managers and teams focus 
on prevention by identifying the Safety 
Nets that should be  in place to keep 
our employees safe and to strengthen 
our health & safety culture. Each 
safety net (layer of defense) is clearly 
deﬁ ned and is supported by tools and 
information. The Safety Nets start 
with Risk Assessment and progress 
through Safe Systems of Work; Training 
& Supervision; Physical Barriers; Tools, 

Equipment & Personal Protective 
Equipment. Safety Nets also reinforce 
our safety culture ensuring a focus 
on Safety Walks, Safety Observations 
and Near Miss reporting, and dynamic 
risk assessment of the task using the 
3 Checks For Safety.  

AWARDS RECOGNIZE 

EXCEPTIONAL EFFORTS BY TEAMS 

AND INDIVIDUALS

To recognize the eff orts of individuals 
and teams in promoting better health 
and safety, Sodexo held the “Have a 
Safe Day Awards” in December 2017. 
Awards were presented for creating, 
developing or sharing a safety best 
practice to help others to progress, 
for teams demonstrating excellence 
in enhancing safety and for a client 
contract or site demonstrating 
exceptional improvement or sustained 
high performance in safety.

STUDY EXAMINES LINK 

BETWEEN WORKPLACE AND 

HEALTH OUTCOMES

With a growing body of evidence 
linking the work environment with 
health outcomes, Sodexo has teamed 
with Harvard University to seek 
new approaches to address the 

2

 33

number of countries 
where the “Sodexo supports me” 
hotline is available 

6.5 %

percentage  of Lost Time 
Injury Rate Reduction  

2.7 million

U.S. dollars 

amount of four-year federal grant 
awarded for Harvard-Sodexo study

many ways that the workplace can 
aff ect health and safety of front-line 
employees. Stressful conditions at 
work and little supervisor support 
have been associated with increased 
risk of cardiovascular disease and 
depression and contribute to higher 
absences and turnover – adding to 
costs for employers. Supported by 
a major grant from the U.S. federal 
government, Harvard is conducting 
research examining Sodexo’s front-line 
service workers across the Boston area, 
to be followed by the implementation 
and evaluation of practices to improve 
worker quality of life.

SODEXO “SAFETY OLYMPICS” FOCUSES 

ON LIFE SAFETY HAZARDS 

Sodexo Safety Olympics is a group-
wide initiative aimed at making our 
teams more aware of life safety 
hazards and  how they can be managed. 
 The Safety Olympics was made 
available as a mobile device App. 
and teams competed to achieve the 
highest score in several challenges.  
The Safety Olympics focused on Life 
safety hazards such as  electricity, 
ﬁ re  and  working at height. Over 
70,000  people participated in 
the  campaign in Fiscal 2018 . 

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Anchoring 
corporate 
responsibility

Sodexo’s commitment to corporate responsibility is a source 

of diff  erentiation that drives employee engagement and responds to stakeholder 

expectations. These include rising awareness of the impact of food choices on health, the amount 

of  food wasted globally and economic disparity in communities. In addition to fostering diversity 

and  inclusion , reducing food waste and minimizing its carbon footprint , Sodexo is particularly focused 

on two major issues: developing and advocating healthy and sustainable choices and sourcing locally 

and inclusively. Sodexo believes that corporate responsibility is a source of competitive advantage that 

supports its business growth. Through its corporate responsibility roadmap, Better Tomorrow 2025, 

it is taking steps to further strengthen its performance – as demonstrated by  initiatives 

and actions highlighted throughout this report and the recognitions received during Fiscal 2018.

65.6 %

of client sites implementing 
actions that proactively 
address Sodexo’s 10 Golden 
Rules of Nutrition, 
Health and Wellness

96.9 %

of Group revenues 
of countries employing 
environmental experts

 4.4 

billion euro
amount of our business 
value beneﬁ ting SMEs 

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WORDS TO LIVE BY

Responsible business conduct and respect 
for H uman rights

Being a responsible company means 
integrating a sustainable development 
approach as central to its strategy and 
operational activities. A fundamental 
commitment to business integrity 
and respect for human rights and the 
environment has  been essential to 
Sodexo’s values and ethical principles 
since the company ’s founding in 1966.
A pillar of Sodexo’s responsible 
business conduct commitments is 
respect for human rights. It is essential 

to Sodexo’s mission to improve the 
quality of life of its employees and of 
all whom it serves and to contribute to 
the economic, social and environmental 
development of the communities, 
regions and countries where it operates. 
Wherever it does business, Sodexo 
seeks to conduct its business in a 
manner that will not infringe upon the 
human rights of others and addresses 
adverse impacts resulting from its 
business activities.

A COMMITMENT TO ALL 

OUR EMPLOYEES

Sodexo’s commitment to responsible 
business conduct is guided by 
statements on human rights and 
business integrity as well as its 
corporate responsibility roadmap. 
These statements apply to all 
employees, operations  and business 
relationships worldwide. All Sodexo 
leaders, executives  and managers 
are expected to know, abide by and 
communicate these principles and to 
integrate them into the company ’s 
business policies, practices and 
relationships. Employees are 
responsible for understanding and 

complying with Sodexo’s Responsible 
Business Conduct and to raise concerns 
or report promptly any suspected 
violations of laws or Sodexo policies.

A COMMITMENT TO 

OUR BUSINESS PARTNERS

Business partners are also  
expected to support and act upon 
these commitments. Prior to any 
partnership with Sodexo, suppliers 
and subcontractors must commit 
to the ethical, social and environmental 
practices deﬁ ned in Sodexo’s Supplier 
Code of conduct and communicate 
its principles throughout their own 
supply chain.

2

93.6 %

spend with contracted 
suppliers having signed the Sodexo 
Supplier Code of conduct

96.8  %

percentage of  workforce 
working in countries having the 
Sodexo Statement of Business 
Integrity available in at least one 
offi  cial language

80.5 %

percentage of Group revenues 
of countries having implemented 
Sodexo’s 10 People Fundamentals

Sodexo is committed to providing 
meaningful pathways for employees, 
the people  in its supply chain  and 
others aff ected  by its business to 
raise concerns free from the threat 
of retaliation. Sodexo also respects 
the rights of employees to raise 
such concerns through lawful collective 
representatives and seeks to address 
promptly every report that it receives.
The company  reviews its policies 
and practices routinely in light 
of what it learns through its own 
due diligence and through reports 
received regarding its business 
practices or adverse impacts that 
may result from its business activities. 
This continuous review informs 
the development and enhancement 
of systems and processes, including 
due diligence methods, and the 
prioritization of areas of concern 
and eff orts to mitigate identiﬁ ed 
risks. Sodexo reports annually 
on actions and outcomes relating 
to its responsible business conduct.

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ROBUST DATA COLLECTION 
AND REPORTING

Impact valuation facilitates planning and leadership

Sodexo places  high importance  on 
measuring its performance by  living 
up to its corporate responsibility 
commitments. From 2009, there has 
been a robust measurement approach 
that ensures Sodexo’s continued 
progress. The company ’s Key Indicators 
Performance system at the site and 
country level helps to track its actions 

and achievement around all Better 
Tomorrow 2025 commitments.
Data we gather not only drives our 
sustainability performance but also 
provides insights into the management 
of human resources, market trends 
and client and consumer expectations, 
environmental and supply chain risks 
and opportunities.

80 %

percentage of sites 
participating in the Fiscal 2018 
Sodexo annual site survey

72  

number of entities 
participating in the Fiscal 2018 
Sodexo annual country survey

32  

number of entities 
participating in the Fiscal 2018 
Carbon Emissions calculation 
process

OUR ANNUAL GLOBAL SURVEYS

Sodexo conducts three annual surveys: 
a site-level environmental survey of 
10,000 relevant sites in 47  countries; 
a country survey covering all corporate 
responsibility-related topics in over  
 72  entities and a separate carbon 
emissions calculation process.
Each year, both Sodexo’s Internal Audit 
team and its Third Party Statutory 
Auditors audit data collected at the 
site and country levels as well as the 
consolidation at Group level in order 
to verify its accuracy.
As one of the few companies that 
subjects its measurement and reporting 
on these indicators to an external audit, 
Sodexo is well-positioned to continue to 
remain a corporate responsibility leader 
and continually raise the bar through 
innovation and by embedding digital 
tools in its processes. This includes 
subjecting its data to analysis that 
compares Sodexo to its competitors. 
The information gathered provides 
considerable insight for management 
teams into the implementation and 
deployment, together with company 
policies that help to better identify 
potential risks.

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MULTIPLYING RESULTS THROUGH THE POWER OF MANY

Uniting stakeholders for a better world

2

and capacity to reduce food loss 
and waste around the world, leading 
by example, motivating others and 
showcasing successful strategies.

THE INTERNATIONAL FOOD WASTE 

COALITION, A GLOBAL PARTNERSHIP

Sodexo led the creation of 
International Food Waste Coalition, 
bringing together companies and 
organizations to prevent food 
waste outside the home. Member 
organizations represent the largest 
geographical food services footprint 
in the world and share a common goal 
of reducing food waste throughout 
the value chain through collaboration 
and empowering other companies 
to follow. The Coalition’s strategic 
principle: “Bring back the value  of food.”
One example of the Coalition’s 
actions is the development of a 
global partnership with the UN’s 
Food and Agriculture Organization 
(FAO) for the creation and testing 
of a food waste reduction program 
in European schools. Featuring a 
strong measurement and reporting 
system and a comprehensive set of 
education packages for students, the 
program is being rolled out in European 
schools and beyond.

STOP HUNGER AND THE WORLD FOOD 

PROGRAMME: ADVANCING TOGETHER 

AGAINST HUNGER

Stop Hunger  has renewed its partnership 
until 2020 with the World Food 
Programme (WFP), the United Nations 
leading humanitarian organization 
ﬁ ghting hunger worldwide, to contribute 
to achieve Zero Hunger by 2030.
We have built a sustainable relationship 
between public and private partners 
with a unique potential for action 
with WFP, which enables us to support 
governments in the management 
of school canteens and assists 
farmers in ﬁ nding markets, selling 
their products and guaranteeing their 
production, while increasing reliability 
exchanges and securing payment 
systems.
Our roadmap with WFP includes three 
focus areas: the free sustainable school 
meals program, women empowerment 
and emergency assistance. To optimize 
and improve the reliability of its 
systems and its impact, the WFP is 
able to access the Stop Hunger YEAH! 
Program: at least 20 types of expertise 
in a dozen ﬁ elds, and already 45 Sodexo 
experts committed for 270 mission 
days in Africa, Latin America, Asia and 
the Middle East .

An important contributor to Sodexo’s 
leadership on corporate responsibility 
has been its success in building 
partnerships with external stakeholders 
who are then able to magnify the 
impact of its actions.
Partnerships with organizations at 
both the global and national levels are 
helping Sodexo to advance its strategy 
in the areas of gender equality, people 
with disabilities, LGBT, generations 
and cultures and  origins. Likewise , 
Stop Hunger continues to extend its 
global reach by co-building innovative 
programs with 1,200 NGOs and 
associations, including the World Food 
Programme.
Sodexo’s growing ecosystem of NGOs 
and multi-stakeholder engagements 
also is critical to tackling massive 
global issues like food waste. In 
addition to its actions to reduce its 
own environmental footprint, Sodexo 
partners with other companies 
and organizations to go further in 
promoting sustainable practices, 
optimizing natural resource use and 
sharing environmental initiatives and 
innovations.

MEANINGFUL ENGAGEMENT: 

CHAMPIONS 12.3

Among the multi-stakeholder 
initiatives in which Sodexo is 
engaged is Champions 12.3, a global 
campaign to create momentum 
toward United Nations Sustainable 
Development Goal 12.3 to halve food 
waste and reduce food losses along 
production and supply chains by 
2030. Its leaders are CEOs of major 
companies, government ministers 
and executives of intergovernmental 
and research institutions, foundations, 
farmer organizations and civil society 
groups.
Champions act together to drive on-
the-ground results by advocating more 
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2   G R O W I N G   O U R   B U S I N E S S   R E S P O N S I B LY

EXTENDING CORPORATE RESPONSIBILITY LEADERSHIP

Becoming a more inclusive business

In 2018, Sodexo reconﬁ rmed 
its conviction to continued progress 
toward its Better Tomorrow 2025 
objectives by becoming a more inclusive 
business, renewing its conviction to 
improve quality of life and contributing 
to a better future for all. An inclusive 
business is one providing goods, services  
and livelihoods on a commercially viable 
basis to people by making them a part of 
a company’s core business value chain 
as suppliers, distributors, retailers or 
customers.

180 

number of active agreements 
with local communities, clients, 
NGOs and associations to promote 
inclusion of SMEs (Small and 
Medium Enterprises) in Sodexo’s 
Value Chain

91.8 %

percentage of Group revenues 
from countries having speciﬁ c 
initiatives to integrate SMEs into 
Sodexo’s Value Chain

14  years 

as industry leader 
in the Dow Jones Sustainability 
Index(1)

SODEXO’S VIGILANCE PLAN

The vigilance plan(2) aims to  
present  the measures put in place 
within the Group to identify  risks 
and prevent severe impacts on 
human rights and fundamental 
freedoms, health and safety 
and the environment resulting 
from our own activities as well 
as those of our subcontractors 
and suppliers.
For the detailed Plan, see page 231 .

SOCIAL PROGRESS 

AND ECONOMIC SUCCESS

As a global corporate citizen, Sodexo 
recognizes its responsibility to conduct 
business in a way that contributes 
to the sustainable progress of society, 
embodied in its mission. For more 
than 50 years, Sodexo has pursued 
its mission of economic success 
and social progress. This progress 
can be seen through the beneﬁ ts 
produced for the company ’s federation 
of stakeholders: the development 
and well-being of employees; services 
that improve consumer quality of 
life and enhance  client performance; 
opportunities for suppliers to develop; 
returns to investors; and  improvements 
in the communities in which the 
company  operates.

A CORPORATE RESPONSIBILITY 

LEADER

Already recognized as a corporate 
responsibility leader in its i ndustry, 
Sodexo is diff erentiating its services 
through innovations that can be 
replicated across its activities 
throughout the world. Examples 
include its Partner Inclusion Program 
and Responsible Sourcing policies, 

its FoodChéri, Mindful and Green & Lean 
menus and solutions, such as Inspirus 
to reinforce employee well-being, 
engagement and recognition.
By becoming a more inclusive 
business built on its past success 
and achievements, the company  
will put the spotlight on its corporate 
responsibility performance, enabling 
it to extend its role as a leader. 
By continuing to demonstrate 
its credibility and build trust with 
stakeholders, particularly consumers, 
Sodexo can continue to progress, 
change behaviors and position itself 
for future growth.

A MORE INCLUSIVE BUSINESS 

TO ACHIEVE STRATEGY OBJECTIVES

By making  its intentions to become 
a more inclusive business public, 
Sodexo  also strengthens its brand and 
business activities in diff erentiating 
itself from competitors as well as 
helping to attract and motivate the 
talent it needs to achieve its strategy 
objectives. This demonstrated 
leadership also becomes self-reinforcing 
as business units and countries 
increasingly take ownership for 
corporate responsibility performance.

1  The Dow Jones Sustainability Indices (DJSI) provide a global ranking of the companies most advanced in the area of sustainable development. They 

are jointly compiled by the S&P Dow Jones Indices and RobecoSAM.

2 

In accordance with Article L. 225-102-4 of the French Commercial Code.

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W W W. S O D E X O . C O M

3

CONSOLIDATED 
INFORMATION

3.1 

Fiscal 2018 Activity Report 

3.1.1  Fiscal 2018 year highlights 

3.1.2  Fiscal 2018 performance 

3.1.3  Consolidated ﬁ nancial position 

3.2 

Extra-financial reporting 

3.2.1  460,000 employees serving clients 

3.2.2  Engaged employees 

3.2.3 

Investment in employee skills 
development 

3.2.4  Flexible organization, respectful 

of  employees, off ering good working 
conditions 

3.2.5  Running business with integrity 

and  respect for human rights wherever 
Sodexo operates 

3.2.6  Our commitments as a service provider 

74

74

77

84

89

89

91

91

92

93

94

3.2.7  Our commitments as a corporate citizen  96

3.2.8  Our reporting methodology 

97

3.2.9  Report by one of the Statutory 
Auditors appointed as 
an  independent third party, 
on  the consolidated non-
ﬁ nancial performance statement 
in  the  Management Report 

3.3 

Consolidated financial 
statements as of August 31, 2018  104

3.3.1  Consolidated income statement 

3.3.2  Consolidated statement 

of comprehensive income 

3.3.3  Consolidated statement 

of ﬁ nancial position 

3.3.4  Consolidated cash ﬂ ow statement 

3.3.5  Consolidated statement of changes 

in  shareholders’ equity 

3.4 

Notes to the consolidated 
financial statements 

3.5 

Statutory Auditors’ Report 
on the consolidated financial 
statements 

3.6 

Supplemental Information 
and condensed Group 
organiz ation chart 

3.6.1  Financial ratios 

3.6.2  Two-year ﬁ nancial summary 

3.6.3  Exchange rates 

3.6.4 

Investment policy 

104

105

106

108

109

110

158

163

163

164

165

166

167

99

3.6.5  Condensed group organization chart 

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3.1  FISCAL 2018 ACTIVITY REPORT

3.1.1  Fiscal 2018 year highlights

3.1.1.1  Financial results

•  Organic revenue growth for the year, at +2% excluding the 
effect of the 53rd week, was slightly above the +1 to +1.5% 
guidance revised on March 29, 2018. There was an acceleration 
in the fourth quarter due to a return to record levels of summer 
tourism in France, an expected board days shift  in universities 
in North America from the third to the fourth quarter, and, in 
Benefits and Rewards, a strong pick-up in activity in Brazil. 
Underlying  operating  profit  margin  was  in  line  at  5.7%, 
excluding currency impact or 5.5% as published.

•  On-site Services organic revenue growth of +1.4%, or +1.9% 

excluding the 53rd week, reﬂ ects:

•  a -1.1% decline in revenue in North America, and growth 
of +4.5% in all other regions, with double digit growth in 
Asia, Brazil and Latin America;

•  an improvement in the Key Performance Indicators:

 –

client retention rate has increased +30 bps to 93.8%, 
thanks to an improvement in Education in North America 
which will be felt in Fiscal 2019,

 – new sales development has increased 30 bps to 6.8%, with 
an improvement in Health Care in the last few months of 
the year,

 –

excluding the 53rd week impact in both years, same site 
sales growth was 2.6%, up from 1.5% in Fiscal 2017.

•  Benefits and Rewards Services organic revenue growth 
was +5.1%. Organic growth in Europe reached +7.5%. In Latin 
America, organic growth was +2.4%, with a turnaround in 
Brazil in the second half.

•  The underlying operating margin was 5.7% excluding the 
currency impact, or 5.5% as published, down 80 or 100 bps 
respectively. This is explained principally by:

•  delays in labor and food productivity initiatives in North 
America  which  were  supposed  to  compensate  for  the 
decline in revenues;

•  delays in the ramp-up in proﬁ tability of a few very large 

contracts;

• 

in Benefits and Rewards, investments in mobility and 
digital migration, as well as lower interest rates in Brazil.

•  Other operating income and expenses reached 131 million 
euro. Restructuring costs amounted to 42 million euro against 
137 million euro in the previous year. Acquisition costs and 
amortization and depreciation of client relationships and brands, 
were higher. The increase in amortization  of client relationships 
was  principally related to the Centerplate acquisition.

•  Underlying  Net  profit  totaled  706  million  euro,  down 
-8.6%  excluding  the  currency  effect.  Reported  net  profit 

was 651 million euro, down -9.9%, or -4.0% excluding the 
currency  impact.  Basic  EPS  was  4.40  euro  down  -9.4%, 
helped by a lower share count linked to the share buy-back 
program.

•  Free cash flow reached 1,076 million euro. This represented 
a substantial improvement on Fiscal 2017 free cash flow, 
at  887  million  euro.  Cash  flow  from  operations,  was  up 
+5.9% due to much lower cash taxes. Capital expenditure 
was  relatively  flat  at  298  million  euro.  As  a  result,  cash 
conversion reached 165% compared to 123% in Fiscal 2017.

•  Aft  er taking into account acquisitions, dividends and share 
buy-backs, consolidated net debt rose during the year by 
648 million euro to 1,260 million euro at August 31, 2018. 
The Group’s ﬁ nancial position remained strong, with a net 
debt ratio at 1.0, at the bottom end of the target levels of 1-2.

•  Acquisitions, net of disposals, amounted to 697 million 
euro.  Centerplate,  a  provider  of  food  and  beverage, 
merchandise and hospitality services at sports facilities, 
convention  centers  and  entertainment  facilities  in  the 
United States and Europe was the biggest. The company 
contributed  509  million  euro  to  Group  revenue  this  year 
and was accretive to operating margin. Centerplate doubles 
the  Group’s  presence  in  the  Sports  &  Leisure  segment, 
particularly strengthening its position in the North America 
market. Other acquisitions during the year included Kim Yew 
to strengthen the Group’s technical expertise and capacities 
in Singapore, Morris Corporation to enhance the Group’s 
presence in remote site services for the mining industry in 
Australia. Since year end, further acquisitions have been 
made,  including Crèche  de  France,  doubling  the  Group’s 
presence  in  the  child-care  market  in  France  and  Novae 
Restauration, signiﬁ cantly enhancing the Group’s presence in 
the high-end catering market in French-speaking Switzerland.

3.1.1.2  New business opportunities 

and retention

In Fiscal 2018, new business reached 6.8% and retention 93.8%, 
both up by 30 bps. Same site sales growth improved by 110 bps 
to 2.6% (excluding 53rd week impact). These improvements are 
due to:

• 

Improved momentum in Food services

•  West Virginia State University in the U.S., a 15-year 
contract, for 47 million euro annual revenue to provide 
food and retail services for their 30,000 students across 
4 campuses and 29 dining venues. Our understanding of 
the client’s challenges, and our focus on local sourcing 
and supporting farmers in the region were decisive factors 
in winning this major piece of new business.

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•  We also signed a ﬁ ve-plus-two-year contract to operate 
10 catering outlets and modernize the food experience 
across The University of Hong Kong, the ﬁ rst and oldest 
institution of higher learning in Hong Kong, founded in 
1911.

• 

In the UK, we recently renewed our Quaerere Academy 
Trust contract in Sandwell, West Midlands for 5 more 
years with a 2.8 million pounds sterling catering contract, 
featuring our new modern school food and dining room 
off er, “Food & Co. by Sodexo”.

•  During  the  year,  continuing  our  strong  record  in  the 
airline business worldwide we started two new contracts 
with Cathay Pacific in January, and  Airport Lounge 
Development in the U.S., in May.

•  Our existing contract with 184 Chicago Public Schools, 
has not only been renewed for ﬁ ve more years, but also 
extended to 102 additional schools for food and facilities 
management services.

•  Sodexo has been selected as the high-end food services 
partner of INSEAD Asia Campus in Singapore to serve 
500 students, 100 executive participants and 350 faculty 
and staff  each day.

•  Strong momentum in contract extensions

•  Starting in 2016, Sodexo has been providing integrated 
facility management services to ByteDance, a high-tech 
company headquartered in Beijing specialist in Artiﬁ cial 
Intelligence. Sodexo has grown this business in China from 
one site to 87 sites. Since January 2018, we extended our 
contract with ByteDance with a new 2-year contract to 
cover 70 cities across China.

•  Sodexo recently extended its contract with Microsoft to 
18 new countries in Europe and South Africa in addition 
to our existing sites in China and the Middle East. With 
this new contract, Sodexo strengthens its relationship 
with Microsoft   which started in 2008 and provides fully 
integrated services in all Microsoft   sites.

•  Sodexo  also  signed  a  five-year  agreement  with  Tetra 
Pak, the world’s leading food processing and packaging 
solutions company, to provide integrated services on a 
global scale in 30 countries in 4 continents. Following 
this agreement Sodexo extended geographical scope, to 
provide services to Tetra Pak in Brazil, Norway, Vietnam, 
the UK and the Philippines.

•  Finally, Sodexo expanded its 12-year relationship with 
the International School of Beijing for a 4-year term, 
adding  catering  to  the  FM  services  Sodexo  previously 
supplied to the school. ISB’s 1,700 students and 350 staff  
enjoy a range of dining options in the newly-designed 
School cafeterias, Chinese canteen, staff  lounge and coff ee 
bar and event catering.

•  Better  retention  in  the  Fiscal  2018,  especially  in 

Education

• 

In terms of contract retentions, during the last quarter 
of FY18, Sodexo won the bid to operate the restaurants 
of the Eiffel Tower with Michelin-starred chefs Frédéric 
Anton and Thierry Marx for the next 10 years. Sodexo 
Sports & Leisure’s winning proposition was a completely 
redesigned,  modern  and  innovative  offer  with  strong 
social  and  environmental  commitments  particularly 
around local sourcing and zero waste.

•  We also renewed our existing contract with the Écoles de 
Marseille in France, to provide 50,000 meals daily to the 
city’s 320 primary schools.

•  Some improvement in Health Care signings in the last 

quarter

•  Sodexo also recently won a contract with MedStar Health 
System in Maryland, in the U.S., to provide food and retail 
services in their 10 locations, with over 3,000 beds. Our 
use of data analytics to understand the client’s complex 
demographics and enhance patient satisfaction scores 
going forward, as well as to extend staff  and guest dining 
to 24 hours and provide improved ﬂ exible patient dining 
options were key success factors.

3.1.1.3 

In 2018, Sodexo continued 
to be recognized 
for its contribution to 
a better world

•  Sodexo’s engagement in corporate responsibility continues 
to be recognized within the investment community, with 
the  highest  marks  of  its  sector  in  RobecoSAM’s  2018  
“Sustainability  Yearbook”,  for  the  11th  consecutive  year. 
Sodexo also remains the top-rated company in its sector 
within the Dow Jones Sustainability Index (DJSI), for the 
14th consecutive year.

3.1.1.4  Research and Thought 

Leadership

As  a  recognized  leader  in  Quality  of  Life  Services,  Sodexo 
continues  to  explore  the  frontiers  of  research  into  the  link 
between Quality of Life and performance in today’s rapidly-
changing work environment.

• 

In October 2017, Sodexo organized the second edition of the 
Quality of Life Conference, in London, bringing together 
Sodexo clients, leaders of companies, universities, NGOs, 
hospitals, governments and communities from more than 30 
countries to explore the future of quality of life.

•  The  Group  issued  the  second  edition  of  the  Global 
Workplace  Trends.  Gen  Z,  the  Internet  of  Things  and 
gender balance are among the forces shaping tomorrow’s 
workplace  explored  in  Sodexo’s  2018  Global  Workplace 
Trends. Seven critical factors are identiﬁ ed that aff ect the 
future  of  work  and  contribute  to  an  improved  workplace 
e x p e r i e n c e ,   e n h a n c i n g   c o m p a n y   p e r f o r m a n c e   a n d , 
ultimately, employee engagement. Among the insights is 
the need to foster collective intelligence across all workplace 
domains by creating an emotionally intelligent workplace. 

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Other trends include the increasing role of employees in 
companies’ corporate responsibility strategies, the sharing 
economy and the impact of technologies through Human 
Capital Management. By understanding and anticipating 
these trends, Sodexo is able to focus its human-centered and 
experience-based solutions to most eff ectively boost client 
performance.

•  Sodexo also released its 2018 Sodexo University Trends 
Report: Five Trends Set to Impact the Student Journey 
and Campus. Drawing on insight from a panel of leading 
higher  education  experts  as  well  as  Sodexo’s  experience 
providing services to 700 universities globally, it delivers 
key trends shaping the student journey and the campus 
experience,  and  how  universities  can  and  should  be 
responding.

3.1.1.5  Technology partnership 

with Microsoft   to enhance 
Quality of Life Services

In  September  2018,  Sodexo  signed  a  global  partnership 
agreement with Microsoft. The Group will use an integrated 
information platform developed in partnership with Microsoft  
Consulting  Services.  The  platform  combines  different 
productivity solutions from Microsoft  , including Dynamics 365 
and Azure as well as Microsoft  ’s Artiﬁ cial Intelligence and object 
intelligence capabilities.

In addition to improving Sodexo’s own facilities management 
processes, the effi  ciency gains unleashed by the initiative will 
help its clients achieve signiﬁ cant savings. For Microsoft  , the 
partnership provides a key opportunity to bring the most value 
to its technologies in becoming part of the Sodexo ecosystem.

3.1.1.6  Governance

Denis Machuel became Chief Executive Offi  cer 
in January 2018

Michel Landel announced his intention to retire in May 2017 
and  stepped  down  after  the  Annual  General  Shareholders’ 
Meeting on January 23, 2018. To ensure a smooth transition, 
Denis Machuel became Deputy Chief Executive Offi  cer of Sodexo 
as of September 1, 2017, and then Chief Executive Officer on 
January  23,  2018.  Michel  Landel  remained  on  the  Board  of 
Directors until July 2018, until the transition was fully completed.

Executive Committee expanded to reinforce 
regional representation and strengthen Sodexo’s 
focus on clients and consumers

The Executive Committee was substantially changed during 
the year, with an increase in the number of members from 14 
to 19, bringing to the table more geographical representation, 
the segments and activities not already represented and new 
functions including Marketing, Digital and Innovation.

With these changes, more than one third of the members of the 
Executive Committee are women and seven nationalities are 
represented.

Board changes

During the Board meeting on June 20, the Board:

•  accepted the resignation effective July 1, 2018 of Patricia 
Bellinger, Board member since 2005 and Michel Landel, Board 
member since 2009;

•  appointed Sophie Stabile, as a new director. She brings strong 
ﬁ nancial and operational expertise and deep service sector 
experience, and has joined the Audit Committee.

With  these  changes,  as  of  August  31,  the  Board  comprised 
13 directors of which six are independent, and two are employee 
representatives. The Board continues to be diverse with seven 
women, six men and four diff erent nationalities.

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3.1.2  Fiscal 2018 performance

3.1.2.1  Consolidated income statement

 (in millions of euro)

Revenue

Organic growth

UNDERLYING OPERATING PROFIT

UNDERLYING OPERATING PROFIT MARGIN

Other operating expenses

Operating profit

Interest income

Interest expense

Net financial expense

Share of profit of other companies consolidated by the equity method

Profit before tax

Income tax expense

Effective tax rate

Minorities deduction

UNDERLYING NET PROFIT

Underlying Earnings per share -basic- (in euro)

GROUP NET PROFIT

Earnings per share -basic- (in euro)

Proposed dividend per share (in euro)

(1) Please refer to pages 87-88  for Alternative Performance Measures definitions.
(2) To be proposed at the Annual General Meeting on January 22, 2019.

3.1.2.2  Currency eff ect

FISCAL 2018 (ENDED 
AUGUST 31, 2018)

FISCAL 2017 (ENDED 
AUGU ST 31, 2017)

DIFFERENCE

DIFFERENCE 
EXCLUDING 
CURRENCY EFFECT (1)

20,407

20,698

-1.4%

+4.4%

+1.6%

1,128

5.5%

(131)

997

46

(136)

(90)

2

910

(245)

27.1%

(13)

706

4.77

651

4.40

2.75(2)

+1.9%

1,340

6.5%

(151)

-15.8%

-8.6%

-100 BPS

-80 BPS

1,189

-16.1%

-8.3%

31

(136)

(105)

4

1,088

(343)

31.7%

(22)

822

5.52

723

4.85

2.75

-16.4%

-10.3%

3

-8.6%

-4.0%

-14.0%

-13.6%

-9.9%

-9.4%

=

Sodexo operates in 72 countries. The percentage of total revenues and underlying operating proﬁ t denominated in the main currencies 
are as follows:

U.S. dollar

Euro

UK pound sterling

Brazilian real

REVENUES

UNDERLYING 
OPERATING PROFIT

41%

26%

9%

5%

51%

4%

10%

19%

 Exchange rate ﬂ uctuations do not generate operational risks, 
because  each  subsidiary  bills  its  revenues  and  incurs  its 
expenses in the same currency. However, given the weight of the 
Beneﬁ t and Rewards business in Brazil, and the high level of the 
margins relative to the Group, when the Brazilian real declines 

against the euro, it has a negative effect on the underlying 
operating  margin  due  to  a  change  in  the  mix  of  margins. 
Conversely, when the Brazilian real improves, Group margins 
increase.

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The currency eff ect is determined by applying the previous year’s 
average exchange rates to the current year ﬁ gures except for 
Beneﬁ ts and Rewards in Venezuelan Bolivar.

In terms of the Venezuelan Bolivar, the Group considers that 
the best estimate of the exchange rate at which funds from its 
activities in Venezuela could be repatriated is the DICOM rate. The 

exchange rate used for the year ended August 31, 2018 is therefore 
1 U.S. dollar = 6,112,000 bolivars (1 euro = 7,121,091.20 bolivars) 
relative to the Fiscal 2017 rate of 1 U.S. dollar = 3,250 bolivars. 
The eff ect of this depreciation is no longer material at Group level, 
as the Group’s operations in Venezuela now represent a negligible 
share of consolidated revenues and underlying operating proﬁ t.

 IMPACT OF EXCHANGE RATES

Euro/U.S. dollar

Euro/Brazilian real

Euro/UK pound sterling

AVERAGE RATE 
CHANGE VS. THE EURO 
(in %)

CLOSING RATE 
CHANGE VS. THE EURO 
(in %)

REVENUES

UNDERLYING 
OPERATING 
PROFIT

NET PROFIT

IMPACT (in millions of euro)

-7.8%

-13.5%

-1.9%

+1.5%

-23.0%

+2.5%

(704)

(161)

(35)

(49)

(34)

(2)

(24)

(19)

(2)

During Fiscal 2018, the euro was strong against all currencies, particularly in the second half against both the U.S. dollar and the 
Brazilian real, the two most important currencies for the Group. On the other hand, UK Sterling was stable during the year.

3.1.2.3  Revenues

REVENUES BY ACTIVITY

REVENUES BY SEGMENT
(in millions of euro)

FISCAL 2018

FISCAL 2017

ORGANIC 
GROWTH

EXTERNAL 
GROWTH

CURRENCY 
EFFECT

TOTAL 
GROWTH

ORGANIC 
GROWTH 
EXCLUDING 
53RD WEEK

Business & Administrations

10,938

10,551

+3.8%

+5.6%

-5.7%

+3.7%

+4.1%

Health Care and Seniors

4,768

5,007

+0.2%

+0.8%

-5.7%

-4.8%

+1.0%

Education

3,855

4,239

-3.0%

-0.1%

-6.0%

-9.1%

-2.5%

ON-SITE SERVICES

19,561

19,797

+1.4%

+3.1%

-5.8%

-1.2%

+1.9%

BENEFITS AND REWARDS SERVICES

Elimination

GROUP TOTAL

850

(4)

905

+5.1%

-3.4%

-7.9%

-6.1%

+5.1%

(4)

20,407

20,698

+1.6%

+2.9%

-5.9%

-1.4%

+2.0%

Fiscal 2018 consolidated revenues totaled 20.4 billion euro, 
down  -1.4%  year-on-year  due  to  the  currency  movements 
exposed  above.  The  contribution  from  acquisitions  net  of 
disposals  of  subsidiaries  amounted  to  +2.9%.  As  a  result, 
organic revenue growth was +1.6%. Excluding the eff ect of the 
53rd week, organic growth was +2.0%.

The 53rd week adjustment is linked to the change from weekly to 
monthly accounting as from September 2017 in North America. 
Weekly accounting has the side eff ect of losing one or two days 
per year, depending upon whether there is a leap year or not. 
These lost days were usually recovered in the accounts in a one-
off  every 5 to 6 years. In Fiscal 2017, this 53rd week eff ect was 
the equivalent of six more days of trading. From Fiscal 2019 
onwards, the monthly accounting will be normalized.

On-site Services

On-site Services organic revenue growth was +1.4%, or +1.9% 
excluding the 53rd week. This performance reﬂ ects weakness in the 
performance of the Education and Healthcare segments. However, 
the fourth quarter was better than expected at +3.3% excluding 
the 53rd week, beneﬁ ting from a better performance in Education, 
offsetting the particularly weak third quarter, a good summer 
season in Europe and solid growth in the Rest of the World.

During Fiscal 2018, the Key Performance indicators improved:

•  client retention increased 30 bps to 93.8%. Education in 
North America increased by 300 basis points during the year. 
However, this was somewhat off set by weakness in Health 
Care in most regions;

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•  new  sales  development  was  6.8%  compared  to  6.5%  the 
previous year reﬂ ecting a slightly better performance in all 
regions;

•  excluding the 53rd week impact in both years, same site sales 
growth was +2.6%, up from a low point of +1.5% in Fiscal 
2017.

Again, in Fiscal 2018, organic growth was driven by continued 
high single digit growth in facilities management services, while 
food services were stable reflecting the weak performance in 
Universities in North America, which are predominantly food 
services. Non-food services represent 33% of On-site Services 
sales.

ON-SITE SERVICES REVENUES BY REGION

 REVENUES BY REGION
(in millions of euro)

North America

Europe

Africa, Asia, Australia, Latam, Middle East

FISCAL 2018

FISCAL 2017

ORGANIC GROWTH

ORGANIC GROWTH 
EXCLUDING 
53RD WEEK

8,707

7,690

3,163

9,093

7,591

3,113

-2.1%

+1.5%

-1.1%

+1.5%

+11.7%

+11.7%

ON-SITE SERVICES

19,561

19,797

+1.4%

+1.9%

Note: In Fiscal 2017, North America benefited from a 53rd week in the fourth quarter.

Organic growth outside North America, representing 55% of On-site revenue, was +4.5%.

Brexit:

In June 2016, the United Kingdom voted to leave the European Union. Sodexo has been present in the United Kingdom since 
1988 and has around 35,000 employees there today. The Group’s business should not be materially impacted by the United 
Kingdom leaving the European Union. The Group is a local player, working with local suppliers and employees, and very oft  en 
for Government authorities and Government services. Of course, growth in activity will remain dependent upon growth in GDP 
and employment in the country.

3

Business & Administrations

REVENUES

REVENUES BY REGION
(in millions of euro)

North America

Europe

Africa, Asia, Australia, Latam, Middle East

FISCAL 2018

FISCAL 2017

ORGANIC GROWTH

ORGANIC GROWTH 
EXCLUDING 
53RD WEEK

2,822

5,313

2,804

2,515

5,235

2,801

+0.5%

+1.5%

+1.7%

+1.5%

+11.2%

+11.2%

BUSINESS & ADMINISTRATIONS

10,938

10,551

+3.8%

+4.1%

Fiscal 2018 Business & Administrations revenues totaled 
10.9  billion  euro,  representing  organic  growth  of  +4.1% 
excluding the impact of the 53rd week in North America.

In  North  America,  organic  growth  was +1.7%  excluding 
the 53rd week impact, reflecting progress in Airline lounges 
and Corporate Services with further development of facilities 
management services. Energy & Resources remains challenging 
due to a signiﬁ cant site closure. Government & Agencies was ﬂ at 
due to generally weak demand in some contracts, mess closures 
in the Marine Corps and a lot of work being done on successfully 
retaining some big contracts.

In Europe, sales were up +1.5% organically. Summer tourism in 
Paris returned to the record levels not seen since 2015. Corporate 

services  were  stable  impacted  by  several  large  losses  in  the 
Benelux region compensated by improved performance in France 
and the UK and strong growth in southern and eastern Europe. 
Government & Agencies has been impacted by the progressive exit 
of three army contracts with the British Army. Energy & Resources 
performance in the North Sea remains negative for the year, but 
there were signs of stabilization in the second half.

In  Africa,  Asia,  Australia,  Latin  America,  Middle  East 
organic  revenue  growth  remains  strong  at  +11.2%  for  the 
year, reﬂ ecting double digit growth in most segments due to 
strong new business and same site sales in Corporate services 
and favorable momentum in Energy & Resources, particularly 
in mining.

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Health Care & Seniors

REVENUES

REVENUES BY REGION
(in millions of euro)

North America

Europe

Africa, Asia, Australia, Latam, Middle East

HEALTH CARE & SENIORS

(1) Restated for internal transfers between segments.

FISCAL 2018

FISCAL 2017

ORGANIC GROWTH

ORGANIC GROWTH 
EXCLUDING 
53RD WEEK

3,001

1,493

274

4,768

3,303

1,465

-1.8%

+0.6%

-0.5%

+0.6%

239

+17.2%(1)

+17.2%(1)

5,007

+0.2%

+1.0%

Health Care and Seniors revenues amounted to 4.8 billion 
euro, up +1.0% organically excluding the impact of the 53rd week.

In North America, organic growth was -0.5%, excluding the 
impact of the 53rd week, impacted by slow new business and 
weak retention throughout this year. The second half activity 
was better than the ﬁ rst due to an easier comparable base. The 
sales teams have now been signiﬁ cantly reorganized and there 
were a series of signatures during the summer.

In Europe, organic growth was +0.6%. While net new business 
was slightly negative in the year, due to a lack of significant 

development  opportunities,  same  site  sales  were  solid, 
particularly in the UK. There was an improved trend in Seniors in 
France and hospitals in Belgium and the Nordics.

In  Africa,  Asia,  Australia,  Latin  America,  Middle  East 
organic  revenue  growth  has  remained  strong  all  year,  at 
+17.2%1 reﬂ ecting many new contract startups in Brazil and 
particularly strong same site sales growth in Asia. Many of 
these contracts have involved transferring expertise from other 
sites around the world or extending services into new facilities 
management off ers.

Education

REVENUES

REVENUES BY REGION
(in millions of euro)

North America

Europe

Africa, Asia, Australia, Latam, Middle East

FISCAL 2018

FISCAL 2017

ORGANIC GROWTH

ORGANIC GROWTH 
EXCLUDING 53RD 
WEEK

2,884

3,275

885

86

891

73

-4.5%

+3.0%

-3.9%

+3.0%

+14.7%(1)

+14.7%(1)

EDUCATION

3,855

4,239

-3.0%

-2.5%

(1) Restated for internal transfers between segments.

Revenues  in Education  were  3.9  billion  euro,  down  -2.5% 
organically, excluding the 53rd week impact.

North  America  was  down -3.9%,  excluding  the  53 rd  week 
contribution. While Schools generated solid growth due to new 
business and strong same site sales growth, this was off set by 
the negative net new business contribution from Universities, 
impacted by particularly weak retention during the previous 
year selling season, and much lower same site sales growth. 
Fiscal 2018 retention has improved so that net new business 
going into Fiscal 2019 is neutral.

In Europe, organic growth was +3%. This was driven by solid 
prior year contract wins, same site sales growth in the UK and 
Spain, and two additional days in Italy. France was ﬂ at due to 
weak prior year development.

In Africa, Asia, Australia, Latin America, and the Middle 
East, organic growth was +14.7% resulting from strong growth 
in new Schools contracts and same site sales in China, Singapore 
and India.

Beneﬁ ts and Rewards Services

Benefits  and  Rewards  Services  revenue  amounted  to 
850 million euro, down -6.1%. The currency effect of -7.9% 
resulted in particular from the weakness of the Brazilian real 
in the second half. The scope change of -3.4% also weighed on 
revenues, principally due to the sale of Vivabox at the end of 
Fiscal 2017. Organic growth in revenues was +5.1%, on issue 
volume growth of +6.8%.

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 REVENUES

REVENUES BY REGION
(in millions of euro)

Europe, USA and Asia

Latin America

Benefits and Rewards Services

ISSUE VOLUME

ISSUE VOLUME BY REGION
(in millions of euro)

FISCAL 2018

FISCAL 2017

ORGANIC 
GROWTH

EXTERNAL 
GROWTH

CURRENCY 
EFFECT

TOTAL GROWTH

473

377

850

480

425

905

+7.5%

+2.4%

+5.1%

-3.4%

-7.9%

-6.1%

FISCAL 2018

FISCAL 2017

ORGANIC 
GROWTH

EXTERNAL 
GROWTH

CURRENCY 
EFFECT

TOTAL GROWTH

Europe, USA and Asia

10,537

10,000

+6.7%

Latin America

7,230

7,792

+7.0%

BENEFITS AND REWARDS SERVICES

17,767

17,792

+6.8%

+0.2%

-7.1%

-0.1%

In Europe, Asia and the USA, organic growth in revenues and 
issue volume has been strong throughout the year at +7.5% and 
+6.7% respectively. This strong performance reﬂ ects solid face 
value increases in most countries, and more speciﬁ cally double 
digit organic growth in Central Europe. The signiﬁ cant digital 
migration in India has been managed successfully, and growth 
bounced back in the last quarter of the year. Good momentum 
in the Incentive and Recognition activity in the USA and the UK 
(revenues without issue volume) continued. The launch of Rydoo, 
the new end-to-end Travel and Expense management system, 
was completed in June and the business development since is in 
line with expectations.

Organic revenue growth in Latin America was +2.4% for the 
full year, reﬂ ecting an improvement in the trend in the second 
half as recovery started to come through in Brazil even though 
interest rates have remained much lower than last year. Issue 
volume growth also improved in the second half, ending the year 
up +7.0% helped by increases in face value and the number of 
beneﬁ ciaries. From the third quarter, inﬂ ation and interest rates 
in Brazil have been progressively stabilizing and the comparable 
base has become easier.

3.1.2.4  Underlying operating proﬁ t

Fiscal  2018  Underlying  operating  profit  amounted  to 
1,128  million  euro,  down  -15.8%,  or  -8.6%  excluding  the 
currency eff ect. As a result, the Underlying operating margin 

was  5.5%,  down  -100  basis  points  relative  to  the  previous 
year. Excluding the currency impact, principally linked to the 
weakness of the Brazilian real against the euro, the margin was 
5.7%, down -80 basis points, in line with the revised guidance 
provided on March 29, 2018.

The  80  basis  points  decline  in  Underlying  operating  profit 
margin excluding currencies is explained by:

•  the expected decline in margins of Beneﬁ ts and Rewards due 
to lower interest rates in Brazil, higher costs linked to digital 
migration in several large countries at the same time and 
investments in the mobility activities. The recovery in Brazil 
in the second half mitigated the annual decline;

•  generally, in On-site Services, there was an improvement in 
the margin in the second half versus ﬁ rst half, as a result of 
the many action plans put in place. However, the second half 
comparative base was high;

•  the slower than expected ramp-up of proﬁ tability in a small 
number of large On-site contracts even though negotiations 
with certain clients have been resolved which has led to some 
improvement in the second half;

•  a  shortfall  in  Education  and  Health  Care,  particularly  in 
North America, due to the delays in the execution of planned 
efficiency  programs  which  were  aimed  at  compensating 
anticipated weak revenues ;

•  corporate  expenses  were  also  up  due  to  investments  in 

marketing, digital and innovation.

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UNDERLYING OPERATING PROFIT BY ACTIVITY

(in millions of euro)

Business & Administrations

Health Care & Seniors

Education

On-site Services

Benefits and Rewards Services

Corporate expenses & Intragroup 
eliminations

UNDERLYING 
OPERATING 
PROFIT 
FISCAL 2018

DIFFERENCE 
VS FISCAL 2017

DIFFERENCE 
VS FISCAL 2017 
(EXCLUDING 
CURRENCY 
EFFECT)

UNDERLYING 
OPERATING 
PROFIT MARGIN 
FISCAL 2018

DIFFERENCE IN 
UNDERLYING 
OPERATING 
MARGIN 
VS FISCAL 2017

DIFFERENCE IN 
UNDERLYING OPERATING 
MARGIN VS FISCAL 2017 
(EXCLUDING 
CURRENCY EFFECT)

458

306

222

986

262

-11.5%

-9.5%

-6.2%

-3.1%

-21.5%

-15.6%

4.2%

6.4%

5.8%

-70 bps

-30 bps

-90 bps

-70 bps

-30 bps

-90 bps

-13.4%

-7.6%

5.0%

-70 bps

-70 bps

-14.3%

-3.7%

30.8%

-290 bps

-180 bps

(120)

-15.9%

-16.7%

UNDERLYING OPERATING PROFIT

1,128

-15.8%

-8.6%

5.5%

-100 BPS

-80 BPS

 The performance by segment, excluding the currency eff ect, is 
as follows:

•  Business & Administrations Underlying operating proﬁ t 
decreased by -6.2% and the operating margin decreased by 
-70 basis points. This performance reﬂ ects execution issues 
in some of our larger accounts, as well as investments in 
sales, marketing and new off ers;

• 

• 

in Health Care & Seniors the decline in Underlying operating 
profit  and  margin  was  respectively  -3.1%  and  -30  basis 
points. This reﬂ ects the weakness in the top line particularly 
in North America and delays in the delivery of effi  ciencies 
from the productivity programs. Productivity is improving 
now and should accelerate into Fiscal 2019. In the fourth 
quarter, the new management and sales structures have been 
put in place which should boost execution and sales in North 
America;

in Education, underlying operating profit fell by -15.6% 
and the margin by -90 basis points due to the impact of 
low retention, particularly in North America. While the labor 
scheduling and SKU management programs are starting to 
come through in the second half, inﬂ ation in labor costs has 
offset this productivity. Pricing negotiations confirm that 
labor inﬂ ation has been passed through for Fiscal 2019.

In Benefits and Rewards Services, the Underlying operating 
profit  and  margin  were  down  respectively  -3.7%  and  -180 
basis  points  excluding  currency  impacts.  The  first  half  was 
down -320 basis points due to the costs of digital migration, 
particularly in India and the Czech Republic, lower interest rates 
in Brazil and investments in the Mobility & Expense activities. 
However, the second half was better, down only -60 basis points, 
beneﬁ ting from the strong recovery in volumes and progressive 
stabilization of the interest rate impact in Brazil.

3.1.2.5  Group net proﬁ t

Other operating income and expense

Other operating income and expenses were 131 million euro 
versus 151 million euro in the previous year. Restructuring costs 
fell very signiﬁ cantly to 42 million euro from 137 million euro 
in the previous year linked to the Adaptation and Simpliﬁ cation 
program.  However,  acquisition  costs  and  amortization  and 
depreciation of client relationships, linked principally to the 
Centerplate acquisition, and brands, were up and there were 
some provisions resulting from scope changes in the Middle 
East.

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(in millions of euro)

TOTAL OTHER OPERATING INCOME

Gains related to perimeter changes

Gains on changes of post-employment benefits

Other

TOTAL OTHER OPERATING EXPENSES

Restructuring and rationalization costs

Acquisition-related costs

Losses related to perimeter changes

Losses on changes of post-employment benefits

Amortization and impairment of client relationships and trademarks

Impairment of non-current assets

Other

C O N S O L I D A T E D   I N F O R M A T I O N

F i s c a l   2 0 1 8   A c t i v i t y   R e p o r t

FISCAL 2018

FISCAL 2017

10

3

-

7

(141)

(42)

(15)

(18)

-

(52)

-

(14)

24

21

3

-

(176)

(137)

(6)

-

(2)

(31)

-

-

OTHER OPERATING INCOME AND EXPENSES

(131)

(151)

As a result, the Operating Profit was 997 million euro down 
from 1,189 million euro.

Net financial expenses fell by 15 million euro essentially due 
to two factors: an early redemption indemnity of 10 million euro 
last year and interest on the dividend tax reimbursement this 
year of 7 million euro. Otherwise, despite the signiﬁ cant increase 
in debt during the year, due to, in particular, the acquisition of 
Centerplate in January 2018, the cost of debt was stable with 
a blended cost of debt at 2.5% as at August 31, 2018 versus 
2.4% a year earlier.  During the year, the Group issued a bond of 
300 million euro in May at 1.125% and a U.S. private placement 
of 400 million dollars in June at 3.7%.

The  effective  tax  rate  fell  to  27.1%  in  Fiscal  Year  2018, 
compared to 31.7% in Fiscal Year 2017. The rate beneﬁ ts from 
a positive one-off  in France from the reimbursement of the 3% 
contribution on distributed dividends over the period 2013-
2017. The reduction in the income tax rate in the USA (from 
35% to a blended 25.7%) is partly off set by the realignment of 
deferred taxes and the deemed repatriation tax. The tax rate for 
Fiscal Year 2019 is expected to be around 29% as the Group will 
beneﬁ t fully from the tax rate reduction in the USA.

The share of profit of other companies consolidated by the 
equity method was 2 million euro. Profit attributed to non-
controlling interests was 13 million euro against 22 million euro 
in the previous year due principally to the disposal of subsidiaries.

As a result, Group net profit was 651 million euro, down -9.9%, 
or -4.0% excluding the negative currency  impact. Underlying 
net  profit  amounted  to  706  million  euro,  down  -14.0%  at 
current rates or -8.6% excluding the currency eff ect, adjusted for 
Other operating income and expenses at a normalized tax rate.

3

3.1.2.6  Earnings per share

Underlying Earnings per share amounted to 4.77 euro, down 
-13.6%.

Published EPS was 4.40 euro, down -9.4%. The 50-basis point 
accretion relative to the change in net proﬁ t is due to the eff ect 
of the 300-million-euro share buy-back during the year resulting 
in a lower weighted average number of shares of 148,077,776 
relative to 148,998,961 shares for Fiscal 2017.

3.1.2.7  Proposed dividend

At the Annual Shareholder’s Meeting to be held on January 22, 
2019, the Board of Directors will recommend a dividend of 2.75 
euro per share for Fiscal 2018, stable relative to the prior year. 
This proposal reflects the Board’s confidence in the Group’s 
strategy. As a result, the pay-out ratio will be 58% on Underlying 
net proﬁ t and 63% on published net proﬁ t.

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3.1.3  Consolidated financial position

3.1.3.1  Cash ﬂ ows

Cash ﬂ ows for the period were as follows:

(in millions of euro)

Operating cash flow

Change in working capital excluding change in BRS financial assets*

Net capital expenditure

FREE CASH FLOW

Net acquisitions

Share buy-backs

Dividends paid to shareholders

Other changes (including scope and exchange rates)

(INCREASE)/DECREASE IN NET DEBT

FISCAL 2018

FISCAL 2017

1,140

221

(286)

1,076

(697)

(300)

(411)

(316)

(648)

1,076

120

(308)

887

(268)

(300)

(359)

(164)

(204)

*  Excluding change in financial assets related to the Benefits and Rewards Services activity (-228 million euro in Fiscal 2018 and-134 million euro in Fiscal 2017). Total 
change in working capital as reported in consolidated accounts: in Fiscal 2018: -7 million euro = 221 million euro-228 million euro and in Fiscal 2017 -14 million euro 
= 120 million euro -134 million euro.

 Operating cash ﬂ ow totaled 1,140 million euro up +5.9%, due 
to much lower cash taxes, and to a lesser extent, the reduction 
in  net  interest  paid.  The  positive  inflow  of  Working  capital 
of  221  million  euro  was  due  to  improved  operational  cash 
management throughout the Group.

Net capital expenditure, including client investments amounted 
to 286 million euro, representing 1.4% of revenues compared 
to 1.5% last year. This reﬂ ects the poor retention in Education 
in the previous year as Education, with Sports & Leisure, is the 
most  capital-intensive  segment.  As  previously  announced, 
this rate is expected to increase over the next few years, as 
investments in IT and digital increase by 30 to 50 million euro 
annually, Education retention and development improve and 
Centerplate ramps-up its new business wins.

Free cash flow reached 1,076 million euro. This represented 
a substantial improvement on Fiscal 2017 free cash flow, at 
887 million euro. As a result, cash conversion reached 165% 
compared to 123% in Fiscal 2017.

Net  acquisitions  and  disposals  of  subsidiaries  increased 
significantly  to  697  million  euro  from  268  million  euro  in 
the previous year, reflecting, in particular, the acquisition of 
Centerplate for a total of 610 million euro. After taking into 
account share buy-backs of 300 million euro, dividend payments 
of 411 million euro, and Other changes, principally linked to 
currency impacts and perimeter changes, consolidated net debt 
rose during the year by 648 million euro to 1,260 million euro 
at August 31, 2018.

3.1.3.2  Acquisitions for the period

During Fiscal 2018, Sodexo substantially increased the size of 
its acquisition spend.

The Group made a strategic move with Centerplate in the USA, 
providing the Group with the size and credibility in Sports & 
Leisure in North America to complement its strong positions 
in Europe. The size of the stadiums and conference centers are 
much bigger in the USA than in Europe.

During the year, the Group’s offer was also enriched with the 
acquisition of the digital food company, FoodChéri in France. 
Beneﬁ ts and Rewards has also strengthened its off er in the area 
of health and sports services with the acquisition of Gym for 
Less in Spain.

Technical  expertise  was  extended  in  Singapore  with  the 
acquisition of Kim Yew.

The Group has consolidated its positions in the mining market in 
Australia with the acquisition of Morris.

3.1.3.3  2018 Share buy-back 

program

On April 12, 2018, Sodexo announced a 300-million-euro share 
buy-back program reﬂ ecting the Board’s conﬁ dence in the future 
of the Group despite the disappointing first half figures and 
revised guidance. The share  buy-back program was completed 
on August 13, 2018 with the purchase of 3,356,732 shares, 
representing  2.2%  of  the  capital,  at  an  average  price  of 
88.92 euro. A total of 3,375,562 shares were cancelled in the 
August Board meeting. As a result, at August 31, 2018, the total 
number of shares was 147,454,887 down from 150,830,449 as 
at year end Fiscal 2017.

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3.1.3.4  Condensed consolidated statement of ﬁ nancial position at August 31, 2018

(in millions of euro)

AUGUST 31, 2018

AUGUST 31, 2017

(in millions of euro)

AUGUST 31, 2018

AUGUST 31, 2017

Non-current assets

Current assets excluding cash

Restricted cash Benefits 
and Rewards

Financial assets Benefits 
and Rewards

7,944

4,628

615

427

7,416

Shareholders’ equity

3,283

3,536

4,531

Non-controlling interests

45

34

511

Non-current liabilities

4,330

3,885

398

Current liabilities

7,622

7,419

Cash

1,666

2,018

TOTAL ASSETS

15,280

14,874

TOTAL LIABILITIES 
AND SHAREHOLDERS’ EQUITY

15,280

14,874

3

Gross debt

Net debt

Gearing

Net debt ratio

3,940

1,260

38%

1.0

3,500

611

17%

0.4

3.1.3.5  Subsequent events

Since the beginning of Fiscal 2019, two further acquisitions have 
been closed:

•  Crèches de France: consolidating the Group’s position in the 
child-care market in France with the acquisition of Crèches de 
France at the beginning of September;

•  Novae  Restauration,  to  strengthen  Sodexo’s  footprint  in 
Switzerland. Novae Restauration is a major player in the 
high-end catering services for French-speaking Switzerland, 
with 700 employees serving a network of over 80 prestigious 
client sites. Novae Restauration and Sodexo Switzerland 
have  complementary  client  portfolios  and  offers:  Novae 
Restauration’s comprehensive offer of premium catering 
services  complements  Sodexo’s  position  as  a  facilities 
management provider on the German Swiss market. There 
is strong potential for synergies in terms of cross-selling and 
cross geographic development.

As  of  August  31,  2018,  net  debt  was  1,260  million  euro, 
representing  a  gearing  of  38%,  compared  to  17%  as  of 
August  31,  2017,  and  a  net  debt  ratio  of  1.0,  back  into  the 
Group’s target range of 1 to 2.

The Group’s financial position remains strong with cash flow 
covering investments, acquisitions and the dividend and despite 
a particularly signiﬁ cant acquisition spend in the year. Gearing 
and net debt ratio have increased due to the share buy-back. 
 During  Fiscal  2018,  the  Group  issued  a  7-year  bond  for  an 
amount of 300 million euro out to May 2025 with a coupon of 
1.125% and a 5-year U.S. dollar placement of 400 million dollars 
at 3.7% which has extended the average maturity to 5.6 years. 
 The blended cost of debt as of August 31, 2018 was 2.5% stable 
against 2.4% in the previous year.

At the end of Fiscal 2018, the Group had an operating cash 
position  of  2,680  million  euro  and  unused  lines  of  credit 
totaling 1,589 million euro. As a reminder, the cash position 
includes 1,987 million euro for Beneﬁ ts and Rewards Services 
(including restricted cash for 615 million euro, ﬁ nancial assets 
for 427 million euro and 28 million euro of bank overdraft  s).

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3.1.3.6  Outlook

During the Capital Markets Day on September 6, 2018, Denis 
Machuel, Group CEO, presented his strategic agenda to return 
the Group to market-leading growth.

In the series of presentations, Sodexo’s managers highlighted:

•  Sodexo’s  strong  positions  in  significant  and  growing 

addressable markets;

•  how the Group has successfully diversiﬁ ed from a pure food 

off ering to an integrated services provider;

•  how Sodexo is reasserting its excellence in food services at 
the heart of its Quality of Life integrated services proposition;

•  how the action plans that are being rolled out are:

•  addressing  the  specific  areas  of  underperformance, 

particularly in North America,

•  simplifying  the  organization  to  gain  in  focus  and 

eff ectiveness,

•  strengthening the performance culture, by focusing the 
teams on operational KPIs, through the STEP(1) framework;

•  how the whole organization is refocused on accelerating 
growth through Sodexo’s strategic agenda by Reinforcing 
client  and  consumer  centricity;  Enhancing  operational 
efficiency;  Nurturing  talent  and  Anchoring  corporate 
responsibility.

FOCUS ON GROWTH:

More  specifically  for  Fiscal  2019,  the  management  team  is 
rolling out the action plans to ensure that enhanced productivity 
will  free  up  the  capacity  to  invest  in  sales,  marketing, 
Information Systems & Technology, and digital to accelerate 
revenue growth.

In  On-site  Services  in  North  America,  the  Education  selling 
season in Fiscal 2018 resulted in improved retention and stable 
new development. As a result, Fiscal 2019 growth in Education 
should be neutral. There are signs that Health Care signatures 
are also picking up progressively.

The Africa, Asia, Australia, Latin America and Middle East region 
now accounts for 16% of total sales, and should continue to 
generate solid growth.

In Europe, while the UK public sector remains highly competitive, 
and Northern Europe is suff ering from large contract losses and 
low development, the Energy & Resources activities in the North 
Sea are stabilizing, France is continuing to progress regularly 
and Southern and Eastern Europe should continue to generate 
good growth in all segments.

Benefits  and  Rewards  is  expected  to  generate  growth  of 
between 5 and 10% due to the progressive recovery in Brazil, 
the return to growth in India and steady progress in Europe in 
both the traditional beneﬁ ts business as well as the Incentive & 
Recognition and mobility activities.

Progress in productivity and simpliﬁ cation will be reinjected into 
the organization to support sales growth, with more innovation, 
new off ers, digital apps and reinvigorated sales and marketing 
eff orts, aimed at retaining existing clients, boosting new sales 
and being more competitive.

Therefore, for Fiscal 2019, the Group expects to deliver:

•  organic growth of between +2 and +3%;

•  an Underlying operating margin between 5.5% and 5.7%, 

excluding currency eff ects.

The  strategic  agenda  is  aimed  at  delivering  market  leading 
growth. The first steps to return to this performance are to 
achieve organic growth of more than 3% from Fiscal 2020 and 
then improve margins back up over 6% sustainably (at Fiscal 
2017  exchange  rates). As  explained  during  the  Capital 
Markets  Day, margin  improvement  will  come  with  the 
right levels of growth.

1  STEP = Sodexo Targets for Enhanced Performance.

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3.1.3.7  Alternative Performance Measure deﬁ nitions

C O N S O L I D A T E D   I N F O R M A T I O N

F i s c a l   2 0 1 8   A c t i v i t y   R e p o r t

Financial ratios

Gearing ratio

Net debt ratio

Debt coverage

Financial independence

Return on equity

Return on capital employed 
(ROCE)

Interest cover

Borrowings ( 1) – operating cash ( 2)

FISCAL 2018

FISCAL 2017

Shareholders’ equity and non-controlling interests

37.9%

17.1%

Borrowings ( 1)  – operating cash ( 2)

Earnings before Interest, Taxes, Depreciation and Amortization ( EBITDA) ( 3)

1.0

0.4

Borrowings

Operating cash flow

3.5 years

3.3.years

Non-current borrowings

Shareholders’ equity and non-controlling interests

106.3%

84.3%

Profit attributable to equity holders of the parent

Equity attributable to equity holders of the parent ( before profit 
for the period)

24.7%

25.7%

Operating profit after tax ( 4)

Capital employed ( 5)

16.4%

20.6%

3

Operating profit

Net borrowing cost

Financial ratios have been computed based on the following key indicators:

12.6

15.0

FISCAL 2018

FISCAL 2017

Non-current borrowings

3,537

3,012

(1) Borrowings

+ current borrowings excluding overdrafts

- derivative financial instruments recognized as assets

(2) Operating cash

- bank overdrafts

+ financial assets related to the Benefits and Rewards Services activity

Cash and cash equivalents

(3)  Earnings before Interest, 
Taxes, Depreciation and 
Amortization (EBITDA)

(4) Operating profit after tax

Operating profit

+ depreciation and amortization

Operating profit

Effective tax rate

Property, plant and equipment

421

(18)

3,940

1,666

1,042

(28)

2,680

997

317

1,314

997

499

(11)

3,500

2,018

909

(38)

2,889

1,189

281

1,470

1,189

27.1%

31.7%

727

619

812

590

+ goodwill

5,664

5,308

(5) Capital employed

+ other intangible assets

+ client investments

+ working capital excluding restricted cash and financial assets of the 
Benefits and Rewards Services activity

704

558

511

547

(3,104)

(3,009)

4,441

3,947

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 Blended cost of debt

The  blended  cost  of  debt  is  calculated  at  period  end  and  is 
the weighted blended ﬁ nancing rate on borrowings (including 
derivative ﬁ nancial instruments and commercial papers) and 
cash pooling balances at period end.

Free cash ﬂ ow

Please refer to section Consolidated ﬁ nancial position.

Growth excluding currency eff ect

Change excluding currency eff ect calculated converting Fiscal 
2018 figures at Fiscal 2017 rates, except for countries with 
hyperinﬂ ationary economies. As a result, for Venezuelan Bolivar, 
Fiscal 2018 and Fiscal 2017 ﬁ gures in VEF have been converted 
at the exchange rate of USD 1 = VEF 6,112,000 vs. VEF 3,250 
respectively.

Issue volume

Issue  volume  corresponds  to  the  total  face  value  of  service 
vouchers, cards and digitally-delivered services issued by the 
Group (Beneﬁ ts and Rewards Services activity) for beneﬁ ciaries 
on behalf of clients.

Net debt

Group borrowing at the balance sheet date, less operating cash.

Operating margin

• 

• 

• 

for businesses divested (or loss of control) during the prior 
ﬁ scal year, revenue generated in the comparative period of 
the prior ﬁ scal year until the divestment date is excluded;

for businesses divested (or loss of control) during the current 
fiscal year, revenue generated in the period commencing 
12 months before the divestment date up to the end of the 
comparative period of the prior ﬁ scal year is excluded;

for countries with hyperinflationary economies all figures 
are converted at the latest closing rate for both periods. 
As a result, for the calculation of organic growth, Beneﬁ ts 
and  Rewards  figures  for  Fiscal  2018  and  Fiscal  2017  in 
Venezuelan Bolivar, have been converted at the exchange rate 
of USD 1 = 6,112,000 (vs. VEF 3,250 for Fiscal 2017).

Underlying Net proﬁ t

Underlying Net proﬁ t presents a net income excluding signiﬁ cant 
unusual and/or infrequent elements. Therefore, it corresponds to 
the Net Income Group share excluding Other Income and Expense 
and significant non-recurring elements in both Net Financial 
Expense and Income Tax Expense.

In Fiscal 2018, the Underlying net proﬁ t excludes the following 
items and the related tax impact where applicable from Net 
Income Group share:

•  other  Income  and  Expense  for  -131  million-euro,  net  of 

normalized tax rate of 30.2%;

• 

interest received in France on tax reimbursement for 7 million 
euro;

•  reimbursement  of  the  3%  tax  on  dividends  received  for 

Operating proﬁ t divided by Revenues.

43 million euro;

Organic growth

Organic growth corresponds to the increase in revenue for a 
given period (the “current period”) compared to the revenue 
reported for the same period of the prior ﬁ scal year, calculated 
using the exchange rate for the prior ﬁ scal year; and excluding 
the impact of business acquisitions (or gain of control) and 
divestments, as follows:

for businesses acquired (or gain of control) during the current 
period,  revenue  generated  since  the  acquisition  date  is 
excluded from the organic growth calculation;

• 

• 

•  one-off  impacts  resulting  from  changes  in  the  U.S.  tax 

regulation, for -13 million euro.

Underlying Net proﬁ t per share

Underlying Net profit per share presents the Underlying net 
proﬁ t divided by the average number of shares.

Underlying operating proﬁ t margin

Underlying operating proﬁ t divided by revenues.

Underlying operating proﬁ t margin at constant rate

for businesses acquired (or gain of control) during the prior 
ﬁ scal year, revenue generated during the current period up 
until the ﬁ rst anniversary date of the acquisition is excluded;

Underlying operating profit divided by revenues, calculated 
by converting Fiscal 2018 ﬁ gures at FY 2017 rates, except for 
countries with hyperinﬂ ationary economies.

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E x t r a - f i n a n c i a l   r e p o r t i n g

3.2  EXTRA-FINANCIAL REPORTING 

3.2.1  460,000 employees serving clients

3.2.1.1  Workforce by segment and activity

Business & Administrations (cid:2)

Health Care and Seniors (cid:2)

Education (cid:2)

TOTAL ON-SITE SERVICES (cid:2)

BENEFITS AND REWARDS SERVICES (cid:2)

GROUP HEADQUARTERS AND SHARED STRUCTURES (cid:2)

TOTAL (cid:2)

FISCAL 2018

CHANGE

FISCAL 2018

FISCAL 2017

276,572

29,867

82,384

86,717

3,542

18

445,673

33,427

4,380

10,610

(102)

70

460,663

33,395

60.0%

17.9%

18.8%

96.7%

1.0%

2.3%

100%

57.7%

18.5%

20.3%

96.5%

1.0%

2.5%

100%

In Business and Administrations, the workforce growth is mainly 
driven by the acquisition of Centerplate (27,696 employees) and 
the development in Asia and Latin America.

In Education the headcount remains ﬂ at. Losses in Universities 
in the USA are off set by opening of sites in Schools in the USA 
and Spain.

3

In Healthcare, the increase in workforce is mainly due to the 
opening of sites in Brazil and Chile.

3.2.1.2  Workforce by region

North America

Europe

Africa, Asia, Australia, Latin America, Middle East

TOTAL

All analysis on workforce is excluding Centerplate ( 27,696 employees as of August 31, 2018).

3.2.1.3  Workforce by category

FISCAL 2018

FISCAL 2017

34.1%

29.9%

36.0%

100.0%

31.3%

32.0%

36.8%

100%

Board (cid:2)

Executive Committee (cid:2)

Group Senior Executives  (cid:2)(1)

Managers (cid:2)

Employees (cid:2)

FISCAL 2018

FISCAL 2017

TOTAL

% FEMALE

TOTAL

% FEMALE

13

19

203

49,743

432,967

54%

37%

34%

43%

55%

14

14

190

49,909

427,268

50%

25%

33%

43%

54%

 (1) Group Senior Executive includes the key functions reporting directly to a Global Executive Committee members, higher level sales and operations and high potentials 

95.3% of Sodexo employees work in the  ﬁ eld, on site.

(cid:2) Indicator verified to the level of “reasonable” assurance by KPMG. 

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3.2.1.4  Workforce per age

Under 30 years

30-40 years

40-50 years

50-60 years

Over 60 years

TOTAL

(in number of years)

Managers

Employees

AVERAGE SENIORITY

FISCAL 2018

FISCAL 2017

EMPLOYEES

MANAGERS

EMPLOYEES

MANAGERS

27.4%

23.6%

22.3%

19.4%

7.3%

100%

11.9%

30.7%

29.5%

21.9%

6.0%

100%

28.0%

23.3%

22.6%

19.1%

6.9%

100%

12.4%

30.4%

29.8%

21.9%

5.6%

100%

FISCAL 2018

FISCAL 2017

8.3

4.8

4.8

8.3

4.6

4.6

FISCAL 2018

FISCAL 2017

CHANGE

161,365

151,741

9,624

6,117

8,109

(1,992)

167,482

159,850

7,632

3.2.1.5  New hires excluding acquisitions & transfers

Employees

Managers

Hires have increased in Fiscal 2018, mainly driven by Business and Administrations in countries that are growing strongly such as 
India, China and Brazil.

In some countries hires have slightly reduced in correlation with the decrease in the number of departures.

3.2.1.6  Departures by reason on continuous contract (excluding site loss)

Resignations (less than 3 months)

Resignations (after 3 months)

TOTAL RESIGNATIONS

Dismissals or Redundancy

Retirement and other reasons

FISCAL 2018

FISCAL 2017

CHANGE

33,353

81,770

n.a.

n.a.

n.a.

n.a.

115,123

110,291(1)

4,832

33,972

34,154

4,093

4,573

(182)

(480)

TOTAL NUMBER OF DEPARTURES

153,188

149,018

4,170

(1) Split of resignations is not available for Fiscal 2017.

3.2.1.7  Retention

Retention Rate for Total Workforce (cid:2)

Retention Rate for Site Management (cid:2)

80,9%

86,6%

The retention rate is calculated on the basis of resignations aft  er more than 3 months of service and is therefore not comparable with 
last year’s published ﬁ gures.

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E x t r a - f i n a n c i a l   r e p o r t i n g

RETENTION RATE FOR SITE MANAGERS

COUNTRIES

> 90%

80%-90%

< 80%

France, Italy, Spain, Germany, Belgium, Netherlands, Brazil, Chile, Argentina, Finland, Sweden

USA, Canada, UK, China, Colombia

India, Russia

3.2.2  Engaged employees

The employee engagement rate – expressing both satisfaction 
and involvement – is a key performance indicator for Sodexo, 
which seeks to become one of the most admired companies by 
its employees in the world.

In  April  2018,  Sodexo  conducted  its  seventh  international 
engagement survey with all employees of at least six months 
seniority, or 386,262 employees in 55  countries. The survey, 
conducted online, attracted a high participation rate of 62% 
(versus  57%  in  2016).  For  the  fifth  consecutive  time,  the 

employee engagement rate increased. In 2018, it reaches 69% 
(1 point increase compared to the last survey), well above the 
64% benchmark rate (1).

Local survey results are then shared with teams to develop 
tangible  action  plans.  These  plans  are  used  to  improve 
performance on issues such as absenteeism, health and safety 
and employee retention , so as to continue to enhance QoL for 
employees, to in turn enhance quality of life for consumers and 
productivity for clients.

JUNE 2018

JUNE 2016

CHANGE

Number of respondents

Engagement Rate (cid:2)

 % of employees rating Sodexo as the best employer in its sector

% of employees believing that Sodexo values diversity (such as age, gender, 
culture and origin, religion, sexual orientation and providing opportunities for 
individuals with disabilities) in the workplace

 % of employees considering Sodexo to be a socially and environmentally 
responsible company

69%

84%

82%

80%

80%

+2 pts

80%

-

239,520

208,775

3

+15%

+1 pt

-4 pts

68%

88%

3.2.3  Investment in employee skills development

3.2.3.1  Training employees to respond to client needs

Sodexo is convinced that the satisfaction of its clients and consumers depends largely on the skills and talents of its employees.

The Training and Development Department off ers Sodexo employees a wide range of professional and learning programs.

FISCAL 2018

FISCAL 2017

CHANGE

Total number of training hours

6,232,374

5,802,417

Average number of hours of training per employee

% of client sites providing training on sustainable practices

14.6

49.2%

13.6

+7.4%

+7.2%

49.4%

-0.2 pt 

The number of hours of training increased in FY18 mainly due 
to the deployment of the Sodexo Ambassador program and an 
increasing focus on regulatory training. Sodexo Ambassador 

program ensures that our 460,000 employees have a consistent 
understanding of what Sodexo stands for and how we all improve 
quality of life.

1  Aon Hewitt client companies.
(cid:2) Indicator verified to the level of “reasonable” assurance by KPMG. 

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3.2.3.2 

Internal promotion at the heart of Sodexo’s model

The Company encourages employees to develop a career plan, to explore new professional horizons and take on new responsibilities. 
This is dependent upon providing multiple opportunities through continued growth, the evolution of the portfolio of activities and the 
variety of its professions.

% of off-site managers promoted internally

% of on-site managers promoted internally

% of employees promoted internally

FISCAL 2018

FISCAL 2017

6.6%

8.7%

3.5%

7.5%

8.5%

3.2%

3.2.4   Flexible organization, respectful of employees, offering good 

working conditions

Because people work better when they work in a professionally 
fulﬁ lling, stable and secure environment, Sodexo ensures that 
its employees are the ﬁ rst to beneﬁ t from its mission to improve 
Quality of Life. Sodexo is committed to improving the well-being 
of its employees.

Around  the  world,  Sodexo  promotes  work  flexibility  for  its 
employees, taking into account their lifestyle and ways of working. 
The Group facilitates a good work-life balance, improving individual 
performance. Committed and eff ective, Sodexo employees are thus 
able to deliver quality service to clients and consumers.

The Group’s organizational model ensures continuity of service 
quality, while remaining attentive to the expectations of its 
employees,  in  accordance  with  local  regulations.  Part-time 
work and use of ﬁ xed-term contracts provide the ﬂ exibility for 
business needs.

FISCAL 2018

FISCAL 2017

% Workforce working 
part-time

24.7%

25.0%

3.2.4.1  Ensuring employee safety

FISCAL 2018

FISCAL 2017

At  the  heart  of  Sodexo’s  Health,  Safety,  Food  Safety  and 
Environment  (HSE)  commitment  is  its  care  for  people,  for 
the community of employees as well as for the 100 million 
consumers it serves every day. Health and Safety is the founding 
pillar on which the Group bases its mission to improve quality 
of life.

% of Group revenues 
of countries having 
one or more 
OHSAS 18001 
or ISO 45001 
certification (cid:2)

As such, Sodexo’s Health and Safety Policy guides its actions 
in this area by deﬁ ning minimum standards for each business 
entity and is based on OHSAS 18001 .

3.2.4.2  Work absenteeism and number of accidents

85.2%

81.8%

Number of work related accidents requiring leave (cid:2)

Average number of work day absences per employee due to work-related accident or illness 
and non-work-related accident or illness

% LTIR reduction

% of Group revenues of countries employing environmental experts

FISCAL 2018

FISCAL 2017

3,872

4,094

8.3

6.5%

96.9%

7.2

16.5%

97.7%

The number of work day absences per employee has increased in Fiscal 2018. It is not comparable with prior years published ﬁ gures 
due to a signiﬁ cant improvement in reporting quality in Latin America.

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E x t r a - f i n a n c i a l   r e p o r t i n g

3.2.4.3  Collective agreement for health and safety

Sodexo develops and maintains open and constructive dialogue 
with duly recognized trade unions or other legal representatives 
of its employees on issues of mutual concern.

In  France,  more  than  10  Committees  and  a  dedicated  team 
are  working  on  the  subject.  All  of  our  managers  have  been 
incentivized on the reduction of the Lost Time Injury Rate (LTIR).

In Sodexo’s International Framework Agreement with the IUF 
(International  Union  of  Food,  agriculture,  Hotel  Restaurant 

Catering,  Tobacco  and  Allied  Worker ’s  Associations),  its 
commitments include protection of health and safety through 
prevention  and  improvement  measures  while  conforming 
with local legislation. Where appropriate, Sodexo’s collective 
agreements  may  include  provisions  regarding  health  and 
safety. For example, in the United States, Sodexo has numerous 
agreements containing health and safety provisions.

% of workforce covered by collective agreements

% of workforce working in countries that have collective agreements 
and are covered by these agreements

FISCAL 2018

FISCAL 2017

43.9%

46.1%

89.2%

88.1%

3.2.5  Running business with integrity and respect for human 

rights wherever Sodexo operates

3

Sodexo lives by its core values and its ethical principles. Every 
employee in the Group is expected to understand and to act in 
accordance with these values and principles. At the center of our 
ethical principles is our commitment to business integrity. To 
ensure integrity in all business dealings, Sodexo has adopted 
strict  principles  formulated  in  its  Statement  of  Business 
Integrity. The statement is supported by a guide describing 
concrete situations that employees might encounter.

Sodexo’s  commitments  to  Human  Rights  and  Fundamental 
Rights at Work are laid out in the Human Rights Policy and the 
Fundamental Rights at Work charter.

The Group’s Human Rights policy is based on the UN Guiding 
Principles  on  Business  and  Human  Rights,  the  Universal 
Declaration  of  Human  Rights  and  the  International  Labour 
Organization’s (ILO) Declaration on Fundamental Principles and 
Rights at Work.

Our occupational Health and Safety policy is encapsulated in 
the Group Health and Safety Policy and Environmental Policy is 
covered by Better Tomorrow 2025.

Our responsible business requirements in relation to suppliers 
and sub-contractors are set out in the Sodexo Supplier Code of 
conduct, to which suppliers and sub-contractors are required 
to commit, as a condition of doing business with Sodexo. This 
Supplier Code of conduct is supported by a Guide to help our 
suppliers to understand and act on their obligations.

To further strengthen the Group’s responsible business conduct 
and governance standards, and to review the impact of legal 
and  regulatory  developments,  a  working  group  has  been 
established. The working group brings together the heads of all 
relevant functions who will play a central role in the deﬁ nition, 
implementation and monitoring of the systems designed to 
ensure that all Group activities are robust and compliant.

% of workforce working in countries having the Sodexo Statement of Business Integrity available 
in at least one official language

% of Group revenues of countries having implemented Sodexo’s 10 People Fundamentals (cid:2) 

FISCAL 2018

FISCAL 2017

96.8%

80.5%

96.7%

N/A

% of workforce working in countries having the Group Human Rights policy available in at least 
one official language

96.9%

96.9%

(cid:2) Indicator verified to the level of “reasonable” assurance by KPMG. 

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3.2.6  Our commitments as a service provider

3.2.6.1  Provide and encourage our consumers to access 

healthy lifestyle choices

Serving 100 million consumers each day, we recognize our responsibility to understand and provide for their unique needs and to 
respond to their long-term aspirations.

It represents both an opportunity and obligation for Sodexo to promote and encourage healthier choices that improve quality of life 
for millions of people.

% of On-site Services revenues of countries having a system to ensure that 
employees with food service responsibilities are trained in compliance with local laws 
and regulations and Global Food Safety and Hygiene Policy

% of Group revenues of countries having one or more ISO 9001 certification

% of On-site Services revenues of countries having either ISO 9001 or ISO 22000 

FISCAL 2018

FISCAL 2017

CHANGE

96.0% 

94.4%

95.3%

95.5%

+0.7 pt 

-1.1 pt

certification for food safety (cid:2)

98.5%

97.4%

+1.1 pt

% of On-site Services revenues of countries providing Health and Wellness Services 
including physical wellness services

81.4%

82.6%

-1.2 pt

 % of Group revenues having a nutritional hotline, webline or other digital tool 
or application to provide nutritional advice for consumers

90.1%

72.6%

+17.5 pts

% of client sites implementing actions that proactively address Sodexo’s 10 Golden 

Rules of Nutrition, Health and Wellness (cid:2)

Number of registered dietitians employed by Sodexo

65.6%

5,306

88.8%

-23.2 pts

5,029

+277

In Fiscal 2018, the calculation method related to the 10 Golden Rules of Nutrition, Health and Wellness indicator has changed. This 
change is aimed at enhancing and expanding our actions on nutrition, health and wellbeing across our client sites. On the same basis, 
the KPI would have been down by 2 pts.

3.2.6.2  Promote local development, fair, inclusive and sustainable 

business practices

Since its founding, Sodexo has worked to contribute to the economic and social development of the communities, regions and 
countries where it operates.

We are committed to making a positive impact on quality of life for people in local communities through our business activities. This 
is why we support communities, and contribute to creating positive interactions with mutual beneﬁ ts.

FISCAL 2018

FISCAL 2017

CHANGE

% of Group revenues of countries having specific initiatives to integrate SMEs 
(Small and Medium Enterprises) into Sodexo’s Value Chain

91.8%

91.4%

+0.4 pt

Number of active agreements with local communities, clients, NGOs and 
associations to promote inclusion of SMEs in Sodexo’s Value Chain

Our business value benefiting SMEs (in billions of euro)

180

4.4

180

1.9

+2.5

% in kg of certified sustainable coffee

50.1%

43.2%

+6.9 pts

% of spend with contracted suppliers having signed the Sodexo Supplier Code 

of conduct (cid:2)

93.6%

91.7%

+1.9 pt

Our business value beneﬁ ting SMEs has signiﬁ cantly increased in Fiscal 2018. This is mainly due to an increase in Brazil Beneﬁ ts and 
Rewards and Romania Beneﬁ ts and Rewards.

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3.2.6.3  Source responsibly and provide management services that reduce 

carbon emissions

A rich and resourceful planet is indispensable to quality of life in the long term. This is why Sodexo strives for a healthier planet in 
all we do.

Sourcing responsibly and managing services that contribute to reducing carbon emissions are two major areas of our business 
activities that reﬂ ect our commitment to protecting the environment.

Sustainable supplies

% of physical certified sustainable palm oil

% of cage free shell eggs (of the total of shell eggs purchased by Sodexo)

% of cage free liquid eggs (of the total liquid eggs purchased by Sodexo)

FISCAL 2018

FISCAL 2017

CHANGE

59.5%

37.6%

51.1%

31.8%

+27.7 pts

25.4%

+12.2 pts

28.6%

+22.5 pts

% of On-site Services revenues of countries having the Sodexo Animal Welfare Supplier 
charter available in at least one official language

95.5% 

95.3%

+0.2 pt 

% of certified sustainable fish and seafood as a % of total fish and seafood

38.7% 

41.3%

-2.6 pts 

% of sustainable fish and seafood which is sustainable as a % of total seafood (in kg)* 

% of spend on certified sustainable paper disposables as a % of total paper disposables (cid:2)

80.7%

70.4%

83.7%

-3 pts

80.0%

-9.6 pts

Reduction in carbon emissions

3

% of Group revenues of countries having one or more ISO 14001 certification

90.8%

93.6%

-1.8 pt

Scope 1 and Scope 2 emissions energy consumption (in Mwh)** 

Scope 1 and Scope 2 (market based) emissions (tCO2e)** 

% reduction in carbon emissions (compared to 2011 baseline) absolute** 

% reduction in carbon emissions (compared to 2011 baseline) intensity***

% of client sites implementing heightened awareness and behavior steps 
to reduce their consumption of energy

% of client sites implementing heightened awareness and behavior steps 
to reduce their consumption of blue water

% of client sites implementing equipment and processes steps to reduce 
their organic waste

% of client sites implementing equipment and processes steps to reduce 
their non-organic waste

+9%

+11%

669,688

144,468

40%

53%

34.6%

34.2%

+0.4 pt

39.0%

40.0%

-1 pt

87.5%

88.2%

-0.7 pt

80.6%

80.7%

-0.1 pt

  *   Green listed or orange listed meeting control measures per Sodexo Sustainable Seafood Sourcing Guide .
**   Data for Fiscal 2017 in process, see our reporting methodology, so data provided with one year’s delay.
 There are no provisions made for risks related to the environment.

Physical certiﬁ ed sustainable palm oil, cage free shell eggs and 
cage free liquid eggs indicators have increased significantly 
compared to last year. These results reﬂ ect all the eff orts put 
in  place  in  countries  towards  a  more  responsible  sourcing, 
including enhanced traceability and transparency throughout 
our supply chain.

Scope 1 and Scope 2 energy consumption and emissions have 
increased for Fiscal Year 2018 due mainly to Sodexo’s growth in 
the facilities management services activity.

(cid:2) Indicator verified to the level of “reasonable” assurance by KPMG. 

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3.2.7  Our commitments as a corporate citizen

3.2.7.1  Fight hunger and malnutrition

To act for a hunger-free world is to act for a better quality of life. Because we believe that Quality of Life begins when basic needs are 
met, Sodexo employees in the U.S. decided to create Stop Hunger in 1996.

Sustainably eradicating hunger and providing a fairer and happier world is the target set by the United Nations. Stop Hunger and 
Sodexo want to contribute to achieving it.

Funds invested in programs to empower women working to end hunger 
in their communities (in thousand of euro)

1,063

988

+75

FISCAL 2018

FISCAL 2017

CHANGE

 In addition of our project already engaged in Fiscal 2017, in Fiscal 2018 we have mainly increased our support to the WIA (Women 
In Africa), because we share the same vision and desire to support the empowerment of African women and the development of their 
businesses.

3.2.7.2  Drive diversity and inclusion as a catalyst for societal change

Sodexo has always placed the advancement of women at the heart of its vision for economic, social and environmental development.

As a company where diversity and inclusion is embedded into the way we work, Sodexo strives to broaden its inﬂ uence in our local 
communities on key priorities such as advancing gender equality by sharing our expertise and working together with our partners.

% of Group revenues of countries with initiatives to improve the quality 
of life of women

89.1%

77.1%

+12 pts

FISCAL 2018

FISCAL 2017

CHANGE

% of Group revenues of countries with initiatives to improve the quality of life of women increased signiﬁ cantly mainly due to the 
implementation of initiatives in France this year, France representing more than 10% of our Group revenues.

3.2.7.3  Champion sustainable resource usage

We live in a world of ﬁ nite material resources whose biophysical capacity to replenish and absorb waste to land, air and water ‘sinks’ 
is limited.

Sodexo’s growing ecosystem of NGOs and multi-stakeholder engagement is critical to tackling global issues like food waste.

% of Group revenues of countries working to deliver on the United Nations’ food 
waste objective

65.9%

69.0%

-3.1 pts

FISCAL 2018

FISCAL 2017

CHANGE

The drop in this indicator is due to the increase of the number of entities participating in the Annual Country Survey. Entities having 
participated for the ﬁ rst time this year, have not yet put in place initiatives helping to deliver on the United Nations’ food waste 
objective.

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3.2.8  Our reporting methodology 

Choice of indicators

Fiscal 2018 workforce indicators

In  Fiscal  2018,  we  have  decided  to  disclose  or  Corporate 
Responsibility related information and data in our Integrated 
Report (chapter 1), chapter 2 and chapter 3 of the present report.

•  As part of the Integrated Report we have presented our Value 
Creation Model, our Materiality Matrix and our Corporate 
Responsibility Roadmap Better Tomorrow 2025. These three 
elements are linked and interdependent.

•  Chapter  2  contains  information  of  our  concrete  actions 
responding  to  key  issues  identified  in  our  Materiality 
assessment.

•  Chapter 3 presents our key performance indicators and their 

progress compared to the previous year.

Sodexo’s  Corporate  Responsibility  strategy  requires  that 
workforce and environmental performance be measured with 
clear indicators. These indicators take into consideration the 
decentralized and primarily client site-based nature of Sodexo’s 
operations and were selected to meet the following reporting 
objectives:

•  to comply with legal requirements such as the European non-

ﬁ nancial Directive;

•  to address the expectations of other external stakeholders, 

including shareholders and rating agencies;

•  to provide reporting that is consistent with the requirements 
of the Global Reporting Initiative (GRI) and the United Nations 
Global Compact.

In addition, Sodexo’s indicators:

•  are key in allowing us to monitor the progress in the areas 
identiﬁ ed as key topics following our materiality assessment;

• 

include measures of the tangible beneﬁ ts Sodexo brings to 
its clients;

•  enhance employees’ knowledge about Sodexo, increasing 

awareness and engagement;

•  provide  visibility  on  progress  for  Group  and  country 

management.

As  part  of  its  progressive  journey,  Sodexo  has  added  some 
additional indicators this year and will continue to do so (cf. List 
of indicators).

Scope of consolidation

Indicators  generally  include  all  entities  which  are  fully 
consolidated for ﬁ nancial reporting purposes, with the following 
exceptions:

•  a new country added during the ﬁ scal year is included in the 

reporting scope in the following ﬁ scal year; and

•  acquired entities are included as from the date of acquisition.

Additional restrictions may be applicable and are speciﬁ ed in 
the section below.

Workforce indicators are consolidated for all Sodexo entities 
(excluding Centerplate entity), Safety indicators cover On-site 
Services activity only, representing more than 96 % of Group 
revenues. Other activities will join the reporting process in Fiscal 
2019.

Fiscal 2018 societal and environmental indicators

Societal  and  environmental  indicators  are  calculated  and 
consolidated for entities representing at least between 70 % and 
98 % of Group revenues.

Certain environmental indicators are applicable only to On-site 
Services or to Beneﬁ ts and Rewards Services due to the nature 
of the indicator itself; for example, an indicator relating to the 
percentage of sustainable seafood purchased relates only to On-
site Services entities which provide foodservice.

Reporting framework and tools

Sodexo’s commitments to social and environmental responsibility 
have always been central to the Group’s fundamentals. The Group 
reinforced its workforce and environmental reporting in 2005 
with the publication of its ﬁ rst Corporate Responsibility Report 
and further developed its sustainability performance processes 
in 2009 when its Corporate Responsibility roadmap, the Better 
Tomorrow Plan was launched. At the time, the Group committed 
to report its progress regularly and transparently. In 2016, Sodexo 
reconﬁ rmed its conviction to continued progress as an employer, 
a service provider and a corporate citizen through an updated 
version of our roadmap, Better Tomorrow 2025.

Each year, Sodexo endeavors to improve its processes and to 
this end, has implemented a reporting tool with two modules for 
gathering and consolidating information.

Consistency  checks  are  embedded  within  the  tools  and 
additional control testing is performed.

The  consolidation  of  workforce  data  is  performed  by  Group 
Human Resources with the exception of the Health and Safety 
data which is consolidated by Group Health and Safety and the 
consolidation of environmental data is performed by Group 
Corporate Responsibility.

Certain strategic workforce indicators are consolidated monthly 
or quarterly for a detailed follow up.

All information published in this report was also examined by 
the Group’s external auditors.

In addition to the “limited assurance” delivered by the external 
auditors in relation to indicators published for the requirements 
of European directive , Sodexo obtained a higher level of assurance 
called “reasonable assurance” of the following key indicators:

• 

 %  of  Group  revenues  of  countries  having  implemented 
Sodexo’s 10 People Fundamentals;

•  Total Workforce, per activity and client segment;

•  Retention rate for total workforce;

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•  Retention rate for site management;

• 

 Group Employee Engagement Rate;

•  % of women’s representation on the Board of Directors;

•  % of women’s representation on the Executive Committee;

•  % of women’s representation among Group Senior Leaders;

•  % of women in management positions;

•  % of women’s representation in total workforce;

 –

 –

 –

sub sites of a main site such as an University campus or 
which has several restaurants, cafeterias, kiosks, etc.,

sites where Sodexo has a limited activity and where there 
is no management, supervision or site based Sodexo staff  
(such as: vending, delivery of meals and maintenance),

sites where Sodexo has a short term contract (less than 
12 months).

•  Certain information is extremely diffi  cult to gather given the 

•  Number of work related accidents requiring a leave(LTSC);

nature of the Group’s activities:

•  %  of  Group  revenues  of  countries  having  one  or  more 

OHSAS 18001 or ISO 45001 certiﬁ cation;

•  % of On-site services revenues of countries having either 

ISO 22000 or ISO 9001 certiﬁ cation for food safety;

•  %  of  spend  with  contracted  suppliers  having  signed  the 

Sodexo Supplier Code of conduct;

•  % of spend on certiﬁ ed sustainable paper disposables as a % 

of total paper disposables.

Limitations

With 432,967 employees (excluding Centerplate), Sodexo is 
present in 72 countries with diff ering regulations and operates 
a signiﬁ cant number of client sites of diff erent sizes and types 
of activity.

•  Certain indicators therefore require some speciﬁ c explanation 

as follows:

•  number of work-related accidents requiring a leave:

 –

 –

 –

excludes commuting accidents,

includes Sodexo workforce only,

excludes  temporary  labor,  sub-contracts  and  other 
personnel who are not Sodexo employees,

 – may  have  insignificant  differences  created  by  the 
local diff erences in the way that work-related illness is 
accounted for;

•  average number of days absence:

 –

includes absences for work-related accidents and illness 
as well as personal accidents and illness,

 – may  have  insignificant  differences  created  by  the 
variances  in  local  legislation  in  accounting  for  the 
number of days of absence as some include weekend and 
others only working days, the minimum number of days 
of absence from which the absence is recorded varies 
according to local legislation;

•  the  training  indicators  in  the  USA  (46%  of  disclosed 
data)  are  based  on  estimation.  The  estimation  is  an 
extrapolation of actual data on 15% of the population. 
Solutions are under discussion in order to increase the 
part of actual data disclosed in the next years;

• 

 the indicators gathered through the Annual site survey 
are consolidated for a representative number of sites 
(more than 9,000 in Fiscal 2018), excluding:

 –

sites that are closed,

•  Scope 1 and Scope 2 energy consumption and related 
carbon emissions are extrapolated for the Group based on 
the energy consumption and carbon emissions calculation 
for a set of 32 major countries representing 83% of Group 
revenues. Given the time and resource required for the 
data gathering for the calculation of energy consumption 
and  the  Scope  1  and  Scope  2  carbon  emissions  data, 
the calculation of carbon emissions for Fiscal 2018 has 
not been prepared in time for this publication and will 
be  reported  subsequently  through  the  CDP(1).   We  are 
currently working on eliminating this one year reporting 
gap;

•  Scope  1  includes  energy  consumption  and  carbon 
emissions related to the fuel consumed by vehicles used 
by Sodexo as well as from its consumption of natural gas 
for the offices and sites where Sodexo has operational 
control;

•  Scope  2  includes  the  electricity  consumption  for  the 
offices and sites where Sodexo has operational control 
and is market-based;

•  Scope  1  and  Scope  2  covers  a  very  small  part  of  our 
emissions, this is why we have started working on our 
Scope  3  emissions  calculation,  with  on  objective  to 
publish the ﬁ rst ﬁ gures in Fiscal 2019.

•  One of Sodexo’s missions is to improve quality of life for 
its employees and all who it serves. Sodexo’s services are, 
in  the  majority  of  cases,  provided  by  its  own  employees 
on a signiﬁ cant number of client sites where the Company 
operates throughout the world. The following information is 
therefore not applicable or not material for Sodexo:

•  preventive or corrective actions with regard to discharges 
into the atmosphere, water and soil with a significant 
negative impact on the surrounding environment;

•  consideration of noise and any other activity-specific 

pollution;

land usage;

importance of sub-contracting.

• 

• 

Reconciliation tables

The reconciliation tables for Grenelle II and the GRI are included 
in the section “Other information” of this report.

1  CDP: formerly named “Carbon Disclosure Project” works with investors, companies and governments to promote reporting and environmental action in order 

to ensure a sustainable economy, avoid the eff ects of climate change and protect natural resources.

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3.2.9  Report by one of the Statutory Auditors appointed as an 

independent third party, on the consolidated non-financial 
performance statement in the Management Report

This is a free English translation of the Statutory Auditors’ report issued in French and it is provided solely for the convenience 
of English-speaking readers. This report should be read in conjunction with, and construed in accordance with, French law and 
professional auditing standards applicable in France.

Sodexo S.A. 
Head offi  ce: 255, quai de la Bataille-de-Stalingrad
92130 Issy-les-Moulineaux

For the year ended August 31, 2018

To the shareholders,

In our capacity as an independent third party of Sodexo S.A. , certiﬁ ed by the French Accreditation Committee (Comité Français 
d’Accréditation or COFRAC) under number 3-1049(1),, we hereby report to you on the consolidated extra-ﬁ nancial statement for the 
year ended August 31, 2018, (hereinaft  er the “Statement”), included in the Group Management Report, in accordance with the legal 
and regulatory provisions of Articles L.225-102-1, R.225-105 and R.225-105-1 of the French Commercial Code (Code de commerce).

3

Company’s responsibility

It is the Board of Directors’s responsibility to prepare a Statement in accordance with the legal and regulatory provisions, including a 
presentation of the business model, a description of the main extra-ﬁ nancial risks, a presentation of policies applied to mitigate these 
risks and the outcomes of those policies, including key performance indicators.

The Statement has been prepared applying the procedures of the company, (hereinaft  er the “Guidelines”), the most signiﬁ cant aspects 
of which are presented in the Statement (or available on the website or on request, etc.).

Independence and quality control

Our independence is deﬁ ned by the provisions of Article L.822-11-3 of the French Commercial Code (Code de commerce) and the French 
Code of Ethics (Code de déontologie) for statutory auditors. Moreover, we have implemented a quality control system which includes 
documented policies and procedures to ensure compliance with applicable ethical rules, professional standards, laws and regulations.

Statutory Auditor’s responsibility

On the basis of our work, it is our responsibility to express an opinion of limited assurance about whether:

•  the Statement complies with the provisions of Article R.225-105 of the French Commercial Code (Code de commerce);

•  the information provided (hereinaft  er the “Information”) is fairly presented in accordance with Article R.225-105-I(2) and II of the 
French Commercial Code (Code de commerce) concerning appropriate due diligence processes and policy outcomes including the 
key performance indicators on the main risks;

It is our responsibility to express, at the request of the company and outside of the scope of certiﬁ cation, reasonable assurance that 
information selected by the Company and identiﬁ ed by the symbol √ in chapter 3 of the Management Report has been prepared, in all 
material respects, in accordance with the Guidelines.

However, it is not our responsibility to issue an opinion on:

•  the company’s compliance with any other applicable legal provisions, especially with those in accordance with the Duty of 

Vigilance, with the ﬁ ght against corruption and with the ﬁ scal fraud;

•  the compliance of products and services with applicable regulations.

Conclusion on the fairness of the CSR Information

Nature and scope of our work

We performed our work described below in accordance with the articles A. 225-1 and the ones following, of the French Commercial 
Code, deﬁ ning the conditions under which the independent third party performs its engagement, and with the professional guidance 
issued by the French Institute of Statutory Auditors (Compagnie nationale des commissaires aux comptes or CNCC) relating to this 
engagement, and with ISAE 3000 (International standard on assurance engagements other than audits or reviews of historical 
ﬁ nancial information).

1  For which the scope is available at www.cofrac.fr.

2  Refer to the list of key indicators in Appendix 1 of this report.

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We conducted work to form an opinion on the Statement’s compliance with legal and regulatory provisions and the fair presentation 
of the Information therein:

•  we gained an understanding of the activity of all companies in the consolidation scope, of the Entity’s exposure to the main social 
and environmental risks relating to the business activity and, if applicable, of its eff ects on human rights and the ﬁ ght against 
corruption, including any related policies and their outcomes;

•  we assessed the appropriateness of the Guidelines in terms of their relevance, completeness, reliability, neutrality and clarity, by 

taking into consideration, where relevant, the sector’s best practices;

•  we veriﬁ ed that the Statement covers every category of information required under Article L.225-102-1, Paragraph III concerning 

social and environmental matters as well as respect for human rights, the ﬁ ght against corruption and against ﬁ scal fraud;

•  we veriﬁ ed that the Statement presents the business model and the main risks relating to the Entity’s business activity of all 
companies in the consolidation scope, including – if relevant and proportionate – risks created by business relationships, its 
products or services, in accordance with disclosures required under Article R.225-105-I, and the policies, appropriate due diligence 
processes and outcomes, including key performance indicators;

•  we veriﬁ ed that the Statement presents disclosures required under article R.225-105-II if they are relevant given the main risks 

or policies presented;

•  we obtained an understanding of the process for identifying, prioritizing and validating main risks;

•  we enquired about the existence of internal control and risk management procedures implemented by the company;

•  we veriﬁ ed that the Statement covers all companies in the consolidation scope in accordance with Article L.233-16 within the limits 

speciﬁ ed in the Statement;

•  we assessed the data collection process implemented by the entity to ensure the completeness and fair presentation of the policy 

outcomes and key performance indicators that must be mentioned in the Statement;

• 

for key performance indicators and a selection of other quantitative outcomes(1) that we considered the most important, we set up:

•  analytical procedures to verify that data collected are correctly consolidated and that any changes to the data are consistent,

•  tests of details based on sampling to verify that deﬁ nitions and procedures are correctly applied and to reconcile data with 
supporting documents. The work was carried out with a selection of entities contributing to the report(2) and represents between 
15 to 84% of consolidated data of key performance indicators and outcomes selected for these tests;

•  we referred to documentary sources and conducted interviews to corroborate the appropriate due diligence processes that we 

deemed the most important(3) (organization, policies, actions, qualitative outcomes);

•  we gained an understanding of the overall consistency of the Statement based on our understanding of the Company.

We believe that the sampling methods and sample sizes we have used, based on our professional judgement, are suffi  cient to provide 
a basis for our limited assurance opinion. A higher level of assurance would have required us to carry out more extensive procedures.

Nature and scope of our work

Our work drew on the skills of nine individuals.

To assist us in conducting our work, we called on our ﬁ rm’s sustainable development and CSR specialists. We conducted ten interviews 
with the individuals responsible for preparing the Statement.

Conclusion

Based on our work, we have no material misstatements to report that would call into question the Statement’s compliance with the 
applicable regulatory provisions, or the fair presentation of the information, taken as a whole, in accordance with the Guidelines.

1  Refer to the list of key indicators in Appendix 1 of this report.

2   Entities selected in the context of legal limited assurance:

- Sodexo On-Site Services: Sodexo France, Sodexo Finland, Sodexo USA;
- Sodexo Beneﬁ ts & Rewards: Sodexo Pass France;

  Complementary entities selected under reasonable assurance, outside the scope of accreditation;

- On-Site Services: Sodexo UK & Ireland, Sodexo Luxembourg, Sodexo Spain.

3  Refer to the list of key indicators in Appendix 1 of this report.

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Reasonable assurance on a selection of CSR Information

Nature and scope of the work

For the information selected by the Group and identiﬁ ed by the symbol (cid:57) , our audit consisted of work of the same nature as described 
in paragraph “Nature and scope of our work” above for CSR information considered the most important, but in more depth, particularly 
regarding the number of tests.

The selected sample represents between 44% and 63% of the information identiﬁ ed by the symbol (cid:57) published.

We consider that this work enables us to express a conclusion of reasonable assurance for the information selected by the Group and 
identiﬁ ed by the symbol (cid:57).

Conclusion

In our opinion, the information selected by the Group and identiﬁ ed by the symbol (cid:57) is fairly presented, in all material respects, in 
compliance with the Guidelines.

French original signed by:

Paris-La Défense, November 5, 2018

KPMG SA

Philippe Arnaud

Partner

Sustainability Services

Hervé Chopin

Partner 

Audit  

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3 E x t r a - f i n a n c i a l   r e p o r t i n g

Appendix 1

All information published in the Declaration is subject to moderate or reasonable assurance.

The list below shows the information:

•  veriﬁ ed with a moderate level of assurance and considered the most important;

•  veriﬁ ed with a reasonable level of assurance ((cid:57)).

HUMAN RESOURCES INDICATORS

LEVEL OF ASSURANCE

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

% of Group revenues of countries having implemented Sodexo’s 10 People Fundamentals

Total Workforce, per activity and client segment

Retention rate for total workforce

Retention rate for site management

Group Employee Engagement Rate

Number of Departures related to Resignation of continuous employment excl. site loss

Number of Departures related to Dismissals or Redundancy of continuous employment excl. site loss

Number of work days absence due to non-work-related accidents or illness

Total number of training hours

% of women’s representation on the Board of Directors

% of women’s representation on the Executive Committee

% of women’s representation among Group Senior Leaders

% of women in management positions

% of women’s representation in total workforce

SAFETY INDICATORS

Number of work related accidents requiring a leave (LTSC)

% of Lost time injury rate reduction

% of Group revenues of countries having one or more OHSAS 18001 or ISO 45001 certification

ENVIRONMENTAL INDICATORS

Scope 1 and Scope 2 emissions energy consumption

Scope 1 and Scope 2 (market based) emissions

% reduction in carbon emissions (compared to 2011 baseline) absolute

% reduction in carbon emissions (compared to 2011 baseline) intensity

% of client sites implementing heightened awareness and behaviour steps to reduce their consumption of energy

% of client sites implementing heightened awareness and behaviour steps to reduce their consumption of blue water

% of client sites implementing equipment and processes steps to reduce their organic waste

% of client sites implementing equipment and processes steps to reduce their non-organic waste

% of Group revenues of countries employing environmental resources

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E x t r a - f i n a n c i a l   r e p o r t i n g

 SOCIETAL INDICATORS

% of On-site services revenues of countries having either ISO 22000 or ISO 9001 certification for food safety

% of Group revenues of countries having a nutritional hotline, webline or other digital tool or application to provide 
nutritional advice for consumers

% of client sites with actions that proactively address the 10 golden rules of Nutrition, Health and Wellness

% of spend with contracted suppliers having signed the Sodexo Supplier Code of conduct

% of client sites with training on sustainable practices

Business value benefiting SMEs (Euro)

% of physical certified sustainable palm oil

% of cage free shell eggs as a total of shell eggs purchased by Sodexo

% of cage free liquid eggs as a total of liquid eggs purchased by Sodexo

% of spend on certified sustainable paper disposables as a % of total paper disposables

% of sustainable fish and seafood which is sustainable as a % of total seafood (kg)

(cid:57)

(cid:57)

(cid:57)

QUALITATIVE INFORMATION

Occupational health and safety conditions

Labour themes

Measures implemented to promote gender equality

Absenteeism

Environmental themes

Actions against food waste

Energy consumption and measures implemented to improve energy efficiency and renewable energy use

Measures implemented to promote consumers health and safety

Social themes

Actions of partnership and sponsorship

Action implemented against corruption

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3.3  CONSOLIDATED FINANCIAL STATEMENTS 

AS OF AUGUST 31, 2018

3.3.1  Consolidated income statement

(in millions of euro)

Revenues

Cost of sales

Gross profit

NOTES

FISCAL 2018

FISCAL 2017(1)

3

4.1

20,407

20,698

(17,320)

(17,450)

3,087

3,248

Administrative and Sales Department costs

4.1

(1,963)

(1,913)

Share of profit of companies consolidated by the equity method that directly 
contribute to the Group’s business

3 and 4.9

4

5

Underlying operating profit(1)

Other operating income

Other operating expenses(2)

Operating profit

Financial income

Financial expense

Share of profit of other companies consolidated by the equity method

Profit for the period before tax

Income tax expense

Profit for the period

Of which:

Attributable to non-controlling interests

PROFIT ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT

Basic earnings per share (in euro)

Diluted earnings per share (in euro)

3

4.1

4.1

4.2

4.2

4.9

4.3

4.4

4.4

1,128

1,340

10

(141)

997

46

(136)

2

909

(245)

664

13

651

4.40

4.34

24

(176)

1,189

31

(136)

4

1,088

(343)

745

22

723

4.85

4.79

(1) After reclassifications based on the new consolidated income statement presentation (see note 2.22.1).
(2) Including 137 million euro in costs recorded in Fiscal 2017 in connection with the Adaptation and Simplification program. The total amount reported as “Other operating 
expenses” in the new presentation includes 51 million euro previously reported under “Cost of sales”, 65 million euro previously reported under “Administrative and 
Sales Department costs”, and 20 million euro reported under “Other operating expenses” in the old presentation.

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3.3.2  Consolidated statement of comprehensive income

(in millions of euro)

PROFIT FOR THE PERIOD

NOTES

FISCAL 2018

FISCAL 2017

664

745

Components of other comprehensive income that may be reclassified 
subsequently to profit or loss

Change in fair value of available-for-sale financial assets

Change in fair value of Cash Flow Hedge instruments

4.11.2 and 4.14

4.16 and 4.14

Change in fair value of Cash Flow Hedge instruments reclassified to profit or loss

4.16 and 4.14

Currency translation adjustment

Currency translation adjustment reclassified to profit or loss

(245)

(260)

(3)

Tax on components of other comprehensive income that may be reclassified 
subsequently to profit or loss

4.14

3

Share of other components of comprehensive income (loss) of companies 
consolidated by the equity method, net of tax

4.14 and 4.9

(1)

(3)

Components of other comprehensive income that will not be reclassified 
subsequently to profit or loss

Remeasurement of defined benefit plan obligation

4.17.1 and 4.14

79

72

Tax on components of other comprehensive income that will not be reclassified 
subsequently to profit or loss

4.14

TOTAL OTHER COMPREHENSIVE INCOME (LOSS), AFTER TAX

COMPREHENSIVE INCOME

Of which:

Attributable to equity holders of the parent

Attributable to non-controlling interests

(13)

(180)

485

471

14

(21)

(215)

530

511

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3.3.3  Consolidated statement of financial position

Assets

(in millions of euro)

NON-CURRENT ASSETS

Property, plant and equipment

Goodwill

Other intangible assets

Client investments

Companies consolidated by the equity method

Financial assets

Derivative financial instrument assets

Other non-current assets

Deferred tax assets

TOTAL NON-CURRENT ASSETS

CURRENT ASSETS

Financial assets

Derivative financial instrument assets

Inventories

Income tax receivable

Trade and other receivables

Restricted cash and financial assets related to the Benefits 
and Rewards Services activity

Cash and cash equivalents

TOTAL CURRENT ASSETS

TOTAL ASSETS

NOTES

AUGUST 31, 2018

AUGUST 31, 2017

4.5

4.6

4.7

4.8

4.9

4.11

4.16

4.12

4.20

4.11

4.16

4.12

4.12

4.11

4.13

619

5,664

704

558

83

190

3

18

105

590

5,308

511

547

89

163

4

17

187

7,944

7,416

36

15

280

176

32

7

257

185

4,121

4,050

1,042

1,666

7,336

909

2,018

7,458

15,280

14,874

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NOTES

AUGUST 31, 2018

AUGUST 31, 2017

590

248

2,445

3,283

 45

3,328

603

534

2,399

3,536

34

3,570

3,537

3,011

-

389

190

88

126

1

462

181

93

137

4,330

3,885

28

420

1

98

73

4,222

2,780

7,622

38

498

1

104

61

3,953

2,764

7,419

4.14

4.15

4.16

4.17

4.19

4.18

4.20

4.13

4.15

4.16

4.18

4.19

3

Shareholders’ equity and liabilities

(in millions of euro)

Shareholders’ equity

Share capital

Additional paid-in capital

Reserves and retained earnings

EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT

NON-CONTROLLING INTERESTS

TOTAL SHAREHOLDERS’ EQUITY

NON-CURRENT LIABILITIES

Borrowings

Derivative financial instrument liabilities

Employee benefits

Other non-current liabilities

Provisions

Deferred tax liabilities

TOTAL NON-CURRENT LIABILITIES

CURRENT LIABILITIES

Bank overdrafts

Borrowings

Derivative financial instrument liabilities

Income tax payable

Provisions

Trade and other payables

Vouchers payable

TOTAL CURRENT LIABILITIES

TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES

15,280

14,874

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3.3.4  Consolidated cash flow statement

(in millions of euro)

OPERATING ACTIVITIES

NOTES

FISCAL 2018

FISCAL 2017

Operating profit of consolidated companies

993

1,184

Elimination of non-cash and non-operating items

Depreciation, amortization and impairment of intangible assets and property, plant and equipment

Provisions

Disposal (gains) losses and other non-cash items

Dividends received from companies consolidated by the equity method

Interest paid

Interest received

Income tax paid

Operating cash flow

Change in working capital from operating activities

Change in inventories

Change in trade and other receivables

Change in trade and other payables

Change in vouchers payable

Change in financial assets related to the Benefits and Rewards Services activity

NET CASH PROVIDED BY OPERATING ACTIVITIES

INVESTING ACTIVITIES

317

(15)

20

19

(117)

51

(128)

281

(31)

(3)

11

(120)

25

(271)

1,140

1,076

(7)

(6)

(160)

193

194

(228)

1,133

(14)

(13)

(196)

180

149

(134)

1,062

Acquisitions of property, plant and equipment and intangible assets

(329)

(309)

Disposals of property, plant and equipment and intangible assets

Change in client investments

Change in financial assets and share of companies consolidated by the equity method

Acquisitions of subsidiaries

Disposals of subsidiaries

NET CASH USED IN INVESTING ACTIVITIES

FINANCING ACTIVITIES

Dividends paid to parent company shareholders

Dividends paid to non-controlling shareholders of consolidated companies

Purchases of treasury shares

Sales of treasury shares

Increase in share capital

Change in non-controlling interests

Proceeds from borrowings (excluding leasing)

Repayment of borrowings

NET CASH PROVIDED BY/(USED IN) FINANCING ACTIVITIES

CHANGE IN NET CASH AND CASH EQUIVALENTS

Net effect of exchange rates and other effects on cash

Net cash and cash equivalents, beginning of period

4.8

4.14

4.14

4.15

4.15

NET CASH AND CASH EQUIVALENTS, END OF PERIOD

4.13

31

11

(40)

(683)

11

(1,000)

(411)

(13)

(371)

25

1

(5)

645

(215)

(345)

 (212)

(130)

1,980

1,638

19

(16)

(38)

(257)

(11)

(612)

(359)

(10)

(339)

20

1

5

1,118

(114)

322

772

(139)

1,347

1,980

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3.3.5  Consolidated statement of changes in shareholders’ equity

Treasury share transactions

(319)

(319)

(319)

SHARES 
OUTSTANDING

SHARE 
CAPITAL

ADDITIONAL 
PAID-IN 
CAPITAL

TREASURY 
SHARES

RESERVES AND 
COMPREHENSIVE 
INCOME

CURRENCY 
TRANSLATION 
ADJUSTMENT

4.14

4.14

4.14

TOTAL SHAREHOLDERS’ EQUITY

ATTRIBUTABLE 
TO EQUITY 
HOLDERS OF 
THE PARENT

NON-
CONTROLLING 
INTERESTS

TOTAL

153,741,139

615

822

(352)

3,008

(425)

3,668

723

48

771

(359)

(2,910,690)

(12)

(288)

300

34

22

3,702

745

723

(260)

(212)

(3)

(215)

(260)

511

19

530

(359)

(22)

(381)

43

(8)

43

(8)

150,830,449

603

534

(371)

3,455

(685)

3,536

651

65

716

(411)

(3,375,562)

(14)

(286)

300

651

(245)

(180)

(245)

471

3

43

1

(6)

3,570

664

(180)

485

1

2

34

13

0

14

(411)

(16)

(427)

(in millions of euro)

Notes

Shareholders’ equity 
as of August 31, 2016

Profit for the period

Other comprehensive 
income (loss), net of tax

Comprehensive income

Dividends paid

Capital reduction by 
cancelling treasury shares

Share-based payment 
(net of income tax)

Change in ownership 
interest without any change 
of control

Other(1)

Shareholders’ equity as of 
August 31, 2017

Profit for the period

Other comprehensive 
income (loss), net of tax

Comprehensive income

Dividends paid

Capital reduction by 
cancelling treasury shares

Treasury share transactions

(348)

(348)

(348)

Share-based payment 
(net of income tax)

Change in ownership 
interest without any change 
of control

Other(1)

SHAREHOLDERS’ EQUITY 
AS OF AUGUST 31, 2018

44

(0)

(10)

44

(0)

(10)

44

13

(9)

14

0

147,454,887

589

248

(419)

3,795

(930)

3,283

45

3,328

(1) Including the effects of hyperinflation and the recognition of put options written over non-controlling interests other than in connection with business combinations.

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3 N o t e s   t o   t h e   c o n s o l i d a t e d   f i n a n c i a l   s t a t e m e n t s

3.4  NOTES TO THE CONSOLIDATED 

FINANCIAL STATEMENTS

DETAILED LIST OF NOTES

1. 

SIGNIFICANT EVENTS 

2. 
2.1 

2.2 

2.3 

2.4 

2.5 

2.6 

2.7 

2.8 

2.9 

ACCOUNTING POLICIES 
Basis of preparation of the ﬁ nancial statements 

Use of estimates 

Principles and methods of consolidation 

Business combinations and goodwill 

Intangible assets 

Property, plant and equipment 

Leases 

Impairment of assets 

Client investments 

2.10 

Inventories 

2.11  Trade and other receivables 

2.12  Financial instruments 

2.13  Cash and cash equivalents 

2.14  Borrowing costs 

2.15  Sodexo treasury shares 

2.16  Provisions 

2.17  Employee beneﬁ ts 

2.18  Vouchers payable 

2.19  Share-based payment 

2.20  Deferred taxes 

2.21  Trade and other payables 

2.22 

Income statement 

2.23  Earnings per share 

2.24  Cash ﬂ ow statement 

3. 
3.1 

3.2 

3.3 

4. 

4.1 

4.2 

4.3 

OPERATING SEGMENTS 
By business segment 

By signiﬁ cant country 

By type of service 

NOTES TO THE FINANCIAL STATEMENTS 
AS OF AUGUST 31, 2018 
Operating expenses by nature and other operating 
income and expenses 

Financial income and expense 

Income tax expense 

111

111
111

112

112

113

114

115

115

115

116

116

116

116

117

117

117

117

117

118

118

118

119

119

120

120

120
121

121

121

122

122

123

123

4.4 

4.5 

4.6 

4.7 

4.8 

4.9 

Earnings per share 

Property, plant and equipment 

Goodwill 

Other intangible assets 

Client investments 

Companies consolidated by the equity method 

4.10 

Impairment of assets 

4.11  Financial assets 

4.12 

Income tax, trade and other receivables 

4.13  Cash and cash equivalents 

4.14  Statement of changes in shareholders’ equity 

4.15  Borrowings 

4.16  Derivative ﬁ nancial instruments 

4.17  Long-term employee beneﬁ ts 

4.18  Provisions 

4.19  Trade and other payables 

4.20  Deferred taxes 

4.21  Financial instruments 

4.22  Share-based payment 

4.23  Business combinations 

4.24  Commitments and contingencies 

4.25  Related parties 

4.26  Compensation, loans, post-employment beneﬁ ts 

and other beneﬁ ts granted to Board members, 
the  Executive Committee, and the Group Chief 
Executive Offi  cer of Sodexo 

4.27  Group employees 

4.28  Disputes and litigation 

4.29  Subsequent events 

5. 

5.1 

5.2 

5.3 

5.4 

6. 

7. 

FINANCIAL RISK MANAGEMENT 
OBJECTIVES AND POLICY 
Exposure to foreign exchange and interest rate risk 

Exposure to liquidity risk 

Exposure to counterparty risk 

Policy for managing the Company’s capital structure  154

SCOPE OF CONSOLIDATION 

AUDITORS’ FEES 

154

157

124

125

126

127

128

128

128

130

131

132

133

134

138

139

142

143

144

145

146

149

149

150

151

151

152

152

153
153

153

153

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N o t e s   t o   t h e   c o n s o l i d a t e d   f i n a n c i a l   s t a t e m e n t s

C O N S O L I D A T E D   I N F O R M A T I O N

 _ Sodexo is a société anonyme (a form of limited liability company) domiciled in France, with its 
headquarters located in Issy-les-Moulineaux.

Sodexo’s consolidated ﬁ nancial statements for the ﬁ scal year ended August 31, 2018 were approved 
by the Board of Directors on November 6, 2018 and will be submitted to the Annual Shareholders’ 
Meeting on January 22, 2019.

1.  SIGNIFICANT EVENTS

The  Group  expanded  its  Sports  &  Leisure  offer  by  acquiring 
Centerplate, Inc., which has operations in the United States, 
the United Kingdom, Spain and Canada. In addition, The Good 
Eating Company in the United Kingdom was acquired in the 
Corporate Services segment and Morris Corporation in Australia 
in the Energy & Resources segment. Strategic initiatives during 
the ﬁ scal year included acquisition of control of FoodChéri in 
France, while the Group’s expertise and technical offer were 
strengthened with the acquisition of Singapore-based Kim Yew.

Details  of  these  business  combinations’  impact  on  the 
consolidated financial statements as of August 31, 2018 are 
provided in note 4.23.

On March 29, 2018, Sodexo S.A.  reimbursed in full  a 147 million 
U.S. dollar  loan from March 2011 from U.S. investors and signed 
on June 27, 2018, a new 400 U.S. dollar  loan from U.S. investors 
due June 2023.

On May 22, 2018, Sodexo S.A.  carried out a new bond issue 
comprising  300  million  euro  worth  of  bonds  redeemable  in 
May 2025.

At the close of the Annual Shareholders’ Meeting on January 23, 
2018, Denis Machuel succeeded Michel Landel and offi  cially took 
up the position of Chief Executive Offi  cer of Sodexo.

3

2.  ACCOUNTING POLICIES

2.1  Basis of preparation of 

the ﬁ nancial statements

2.1.1  Basis of preparation of financial information 

for Fiscal 2018

Pursuant to European Regulation 1606/2002 of July 19, 2002, 
the  consolidated  financial  statements  of  the  Sodexo  Group 
have been prepared in accordance with International Financial 
Reporting  Standards  (IFRS)  as  issued  by  the  International 
Accounting  Standards  Board  (IASB)  and  approved  by  the 
European Union as of the period end. A comprehensive list of 
the accounting standards adopted by the European Union is 
available for consultation on the European Commission website 
at https://ec.europa.eu/commission/index_en.

Information  for  the  comparative  year  presented  has  been 
prepared using the same principles.

The numbers shown in the tables were prepared in thousands 
of euros and are presented in millions of euros unless otherwise 
indicated.

The  IFRS  application  dates  as  approved  by  the  European 
Union  have  been  the  same  as  those  for  the  IFRS  standards 
published by the IASB for the Company’s past three ﬁ scal years. 
Consequently, any diff erences between the two sets of standards 
arising out of delays in approval by the European Union had no 
impact on the consolidated ﬁ nancial statements.

2.1.2  New accounting standards 

and interpretations required to be applied

The new standards, interpretations and amendments whose 
application was mandatory for the Group eff ective for the ﬁ scal 
year beginning September 1, 2017 had no material impact on 
the consolidated ﬁ nancial statements.

2.1.3  Accounting standards and interpretations 

issued but not yet applicable

The  Group  has  not  elected  to  early  adopt  any  standards, 
interpretations or amendments not required to be applied in 
Fiscal 2018.

The Group has not applied any IFRSs that had not yet been 
approved by the European Union as of August 31, 2018.

It  is  currently  analyzing  the  impacts  of  applying  IFRS  16, 
“Leases”, IFRS 9, “Financial Instruments” and IFRS 15, “Revenue 
from Contracts with Customers”.

• 

IFRS 16 - Leases, applicable to the Group as from the ﬁ scal 
year opening on September 1, 2019

IFRS  16  eliminates  the  current  dual  accounting  model  for 
lessees, which distinguishes between on-balance sheet ﬁ nance 
leases and off -balance sheet operating leases. All leases will now 
have to be on-balance sheet, with the recognition of the present 
value of the ﬁ xed lease payments over the expected lease term 
and a corresponding right-of-use asset. Short-term leases and 
leases of low-value assets are exempt from this requirement.

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During Fiscal 2018, the Group continued its work on collecting 
data  relating  to  the  leases  in  place  in  its  various  business 
segments and regions.

a net basis. Consequently, we believe that the revenues 
on certain contracts will now need to be recognized on a 
gross basis in accordance with the new standard.

The Group estimates that the amount of the liability it will need 
to recognize in the consolidated statement of ﬁ nancial position 
could be close to 1 billion euro not discounted and excluding 
concessions,  for  which  the  impact  of  IFRS  16  is  still  being 
analyzed.

• 

IFRS 9 – Financial instruments, applicable to the Group as 
from the ﬁ scal year opening on September 1, 2018.

IFRS 9 – which deals with the recognition and measurement of 
ﬁ nancial instruments – was developed in three phases:

•  phase I, “Classification and measurement of financial 
assets and liabilities”. The main impact that the Group 
expects this phase to have on its consolidated ﬁ nancial 
statements concerns available-for-sale ﬁ nancial assets 
(investments in equity instruments), for which changes 
in  fair  value  now  have  to  be  recognized  in  full  either 
in  profit  or  loss  or  in  other  comprehensive  income, 
depending on which classiﬁ cation the Group opts for on 
first-time application of IFRS 9. The Group has not yet 
decided which accounting treatment to apply for each of 
its investments in equity instruments. For the Bellon SA 
shares held by Soﬁ nsod (a wholly-owned Sodexo Group 
subsidiary), which are currently measured at cost, an 
external valuation being currently performed in order to 
determine the fair value of this non-controlling interest in 
view of its speciﬁ c nature;

•  phase II, “Impairment treatment”. IFRS 9 replaces the 
existing incurred loss model with an expected credit loss 
model. The work launched in Fiscal 2017 to put in place 
a provision matrix within the Group is still in progress, 
but so far no significant changes in the recognition of 
provisions seem likely;

•  phase III, “Hedge accounting”. The impact of this phase 
will not be significant as the Group rarely uses hedge 
accounting.

• 

IFRS 15 – Revenue from operative activities from customer 
contracts, applicable to the Group as from the fiscal year 
opening on September 1, 2018.

The impact analysis for IFRS 15 has now been completed and the 
Group expects its eff ect on the consolidated ﬁ nancial statements 
to be minimal. This is because the client investments deﬁ ned in 
note 2.9 below were already amortized by way of a deduction 
from revenues over the life of the contracts concerned, which is 
the method required under IFRS 15.

For  On-site  Services,  we  estimate  that  the  total  impact  on 
revenue will not exceed 20 base points in absolute value.

Two main impacts have been identiﬁ ed:

• 

in certain situations, mainly upon clients requirement, the 
Group sometimes pays fees or rents for the use of space 
and equipment made available to us on sites that enable 
us to deliver our services. In accordance with the principles 
of  IFRS  15,  we  have  decided  that  these  fees  should 
be recognized  as a deduction from  the  corresponding 
revenues;

•  we have reassessed the accounting treatment we apply for 
the instances where, based on the new concepts deﬁ ned 
in IFRS 15, revenue should be recognized on a gross or 

No signiﬁ cant impact has been identiﬁ ed for the Beneﬁ ts and 
Rewards Services activity.

2.2  Use of estimates

T h e   p r e p a r a t i o n   o f   f i n a n c i a l   s t a t e m e n t s   r e q u i r e s   t h e 
management of Sodexo and its subsidiaries to make estimates 
and assumptions which aff ect the amounts reported for assets, 
liabilities and contingent liabilities as of the date of preparation 
of the ﬁ nancial statements, and for revenues and expenses for 
the period.

These estimates and valuations are updated continuously based 
on past experience and on various other factors considered 
reasonable in view of current circumstances, and are the basis 
for  the  assessments  of  the  carrying  amount  of  assets  and 
liabilities.

Actual results may diff er substantially from these estimates if 
assumptions or circumstances change.

Signiﬁ cant items subject to such estimates and assumptions 
include the following:

• 

impairment of current and non-current assets (notes 4.10 
to 4.12);

• 

fair value of derivative ﬁ nancial instruments (note 4.16);

•  provisions and litigation (notes 4.18 and 4.28);

•  valuation of post-employment deﬁ ned beneﬁ t plan assets 

and liabilities (note 4.17);

•  recognition of deferred tax assets (note 4.20);

•  share-based payment (note 4.22);

•  valuation of goodwill and intangible assets acquired as part 
of a business combination, as well as their estimated useful 
lives (note 4.23).

2.3  Principles and methods 

of consolidation

2.3.1  Intragroup transactions

Intragroup transactions and balances, and unrealized losses 
and gains between Group companies, are eliminated. Unrealized 
losses  are  eliminated  in  the  same  way  as  unrealized  gains, 
unless they represent an impairment loss.

2.3.2  Consolidation methods

A subsidiary is an entity directly or indirectly controlled by 
Sodexo S.A . The Group controls a subsidiary when it is exposed, 
or has rights to obtain variable beneﬁ ts from its involvement 
with the subsidiary and has the ability to inﬂ uence those beneﬁ ts 
through its power over the subsidiary. In determining whether 
control exists, voting rights granted by equity instruments are 
taken into account only when they give the Group substantive 
rights. The ﬁ nancial statements of subsidiaries are included in 
the consolidated ﬁ nancial statements from the date on which 
control is obtained to the date on which control ceases to be 
exercised.

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C O N S O L I D A T E D   I N F O R M A T I O N

Associates  are  companies  in  which  Sodexo  S.A.   directly  or 
indirectly  exercises  significant  influence  over  financial  and 
operating policy without exercising exclusive or joint control. 
Joint  ventures  are  joint  arrangements  in  which  Sodexo  S.A.  
directly  or  indirectly  exercises  joint  control  and  has  rights 
to  the  net  assets  of  the  arrangement.  Associates  and  joint 
ventures are consolidated by the equity method. Sodexo has 
a number of equity interests in project companies established 
in connection with Public-Private Partnership (PPP) contracts. 
These contracts enable governments to call upon the private 
sector for the design, construction, ﬁ nancing and management 
of public infrastructure (hospitals, schools, barracks, prisons), 
with detailed performance criteria. An analysis is performed for 
each of these equity interests, in order to determine whether 
they qualify as associates or joint ventures.

Sodexo only makes equity and subordinated debt investments 
in such projects when it acts as a service provider to the project 
company.

Further information on the main entities consolidated as of 
August 31, 2018 is provided in note 6.

2.3.3  Foreign currency translation

The exchange rates used are derived from rates quoted on the 
Paris stock exchange and other major international financial 
markets.

2.3.3.1  FOREIGN CURRENCY TRANSACTIONS

Monetary  assets  and  liabilities  denominated  in  foreign 
currencies at the period end are translated using the closing 
rate.  The  resulting  translation  differences  are  reported  in 
ﬁ nancial income or expense.

Non-monetary foreign-currency assets and liabilities reported at 
historical cost are translated using the exchange rate at the date 
of the transaction. Non-monetary assets and liabilities reported 
at fair value are translated using the exchange rate at the date 
when the fair value was determined.

Transactions for the period are translated at the exchange rate 
at the transaction date.

Translation diff erences on monetary items that are in substance 
part of a net investment in a foreign operation consolidated by 
Sodexo are reported in other comprehensive income until the 
disposal or liquidation of the investment.

2.3.3.2  FINANCIAL STATEMENTS DENOMINATED 

IN FOREIGN CURRENCIES

Countries with stable currencies

The separate ﬁ nancial statements of each consolidated entity 
are presented on the basis of the primary economic environment 
(functional currency) in which the entity operates.

For consolidation purposes, all foreign-currency assets and 
liabilities  of  consolidated  entities  are  translated  into  the 
reporting currency of the Sodexo Group (the euro) at the closing 
exchange rate, and all income statement items are translated 
at  the  average  exchange  rate  for  the  period.  The  resulting 
translation diff erences are recognized in other comprehensive 
income under “Currency translation adjustment”.

Countries with hyperinﬂ ationary economies

For these countries, the diff erence between proﬁ t or loss for the 
period translated at the average rate and proﬁ t or loss for the 
period translated at the closing rate is recognized in ﬁ nancial 
income or expense.

Since July 1, 2018, Argentina has been classiﬁ ed as a country 
with a hyperinflationary economy. However, the impacts of 
hyperinﬂ ation in that country were not material at Group level 
during ﬁ scal year 2018.

Subsidiaries operating in Venezuela

At the end of calendar 2009, Venezuela joined the list of countries 
considered hyperinﬂ ationary according to the criteria in IAS 29. 
Consequently, with eff ect from the ﬁ scal year ended August 31, 
2010, for the preparation of the consolidated ﬁ nancial statements 
the Group applied the speciﬁ c accounting requirements of this 
standard to the transactions of its subsidiaries operating in 
Venezuela that use the local currency as their functional currency.

Eff ective from Fiscal 2010, the Group decided to no longer use the 
offi  cial exchange rate published by the Venezuelan government, and 
instead to use the exchange rate corresponding to its best estimate 
of the exchange rate at which cash from its operations in Venezuela 
could be repatriated. In February 2015, the Venezuelan government 
announced  that  it  was  setting  up  a  new  foreign  exchange 
platform called SIMADI (Marginal Currency Exchange System), 
and in March 2016 another new platform was put in place, called 
DICOM. In mid-July 2015, Sodexo decided to transition to these 
new platforms and started trading on DICOM in Fiscal 2017. As of 
August 31, 2018 and August 31, 2017, the Group’s best estimate 
of the exchange rate at which it could repatriate cash from its 
operations in Venezuela corresponded to the closing exchange rate 
quoted on DICOM. The exchange rate used for the ﬁ scal year ended 
August 31, 2017 was therefore 1 U.S. dollar = 3,250 bolivars (1 euro 
= 3,843 bolivars), and for the ﬁ scal year ended August 31, 2018 it 
was 1 U.S. dollar = 6,112,000 bolivars (1 euro = 7,121,091 bolivars).

2.4  Business combinations 

and goodwill

The purchase method is used to account for acquisitions of 
subsidiaries  by  the  Group.  Fair  value  of  the  consideration 
corresponds  to  the  fair  value  of  assets  acquired,  equity 
instruments issued by the purchaser and liabilities assumed 
as of the date of the acquisition. Costs directly related to the 
acquisition are expensed as incurred in the income statement.

On initial consolidation of a subsidiary or equity interest, the 
Group measures all identiﬁ able elements acquired at fair value 
at the acquisition date, in the currency of the acquired entity.

Changes to the measurement of identiﬁ able assets and liabilities 
resulting from specialist valuations or additional analysis may be 
recognized as adjustments to goodwill if they are identiﬁ ed within 
one year of the date of acquisition and result from facts and 
circumstances existing at the acquisition date. Once this one-year 
period has elapsed, the eff ect of any adjustments is recognized 
directly in the income statement (unless it is the correction of 
an error), including recognition of deferred tax assets which are 
recognized in the income statement as a tax beneﬁ t if recognized 

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more than one year aft  er the acquisition date. Goodwill arising on 
the acquisition of associates and joint ventures is included in the 
value of the equity method investment.

Goodwill is not amortized, but is subject to impairment tests 
immediately if there are indicators of impairment, and at least 
once  per  year.  Impairment  test  procedures  are  described  in 
note 2.8. Goodwill impairment losses recognized in the income 
statement are irreversible.

2.4.5  Step acquisitions

In  a  step  acquisition,  the  fair  value  of  the  Group’s  previous 
interest in the acquired entity is measured at the date that 
control  is  obtained  and  is  recognized  in  profit  or  loss.  In 
determining the amount of goodwill recognized, the fair value 
of the consideration transferred (for example the price paid) is 
increased by the fair value of the interest previously held by the 
Group.

2.4.1  Goodwill

Any residual diff erence between the fair value of the consideration 
transferred (for example the amount paid), increased by the 
amount of the non-controlling interest in the acquired company 
(measured either at fair value or its share in the fair value of the 
identiﬁ able net assets acquired) and the fair value as of the date 
of acquisition of the assets acquired and liabilities assumed, is 
recognized as goodwill in the statement of ﬁ nancial position.

The Group measures non-controlling interests on a case-by-case 
basis for each business combination either at fair value or based 
on their percentage interest in the fair value of identiﬁ able net 
assets acquired.

2.4.2  Bargain purchases

When the fair value of the assets acquired and the liabilities 
assumed as of the acquisition date is greater than acquisition 
cost, increased by the amount of any non-controlling interest, the 
excess – representing negative goodwill – is immediately recognized 
in the income statement in the period of acquisition, aft er reviewing 
the procedures for the identification and measurement of the 
diff erent components included in the calculation.

2.4.3  Transactions in non-controlling interests

Changes in non-controlling interests, in the absence of either 
assumption or loss of control, are recognized in shareholders’ 
equity. In particular, when additional shares in an entity already 
controlled by the Group are acquired, the difference between 
the acquisition cost of the shares and the share of net assets 
acquired is recognized in equity attributable to equity holders of 
the parent. The consolidated value of the assets and liabilities of 
the subsidiary (including goodwill) remains unchanged.

2.4.4  Purchase price adjustments and/or 

earn-outs

Purchase price adjustments and/or earn-outs related to business 
combinations are recognized at their fair value as of the date of 
acquisition even if they are considered to be not probable. Aft  er 
the date of acquisition, changes in estimates of the fair value 
of price adjustments lead to an adjustment to goodwill only 
if they occur within the time allowed (a maximum of one year 
as of the date of acquisition) and if they result from facts and 
circumstances that existed at the acquisition date. In all other 
cases, the change is recognized in proﬁ t or loss except when the 
consideration transferred consists of an equity instrument.

2.5  Intangible assets

Separately acquired intangible assets are initially measured 
at  cost.  Intangible  assets  acquired  in  connection  with  a 
business combination and which can be reliably measured, are 
controlled by the Group and are separable or arise from a legal 
or contractual right, are recognized at fair value separately 
from  goodwill.  Subsequent  to  initial  recognition,  intangible 
assets are measured at cost less accumulated amortization and 
impairment losses.

Intangible  assets  other  than  certain  trademarks  having  an 
indeﬁ nite useful life are considered to have ﬁ nite useful lives, 
and  are  amortized  by  the  straight-line  method  over  their 
expected useful lives:

Integrated management software

Other software

Patents and licenses

Client relationships

Other intangible assets

3-7 years

3-5 years

2-10 years

3-20 years

3-20 years

Acquired  trademarks  with  a  finite  useful  life  are  generally 
amortized over a period of less than ten years. Trademarks 
that  the  Group  considers  as  having  an  indefinite  useful  life 
(notably based on criteria relating to their durability and name 
recognition) are not amortized.

In view of the legal characteristics of French commercial leases, 
lease rights are considered as having an indeﬁ nite useful life and 
are not amortized.

The cost of licenses and soft  ware recognized in the statement 
of ﬁ nancial position comprises the costs incurred in acquiring 
the soft  ware and bringing it into use, and is amortized over the 
estimated useful life of the asset.

Subsequent expenditures on intangible assets are capitalized 
only if they increase the expected future economic benefits 
associated  with  the  asset  to  which  they  relate.  Other 
expenditures are expensed as incurred.

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Leases under which the lessor retains substantially all the risks 
and rewards incidental to ownership of the asset are treated as 
operating leases. Payments made under operating leases are 
expensed as an operating item on a straight-line basis over the 
term of the lease.

2.8  Impairment of assets

2.8.1  Impairment of assets with finite useful lives

Property, plant and equipment and intangible assets with ﬁ nite 
useful lives are tested for impairment if there is any indication 
of impairment. Impairment losses are recognized in the income 
statement, and may be reversed subsequently.

2.8.2  Impairment of assets with indefinite 

useful lives

Goodwill and other intangible assets considered to have an 
indefinite useful life (such as certain trademarks) are tested 
for impairment whenever there is an indication of impairment, 
and at least annually, in the last quarter of the ﬁ scal year. The 
results of the impairment tests are then conﬁ rmed using data 
as of August 31.

2.8.2.1  CASH GENERATING UNITS

Assets  that  do  not  generate  cash  inflows  that  are  largely 
independent of those from other assets, and hence cannot be 
tested for impairment individually, are grouped together in Cash 
Generating Units (CGUs).

Impairment tests are performed at the level of the CGU or group 
of CGUs corresponding to the lowest level at which goodwill is 
monitored by the Group.

Since Fiscal 2017, goodwill for the has been analyzed based on 
the following operating segments in the Group’s organizational 
structure (see note 3):

•  On-site Services activity:

•  Business & Administrations, which includes Corporate 
Services, Energy & Resources, Government & Agencies, 
Sports & Leisure and other non-segmented activities,

•  Health Care, combined with Seniors,

•  Education, comprising Schools and Universities;

•  the Beneﬁ ts and Rewards Services activity corresponds to a 

single CGU.

Goodwill is not tested for impairment at a higher level than the 
operating segments before aggregation for segment reporting.

The assets allocated to each CGU or group of CGUs comprise:

•  goodwill, which is allocated when the CGU or group of CGUs is 

likely to beneﬁ t from the business combination;

•  other intangible assets, property, plant and equipment, client 

investments and net working capital.

2.8.2.2 

INDICATIONS OF IMPAIRMENT

The  main  indicators  that  a  CGU  may  be  impaired  are  a 
significant  decrease  in  the  CGU’s  revenues  and  underlying 
operating proﬁ t or material changes in market trends.

2.6  Property, plant and equipment

Property,  plant  and  equipment  are  measured  at  cost  less 
accumulated depreciation and impairment losses, except for 
land, which is measured at cost less accumulated impairment 
losses. Cost includes expenditures directly incurred to acquire 
the  asset,  and  in  some  cases  may  also  include  estimated 
unavoidable future dismantling, removal and site remediation 
costs.

Subsequent expenditures are included in the carrying amount 
of the asset, or recognized as a separate component, if it is 
probable that the future economic beneﬁ ts of the expenditures 
will ﬂ ow to Sodexo and the cost can be measured reliably. All 
other repair and maintenance costs are recognized as expenses 
during  the  period  in  which  they  are  incurred,  except  costs 
incurred to improve productivity or extend the useful life of an 
asset, which are capitalized.

Items of property, plant and equipment are depreciated over 
their expected useful lives using the component-based approach, 
taking account of their residual value. The straight-line method of 
depreciation is regarded as the method that most closely reﬂ ects 
the expected pattern of consumption of the future economic 
beneﬁ ts embodied in items of property, plant and equipment.

The useful lives generally used by the Group are:

Buildings

General fixtures and fittings

Plant and machinery

Motor vehicles

Boats and pontoons (depending on the 
component)

20-30 years

3-10 years

3-8 years

4 years

5-15 years

The residual values and useful lives of items of property, plant 
and equipment are reviewed and, if necessary, adjusted at each 
period end.

The carrying amounts of items of property, plant and equipment 
are tested for impairment if there is an indication that an item 
may be subject to impairment.

2.7  Leases

Finance  leases,  under  which  substantially  all  the  risks  and 
rewards incidental to ownership of an asset are transferred to 
Sodexo, are accounted for as follows:

•  at inception of the lease term, the leased asset is recognized 
as an asset at the lower of fair value or the present value of 
the minimum lease payments;

•  the corresponding liability is recognized in borrowings;

• 

lease payments are apportioned between the ﬁ nance charge 
and  the  reduction  of  the  outstanding  liability  so  as  to 
produce a constant periodic rate of interest on the remaining 
balance of the liability.

An  asset  held  under  a  finance  lease  is  depreciated  over  its 
estimated useful life, or if there is no reasonable certainty that 
the lessee will obtain ownership by the end of the lease term, 
over the shorter of the lease term and its useful life.

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2.8.2.3  METHODS USED TO DETERMINE THE RECOVERABLE 

AMOUNT

An  impairment  loss  is  recognized  in  the  income  statement 
when the carrying amount of an asset or CGU is greater than its 
recoverable amount.

Recoverable amount is the greater of:

• 

fair value less costs of disposal, i.e., the amount obtainable 
from  the  sale  of  an  asset  (net  of  selling  costs)  in  an 
orderly  transaction  between  market  participants  at  the 
measurement date; and

•  value in use, which is the present value of the future cash 
flows  expected  to  be  derived  from  continuing  use  and 
ultimate disposal of the asset or CGU.

The value in use of a CGU or group of CGUs is estimated using 
aft  er-tax cash ﬂ ow projections based on business plans and a 
terminal value calculated by extrapolating data for the final 
year of the business plan. Business plans generally cover one to 
ﬁ ve years. These plans have been drawn up for each operating 
segment resulting from the Group’s new organizational structure 
as described in note 3.

Management  both  at  Group  and  subsidiary  levels  prepares 
underlying proﬁ t forecasts on the basis of past performance and 
expected market trends.

The growth rate used beyond the initial period of the business 
plans  reflects  the  growth  rate  of  the  operating  segment 
concerned, taking into account the geographic regions in which 
the operating segment conducts business.

Expected future cash ﬂ ows are discounted at the weighted average 
cost of capital calculated for the Group. For certain CGUs or groups 
of CGUs a premium is added to the weighted average cost of capital 
in order to reﬂ ect the greater risk factors aff ecting certain countries 
in which the operating segment concerned conducts business.

The growth and discount rates used for impairment tests during 
the period are provided in note 4.10.

2.8.2.4  RECOGNITION OF IMPAIRMENT LOSSES

An impairment loss recognized with respect to a CGU is allocated 
initially  to  reducing  the  carrying  amount  of  any  goodwill 
allocated to that CGU, and then to reducing the carrying amount 
of the other assets of the CGU in proportion to the carrying 
amount of each asset.

2.8.3  Reversal of impairment losses

Impairment losses recognized with respect to goodwill cannot 
be reversed.

Impairment losses recognized with respect to any other asset 
may only be reversed if there is an indication that the impairment 
loss is lower or no longer exists. The amount reversed is based on 
the new estimates of the recoverable amount.

The increased carrying amount of an asset resulting from the 
reversal  of  an  impairment  loss  cannot  exceed  the  carrying 
amount that would have been determined for that asset had no 
impairment loss been recognized.

2.9  Client investments

Some client contracts provide for a financial contribution by 
Sodexo. For example, the Group may participate in financing 

the purchase of equipment or ﬁ xtures on the client site that are 
necessary to fulﬁ ll service obligations, or it may make a ﬁ nancial 
contribution that will be recovered over the life of the contract. 
These assets are generally amortized over a period of less than 
10 years, but may be amortized over a longer period depending 
on the contract duration. The amortization is recognized as a 
reduction to revenues over the life of the contract.

In  the  cash  flow  statement,  changes  in  the  value  of  these 
investments are presented as a component of investing cash 
ﬂ ows.

2.10 

Inventories

Inventories are measured at the lower of cost or net realizable 
value. Cost is determined by the FIFO (First In First Out) method.

2.11  Trade and other receivables

Trade  and  other  receivables  are  initially  recognized  at  fair 
value, and are subsequently measured at amortized cost less 
impairment losses recognized in the income statement.

Impairment is recognized when there is objective evidence of 
the Group’s inability to recover the full amount due under the 
initial contract terms. The impairment recognized represents 
the diff erence between the carrying amount of the asset and the 
discounted future cash ﬂ ow, estimated using the initial eff ective 
interest rate. The resulting impairment loss is recognized in the 
income statement.

2.12  Financial instruments

Financial assets and liabilities are recognized in the statement 
of ﬁ nancial position on the transaction date, which is the date 
when Sodexo becomes a party to the contractual provisions of 
the instrument.

The fair values of ﬁ nancial assets and derivative instruments are 
generally determined on the basis of quoted market prices or of 
valuations carried out by the depositary bank.

2.12.1  Financial assets

Financial assets are measured and recognized in three main 
categories:

•  available-for-sale  financial  assets  include  equity 
investments  in  non-consolidated  entities,  marketable 
securities  with  maturities  greater  than  three  months, 
and restricted cash. They are measured at fair value, with 
changes in fair value recognized in other comprehensive 
income. When an available-for-sale ﬁ nancial asset is sold or 
impaired, the cumulative fair value adjustment recognized 
in other comprehensive income is transferred to the income 
statement. For securities listed on an active market, fair 
value  is  considered  to  equal  market  value.  If  no  active 
market exists, fair value is generally determined based on 
appropriate ﬁ nancial criteria for the speciﬁ c security. If the 
fair value of an available-for-sale ﬁ nancial asset cannot be 
reliably measured, it is recognized at cost;

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• 

loans  and  receivables  include  financial  and  security 
deposits,  and  loans  to  non-consolidated  entities.  These 
ﬁ nancial assets are recognized in the statement of ﬁ nancial 
position at fair value and subsequently at amortized cost, 
which  is  equivalent  to  acquisition  cost  as  no  significant 
transaction costs are incurred in acquiring such assets. They 
are tested for impairment if there is an indication that they 
may be impaired, and an impairment loss is recognized if the 
carrying amount of the asset is greater than its estimated 
recoverable amount;

• 

financial  assets  at  fair  value  through  profit  or  loss 
include other ﬁ nancial assets held for trading and acquired 
for  the  purpose  of  resale  in  the  near  term.  Subsequent 
changes in the fair value of these assets are recognized in 
ﬁ nancial income or expense in the income statement.

2.12.2  Derivative financial instruments

Sodexo’s policy is to ﬁ nance the majority of acquisition costs 
insofar  as  possible  in  the  currency  of  the  acquired  entity, 
generally at ﬁ xed rates of interest.

Derivative ﬁ nancial instruments are initially recognized at fair 
value in the statement of ﬁ nancial position. Subsequent changes 
in the fair value of derivative instruments are recognized in the 
income statement, except in the case of instruments that qualify 
as cash ﬂ ow hedges.

For cash ﬂ ow hedges, the necessary documentation is prepared 
at inception and updated at each period end.

Gains or losses arising on the effective portion of the hedge 
are recognized in other comprehensive income, and are not 
recognized in the income statement until the underlying asset 
or liability is realized. Gains or losses arising on the ineff ective 
portion of the hedge are recognized in the income statement.

The  fair  value  of  these  derivative  instruments  is  generally 
determined based on valuations provided by the bank counter-
parties.

2.12.3   Commitments to purchase non-controlling 

interests

As  required  by  IAS  32,  Sodexo  recognizes  commitments 
to  purchase  non-controlling  interests  as  a  liability  within 
borrowings in the consolidated statement of ﬁ nancial position. 
Commitments  to  purchase  non-controlling  interests  given 
in connection with business combinations are recognized as 
follows:

•  the  liability  arising  from  the  commitment  is  recognized 
in other borrowings at the present value of the purchase 
commitment;

•  the corresponding non-controlling interests are cancelled;

•  additional goodwill is recognized for the balance.

2.12.4  Bank borrowings and bond issues

All borrowings, including bank credit facilities and overdraft  s, are 
initially recognized at the fair value of the amount received less 
directly attributable transaction costs.

Subsequent to initial recognition, borrowings are measured 
at  amortized  cost  using  the  effective  interest  method.  The 
effective  interest  rate  is  the  rate  that  discounts  estimated 

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future cash payments or receipts through the expected life of 
a ﬁ nancial liability to the net carrying amount of that liability. 
The calculation includes the eff ects of transaction costs, and of 
diff erences between the issue proceeds (net of transaction costs) 
and reimbursement value.

2.13  Cash and cash equivalents

Cash  and  cash  equivalents  comprise  current  bank  account 
balances, cash on hand and short-term cash investments in 
money-market instruments which either have an initial maturity 
of less than three months at the moment of purchase or may be 
withdrawn at any time at a known cash value with no material 
risk of loss in value.

2.14  Borrowing costs

Borrowing  costs  directly  attributable  to  the  acquisition, 
construction or production of a qualifying non-current asset 
are included in the cost of that asset. Borrowing costs that 
are not directly attributable to the acquisition, construction or 
production of a qualifying non-current asset are recognized as 
an expense using the eff ective interest method.

2.15  Sodexo treasury shares

3

Sodexo  shares  held  by  Sodexo  S.A.   itself  and/or  by  other 
Group  companies  are  shown  as  a  reduction  in  consolidated 
shareholders’ equity at their acquisition cost.

Gains  and  losses  on  acquisitions  and  disposals  of  treasury 
shares are recognized directly in consolidated shareholders’ 
equity and do not aff ect proﬁ t or loss for the period.

2.16  Provisions

A provision is recognized if the Group has a legal or constructive 
obligation at the period end and it is probable that settlement 
of the obligation will require an outflow of resources and the 
amount of the liability can be reliably measured.

Provisions primarily cover commercial, employee-related and 
tax-related risks and litigation (other than those related to 
income tax) arising in the course of operating activities, and 
are measured using assumptions that take account of the most 
likely outcomes.

Where the effect of the time value of money is material, the 
amount  of  the  provision  is  determined  by  discounting  the 
expected  future  cash  flows  at  a  pre-tax  discount  rate  that 
reﬂ ects current market assessments of the time value of money 
and any risks speciﬁ c to the liability.

A  provision  for  onerous  contracts  is  established  where  the 
unavoidable costs of meeting the obligations under a contract 
exceed the economic beneﬁ ts expected to be received under it.

2.17  Employee beneﬁ ts

2.17.1  Short-term benefits

Group  employees  receive  short-term  benefits  such  as 
vacation  pay,  sick  pay,  bonuses  and  other  benefits  (other 

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than termination beneﬁ ts), whose payment is expected within 
12 months of the related service period.

These beneﬁ ts are reported as current liabilities.

2.17.2  Post-employment benefits

Sodexo measures and recognizes post-employment beneﬁ ts as 
follows:

•  contributions to deﬁ ned-contribution plans are recognized as 

an expense; and

•  defined  benefit  plans  are  measured  using  actuarial 

valuations.

Sodexo uses the projected unit credit method as the actuarial 
method for measuring its post-employment beneﬁ t obligations, 
on  the  basis  of  the  national  or  company-wide  collective 
agreements eff ective within each entity.

Factors  used  in  calculating  the  obligation  include  length  of 
service, life expectancy, salary inflation, staff turnover, and 
macro-economic assumptions specific to countries in which 
Sodexo operates (such as inﬂ ation rate and discount rate).

Remeasurement of the net obligation under defined benefit 
plans, including actuarial gains and losses, diff erences between 
the return on plan assets and the corresponding interest income 
recognized in the income statement, and any changes in the 
eff ect of the asset ceiling, is recognized in other comprehensive 
income and have no impact on proﬁ t for the period.

Plan  amendments  and  the  establishment  of  new  defined 
benefit plans result in past service costs that are recognized 
immediately in the income statement.

The accounting treatment applied to deﬁ ned beneﬁ t plans is as 
follows:

•  the obligation, net of plan assets, is recognized as a non-
current liability in the consolidated statement of ﬁ nancial 
position if the obligation exceeds the plan assets;

• 

if the value of plan assets exceeds the obligation under the 
plan, the net amount is recognized as a non-current asset. 
Plan surpluses are recognized as assets only if they represent 
future economic benefits that will be available to Sodexo. 
Where the calculation of the net obligation results in an asset 
for Sodexo, the amount recognized for this asset may not 
exceed the present value of all future refunds and reductions 
in future contributions under the plan;

•  the expense recognized in the income statement comprises:

•  current service cost, past service cost, if any, and the 
effect of plan settlements, all of which are recorded in 
operating income,

Sodexo  contributes  to  multiemployer  plans,  primarily  in 
the United States. These plans are accounted for as defined 
contribution plans, as the information provided by the plan 
administrators is insuffi  cient for them to be accounted for as 
deﬁ ned beneﬁ t plans (see note 4.17.1.3).

2.17.3  Other long-term employee benefits

Other long-term employee beneﬁ ts are measured in accordance 
with IAS 19. The expected cost of such benefits is recognized 
as a non-current liability over the employee’s period of service. 
Actuarial gains and losses and past service costs arising from 
plan  amendments  and  the  establishment  of  new  plans  are 
recognized immediately in the income statement.

2.18  Vouchers payable

Vouchers payable are recognized as a current liability at fair 
value,  which  is  the  face  value  of  vouchers  in  circulation  or 
returned to Sodexo but not yet reimbursed to affi  liates.

2.19  Share-based payment

Some Group employees receive compensation in the form of 
share-based payments, for which payment is made in equity 
instruments.

The services compensated by these plans are recognized as an 
expense, with the off set recognized in shareholders’ equity, over 
the vesting period. The amount of expense recognized in each 
period is determined by reference to the fair value of the equity 
instruments granted, as of the grant date.

Each  year,  Sodexo  reassesses  the  number  of  potentially 
exercisable stock options that are expected to vest as well as the 
number of shares that is likely to be delivered to beneﬁ ciaries 
of free shares based on the applicable vesting conditions. The 
impact of any change in estimates is recognized in the income 
statement, with the off set recognized in shareholders’ equity.

The features of the Group’s share-based payment plans are set 
out in note 4.22.

2.20  Deferred taxes

Deferred taxes are recognized on temporary diff erences between 
the carrying amount of an asset or liability and its tax base, using 
the tax rate that is expected to apply in the period when the asset 
is realized or the liability is settled, based on tax rates (and tax 
laws) that are enacted or substantially enacted at the period end.

Deferred taxes are not recognized on the following items:

•  the  interest  expense  (income)  on  the  net  defined 
beneﬁ t obligation (asset), calculated by multiplying the 
obligation (asset) by the discount rate used to measure 
the defined benefit obligation at the beginning of the 
period.

• 

• 

initial recognition of goodwill;

initial recognition of an asset in a transaction that is not a 
business combination and that aff ects neither accounting 
proﬁ t nor taxable proﬁ t; and

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•  temporary diff erences on investments in subsidiaries that are 

not expected to reverse in the foreseeable future.

The income statement and segment information for Fiscal 2017 
have been restated based on the new presentation.

Taxes on items recognized directly in shareholders’ equity or 
in other comprehensive income are recognized in shareholders’ 
equity or in other comprehensive income, respectively, and not 
in the income statement.

Residual deferred tax assets on temporary diff erences and tax 
loss carry-forwards (aft  er off set of deferred tax liabilities) are 
only recognized if their recovery is considered probable.

Deferred tax assets and liabilities are off set if there is a legally 
enforceable right to set off  current tax assets and liabilities and 
the deferred taxes relate to the same taxable entity and tax 
authority.

2.21  Trade and other payables

Trade and other payables are measured at fair value on initial 
recognition, and subsequently at amortized cost.

2.22 

Income statement

2.22.1  Income statement by function

Sodexo presents its income statement by function.

Operating proﬁ t comprises the following components:

•  gross proﬁ t;

•  administrative and Sales Department costs; and

•  other operating income and expenses.

In order to better focus the Group’s ﬁ nancial communication on 
recurring operating proﬁ t and to simplify benchmarking with 
competitors, the consolidated income statement has changed 
as from Fiscal 2018 to include a new indicator, “Underlying 
operating proﬁ t”, which corresponds to operating proﬁ t before 
“Other operating income” and “Other operating expenses”.

Other operating income and expenses include the following:

•  gains  and  losses  arising  from  changes  in  the  scope  of 

consolidation;

•  gains and losses arising from changes in post-employment 

beneﬁ t obligations;

•  restructuring and rationalization costs;

•  M&A costs;

•  amortization and impairment of client relationships and 

trademarks;

•  goodwill impairment;

• 

impairment of non-current assets and other unusual or non-
recurring items representing material amounts.

Underlying operating proﬁ t also comprises the Group’s share 
of proﬁ t of companies consolidated by the equity method that 
directly contribute to the Group’s business.

Underlying operating proﬁ t has replaced operating proﬁ t in the 
segment information, as it is now the main indicator reviewed 
regularly by the Executive Committee, which is the Group’s main 
operating decision-maker.

In the new presentation of the income statement, the costs of 
the 18-month Adaptation and Simpliﬁ cation program launched 
in Fiscal 2016, aimed at further adapting on-site operating 
costs, simplifying organizational structures and procedures 
and increasing international pooling of resources, have been 
reclassiﬁ ed under “Other operating expenses”.

2.22.2  Revenues

Revenues reported by Sodexo relate to the sale of services in 
connection with the ordinary activities of fully consolidated 
companies as follows:

•  On-site Services: revenues include all revenues stipulated in 
the contract, considering whether Sodexo acts as principal 
(the vast majority of cases) or agent;

•  Benefits  and  Rewards  Services:  revenues  include  mainly 
commissions received from clients and affi  liates, ﬁ nancial 
income  from  the  investment  of  cash  generated  by  the 
activity, and proﬁ ts from vouchers and cards not reimbursed.

Revenues are measured at the fair value of the consideration 
received  or  to  be  received,  net  of  discounts  and  rebates  as 
well as Value Added Tax (VAT) and other taxes. Revenues are 
recognized when it is probable that future economic benefits 
will ﬂ ow to Sodexo and these beneﬁ ts can be measured reliably. 
No income is recognized if there is signiﬁ cant uncertainty about 
recoverability of the costs incurred or to be incurred in meeting 
the service obligation.

Foodservices and other On-site Services revenues are recognized 
when the service is rendered.

Commissions received from clients in the Beneﬁ ts and Rewards 
Services activity are recognized when the vouchers are issued 
and sent to the client or the cards are credited. Commissions 
received from affi  liates are recognized when the vouchers are 
reimbursed or the cards are used. Profits from unreimbursed 
vouchers and cards are recognized based on their expiration 
date and the deadline for presentation for reimbursement by 
the affi  liate.

2.22.3  Discount Allowances

As  part  of  its  food  or  other  material  supply  contracts  with 
manufacturers and distributors, the Group can earn discounts, 
rebates, or credits related to the purchases made under those 
contracts. Vendor Discount Allowances (VDA) are earned by 
the volume of materials purchased under the contract, by the 
periodic purchase volumes exceeding certain contractually-
deﬁ ned thresholds, or as ﬁ xed amounts in exchange for certain 
commitments such as vendor exclusivity arrangements. The 
Group  retains  VDAs  to  the  extent  consistent  with  its  client 
contracts and applicable law. Our accounting policy for VDAs is 
as follows:

•  VDAs earned on purchases made through Sodexo-managed 
food  or  facilities  services  contracts  are  recognized  as  a 
reduction to Cost of Sales;

•  VDAs  earned  on  purchases  made  through  procurement 
management services contracts are recognized as Revenues.

3

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VDAs  are  typically  recognized  in  the  period  the  purchases 
are made based on the volume of materials purchased in the 
period and the contractual VDA rate. VDAs earned based on 
purchase volumes reaching contractually-deﬁ ned thresholds are 
recognized in proportion with the purchases made as soon as the 
Group considers it probable that the thresholds will be reached. 
If the Group does not consider it probable that its purchase 
volumes will reach the contractually-defined thresholds, any 
VDAs  earned  are  recognized  if  and  when  the  thresholds  are 
reached. Fixed-amount VDAs are recognized immediately unless 
certain conditions need to be met in order for them to be earned 
or if there is a clear link between the amount promised and the 
future purchase volumes. In such cases, ﬁ xed-amount VDAs are 
recognized over the period of the related commitment.

VDAs are typically recognized in the period the purchases are 
made based on the volume of materials purchased in the period 
and the contractual VDA rate. VDAs earned based on achieving 
contractually-deﬁ ned thresholds are recognized at the end of the 
contractual measurement period if our purchase volumes exceed 
the deﬁ ned thresholds. Fixed-amount VDAs are recognized on a 
straight-line basis over the period of the related commitment.

2.22.4  Income tax expense

In  connection  with  the  introduction  of  the  contribution 
économique territoriale (CET – local economic contribution) 
under the 2010 Finance Bill in France, which applies to French 
subsidiaries, Sodexo has elected to recognize in income tax 
expense the portion of the CET related to the cotisation sur la 
valeur ajoutée des entreprises (tax on corporate value added).

Tax  credits  that  do  not  affect  taxable  profit  and  are  always 
refunded by the French government if they have not been deducted 

3.  OPERATING SEGMENTS

The segment information presented below has been prepared 
based on internal management data as monitored by the Group 
Executive Committee, which is Sodexo’s chief operating decision-
maker: On-site Services and Beneﬁ ts and Rewards Services.

For On-site Services, since the beginning of Fiscal 2017, the 
Group  has  monitored  this  activity  based  on  global  client 
segments  rather  than  geographies  to  reflect  the  gradual 
reorganization of the Group since September 2015. The Group 
has  progressively  adapted  the  way  it  conducts  its  On-site 
Services business, building an organization by global client 
segment  to  better  support  clients  wherever  they  are,  both 
locally and internationally, and by global function to ensure 
optimized and standardized processes in all service off erings 
and functional activities. These global client segments meet the 
deﬁ nition of operating segments in IFRS 8.

As explained in note 2.22.1, since Fiscal 2018, the Group has 
introduced  a  new  indicator,  “Underlying  operating  profit”, 
which is monitored by segment along with revenues, replacing 

from corporate income tax (including the Competitiveness and 
Employment Tax Credit (CICE) introduced in France under the 
third amended 2012 Finance Bill) are recognized as subsidies and 
therefore deducted from the expenses to which they relate.

2.23  Earnings per share

Earnings per share is calculated by dividing proﬁ t for the period 
by the weighted average number of ordinary shares outstanding 
during the period, net of treasury shares.

In the calculation of diluted earnings per share, the denominator 
is increased by the number of potentially dilutive shares, and the 
numerator is adjusted for all dividends and interest recognized 
in the period and any other change in income or expenses that 
would result from conversion of the potentially dilutive shares.

Potential ordinary shares are treated as dilutive if and only if 
their conversion to shares would decrease earnings per share or 
increase loss per share.

A  reconciliation  between  the  weighted  average  number  of 
ordinary shares for the period and the weighted average number 
of shares for the period adjusted for the eff ects of potentially 
dilutive ordinary shares is presented in note 4.4.

2.24  Cash ﬂ ow statement

The cash ﬂ ow statement analyzes changes in net cash and cash 
equivalents, deﬁ ned as cash and cash equivalents less current 
bank overdraft  s and credit bank balances payable on demand 
that form an integral component of treasury management.

operating proﬁ t. Consequently, Sodexo’s operating segments 
and groups of operating segments are now as follows:

•  On-site Services:

•  Business & Administrations, which includes Corporate 
Services, Energy & Resources, Government & Agencies, 
Sports & Leisure and other non-segmented activities,

•  Health Care, combined with Seniors,

•  Education, comprising Schools and Universities;

•  Beneﬁ ts and Rewards Services.

The operating segments that have been aggregated carry out 
similar operations – both in terms of type of services rendered 
and the processes and methods used to deliver the services – 
and have similar economic characteristics (notably in terms of 
the margins they generate).

Segment assets and liabilities are not presented as they are not 
included in the chief operating decision-maker’s measurement 
of segment performance.

No single Group client or contract accounts for more than 2% of 
consolidated revenues.

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846

4

850

262

901

4

905

304

3.1  By business segment

FISCAL 2018
(in millions of euro)

ON-SITE 
SERVICES

BUSINESS & 
ADMINISTRATIONS

HEALTH CARE 
AND SENIORS

EDUCATION

Revenues (third-party)

19,561

10,938

4,768

3,855

Inter-segment sales (Group)

TOTAL

19,561

10,938

4,768

3,855

Underlying operating profit(1)

986

458

306

222

BENEFITS AND 
REWARDS 
SERVICES

ELIMINATIONS 
AND 
CORPORATE 
EXPENSES

GROUP TOTAL

20,407

(4)

(4)

20,407

(120)

1,128

(1) This is a new consolidated income statement indicator (see note 2.22.1) that includes the Group’s share of profit of companies consolidated by the equity method 

that directly contribute to the Group’s business but excludes other operating income and expenses.

FISCAL 2017
(in millions of euro)

ON-SITE 
SERVICES

BUSINESS & 
ADMINISTRATIONS

HEALTH CARE 
AND SENIORS

EDUCATION

Revenues (third-party)

19,797

10,551

5,007

4,239

Inter-segment sales (Group)

TOTAL

19,797

10,551

5,007

4,239

Underlying operating profit(1)

1,139

518

338

283

BENEFITS AND 
REWARDS 
SERVICES

ELIMINATIONS 
AND 
CORPORATE 
EXPENSES

GROUP TOTAL

20,698

(4)

(4)

20,698

(103)

1,340

3

(1) This is a new consolidated income statement indicator (see note 2.22.1) that includes the Group’s share of profit of companies consolidated by the equity method 

that directly contribute to the Group’s business but excludes other operating income and expenses.

3.2  By signiﬁ cant country

The Group’s operations are spread across 72 countries, including two that each represent over 10% of consolidated revenues: France 
(the Group’s home country) and the United States. Revenues and non-current assets in these countries are as follows:

AUGUST 31, 2018
(in millions of euro)

Revenues (third-party)

Non-current assets(1)

(1) Property, plant and equipment, goodwill, other intangible assets, and client investments.

AUGUST 31, 2017 
(in millions of euro)

Revenues (third-party)

Non-current assets(1)

(1) Property, plant and equipment, goodwill, other intangible assets, and client investments.

FRANCE

UNITED STATES

2,721

1,084

8,243

3,827

FRANCE

UNITED STATES

2,680

1,081

8,675

3,244

OTHER

9,443

2,635

OTHER

9,343

2,631

TOTAL

20,407

7,546

TOTAL

20,698

6,956

3.3  By type of service

Revenues by type of service are as follows:

(in millions of euro)

Foodservices

Facilities management services

TOTAL ON-SITE SERVICES REVENUES

Benefits and Rewards Services

Eliminations

FISCAL 2018

FISCAL 2017

13,172

6,389

19,561

850

(4)

13,632

6,165

19,797

905

(4)

TOTAL CONSOLIDATED REVENUES

20,407

20,698

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4.  NOTES TO THE FINANCIAL STATEMENTS AS OF AUGUST 31, 2018

4.1  Operating expenses by nature and other operating income and expenses

4.1.1  Operating expenses by nature

(in millions of euro)

Depreciation, amortization and impairment losses

Employee costs

•  Wages and salaries

•  Other employee costs(1)

Purchases of consumables and change in inventory

Other operating expenses(2)

TOTAL

FISCAL 2018

FISCAL 2017(3)

(326)

(280)

(7,615)

(2,283)

(5,445)

(3,745)

(7,702)

(2,318)

(5,751)

(3,463)

(19,414)

(19,514)

(1) Primarily payroll taxes, but also including costs associated with defined benefit plans (note 4.17), defined contribution plans (note 4.17) and free shares (note 4.22).
(2) Other operating expenses mainly include operating lease expenses (343 million euro for Fiscal 2018 and 317 million euro for Fiscal 2017), professional fees, other 

purchases of consumables, sub-contracting costs and travel expenses.

(3) Including 137 million euro in expenses recorded in Fiscal 2017 in connection with the Adaptation and Simplification program.

4.1.2  Other operating income and expenses

(in millions of euro)

Gains related to perimeter changes

Gains on changes of post-employment benefits

Other

TOTAL OTHER OPERATING INCOME

Restructuring and rationalization costs(1)

Acquisition-related costs

Losses related to perimeter changes

Losses on changes of post-employment benefits

Amortization and impairment of client relationships and trademarks

Other

FISCAL 2018

FISCAL 2017

3

7

10

(42)

(15)

(18)

(52)

(14)

21

3

24

(137)

(6)

(2)

(31)

TOTAL OTHER OPERATING EXPENSES

(141)

(176)

(1) For Fiscal 2017, this item corresponds to the costs incurred for the Adaptation and Simplification program.

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C O N S O L I D A T E D   I N F O R M A T I O N

4.2  Financial income and expense

(in millions of euro)

Gross borrowing cost(1)

Interest income from short-term bank deposits and equivalent

NET BORROWING COST

Interest income from loans and receivables at amortized cost

Other financial income(2)

Other financial expense(3)

Net foreign exchange gains/(losses)

Net interest cost on net defined benefit plan obligation

Monetary adjustment for hyperinflation

Change in fair value of derivative financial instruments not qualified for hedge accounting

Other(4)

NET FINANCIAL EXPENSE

Of which financial income

Of which financial expense

FISCAL 2018

FISCAL 2017

(110)

31

(79)

3

12

(10)

(2)

(7)

(7)

(90)

46

(136)

(94)

15

(79)

3

5

(29)

(2)

(7)

(4)

8

(105)

31

(136)

3

(1) Gross borrowing cost represents interest expense on financial liabilities at amortized cost and interest expense on hedging instruments.
(2) Including, in Fiscal 2018, 8 million euro in late payment interest received in relation to a refund of dividend tax and other taxes.
(3) Including, in Fiscal 2017, 11 million euro related to the early redemption of 108 million U.S. dollars’ worth of a U.S. private placement.
(4) Including, in Fiscal 2017, a gain from the sale of a non-controlling interest in PFIs in the United Kingdom.

4.3  Income tax expense

4.3.1  Income tax rate reconciliation

(in millions of euro)

Profit for the period before tax

Share of profit of companies consolidated by the equity method

Accounting profit before tax

Tax rate applicable to Sodexo S.A. 

Theoretical income tax expense

Effect of jurisdictional tax rate differences

Reimbursement of additional tax on dividends paid

Permanently non-deductible expenses or non-taxable income

Other tax repayments/(charges), net

Tax loss carry-forwards used or recognized during the period but not recognized as a deferred 
tax asset in prior periods

Tax loss carry-forwards arising during the period or prior years but not recognized as a deferred 
tax asset

Actual income tax expense

Withholding taxes

TOTAL INCOME TAX EXPENSE

FISCAL 2018

FISCAL 2017

909

(6)

903

34.43%

(311)

77

44

(7)

(13)

5

(34)

(239)

(6)

(245)

1,088

(9)

1,079

34.43%

(371)

32

(11)

45

3

12

(39)

(329)

(14)

(343)

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3 N o t e s   t o   t h e   c o n s o l i d a t e d   f i n a n c i a l   s t a t e m e n t s

4.3.2  Components of income tax expense

(in millions of euro)

Current income taxes

Adjustments to current income tax payable in respect of prior periods

Provision for tax exposures

Utilization of tax credits, tax losses and temporary difference carry-forwards

FISCAL 2018

FISCAL 2017

(217)

(327)

(1)

(1)

59

2

4

47

CURRENT INCOME TAXES

(160)

(274)

Deferred taxes on temporary differences arising or reversing during the period

Deferred taxes on changes in tax rates or liability for taxes at new rates

Utilization of tax credits, tax losses and tax loss carry-forwards

DEFERRED INCOME TAXES

ACTUAL INCOME TAX EXPENSE

(55)

(21)

(4)

(80)

(48)

3

(10)

(55)

(239)

(329)

The eff ective tax rate, calculated on the basis of proﬁ t for the period before tax and excluding the share of proﬁ t of companies consolidated 
by the equity method, decreased from 31.7% for Fiscal 2017 to 27.1% for Fiscal 2018.  The decline was mainly due to the reimbursement 
of the tax on dividends in France, for 44 million euro, and to the eff ects of the tax reform in the United States.

4.4  Earnings per share

The table below presents the calculation of basic and diluted earnings per share:

Profit for the period attributable to equity holders of the parent

Basic weighted average number of shares

Basic earnings per share(1)

FISCAL 2018

FISCAL 2017

651

723

148,077,776

148,998,961

4.40

4.85

Average dilutive effect of stock option and free share plans

2,033,657

2,060,749

Diluted weighted average number of shares

Diluted earnings per share(1)

150,111,433

151,059,710

4.34

4.79

(1) Basic  and  diluted  earnings  per  share  do  not  reflect  the  effect  of  the  dividend  premium  to  be  paid  on  certain  registered  shares  meeting  the  criteria  described  in 

note 4.14. Based on the number of registered shares as of August 31, 2018, such shares total 7.227.652 (7,317,098 as of August 31, 2017).

All of the Group’s stock option and free share plans had a dilutive impact in both Fiscal 2017 and Fiscal 2018.

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4.5  Property, plant and equipment

4.5.1  Analysis of property, plant and equipment

The tables below include assets held under ﬁ nance leases.

(in millions of euro)

Carrying amount – August 31, 2016

Increases during the fiscal year

Decreases during the fiscal year

Newly consolidated companies

Newly deconsolidated companies

Impairment losses recognized in profit or loss

Depreciation expense

Currency translation adjustment

Other

Carrying amount – August 31, 2017

Increases during the fiscal year

Decreases during the fiscal year

Newly consolidated companies

Newly deconsolidated companies

Depreciation expense

Currency translation adjustment

Other

Carrying amount – August 31, 2018

(in millions of euro)

Cost

Accumulated depreciation and impairment

Carrying amount

N o t e s   t o   t h e   c o n s o l i d a t e d   f i n a n c i a l   s t a t e m e n t s

C O N S O L I D A T E D   I N F O R M A T I O N

LAND 
AND BUILDINGS

PLANT AND 
EQUIPMENT

CONSTRUCTION 
IN PROGRESS 
AND OTHER

71

1

(1)

(9)

(1)

(4)

57

6

(1)

2

(3)

(3)

(1)

(10)

47

471

170

(16)

5

(4)

(2)

(169)

(12)

17

460

175

(14)

40

(1)

(179)

(17)

28

492

62

52

(2)

(17)

(2)

(20)

73

44

(4)

7

(18)

(23)

80

TOTAL

604

223

(18)

5

(5)

(2)

(195)

(15)

(7)

590

225

(19)

49

(4)

(199)

(18)

(5)

619

AUGUST 31, 2018

AUGUST 31, 2017

1,935

(1,316)

619

1,856

(1,266)

590

3

No item of property, plant and equipment is pledged as collateral for a liability.

Depreciation and impairment losses are reported under either cost of sales or Administrative and Sales Department costs.

4.5.2  Analysis of assets held under finance leases

These leases relate mainly to kitchens and kitchen equipment.

CARRYING AMOUNT
(in millions of euro)

August 31, 2016

August 31, 2017

August 31, 2018

(in millions of euro)

Cost

Accumulated depreciation and impairment

Carrying amount

Maturities of payments under ﬁ nance leases are provided in note 4.15.5.

BUILDINGS

PLANT AND 
EQUIPMENT

CONSTRUCTION 
IN PROGRESS 
AND OTHER

5

4

2

9

9

8

TOTAL

14

13

10

AUGUST 31, 2018

AUGUST 31, 2017

32

(22)

10

38

(25)

13

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3 N o t e s   t o   t h e   c o n s o l i d a t e d   f i n a n c i a l   s t a t e m e n t s

4.6  Goodwill

Changes in goodwill were as follows during the ﬁ scal year:

(in millions of euro)

AUGUST 31, 2017

INCREASES 
DURING 
THE PERIOD

DECREASES 
DURING 
THE PERIOD

CURRENCY 
TRANSLATION 
ADJUSTMENT

AUGUST 31, 2018

Corporate Services

Government & Agencies

Sports & Leisure

Energy & Resources

Other non-segmented activities

Business & Administrations

Health Care

Seniors

Health Care and Seniors

Schools

Universities

Education

On-site Services

Benefits and Rewards Services

TOTAL

1,022

4

(25)

1,001

357

64

302

303

2,048

992

416

1,408

339

842

1,181

4,637

671

5,308

353

35

39

431

5

5

12

12

448

14

462

2

(2)

(16)

(17)

(58)

6

3

9

1

13

14

(35)

(70)

359

415

320

325

2,420

998

424

1,422

352

855

1,207

5,049

615

(1)

(1)

(1)

(1)

(105)

5,664

Increases in goodwill recognized in Fiscal 2018 primarily relate 
to (i) the acquisitions of The Good Eating Company (United 
Kingdom) in the Corporate Services activity, Morris Corporation 
(Australia) in the Energy & Resources activity, Centerplate Inc. 
(United States) in the Sports & Leisure activity, Gym4less (Spain) 
in the Beneﬁ t and Rewards activity, Kim Yew (Singapore) in the 

Education activity, and the acquisition of a controlling interest 
in FoodChéri (France).

The goodwill amounts for the above acquisitions are provisional 
except  for  Morris  Corporation  and  Kim  Yew  for  which  the 
purchase price allocation processes have been completed.

(in millions of euro)

AUGUST 31, 2016

INCREASES 
DURING 
THE PERIOD

DECREASES 
DURING 
THE PERIOD

CURRENCY 
TRANSLATION 
ADJUSTMENT

AUGUST 31, 2017

Corporate Services

Government & Agencies

Sports & Leisure

Energy & Resources

Other non-segmented activities

Business & Administrations

Health Care

Seniors

Health Care and Seniors

Schools

Universities

Education

On-site Services

Benefits and Rewards Services

TOTAL

1,060

377

65

293

243

2,038

1,047

411

1,458

354

895

1,249

4,745

583

5,328

1

2

21

68

92

23

23

115

109

224

(1)

(1)

(2)

(1)

(1)

(3)

(2)

(5)

(39)

(20)

(2)

(12)

(7)

(80)

(55)

(18)

(73)

(14)

(53)

(67)

(220)

(19)

1,022

357

64

302

303

2,048

992

416

1,408

339

842

1,181

4,637

671

(239)

5,308

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W W W. S O D E X O . C O M

N o t e s   t o   t h e   c o n s o l i d a t e d   f i n a n c i a l   s t a t e m e n t s

C O N S O L I D A T E D   I N F O R M A T I O N

Increases  in  goodwill  recognized  in  Fiscal  2017  primarily 
related  to  (i)  the  acquisitions  by  the  Benefits  and  Rewards 
Services activity of Inspirus LLC (United States), Xpenditure 
(Belgium)  and  iAlbatros  (Poland)  and  the  On-site  Services 
activity’s acquisitions of PSL Ltd. and PresNote tige Nursing 

Ltd in the United Kingdom and a controlling interest in Doyon 
(Alaska). Decreases in goodwill recognized during the ﬁ scal year 
arose from deconsolidations, notably resulting from the sale 
of Vivabox USA and the divestment of controlling interests in 
subsidiaries in Angola, Gabon and Saudi Arabia.

4.7  Other intangible assets

The tables below show movements in other intangible assets during Fiscal 2017 and Fiscal 2018.

(in millions of euro)

Carrying amount - August 31, 2016

Increases during the fiscal year

Decreases during the fiscal year

Newly consolidated companies

Amortization expense

Impairment losses recognized in profit or loss

Currency translation adjustment

Other

Carrying amount – August 31, 2017

Increases during the fiscal year

Decreases during the fiscal year

Newly consolidated companies

Amortization expense

Impairment losses recognized in profit or loss

Currency translation adjustment

Other

LICENSES AND 
SOFTWARE

CLIENT RELATIONSHIPS, 
TRADEMARKS 
AND OTHER

161

57

(2)

10

(48)

(5)

2

175

82

(10)

5

(50)

(1)

(3)

3

306

21

(3)

55

(38)

3

(11)

3

336(1)

29

(2)

219

(49)

(18)

(11)

Carrying amount – August 31, 2018

201

503(1)

(1) Including trademarks and lease rights with an indefinite useful life for 86 million euro as of August 31, 2018 (50 million euro as of August 31, 2017).

3

TOTAL

467

78

(5)

65

(86)

3

(16)

5

511

111

(12)

224

(99)

(20)

(14)

3

704

(in millions of euro)

Cost

Accumulated amortization and impairment

CARRYING AMOUNT

AUGUST 31, 2018

AUGUST 31, 2017

1,424

(720)

704

1,154

(643)

511

Amortization and impairment losses are reported under either cost of sales or Administrative and Sales Department costs, except for 
amortization and impairment of client relationships and trademarks, which are recognized in “Other operating expenses”.

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3 N o t e s   t o   t h e   c o n s o l i d a t e d   f i n a n c i a l   s t a t e m e n t s

4.8  Client investments

(in millions of euro)

Carrying amount – September 1

Increases during the fiscal year

Decreases during the fiscal year

Newly consolidated companies(1)

Currency translation adjustment

CARRYING AMOUNT AS OF AUGUST 31

FISCAL 2018

FISCAL 2017

547

83

(94)

18

5

558

562

111

(95)

(31)

547

(1) Corresponds solely to Centerplate’s client investments in the United States and Canada.

4.9  Companies consolidated by the equity method

When Sodexo is legally or constructively obligated to make payments on behalf of companies consolidated by the equity method, a 
provision is made under liabilities in the consolidated statement of ﬁ nancial position for its share in the negative shareholders’ equity 
of the said companies (see note 4.18). Changes in the Group’s share of the net assets of companies consolidated by the equity method 
in Fiscal 2017 and Fiscal 2018 are shown below:

(in millions of euro)

As of September 1

Positive amounts

Negative amounts

Share of profit for the period

Other comprehensive income (loss)(1)

Dividend paid for the period

Changes in scope of consolidation

Currency translation adjustment

Other movements

AS OF AUGUST 31

Positive amounts

Negative amounts

FISCAL 2018

FISCAL 2017

82

89

(7)

6

(1)

(19)

9

77

83

(6)

88

95

(7)

9

(3)

(11)

2

(3)

82

89

(7)

(1) Corresponding to changes in fair value of derivatives used for hedging purposes, net of tax (note 4.16).

4.10 

Impairment of assets

Accumulated impairment losses against property, plant and 
equipment and intangible assets (including goodwill) amounted 
to 38 million euro as of August 31, 2018 (15 million euro as 
of  August  31,  2017),  taking  into  account  a  net  charge  of 
18 million euro in Fiscal 2018 (versus a net reversal of 1 million 
euro in Fiscal 2017).

Assets with indeﬁ nite useful lives were tested for impairment as 
of August 31, 2018 using the methods described in note 2.8.2.

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W W W. S O D E X O . C O M

N o t e s   t o   t h e   c o n s o l i d a t e d   f i n a n c i a l   s t a t e m e n t s

C O N S O L I D A T E D   I N F O R M A T I O N

The main assumptions used were as follows (and any impairment losses were recognized in other operating expenses):

Corporate Services

Energy & Resources

Government & Agencies

Sports & Leisure

Health Care

Seniors

Schools

Universities

Other non-segmented activities

Benefits and Rewards Services

FISCAL 2018

FISCAL 2017

DISCOUNT RATE(1)

LONG-TERM 
GROWTH RATE(2)

DISCOUNT RATE(1)

LONG-TERM 
GROWTH RATE(2)

7.3%

7.6%

6.9%

6.8%

6.9%

6.8%

6.9%

6.7%

7.1%

8.2%

2.4%

3.0%

2.2%

2.3%

2.4%

2.0%

2.2%

2.5%

2.2%

3.2%

8.0%

8.3%

7.6%

7.6%

7.5%

7.5%

7.5%

7.3%

7.9%

9.1%

2.3%

2.9%

2.1%

1.9%

2.1%

1.9%

1.9%

2.0%

2.1%

3.7%

 (1) The discount rate defined by the Group has been increased for certain operating segments in order to incorporate more significant risk factors affecting certain 

countries in which the operating segment concerned conducts business.

(2) The long-term growth rate serves to calculate the terminal value based on data in management’s business plans.

3

The discount rates used by segment were set based on the weighted average of the discount rates for each geographic region, taking 
into account the relative weighting of each segment in the Group’s overall revenues ﬁ gure:

Continental Europe

North America

United Kingdom and Ireland

Latin America

Rest of the World (excluding Latin America)

DISCOUNT RATE

FISCAL 2018

FISCAL 2017

7.0%

6.7%

6.8%

8.7%

7.4%

7.7%

7.3%

7.5%

9.8%

8.2%

SENSITIVITY ANALYSIS

Sodexo has analyzed the sensitivity of goodwill impairment test 
results to diff erent long-term growth rates and discount rates.

•  The results of this sensitivity analysis indicated no probable 
scenario where a change in the discount rate or long-term 
growth rate would result in the recoverable amount of a CGU 
or group of CGUs becoming less than its carrying amount. In 
fact, the results of the impairment testing demonstrate that 
even an increase of 200 basis points in the discount rate or 
a reduction of 200 basis points in the long-term growth rate 
would not result in an impairment of the assets tested for 
any of the CGUs or groups of CGUs tested.

•  The  Group  also  performed  a  sensitivity  analysis  on  the 
operational assumptions used in order to determine whether 
a  5%  decrease  in  projected  net  cash  flows  over  the  time 

period  of  the  business  plans  prepared  by  management 
and  in  terminal  value  would  result  in  the  recognition  of 
an impairment loss in the Group’s consolidated financial 
statements  as  of  August  31,  2018.  The  results  of  this 
analysis did not indicate any risk of impairment for any of 
the CGUs or groups of CGUs.

In addition, the Group is particularly attentive to economic 
trends in the Sport & Leisure segment, which accounted for 
approximately  7%  of  consolidated  revenue  in  Fiscal  2018. 
Indeed, some of the assets are sensitive to the tourism level, 
which can be highly impacted by events out of the control of the 
Group, particularly in France, United Kingdom and United States. 
This has been taken into account in the business plans prepared 
by the management, but actual results may nonetheless diff er 
from  business  plan  estimates  if  assumptions  or  conditions 
change.

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3 N o t e s   t o   t h e   c o n s o l i d a t e d   f i n a n c i a l   s t a t e m e n t s

4.11  Financial assets

4.11.1  Current and non-current financial assets

(in millions of euro)

CURRENT

NON-CURRENT

CURRENT

NON-CURRENT

AUGUST 31, 2018

AUGUST 31, 2017

Available-for-sale financial assets

Investments in non-consolidated companies

Cost

Impairment

Carrying amount

Financial assets related to the Benefits and Rewards Services 
activity, including restricted cash

Cost

Impairment

Carrying amount

Loans and receivables

Receivables from investees

Cost

Impairment

Carrying amount

Loans and deposits

Cost

Impairment

Carrying amount

TOTAL FINANCIAL ASSETS

Cost

Impairment

Carrying amount

97

(6)

91

18

18

101

(20)

81

190

216

(26)

190

94

(6)

88

18

18

76

(19)

57

163

188

(25)

163

909

909

34

(2)

32

941

943

(2)

941

1,042

1,042

36

36

1,078

1,078

1,078

 PRINCIPAL INVESTMENTS IN NON-CONSOLIDATED COMPANIES

The Group holds 19.61% of the shares in Bellon SA, the parent 
company of Sodexo S.A. , carried at a value of 32.4 million euro. 
This available-for-sale financial asset is an investment in a 
company that does not have a quoted market price on an active 
market.

In  addition,  this  investment  is  not  a  liquid  instrument. 
Consequently, it is carried at cost. Any eventual decrease in 
the value of the Bellon SA shares would be recognized as an 
impairment.

RESTRICTED CASH AND FINANCIAL ASSETS RELATED TO 
THE BENEFITS AND REWARDS SERVICES ACTIVITY

Restricted cash of 615 million euro included in “Financial assets 
related to the Beneﬁ ts and Rewards Services activity” primarily 
in funds set aside to comply with regulations governing the 
issuance  of  service  vouchers  in  France  (278  million  euro), 
Romania (141 million euro), China (53 million euro) and India 
(41 million euro). The funds remain the property of Sodexo but 
are subject to restrictions on their use. They may not be used for 
any purpose other than to reimburse affi  liates and must be kept 
separate from the Group’s unrestricted cash. Restricted cash is 
invested in interest-bearing instruments.

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N o t e s   t o   t h e   c o n s o l i d a t e d   f i n a n c i a l   s t a t e m e n t s

C O N S O L I D A T E D   I N F O R M A T I O N

Restricted cash and ﬁ nancial assets related to the Beneﬁ ts and Rewards Services activity breaks down as follows by currency:

(in millions of euro)

Euro

U.S. dollar (USD)

Brazilian real (BRL)

Other currencies

TOTAL

AUGUST 31, 2018

AUGUST 31, 2017

400

8

323

311

1,042

386

6

275

242

909

4.11.2  Changes in current and non-current financial assets

(Carrying amount in millions of euro)

AUGUST 31, 2017

INCREASE/
(DECREASE) 
DURING 
THE PERIOD

CHANGES IN 
SCOPE OF 
CONSOLIDATION

CHANGE IN FAIR 
VALUE

IMPAIRMENT

CURRENCY 
TRANSLATION 
ADJUSTMENT 
AND OTHER

AUGUST 31, 2018

Available-for-sale financial 
assets

Loans and receivables

TOTAL

997

107

1,104

230

25

255

(1)

10

9

(93)

(7)

(100)

1,133

135

1,268

(Carrying amount in millions of euro)

AUGUST 31, 2016

INCREASE/
(DECREASE) 
DURING 
THE PERIOD

CHANGES IN 
SCOPE OF 
CONSOLIDATION

CHANGE IN FAIR 
VALUE

IMPAIRMENT

CURRENCY 
TRANSLATION 
ADJUSTMENT 
AND OTHER

AUGUST 31, 2017

Available-for-sale financial 
assets

Loans and receivables

TOTAL

844

124

968

177

(12)

165

(1)

(1)

1

1

(24)

(5)

(29)

997

107

1,104

4.12 

Income tax, trade and other receivables

(in millions of euro)

GROSS AMOUNT

IMPAIRMENT

CARRYING 
AMOUNT

GROSS AMOUNT

IMPAIRMENT

CARRYING 
AMOUNT

AUGUST 31, 2018

AUGUST 31, 2017

Other non-current assets

Income tax receivable(1)

Advances to suppliers

Trade receivables

Other operating receivables

Prepaid expenses

Non-operating receivables

TOTAL TRADE AND OTHER 
RECEIVABLES(1)

18

176

9

3,614

412

203

8

18

176

9

17

185

7

17

185

7

(109)

(18)

3,505

3,596

(110)

3,486

393

203

8

362

182

19

(6)

356

182

19

4,247

(126)

4,121

4,166

(116)

4,050

(1) After deducting sold receivables, notably 46 million euro worth of CICE tax credits that have been derecognized (71 million euro in Fiscal 2017) as their sale involved 

the transfer of substantially all of the risks and rewards related to ownership of the receivables.

3

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The maturities of trade receivables as of August 31, 2018 and August 31, 2017 respectively were as follows:

AUGUST 31, 2018

AUGUST 31, 2017

BREAKDOWN OF TRADE RECEIVABLES DUE AS OF AUGUST 31, 2018:

GROSS AMOUNT

IMPAIRMENT

GROSS AMOUNT

IMPAIRMENT

Less than 3 months past due

More than 3 months and less than 6 months past due

More than 6 months and less than 12 months past due

More than 12 months past due

TOTAL TRADE RECEIVABLES DUE AS OF AUGUST 31, 2018

TOTAL TRADE RECEIVABLES NOT YET DUE AS OF AUGUST 31, 2018

TOTAL TRADE RECEIVABLES AS OF AUGUST 31, 2018

406

68

110

88

672

2,941

3,614

(10)

(7)

(13)

(70)

(100)

(9)

(109)

422

56

116

92

686

2,910

3,596

(9)

(5)

(14)

(69)

(97)

(13)

(110)

During the ﬁ scal years presented, the Group was not aff ected by any signiﬁ cant change resulting from client bankruptcies. In addition, 
given the geographic dispersion of the Group’s activities and the wide range of client industries, there is no material concentration of 
risks in individual receivables due but not written down.

4.13  Cash and cash equivalents

(in millions of euro)

Marketable securities

Cash(1)

Total cash and cash equivalents

Bank overdrafts

TOTAL

AUGUST 31, 2018

AUGUST 31, 2017

365

1,301

1,666

(28)

1,638

420

1,598

2,018

(38)

1,980

(1) Including 7 million euro allocated to the liquidity contract signed with an investment services provider, which complies with the Code of conduct drawn up by the 
French financial markets association Association française des marchés financiers – AMAFI) and approved by the French securities regulator (Autorité des M archés 
F inanciers – AMF), for the purpose of improving the liquidity of Sodexo shares and the regularity of the quotations.

Marketable securities comprised:

(in millions of euro)

Short-term notes

Term deposits

Mutual funds and other

Total marketable securities

Cash and cash equivalents break down as follows by currency:

(in millions of euro)

Euro

U.S. dollar (USD)

Brazilian real (BRL)

Pound sterling (GBP)

Canadian dollar

Other currencies

AUGUST 31, 2018

AUGUST 31, 2017

199

138

29

365

244

139

37

420

AUGUST 31, 2018

AUGUST 31, 2017

(43)

493

242

280

106

560

81

642

301

385

71

500

Cash and cash equivalents net of bank overdrafts

1,638

1,980

More than 73% of the Group’s cash and cash equivalents, restricted cash and ﬁ nancial assets related to the Beneﬁ ts and Rewards 
Services activity, is held with A1- or A2-rated ﬁ nancial institutions.

No signiﬁ cant amount of cash or cash equivalents was subject to any restrictions as of August 31, 2018.

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N o t e s   t o   t h e   c o n s o l i d a t e d   f i n a n c i a l   s t a t e m e n t s

C O N S O L I D A T E D   I N F O R M A T I O N

4.14  Statement of changes in shareholders’ equity

As part of the share buyback program launched by the Board 
of Directors on April 10, 2018 using the authorization given 
in the seventeenth resolution of the January 23, 2018 Annual 
Shareholders’ Meeting, during Fiscal 2018 Sodexo purchased 
3,356,732 of its own shares, representing 2.2% of its share 
capital,  for  299  million  euro,  and  on  August  29,  2018  it 
carried out a 300 million euro capital reduction by canceling 
3,375,562 shares. The Company’s share capital is therefore 
comprised  of  147,454,887  shares  as  of  August  31,  2018 
(compared with 150,830,449 as of August 31, 2017). The par 
value of Sodexo S.A.  shares is 4 euro per share.

As of August 31, 2018, the Group held 1,869,352 Sodexo shares 
(versus  2,205,010  as  of  August  31,  2017)  with  a  carrying 
amount of 177 million euro (177 million euro as of August 31, 
2017). These treasury shares – which have been deducted from 
shareholders’ equity at cost – have been allocated to cover the 
Group’s obligations under employee stock option and free share 
plans. 

The Company’s bylaws confer double voting rights on shares 
held in registered form for more than four years.

The following shareholders informed the Company that they had 
exceeded the following disclosure thresholds (as provided by law 
or the Company’s bylaws) in Fiscal 2018:

•  on May 8, 2018, Artisan Partners Limited Partnership, acting on 
behalf of the funds it manages, disclosed that due to a purchase 
of 1,856,807 Sodexo shares at that date, it had raised its 
interest in the Company’s share capital above 2.5%, and that 
as of May 8, 2018 it held 5,476,873 Sodexo shares, representing 
3.63% of the share capital and 2.54% of the voting rights;

•  on July 2, 2018, International Value Advisers, LLC, acting 
on behalf of the funds it manages, disclosed that due to a 
purchase of 200,782 Sodexo shares at that date, it had raised 
its interest in the Company’s share capital above 2.5%, and 
that as of July 2, 2018 it held 3,821,370 Sodexo shares, 
representing 2.53% of the share capital and 1.76% of the 
voting rights;

•  on August 31, 2018, Artisan Partners Limited Partnership, 
acting on behalf of the funds it manages, disclosed that due 
to a purchase of 14,269 Sodexo shares at that date, it had 
raised its interest in the Company’s share capital above 5%, 
and that as of August 28, 2018 it held 7,554,178 Sodexo 
shares, representing 5.01% of the share capital and 3.49% 
of the voting rights.

The Company is not aware of any other shareholder having 
increased or decreased its shareholding to above or below any 
disclosure threshold (provided for by law or the Company’s 
bylaws) in Fiscal 2018.

Furthermore, since Fiscal 2013, shares held in registered form 
for  at  least  four  years  and  still  held  in  that  form  when  the 
dividend becomes payable, are entitled to a dividend premium 
equal  to  10%  of  the  dividend  paid  on  the  other  shares.  The 
number of shares eligible for this dividend premium may not 
exceed 0.5% of the share capital for any single shareholder.

Total dividends paid in Fiscal 2018 amounted to 411 million 
euro (taking into account the number of shares held in treasury). 
The ordinary dividend per share was 2.75 euro and the dividend 
premium per share was 0.275 euro.

Items recognized directly in Other Comprehensive Income (OCI) (Group share) are shown below:

(in millions of euro)

Available-for-sale financial assets

Cash flow hedges

Remeasurements of net defined benefit 
obligation

Currency translation adjustment

TOTAL OTHER COMPREHENSIVE INCOME 
(LOSS) (GROUP SHARE)

FISCAL 2018

FISCAL 2017

INCREASE/
(DECREASE) 
DURING THE YEAR, 
PRE TAX

INCOME TAX 
(EXPENSE)/
BENEFIT

INCREASE/
(DECREASE) 
DURING THE YEAR, 
NET OF TAX

INCREASE/
(DECREASE) 
DURING THE YEAR, 
PRE TAX

INCOME TAX 
(EXPENSE)/
BENEFIT

INCREASE/
(DECREASE) 
DURING THE YEAR, 
NET OF TAX

(1)

79

(245)

(13)

(1)

66

(3)

72

(245)

(260)

(21)

(3)

51

(260)

(167)

(13)

(180)

(191)

(21)

(212)

3

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3 N o t e s   t o   t h e   c o n s o l i d a t e d   f i n a n c i a l   s t a t e m e n t s

4.15  Borrowings

Changes in borrowings during Fiscal 2018 and Fiscal 2017 were as follows:

(in millions of euro)

AUGUST 31, 2017

INCREASES

REPAYMENTS

DISCOUNTING 
EFFECTS AND 
OTHER

CURRENCY 
TRANSLATION 
ADJUSTMENT

CHANGES IN 
SCOPE OF 
CONSOLIDATION

AUGUST 31, 2018

Bond issues

Bank borrowings

 Finance lease obligations

Other borrowings

TOTAL

Net fair value of derivative 
financial instruments

1,889

1,582

11

27

298

344

2

3

0

(211)

(4)

(2)

3,509

647

(217)

(9)

2

TOTAL INCLUDING DERIVATIVE 
FINANCIAL INSTRUMENTS

3,500

647

(215)

4

0

0

(2)

2

(2)

0

0

11

0

1

12

(8)

4

0

1

0

3

4

0

4

2,191

1,727

9

30

3,957

(17)

3,940

(in millions of euro)

AUGUST 31, 2016

INCREASES

REPAYMENTS

DISCOUNTING 
EFFECTS AND 
OTHER

CURRENCY 
TRANSLATION 
ADJUSTMENT

CHANGES IN 
SCOPE OF 
CONSOLIDATION

AUGUST 31, 2017

Bond issues

Bank borrowings

Finance lease obligations

Other borrowings

TOTAL EXCLUDING DERIVATIVE 
FINANCIAL INSTRUMENTS

Net fair value of derivative 
financial instruments

TOTAL INCLUDING DERIVATIVE 
FINANCIAL INSTRUMENTS

1,106

1,428

11

13

780

331

2

7

(98)

(2)

(16)

2,558

1,120

(116)

(5)

2

2,553

1,120

(114)

3

(2)

10

11

2

13

1

14

15

(78)

(1)

(79)

(8)

1,889

1,582

11

27

3,509

(9)

(87)

15

3,500

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W W W. S O D E X O . C O M

4.15.1  Borrowings by currency

(in millions of euro)

Bond issues

Euro

TOTAL

Bank borrowings(1)

U.S. dollar

Euro

TOTAL

Finance lease obligations

Euro

Other currencies

TOTAL

Other borrowings(2)

Euro

Other currencies

TOTAL

TOTAL EXCLUDING DERIVATIVE FINANCIAL INSTRUMENTS

Net fair value of derivative financial instruments(3)

TOTAL INCLUDING DERIVATIVE FINANCIAL INSTRUMENTS

N o t e s   t o   t h e   c o n s o l i d a t e d   f i n a n c i a l   s t a t e m e n t s

C O N S O L I D A T E D   I N F O R M A T I O N

AUGUST 31, 2018

AUGUST 31, 2017

CURRENT

NON-CURRENT

CURRENT

NON-CURRENT

15

15

152

240

392

3

1

4

9

9

420

(14)

406

2,176

2,176

1,334

1

1,335

4

1

5

8

13

21

3,537

(3)

3,534

13

13

233

246

479

3

1

4

1

1

2

498

(6)

492

1,876

1,876

1,103

1,103

6

1

7

5

20

25

3,011

(3)

3,008

3

(1) Including the proceeds of the U.S. private placements described in note 4.15.3.2 and the commercial paper issued by Sodexo S.A.  described in note 4.15.3.3.
(2) Including 18 million euro as of August 31, 2018 and 17 million euro as of August 31, 2017 corresponding to liabilities recognized in connection with put options 

written over non-controlling interests in certain subsidiaries.

(3) Described in note 4.16.

For  borrowings  other  than  bond  issues,  amortized  cost  is 
equivalent to historical cost (nominal amount) insofar as no 
signiﬁ cant transaction costs are incurred.

4.15.2  Bond issues

On  June  24,  2014,  Sodexo  S.A.   completed  a  bond  issue 
structured in two tranches:

•  a 600 million euro tranche redeemable at par on January 24, 
2022 and bearing interest at an annual rate of 1.75%, with 
interest payable annually on January 24;

•  a 500 million euro tranche redeemable at par on June 24, 
2026 and bearing interest at an annual rate of 2.50%, with 
interest payable annually on June 24.

Accrued interest on these bonds amounted to 9 million euro as 
of August 31, 2018.

On October 14, 2016 Sodexo S.A.  issued bonds for  600 million 
euro  redeemable in April 2027 and bearing interest at an annual 
rate of 0.75%, with interest payable annually on April 14. On 
August  1,  2017,  the  Company  increased    this  issue  with  an 
additional 200 million euro  of bonds.

Accrued  interest  on  these  bonds  was    2  million  euro  as  of 
August 31, 2018.

On May 22, 2018, Sodexo S.A.  issued   bonds for  300 million euro 
 redeemable in May 2025 and bearing interest at an annual rate 
of 1.125%, with interest payable annually on May 22.

Accrued interest on this bond was  1 million euro as of August 31, 
2018.

None  of  the  above-described  bonds  are  subject  to  financial 
covenants.

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4.15.3  Other borrowings

4.15.3.1  CREDIT FACILITIES

4.15.3.1.1 

 July 2011 multicurrency conﬁ rmed 
credit facility

On July 18, 2011, Sodexo S.A.  contracted a multicurrency credit 
facility for a maximum of 600 million euro plus 800 million 
U.S. dollars, with an original maturity date of July 18, 2016. In 
June 2017, this facility – whose maximum amount has totaled 
531 million euro plus 709 million U.S. dollars since July 2015 – 
was extended until July 2022.

Amounts drawn on this facility carry ﬂ oating interest indexed on 
the LIBOR and EURIBOR rates. This credit facility is not subject 
to any covenants.

No amounts had been drawn down on the facility as of either 
August 31, 2018 or August 31, 2017.

4.15.3.1.2 

 Bilateral conﬁ rmed credit facility

On December 20, 2017, the Group obtained two 150 million euro 
bilateral conﬁ rmed credit facility, one expiring in December 2018 
and the other in December 2019.

On March 5, 2018, the Group obtained a third 150 million euro 
bilateral conﬁ rmed credit facility expiring in March 2019.

No amounts had been drawn down on any of these facilities as 
of August 31, 2018.

4.15.3.2  U.S. PRIVATE PLACEMENTS

During Fiscal 2018, Sodexo S.A.  redeemed the full outstanding 
balance of the ﬁ rst tranche of its March 29, 2011 U.S. P rivate 
P lacement (147 million U.S. dollars).

On June 27, 2018, Sodexo S.A.  completed  a new U.S. P rivate 
P lacement amounting to 400 million U.S. dollars.

The features of the Group’s outstanding private placements as of August 31, 2018 are as follows:

DATE OF THE PLACEMENT

March 29, 2011

TOTAL

March 4, 2014

TOTAL

June 27, 2018

TOTAL

TOTAL

PRINCIPAL OUTSTANDING 
(in millions of U.S. dollars)

FIXED
 INTEREST RATE

MATURITY

4.85%

March 2021

4.95%

March 2023

2.71%

March 2019

3.44%

March 2021

3.99%

March 2024

4.14%

March 2026

4.34%

March 2029

3.70%

June 2023

133

74

207(1)

150

150

525

175

100

1,100

400

400

1,707

(1) After deducting 147 million U.S. dollars redeemed on March 29, 2018.

These  borrowings  are  subject  to  two  financial  covenants 
calculated by reference to the Group’s consolidated financial 
statements:

•  net  debt  (excluding  restricted  cash)  must  not  exceed 
3.5 times EBITDA (operating profit plus amortization and 
depreciation) for the past 12 months;

•  net assets adjusted for cumulative foreign exchange gains 
or  losses  since  August  31,  2007  must  not  be  less  than 
1.3 billion euro.

If  the  covenants  are  not  respected,  the  lenders  may,  with 
a  qualified  majority,  require  early  reimbursement  of  these 
borrowings.

The  Group  was  in  compliance  with  these  covenants  as  of 
August 31, 2018, February 28, 2018 and August 31, 2017.

4.15.3.3  COMMERCIAL PAPER

On January 22, 2018, Sodexo Finance set up a commercial paper 
program representing a maximum of 1.4 billion euro, guaranteed 
by Sodexo S.A. , in addition to Sodexo S.A. ’s existing program.

As of August 31, 2018, 240 million euro of the commercial paper 
programs set up by Sodexo S.A.  and Sodexo Finance had been 
used, compared with 331 million euro as of August 31, 2017 
(100 million U.S. dollars plus 246 million euro).

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N o t e s   t o   t h e   c o n s o l i d a t e d   f i n a n c i a l   s t a t e m e n t s

C O N S O L I D A T E D   I N F O R M A T I O N

4.15.4  Interest rates

In  order  to  comply  with  the  Group’s  financing  policy, 
substantially all borrowings are long term and at ﬁ xed interest 
rates.

As of August 31, 2018, 94% of the Group’s borrowings were at 
ﬁ xed rate. The average rate of interest as of the same date was 
2.5%. As of August 31, 2017, 91% of the Group’s borrowings 

were at ﬁ xed rate. The average rate of interest as of the same 
date was 2.4%.

The bond issues and borrowings from financial institutions 
described above include customary early redemption clauses. 
These  clauses  include  cross-default  and  change-in-control 
clauses which apply to all of the borrowings.

4.15.5  Maturity of borrowings

AUGUST 31, 2018
CARRYING AMOUNTS

Bond issues

Bank borrowings

Finance lease obligations

Other borrowings

TOTAL

LESS THAN 
3 MONTHS

MORE THAN 
3 MONTHS AND LESS 
THAN 6 MONTHS

MORE THAN 
6 MONTHS AND 
LESS THAN 1 YEAR

1 TO 5 YEARS

MORE THAN 
5 YEARS

7

1

6

8

128

2

1

599

649

5

21

1,577

686

TOTAL

2,191

1,727

9

30

14

139

1,274

2,263

3,957

264

1

2

267

Excluding the impact of derivative financial instruments described in note 4.16.
For borrowings expressed in a foreign currency, amounts are translated at the year-end closing rate.
Maturities include interest accrued as of the period end.
Credit facility renewal rights are taken into account in determining maturities.

3

AUGUST 31, 2018
UNDISCOUNTED CONTRACTUAL MATURITIES, INCLUDING 
PAYMENT OF FUTURE INTEREST NOT YET DUE

MORE THAN 
3 MONTHS AND 
LESS THAN 
6 MONTHS

MORE THAN 
6 MONTHS AND 
LESS THAN 
1 YEAR

LESS THAN 
3 MONTHS

1 TO 5 YEARS

MORE THAN 
5 YEARS

Bond issues

Bank borrowings

Finance lease obligations

Other borrowings

Impact of derivative financial instruments 
excluding those related to PPP companies

264

1

2

11

4

1

6

1

24

156

2

1

1

721

836

8

22

1

1,640

731

1

TOTAL

2,396

1,991

13

31

3

TOTAL

267

23

184

1,588

2,372

4,434

MORE THAN 
3 MONTHS AND 
LESS THAN 
6 MONTHS

MORE THAN 
6 MONTHS AND 
LESS THAN 
1 YEAR

LESS THAN 
3 MONTHS

1 TO 5 YEARS

MORE THAN 
5 YEARS

AUGUST 31, 2017
CARRYING AMOUNTS

Bond issues

Bank borrowings

Finance lease obligations

Other borrowings

TOTAL

354

1

355

6

1

7

Excluding the impact of derivative financial instruments described in note 4.16.
For borrowings expressed in a foreign currency, amounts are translated at the year-end closing rate.
Maturities include interest accrued as of the period end.
Credit facility renewal rights are taken into account in determining maturities.

1,278

737

7

125

2

2

598

366

7

25

TOTAL

1,889

1,582

11

27

136

996

2,015

3,509

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3 N o t e s   t o   t h e   c o n s o l i d a t e d   f i n a n c i a l   s t a t e m e n t s

AUGUST 31, 2017
UNDISCOUNTED CONTRACTUAL MATURITIES, INCLUDING 
PAYMENT OF FUTURE INTEREST NOT YET DUE

MORE THAN 
3 MONTHS AND 
LESS THAN 
6 MONTHS

MORE THAN 
6 MONTHS AND 
LESS THAN 
1 YEAR

LESS THAN 
3 MONTHS

1 TO 5 YEARS

MORE THAN 
5 YEARS

Bond issues

Bank borrowings

Finance lease obligations

Other borrowings

Impact of derivative financial instruments 
excluding those related to PPP companies

355

1

2

10

1

21

147

2

2

2

714

515

8

27

4

1,358

811

TOTAL

2,103

1,828

12

29

8

TOTAL

358

11

174

1,268

2,169

3,980

4.16  Derivative ﬁ nancial instruments

The fair values of Sodexo’s derivative ﬁ nancial instruments are as follows:

DERIVATIVE FINANCIAL INSTRUMENTS
(in millions of euro)

Currency instruments

Assets

Liabilities

Cross-currency swaps(1)

Assets

Liabilities

Net derivative financial instruments

IFRS CLASSIFICATION

AUGUST 31, 2018

AUGUST 31, 2017

Trading

Trading

Cash flow hedge

Cash flow hedge

10

11

(1)

7

8

(1)

17

5

6

(1)

4

5

(1)

9

(1) Corresponds  to  a  euro-BRL  cross-currency  swap  with  a  notional  value  of  85  million  BRL  as  of  August  31,  2018  for  which  accrued  interest  of  1  million  euro  was 

recognized as a liability as of August 31, 2018.

The face values and fair values of currency instruments and cross-currency swaps are as follows by maturity:

AUGUST 31, 2018

AUGUST 31, 2017

LESS 
THAN 1 YEAR

1 TO 5 YEARS

MORE THAN 
5 YEARS

TOTAL

LESS 
THAN 1 YEAR

1 TO 5 YEARS

MORE THAN 
5 YEARS

TOTAL

(in millions of euro)

Currency lender positions

Czech crown/Euro

Polish zloty/Euro

Mexican peso/Euro

20

15

5

20

15

5

26

6

14

6

6

6

Currency borrower positions

(88)

(31)

(119)

(36)

(81)

Pound sterling/Euro

Brazilian real/Euro

Mexican peso/Euro

Swedish krona/Euro

Other

TOTAL

Fair value

(3)

(18)

(5)

(10)

(52)

(68)

14

(6)

(6)

(19)

(31)

3

(9)

(18)

(5)

(16)

(71)

(3)

(23)

(7)

(3)

(14)

(23)

(6)

(18)

(20)

(99)

(10)

(75)

17

6

3

32

6

14

12

(123)

(21)

(46)

(13)

(18)

(25)

(91)

9

(6)

(4)

(2)

(6)

The “face value” represents the nominal value of currency hedging instruments, including amounts related to forward agreements. 
Foreign currency amounts are translated at year-end closing rates.

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W W W. S O D E X O . C O M

N o t e s   t o   t h e   c o n s o l i d a t e d   f i n a n c i a l   s t a t e m e n t s

C O N S O L I D A T E D   I N F O R M A T I O N

4.17  Long-term employee beneﬁ ts

(in millions of euro)

Net defined benefit plan assets(1)

Net defined benefit plan obligation

Other long-term employee benefits

Employee benefits

(1) Included in “Other non-current assets” in the consolidated statement of financial position.

AUGUST 31, 2018

AUGUST 31, 2017

(3)

237

152

386

(3)

316

146

459

4.17.1  Post-employment benefits

4.17.1.1  DEFINED CONTRIBUTION PLANS

Under  a  defined  contribution  plan,  periodic  contributions 
are  made  to  an  external  entity  that  is  responsible  for  the 
administrative and financial management of the plan. Under 
such a plan, the employer is relieved of any future obligation 
(the  external  entity  is  responsible  for  paying  benefits  to 
employees as they become due and the employer is not required 
to make additional payments related to prior or current years if 
the entity does not have suffi  cient funds).

Contributions  to  defined  contribution  plans  –  which  were 
recognized in operating expenses – were 404 million euro for 
Fiscal 2018, compared with 448 million euro for Fiscal 2017.

Contributions made by the Group are expensed in the period to 
which they relate.

4.17.1.2  DEFINED BENEFIT PLANS

The characteristics of Sodexo’s principal deﬁ ned beneﬁ t plans 
are described below:

• 

in France, the obligation primarily represents lump-sum 
beneﬁ ts payable on retirement if the employee is still with 
the  Company  at  retirement  age.  These  obligations  are 
covered by speciﬁ c provisions in the consolidated statement 
of ﬁ nancial position;

• 

in  the  United  Kingdom,  Sodexo’s  obligation  relates  to  a 
complementary retirement plan funded by externally held 
assets, and calculated on the basis of:

• 

• 

for managers working in the private sector, a percentage 
of ﬁ nal base salary,

for managers working on public sector contracts, beneﬁ ts 
comparable to those off ered in the public sector,

•  this plan was closed to new employees eff ective July 1, 
2003 and the level of contributions was increased in order 
to cover the shortfall in the fund.

by the plan’s actuary is required to be conducted every three 
years, and any shortfall identiﬁ ed at that time must be addressed 
through mutual agreement between the plan’s Trustee and Sodexo 
UK. Following a consultation process with the members of the 
pension plan carried out with a view to freezing beneﬁ t accruals 
for certain members, an agreement was signed in October 2012 
between  the  plan’s  Trustee  and  Sodexo  UK  whereby  from 
November 1, 2012 the plan would remain open only to employees 
who transferred to Sodexo UK from the public sector, as Sodexo 
UK has a legal obligation to pay them certain beneﬁ ts. As part 
of the 12-year plan to address the funding shortfall, Sodexo UK 
also agreed to pay annual contributions of (i) 10 million pounds 
sterling per year over the ﬁ ve years from January 1, 2013 and 
(ii) 7.5 million pounds sterling per year over the following seven 
years.  Lastly,  in  October  2012,  Sodexo  S.A.   issued  a  parent 
company guarantee to the Trustee in order to cover Sodexo UK’s 
obligations in connection with the plan. This guarantee is for 
up to 100 million pounds sterling for a duration of 12 years. On 
completion of the most recent valuation of the fund in July 2016, 
Sodexo UK and the Trustee agreed to keep unchanged the amount 
of contributions and the terms and conditions of the parent 
company guarantee as set in October 2012.

In  Continental  Europe  other  than  France,  the  main  defined 
beneﬁ t plans are as follows:

• 

in  the  Netherlands,  certain  employees  are  entitled  to 
complementary retirement or early retirement beneﬁ ts.

In Fiscal 2017 Sodexo negotiated an agreement to convert its 
pension plans in the Netherlands from deﬁ ned beneﬁ t to deﬁ ned 
contribution plans as from January 1, 2016. The entitlements 
accumulated up until that date under the plans in their previous 
defined benefit form have been frozen and the plans are still 
accounted for as defined benefit plans in view of the related 
indexation commitments given by Sodexo. These plans are fully 
funded;

The United Kingdom plan is regularly evaluated by the plan’s 
actuary in compliance with UK law. A formal actuarial valuation 

• 

in  Italy,  there  is  a  legal  obligation  to  pay  a  lump-sum 
retirement beneﬁ t (“TFR”).

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3 N o t e s   t o   t h e   c o n s o l i d a t e d   f i n a n c i a l   s t a t e m e n t s

Changes in the present value of the deﬁ ned beneﬁ t plan obligation and the fair value of plan assets are shown below:

FISCAL 2018

FISCAL 2017

BENEFIT 
OBLIGATION

PLAN ASSETS

NET BENEFIT 
OBLIGATION

BENEFIT 
OBLIGATION

PLAN ASSETS

NET BENEFIT 
OBLIGATION

1,293

(980)

313

1,438

(1,034)

404

(in millions of euro)

As of September, 1

Expense/(income) recognized in the income 
statement

Current service cost

Past service cost

Effect of settlements

Interest cost/(income)

Remeasurement losses/(gains)

Actuarial losses/(gains) arising from 
changes in demographic assumptions

Actuarial losses/(gains) arising from 
changes in financial assumptions

Experience adjustments

Currency translation adjustment

Contributions made by plan members

Employer contributions

Benefits paid from plan assets

Benefits paid other than from plan assets

46

17

(1)

30

(88)

(4)

(81)

(3)

22

(55)

(23)

(23)

9

9

(19)

(26)

55

25

22

(4)

7

(72)

(16)

(47)

(9)

(14)

(20)

(10)

(18)

(18)

34

34

62

(1)

(20)

52

(55)

23

17

(1)

7

(79)

43

22

(4)

25

(106)

(4)

(16)

(81)

(9)

(76)

1

(52)

(10)

55

(72)

(3)

3

(26)

(1)

234

109

125

Changes in scope of consolidation and other(1)

(18)

17

As of August, 31

Of which:

Partially funded plans

Unfunded plans

1,201

(967)

1,076

125

(967)

1,293

(980)

313

1,160

133

(980)

180

133

(1) Including a benefit obligation decrease amounting to 18 million euro in Fiscal 2018, and assets for the same amount, linked to the retirement benefit obligations in 

six UK companies for which the client (public sector) contractually bears all the deficit of the plan.

The  amounts  recorded  in  the  income  statement  for  defined 
beneﬁ t plans totaled 23 million euro in Fiscal 2018 (25 million 
euro in Fiscal 2017) and break down as follows:

•  net expense of 9 million euro in Fiscal 2018 (net expense of 
10 million euro in Fiscal 2017) in Administrative and Sales 
Department costs;

•  net expense of 7 million euro in Fiscal 2018 (net expense of 

•  net  expense  of  7  million  euro  in  financial  expenses  (see 

8 million euro in Fiscal 2017) in cost of sales;

note 4.2).

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Deﬁ ned beneﬁ t plan assets comprise:

(in millions of euro)

Equities

Bonds

Real estate

Cash

Investment funds

Insurance and other

TOTAL

N o t e s   t o   t h e   c o n s o l i d a t e d   f i n a n c i a l   s t a t e m e n t s

C O N S O L I D A T E D   I N F O R M A T I O N

AUGUST 31, 2018

AUGUST 31, 2017

158

14

39

17

353

386

967

145

14

68

15

304

434

980

Recognized net actuarial gains arising from changes in ﬁ nancial assumptions amounted to 79 million euro, of which 72 million euro 
in the United Kingdom and 4 million euro in the United States. In the United Kingdom, these gains were mainly due to the updated 
discount rate.

The following assumptions were used for actuarial valuations for the principal countries as of August 31, 2018 and 2017:

August 31, 2018

Discount rate(1)

Salary long-term inflation rate(2)

General long-term inflation rate

Net liability (in millions of euro)

Average term of the plans (in years)

FRANCE

NETHERLANDS UNITED KINGDOM(4)

0.75%-1%

1.25%-2%

2.5%-2.8%

2.75%

1.75%

83

11

2%

3.5%-3.6%

1.75%

2%-3%(3)

1.75%

9

19

65

22

21

8

ITALY

1%

N/A

3

(1) Discount rates in each country have been adapted to reflect the term of the plans. For the euro zone and United Kingdom, the Group uses discount rates based on 

yield curves for high quality corporate bonds drawn up by an external actuary.

(2) The salary inflation rate disclosed includes general inflation.
(3) Retail Price Index (RPI): 2%; Consumer Price Index (CPI): 3% for Fiscal 2018.
(4) Excluding 36 million euro in retirement benefit obligations in the 6 UK companies (offset by an asset in the same amount).

August 31, 2017

Discount rate(1)

FRANCE

NETHERLANDS UNITED KINGDOM(4)

ITALY

0.75% -1.75%

2%

2.5%

3.6%

0.75%

N/A

Salary long-term inflation rate(2)

2.25%-2.75%

1.75%

General long-term inflation rate

Net liability (in millions of euro)

Average term of the plans (in years)

1.75%

1.75% 2.1%-3.1%(3)

1.75%

81

10

10

20

136

21

23

8

(1) Discount rates in each country have been adapted to reflect the term of the plans. For the euro zone and United Kingdom, the Group uses discount rates based on 

yield curves for high quality corporate bonds drawn up by an external actuary.

(2) The salary inflation rate disclosed includes general inflation.
(3) Retail Price Index (RPI): 3.1%; Consumer Price Index (CPI): 2.1% for Fiscal 2017.
(4) Excluding 53 million euro in retirement benefit obligations in the 6 UK companies (offset by an asset in the same amount).

With respect to the assumptions provided in the above table, 
for Fiscal 2018, and excluding the 36 million euro retirement 
beneﬁ t obligations in the 6 UK companies (off set by an asset 
in the same amount), a reduction of 1% in the discount rate 
would  increase  the  gross  obligation  to  1,411  million  euro 
(compared with 1,164 million euro based on the assumptions 
used as of August 31, 2018), while a rise of 0.5% in the general 
long-term inﬂ ation rate would increase the gross obligation to 
1,256 million euro.

Based  on  estimates  derived  from  reasonable  assumptions, 
Sodexo will pay 14 million euro into defined benefit plans in 
Fiscal 2019.

4.17.1.3  MULTIEMPLOYER PLANS

In the USA, as of August 31, 2018, the Company contributed 
to 47 multiemployer defined benefit pension plans under the 
terms of collective-bargaining agreements (“CBA”) that cover its 
union-represented employees. The risks of participating in these 
multiemployer plans are diff erent than those of single-employer 
plans in the following respects:

•  assets  contributed  to  the  multiemployer  plan  by  the 
Company are used to provide benefits to all beneficiaries 
of the plan, including beneficiaries of other participating 
employers;

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3 N o t e s   t o   t h e   c o n s o l i d a t e d   f i n a n c i a l   s t a t e m e n t s

• 

• 

• 

if a multiemployer plan is considered to be in “critical” status 
as deﬁ ned by the U.S. Pension Protection Act of 2006, the 
plan will be required to adopt a rehabilitation plan which may 
require the Company to increase its required contributions 
to the plan;

if a participating employer ceases to contribute to the plan, 
the unfunded obligations of the plan may have to be borne 
by  the  Company  and  the  other  remaining  participating 
employers; and

if the Company ceases to participate in a multiemployer 
plan,  entirely  or  partially  in  excess  of  a  threshold,  or  if 
substantially all of the participating employers of a given 
plan cease to participate, the Company may be required to 
pay that plan an amount based on the value of unfunded 
vested beneﬁ ts of the plan and the Company’s pro-rata share 
of total plan contributions, referred to as withdrawal liability.

The Company does not have the ability to account for these 
multiemployer plans as deﬁ ned beneﬁ t plans because it does 
not have timely access to information about plan assets, plan 
obligations,  actuarial  gains  and  losses,  service  costs,  and 
interest costs. As such, the multiemployer plans are accounted 
for as deﬁ ned contribution plans.

The Company contributed 13 million euro for U.S. multiemployer 
deﬁ ned beneﬁ t plans in 2018. Of the contributions made by the 
Company, 53% and 2% were made to plans considered to be in 
“critical” status or “endangered” status, respectively, as deﬁ ned 
by the U.S. Pension Protection Act of 2006 and per each plan’s 
most-recent notice of plan funding status. Plans are generally 
considered to be in “critical” status when they are funded at 
less than 65%, among other factors, and are considered to be 
“endangered” when they are funded at 65% or more, but at less 
than 80%, among other factors.

4.17.2  Other employee benefits

Other employee beneﬁ ts, in the amount of 152 million euro as 
of August 31, 2018 (149 million euro as of August 31, 2017), 
mainly comprise a liability related to a deferred compensation 
program in the United States and obligations relating to long-
service awards.

The total expense recognized with respect to these beneﬁ ts in 
Fiscal 2018 was 12 million euro (8 million euro in Fiscal 2017), 
of which 2 million euro (unchanged from Fiscal 2017) related to 
a deferred compensation program in the United States and was 
reported in ﬁ nancial expenses.

4.18  Provisions

(in millions of euro)

AUGUST 31, 2017

INCREASES/
CHARGES

REVERSALS 
WITH 
UTILIZATION

REVERSALS 
WITHOUT 
UTILIZATION

CURRENCY 
TRANSLATION 
ADJUSTMENT 
AND OTHER

CHANGES IN 
SCOPE OF 
CONSOLIDATION

AUGUST 31, 2018

Tax and social security exposures

Employee claims and litigation

Contract termination and loss-making 
contracts

Reorganization costs

Client/supplier claims and litigation

Negative net assets of associates*

Other provisions

34

63

7

13

13

7

17

4

17

8

1

8

4

TOTAL PROVISIONS

154

42

(1)

(20)

(6)

(8)

(4)

(3)

(42)

(8)

 (1)

(1)

(3)

(2)

(15)

(3)

(6)

(1)

(1)

(11)

* 

Investments in companies consolidated by the equity method that have negative net assets (see note 4.9).

34

47

18

5

35

6

16

161

1

10

21

1

33

(in millions of euro)

AUGUST 31, 2016

INCREASES/
CHARGES

REVERSALS 
WITH 
UTILIZATION

REVERSALS 
WITHOUT 
UTILIZATION

CURRENCY 
TRANSLATION 
ADJUSTMENT 
AND OTHER

CHANGES IN 
SCOPE OF 
CONSOLIDATION

AUGUST 31, 2017

Tax and social security exposures

Employee claims and litigation

Contract termination and loss-making 
contracts

Reorganization costs

Client/supplier claims and litigation

Negative net assets of associates*

Other provisions

TOTAL PROVISIONS

51

60

7

29

22

7

18

194

3

32

1

11

4

8

59

(4)

(19)

(2)

(23)

(2)

(50)

(15)

(9)

(4)

(16)

(4)

(48)

(1)

(1)

5

(2)

1

* 

Investments in companies consolidated by the equity method that have negative net assets (see note 4.9).

34

63

7

13

13

7

17

154

1

(3)

(2)

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W W W. S O D E X O . C O M

N o t e s   t o   t h e   c o n s o l i d a t e d   f i n a n c i a l   s t a t e m e n t s

C O N S O L I D A T E D   I N F O R M A T I O N

Provisions for exposures and litigation are determined on a case-by-case basis and rely on management’s best estimate of the 
outﬂ ows deemed likely to satisfy legal or implicit obligations to which the Group is exposed as of the end of the ﬁ scal year.

Current and non-current provisions are as follows:

(in millions of euro)

CURRENT

NON-CURRENT

CURRENT

NON-CURRENT

AUGUST 31, 2018

AUGUST 31, 2017

Tax and social security exposures

Employee claims and litigation

Contract termination and loss-making contracts

Reorganization costs

Client/supplier claims and litigation

Negative net assets of associates*

Other provisions

TOTAL PROVISIONS

6

26

8

3

28

2

73

28

21

10

2

7

6

14

88

4

32

3

9

12

1

61

30

31

4

4

1

7

16

93

* 

Investments in companies consolidated by the equity method that have negative net assets (see note 4.9).

4.19  Trade and other payables

(in millions of euro)

Operating payables

Non-operating payables

TOTAL OTHER NON-CURRENT LIABILITIES

Advances from clients

Trade payables

Employee-related liabilities

Tax liabilities

Other operating payables

Deferred revenues

Non-operating payables

TOTAL TRADE AND OTHER CURRENT PAYABLES

TOTAL TRADE AND OTHER PAYABLES

AUGUST 31, 2018

AUGUST 31, 2017

3

163

27

190

341

2,226

1,101

285

114

120

35

4,222

4,412

153

28

181

282

2,112

1,106

257

81

97

17

3,952

4,133

Employee-related liabilities mainly include short-term employee 
beneﬁ ts.

have been approved in advance). Each supplier is free to 
choose whether or not to sell each of its invoices;

The Sodexo Group has set up several reverse factoring programs 
in its main operating countries, which give its suppliers the 
opportunity of being paid in advance. In practice these programs 
involve  sales  of  trade  receivables  to  a  factor,  organized  by 
Sodexo.

Relations between the parties concerned are governed by two 
totally separate contracts:

•  Sodexo’s suppliers can, if they wish, sign a master agreement 
with the factor enabling them to sell their invoices before 
their scheduled due date, under conditions that take into 
consideration the Group’s credit risk.

As of August 31, 2018, the total amount of receivables sold by 
Sodexo’s suppliers under these reverse factoring programs was 
370 million euro.

•  the Sodexo Group signs a master agreement with the factor, 
pursuant to which it undertakes to pay on the scheduled due 
dates the invoices sold by its suppliers to the factor (which 

Trade  payables  that  have  been  financed  through  a  reverse 
factoring program as of the ﬁ scal year-end are still classiﬁ ed as 
trade payables and included in the total trade payables ﬁ gure.

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3 N o t e s   t o   t h e   c o n s o l i d a t e d   f i n a n c i a l   s t a t e m e n t s

MATURITIES OF TRADE AND OTHER PAYABLES

Less than 3 months

More than 3 months and less than 6 months

More than 6 months and less than 12 months

More than 1 year and less than 5 years

More than 5 years

CARRYING AMOUNT

UNDISCOUNTED 
CONTRACTUAL 
VALUE

3,041

3,041

291

848

166

66

291

848

175

79

TOTAL TRADE AND OTHER PAYABLES

4,412

4,434

4.20  Deferred taxes

Movements in deferred taxes were as follows in Fiscal 2018:

(in millions of euro)

•  Employee-related liabilities

•  Fair value of financial instruments

•  Intangible assets

•  Other temporary differences

•  Tax loss carry-forwards

TOTAL

Of which deferred tax assets

Of which deferred tax liabilities

AUGUST 31, 2017

DEFERRED TAX 
BENEFIT/(EXPENSE)

DEFERRED TAX 
RECOGNIZED 
IN OTHER 
COMPREHENSIVE 
INCOME

CURRENCY 
TRANSLATION 
ADJUSTMENT AND 
OTHER

AUGUST 31, 2018

(117)

(12)

21

20

(4)

(80)

(12)

17

14

(2)

(14)

6

21

268

1

(70)

(218)

69

50

187

(137)

Movements in deferred taxes were as follows in Fiscal 2017:

(in millions of euro)

•  Employee-related liabilities

•  Fair value of financial instruments

•  Intangible assets

•  Other temporary differences

•  Tax loss carry-forwards

TOTAL

Of which deferred tax assets

Of which deferred tax liabilities

DEFERRED TAX 
RECOGNIZED 
IN OTHER 
COMPREHENSIVE 
INCOME

CURRENCY 
TRANSLATION 
ADJUSTMENT AND 
OTHER

(21)

(20)

5

(5)

11

(3)

(21)

(12)

AUGUST 31, 2016

DEFERRED TAX 
BENEFIT/(EXPENSE)

(9)

18

1

(50)

(15)

(55)

318

(22)

(66)

(179)

87

138

287

(149)

156

15

(51)

(212)

71

(21)

105

(126)

AUGUST 31, 2017

268

1

(70)

(218)

69

50

187

(137)

Deferred tax assets arising on tax loss carry-forwards and not 
recognized because their recovery is not considered probable 
totaled 99 million euro as of August 31, 2018 (85 million euro 
as  of  August  31,  2017),  including  9  million  euro  generated 
by subsidiaries prior to their acquisition (6 million euro as of 
August 31, 2017).

Temporary differences on employee-related liabilities relate 
primarily to post-employment beneﬁ ts.

Other  temporary  differences  mainly  include  deferred  taxes 
recognized on the tax-deductible portion of the amortization that 
is recognized on goodwill in certain countries, which amounted 
to 225 million euro as of August 31, 2018 (229 million euro as 
of August 31, 2017).

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N o t e s   t o   t h e   c o n s o l i d a t e d   f i n a n c i a l   s t a t e m e n t s

C O N S O L I D A T E D   I N F O R M A T I O N

4.21  Financial instruments

The table below presents the categories of ﬁ nancial instruments, 
their  carrying  amount  and  their  fair  value,  by  item  in  the 
consolidated statement of ﬁ nancial position.

The levels used for the classiﬁ cation of ﬁ nancial instruments are 
as follows:

•  Level 1: Instruments traded on an active market;

•  Level 2: Instruments measured through inputs other than 
quoted prices included within Level 1 and that are observable;

•  Level 3: Instruments whose fair value is determined using 

valuation techniques based on unobservable inputs.

FINANCIAL ASSETS
(in millions of euro)

CATEGORY

NOTE

CARRYING 
AMOUNT

FAIR VALUE

LEVEL 1

LEVEL 2

LEVEL 3

TOTAL

AUGUST 31, 2018

FAIR VALUE LEVEL

Marketable securities

Restricted cash and financial 
assets related to the Benefits 
and Rewards Services activity

Trade and other receivables

Other financial assets

Financial assets at fair 
value through profit or loss

Available-for-sale 
financial assets

Loans and receivables 
at amortized cost

Available-for-sale financial 
assets

Loans and receivables at 
amortized cost

4.13

365

365

29

336

365

4.11

1,042

1,042

294

748

1,042

4.12

4,121

4,121

4.11

91

N/A

4.11

135

135

3

Derivative financial instrument 
assets

4.16

18

18

18

18

FINANCIAL LIABILITIES
(in millions of euro)

Bond issues(1)

Bank borrowings

Other borrowings

Bank overdrafts

Trade and other payables

Vouchers payable

Derivative financial instrument 
liabilities

CATEGORY

Financial liabilities 
at amortized cost

Financial liabilities 
at amortized cost

Financial liabilities 
at amortized cost

Financial liabilities 
at amortized cost

Financial liabilities 
at amortized cost

Financial liabilities 
at amortized cost

AUGUST 31, 2018

FAIR VALUE LEVEL

NOTE

CARRYING 
AMOUNT

FAIR VALUE

LEVEL 1

LEVEL 2

LEVEL 3

TOTAL

4.15

2,191

2,266

2,266

2,266

4.15

1,727

1,715

240

1,475

1,715

4.15

4.13

39

28

39

28

4.19

4,222

4,222

2,780

2,780

4.16

1

1

1

1

(1) Fair value is calculated on the basis of listed bond prices as of August 31, 2018.

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3 N o t e s   t o   t h e   c o n s o l i d a t e d   f i n a n c i a l   s t a t e m e n t s

AUGUST 31, 2017

FAIR VALUE LEVEL

FINANCIAL ASSETS
(in millions of euro)

CATEGORY

NOTE

CARRYING 
AMOUNT

FAIR VALUE

LEVEL 1

LEVEL 2

LEVEL 3

TOTAL

Marketable securities

Financial assets at fair 
value through profit or loss

4.13

420

420

37

383

Restricted cash and financial 
assets related to the Benefits and 
Rewards Services activity

Available-for-sale 
financial assets

4.11

909

909

233

676

420

909

Trade and other receivables

Other financial assets

Loans and receivables at 
amortized cost

Available-for-sale financial 
assets

Loans and receivables at 
amortized cost

4.12

4,050

4,050

4.11

88

N/A

4.11

107

107

Derivative financial instrument 
assets

4.16

11

11

11

11

FINANCIAL LIABILITIES
(in millions of euro)

Bond issues(1)

Bank borrowings

Other borrowings

Bank overdrafts

Trade and other payables

Vouchers payable

Derivative financial instrument 
liabilities

CATEGORY

Financial liabilities 
at amortized cost

Financial liabilities 
at amortized cost

Financial liabilities 
at amortized cost

Financial liabilities 
at amortized cost

Financial liabilities 
at amortized cost

Financial liabilities 
at amortized cost

AUGUST 31, 2017

FAIR VALUE LEVEL

NOTE

CARRYING 
AMOUNT

FAIR VALUE

LEVEL 1

LEVEL 2

LEVEL 3

TOTAL

4.15

1,889

1,990

1,990

1,990

4.15

1,582

1,623

331

1,291

1

1,623

4.15

4.13

38

38

38

38

4.19

3,953

3,953

2,764

2,764

4.16

2

2

2

2

(1) Fair value is calculated on the basis of listed bond prices as of August 31, 2017.

There were no transfers between the various fair value hierarchy levels between Fiscal 2017 and Fiscal 2018.

4.22  Share-based payment

4.22.1  Stock option plans

PRINCIPAL FEATURES OF STOCK OPTION PLANS

Rules governing stock option plans are as follows:

•  the option exercise price has no discount;

•  contractual life of options: 6-7 years.

ESTIMATION OF FAIR VALUE AT DATE OF GRANT

The  fair  value  of  options  granted  and  settled  by  delivery  of 
equity instruments is estimated at the date of grant using a 

binomial model, which takes into consideration the terms and 
conditions of grant and assumptions about exercise behavior.

As the exercise of the options is subject to a continued presence 
condition within the Group representing a maximum of four 
years as from the grant date, no expense was recorded in either 
Fiscal 2018 or 2017 in the consolidated ﬁ nancial statements for 
stock options granted up until December 2011.

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N o t e s   t o   t h e   c o n s o l i d a t e d   f i n a n c i a l   s t a t e m e n t s

C O N S O L I D A T E D   I N F O R M A T I O N

MOVEMENTS DURING FISCAL 2018 AND FISCAL 2017

The table below provides the quantity, weighted average exercise price (WAP) and movements of stock options during Fiscal 2018 
and Fiscal 2017:

FISCAL 2018

FISCAL 2017

NUMBER

WAP (in euro)

NUMBER

WAP (in euro)

Outstanding at the beginning of the period

529,443

50.39

1,016,931

Forfeited during the period

Exercised during the period

Outstanding at the end of the period

Exercisable at the end of the period

(11,075)

51.06

(7,755)

(479,733)(1)

50.27

(479,733)(2)

45,765

45,765

51.40

51.40

529,443

529,443

48.43

48.00

46.28

50.39

50.39

(1) The weighted average share price at the exercise date of options exercised in Fiscal 2018 was 101.43 euro.
(2) The weighted average share price at the exercise date of options exercised in Fiscal 2017 was 106.93 euro.

The weighted average residual life of options outstanding as of August 31, 2018 was 0.3 of a year (August 31, 2017: 0.8 years).

The exercise prices and exercise periods for options outstanding as of August 31, 2018 are provided in the table below:

DATE OF GRANT

December 2011

TOTAL

4.22.2  Free share plans

START DATE OF 
EXERCISE PERIOD

EXPIRATION DATE OF 
EXERCISE PERIOD

EXERCISE PRICE

NUMBER OF OPTIONS 
OUTSTANDING AS 
OF AUGUST 31, 2018

December 2012 December 2018

51.40 euro

45,765

3

45,765

PRINCIPLE FEATURES OF FREE SHARE PLANS

Rules governing free share plans are as follows:

• 

• 

• 

free shares vest only if the beneficiary is still working for 
the Group on the vesting date; in addition, some free share 
grants are subject to a performance condition;

for  the  free  shares  awarded  in  2013,  2014  and  2015,  for 
beneﬁ ciaries who are French tax residents the vesting period is 
two years for shares not subject to any performance condition 
and three years for performance shares, provided in both cases 
that the beneﬁ ciary is still working for the Group on the vesting 
date. For non-French tax residents, the vesting period is four 
years. Free shares awarded to French tax residents are also 
subject to a two-year lock-up period as from the vesting date;

for the free shares awarded in 2016, 2017 and 2018, the 
vesting  period  for  all  beneficiaries  is  four  years,  with  no 
subsequent lock-up period. In addition, beneﬁ ciaries must 
still be working for the Group on the vesting date in order for 
the shares to vest;

•  the proportion of shares subject to a performance condition 
ranges from 0% to 80% (depending on the total number of 
shares awarded), except for the shares granted to the Group Chief 
Executive Offi  cer which consist solely of performance shares.

 The performance conditions other than those related to stock 
market performance (“non-market performance conditions”) 
were as follows:

• 

• 

for the free shares awarded up to and including 2015, the 
non-market  performance  condition  is  based  on  annual 
growth in Group net income over a three-year period;

for  the  free  shares  awarded  since  2016,  the  non-market 
performance  condition  is  based  on  annual  growth  in 
consolidated underlying operating proﬁ t (before exceptional 
items and excluding currency eff ects) over a four-year period. 
For the 2018 plan, a portion of the shares is also subject to 
the achievement of Corporate Responsibility objectives.

Since the 2015 plan, a portion of the free shares awarded has 
also been subject to a stock market performance condition as 
follows:

• 

• 

• 

for  the  2015  plan,  a  portion  of  the  shares  awarded  to 
members of the Group Executive Committee is subject to 
a Total Shareholder Return (TSR) target. TSR is a measure 
of  the  performance  of  a  company’s  shares  over  time.  It 
combines share price appreciation and dividends paid to 
show the total return to the shareholder. For the free shares 
awarded in 2015, the TSR must have increased by at least 
20% between August 31, 2014 and the Annual Shareholders’ 
Meeting  called  to  approve  the  Fiscal  2018  financial 
statements, in January 2018;

for the 2016 and 2017 plans, a portion of the shares awarded 
to the members of the Group Executive Committee and to 
beneﬁ ciaries of more than 1,000 shares under the 2017 plan, 
are subject to a TSR performance condition. For the shares 
subject  to  this  condition  to  vest,  Sodexo’s  TSR  must  be 
positive and outperform the CAC 40 GR (Gross Total Return) 
index, published by Euronext, between (i) January 27, 2016 
and the date of the Annual Shareholders’ Meeting called to 
approve the Fiscal 2019 ﬁ nancial statements for the 2016 
plan, and (ii) January 25, 2017 and the date of the Annual 
Shareholders’  Meeting  called  to  approve  the  Fiscal  2020 
ﬁ nancial statements for the 2017 plan;

for  the  2018  plan,  a  portion  of  the  shares  awarded  to 
the  members  of  the  Group  Executive  Committee  and  to 
beneﬁ ciaries of more than 250 shares, Sodexo’s TSR will be 
compared to that of two peer groups. The ﬁ rst peer group is 
made up of 12 companies selected based on their size, the 
similarity of their operations to those of Sodexo and the fact 
that they all operate in the outsourcing and shared services 
industry. The second peer group comprises CAC 40 companies. 
In both cases, the number of shares that will vest will depend 
on Sodexo’s ranking within the peer group, with no shares 

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vesting if Sodexo’s ranking is below the third quartile. The 

starting share price used will be the average of the share prices 

quoted over the thirty (30) calendar days preceding the plan 

grant date. The end share price used to measure the overall 

stock market performance will be the average of the share 

prices quoted over the thirty (30) calendar days preceding the 

performance assessment date (March 27, 2022).

ESTIMATED FAIR VALUE AT DATE OF GRANT

The fair value of free shares is estimated at the date of grant 

based  on  the  share  price  at  that  date  after  deductions  for 

dividends on the shares that will not be paid to beneficiaries 
during  the  vesting  period  and,  where  applicable,  a  lock-up 
discount. The lock-up discount is determined based on the cost 
for the employee of a two-step strategy consisting of selling the 
shares forward for delivery at the end of the lock-up period and 
purchasing the same number of shares for immediate delivery, 
with  the  purchase  financed  by  a  loan,  taking  into  account 
market inputs.

The fair value of free shares subject to a performance condition 
based on Total Shareholder Return is estimated using a binomial 
model that takes into account the vesting conditions.

MOVEMENTS IN FISCAL 2018 AND FISCAL 2017

The table below shows movements in free shares in Fiscal 2018 and Fiscal 2017:

Outstanding at the beginning of the period

Granted during the period

Forfeited during the period

Delivered during the period

Outstanding at the end of the period

FISCAL 2018

FISCAL 2017

2,801,195

2,787,243

931,880

906,845

(145,391)

(168,841)

(583,325)

(724,052)

3,025,219

2,801,195

The weighted average fair value of the free shares granted in Fiscal 2018 was 66.61 euro for shares granted in Fiscal 2018 (92.56 euro 
for shares granted in Fiscal 2017).

The table below shows the grant dates of free shares outstanding as of August 31, 2018, the assumptions used to estimate their fair 
value at the grant date and the number of free shares outstanding at the period end:

DATE OF GRANT

April 25, 2013

International

March 11, 2014

International

April 27, 2015

France

April 27, 2015

International

December 1, 2015

December 1, 2015

France

France

December 1, 2015

International

April 27, 2016

September 30, 2016

November 30, 2016

April 20, 2017

September 14, 2017

April 27, 2018

TOTAL

N/A

N/A

N/A

N/A

N/A

N/A

VESTING 
PERIOD 
(in years)

LOCK-UP 
PERIOD 
(in years)

EXPECTED 
DIVIDEND YIELD 
(in %)

RISK-FREE 
INTEREST RATE 
(in %)

LOAN INTEREST 
RATE (in %)

VOLATILITY(1) 
(in %)

NUMBER OF SHARES 
OUTSTANDING AS OF 
AUGUST 31, 2017

4

4

3

4

2

3

4

4

4

4

4

4

4

N/A

N/A

2

N/A

2

2

N/A

N/A

N/A

N/A

N/A

N/A

N/A

2.5%

2.5%

2.5%

2.5%

2.5%

2.5%

2.5%

2.5%

2.5%

2.5%

2.4%

2.4%

2.7%

0.6%

0.8%

0.1%

0.2%

0%

0%

0%

0%

0%

0%

0%

0%

0%

6%

5.8%

5.2%

5.2%

4.3%

21%

21%

4.3%

22.5%

4.3%

22.5%

N/A

N/A

N/A

N/A

N/A

N/A

22%

22%

22%

18.1%

18.1%

21.3%

0

0

0

475,020

0

3,025

3,350

758,605

11,600

10,000

839,249

14,000

910,370

3,025,219

(1) Applicable for the portion of the free share grants subject to the TSR performance condition. Volatility is determined by reference to the share’s historical weighted 

average volatility over five years and the implicit volatility expected by the market.

4.22.3  Expense recognized during the fiscal year

The expense recognized in the Fiscal 2018 income statement for free shares was 44 million euro (43 million euro in Fiscal 2017).

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C O N S O L I D A T E D   I N F O R M A T I O N

4.23  Business combinations

The main acquisitions carried out by the Group during the period are set out in note 4.6, “Goodwill”. A summarized amount of assets acquired 
and liabilities assumed at the acquisition dates, measured on a provisional basis as of August 31, 2018, is provided in the table below:

(in millions of euro)

Intangible assets(1)

Property, plant and equipment

Other non-current assets (including client investments)

Trade receivables

Other current assets

Cash and cash equivalents

Borrowings

Other non-current liabilities

Net deferred tax liabilities

Other current liabilities

TOTAL IDENTIFIABLE NET ASSETS

Goodwill

Commitments written over non-controlling interests

Impact of acquisitions of control of companies consolidated by the equity method

CONSIDERATION TRANSFERRED

Cash acquired

Change in liabilities related to acquisitions of subsidiaries

AUGUST 31, 2018

OF WHICH CENTERPLATE

224

236

49

27

43

47

26

(2)

(34)

9

(130)

259

462

(2)

(719)

26

10

44

27

33

43

11

(33)

5

(109)

257

352

(609)

11

3

IMPACT ON THE CASH FLOW STATEMENT

(683)

(598)

(1) Including negative adjustments during the 12-month measurement period for acquisitions that took place in Fiscal 2017.

Intangible assets mainly include customer relationships and 
trademarks. The amortization periods for these intangible assets 
have been set by Management at a maximum of 20 years based 
on  the  estimated  attrition  rate  for  the  contracts  concerned 
and  the  probable  useful  lives  of  the  trademarks.  Goodwill 
corresponds to the positive diff erence between the acquisition 
price and the total fair value of the identiﬁ able net assets.

C o m p a n i e s   a c q u i r e d   d u r i n g   F i s c a l   2 0 1 8   c o n t r i b u t e d 
654 million euro to consolidated revenues and 35 million euro 
to  consolidated  underlying  operating  profit  following  their 
consolidation. The acquisition of Centerplate, which was the 
main business combination in Fiscal 2018, was completed on 
December 26, 2017. If Centerplate had been consolidated as 
from September 1, 2017 it would have contributed an additional 
294 million euro to consolidated revenues and 12 million euro to 
consolidated underlying operating proﬁ t for Fiscal 2018.

Signiﬁ cant entities acquired during the ﬁ scal year are disclosed 
in chapter 6 (N).

4.24  Commitments and contingencies

4.24.1  Sureties

Commitments arising from surety arrangements (pledges, charges secured against plant and equipment, and real estate mortgages) 
contracted by Sodexo S.A.  and its subsidiaries in connection with operating activities during Fiscal 2018 are not material.

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4.24.2  Operating lease commitments

Outstanding commitments arising in respect of operating leases are as follows:

(in millions of euro)

Less than 1 year

1 to 5 years

More than 5 years

TOTAL

AUGUST 31, 2018

AUGUST 31, 2017

144

376

141

662

112

231

65

408

These commitments arise under contracts worldwide, the terms 
of which are negotiated locally. They relate primarily to:

•  equipment  on  sites,  office  equipment  and  vehicles  for 
109 million euro (111 million euro as of August 31, 2017);

•  the rent for offi  ce premises of 330 million euro (288 million 
euro as of August 31, 2017), related mainly to the Group’s 

corporate headquarters in Issy-les-Moulineaux (28 million 
euro), the offices of Sodexo France (46 million euro) and 
Sodexo, Inc. (56 million euro);

•  minimum concession fee payments for sites in France and 

the United States (213 million euro).

4.24.3  Other commitments given

(in millions of euro)

Financial guarantees to third parties

Site management commitments

Performance bonds given to clients

Other commitments

TOTAL

AUGUST 31, 2018

AUGUST 31, 2017

LESS THAN 
1 YEAR

1 TO 5 YEARS

MORE THAN 
5 YEARS

TOTAL

TOTAL

1

1

45

7

54

1

1

22

15

39

2

2

183

134

321

1

3

179

148

331

116

112

228

Financial  guarantees  to  third  parties  mainly  comprise 
bank  subordinated  debt  commitments  under  Public-Private 
Partnership (PPP) contracts (see note 2.3.2) totaling 1 million 
euro.

compensate the client in the event of non-fulfillment of the 
service obligation (compensation is generally due only where 
Sodexo is unable to provide alternative or additional resources 
to fulﬁ ll the obligation to the client).

The performance bonds given to clients relate to around twenty 
sub-contracting contracts where the Group considers that it may 
be exposed to indemnity payments if it is unable to fulﬁ ll the 
service obligation. These bonds are subject to regular review by 
the management of the business unit and a provision is recorded 
as soon as payment under a bond becomes probable. For all 
other contracts with a performance bond, Sodexo considers that 
it can deploy the additional resources needed to avoid paying 
compensation under the bond.

The  Group  also  has  performance  obligations  to  clients,  but 
regards these as having the essential features of a performance 
guarantee  rather  than  an  insurance  contract  designed  to 

In  practice,  given  its  size  and  geographical  reach,  Sodexo 
considers itself capable of providing the additional resources 
needed to avoid paying compensation to clients protected by 
such clauses.

At this time, no provision has been recorded in the consolidated 
statement of ﬁ nancial position with respect to these guarantees.

The “Other commitments” line mainly includes the 12-year 
guarantee given by Sodexo S.A.  in October 2012 to the Trustee 
of the UK pension plan (i.e., until October 2024) for a maximum 
of 100 million pounds sterling in order to cover Sodexo UK’s 
obligations in connection with the plan.

4.25  Related parties

4.25.1  Principal shareholder

As of August 31, 2018, Bellon SA held 42.22% of the capital of 
Sodexo and 57.23% of the exercisable voting rights.

 Bellon  SA  invoiced  3.7  million  euro  to  Sodexo  S.A.   in  Fiscal 
2018  under  an  assistance  and  advisory  services  contract 
(3.6 million euro in Fiscal 2017).

Bellon  SA  received  dividends  of  167.7  million  euro  from 
Sodexo S.A.  in February 2018 and the Group received dividends 
of 2.7 million euro from Bellon SA during Fiscal 2018.

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C O N S O L I D A T E D   I N F O R M A T I O N

4.25.2  Non-consolidated companies

Other transactions with related companies comprise loans advanced, commercial transactions, and off  balance sheet commitments 
involving associates and non-consolidated companies.

(in millions of euro)

Loans

AUGUST 31, 2018

AUGUST 31, 2017

GROSS

IMPAIRMENT

CARRYING AMOUNT

CARRYING AMOUNT

44

44

77

OFF-BALANCE SHEET COMMITMENTS

AUGUST 31, 2018

AUGUST 31, 2017

Financial guarantees to third parties

Performance bonds given to clients

TRANSACTIONS

Revenues

Operating expenses

Financial income and expense, net

2

183

1

179

FISCAL 2018

FISCAL 2017

228

2

401

(2)

3

4.26  Compensation, loans, post-employment beneﬁ ts and other beneﬁ ts 
granted to Board members, the Executive Committee, and the Group 
Chief Executive Offi  cer of Sodexo

The compensation, loans, post-employment beneﬁ ts and other beneﬁ ts granted to Board members, the Executive Committee, and the 
Group Chief Executive Offi  cer of Sodexo in offi  ce as of August 31, 2018 and August 31, 2017 respectively for Fiscal 2018 and Fiscal 
2017 comprise the following:

3

(in euro)

Short-term benefits

Post-employment benefits

Fair value of free shares at the grant date

These  benefits  include  directors’  fees,  and  all  forms  of 
compensation and benefits paid (or earned during the period 
for offi  ces held) by Bellon SA, Sodexo S.A.  and/or other Sodexo 
Group companies.

Michel Landel’s term of offi  ce as Sodexo S.A. ’s Chief Executive 
Offi  cer ended on January 23, 2018. Aft  er that date he remained 
a member of the Board of Directors until his directorship ended 
on July 1, 2018.

Denis Machuel, Group Chief Executive Offi  cer since January 23, 
2018, is paid by Sodexo S.A.  but he likewise does not have an 
employment contract with Sodexo S.A.

4.27  Group employees

The following table shows the breakdown of Group employees:

TOTAL HEADCOUNT

(1) Including Centerplate’s 27,696 employees.

FISCAL 2018

FISCAL 2017

15,424,760

13,559,509

882,048

801,820

8,304,389

15,490,652

The Company has entered into non-compete clauses with the 
Group Chief Executive Offi  cer and the members of the Executive 
Committee with a maximum term of 24 months in order to 
protect the Group by restricting their freedom to hold a position 
as employee or director, or carry out any consulting work, for 
any of Sodexo’s competitors, either directly or through another 
legal entity.

AUGUST 31, 2018

AUGUST 31, 2017

460,663(1)

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3 N o t e s   t o   t h e   c o n s o l i d a t e d   f i n a n c i a l   s t a t e m e n t s

4.28  Disputes and litigation

• 

 The Company is in dispute with the Brazilian tax authorities 
regarding the tax deductibility of the amortization of goodwill 
recognized on the purchase of VR in March 2008. For the 
record, in Fiscal year 2017, Sodexo Pass do Brasil received a 
tax reassessment notice from the Brazilian tax authorities for 
ﬁ scal years 2010, 2011 and 2012 relating to the deductibility 
for tax purposes of the amortization of goodwill recognized 
on the purchase of VR in March 2008. The reassessment 
amounted to 102 million euro (breaking down as 30 million 
euro in principal and 72 million euro in penalties and late 
payment interest).

Sodexo Pass do Brasil is ﬁ rmly disputing this reassessment, 
which  the  Brazilian  tax  authorities  originally  envisaged 
during  a  previous  tax  audit  covering  fiscal  years  2008 
and  2009  but  then  abandoned.  The  Company  considers 
that  the  goodwill  amortization  was  valid,  both  in  terms 
of  its  underlying  reasons  and  the  way  it  has  been 
recorded.  Therefore,  the  Company  considers  that  there 
is a strong probability of winning the dispute with the tax 
authorities, and this has been conﬁ rmed by its tax advisors. 
Consequently, no provision was recorded for this dispute 
in the consolidated statement of financial position as of 
August 31, 2017.

This  dispute  was  presented  on  August  14,  2018  for  a 
judgment of the competent administrative court. The court 
ruled  in  favor  of  Sodexo  Pass  do  Brasil  as  it  considered 
that  the  goodwill  and  corresponding  amortization  were 
legitimately  recognized  on  the  acquisition  of  VR.  The 
judgment  therefore  confirms  that  Sodexo  Pass  do  Brasil 
acquired a full business structure when it purchased VR.

This judgment can be reversed on appeal. The Group believes, 
however, that the risk of change in this judgement is low.

In addition, the tax savings generated by this tax depreciation 
were offset in the consolidated accounts of the Group by 

4.29  Subsequent events

On September 13, 2018, the Board of Directors decided to grant 
up to 34,100 shares to certain Group employees. The shares 
granted under this plan will only vest if the beneﬁ ciaries are still 
working for the Group on the vesting date, and some of the share 
grants are subject to a performance condition.

Since the beginning of fiscal year 2018-2019, the Group has 
completed two acquisitions:

•  Crèches de France in early September 2018. This acquisition 
allows Sodexo to continue its development in the personal 
care services sector ;

•  Novae restauration, to strengthen the position of Sodexo in 
Switzerland. Novae Restauration is a key player in the high-
end catering services in French-speaking Switzerland, with 
700 employees serving a network of more than 80 prestigious 
customer sites. Novae Catering and Sodexo Switzerland have 
customer  portfolios  and  complementary  offers:  Novae’s 
premium  catering  services  range  complements  Sodexo’s 

a  deferred  tax  expense  of  the  same  amount  for  each  of 
the  financial  periods  concerned,  in  accordance  with  the 
IFRS rules. The balance of the related deferred tax liability 
amounts to 65 million of euro at the end of the ﬁ nancial year.

•  On  October  9,  2015,  Octoplus  lodged  a  complaint  with 
France’s Competition Authority concerning the practices of 
several French meal voucher issuers, including Sodexo Pass 
France SA, and asked the authority to issue an interim order.

After  hearing  arguments  from  the  parties  concerned, 
on  October  6,  2016  the  Competition  Authority  rejected 
the  request  for  an  interim  order  but  decided  that  the 
investigation  into  the  complaint  should  be  pursued.  The 
investigations are still in progress and in the absence of any 
estimate of the related risk at this stage in the procedure, no 
provision was booked at August 31, 2018.

• 

In  Brazil,  a  difference  of  interpretation  opposes  Sodexo 
and its main competitors to the Tax Administration on the 
deductibility of PIS/COFIN on certain purchases that are 
made at a zero rate. Proceedings are pending before the 
Superior Courts and, based on the opinion of our counsel, 
the Group considers that its chances of success in these 
proceedings  are  good  and  therefore  did  not  consider 
necessary  at  this  stage  to  provision  for  appropriations 
deducted to date.

•  To the best of the Company’s knowledge, there have been no 
governmental, judicial or arbitral proceedings (including any 
such proceedings which are pending or threatened of which 
Sodexo is aware) which may have, or have had in the past 
12 months, material eff ects on Sodexo and/or the Group’s 
ﬁ nancial position or proﬁ tability.

Sodexo is also involved in litigation arising from its ordinary 
activities. The Group does not believe that liabilities relating 
to such litigation will in aggregate be material to its activities 
or to its consolidated ﬁ nancial position.

position as a service provider of facilities management on the 
German-speaking Swiss market. There is a strong potential 
for synergies in terms of additional on-site sales and inter-
regional development.

On October 26, 2018, a judgment was rendered by the High 
Court of Justice of London in a case concerning the pension 
plan of another company, on the subject of the equalization of 
Guaranteed Minimum Pensions (“GMP equalization”) between 
women  and  men.  This  judgment  clarifies  the  applicable 
statutory provisions and conﬁ rms the obligation for trustees 
of the United Kingdom pension plans to eliminate inequalities 
in the minimum guaranteed pensions of participants in these 
plans. This decision could aff ect many companies with deﬁ ned 
beneﬁ t pension plans in the UK, including the Group. This could 
have the eff ect of increasing the obligation under the Group’s 
pension plans in the United Kingdom. The impacts, which will 
be recognized if necessary in the first half of the 2018-2019 
ﬁ nancial year, are currently being evaluated.

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C O N S O L I D A T E D   I N F O R M A T I O N

5.  FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICY

5.1  Exposure to foreign exchange and interest rate risk

The policies approved by the Board of Directors, the Group Chief 
Executive Offi  cer and the Group Chief Financial Offi  cer are designed 
to prevent speculative positions. Furthermore, under these policies:

•  substantially all borrowings must be at ﬁ xed rates of interest, 

or converted to ﬁ xed-rate using hedging instruments;

• 

in the context of ﬁ nancing policy, foreign exchange risk on 
loans to subsidiaries must be hedged;

•  the maturity of hedging instruments must not exceed the 

maturity of the borrowings they hedge.

5.1.1  Analysis of sensitivity to interest rates

As of August 31, 018 and August 31, 2017, a 0.5% increase or 
decrease in interest rates would have had no material impact on 
proﬁ t before tax or on shareholders’ equity as substantially all 
liabilities at those dates were at a ﬁ xed rate of interest.

SENSITIVITY TO EXCHANGE RATES

5.1.2  Analysis of sensitivity to foreign exchange 
rates and exchange rate exposures on 
principal currencies

Because Sodexo has operations in 72 countries, all components 
of the ﬁ nancial statements are inﬂ uenced by foreign currency 
translation  effects,  and  in  particular  by  fluctuations  in  the 
U.S. dollar. However, exchange rate ﬂ uctuations do not generate 
any operational risk, because each of the Group’s subsidiaries 
invoices  its  revenues  and  incurs  its  expenses  in  the  same 
currency.

Sodexo S.A.  uses derivative instruments to manage the Group’s 
risk exposure resulting from the volatility of exchange rates.

IMPACT OF A 10% APPRECIATION 
OF THE EXCHANGE RATE 
OF THE FOLLOWING CURRENCIES 
AGAINST THE EURO
(in millions of euro)

U.S. dollar (USD)

Brazilian real (BRL)

Pound sterling (GBP)

AUGUST 31, 2018

AUGUST 31, 2017

IMPACT ON 
REVENUES

IMPACT ON 
OPERATING 
PROFIT

IMPACT 
ON PROFIT 
BEFORE TAX

IMPACT ON 
SHAREHOLDERS’ 
EQUITY

IMPACT ON 
REVENUES

IMPACT ON 
OPERATING 
PROFIT

IMPACT 
ON PROFIT 
BEFORE TAX

IMPACT ON 
SHAREHOLDERS’ 
EQUITY

828

104

178

55

21

10

40

19

14

237

77

83

871

110

172

61

24

6

42

20

10

220

82

72

5.2  Exposure to liquidity risk

5.3  Exposure to counterparty risk

The nature of the Group’s bank borrowings and bond issues as of 
August 31, 2018 is described in detail in note 4.15.

Exposure to counterparty risk is limited to the carrying amount 
of ﬁ nancial assets.

As of August 31, 2018 and August 31, 2017, more than 99% 
of the Group’s consolidated borrowings was raised on capital 
markets and bank ﬁ nancing covered less than 1% of the Group’s 
financing needs. The maturity dates of the main borrowings 
range between Fiscal 2018 and Fiscal 2029.

In  addition,  94%  of  the  Group’s  borrowings  correspond  to 
long-term fixed-rate debt raised on the capital markets. The 
remaining 6% corresponds to short-term variable-rate debt, also 
raised on the capital markets. This amount can be reﬁ nanced 
at any time thanks to (i) the Group’s multi-currency conﬁ rmed 
credit facility of 531 million euro plus 709 million U.S. dollars 
which expires in July 2022, and (ii) three bilateral confirmed 
lines of credit amounting to 150 million euro each and expiring 
in  December  2018,  March  2019  and  December  2019.  As  of 
August 31, 2018, none of these facilities had been used.

Group policy is to manage and spread counterparty risk. For 
derivative ﬁ nancial instruments, each transaction with a bank 
is required to be based on a master contract modeled on the 
standard contract issued by the French Bankers’ Association 
(AFB) or the International Swaps and Derivatives Association 
(ISDA).

Counterparty  risk  relating  to  customer  accounts  receivable 
is  immaterial.  Due  to  the  Group’s  geographic  and  segment 
spread, there is no concentration of risk on past due individual 
receivables for which no provision has been recorded. Moreover, 
the Group has not observed any signiﬁ cant change in impacts 
relating to customer default during the year.

The  main  counterparty  risk  is  bank-related.  The  Group  has 
limited its exposure to counterparty risk by diversifying its 
investments and limiting the concentration of risk held by each 

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3 N o t e s   t o   t h e   c o n s o l i d a t e d   f i n a n c i a l   s t a t e m e n t s

of its counterparties. Transactions are conducted with highly 
creditworthy counterparties taking into consideration country 
risk. The Group has instituted a regular reporting of the risk 
spread between counterparties and of their quality.

To reduce this risk further, in Fiscal 2011 the Group implemented 
an international cash pooling mechanism between its main 
subsidiaries (with a netting facility), reducing the amount of 
liquidity held by third parties by concentrating it in the Group’s 
ﬁ nancial holding companies.

The  maximum  counterparty  represents  approximately  14% 
(11% as of August 31, 2017) of the Group’s operating cash 
(including restricted cash and financial assets related to the 
Beneﬁ ts and Rewards Services activity) and is with a banking 
group whose rating is A-1.

5.4  Policy for managing the 

Company’s capital structure

Sodexo takes a long-term view in managing its capital structure, 
with the objective of ensuring the Group’s liquidity, optimizing 
its ﬁ nancial structure and allowing shareholders to beneﬁ t from 
its strong cash ﬂ ow generation.

Contributing to decisions made may be objectives for earnings 
per  share  or  estimated  future  cash  flows,  or  for  balancing 
various components of the consolidated statement of ﬁ nancial 
position in order to meet the net debt criteria deﬁ ned by Group 
management and communicated to the marketplace, notably 
a net debt to equity ratio of less than 75%. The net debt to 
equity ratio corresponds to net debt as a proportion of total 
shareholders’ equity (including minority interests), with net 
debt defined as the difference between gross borrowings and 
total cash, and total cash deﬁ ned as cash and cash equivalents 
plus restricted cash and ﬁ nancial assets related to the Beneﬁ ts 
and Rewards Services activity less bank overdraft  s.

6.  SCOPE OF CONSOLIDATION

The main companies consolidated as of August 31, 2018 and 
presented in the table below together represent over 80% of 
consolidated revenues, operating profit, profit for the period 
attributable to equity holders of the parent, and shareholders’ 
equity. The other entities individually represent less than 0.8% 
of each of these items.

The first column shows the percentage interest held by the 
Group, and the second column the percentage of voting rights 
held by the Group. Percentage interests and percentages of 
voting rights are only shown if less than 97%.

Companies newly consolidated during the year are indicated by 
the letter “N”.

France

% INTEREST

% VOTING 
RIGHTS

PRINCIPAL ACTIVITY

COUNTRY

Sodexo S.A. 

Sodexo Entreprises (consolidated)

Sodexo Santé Médico Social

Société Française de Restauration et Services 
(consolidated)

Segsmhi (Le Lido)

Sogeres

Lenôtre SA (consolidated)

Sodexo Pass France SA

Crèche Attitude (consolidated)

N

Foodchéri

86%

95%

Sodexo En France

Sodexo Energie et Maintenance

Sodexo Pass International SAS

Sofinsod SAS

Etin SAS

Holding

On-site

On-site

On-site

On-site

On-site

On-site

Benefits and Rewards

On-site

On-site

On-site

On-site

Holding

Holding

Holding

France

France

France

France

France

France

France

France

France

France

France

France

France

France

France

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C O N S O L I D A T E D   I N F O R M A T I O N

% INTEREST

% VOTING 
RIGHTS

PRINCIPAL ACTIVITY

COUNTRY

Americas

Sodexo do Brasil Comercial SA (consolidated)

On-site

Sodexo Pass do Brasil Serviços E Comércio SA

Benefits and Rewards

Sodexo Facilities Services Ltda

Sodexo S.A. S.

Sodexo Canada Ltd (consolidated)

N

Centerplate Canada

Sodexo Chile SA (consolidated)

On-site

On-site

On-site

On-site

On-site

Sodexo Soluciones de Motivacion Chile SA

Benefits and Rewards

Brazil

Brazil

Brazil

Colombia

Canada

Canada

Chile

Chile

Sodexo, Inc. (consolidated)

N

Centerplate Ultimate Holdings, Corp.

Europe

Sodexo Remote Sites Partnership

Sodexo Remote Sites USA Inc.

Sodexo Holdings Inc.

CK Franchising Inc.

Sodexo Concierge Services LLC

Circle Company Associates, LLC

Denali Universal Services LLC

Inspirus LLC

Sodexo Global Services, LLC

Sodexo Peru SAC

Sodexo Services GmbH (consolidated)

Sodexo Beteiligungs BV & Co. KG

GA-tec Gebäude und Anlagentechnik GmbH

Sodexo Services Solutions Austria GmbH

Sodexo Belgium SA (consolidated)

Imagor SA

Sodexo Pass Belgium SA (consolidated)

Compagnie Financière Aurore International

Xpenditure NV

Sodexo Iberia SA (consolidated)

N

Centerplate ISG Espana SL

60%

60%

Sodexo Oy

Sodexo Italia SpA (consolidated)

Sodexo Nederland BV (consolidated)

3

On-site

United States

On-site

United States

On-site

United States

On-site

United States

On-site

United States

On-site

United States

On-site

United States

On-site

United States

On-site

United States

Benefits and Rewards

United States

Holding

United States

On-site

Peru

On-site

On-site

On-site

On-site

On-site

Benefits and Rewards

Benefits and Rewards

Holding

Benefits and Rewards

On-site

On-site

On-site

On-site

Germany

Germany

Germany

Austria

Belgium

Belgium

Belgium

Belgium

Belgium

Spain

Spain

Finland

Italy

On-site

Netherlands

Sodexo Pass Česka Republika AS

Benefits and Rewards

Czech Republic

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3 N o t e s   t o   t h e   c o n s o l i d a t e d   f i n a n c i a l   s t a t e m e n t s

N

Centerplate UK Ltd

Sodexo Ltd (consolidated)

Sodexo Global Services UK Ltd

% INTEREST

% VOTING 
RIGHTS

PRINCIPAL ACTIVITY

COUNTRY

On-site

United Kingdom

On-site

United Kingdom

Holding

United Kingdom

Sodexo Motivation Solutions UK Ltd

Benefits and Rewards

United Kingdom

Sodexo Ventures UK Limited

N

Sodexo Finances USD Ltd

Sodexo Holdings Ltd

Purchasing Systems Ltd

Sodexo Remote Sites Holdings Ltd

Sodexo Management Services Ltd

Holding

United Kingdom

Holding

United Kingdom

On-site

United Kingdom

On-site

United Kingdom

On-site

United Kingdom

On-site

United Kingdom

Sodexo Finance Designated Activity Company

Holding

Elder Home Care Ltd

Sodexo Pass Romania Srl

Sodexo AB

Asia, Pacific, Middle East, Africa

Sodexo Australia Pty Ltd (consolidated)

Sodexo Remote Sites Australia Pty Ltd

Sodexo Food Solutions India Private Ltd

Sodexo Shanghaï Management Services

Sodexo Management Company Ltd Shanghaï

Sodexo Services Asia

Teyseer Services Company LLC

49%

49%

Kelvin Catering Services (Emirates) LLC

49%

49%

Personal Home Services

Ireland

Ireland

Benefits and Rewards

Romania

On-site

Sweden

On-site

On-site

On-site

On-site

On-site

Holding

On-site

On-site

Australia

Australia

India

China

China

Singapore

Qatar

United Arab 
Emirates

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C O N S O L I D A T E D   I N F O R M A T I O N

7.  AUDITORS’ FEES

(in millions of euro excluding VAT)

FISCAL 2018

FISCAL 2017

FISCAL 2018

FISCAL 2017

PRICEWATERHOUSECOOPERS

KPMG

Audit of individual company financial statements 
and consolidated financial statements

Issuer

Consolidated subsidiaries

TOTAL AUDIT SERVICES

Other services

Issuer

Consolidated subsidiaries

TOTAL OTHER SERVICES

TOTAL FEES

0.7

4.2

4.9

0.1

0.5

0.6

5.5

0.6

4.9

5.5

0.2

0.7

0.9

6.4

0. 6

3. 5

4. 1

0. 1

0. 1

0. 2

4. 3

0. 6

3. 3

3. 9

0. 1

0. 3

0. 4

4. 3

Services other than the certiﬁ cation of accounts provided by PricewaterhouseCoopers Audit to the consolidating entity and its 
controlled subsidiaries mainly consist of professional services in the context of acquisition due diligences and technical consultations.

Services other than the certiﬁ cation of accounts provided by KPMG SA to the consolidating entity and its controlled subsidiaries 
mainly consist of professional services in the context of the non-ﬁ nancial statement.

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3.5  STATUTORY AUDITORS’ REPORT ON THE 
CONSOLIDATED FINANCIAL STATEMENTS

This is a free translation into English of the Statutory Auditors’ report issued in French and is provided solely for the convenience 
of English speaking readers. This report includes information speciﬁ cally required by European regulations or French law, such 
as information about the appointment of Statutory Auditors. This report should be read in conjunction with, and construed in 
accordance with, French law and professional auditing standards applicable in France.

For the year ended August 31, 2018

Sodexo
255, Quai de la Bataille de Stalingrad
92866 Issy-les-Moulineaux Cedex 9, France

To the Shareholders,

Opinion

In compliance with the engagement entrusted to us by your Shareholders’ Meeting, we have audited the accompanying consolidated 
ﬁ nancial statements of Sodexo for the year ended August 31, 2018.

In our opinion, the consolidated ﬁ nancial statements give a true and fair view of the assets and liabilities and of the ﬁ nancial position 
of the Group as at August 31, 2018 and of the results of its operations for the year then ended in accordance with International 
Financial Reporting Standards as adopted by the European Union.

The audit opinion expressed above is consistent with our report to the Audit Committee.

Basis of the audit opinion

Audit framework

We conducted our audit in accordance with professional standards applicable in France. We believe that the audit evidence we have 
obtained is suffi  cient and appropriate to provide a basis for our opinion.

Our responsibilities under these standards are further described in the “Responsibilities of the Statutory Auditors relating to the audit 
of the consolidated ﬁ nancial statements” section of our report.

Independence

We conducted our audit engagement in compliance with the independence rules applicable to us, for the period from September 1, 
2017 to the date of our report and in particular we did not provide any non-audit services prohibited by article 5 (1) of Regulation (EU) 
No. 537/2014 or the French Code of Ethics (code de déontologie) for Statutory Auditors.

Justiﬁ cation of our assessments – key audit matters

In accordance with the requirements of articles L.823-9 and R.823-7 of the French Commercial Code (code de commerce) relating to 
the justiﬁ cation of our assessments, we inform you of the key audit matters relating to the risks of material misstatement that, in our 
professional judgment, were the most signiﬁ cant in our audit of the consolidated ﬁ nancial statements, as well as how we addressed 
those risks.

These matters were addressed as part of our audit of the consolidated ﬁ nancial statements as a whole, and therefore contributed 
to the opinion we formed as expressed above. We do not provide a separate opinion on speciﬁ c items of the consolidated ﬁ nancial 
statements.

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C O N S O L I D A T E D   I N F O R M A T I O N

Measurement of the  recoverable amount of goodwill

(Notes 2.8.2.3 and 4.10 to the consolidated ﬁ nancial statements)

Description of risk

As at August 31, 2018, the goodwill balance amounted to 5,664 million euro, representing 37% of total assets. An impairment loss 
is recognized if the recoverable amount of goodwill as determined during the annual impairment test or during a speciﬁ c test carried 
out where there is an indication of impairment, is lower than its carrying amount.

Recoverable amount is typically determined based on the present value of future cash ﬂ ows and requires signiﬁ cant judgment from 
management, in particular as regards the preparation of business forecasts, as well as the discount rates and long-term growth rates 
used.

Accordingly, we deemed the measurement of the recoverable amount of goodwill to be a key audit matter, due to the size of the 
goodwill balance and the inherent uncertainty of certain inputs, in particular the likelihood of achieving forecast results included in 
such measurement.

How our audit addressed this risk

We performed a critical review of the methods applied by management to determine the recoverable amount of goodwill. Our audit 
work consisted in:

•  assessing the components of the carrying amount of cash-generating units (CGUs) or groups of CGUs, corresponding to the level 

at which goodwill is monitored by the Group, and their consistency with those used in projecting future cash ﬂ ow forecasts;

•  assessing the consistency of the projected future cash ﬂ ows with the economic environments in which the Group operates;

•  assessing the consistency of the growth rates used to project future cash ﬂ ows with available external analyses;

•  assessing the reasonableness of the discount rates applied to estimated future cash ﬂ ows, verifying in particular that the various 
inputs used to calculate the weighted average cost of capital for each CGU or group of CGUs were suffi  cient to approximate the 
return expected by market participants for similar activities;

•  verifying that note 4.10 to the consolidated ﬁ nancial statements contains the appropriate disclosures on the sensitivity of the 

recoverable amount of goodwill to changes in the main assumptions used.

Supplier discount allowances

(Note 2.22.3 to the consolidated ﬁ nancial statements)

Description of risk

Vendor Discount Allowances (VDA) received by the Group from suppliers in the context of Sodexo-managed food or facilities services 
contracts are recognized as a reduction in the cost of sales.

The Group has a large number of supplier purchasing agreements that provide for VDAs based on quantities purchased or other 
contractual conditions, including exceeding thresholds or respecting commitments, such as for example exclusivity clauses for 
suppliers. These agreements may be signed at a local, regional or global level.

Due to the number of such agreements within the Group and the fact that their anniversaries do not always coincide with the Group’s 
ﬁ scal year, the measurement of VDAs requires signiﬁ cant estimates from management and is therefore deemed to be a key audit 
matter.

How our audit addressed this risk

We tested the eff ectiveness of the controls implemented by management to avert or detect any errors in estimating the value of VDAs.

Our audit procedures included, on a sample basis:

•  analyzing supplier agreements and the proper application of their terms and conditions in determining the VDAs recognized for the 
ﬁ scal year, in particular as regards purchasing volumes, including the estimation of VDA accruals at the end of the reporting period;

•  verifying the existence of the most material receivables recognized at the end of the reporting period with regard to accrued VDAs, 

as well as the consistency of their calculation with the terms and conditions of the supplier agreements;

•  comparing the VDAs eff ectively received aft  er the end of the reporting period with the receivables recognized at the end of the 

reporting period in order to assess the reliability of the Group’s estimates.

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Post-employment beneﬁ ts

(Notes 2.17 and 4.17 to the consolidated ﬁ nancial statements)

Description of risk

The Group contributes to deﬁ ned beneﬁ t pension plans, mainly in France, the United Kingdom, the Netherlands and Italy.

As at August 31, 2018, the Group recognized a net beneﬁ t obligation of 237 million euro, corresponding to the diff erence between the 
fair value of the plan assets (908 million euro) and the present value of the net beneﬁ t obligation (1,145 million euro).

Assumptions used in calculating the obligation include length of service, life expectancy, salary inﬂ ation, staff  turnover, and the 
discount rate and inﬂ ation rate, and therefore involve the judgment of management. Any change in these key assumptions could have 
a signiﬁ cant impact on the net beneﬁ t obligation. Accordingly, this subject was deemed to be a key audit matter.

How our audit addressed this risk

We were informed of the procedures implemented by the Group for measuring the net beneﬁ t obligation.

With the support of our actuaries, we assessed the key assumptions and data used by the Group’s actuaries to measure the net 
beneﬁ t obligation with regard to the main deﬁ ned beneﬁ t plans, most notably in France, the United Kingdom, the Netherlands and 
Italy, and evaluated their ﬁ ndings.

We compared the key assumptions taken from the measurement models with external data and tested the sensitivity of the net 
beneﬁ t obligation to changes in these key assumptions.

We also obtained external conﬁ rmation of the plan assets or implemented other audit procedures to conﬁ rm their existence and proper 
valuation.

Tax risks

(Notes 2.16, 4.18 and 4.28 to the consolidated ﬁ nancial statements)

Description of risk

The Group has operations in 72 countries and, in the normal course of business, is subject to regular inspections by local tax 
authorities.

Such inspections, covering corporate income tax as well as other taxes, levies and similar payments, may give rise to tax adjustments 
and disputes with tax authorities.

Estimates of the impacts of these tax risks and any related provisions involve the judgment of management, especially as regards 
the expected outcome of disputes in progress or the probability of identiﬁ ed risks occurring. Accordingly, we deemed this subject to 
be a key audit matter.

How our audit addressed this risk

We held meetings with management, gained an understanding of the internal control procedures implemented to identify tax risks 
and uncertain tax positions, and, when necessary, for determining any provisions.

With the support of our tax experts, we also:

•  held meetings with the Group tax department and local management to assess the latest status of any inspections in progress and 

tax adjustments notiﬁ ed by the tax authorities, and to monitor developments in any disputes in progress;

•  consulted the recent decisions and correspondence of Group companies with the tax authorities, and gained an understanding of 

the correspondence between the companies concerned and their tax advisors;

•  analyzed the responses of the tax advisors to our requests for information or their analyses of disputes in progress;

•  conducted a critical review of the estimates and positions adopted by management;

•  veriﬁ ed that the latest developments had been factored into the risk analysis and the estimates of the provisions set aside in the 

statement of ﬁ nancial position.

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C O N S O L I D A T E D   I N F O R M A T I O N

Veriﬁ cation of the information pertaining to the group presented 
in the management report

As required by law and in accordance with professional standards applicable in France, we have also veriﬁ ed the information pertaining 
to the Group presented in the management report of the Board of Directors.

We have no matters to report as to its fair presentation and its consistency with the consolidated ﬁ nancial statements.

We attest that the information pertaining to the Group provided in the management report of the Board of Directors comprises the 
statement of non-ﬁ nancial information required under article L.225-102-1 of the French Commercial Code. In accordance with the 
requirements of article L.823-10 of the French Commercial Code, we have not veriﬁ ed the fair presentation or the consistency of the 
information in said statement with the consolidated ﬁ nancial statements.

Report on other legal and regulatory requirements

Appointment of the Statutory Auditors

We were appointed Statutory Auditors of Sodexo by the Shareholders’ Meetings held on February 22, 1994 for PricewaterhouseCoopers 
Audit and on February 4, 2003 for KPMG Audit.

As at August 31, 2018, PricewaterhouseCoopers Audit and KPMG Audit were in the twenty-ﬁ ft  h and sixteenth consecutive year of 
their engagement, respectively.

Responsibilities of management and those charged with governance relating 
to the consolidated ﬁ nancial statements

Management is responsible for preparing consolidated ﬁ nancial statements presenting a true and fair view in accordance with 
International Financial Reporting Standards as adopted by the European Union and for implementing the internal control procedures it 
deems necessary for the preparation of consolidated ﬁ nancial statements free of material misstatement, whether due to fraud or error.

In preparing the consolidated ﬁ nancial statements, management is responsible for assessing the company’s ability to continue as a 
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting, unless it 
expects to liquidate the company or to cease operations.

The Audit Committee is responsible for monitoring the ﬁ nancial reporting process and the eff ectiveness of internal control and 
risk management systems, as well as, where applicable, any internal audit systems, relating to accounting and ﬁ nancial reporting 
procedures.

The consolidated ﬁ nancial statements were approved by the Board of Directors.

Responsibilities of the Statutory Auditors relating to the audit 
of the consolidated ﬁ nancial statements

Objective and audit approach

Our role is to issue a report on the consolidated ﬁ nancial statements. Our objective is to obtain reasonable assurance about whether 
the consolidated ﬁ nancial statements as a whole are free of material misstatement. Reasonable assurance is a high level of assurance, 
but is not a guarantee that an audit conducted in accordance with professional standards will always detect a material misstatement 
when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could 
reasonably be expected to inﬂ uence the economic decisions of users taken on the basis of these consolidated ﬁ nancial statements.

As speciﬁ ed in article L.823-10-1 of the French Commercial Code, our audit does not include assurance on the viability or quality of 
management of the company.

As part of an audit conducted in accordance with professional standards applicable in France, the Statutory Auditors exercise 
professional judgment throughout the audit.

They also:

• 

identify and assess the risks of material misstatement of the consolidated ﬁ nancial statements, whether due to fraud or error, 
design and perform audit procedures responsive to those risks, and obtain audit evidence considered to be sufficient and 
appropriate to provide a basis for their opinion. The risk of not detecting a material misstatement resulting from fraud is higher 
than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override 
of internal control;

•  obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the 

circumstances, but not for the purpose of expressing an opinion on the eff ectiveness of the internal control;

•  evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management 

and the related disclosures in the notes to the consolidated ﬁ nancial statements;

3

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3 S t a t u t o r y   A u d i t o r s ’   R e p o r t   o n   t h e   c o n s o l i d a t e d   f i n a n c i a l   s t a t e m e n t s

•  assess the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence 
obtained, whether a material uncertainty exists related to events or conditions that may cast signiﬁ cant doubt on the company’s 
ability to continue as a going concern. This assessment is based on the audit evidence obtained up to the date of the audit report. 
However, future events or conditions may cause the company to cease to continue as a going concern; If the Statutory Auditors 
conclude that a material uncertainty exists, they are required to draw attention in the audit report to the related disclosures in 
the consolidated ﬁ nancial statements or, if such disclosures are not provided or are inadequate, to issue a qualiﬁ ed opinion or a 
disclaimer of opinion;

•  evaluate the overall presentation of the consolidated ﬁ nancial statements and assess whether these statements represent the 

underlying transactions and events in a manner that achieves fair presentation;

•  obtain suffi  cient appropriate audit evidence regarding the ﬁ nancial information of the entities or business activities within the 
group to express an opinion on the consolidated ﬁ nancial statements. The Statutory Auditors are responsible for the direction, 
supervision and performance of the audit of the consolidated ﬁ nancial statements and for the opinion expressed thereon.

Report to the Audit Committee

We submit a report to the Audit Committee which includes in particular a description of the scope of the audit and the audit program 
implemented, as well as the results of our audit. We also report any signiﬁ cant deﬁ ciencies in internal control that we have identiﬁ ed 
regarding the accounting and ﬁ nancial reporting procedures.

Our report to the Audit Committee includes the risks of material misstatement that, in our professional judgment, were the most 
signiﬁ cant for the audit of the consolidated ﬁ nancial statements and which constitute the key audit matters that we are required to 
describe in this report.

We also provide the Audit Committee with the declaration provided for in article 6 of Regulation (EU) No. 537/2014, conﬁ rming our 
independence within the meaning of the rules applicable in France, as deﬁ ned in particular in articles L.822-10 to L.822-14 of the 
French Commercial Code and in the French Code of Ethics for Statutory Auditors. Where appropriate, we discuss any risks to our 
independence and the related safeguard measures with the Audit Committee.

Neuilly-sur-Seine and Paris La Défense, November 7, 2018

The Statutory Auditors

PricewaterhouseCoopers Audit

Jean-Christophe Georghiou

KPMG Audit

Department of KPMG SA

Hervé Chopin

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C O N S O L I D A T E D   I N F O R M A T I O N

 3.6  SUPPLEMENTAL INFORMATION 
AND CONDENSED GROUP 
ORGANIZ ATION CHART

3.6.1  Financial ratios

Gearing ratio

Net debt ratio

Debt coverage

Financial independence

Return on equity

Return on capital employed (ROCE)

Interest cover

FISCAL 2018

FISCAL 2017

Borrowings ( 1)  – operating cash ( 2)

Shareholders’ equity and non-controlling interests

37.9%

17.1%

Borrowings ( 1)  – operating cash ( 2)

Earnings before Interest, Taxes, Depreciation and Amortization 
(EBITDA) (3)

1.0

0.4

Borrowings

Operating cash flow

Non-current borrowings

3.5 years

3.3 years

Shareholders’ equity and non-controlling interests

106.3%

84.3%

Profit attributable to equity holders of the parent

Equity attributable to equity holders of the parent 
(before profit for the period)

Operating profit after tax ( 4)

Capital employed ( 5)

Operating profit

Net borrowing cost

24.7%

25.7%

16.4%

20.6%

12.6

15.0

Financial ratios have been computed based on the following key indicators:

Non-current borrowings

3,537

3,012

FISCAL 2018

FISCAL 2017

(1)  Borrowings

+ current borrowings excluding overdrafts

- derivative financial instruments recognized as assets

(2)  Operating cash

(3)   Earnings before Interest, 
Taxes, Depreciation 
and Amortization (EBITDA)

(4)  Operating profit after tax

(5)  Capital employed

Cash and cash equivalents

+ financial assets related to the Benefits 
and Rewards Services activity

- bank overdrafts

Operating profit

+ depreciation and amortization

Operating profit

Effective tax rate

Property, plant and equipment

+ goodwill

+ other intangible assets

+ client investments

+ working capital excluding restricted cash and financial assets 
of the Benefits and Rewards Services activity

421

(18)

3,940

1,666

1,042

(28)

2,680

997

317

1,314

997

27.1%

727

619

5,664

704

558

(3,104)

4,441

499

(11)

3,500

2,018

909

(38)

2,889

1,189

281

1,470

1,189

31.7%

812

590

5,308

511

547

(3,009)

3,947

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3 S u p p l e m e n t a l   I n f o r m a t i o n   a n d   c o n d e n s e d   G r o u p   o r g a n i z a t i o n   c h a r t

3.6.2  Two-year financial summary

Total shareholders’ equity

Equity attributable to equity holders of the parent

Non-controlling interests

Borrowings(1)

Non-current borrowings

Current borrowings

Cash and equivalent, net of bank overdrafts

Financial assets of the Benefits and Rewards Services activity (including restricted cash)

Net borrowings(2)

Revenue

Operating profit

Profit for the period

Profit attributable to non-controlling interests

Profit attributable to equity holders of the parent

FISCAL 2018

FISCAL 2017

3,328

3,283

45

3,940

3,534

406

1,638

1,042

1,260

20,407

997

664

13

651

3,570

3,536

34

3,500

3,008

492

1,980

909

611

20,698

1,189

745

22

723

Weighted average number of shares

148,077,776

148,998,961

Earnings per share (in euro)

Dividend per share paid during the fiscal year (in euro)

Share price at August 31 (in euro)

Highest share price in the fiscal year (in euro)

Lowest share price in the fiscal year (in euro)

4.40

2.75

89.72

114.05

78.10

4.85

2.40

98.03

123.60

96.02

(1) Including net financial instruments at fair value, excluding bank overdrafts.
(2) Cash and cash equivalents + restricted cash and financial assets of the Benefits and Rewards Services activity – borrowings.

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C O N S O L I D A T E D   I N F O R M A T I O N

3.6.3  Exchange rates

ISO CODES

CFA

ZAR

DZD

SAR

ARS

AUD

BRL

BGN

CAD

CLP

CNY

COP

KRW

CRC

DKK

AED

USD

GNF

HKD

HUF

INR

IDR

ILS

JPY

KZT

KWD

LBP

MGA

MYR

MAD

MXN

MZN

NOK

NZD

OMR

PEN

CLOSING EXCHANGE RATE 
AT AUGUST 31, 2018

AVERAGE EXCHANGE RATE
FISCAL 2018

COUNTRIES

Africa

South Africa

CURRENCY

1 EURO =

1 EURO =

CFA (thousands)

0.655957

0.655957

Rand

17.172800

15.340557

Algeria

Dinar (thousands)

0.137258

0.136826

Saudi Arabia

Argentina

Australia

Brazil

Bulgaria

Canada

Chile

China

Riyal

Peso

Dollar

Real

Lev

4.376700

4.466986

44.301650

44.301650

1.612900

1.556875

4.859100

4.074978

1.955800

1.955800

Dollar

1.519200

1.525952

Peso (thousands)

0.792370

0.745478

Yuan

7.966400

7.772575

Colombia

Peso (thousands)

3.537000

3.465322

3

South Korea

Won (thousands)

1.301910

1.304398

Costa Rica

Denmark

United Arab Emirates

United States

Colon (thousands)

0.666120

0.673690

Krone

Dirham

Dollar

7.455800

7.446222

4.286200

4.374545

1.165100

1.192645

Guinea

Guinea Franc (thousands)

10.507670

10.702237

Hong Kong

Hungary

India

Dollar

9.145300

9.338008

Forint (thousands)

0.326250

0.314984

Rupee (thousands)

0.082724

0.078526

Indonesia

Rupiah (thousands)

17.230000

16.445610

Israel

Japan

Shekel

4.199400

4.223479

Yen (thousands)

0.129050

0.131597

Kazakhstan

Tenge (thousands)

0.424290

0.395908

Kuwait

Lebanon

Dinar

0.352900

0.358849

Pound (thousands)

1.759840

1.795908

Madagascar

Ariary (thousands)

3.874000

3.800529

Malaysia

Morocco

Mexico

Mozambique

Norway

New Zealand

Oman

Peru

Ringgit

Dirham

4.796700

4.815987

10.971900

11.164337

Peso

22.362800

22.507850

Metical

69.270000

71.234412

Kroner

Dollar

Rial

Sol

9.714800

9.598936

1.755900

1.696847

0.449248

0.458325

3.852600

3.867189

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ISO CODES

PHP

PLN

QAR

CZK

RON

GBP

RUB

SGD

SEK

CHF

TZS

THB

TND

TRY

UYU

VEF

VND

COUNTRIES

Philippines

Poland

Qatar

CLOSING EXCHANGE RATE 
AT AUGUST 31, 2018

AVERAGE EXCHANGE RATE
FISCAL 2018

CURRENCY

1 EURO =

1 EURO =

Peso

Zloty

Riyal

62.318000

61.734111

4.291300

4.242137

4.247900

4.361060

Czech Republic

Koruna (thousands)

0.025735

0.025636

Romania

United Kingdom

Russia

Singapore

Sweden

New Lei

Pound

4.643700

4.641427

0.897400

0.883967

Ruble (thousands)

0.079096

0.071007

Dollar

Krona

1.596500

1.600536

10.620500

10.058567

Switzerland

Swiss Franc

1.128100

1.161704

Tanzania

Thailand

Tunisia

Turkey

Uruguay

Venezuela

Vietnam

Shilling (thousands)

2.658430

2.685713

Baht

Dinar

38.175000

38.620592

3.214000

2.948677

New Lira

7.638600

4.846916

Peso

37.332000

35.010776

Bolivar (thousands)

7,121.091200

7,121.091200

Dong

27,193.430000

27,194.422170

3.6.4  Investment policy

(in millions of euro)

Acquisitions of property, plant equipment and intangible assets, plus client investments

Acquisitions of equity interests

FISCAL 2018

FISCAL 2017

286

697

308

268

Investments in progress as of August 31, 2018:

•  post-balance sheet acquisitions of equity interests: notably 
the acquisition of Crèches de France and Novae Restauration;

•  other ﬁ rm commitments to acquire equity interests: as of the 
date of this document Sodexo has not made any signiﬁ cant 
ﬁ rm commitment to acquire equity interests.

Because of the nature of the Group’s activities, investments 
represent  less  than  2%  of  revenues  and  mainly  relate  to 

investments on the Group’s sites, which are used to support 
operating activities and are ﬁ nanced by operating cash. None 
of these investments is individually signiﬁ cant in Fiscal 2018.

The main acquisitions made during Fiscal 2017 are indicated 
in note 4.6, “Goodwill”, to the consolidated ﬁ nancial statements.

A detailed description of changes in investments is provided in 
notes 4.5, 4.7 and 4.8 to the consolidated ﬁ nancial statements.

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C O N S O L I D A T E D   I N F O R M A T I O N

3.6.5  Condensed group organization chart

SODEX0 SA

Holds directly
or indirectly
100% of the
subsidiaries
indicated

3

U N I T E D   K I N G D O M

N O R T H   A M E R I C A

SODEXO LTD
SODEXO HEALTHCARE SERVICES LTD
SODEXO PRESTIGE LTD
SODEXO DEFENCE SERVICES LTD
UK DETENTION SERVICES
SODEXO EDUCATION SERVICES LTD
SODEXO IRELAND LTD

SODEXO, INC
CENTERPLATE ULTIMATE HOLDINGS, CORP.
CK FRANCHISING, INC
SODEXO REMOTE SITES PARTNERSHIP 
SODEXO CANADA LTD

F R A N C E

SOGERES SA
SODEXO ENTREPRISES SAS
SODEXO SANTE MEDICO SOCIAL SAS
SOCIETE FRANCAISE DE RESTAURATION ET 
SERVICES
SODEXO SPORTS ET LOISIRS
SODEXO JUSTICE SERVICES

E U R O P E  

SODEXO ITALIA SPA
SODEXO BELGIUM SA
SODEXO GERMANY 
SODEXO IBERIA SA
SODEXO AB (SWEDEN)
SODEXO NEDERLAND BV

S O U T H   A M E R I C A

A S I A   A U S T R A L I A

B E N E F I T S
  A N D   R E W A R D S
  S E R V I C E S

SODEXO CHILE SA
SODEXO DO BRASIL COMERCIAL SA
SODEXO FACILITIES MANAGEMENT SCES LTDA 
(BRASIL)
SODEXO PEROU SAC
SODEXO SAS (COLOMBIA) *

SODEXO SHANGHAI MGT. SERVICES CO. LTD
SODEXO SINGAPORE PTE LTD
SODEXO AUSTRALIA PTY LTD
SODEXO REMOTE SITES AUSTRALIA PTY LTD
SODEXO FOOD SOLUTIONS INDIA PRIVATE LTD
SODEXO FACILITIES MANAGEMENT INDIA PRIVATE LTD
KELVIN CATERING SERVICES (UNITED 
ARAB EMIRATES) *

SODEXO PASS INTERNATIONAL SAS (FRANCE)
SODEXO PASS FRANCE SA
SODEXO PASS DO BRASIL SERV. E COMERCIO SA
SODEXO PASS CESKA REPUBLICA AS
SODEXO PASS BELGIUM SA
SODEXO MOTIVATION SOLUTIONS UK LTD
INSPIRUS LLC (USA)

* Third party non-controlling interest

NB : The operating subsidiaries indicated for each geographic area or activity are those with the highest revenues for Fiscal year 2018.

S O D E X O   -   F I S C A L   2 0 1 8   R E G I S T R AT I O N   D O C U M E N T

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C O N S O L I D A T E D   I N F O R M A T I O N

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4

INFORMATION 
ON THE ISSUER

4.4 

Statutory Auditors’ Report 

192

4.4.1  Statutory Auditors’ Report on the 

ﬁ nancial statements 

4.4.2  Statutory Auditors’ Report on related-
party agreements and commitments 

192

196

4.1 

Sodexo S.A. Individual Company 
Financial Statements 

4.1.1 

Income statement 

4.1.2  Balance sheet 

170

170

171

4.2 

Notes to the Individual Company 
Financial Statements 

172

4.3 

Supplemental Information 
on the Individual Company 
Financial Statements 

4.3.1  Five-year ﬁ nancial summary 

4.3.2  Appropriation of earnings 

4.3.3  Supplier and client dues 

189

189

190

190

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I N F O R M A T I O N   O N   T H E   I S S U E R 

4 S o d e x o   S . A

4.1  SODEXO S.A. INDIVIDUAL COMPANY 

FINANCIAL STATEMENTS

4.1.1  Income statement

 (in millions of euro)

Revenues

Other operating income

Purchases

Employee costs

Other operating expenses

Taxes other than income taxes

Depreciation, amortization and increase in provisions

Operating profit

Financial income/(expense), net

Exceptional income/(expense), net

Employee profit-sharing

Income taxes

Net income

NOTES

FISCAL 2018

FISCAL 2017

3

4

5

6

114

238

(1)

(64)

119

248

(1)

(56)

(251)

(227)

(10)

(2)

24

459

(64)

-

62

481

(9)

(3)

71

342

(31)

-

14

396

170

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4.1.2  Balance sheet

Assets

(in millions of euro)

NON-CURRENT ASSETS, NET

Intangible assets

Property, plant and equipment

Financial investments

TOTAL NON-CURRENT ASSETS

CURRENT AND OTHER ASSETS

Accounts receivable

Prepaid expenses, other receivables and other assets

Marketable securities

Cash

TOTAL CURRENT AND OTHER ASSETS

TOTAL ASSETS

Liabilities and equity

(in millions of euro)

SHAREHOLDERS’ EQUITY

Share capital

Additional paid-in capital

Reserves and retained earnings

Restricted provisions

TOTAL SHAREHOLDERS’ EQUITY

Provisions for contingencies and losses

LIABILITIES

Borrowings

Accounts payable

Other liabilities

TOTAL LIABILITIES AND PROVISIONS

TOTAL LIABILITIES AND EQUITY

I N F O R M A T I O N   O N   T H E   I S S U E R 

S o d e x o   S . A

NOTES

AUGUST 31, 2018

AUGUST 31, 2017

7

7

7-9

7

9

9

11

9

1

5,897

5,907

70

436

177

112

795

6,702

4

1

5,815

5,820

63

390

177

409

1,039

6,859

NOTES

AUGUST 31, 2018

AUGUST 31, 2017

590

248

1,818

15

2,671

342

603

534

1,745

17

2,899

343

13

10

14-15

3,407

2,778

14

14

28

254

4,031

6,702

32

807

3,960

6,859

4

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I N F O R M A T I O N   O N   T H E   I S S U E R 

4 N o t e s   t o   t h e   I n d i v i d u a l   C o m p a n y   F i n a n c i a l   S t a t e m e n t s

4.2  NOTES TO THE INDIVIDUAL COMPANY 

FINANCIAL STATEMENTS

DETAILED LIST OF NOTES

1. 

1.1 

1.2 

2. 

SIGNIFICANT EVENTS 

Capital transactions 

Borrowings 

SUMMARY OF SIGNIFICANT 
ACCOUNTING POLICIES 

2.1  Non-current assets 

2.2 

Accounts receivable 

2.3  Marketable securities (excluding treasury shares) 

173

173

173

173

173

174

174

14.  AMOUNT AND MATURITY OF LIABILITIES 

181

15.  BOND ISSUES AND OTHER BORROWINGS 

181

15.1  Bond issues 

15.2  Other borrowings 

15.3  Borrowings from related companies 

16.  ACCRUED EXPENSES – DEFERRED 

REVENUES AND PREPAID EXPENSES 

Treasury shares – free share and stock option plans 

174

17.  RELATED-PARTY INFORMATION 

2.4 

2.5 

2.6 

2.7 

2.8 

3. 

4. 

5. 

6. 

7. 

8. 

9. 

Foreign currency transactions 

Debt issuance costs 

Retirement beneﬁ ts 

French tax consolidation 

ANALYSIS OF NET REVENUES 

174

174

174

174

175

FINANCIAL INCOME AND EXPENSE, NET 

175

EXCEPTIONAL ITEMS, NET 

ANALYSIS OF INCOME TAX EXPENSE 

NON-CURRENT ASSETS 

DEPRECIATION AND AMORTIZATION 

AMOUNT AND MATURITY OF 
RECEIVABLES AND OTHER ASSETS 

10.  PROVISIONS AND IMPAIRMENT 

11.  MARKETABLE SECURITIES 

12.  TREASURY SHARES 

13.  SHAREHOLDERS’ EQUITY 

13.1  Share capital 

13.2  Changes in shareholders’ equity 

176

176

177

177

178

178

179

179

180

180

180

181

181

182

182

183

184

184

184

184

185

185

185

185

185

185

185

185

186

186

186

18.  FINANCIAL COMMITMENTS 

18.1  Commitments made by Sodexo S.A. 

18.2  Commitments received by Sodexo S.A. 

18.3  Financial instrument commitments 

19.  PRINCIPAL FUTURE ADJUSTMENTS TO 

THE TAX BASIS 

20.  RETIREMENT BENEFIT COMMITMENTS 

20.1  Retirement beneﬁ ts payable by law or under 

collective agreements 

20.2  Commitments related to a supplemental 

pension plan 

21.  DIRECTORS’ FEES 

22.  FRENCH TAX CONSOLIDATION 

22.1  Beneﬁ t arising from French tax consolidation 

22.2  Tax losses reclaimable as of August 31, 2018 

23.  AVERAGE NUMBER OF EMPLOYEES 

24.  CONSOLIDATION 

25.  POST-BALANCE SHEET EVENTS 

26.  LIST OF SUBSIDIARIES 

AND OTHER EQUITY INVESTMENTS 

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I N F O R M A T I O N   O N   T H E   I S S U E R 

  1.  SIGNIFICANT EVENTS

 1.1  Capital transactions

1.2  Borrowings

As part of the share buyback program launched by the Board of 
Directors, during Fiscal 2018 Sodexo S.A. purchased 3,356,732 
of  its  own  shares,  representing  2.2%  of  its  share  capital, 
for 299 million euro, and on August 29, 2018 it reduced its 
share capital by  300 million euro  through the cancellation of   
3,375,562 shares.

On September 14, 2017, Sodexo S.A. borrowed  580 million euro 
from  its subsidiary Sodexo Finance Designed Activity Company  
maturing in September 2034.

On March 29, 2018, Sodexo S.A. redeemed in full its March 2011 
U.S. private placement for 147 million U.S. dollars. Subsequently, 
on June 27, 2018 it carried out a new U.S. P rivate P lacement 
amounting  to  400  million  U.S.  dollars  and  redeemable  in 
June 2023.

On May 22, 2018, Sodexo S.A. carried out a new bond issue for  
300 million euro  redeemable in May 2025.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The  individual  company  financial  statements  have  been 
prepared in accordance with the plan comptable général of 2014 
and regulation no. 2014-03 issued by the Autorité des normes 
comptables (ANC), as amended by regulation no. 2016-07 dated 
November 4, 2016.

The  accounting  policies  applied  in  preparing  the  individual 
company ﬁ nancial statements for Fiscal 2018 are the same as 
those applied for Fiscal 2017. The financial statements have 
been prepared using the historical cost convention.

In accordance with regulation no. 2015-06 issued by the ANC, 
merger deficits are included in “Other financial assets” (see 
note 7, “Non-current assets”).

ANC  regulation  no.  2015-05  concerning  forward  financial 
instruments and hedging transactions has been effective for 
Sodexo S.A. since September 1, 2017 (see note 2.5 below for 
further details). The resulting change in accounting policy did not 
have a material impact on the presentation of the Company’s 
ﬁ nancial statements or on year-on-year comparisons with Fiscal 
2017.

Exceptional items comprise items that do not relate to ordinary 
activities, and certain items that do relate to ordinary activities 
but are of an exceptional nature.

The balance sheet and income statement of Sodexo S.A. include 
amounts for branches in metropolitan France and in French 
overseas departments and regions.

2.1  Non-current assets

Non-current assets are valued at acquisition cost or historical 
cost.  Acquisition  cost  comprises  the  amount  paid  plus  all 
incidental costs directly related to the acquisition or to the 
installation of the asset, and incurred to enable the asset to 
function as intended.

The  amounts  presented  in  the  tables  in  these  notes  are  in 
millions of euro.

Vehicles

Depreciation is calculated over the useful life of the asset using 
the straight-line method, which is considered to best reﬂ ect the 
underlying economic reality.

2.1.1  Intangible assets

Software is amortized over four to five years and integrated 
management software packages are amortized over three to 
seven years, depending on their expected useful lives.

The diff erence between the accounting and tax amortization of 
intangible assets is recognized as exceptional amortization.

4

2.1.2  Property, plant and equipment

The  st raight-line depreciation lives generally used are:

Buildings

General fixtures and fittings

Plant and machinery

Office and computer equipment

Other property, plant and equipment

2.1.3  Financial investments

20 years

3-10 years

4-10 years

4 years

3-10 years

5-10 years

Equity investments and other ﬁ nancial investments are carried 
on the balance sheet at cost. At each balance sheet date, a 
provision for impairment is recorded if the value in use of these 
assets is less than their net carrying amount including any 
merger deﬁ cits allocated to the assets for accounting purposes.

The value in use of investments is determined on the basis of 
net asset value, profitability and the future prospects of the 
investee.

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When the carrying amount of an investment is higher than the 
net book value of the share of net assets of the subsidiary, the 
valuation is also supported by comparing the carrying amount 
of the investment to its value in use based on discounted future 
cash ﬂ ows, using the following parameters:

•  after-tax  cash  flows  derived  from  business  plans  and  a 
terminal value calculated by extrapolating the data for the 
final year of the business plan using a long-term growth 
rate speciﬁ c to the business activity and geographic region. 
Business plans generally cover one to ﬁ ve years;

•  the  cash  flows  are  discounted  using  a  rate  based  on  the 

weighted average cost of capital.

Based on the estimated value in use, an investment may be 
maintained at a carrying amount in excess of the share of book 
net assets held.

Costs incurred to acquire shares in companies recognized at cost 
are recognized for tax purposes as exceptional amortization over 
a ﬁ ve-year period.

Receivables related to equity investments are recognized at 
face value. A provision for impairment is recorded where the 
recoverable amount is less than the carrying amount.

When an equity investment is sold or liquidated, any provision 
for impairment previously recognized against that investment is 
released and recorded as exceptional income.

2.2  Accounts receivable

Accounts receivable are recognized at face value. An allowance 
for doubtful accounts is recorded where the recoverable amount 
is less than the carrying amount.

2.3  Marketable securities 

(excluding treasury shares)

Marketable securities are recognized at acquisition cost, with 
any unrealized losses at the balance sheet date covered by a 
provision for impairment.

2.4  Treasury shares – free share and 

stock option plans

A provision is recorded when it is probable that stock option or 
free share plans will give rise to an outflow of resources. The 
amount of the provision is based on the cost of the treasury 
shares acquired (or to be acquired) for allocation to each plan. 
For stock option plans, the provision is net of the option exercise 
price.

Depending on the plan terms, the provision is recognized over 
the period in which the services are rendered by the beneﬁ ciaries, 
as applicable.

The  provision  is  released  upon  delivery  of  the  shares  and 
recognition of a capital loss in an amount equal to the average 
cost of the delivered shares, less the option exercise price in the 
case of shares delivered upon exercise of stock options.

When treasury shares are neither allocated to a plan nor held for 
the purpose of being cancelled, they are valued at the lower of 
the average purchase price and the average market price for the 
last month of the ﬁ scal year.

Treasury  shares  acquired  for  cancellation  purposes  are 
recognized  in  other  financial  assets  and  no  provision  for 
impairment is recorded.

2.5  Foreign currency transactions

Foreign currency revenues and expenses are translated using the 
exchange rate as of the transaction date. Foreign currency liabilities 
and receivables are translated in the balance sheet at the exchange 
rate prevailing as of the balance sheet date. Any diff erence arising 
from the retranslation of foreign currency liabilities and receivables 
at the closing exchange rate is recorded in the balance sheet. 
Unrealized foreign exchange losses at the balance sheet date are 
recognized to the extent the underlying balance is not hedged.

For the Company’s first-time application of ANC regulation 
no. 2015-05 on September 1, 2017, it recognized a 3 million 
euro credit in retained earnings for the premiums on currency 
hedges that were in place at that date. These premiums are 
recognized in the income statement over the duration of the 
contracts concerned in “Other ﬁ nancial income”.

In accordance with this new ANC regulation, for foreign currency 
transactions a distinction is now made between commercial 
transactions and ﬁ nancial transactions, with the exchange gains 
and losses on these transactions recognized as follows:

•  within operating proﬁ t, under “Other operating expenses” for 

commercial transactions;

•  within  “Financial  income/(expense),  net”  for  financial 

transactions.

The changes introduced by the regulation concerning isolated 
open positions and hedging transactions with a risk component 
do not aff ect Sodexo.

The ﬁ rst-time application of the regulation did not have any other 
material impacts on the presentation of the ﬁ nancial statements.

2.6  Debt issuance costs

Debt issuance costs are recognized as a deferred charge asset 
in the balance sheet and amortized straight-line over the term 
of the debt.

2.7  Retirement beneﬁ ts

Retirement beneﬁ t obligations due to active employees by law 
or under collective agreements are included in off -balance sheet 
commitments. Commitments under supplementary retirement 
plans are estimated using the projected unit credit method 
based on ﬁ nal salary and are also included in off -balance sheet 
commitments, net of any plan assets.

2.8  French tax consolidation

Sodexo S.A. is the lead company in the French tax consolidation, 
and has sole liability for income taxes for the whole of this tax 
group. Each company included in the French tax consolidation 
recognizes the income tax for which it would have been liable 
had there been no French tax consolidation. Any income tax 
gains or losses arising from the French tax consolidation are 
recognized in the Sodexo S.A. ﬁ nancial statements.

In  connection  with  position  statement  no.  2005-G  issued  on 
October 12, 2005 by the Urgent Issues Committee of the Conseil 

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national de la comptabilité on the conditions under which a provision 
may be recognized by a parent company covered by a French tax 
consolidation, Sodexo S.A. has elected the following accounting 
treatment: a provision for taxes is recognized in the financial 
statements of Sodexo S.A. to cover tax losses of subsidiaries which 

are used to offset income in the French tax consolidation and 
which will probably be reclaimed by the subsidiary. All tax losses 
incurred by operating subsidiaries are regarded as probable of being 
reclaimed by the subsidiary, given that the subsidiary will be able 
to off set such losses against income once it returns to proﬁ tability.

3.  ANALYSIS OF NET REVENUES

(in millions of euro)

Revenues by business activity

On-site Services

Holding company services

TOTAL

Revenues by geographic region

France

French overseas departments and regions

TOTAL

FISCAL 2018

FISCAL 2017

4

110

114

110

4

114

4

115

119

115

4

119

4.  FINANCIAL INCOME AND EXPENSE, NET

4

(in millions of euro)

FISCAL 2018

FISCAL 2017

Dividends received from subsidiaries and equity investments

Interest income

Interest expense

Net foreign exchange gain/(loss)

Net change in provisions for financial items

TOTAL

541

20

(72)

(6)

(24)

459

423

19

(60)

7

(47)

342

The net change in provisions for ﬁ nancial items primarily corresponds to 27 million euro representing the net total of charges to and 
releases of provisions for impairment of equity investments.

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5.  EXCEPTIONAL ITEMS, NET

(in millions of euro)

FISCAL 2018

FISCAL 2017

Net change in provision for negative net assets of subsidiaries and equity investments

Net expense on treasury shares and commitments under stock option plans

Net change in restricted provisions and exceptional depreciation

Net change in provisions for tax losses reclaimable by subsidiaries included in the French 
tax consolidation

Debt forgiveness/subsidies given

Net gain/(loss) on asset disposals

Other

TOTAL

(3)

(14)

2

(13)

-

(36)

-

(64)

2

(25)

-

(2)

-

4

(10)

(31)

The  net  loss  on  asset  disposals  includes  gains  and  losses 
on  equity  investments  sold  in  connection  with  the  Group’s 
reorganization of its legal structure.

The  14  million  euro  net  expense  on  treasury  shares  and 
commitments under stock option plans comprises:

•  a  51  million  euro  loss  on  the  sale  of  treasury  shares  in 
connection with the exercise of stock options and delivery of 
free shares;

•  a 34 million euro net decrease in the provision for free share 

grants;

•  a 3 million euro release of the provision for stock option 

plans.

The “Other ” line item included 10 million euro in Fiscal 2017 due 
as a result of Sodexo S.A.’s early redemption of 108 million U.S. 
dollars of its March 2011 U.S. private placement.

6.  ANALYSIS OF INCOME TAX EXPENSE

(in millions of euro)

Operating income

Financial income/(expense), net

Exceptional income/(expense), net

Employee profit-sharing

TOTAL

PRE-TAX INCOME

INCOME TAXES

AFTER-TAX INCOME

24

459

(64)

-

419

(11)

50(1)

23(2)

-

62

13

509

(41)

-

481

(1) This amount  includes a credit for the reimbursement of the tax on dividends for 44 million euro.
(2) This amount includes the 18 million euro tax gain arising from the French tax consolidation.

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7.  NON-CURRENT ASSETS

(in millions of euro)

Intangible assets

Property, plant and equipment

Financial investments

•  Equity investments

•  Receivables related to equity investments

•  Other financial assets

TOTAL FINANCIAL INVESTMENTS

TOTAL

GROSS VALUE AT 
AUGUST 31, 2017

ADDITIONS 
DURING THE 
PERIOD

DECREASES 
DURING 
THE PERIOD

OTHER 
MOVEMENTS 
DURING THE 
PERIOD

GROSS VALUE AT 
AUGUST 31, 2018

NET VALUE AT 
AUGUST 31, 2018

9

11

5,851

72

16

5,939

5,959

6

1

235

30

265

272

1

105

58

1

164

165

14

12

9

1

5,981

5,840

52

15

6,048

6,074

42

15

5,897

5,907

8

8

8

In  the  prior  year ,  intangible  assets   included  10.9  million 
euro in merger deficits, which were allocated in full to equity 
investments.  In  accordance  with  ANC  regulation  no.  2015-
06, these merger deﬁ cits are now included in “Other ﬁ nancial 
assets”.

Sodexo S.A. participated in the recapitalization of its subsidiaries 
in Australia and Brazil.

In  addition,  Sodexo  S.A.  created  and  acquired  new  foreign 
subsidiaries  in  connection  with  the  Group’s  international 
expansion during the ﬁ scal year and participated in the  share  
capital increases of several  of its existing subsidiaries.

“Other movements during the period” were due to the Group’s 
reorganization of its legal structure.

8.  DEPRECIATION AND AMORTIZATION

(in millions of euro)

Intangible assets

Property, plant and equipment

TOTAL

ACCUMULATED 
DEPRECIATION 
AND 
AMORTIZATION 
AUGUST 31, 2017

INCREASES 
DURING 
THE PERIOD

DECREASES 
DURING 
THE PERIOD

OTHER 
MOVEMENTS 
DURING THE 
PERIOD

ACCUMULATED 
DEPRECIATION 
AND 
AMORTIZATION 
AUGUST 31, 2018

5

9

14

1

1

2

1

1

5

10

15

4

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9.  AMOUNT AND MATURITY OF RECEIVABLES AND OTHER ASSETS

(in millions of euro)

Equity investments

Receivables related to equity investments

Other financial assets

TOTAL FINANCIAL INVESTMENTS

Accounts receivable

Prepaid expenses, other receivables and other assets

TOTAL ACCOUNTS AND OTHER RECEIVABLES(1)

TOTAL

GROSS VALUE

LESS 
THAN 1 YEAR

MORE 
THAN 1 YEAR

AMORTIZATION 
AND PROVISIONS

CARRYING 
AMOUNT

5,981

52

16

6,049

72

436

508

6,557

5,981

12

5,993

154

154

141

11

5,840

41

16

152

5,897

2

1

3

70

435

505

6,147

155

6,402

52

4

56

72

282

354

410

(1) After deducting sold receivables, notably 46 million euro worth of CICE tax credits that have been derecognized as their sale involved the transfer of substantially all 

of the risks and rewards related to ownership of the receivables.

There is no commercial paper included in accounts receivable.

10. PROVISIONS AND IMPAIRMENT

(in millions of euro)

AUGUST 31, 2017

INCREASES AND 
CHARGES DURING 
THE PERIOD

DECREASES, 
RELEASES AND 
RECLASSIFICATIONS 
DURING THE PERIOD

OTHER MOVEMENTS 
DURING THE PERIOD

AUGUST 31, 2018

Provisions for contingencies and losses

343

103

104

Impairment

•  financial investments

•  current assets

TOTAL IMPAIRMENT

TOTAL

Increases and decreases:

•  operating items

•  financial items

•  exceptional items

124

3

127

470

30

30

133

7

58

68

2

2

106

10

36

60

342

152

3

155

497

As of August 31, 2018, the main provisions for contingencies 
and losses were for the following:

•  subsidiaries in negative net equity positions for 15 million 

euro;

•  stock options and free share grants for 191 million euro;

• 

foreign exchange losses for 29 million euro.

• 

losses reclaimable by subsidiaries included in the French tax 
consolidation for 105 million euro;

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11. MARKETABLE SECURITIES

(in millions of euro)

Treasury shares

Cash in the liquidity contract account

TOTAL

12. TREASURY SHARES

MOVEMENTS IN TREASURY SHARES DURING THE FISCAL YEAR

Number of shares held

September 1, 2017

Acquisitions

Disposals

N o t e s   t o   t h e   I n d i v i d u a l   C o m p a n y   F i n a n c i a l   S t a t e m e n t s

I N F O R M A T I O N   O N   T H E   I S S U E R 

GROSS VALUE 
AUGUST 31, 2018

NET VALUE 
AUGUST 31, 2018

NET VALUE 
AUGUST 31, 2017

160

17

177

160

17

177

177

177

MARKETABLE 
SECURITIES

OTHER FINANCIAL 
ASSETS

2,205,010

1,637,734(1)

3,356,732

(1,954,562)(1)

Cancellation of treasury shares leading to a reduction in capital and additional paid-in capital

(3,375,562)

Allocation as treasury shares held for cancellation

August 31, 2018

Gross value of shares held (in millions of euro)

September 1, 2017

Acquisitions

Disposals

Cancellation of treasury shares leading to a reduction in capital and additional paid-in capital

Allocation as treasury shares held for cancellation

August 31, 2018

(18,830)

18,830

4

1,869,352

177

161(1)

(160)(1)

(1)

177

299

(300)

1

(1) Acquisitions and disposals include the implementation of the liquidity contract signed with an investment services provider, which complies with the Code of conduct 
drawn  up  by  the  French  financial  markets  association  (Association  française  des  marchés  financiers  –  AMAFI)  and  approved  by  the  French  securities  regulator 
(Autorité des M archés F inanciers – AMF), for the purpose of improving the liquidity of Sodexo shares and the regularity of the quotations.

  Disposals of treasury shares also include those resulting from the exercise of stock options and delivery of free shares granted to employees in prior years.

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13. SHAREHOLDERS’ EQUITY

13.1  Share capital

As of August 31, 2018, the Company’s share capital totaled 
589,819,548 euro and comprised 147,454,887 shares, including 
66,721,360 with double voting rights.

Since Fiscal 2013, all shares held in registered form for at least 
four years and still held in that form when the dividend becomes 
payable for the related ﬁ scal year, qualify for a 10% dividend 
premium, provided that they do not represent over 0.5% of the 
capital per shareholder.

The following shareholders informed the Company that they had 
exceeded the following disclosure thresholds (provided for by law 
or the Company’s bylaws) in Fiscal 2018:

•  on  May  8,  2018,  Artisan  Partners  Limited  Partnership, 
acting on behalf of the funds it manages, disclosed that due 
to a purchase of 1,856,807 Sodexo shares on  that date,  its 
interest in the Company’s capital had increased to above 
2.5%, and that as of May 8, 2018 it held 5,476,873 Sodexo 
shares, representing 3.63% of the share capital and 2.54% of 
the voting rights;

13.2  Changes in shareholders’ equity

(in millions of euro)

Shareholders’ equity at end of previous fiscal year

Dividends approved by Shareholders’ Meeting and paid

Dividends on treasury shares

Net income for the fiscal year

Restricted provisions

•  on July 2, 2018, International Value Advisers, LLC, acting 
on behalf of the funds it manages, disclosed that due to a 
purchase of 200,782 Sodexo shares on  that date,  its interest 
in the Company’s capital had increased to above 2.5%, and 
that as of July 2, 2018 it held 3,821,370 Sodexo shares, 
representing 2.53% of the share capital and 1.76% of the 
voting rights;

•  on August 31, 2018, Artisan Partners Limited Partnership, 
acting on behalf of the funds it manages, disclosed that 
due to a purchase of 14,269 Sodexo shares on  that date,  its 
interest in the Company’s capital had increased to above 
5%, and that as of August 28, 2018 it held 7,554,178 Sodexo 
shares, representing 5.01% of the share capital and 3.49% of 
the voting rights.

The  Company  is  not  aware  of  any  other  shareholder  that 
increased or decreased its shareholding to above or below any 
disclosure threshold (provided for by law or the Company’s 
bylaws) in Fiscal 2018.

2,899

(416)

6

481

(2)

(300)

3

2,671

Cancellation of treasury shares leading to a reduction in capital and additional paid-in capital

Other – Premiums/discounts on currency forwards

SHAREHOLDERS’ EQUITY AT END OF FISCAL YEAR

As part of the share buyback program launched by the Board of 
Directors, during Fiscal 2018 Sodexo S.A. purchased 3,356,732 
of  its  own  shares,  representing  2.2%  of  its  share  capital, 
for 299 million euro, and on August 29, 2018 it reduced its 
share capital by  300 million euro through the cancellation  of 
3,375,562 shares.

For the Company’s first-time application of ANC regulation 
no. 2015-05 on September 1, 2017, it recognized a 3 million 

euro credit in retained earnings for the premiums on currency 
hedges that were in place at that date.

Sodexo is in compliance with article L.225-210 of the French 
Commercial Code because in addition to the legal reserve, it has 
other reserves at least equal to the value of treasury shares held.

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14. AMOUNT AND MATURITY OF LIABILITIES

LIABILITIES
(in millions of euro)

Bond issues

Borrowings from related companies

Other borrowings

SUB-TOTAL BORROWINGS

Accounts payable(1)

Other liabilities

TOTAL

(1) Only accounts payable and accrued expenses are included in this line item.

There is no commercial paper included in payables.

GROSS AMOUNT

LESS THAN 1 YEAR

1 TO 5 YEARS MORE THAN 5 YEARS

2,212

617

578

3,407

28

254

3,689

12

16

87

115

28

254

397

600

1,600

94

694

601

397

2,598

694

2,598

ACCOUNTS PAYABLE BY AMOUNT AND DUE DATE
(in millions of euro)

Non-Group accounts payable(2)

Group accounts payable

TOTAL

TOTAL

< 30 DAYS

31-44 DAYS

45-75 DAYS

76-90 DAYS

> 90 DAYS

10

18

28

10

18

28

(2) Only accounts payable and accrued expenses are included in this line item.

 15. BOND ISSUES AND OTHER BORROWINGS

15.1  Bond issues

15.2  Other borrowings

On  June  24,  2014,  Sodexo  S.A.  completed  a  bond  issue 
structured in two tranches:

•  a 600 million euro tranche redeemable at par on January 24, 
2022 and bearing interest at an annual rate of 1.75%, with 
interest payable annually on January 24;

•  a 500 million euro tranche redeemable at par on June 24, 
2026 and bearing interest at an annual rate of 2.50%, with 
interest payable annually on June 24.

On October 14, 2016, Sodexo S.A. issued  bonds for  600 million 
euro,  redeemable in April 2027 and bearing interest at an annual 
rate of 0.75%, with interest payable annually on April 14. On 
August  1,  2017,  the  Company  increased   this  issue  with  an 
additional 200 million euro worth of bonds.

On May 22, 2018, Sodexo S.A. issued  bonds for  300 million euro, 
 redeemable in May 2025 and bearing interest at an annual rate 
of 1.125%, payable annually on May 22.

Accrued  interest  on  these  bonds  was   12  million  euro  as  of 
August 31, 2018.

None of the bonds in the four issues described above are subject 
to ﬁ nancial covenants.

15.2.1   July 2011 multicurrency confirmed 

credit facility

On July 18, 2011, Sodexo S.A. contracted a multicurrency credit 
facility for a maximum of 600 million euro plus 800 million 
U.S. dollars, with an original maturity date of July 18, 2016. In 
June 2017, this facility – whose maximum amount has totaled 
531 million euro plus 709 million U.S. dollars since July 2015 – 
was extended until July 2022.

Amounts drawn on this facility carry ﬂ oating interest indexed on 
the LIBOR and EURIBOR rates. This credit facility is not subject 
to any ﬁ nancial covenants.

No amounts had been drawn down on the facility as of either 
August 31, 2018 or 2017.

15.2.2  U.S. P rivate P lacements

During Fiscal 2018, Sodexo S.A. redeemed the full outstanding 
balance of the ﬁ rst tranche of its March 29, 2011 U.S. P rivate 
P lacement (147 million U.S. dollars).

On June 27, 2018, Sodexo S.A. completed  a new U.S. P rivate 
P lacement for  400 million U.S. dollars.

4

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4 N o t e s   t o   t h e   I n d i v i d u a l   C o m p a n y   F i n a n c i a l   S t a t e m e n t s

The features of the Group’s outstanding U.S. private placements as of August 31, 2018 are as follows:

DATE OF THE PLACEMENT

March 29, 2011

SUB-TOTAL

June 27, 2018

SUB-TOTAL

TOTAL

PRINCIPAL OUTSTANDING 
(in millions of U.S. dollars)

FIXED INTEREST 
RATE

MATURITY

4.85%

March 2021

4.95%

March 2023

3.7%

June 2023

133

74

207(1)

400

400

607

(1) After deducting 147 million U.S. dollars redeemed on March 29, 2018.

This private placement carries two ﬁ nancial covenants calculated 
with reference to the Group’s consolidated ﬁ nancial statements:

with 331 million euro as of August 31, 2017 (100 million U.S. 
dollars plus 246 million euro).

•  net debt (excluding restricted cash) no higher than 3.5 times 
EBITDA (operating proﬁ t plus amortization and depreciation) 
for the past 12 months;

•  net  assets  adjusted  for  cumulative  currency  translation 
eff ects since August 31, 2007 not lower than 1.3 billion euro.

If the covenants are not respected, the lenders may, with a 
qualiﬁ ed majority, require early repayment of the outstanding 
borrowings.

The  Group  was  in  compliance  with  these  covenants  as  of 
August 31, 2018.

15.2.3  Commercial paper

As  of  August  31,  2018,  borrowings  under  the  Sodexo  S.A. 
commercial paper programs totaled 80 million euro, compared 

The bond issues and borrowings from financial institutions 
described  above  have  customary  early  redemption  clauses. 
These  clauses  include  cross-default  and  change  in  control 
clauses, which apply to all of the borrowings.

15.3  Borrowings from related 

companies

On September 14, 2017, Sodexo S.A. borrowed  580 million euro 
from  its subsidiary Sodexo Finance Designed Activity Company. 
The loan matures  in September 2034.

16. ACCRUED EXPENSES – DEFERRED REVENUES 

AND PREPAID EXPENSES

ACCRUED EXPENSES
(in millions of euro)

Borrowings

Accounts payable

Tax and employee-related liabilities

TOTAL

DEFERRED REVENUES AND PREPAID EXPENSES
(in millions of euro)

Deferred revenues

Prepaid expenses

34

5

19

58

1

3

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I N F O R M A T I O N   O N   T H E   I S S U E R 

17. RELATED-PARTY INFORMATION

(in millions of euro)

Assets – Gross values

Equity investments

Receivables related to equity investments

Other investment securities

Advances to suppliers

Accounts receivable

Other operating receivables

Due from related companies

Non-operating receivables

TOTAL

Liabilities

Accounts payable

Due to related companies

TOTAL

Income statement

Revenues

Other operating income

Other operating expenses

Financial income

Financial expenses

Exceptional income

Exceptional expenses

RELATED PARTIES

ASSOCIATED COMPANIES

OTHER

TOTAL

38

11

1

50

1

5,943

41

67

42

6,093

18

134

152

111

219

(183)

567

(61)

86

(71)

5,981

52

67

43

6,143

18

134

152

112

219

(183)

567

(61)

86

(71)

4

Related parties: fully consolidated companies.

Associated companies: companies accounted for under the equity method, and non-consolidated companies in which Sodexo S.A. has 
an equity interest of more than 10%.

Other: companies accounted for under the equity method, and non-consolidated companies in which Sodexo S.A. has an equity 
interest of less than 10%.

There has been no related-party transaction that is both material and falls outside the framework of normal business dealings.

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18. FINANCIAL COMMITMENTS

18.1  Commitments made by Sodexo S.A.

(in millions of euro)

AUGUST 31, 2018

AUGUST 31, 2017

Performance bonds given to Sodexo Group clients

Financial guarantees to third parties

Retirement benefit commitments

Other commitments

TOTAL

1,559

4,137

12

142

5,850

1,498

2,398

12

144

4,052

Financial guarantees to third parties concern (i) guarantees for 
loans granted to Sodexo S.A. subsidiaries, (ii) guarantees related 
to reverse factoring programs set up by Sodexo S.A. subsidiaries, 
capped  at  580  million  euro  (of  which  132  million  euro  was 
guaranteed as of August 31, 2018), and (iii) a 1,400 million 
euro guarantee given in Fiscal 2018 for a new commercial paper 
program.

Sodexo  S.A.  has  issued  a  guarantee  for  the  repayment  of 
bonds for 1,100 million U.S. dollars issued in March 2014 by 
Sodexo, Inc. in a private placement with U.S. investors.

The  leases  for  the  Group’s  corporate  headquarters  in  Issy-
les-Moulineaux increased commitments for office leases by 
28 million euro.

Other commitments notably include the guarantee issued by 
Sodexo S.A. in October 2012 to cover Sodexo UK’s retirement 
plan obligation in the United Kingdom (i.e., until October 2024). 
This guarantee was issued to the plan trustee for a maximum 
100 million pounds sterling with a 12-year term.

18.2  Commitments received by Sodexo S.A.

(in millions of euro)

Commitments received

AUGUST 31, 2018

AUGUST 31, 2017

2,921

2,400

Commitments received mainly correspond to counter-guarantees by Sodexo, Inc. of Sodexo S.A.’s ﬁ nancial borrowings, which increased 
in Fiscal 2018 due to the new borrowings set up during the year.

18.3  Financial instrument commitments

The ongoing commitments as of the end of the year were as follows:

DESCRIPTION

INCEPTION DATE

EXPIRATION DATE

NOMINAL AMOUNT

MARKET VALUE AS OF 
AUGUST 31, 2018

Forward currency purchase

April 2011

April 2021

USD 633 million 

EUR 69 million 

Swap hedging the currency and interest rate risk on loans 
to Sodexo do Brasil

April 2017

BRL 170 million 

EUR 7 million 

October 2017 
and 2018, 
April 2018, 
May 2019

Sodexo may use derivative ﬁ nancial instruments in order to hedge its exposure to volatility in interest and currency exchange rates.

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I N F O R M A T I O N   O N   T H E   I S S U E R 

19.  PRINCIPAL FUTURE ADJUSTMENTS TO THE TAX BASIS

INCREASES
(in millions of euro)

DECREASES
(in millions of euro)

Exceptional amortization

15

Employee profit-sharing

Other non-deductible provisions

-

2

The future tax liability related to this unrealized tax diff erence was 4 million euro, calculated at a rate of 34.43%.

20. RETIREMENT BENEFIT COMMITMENTS

20.1  Retirement beneﬁ ts payable 

20.2  Commitments related to 

a supplemental pension plan

Commitments related to a supplemental pension plan were 
estimated using the projected unit credit method based on ﬁ nal 
salary and net of funding for the plan. These commitments, 
amounting to 8 million euro, are not recognized in the ﬁ nancial 
statements.

4

by law or under collective 
agreements

Sodexo S.A. is required to pay beneﬁ ts to retiring employees on 
the terms stipulated in a company-wide collective agreement. 
The amount of the commitment has been calculated on the basis 
of rights vested at the balance sheet date, taking into account 
assumptions about ﬁ nal salary, discount rates and employee 
turnover.

This commitment, which is not recognized as a liability in the 
balance sheet, was estimated at 4 million euro as of August 31, 
2018.

21. DIRECTORS’ FEES

Directors’ fees paid to Board members during the ﬁ scal year represented less than 1 million euro  (refer to section 5 – note 3.1).

22. FRENCH TAX CONSOLIDATION

22.1  Beneﬁ t arising from French tax 

consolidation

22.2  Tax losses reclaimable as 
of August 31, 2018

Sodexo S.A. recognized a benefit of 18 million euro from the 
French tax consolidation for Fiscal 2018. This beneﬁ t represents 
the diff erence between the aggregate of the income tax beneﬁ ts 
recognized by the French subsidiaries included in the French tax 
consolidation and the income tax liability of Sodexo S.A. as lead 
company in the French tax consolidation.

The  amount  of  potentially  reclaimable  tax  losses  from 
subsidiaries  included  in  the  French  tax  consolidation  as  of 
August 31, 2018 was 306 million euro, resulting in a provision 
of 105 million euro (using a rate of 34.43%).

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4 N o t e s   t o   t h e   I n d i v i d u a l   C o m p a n y   F i n a n c i a l   S t a t e m e n t s

23. AVERAGE NUMBER OF EMPLOYEES

The average number of employees is an average of the number 
of employees who were present at the end of each quarter, and 
includes employees working at Sodexo S.A. branches in France 
and the French overseas departments and regions.

Managers

Supervisors

Other

Apprentices

TOTAL

AUGUST 31, 2018

AUGUST 31, 2017

303

29

31

7

370

279

33

45

3

360

24. CONSOLIDATION

Sodexo S.A. is consolidated in the ﬁ nancial statements of Bellon SA, which has its registered offi  ce at 17-19, place de la Résistance, 
Issy-les-Moulineaux, France.

The consolidated ﬁ nancial statements of the Sodexo Group are presented in chapter 3 of this Registration Document.

25. POST-BALANCE SHEET EVENTS

On September 13, 2018, the Board of Directors decided to grant 
34,100 shares to certain Group employees. The shares granted 
will only vest if the beneficiaries are still with the Group on 
the vesting date, and some of the share grants are subject to 
performance conditions.

On  October  31,  2018,  Sodexo  announced  the  acquisition  of 
Novae Restauration, signiﬁ cantly expanding its footprint in the 
attractive Swiss market. Founded in 2003, Novae Restauration 
is the leading independent player in high-end catering services 
for French-speaking Switzerland, with 700 employees serving a 
network of over 80 prestigious client sites.

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I N F O R M A T I O N   O N   T H E   I S S U E R 

26. LIST OF SUBSIDIARIES AND OTHER EQUITY INVESTMENTS

OTHER 
SHAREHOLDERS’ 
EQUITY

PERCENTAGE 
INTEREST 
IN CAPITAL

GROSS

NET

BOOK VALUE OF INVESTMENT

LOANS AND 
ADVANCES 
GRANTED, 
NET

GUARANTEES 
GIVEN

REVENUES 
FOR MOST 
RECENT 
FISCAL YEAR

INCOME 
FOR MOST 
RECENT 
FISCAL YEAR

DIVIDENDS 
RECEIVED 
DURING THE 
FISCAL YEAR

(in thousands of euro)

CAPITAL

Detailed information

French subsidiaries

Sodexo Pass 
International SAS

Sodexo 
Entreprises

406,656

274,753

93.46% 380,057

380,057

98,931

70,679

52,189

21,685

99.15% 201,669

201,669

1,250

701,374

17,134

17,933

Sofinsod SAS

82,683

16,390

100.00% 133,860

133,860

11,688

13,998

Holding Sogeres

6,098

35,748

100.00% 104,702

104,702

Sodexo GC

15,095

(2,190) 100.00%

72,218

72,218

6,523

2,352

Lenôtre SA

2,606

(18,928) 100.00%

60,876

11,553

97,830

(7,186)

Sodexo Ventures 
France

Société Française 
de Restauration 
et Services

Sodexo Afrique 
SARL

143

(754) 100.00%

23,425

2,900

(514)

1,899

(17,601)

90.92%

21,782

21,782

2,140

253,821

(5,709)

1,624

(2,437)

99.80%

14,539

17

SoTech Services

2,025

2,060

100.00%

12,500

4,085

Ouest Catering

516

1,922

100.00%

7,900

7,900

French equity investments

484

(310)

3,577

1,033

1,529

4

Sogeres

2,153

12,580

34.18%

72,570

72,570

486,783

9,212

3,828

Foreign subsidiaries

Sodexo, Inc.

2

1,668,655

100.00% 2,120,844 2,120,844

1,291,772 7,592,879

239,202

265,812

Sodexo Holdings 
Ltd

Sodexo Finance 
Designed Activity 
Company

Sodexo do Brasil 
Comercial SA

Sodexo 
Beteiligungs BV & 
Co. KG

Sodexo Food 
Solutions 
India Private 
Limited

Sodexo Australia 
Pty Ltd

572,372

38,066

100.00% 751,028

751,028

1,114

36,381

100,000

448,130

100.00% 528,000

528,000

1,430,000

45,910

74,448

181,239

98.56% 438,515

438,515

25,620

8,556

611,463

18,280

194

161,747

100.00% 195,456

195,456

(4,910)

11,604

(5,397) 100.00% 110,442

110,442

115,375

557

98,115

(48,134) 100.00% 108,618

108,618

21,127

106,482

(28,575)

Sodexo AB

10,206

20,894

100.00%

91,116

91,116

355,170

8,454

Sodexo Services 
Asia

Compagnie 
Financière Aurore 
International

82,929

14,205

100.00%

89,462

89,462

7,552

1,718

58,010

209,999

100.00%

68,918

68,918

1,899

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4 N o t e s   t o   t h e   I n d i v i d u a l   C o m p a n y   F i n a n c i a l   S t a t e m e n t s

(in thousands of euro)

CAPITAL

OTHER 
SHAREHOLDERS’ 
EQUITY

PERCENTAGE 
INTEREST 
IN CAPITAL

GROSS

NET

BOOK VALUE OF INVESTMENT

LOANS AND 
ADVANCES 
GRANTED, 
NET

GUARANTEES 
GIVEN

REVENUES 
FOR MOST 
RECENT 
FISCAL YEAR

INCOME 
FOR MOST 
RECENT 
FISCAL YEAR

DIVIDENDS 
RECEIVED 
DURING THE 
FISCAL YEAR

Sodexo 
Belgium SA

16,765

23,583

88.54%

38,560

38,560

3,958

317,488

2,080

861

Sodexo Iberia SA

3,467

15,281

98.86%

26,804

26,804

221,516

3,169

1,270

Sodexo Global 
Services UK Ltd

Sodexo Entegre 
Hizmet Yonetimi 
AS

Sodexo Mexico SA 
de CV

Sodexo 
Inversiones SA

Sodexo Facilities 
Management 
Services India 
Private Ltd

25,072

76,481

100.00%

24,391

24,391

59,451

34,060

4,476

100.00%

21,307

4,868

55,598

5,786

308

100.00%

17,434

6,094

61,458

749

14,256

20,924

100.00%

16,100

16,100

48,776

858

10,222

(1,452) 100.00%

14,191

14,191

98,414

253

Sodexo Chile SA

11,619

7,317

99.61%

10,911

10,911

26,543

369,034

3,190

Kalyx Limited

17

176,136

100.00%

9,430

9,430

167,656

25,519

Sodexo Argentina 
SA

Sodexo Singapore 
Pte Ltd

Sofinsod 
Insurance 
Designed Activity 
company

225

1,512

99.45%

9,137

9,137

1,817

49,495

8,456

2,140

100.00%

8,614

8,614

52,929

147

7,868

(1,026) 100.00%

7,868

7,868

5,500

Sodexo Maroc SA

2,525

(1,180) 100.00%

7,667

6,146

1,823

22,141

Sodexo OY

5,046

2,457

100.00%

7,054

7,054

130,666

3,645

Sodexo Italia SpA

1,898

75,408

100.00%

7,029

7,029

422,531

13,398

13,191

Foreign equity investments

Mentor Technical 
Group Corporation

17,950

45.00%

18,423

18,423

1,313

782

Eat Club

46,277

(23,802)

17.05%

18,395

18,395

33,772

(3,800)

Sodexo GmbH

308

307,618

37.40%

38,702

38,702

10,286

Aggregate information

Other French 
subsidiaries

Other foreign 
subsidiaries

Other French 
equity 
investments

Other foreign 
equity 
investments

TOTAL

13,171

10,990

44,576

40,843

27,348

12,151

71,342

26,587

43,371

375

7

1,786

57

14,389

11,649

272

5,979,282 5,838,423

38,043 2,962,080

5,871

541,505

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I N F O R M A T I O N   O N   T H E   I S S U E R 

4.3  SUPPLEMENTAL INFORMATION ON 

THE INDIVIDUAL COMPANY FINANCIAL 
STATEMENTS

4.3.1  Five-year financial summary

(in millions of euro)

FISCAL 2018(1)

FISCAL 2017

FISCAL 2016

FISCAL 2015

FISCAL 2014

Capital at end of period

Share capital

590

603

615

629

629

Number of ordinary shares outstanding

147,454,887

150,830,449

153,741,139

157,132,025

157,132,025

Maximum number of potential new shares issuable by 
conversion of bonds

Income statement data

Revenues excluding taxes

Earnings before income tax, employee profit-sharing, 
depreciation, amortization and provisions

Income tax

Employee profit-sharing

Earnings after income tax, employee profit-sharing, 
depreciation, amortization and provisions

Dividend payout

Per share data

Earnings after income tax and employee profit-sharing 
but before depreciation, amortization and provisions

Earnings after income tax, employee profit-sharing, 
depreciation, amortization and provisions

Net dividend per share(2)

114

450

62

481

407

119

428

14

396

417

132

587

(15)

616

371

86

370

(14)

324

347

85

363

5

269

283

4

3.47

2.93

3.72

2.27

2.34

3.26

2.75

2.62

2.75

4.01

2.40

0.24

2.06

2.20

0.22

1.71

1.80

0.18

Dividend premium per eligible share(2)

0.275

0.275

(1) Subject to approval by the Annual Shareholders’ Meeting to be held on January 22, 2019.
(2) The Board of Directors proposes that the Annual Shareholders’ Meeting on January 22, 2019 approve the payment of a cash dividend of 2.75 euro per share. In 
addition, and in accordance with the system adopted by the Annual Shareholders’ Meeting held on January 24, 2011, shares held in registered form since at least 
August 31, 2011 and still held in that form when the dividend becomes payable  February 1, 2019, will automatically be entitled, without any additional formality, to 
a 10% dividend premium, representing an additional 0.275 euro per share (provided that the shares eligible for the dividend premium do not represent over 0.5% of 
the share capital for any single shareholder).

(in millions of euro)

Employee data

FISCAL 2018

FISCAL 2017

FISCAL 2016

FISCAL 2015

FISCAL 2014

Average number of employees during the fiscal year

Salary expense for the fiscal year

Social security and other employee benefits paid during 
the fiscal year

370

44

20

360

40

16

337

40

16

301

39

21

293

34

18

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4 S u p p l e m e n t a l   I n f o r m a t i o n   o n   t h e   I n d i v i d u a l   C o m p a n y   F i n a n c i a l   S t a t e m e n t s

4.3.2  Appropriation of earnings

(in millions of euro)

Net income

Retained earnings

Retained earnings(2)

Retained earnings(3)

Transfer to legal reserve

Transfer from long-term capital gains reserve

Distributable earnings

Net dividend

Dividend premium(4)

Reserves

Retained earnings

FISCAL 2018(1)

FISCAL 2017

FISCAL 2016

FISCAL 2015

FISCAL 2014

481

1,202

18

-

-

-

1,701

405

2

-

396

1,223

11

-

-

-

1,630

415

2

-

616

966

12

-

-

-

1,594

369

2

-

324

981

8

-

-

-

1,313

346

1

-

269

987

8

-

-

-

1,264

283

-

-

1,294

1,213

1,223

966

981

Number of shares outstanding

147,454,887

150,830,449

153,741,139

157,132,025

157,132,025

Number of shares entitled to a dividend

147,454,887

150,830,449

153,741,139

157,132,025

157,132,025

Earnings per share (in euro)

3.26

2.62

4.01

2.06

1.71

(1) Subject to approval by the Annual Shareholders’ Meeting to be held on January 22, 2019.
(2) Corresponding to dividends not paid on treasury shares.
(3) Corresponding to the 10% dividend premium not paid.
(4) The Board of Directors proposes that the Annual Shareholders’ Meeting on January 22, 2019 approve the payment of a cash dividend of 2.75 euro per share. In 
addition, shares held in registered form since at least August 31, 2011 and still held in that form when the dividend becomes payable in  February 1, 2019,   will 
automatically be entitled, without any additional formality, to a 10% dividend premium, representing an additional 0.275 euro per share (provided that the shares 
eligible for the dividend premium do not represent over 0.5% of the share capital for any single shareholder).

4.3.3  Supplier and client dues

INVOICES RECEIVED AND PAST DUE AS OF AUGUST 31, 2018

(in millions of euro)

0 DAYS

1-30 DAYS

31-60 DAYS

61-90 DAYS

OVER 91 DAYS

Classified as late payment

Number of invoices

Amount (incl. VAT)

554

5

18

% of total purchases for the fiscal year

3.6%

12.0%

0.2%

Invoices related to disputed or unrecognized payables and not classified as late payment

TOTAL 
(1 DAY AND OVER)

278

18

15.6%

Number of invoices

Amount (incl. VAT)

Reference payment terms used

-

-

Contractual payment terms

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INVOICES ISSUED AND PAST DUE AS OF AUGUST 31, 2018

(in millions of euro)

0 DAYS

1-30 DAYS

31-60 DAYS

61-90 DAYS

OVER 91 DAYS

TOTAL 
(1 DAY AND OVER)

Classified as late payment

Number of invoices

Amount (incl. VAT)

323

67

(25)

3

2

% of total purchases for the fiscal year

19.4%

(7.4)%

0.8%

0.6%

Invoices related to disputed or unrecognized receivables and not classified as late payment

24

7.0%

1,134

3

0.9%

Number of invoices

Amount (incl. VAT)

Reference payment terms used

48

2

Contractual payment terms

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4.4  STATUTORY AUDITORS’ REPORT

4.4.1  Statutory Auditors’ Report on the financial statements

This is a free translation into English of the Statutory Auditors’ report issued in French and is provided solely for 
the convenience of English speaking readers. This report includes information specifically required by European 
regulations or French law, such as information about the appointment of Statutory Auditors. This report should 
be read in conjunction with, and construed in accordance with, French law and professional auditing standards 
applicable in France.

For the year ended August 31, 2018

SODEXO
255, quai de la Bataille-de-Stalingrad
92866 Issy-les-Moulineaux Cedex 9, France

To the shareholders,

Opinion

In compliance with the engagement entrusted to us by your Shareholders’ Meeting, we have audited the accompanying ﬁ nancial 
statements of Sodexo for the year ended August 31, 2018.

In our opinion, the ﬁ nancial statements give a true and fair view of the assets and liabilities and of the ﬁ nancial position of the 
Company as at August 31, 2018 and of the results of its operations for the year then ended in accordance with French accounting 
principles.

The audit opinion expressed above is consistent with our report to the Audit Committee.

Basis of the audit opinion

Audit reference framework

We conducted our audit in accordance with professional standards applicable in France. We believe that the audit evidence we have 
obtained is suffi  cient and appropriate to provide a basis for our opinion.

Our responsibilities under these standards are further described in the “Responsibilities of the Statutory Auditors relating to the audit 
of the ﬁ nancial statements” section of our report.

Independence

We conducted our audit engagement in compliance with the independence rules applicable to us for the period from September 1, 
2017 to the date of our report and in particular we did not provide any non-audit services prohibited by article 5 (1) of Regulation (EU) 
No. 537/2014 or the French Code of Ethics (code de déontologie) for Statutory Auditors.

Emphasis of matter

Without qualifying our opinion, we draw your attention to the matter set out in note 2.5, “Foreign currency transactions” to the 
ﬁ nancial statements regarding the ﬁ rst-time application of ANC regulation no. 2015-05.

Justiﬁ cation of our assessments – key audit matters

In accordance with the requirements of articles L.823-9 and R.823-7 of the French Commercial Code (code de commerce) relating to 
the justiﬁ cation of our assessments, we inform you of the key audit matters relating to the risks of material misstatement that, in 
our professional judgment, were the most signiﬁ cant in our audit of the ﬁ nancial statements, as well as how we addressed those risks.

These matters were addressed as part of our audit of the ﬁ nancial statements as a whole, and therefore contributed to the opinion we 
formed as expressed above. We do not provide a separate opinion on speciﬁ c items of the ﬁ nancial statements.

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Valuation of equity investments

Description of risk

The balance of equity investments as at August 31, 2018 represented 5,840 million euro, the largest asset on the balance sheet. 
Equity investments are carried at cost, and at each balance sheet date, may be impaired based on their value in use.

As described in note 2.1.3 to the ﬁ nancial statements, value in use is determined by management on the basis of the net asset value, 
proﬁ tability and the future prospects of the investee.

When the carrying amount of an investment is higher than the net book value of the share of net assets of the subsidiary, value in use 
is determined based on discounted future cash ﬂ ows, using business plans prepared by management and covering one to ﬁ ve years. 
In preparing such business plans, management is required to exercise judgment.

Accordingly, we deemed the valuation of equity investments and any related receivables or provisions for contingencies and losses to 
be a key audit matter, due to the inherent uncertainty of certain components of the valuation, in particular the likelihood of achieving 
forecast results used to calculate value in use.

How our audit addressed this risk

In order to assess the reasonableness of the estimate of the value in use of equity investments, based on the information provided to 
us, our audit work consisted mainly in verifying that the estimated values determined by management were based on an appropriate 
measurement method and underlying data, and, depending on the investee concerned:

• 

for valuations based on historical data: verifying that the equity values used were consistent with the ﬁ nancial statements of the 
entities concerned, and that any adjustments to equity were based on documentary evidence;

• 

for valuations based on forecast data:

•  obtaining forecast future cash ﬂ ows of the investees concerned, and assessing their consistency with the business plans drawn 

up by management,

•  assessing the consistency of the growth rates used for projected cash ﬂ ows with available external analyses consistent with 

the economic environments in which the investees operate,

•  assessing the reasonableness of the discount rates applied to estimated future cash ﬂ ows, verifying in particular that the 
various inputs used to calculate the weighted average cost of capital for each investee were suffi  cient to approximate the return 
demanded by market participants for similar activities.

4

Our audit work also consisted in:

•  assessing the recoverability of receivables related to equity investments;

•  verifying the recognition of provisions for contingencies where the Company is exposed to the losses of investees with negative 

equity.

Veriﬁ cation of the Management Report, of the other documents provided 
to the shareholders with respect to the ﬁ nancial position and the ﬁ nancial 
statements and of the information given in the Corporate Governance Report

In accordance with professional standards applicable in France, we have also performed the speciﬁ c veriﬁ cations required by French 
law.

Information given in the Management Report and the other documents provided to the shareholders with 
respect to the ﬁ nancial position and the ﬁ nancial statements

We have no matters to report as to the fair presentation and the consistency with the ﬁ nancial statements of the information given 
in the management report of the Board of Directors, and in the other documents provided to the shareholders with respect to the 
ﬁ nancial position and the ﬁ nancial statements.

We attest to the fair presentation and the consistency with the ﬁ nancial statements of the information given with respect to the 
payment terms referred to in article D.441-4 of the French Commercial Code.

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Report on corporate governance

We attest that the Board of Directors’ report on corporate governance sets out the information required by articles L.225-37-3 and 
L.225-37-4 of the French Commercial Code.

Concerning the information given in accordance with the requirements of article L.225-37-3 of the French Commercial Code relating 
to remuneration and beneﬁ ts received by corporate offi  cers and any other commitments made in their favor, we have veriﬁ ed its 
consistency with the ﬁ nancial statements, or with the underlying information used to prepare these ﬁ nancial statements and, where 
applicable, with the information obtained by your Company from companies controlling it or controlled by it. Based on this work, we 
attest to the accuracy and fair presentation of this information.

Concerning the information given in accordance with the requirements of article L.225-37-5 of the French Commercial Code relating 
to those items your Company has deemed liable to have an impact in the event of a takeover bid or exchange off er, we have veriﬁ ed 
its consistency with the underlying documents which were disclosed to us. Based on this work, we have no matters to report with 
regard to this information.

Other information

In accordance with French law, we have veriﬁ ed that the required information concerning the purchase of investments and controlling 
interests and the identity of the shareholders and holders of the voting rights has been properly disclosed in the management report.

Report on other legal and regulatory requirements

Appointment of Statutory Auditors

We were appointed Statutory Auditors of Sodexo by the Shareholders’ Meetings held on February 22, 1994 for PricewaterhouseCoopers 
Audit and on February 4, 2003 for KPMG Audit.

As at August 31, 2018, PricewaterhouseCoopers Audit and KPMG Audit were in the twenty-ﬁ ft  h and sixteenth consecutive year of 
their engagement, respectively.

Responsibilities of management and those charged with governance relating 
to the ﬁ nancial statements

Management is responsible for preparing ﬁ nancial statements presenting a true and fair view in accordance with French accounting 
principles, and for implementing the internal control procedures it deems necessary for the preparation of ﬁ nancial statements free 
of material misstatement, whether due to fraud or error.

In preparing the ﬁ nancial statements, management is responsible for assessing the company’s ability to continue as a going concern, 
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting, unless it expects to 
liquidate the company or to cease operations.

The Audit Committee is responsible for monitoring the ﬁ nancial reporting process and the eff ectiveness of internal control and 
risk management systems, as well as, where applicable, any internal audit systems, relating to accounting and ﬁ nancial reporting 
procedures.

The ﬁ nancial statements were approved by the Board of Directors.

Responsibilities of the Statutory Auditors relating to the audit of the ﬁ nancial 
statements

Objective and audit approach

Our role is to issue a report on the ﬁ nancial statements. Our objective is to obtain reasonable assurance about whether the ﬁ nancial 
statements as a whole are free of material misstatement. Reasonable assurance is a high level of assurance, but is not a guarantee 
that an audit conducted in accordance with professional standards will always detect a material misstatement when it exists. 
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be 
expected to inﬂ uence the economic decisions of users taken on the basis of these ﬁ nancial statements.

As speciﬁ ed in article L.823-10-1 of the French Commercial Code, our audit does not include assurance on the viability or quality of 
management of the company.

As part of an audit conducted in accordance with professional standards applicable in France, the Statutory Auditors exercise 
professional judgment throughout the audit. They also:

• 

identify and assess the risks of material misstatement of the ﬁ nancial statements, whether due to fraud or error, design and 
perform audit procedures responsive to those risks, and obtain audit evidence considered to be suffi  cient and appropriate to 
provide a basis for their opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one 
resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal 
control;

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•  obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the 

circumstances, but not for the purpose of expressing an opinion on the eff ectiveness of the internal control;

•  evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management 

and the related disclosures in the notes to the ﬁ nancial statements;

•  assess the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence 
obtained, whether a material uncertainty exists related to events or conditions that may cast signiﬁ cant doubt on the company’s 
ability to continue as a going concern. This assessment is based on the audit evidence obtained up to the date of the audit report. 
However, future events or conditions may cause the company to cease to continue as a going concern. If the Statutory Auditors 
conclude that a material uncertainty exists, they are required to draw attention in the audit report to the related disclosures in 
the ﬁ nancial statements or, if such disclosures are not provided or are inadequate, to issue a qualiﬁ ed opinion or a disclaimer of 
opinion;

•  evaluate the overall presentation of the ﬁ nancial statements and assess whether these statements represent the underlying 

transactions and events in a manner that achieves fair presentation.

Report to the Audit Committee

We submit a report to the Audit Committee which includes in particular a description of the scope of the audit and the audit program 
implemented, as well as the results of our audit. We also report any signiﬁ cant deﬁ ciencies in internal control that we have identiﬁ ed 
regarding the accounting and ﬁ nancial reporting procedures.

Our report to the Audit Committee includes the risks of material misstatement that, in our professional judgment, were the most 
signiﬁ cant for the audit of the ﬁ nancial statements and which constitute the key audit matters that we are required to describe in 
this report.

We also provide the Audit Committee with the declaration provided for in article 6 of Regulation (EU) No. 537-2014, conﬁ rming our 
independence within the meaning of the rules applicable in France, as deﬁ ned in particular in articles L.822-10 to L.822-14 of the 
French Commercial Code and in the French Code of Ethics for Statutory Auditors. Where appropriate, we discuss any risks to our 
independence and the related safeguard measures with the Audit Committee.

Neuilly-sur-Seine and Paris La Défense, November 7, 2018

The Statutory Auditors

4

PricewaterhouseCoopers Audit

Jean-Christophe Georghiou

KPMG Audit

Department of KPMG SA

Hervé Chopin

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4.4.2  Statutory Auditors’ Report on related-party agreements 

and commitments

This is a free translation into English of the Statutory Auditors’ special report on related-party agreements and 
commitments issued in French and is provided solely for the convenience of English speaking readers. This report 
should be read in conjunction with, and construed in accordance with, French law and professional auditing standards 
applicable in France.

Shareholders’ Meeting held to approve the ﬁ nancial statements for the year ended August 31, 2018

SODEXO
255, quai de la Bataille-de-Stalingrad
92866 Issy-les-Moulineaux Cedex 9, France

To the shareholders,

In our capacity as Statutory Auditors of Sodexo, we hereby present our report on related-party agreements and commitments.

It is our responsibility to report to shareholders, based on the information provided to us, on the main terms and conditions of the 
agreements and commitments that have been disclosed to us or that we may have identiﬁ ed as part of our engagement, as well as 
the reasons given as to why they are beneﬁ cial for the Company, without commenting on their relevance or substance or identifying 
any undisclosed agreements or commitments. Under the provisions of article R.225-31 of the French Commercial Code (code de 
commerce), it is the responsibility of the shareholders to determine whether the agreements and commitments are appropriate and 
should be approved.

Where applicable, it is also our responsibility to provide shareholders with the information required by article R.225-31 of the French 
Commercial Code in relation to the implementation during the year of agreements and commitments already approved by the 
Shareholders’ Meeting.

We performed the procedures that we deemed necessary in accordance with professional standards applicable in France to such 
engagements. These procedures consisted in verifying that the information given to us is consistent with the underlying documents.

Agreements and commitments to be approved by the Shareholders’ Meeting

Agreements and commitments authorized and entered into during the year

In accordance with article L.225-40 of the French Commercial Code, we were informed of the following agreements and commitments, 
which were entered into during the year and authorized in advance by the Board of Directors.

NON-COMPETE AGREEMENT ENTERED INTO WITH DENIS MACHUEL , GROUP CHIEF EXECUTIVE OFFICER, 
WITH EFFECT FROM JANUARY 23, 2018

•  Purpose and reasons given as to why they are beneﬁ cial for the Company:

On April 27, 2018, on the recommendation of the Compensation Committee, the Board of Directors approved in advance the conclusion 
of a non-compete agreement, the purpose of which is to restrict Denis Machuel’s freedom to carry out certain activities following the 
end of his term as Chief Executive Offi  cer of the Company. The activities concerned are (i) holding any position as a corporate offi  cer, 
employee or consultant, and (ii) carrying out any consulting work for certain of the Sodexo Group’s competitors, as set out in the 
agreement, either directly or through another legal entity.

Because of his duties within the Group, Denis Machuel has knowledge of Sodexo’s business, strategy and customers in each of its 
activities, which justiﬁ es the need for a non-compete agreement.

This non-compete agreement entered into between the Company and Denis Machuel on August 30, 2018, and amended on 
November 6, 2018, will apply for a period of twenty-four (24) months as from the date on which his duties as Chief Executive Offi  cer 
cease.

However, the Board of Directors may decide to waive the Company’s right to enforce this agreement when Denis Machuel leaves the 
Group.

•  Terms and conditions:

As consideration for this agreement, Denis Machuel will receive an indemnity representing twenty-four (24) months of the gross ﬁ xed 
compensation that he received during the twelve (12) months preceding the entry into force of this agreement.

If Denis Machuel fails to fulﬁ ll his obligations under this agreement, he will not receive the indemnity described above, and he will have 
to repay any amounts that he has already received. In addition, he will be liable to pay a ﬁ xed penalty representing twelve (12) months 
of his most recent gross annual compensation.

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SUPPLEMENTAL HEALTH, BENEFIT AND PENSION PLANS FOR DENIS MACHUEL, GROUP CHIEF EXECUTIVE OFFICER 
FROM JANUARY 23, 2018

•  Purpose and reasons given as to why they are beneﬁ cial for the Company:

Denis Machuel is a member of the national social welfare plans governed by the French general social security regime, as required 
by article 311-3, 12° of the French Social Security Code (code de la sécurité sociale), which states that the Chief Executive Offi  cers of 
French joint stock corporations (sociétés anonymes) must be a member of such plans.

At its meeting on January 23, 2018, on the recommendation of the Compensation Committee, the Board of Directors decided 
that, following the termination of his employment contract as a result of his appointment as Group Chief Executive Offi  cer, Denis 
Machuel would continue to be a member of (i) the supplemental health and beneﬁ t plans set up by Sodexo and (ii) the ARRCO/AGIRC 
supplemental pension plan. His membership of these plans will be subject to the same conditions as all of the Sodexo employees who 
are plan members.

This commitment is intended to help Sodexo retain its Group Chief Executive Offi  cer by allowing him to continue to be covered by 
supplemental health, beneﬁ t and pension plans.

•  Terms and conditions:

The Group Chief Executive Offi  cer is a member of the following plans under the same conditions as all of the Sodexo employees who 
are plan members:

•  an “incapacity, disability or death” beneﬁ t plan, ﬁ nanced in part by Sodexo, which, in the event of an employee’s death, provides 
for the payment of a death beneﬁ t equal to 215% of their annual compensation, up to a maximum amount of eight times the 
French Social Security Code’s annual ceiling, and which is increased for dependent children;

•  an additional “incapacity, disability or death” beneﬁ t plan, ﬁ nanced in full by Sodexo, which is reserved for employees whose 
annual gross compensation is greater than eight times the French Social Security Code’s annual ceiling and which, in the event 
of an employee’s death, provides for the payment of a death beneﬁ t equal to 200% of the portion of their annual compensation 
that is greater than eight times the French Social Security Code’s annual ceiling;

•  a supplemental health insurance plan, which all Sodexo employees are entitled to, ﬁ nanced in part by Sodexo.

SUPPLEMENTAL PENSION PLAN FOR DENIS MACHUEL, GROUP CHIEF EXECUTIVE OFFICER FROM JANUARY 23, 2018

•  Purpose and reasons given as to why they are beneﬁ cial for the Company:

Since his appointment to the Group Executive Committee in September 2014, Denis Machuel has been a beneﬁ ciary of a deﬁ ned beneﬁ t 
pension plan governed by article 39 of the French General Tax Code (code général des impôts) and article 137-11-1 of the French 
Social Security Code, and which has been set up for the most senior executives employed by French companies of the Sodexo Group.

4

At its meeting on April 27, 2018, on the recommendation of the Compensation Committee, the Board of Directors decided that, 
following his appointment as Group Chief Executive, Denis Machuel would continue to be a beneﬁ ciary of this pension plan.

This commitment is intended to help Sodexo reward and retain its Group Chief Executive Offi  cer.

•  Terms and conditions:

Denis Machuel will be paid a pension under this supplemental pension plan if he has been a member of the plan for at least ﬁ ve years. 
The pension paid can represent up to 15% of his average ﬁ xed salary for the three years preceding his retirement if he has been a 
member of the plan for at least 15 years. This is in addition to the pensions due to him under compulsory pension plans, provided that 
he is employed by, or is a corporate offi  cer of, the Company at the time of his retirement.

Consequently, the Chief Executive Offi  cer’s entitlements under this plan (1% per year up to a maximum of 15%) will only accrue if 
the achievement rate for his annual variable compensation targets is at least 80%. If this rate is reached, then an additional 1% 
contribution to the deﬁ ned beneﬁ t plan will accrue for the year concerned. However, if the achievement rate is less than 80%, no 
deﬁ ned beneﬁ t contribution will accrue for the year.

Agreements and commitments already approved by the Shareholders’ Meeting

Agreements and commitments approved in previous years that remained in force during the year

In accordance with article R.225-30 of the French Commercial Code, we were informed of the following agreements and commitments, 
which were already approved by the Shareholders’ Meeting in previous years and which remained in force during the year.

SERVICE AGREEMENT BETWEEN BELLON SA AND SODEXO

•  Persons concerned:

Sophie Bellon, Nathalie Bellon-Szabo, Astrid Bellon, Bernard Bellon, François-Xavier Bellon, members of the Board of Directors of 
Sodexo and members of the Management Board or of the Supervisory Board of Bellon SA.

•  Purpose and reasons given as to why they are beneﬁ cial for the Company:

A service agreement has been in place between the Company and Bellon SA, Sodexo’s managing holding company, since 1991.

At its meetings on November 15, 2016 and July 10, 2017, the Board of Directors, on the recommendation of the Audit Committee, 
approved the revision of this agreement, which was approved by the Shareholders’ Meeting on January 23, 2018.

The new agreement came into eff ect on November 17, 2016 for a period of ﬁ ve years.

Under the terms of this agreement, Sodexo can call upon the professional experience and expertise of the three Bellon SA managers 
holding the positions of Chief Financial Offi  cer, Chief Human Resources Offi  cer and Chief Strategy Offi  cer.

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•  Terms and conditions:

Under the terms of this agreement, Bellon SA invoices Sodexo for the compensation of the Chief Financial Offi  cer, Chief Human 
Resources Offi  cer and Chief Strategy Offi  cer during the secondment period. Their compensation is rebilled for the exact amount and 
includes a ﬁ xed and variable portion, as well as any related payroll taxes.

The total fees rebilled under this agreement, and changes compared with the previous year, are reviewed by the Audit Committee 
annually. In addition, and in compliance with the law, the agreement is reviewed every year by the Board of Directors.

The annual rebilled fees payable to Bellon SA are approved each year by the Board of Directors of Sodexo, without directors who are 
members of the Bellon family taking part in the vote.

For the year ended August 31, 2018, the fees billed by Bellon SA under this agreement amounted to 3,709,500 million euro excluding 
taxes, relating to the compensation (including payroll taxes) paid to the Chief Financial Offi  cer, Chief Human Resources Offi  cer and 
Chief Strategy Offi  cer.

SUPPLEMENTAL HEALTH, BENEFIT PLANS FOR SOPHIE BELLON, CHAIRWOMAN OF THE BOARD OF DIRECTORS, AND MICHEL 
LANDEL, GROUP CHIEF EXECUTIVE OFFICER UNTIL JANUARY 23, 2018 AND DIRECTOR UNTIL JULY 1, 2018

•  Purpose and reasons given as to why they are beneﬁ cial for the Company:

Sophie Bellon and Michel Landel are members of the national social welfare plans governed by the French general social security 
regime, as required by article 311-3, 12° of the French Social Security Code, which states that the Chairs of the Boards of Directors 
and the Chief Executive Offi  cers of French joint stock corporations must be members of such plans.

At its meeting on November 17, 2015, on the recommendation of the Compensation Committee, the Board of Directors decided that, 
following the termination of the employment contracts of Sophie Bellon and Michel Landel as a result of their respective corporate 
offi  cer positions, they would continue to be members of (i) the supplemental health and beneﬁ t plans set up by Sodexo and (ii) the 
ARRCO/AGIRC supplemental pension plan. Their membership of these plans will be subject to the same conditions as all of the Sodexo 
employees who are plan members. Sophie Bellon and Michel Landel did not take part in the votes concerning them at the Board of 
Directors’ meeting during which these commitments were authorized.

These commitments are intended to help Sodexo retain its Chairwoman of the Board of Directors and Group Chief Executive Offi  cer, 
for as long as he holds this position within the Group, by allowing them to continue to be covered by supplemental health and beneﬁ t 
plans.

•  Terms and conditions:

The Chairwoman of the Board of Directors and the Group Chief Executive Offi  cer, for as long as they hold their respective positions 
within the Group, are members of the following plans under the same conditions as all of the Sodexo employees who are plan members:

•  an “incapacity, disability or death” beneﬁ t plan, ﬁ nanced in part by Sodexo, which, in the event of an employee’s death, provides 
for the payment of a death beneﬁ t equal to 215% of their annual compensation, up to a maximum amount of eight times the 
French Social Security Code’s annual ceiling, and which is increased for dependent children;

•  an additional “incapacity, disability or death” beneﬁ t plan, ﬁ nanced in full by Sodexo, which is reserved for employees whose 
annual gross compensation is greater than eight times the French Social Security Code’s annual ceiling and which, in the event 
of an employee’s death, provides for the payment of a death beneﬁ t equal to 200% of the portion of their annual compensation 
that is greater than eight times the French Social Security Code’s annual ceiling;

•  supplemental health insurance plan, which all Sodexo employees are entitled to, ﬁ nanced in part by Sodexo.

TRANSACTIONS WITH MICHEL LANDEL, GROUP CHIEF EXECUTIVE OFFICER UNTIL JANUARY 23, 2018 AND DIRECTOR UNTIL 
JULY 1, 2018

•  Purpose and reasons given as to why they are beneﬁ cial for the Company:

Pursuant to a decision taken by the Board of Directors on November 6, 2008 and approved by the Shareholders’ Meeting on 
January 19, 2009, in the event of the termination of his appointment as Group Chief Executive Officer (unless for reasons of 
resignation or retirement, and barring his removal from offi  ce for serious misconduct or gross negligence), Sodexo will pay Michel 
Landel an indemnity.

Michel Landel is also entitled to the Sodexo Group executive pension plan.

These commitments were intended to help Sodexo reward and retain its Group Chief Executive Offi  cer.

•  Terms and conditions:

For the indemnity paid out in the event of the termination of his appointment, the amount is equal to twice the gross annual 
compensation (ﬁ xed and variable) received during the twelve (12) months preceding the termination. The payment of this indemnity 
is subject to the Sodexo Group achieving a minimum 5% year-on-year increase in consolidated operating income, at constant 
consolidation scope and exchange rates, in each of the three ﬁ nancial years preceding the termination of his appointment, it being 
speciﬁ ed that the indemnity will be not payable in the event that Michel Landel resigns, retires or is removed from offi  ce for serious 
misconduct or gross negligence. As Michel Landel retired following the Shareholders’ Meeting on January 23, 2018, he did not receive 
a termination indemnity at the end of his term of offi  ce.

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I N F O R M A T I O N   O N   T H E   I S S U E R 

S t a t u t o r y   A u d i t o r s ’   R e p o r t

Concerning his supplemental pension plan, Michel Landel is a beneﬁ ciary of a deﬁ ned beneﬁ t pension plan governed by article 39 of 
the French General Tax Code and article 137-11-1 of the French Social Security Code, and which has been set up for the most senior 
executives employed by French companies of the Sodexo Group.

Michel Landel will be paid a pension under this supplemental pension plan if he has been a member of the plan for at least ﬁ ve years. 
The pension paid can represent up to 15% of his average ﬁ xed salary for the three years preceding his retirement if he has been a 
member of the plan for at least 15 years. This is in addition to the pensions due to him under compulsory pension plans, provided that 
he is employed by, or is a corporate offi  cer of, the Company at the time of his retirement.

As of January 1, 2016, the date on which Michel Landel’s employment contract with Bellon SA, the company that controls Sodexo, 
was terminated, he is no longer accruing any additional entitlements under this plan. However, as a corporate offi  cer, he retains the 
entitlements he had accrued up until the termination of his employment contract.

Agreements and commitments approved during the year

We were informed of the implementation during the year of the following commitment, which was already approved by the 
Shareholders’ Meeting on January 23, 2018 and included in the Statutory Auditors’ report of November 15, 2017.

NON-COMPETE AGREEMENT ENTERED INTO WITH MICHEL LANDEL, GROUP CHIEF EXECUTIVE OFFICER UNTIL JANUARY 23, 
2018 AND DIRECTOR UNTIL JULY 1, 2018

•  Purpose and reasons given as to why they are beneﬁ cial for the Company:

On November 14, 2017, on the recommendation of the Compensation Committee, the Board of Directors approved in advance the 
conclusion of a non-compete agreement, the purpose of which is to restrict Michel Landel’s freedom to carry out certain activities 
following the end of his term as Chief Executive Offi  cer of the Company. The activities concerned are (i) holding any position as a 
corporate offi  cer, employee or consultant and (ii) carrying out any consulting work for certain of the Sodexo Group’s competitors, as 
set out in the agreement, either directly or through another legal entity.

Because of his duties within the Group, Michel Landel has knowledge of Sodexo’s business, strategy and customers in each of its 
activities, which justiﬁ es the need for a non-compete agreement.

This non-compete agreement entered into between the Company and Michel Landel on November 14, 2017 will apply for a period of 
twenty-four (24) months as from January 23, 2018, the date on which his duties as Chief Executive Offi  cer cease.

•  Terms and conditions:

As consideration for this agreement, Michel Landel receives an indemnity representing twenty-four (24) months of the gross ﬁ xed 
compensation that he received during the twelve (12) months preceding the entry into force of this agreement, i.e., a total of 
one million, eight hundred and sixty-six thousand, eight hundred euro (1,866,800 euro).

4

If Michel Landel fails to fulﬁ ll his obligations, he will not receive the indemnity described above, and he will have to repay any amounts 
that he has already received. In addition, he will be liable to pay a ﬁ xed penalty of nine hundred and thirty-three thousand, four 
hundred euro (933,400 euro), representing twelve (12) months of his most recent gross annual compensation.

Neuilly-sur-Seine and Paris La Défense, November 7, 2018

The Statutory Auditors

PricewaterhouseCoopers Audit

Jean-Christophe Georghiou

KPMG Audit

Department of KPMG SA

Hervé Chopin

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I N F O R M A T I O N   O N   T H E   I S S U E R 

4 S t a t u t o r y   A u d i t o r s ’   R e p o r t

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5

CORPORATE 
GOVERNANCE

5.1 

Shareholding structure 

5.2 

Board of Directors 

5.2.1  Composition and operating 

203

204

procedures of the Board of Directors 

204

5.3 

Other information 

5.3.1  Other information concerning 

corporate offi  cers and senior 
management of the Company 

5.3.2  Related-party agreements and 

commitments 

5.3.3  Vigilance Plan 

5.4 

Risk management 

5.4.1  Group Policies 

5.4.2  Description of the risk management 

approach 

229

229

230

231

236

236

240

5.4.3  Risk factors 

5.4.4  Group Internal Audit Department 

5.5 

Compensation 

5.5.1  Compensation policy applicable to 

corporate offi  cers 

5.5.2 

Information on the components of 
compensation due or awarded to 
corporate offi  cers for Fiscal 2018 

5.5.3  Compensation of directors other than 

corporate offi  cers 

5.5.4  Compensation policy for members of 

the Executive Committee 

5.5.5  Description of the long-term incentive 

plan for managers 

241

248

249

249

254

263

264

265

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C O R P O R A T E   G O V E R N A N C E 

5  

In accordance with article L.225-37 of the French Commercial Code, this chapter includes the Board of Directors’ Report on corporate 
governance. It describe s  (i) the composition of the Board of Directors and information on the preparation and organization of the 
Board’s work; (ii) the components of corporate offi  cers’ compensation packages and  compensation policy (disclosed in compliance 
with article L.225-37-2 of the French Commercial Code); (iii) Sodexo ’s ownership structure ; and (iv)  the risk management and internal 
control procedures, as well as the Vigilance plan .

Information on the  delegations concerning share capital increases is an integral element of the Corporate Governance Report and is 
presented  in chapter 6 of this Registration Document.

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C O R P O R A T E   G O V E R N A N C E 

S h a r e h o l d i n g   s t r u c t u r e

5.1  SHAREHOLDING STRUCTURE*

O T H E R   M E M B E R S  
O F   T H E   B E L L O N   F A M I L Y

MR. AND MRS. PIERRE BELLON
A N D   T H E I R   C H I L D R E N

7.8%

B E L L O N   S A
F A M I L Y   H O L D I N G
C O M P A N Y

72.6%

E M P L O Y E E S

1.2%

42.2%

T R E A S U R Y   S H A R E S

S O D E X O

55.3%

P U B L I C

19.6%

1.3%

S O F I N S O D

5

For further information please refer to section 6.3 of the Registration Document.

*  Figures have been rounded to the nearest higher value.

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5 B o a r d   o f   D i r e c t o r s

5.2  BOARD OF D IRECTORS

5.2.1  Composition and operating procedures of the Board 

of Directors

Sodexo is a French public liability company (société anonyme) 
governed by a Board of Directors. Since September 1, 2005, the 
roles of Chairman of the Board of Directors and Chief Executive 
Offi  cer have been separated. This governance structure creates 
a clear segregation between the strategic planning and oversight 
functions that are the responsibility of the Board of Directors, 
and  the  operational  and  executive  functions  that  are  the 
responsibility of senior management.

The rules and operating procedures of the Board of Directors are 
deﬁ ned by law, the Company’s by-laws and the Internal Rules 
of the Board. In addition, specialized Committees of the Board 
have been established in accordance with these Internal Rules.

Directors  hold  office  for  a  term  of  three  years  and  may  be 
reappoin ted. Exceptionally, the Shareholders’ Meeting may, 
on the recommendation of the Board of Directors, appoint or 
reappoint  one or several directors for a period of one or two 
years.

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C O R P O R A T E   G O V E R N A N C E 

B o a r d   o f   D i r e c t o r s

5.2.1.1  Composition as of August 31, 2018

NAME

POSITION HELD ON THE BOARD/
BOARD SPECIALIZED COMMITTEES

FIRST 
APPOINTMENT 
TO THE BOARD 

TERM EXPIRES 
(AT THE ANNUAL 
SHAREHOLDERS’ 
MEETING CALLED 
TO APPROVE 
THE FINANCIAL 
STATEMENTS FOR THE 
YEAR INDICATED)

INDEPENDENT 
DIRECTORS(1)

DATE OF BIRTH

FEM  (F)
M  (M)

NATIONALITY

NUMBER OF 
DIRECTOR/
OFFICER 
POSITIONS 
HELD IN 
OTHER LISTED 
COMPANIES

NUMBER 
OF SODEXO 
SHARES 
HELD

Chairwoman of the Board of 
Directors
Member of the Nominating 
Committee

Director
Chairman of the Audit 
Committee
Member of the Compensation 
Committee

Sophie Bellon

Emmanuel 
Babeau

Director
Member of the Audit 
Committee

Robert Baconnier

07/26/1989

Fiscal 2020(2)

08/19/1961

F  

French

7,694

01/26/2016

Fiscal 2018

X

02/13/1967

M  

French

400

1

3

02/08/2005

Fiscal 2018

X(3) 04/15/1940

Astrid Bellon

Director

07/26/1989

Fiscal 2018

04/16/1969

Bernard Bellon

Director

02/26/1975

Fiscal 2018(2)

08/11/1935

M  

F  

M  

French

410

French

39,000

French

117,200

François-Xavier 
Bellon

Director
Member of the Audit 
Committee

Nathalie 
Bellon-Szabo

Director
Member of the Nominating 
Committee

Director representing 
employees
Member of the Compensation 
Committee

Director
Chairwoman of the Nominating 
Committee
Member of the Compensation 
Committee

Director
Member of the Audit 
Committee

Director representing 
employees
Member of the Audit 
Committee

Director
Chairwoman of the 
Compensation Committee
Member of the Nominating 
Committee

Philippe Besson

Françoise 
Brougher

Soumitra Dutta

Cathy Martin

Cécile Tandeau 
de Marsac

Director
Member of the Audit 
Committee

Sophie Stabile(2)

07/26/1989

Fiscal 2018

09/10/1965

M  

French

36,383

07/26/1989

Fiscal 2020(2)

01/26/1964

F  

French

1,147

06/18/2014

Fiscal 2019

N/A(4) 09/21/1956

M  

French

(4)

01/23/2012

Fiscal 2020(2)

X

09/02/1965

F  

Dual 
French and 
American

400

5

01/19/2015

Fiscal 2020(2)

X

08/27/1963

M  

Indian

400

1

09/10/2015

Fiscal 2020

N/A(4) 06/05/1972

F  

Canadian

(4)

01/24/2017

Fiscal 2019

X

04/17/1963

F  

French

400

07/01/2018

Fiscal 2019

X

03/19/1970

F  

French

100

4

(1)  Independent director as defined by the AFEP-MEDEF Code of corporate governance for listed companies.
(2)  At the Annual Shareholders’ Meeting to be held on January 22, 2019, the Board of Directors will propose that shareholders (i) reappoint  these Board members and (ii) ratify the Board’s 

June 20, 2018 decision to appoint by cooptation as of July 1, 2018 Sophie Stabile as a director to replace Patricia Bellinger, who resigned.

(3)  For further information on the qualification of Robert Baconnier as independent Board director, please refer to the table “Comply or explain” available at the end of  section 5.2  of this 

Registration  Document related to the c ompliance with the AFEP-MEDEF Code of corporate governance for listed companies.

(4)  In accordance with the law and the AFEP-MEDEF Code of corporate governance for listed companies, directors representing employees are not included in the determination of the following: 
the minimum and maximum number of Board members, the representation of men and women on the Board, and the number of independent Board members. In addition, they do not have 
to comply with the obligation defined in the Board of Directors’ Internal Rules for directors to hold a minimum of 400 Sodexo shares.

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5 B o a r d   o f   D i r e c t o r s

Changes in the composition of the Board of Directors and the specialized Committees of the Board in Fiscal 2018

DEPARTURE

APPOINTMENT

RE-ELECTION

Board of Directors

As of July 1, 2018:
Michel Landel
Patricia Bellinger

As of July 1, 2018:
Sophie Stabile

Audit Committee

As of July 1, 2018:
Sophie Stabile

Compensation Committee

As of July 1, 2018:
Patricia Bellinger

Nominating Committee

As of January 23, 2018:
Sophie Bellon
Bernard Bellon
Nathalie Bellon-Szabo
Françoise Brougher
Soumitra Dutta
Cathy Martin

As of January 23, 2018:
Soumitra Dutta
Cathy Martin

As of January 23, 2018:
Françoise Brougher

As of January 23, 2018:
Sophie Bellon
Nathalie Bellon-Szabo
Françoise Brougher

5.2.1.2  Chairman Emeritus

PIERRE BELLON

Born January 24, 1930 

Nationality: French 

Graduate of the École des hautes études commerciales (HEC) 

Business address:
Sodexo
255, quai de la Bataille-de-Stalingrad
92130 Issy-les-Moulineaux (France)

Number of Sodexo shares held: 12,900 

Main role: Chairman of the Supervisory Board, Bellon SA, and Chairman Emeritus, Sodexo S.A.  

Background

Pierre Bellon joined Société d’Exploitations Hôtelières, Aériennes, Maritimes et Terrestres in 1958 as Assistant Manager. He later 
served as Managing Director and then Chairman of the Board of Directors and Chief Executive Offi  cer.

In 1966, he founded Sodexho SA. He served as Chairman of the Board of Directors and Chief Executive Offi  cer until August 31, 2005, 
when Michel Landel was named Chief Executive Offi  cer following the Board decision to separate the roles of Chairman of the Board 
of Directors and Chief Executive Offi  cer. Pierre Bellon remained as Chairman of the Board of Directors of Sodexo (new name since 
January 2008) until the Shareholders’ Meeting of January 26, 2016, when he was named Chairman Emeritus.

In 1988, Pierre Bellon was appointed Chairman and Chief Executive Offi  cer of Bellon SA before serving as Chairman of the Management 
Board from 1996 to 2002 and Chairman of the Supervisory Board since February 2002.

Pierre Bellon has also served as:

•  Vice President of CNPF (subsequently MEDEF), 1980-2005;
•  President of the French National Center for Young Business Leaders (formerly the Center for Young Employers), 1968-1970;

•  President of the French National Federation of Hotel and Restaurant Chains, 1972-1975;

•  Member of the French Economic and Social Council, 1969-1979.

 Other positions and corporate offices held

Inside the Group

FRENCH COMPANIES

None 

Outside the Group

FRENCH COMPANIES

•  Chairman of the Supervisory Board: Bellon SA 
•  Member of the Supervisory Board: Sobelnat SCA 
•  Member of the Board of Directors: Association progrès du 

management (APM), created by Pierre Bellon in 1987 
•  Chairman and Founder:  Pierre Bellon Foundation 

FOREIGN COMPANIES

None 

FOREIGN COMPANIES

None 

Other corporate offices held within the past five years but no longer held

•  Chairman of the Board of Directors: Sodexo S.A.  (France) 

206

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C O R P O R A T E   G O V E R N A N C E 

B o a r d   o f   D i r e c t o r s

5.2.1.3  Board members as of August 31, 2018

SOPHIE BELLON – CHAIRWOMAN OF THE BOARD OF DIRECTORS

Born August 19, 1961 

Nationality: French 

Graduate of the École des hautes études commerciales 
du  Nord (EDHEC) 

First appointed: July 26, 1989 
Expiration of current term: at the Annual Shareholders’ Meeting 
held  to approve the financial statements for Fiscal 2020 

Member of the Nominating Committee 

Number of Sodexo shares held: 7,964 

Business address:
Sodexo
255, quai de la Bataille-de-Stalingrad
92130 Issy-les-Moulineaux (France)

Main role: Chairwoman of the Board of Directors, Sodexo

Background

Sophie Bellon began her career in 1985 with Crédit Lyonnais in the United States as a mergers and acquisitions advisor for the bank’s 
French clientele in New York. She joined Sodexo in 1994 as a senior analyst in the Group Finance Department. In 2001, she was 
appointed Project Manager – Strategic Financial Planning within the Group Strategic Planning Department to develop and implement 
key performance indicators for the Group. In September 2005, she was named Group Vice President of Client Retention and was 
responsible for the worldwide deployment of the initiative on client retention.

In September 2008, she was appointed Chief Executive Offi  cer of Corporate Services for Sodexo France. In that capacity, she also took 
over responsibility for facilities management (FM) activities in France in September 2010.

In November 2013, Sophie Bellon was appointed Vice Chairwoman of the Sodexo Board of Directors (replacing Robert Baconnier), 
with speciﬁ c responsibility for increasing the pace of Research, Development and Innovation, particularly in Quality of Life services.

On January 26, 2016, Sophie Bellon became Chairwoman of the Board of Directors of Sodexo.

 Other positions and corporate offices held

Inside the Group

FRENCH COMPANIES

None 

Outside the Group

FRENCH COMPANIES

• 

•  Member of the Management Board: Bellon SA
• 

 Chairwoman: PB Holding SAS
 Member of the Board of Directors: L’Oréal*; Association 
nationale  des  sociétés  par  actions  (ANSA); Association 
française des entreprises privées (AFEP); Association Comité 
France Chine

5

FOREIGN COMPANIES

None 

    FOREIGN COMPANIES

None 

Other corporate offices held within the past five years but no longer held

•  Vice Chairwoman of the Board of Directors: Sodexo S.A.
•  Chief Executive Officer: Sodexo Entreprises SAS (France) 
•  Chairwoman of the Management Board: Bellon SA (France) 

*  Listed company.

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5 B o a r d   o f   D i r e c t o r s

EMMANUEL BABEAU

Born February 13, 1967

 Nationality: French

 Graduate of the École supérieure de commerce de Paris 
(ESCP Europe, 1989); degree in accounting and finance 
(DESCF)

 First appointed: January 26, 2016

 Expiration of current term: at the Annual Shareholders’ Meeting 
held  to approve the ﬁ nancial statements for Fiscal 2018 (renewal 
proposed)

Chairman of the Audit Committee

 Member of the Compensation Committee 

Number of Sodexo shares held: 400 

Business address:
Schneider Electric
35, rue Joseph-Monier
92500 Rueil-Malmaison (France)

Main role: Deputy Chief Executive Offi  cer, Schneider Electric SE 

Background

Emmanuel Babeau is Deputy Chief Executive Offi  cer in charge of Finance and Legal Aff airs at Schneider Electric SE.

He began his career at Arthur Andersen in late 1990. In 1993, he joined the Pernod Ricard Group as Internal Auditor and was 
appointed Head of Internal Audit, Corporate Treasury and Consolidation in 1996. He subsequently held several executive positions 
at Pernod Ricard, notably outside France, before becoming Vice President, Development in 2001. In June 2003, he was appointed 
Chief Financial Offi  cer and in 2006 he was named Group Deputy Managing Director of Finance. He joined Schneider Electric in 2009 
as Executive Vice President, Finance and a member of the Management Board, and in 2013 he became Deputy Chief Executive Offi  cer 
in charge of Finance and Legal Aff airs.

 Other positions and corporate offices held

Inside the Group

FRENCH COMPANIES

None 

FOREIGN COMPANIES

None 

Outside the Group

FRENCH COMPANIES

•  Deputy Chief Executive Officer: Schneider Electric SE* 
•  Vice Chairman: Aveva Group plc* 
•  Member of the Board of Directors: Sanoﬁ * 
•  Member  of  the  Board  of  Directors:  Schneider  Electric 

Industries SAS** 

•  Member of the Supervisory Board: InnoVista Sensors SAS**; 
Aster Capital Partners SAS**; Schneider Electric Energy Access 

representing Schneider Electric Industries SAS** (corporate 

member) 

•  Managing partner: SCI GETIJ 

FOREIGN COMPANIES

•  Member of the Board of Directors: Schneider Electric USA 
Inc.** (USA); Schneider Electric (China) Co., Ltd.** (China); Samos 

Acquisition Company Ltd.** (UK); Schneider Electric Holdings 

Inc.** (USA); Invensys Ltd.** (UK); Carros Sensors Topco (formerly 

InnoVista Sensors Topco Ltd.)** (UK) 

Other corporate offices held within the past five years but no longer held

•  Chairman of the Managing Board: Schneider Electric Services International** (Belgium) 
•  Member of the Management Board: Schneider Electric SA** (France) 
•  Member of the Board of Directors: Schneider Electric Taïwan Co. Ltd.** (Taiwan); Telvent GIT SA** (Spain); Transformateurs SAS** (France) 

*  Listed company.

**  Schneider Electric Group company.

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C O R P O R A T E   G O V E R N A N C E 

B o a r d   o f   D i r e c t o r s

Address:
Sodexo
255, quai de la Bataille-de-Stalingrad
92130 Issy-les-Moulineaux (France)

ROBERT BACONNIER

Born April 15, 1940

 Nationality: French

 Degree in Literature, graduate of the Institut d’études 
politiques de Paris and of the École nationale 
d’administration (1965-1967)

 First appointed: January 8, 2005
 Expiration of current term: at the Annual Shareholders’ Meeting 
held  to approve the financial statements for Fiscal 2018 (renewal 
proposed for one year)

 Member of the Audit Committee 

Number of Sodexo shares held: 410 

Main role: Director 

Background

Robert Baconnier began his career in 1967 as a civil servant at the French Ministry of Economy and Finance, and was assigned to the Internal 
Revenue Service (Direction Générale des Impôts). From 1977 to 1979, he was Technical Advisor to the offi  ce of the Minister of Economy and 
Finance, then Deputy Director in the offi  ce of the Minister for the Budget. From 1979 to 1983, he was Deputy Director in charge of the International 
Division of the Tax Legislation Department. In 1983, he was appointed head of the Litigation Department of the French Internal Revenue Service. 
In 1986, he became head of the French Internal Revenue Service. From 1990 to 1991, he was Paymaster General at the French Treasury.

In 1991, he joined the law ﬁ rm Bureau Francis Lefebvre, where he served as Chairman of the Management Board until 2004.

He then held offi  ce as Chairman and Chief Executive Offi  cer of Association nationale des sociétés par actions (ANSA) until January 2012, 
when he was named Chairman Emeritus. From 2010 to November 2013, he was Vice Chairman of the Board of Directors of Sodexo.

 Other positions and corporate offices held

Inside the Group

FRENCH COMPANIES

None 

FOREIGN COMPANIES

None 

Outside the Group

FRENCH COMPANIES

None 

FOREIGN COMPANIES

None 

Other corporate offices held within the past five years but no longer held

•  Non-voting Board member and member of the Audit Committee: Siparex Associés (France) 

5

Business address:
Bellon SA
17, place de la Résistance 
92130 Issy-les-Moulineaux (France)

ASTRID BELLON

Born April 16, 1969

 Graduate of ESLSCA

 Nationality: French

 Master of Arts in Cinema Studies, New York

 First appointed: July 26, 1989
 Expiration of current term: at the Annual Shareholders’ Meeting 
held  to approve the financial statements for Fiscal 2018 (renewal 
proposed) 

Number of Sodexo shares held: 39,000 

Main role: Director 

Background

Astrid Bellon is a member of the Management Board of Bellon SA.

 Other positions and corporate offices held

Inside the Group

FRENCH COMPANIES

None 

FOREIGN COMPANIES

None 

Outside the Group

FRENCH COMPANIES

•  Member of the Management Board: Bellon SA 
•  Member of the Orientation Committee: Pierre Bellon Foundation 
•  Chairwoman: Sofrane SAS 
•  Legal Manager: Sobelnat SCA (permanent representative of 

Sofrane SAS) 

FOREIGN COMPANIES

None 

Other corporate offices held within the past five years but no longer held

None 

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BERNARD BELLON

Born August 11, 1935

 Nationality: French

 Degree in French Literature from IAE Aix-Marseille

 First appointed: February 26, 1975
 Expiration of current term: at the Annual Shareholders’ Meeting 
held  to approve the financial statements for Fiscal 2018 

Number of Sodexo shares held: 117,200 

Business address:
14, rue Saint Jean
1260 Nyon (Switzerland)

Main role: Director 

Background

Bernard Bellon was director of Compagnie Hôtelière du Midi (part of the Compagnie de Navigation Mixte Group) from 1962 to 1970 
and then held various managerial positions in banking at CIC-Banque de l’Union européenne Group from 1970 to 1988. He founded 
Finadvance SA, a venture capital company of which he was Chairman from its creation in 1988 until 2013.

 Other positions and corporate offices held

Inside the Group

FRENCH COMPANIES

None 

FOREIGN COMPANIES

None 

Outside the Group

FRENCH COMPANIES

•  Member of the Supervisory Board: Bellon SA 
•  Founding member:  Pierre Bellon Foundation 

FOREIGN COMPANIES

None 

Other corporate offices held within the past five years but no longer held

None 

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FRANÇOIS-XAVIER BELLON

Born September 10, 1965

 Nationality: French

 Graduate of the European Business School

 First appointed: July 26, 1989
 Expiration of current term: at the Annual Shareholders’ Meeting 
held  to approve the financial statements for Fiscal 2018  (Renewal 
proposed )

Member of the Audit Committee 

Number of Sodexo shares held: 36,383 

Business address:
LifeCarers Limited
2 East Throp House 
1 Paddock Road 
Reading RG4 5BY (United Kingdom)

Main role: Founder and CEO of LifeCarers Ltd 

Background

François-Xavier Bellon joined the Adecco Group in 1990 as agency head in Orsay-les-Ulis (France). In 1992 he was appointed agency 
head in Barcelona, before becoming Catalonia Regional Director.

In 1995, François-Xavier Bellon joined the Sodexo Group as Head of Sector and became Healthcare Head of Development in France. In 1999, 
he was appointed Regional Director in Mexico, and subsequently held the role of Chief Executive Offi  cer of the Mexican subsidiary until 2004.

In January 2004, he was appointed Chief Executive Offi  cer of Sodexo UK and Ireland but later left   the Group due to health problems.

From 2004 to 2006, he rejoined the Adecco Group and was Sales and Marketing Director of the Global Temporary Work Division of the 
Adecco Group, based in Zurich and London.

In 2007, François-Xavier Bellon founded LifeCarers, a company based in the United Kingdom that provides home care services to dependent 
people (people living in social isolation, people in recovery or people living with dementia), of which he is also the Chief Executive Offi  cer.

 Other positions and corporate offices held

Inside the Group

FRENCH COMPANIES

None 

FOREIGN COMPANIES

None 

Outside the Group

FRENCH COMPANIES

•  Chairman of the Management Board: Bellon SA 
•  Chief Executive Officer: PB Holding SAS 
•  Advisor: French Foreign Trade Commission 

FOREIGN COMPANIES

•  Chief Executive Officer: PB Holding SAS (UK) 
•  Member of the Board of Directors: LifeCarers Ltd (UK) 
•  Advisor: U1st Sports SA (Spain); House of HR (Belgium) 

Other corporate offices held within the past five years but no longer held

•  Advisor: Dr Clic Sociedad Limitada (Spain) 

5

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NATHALIE BELLON-SZABO

Born January 26, 1964

 Nationality: French

 Graduate of the European Business School

 First appointed: July 26, 1989
 Expiration of current term: at the Annual Shareholders’ Meeting 
held  to approve the financial statements for Fiscal 2020

Business address:
Sodexo Prestige Sports and Leisure/
Sodexo Prestige Sites and Brands
Tour Horizons
CP H 200
30, cours de l’Île Seguin
92777 Boulogne Billancourt (France)

 Member of the Nominating Committee 

Number of Sodexo shares held: 1,147 

Main role: Chief Executive Offi  cer, Sodexo Sports and Leisure 

Background

Nathalie Bellon-Szabo began her career in the foodservices industry in 1987. From 1989, she was an account manager for Scott 
Traiteur, and then Sales Manager of Le Pavillon Royal.

She  joined  Sodexo  in  March  1996  as  Sales  Director  for  Sodexo  Prestige  in  France,  becoming  a  Regional  Manager  in  1999.  In 
September 2003, she was appointed Managing Director of Sodexo Prestige, and Managing Director of L’Affi  che in January 2006. She 
was named Chairwoman of the Management Board of the Lido in 2009. She became Chief Executive Offi  cer of Sodexo Prestige Sports 
and Leisure in France on September 1, 2010 and Chairwoman of the Management Board of Lenôtre in 2012.

On September 1, 2015, Nathalie Bellon-Szabo was appointed Chief Executive Offi  cer Sports & Leisure France, On-site Services and Chief 
Operating Offi  cer Sports and Leisure Worldwide, On-site Services. On June 19, 2018, she was appointed Chief Executive Offi  cer Sports and 
Leisure Worldwide and joined the Group Executive Committee.

 Other positions and corporate offices held

Inside the Group

FRENCH COMPANIES

Outside the Group

FRENCH COMPANIES

•  Chairwoman: Yachts de Paris SAS; Compagnie d’armateur ﬂ uvial 
et maritime SAS; Société d’exploitation des vedettes Paris Tour 

•  Member of the Management Board: Bellon SA 
•  Member of the Board of Directors: Altima SA 

Eiff el SAS; Sodexo Sports et Loisirs SAS; Gedex SAS; Umanis SAS 

•  Chairwoman of the Board of Directors: Millenia SA 
•  Chairwoman of the Management Board: Société du Lido 

(SEGSMHI); Lenôtre SA 

FOREIGN COMPANIES

None 

FOREIGN COMPANIES

None 

Other corporate offices held within the past five years but no longer held

None 

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PHILIPPE BESSON - DIRECTOR REPRESENTATING EMPLOYEES

Born September 21, 1956

 Nationality: French

 First appointed: June 18, 2014
 Expiration of current term: at the Annual Shareholders’ 
Meeting held  to approve the financial statements for Fiscal 2019

 Member of the Compensation Committee 

Number of Sodexo shares held: N/A  

Business address:
Sodexo
255, quai de la Bataille-de-Stalingrad
92130 Issy-les-Moulineaux (France)

Main role: Head of Projects for Sponsorship   

Background

Philippe Besson joined the Sodexo Healthcare Division in 1981, as foodservices manager for the Paris Ile de France region. He took 
part in the World Youth Days in Paris, Rome and Cologne, was responsible for the Tour de France departure villages for Sodexo and 
managed athlete foodservices for the Paciﬁ c Games.

He has been H ead of Projects for Sponsorship     and has served as a director representing employees since June 2014.

 Other positions and corporate offices held

Inside the Group

FRENCH COMPANIES

None 

FOREIGN COMPANIES

None 

Outside the Group

FRENCH COMPANIES

None 

FOREIGN COMPANIES

None 

Other corporate offices held within the past five years but no longer held

None 

FRANÇOISE BROUGHER

Born September 2, 1965

 Nationality: dual French and American

 Graduate of ICAM-Lille (Institut catholique d’arts et 
métiers) (France) and Harvard University (United States)

 First appointed: January 23, 2012
 Expiration of current term: at the Annual Shareholders’ Meeting 
held  to approve the financial statements for Fiscal 2020

Business address:
Pinterest
808 Brannan Street,
San Francisco,
California, 94103 USA

5

 Chairwoman of the Nominating Committee
 Member of the Compensation Committee 

Number of Sodexo shares held: 400 

Main role: Chief Operating Offi  cer, Pinterest 

Background

Françoise Brougher began her career in 1989 in a production unit of L’Oréal in Japan. Aft  er receiving her MBA in 1994, she joined 
the strategy consulting ﬁ rm Booz Allen & Hamilton, dividing her time between Europe and the United States. In 1998, she joined the 
San Francisco-based Ocean Gem Pearl Corporation, an importer of black Tahitian pearls, as Chief Executive Offi  cer. From 2000 to 
2005, she was Vice President of Strategy at California-based brokerage ﬁ rm Charles Schwab Corporation.

In March 2005, she joined Google, where she managed the Business Operations Group for four years, becoming Vice President, Global 
SMB Sales & Operations in 2009. In April 2013, she joined San Francisco-based Square as Business Lead.

She has been Chief Operating Offi  cer at Pinterest since February 2018.

 Other positions and corporate offices held

Inside the Group

FRENCH COMPANIES

None 

FOREIGN COMPANIES

None 

Outside the Group

FRENCH COMPANIES

None 

FOREIGN COMPANIES

•  Member of the Board of Directors: Blackbird Air (USA) 

Other corporate offices held within the past five years but no longer held

•  Chief Operating Officer: Square* (USA) 

*  Listed company.

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SOUMITRA DUTTA

Born August 27, 1963

 Nationality: Indian

 Doctorate in Computer Science, Artificial Intelligence, 
University of California, Berkeley, USA

 First appointed: January 19, 2015
 Expiration of current term: at the Annual Shareholders’ Meeting 
held  to approve the financial statements for Fiscal 2020

 Member of the Audit Committee 

Number of Sodexo shares held: 400 

Business address:
Cornell SC Johnson
College of Business
Cornell University
Ithaca, New York (USA)

Main role: Dean and professor of Management, Cornell University 

Background

Soumitra Dutta began his career in 1985 as a research assistant at University of California, Berkeley, USA. Between 1988 and 1990, 
he gained further research experience at General Electric. He then joined Insead, the international management school based in 
Fontainebleau (France), where he served as lecturer then dean of technology and e-learning.

In 1999, he set up eLab@Insead, the school’s research and analytics center focused on big data analytics for businesses, which he 
headed until 2012. In 2002, he was named dean of Executive Education at Insead. During his tenure at Insead, Soumitra Dutta also 
participated in setting up and managing three strategy consultancies specialized in new technologies and innovation, which he 
developed before selling them.

Since 2012, he has been dean and professor of Management at Cornell SC Johnson College of Business at Cornell University, Ithaca, 
New York.

 Other positions and corporate offices held

Inside the Group

FRENCH COMPANIES

None 

FOREIGN COMPANIES

None 

Outside the Group

FRENCH COMPANIES

•  Member of the Board of Directors: Dassault Systèmes* 

FOREIGN COMPANIES

•  Chairman of the Board of Directors: The Global Business 

School Network (USA) 

Other corporate offices held within the past five years but no longer held

•  Member of the Board of Directors: AACSB (USA) 

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CATHY MARTIN – DIRECTOR REPRESENTING EMPLOYEES

Born June 5, 1972

 Nationality: Canadian

 First appointed: September 10, 2015
 Expiration of current term: at the Annual Shareholders’ Meeting 
held  to approve the financial statements for Fiscal 2020

 Member of the Audit Committee 

Number of Sodexo shares held: N/A  

Business address:
Sodexo Canada
740 Rue Saint-Maurice, bureau 106
Montreal, Quebec
H3C 1L5 (Canada)

Main role: Regional Manager

Background

Aft  er completing her studies in nutrition, Cathy Martin began her career in the foodservices industry in 1998. In January 2000, she 
joined Sodexo as an on-site foodservices manager. Over the past 15 years, she has held various operating and project management 
positions. In December 2014, she was named Regional Manager, On-site Services in the Education segment in Quebec, Canada.

 Other positions and corporate offices held

Inside the Group

FRENCH COMPANIES

None 

FOREIGN COMPANIES

None 

Outside the Group

FRENCH COMPANIES

None 

FOREIGN COMPANIES

None 

Other corporate offices held within the past five years but no longer held

None 

CÉCILE TANDEAU DE MARSAC

Born April 17, 1963

 Nationality: French

 Graduate of the École supérieure de commerce de Rouen

 First appointed: January 24, 2017
 Expiration of current term: at the Annual Shareholders’ Meeting 
held  to approve the financial statements for Fiscal 2019

 Chairwoman of the Compensation Committee
 Member of the Nominating Committee 

Number of Sodexo shares held: 400 

Business address:
Solvay
Rue de Ransbeek, 310
B-1120 Brussels (Belgium)

5

Main role: Chief Human Resources Offi  cer, Solvay Group 

Background

Cécile Tandeau de Marsac began her career with Nestlé in 1987, holding various positions in Marketing and Communications before 
joining the Human Resources Department in 2002, where she was in charge of career development in France. In 2005, she became 
Human Resources Director for certain businesses and corporate functions at Nestlé France. In 2007, she joined Rhodia as HR Director 
of a business unit in France, responsible for talent development for the Group. She subsequently took part in two major projects to 
transform Rhodia’s organizational structure and to integrate Rhodia’s teams following its acquisition by Solvay.

In September 2012, she was appointed Human Resources Director at Solvay.

 Other positions and corporate offices held

Inside the Group

FRENCH COMPANIES

None 

FOREIGN COMPANIES

None 

Outside the Group

FRENCH COMPANIES

None 

FOREIGN COMPANIES

None 

Other corporate offices held within the past five years but no longer held

None 

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SOPHIE STABILE

Born March 19, 1970

 Nationality: French

 Graduate of the É cole supérieure de gestion et finances 
(ESGF) de Paris

 First appointed: July 1, 2018
 Expiration of current term: at the Annual Shareholders’ Meeting 
held  to approve the financial statements for Fiscal 2019

Business address:
Sodexo
255, quai de la Bataille-de-Stalingrad
92130 Issy-les-Moulineaux (France)

 Member of the Audit Committee 

Number of Sodexo shares held: 100 

Main role: Founder and Managing Partner of Révérence 

Background

Sophie Stabile began her career as a ﬁ nancial auditor before joining the Accor group in 1999. In 2006, she was appointed Group Controller-
General, in charge of the consolidation process, the International Finance Departments and the Financial Control and Internal Audit 
Departments as well as the Accor holding company and the group’s ﬁ nancial back offi  ces. In 2010 she became the Accor group’s Chief 
Financial Offi  cer. From 2015 to 2017 she served as Chief Executive Offi  cer, HotelServices France, for AccorHotels.

In February 2018, she founded Révérence – a consulting, investment and private equity ﬁ rm – of which she has been Managing Partner 
since that date.

 Other positions and corporate offices held

Inside the Group

FRENCH COMPANIES

None 

FOREIGN COMPANIES

None 

Outside the Group

FRENCH COMPANIES

•  Member  of  the  Board  of  Directors:  Ingenico*,  Unibail-

Rodamco*, Altamir*, SPIE* 
•  Managing Partner: Révérence

FOREIGN COMPANIES

None 

Other corporate offices held within the past five years but no longer held

•  Chairwoman of the Supervisory Board: Orbis 
•  Chief Executive Officer: HotelServices France for AccorHotels 

*  Listed company.

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5.2.1.4 

Internal Rules of the Board 
of Directors

5.2.1.4.1  Principles governing the composition 

of the Board of Directors

The  Internal  Rules  of  the  Board  of  Directors  were  amended 
and approved by the Board on November 6, 2018 in order to 
implement the new recommendations of the AFEP-MEDEF Code 
of  corporate  governance  for  listed  companies.  The  new  full 
version of the Internal Rules of the Board of Directors is available 
on the Group’s website at www.sodexo.com. A summary of the 
key elements of these Rules is provided below.

Diversity policy of the Board of Directors 

The  Board  of  Directors  regularly  assesses  whether  the 
composition of the Board and its specialized Committees is 
well balanced, particularly in terms of diversity (gender mix, 
nationality, age, qualiﬁ cations, professional experience, etc.).

CRITERIA

OBJECTIVES

IMPLEMENTATION  AND RESULTS ACHIEVED IN FISCAL 2018

Board of 
Directors’ 
membership 
structure

Optimal gender mix on the Board

WOMEN REPRESENTATION ON THE BOARD

54%

46%

42%

42%

38%

38%

To ensure the best possible balance by 
seeking diverse and complementary profiles, 
in terms of nationality, expertise and 
experience (including international)

2 0 1 3

2 0 1 4

2 0 1 5

2 0 1 6

2 0 1 7

2 0 1 8

INTERNATIONAL PROFILES REPRESENTATION 
ON THE BOARD

40%

36%

31%

31%

27%

23%

5

2 0 1 3

2 0 1 4

2 0 1 5

2 0 1 6

2 0 1 7

2 0 1 8

Expertise and exper ience:

Human Resources:

2017:  election of Cécile Tandeau 

de Marsac

Sales/Marketing:

2012: election of Françoise Brougher
2017:  election of Cécile Tandeau 

de Marsac

IT/Digital:

2012: election of Françoise Brougher
2015: election of Soumitra Dutta

Finance/Executive 
Management:

2016: election of Emmanuel Babeau
2018:  Board appointment of Sophie 

Stabile

All of the above directors qualify as independent and have 
extensive international experience.

Appointment of one or two directors 
representing employees.

Since 2015, the Company has had two directors 
representing employees.

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CRITERIA

OBJECTIVES

IMPLEMENTATION  AND RESULTS ACHIEVED IN FISCAL 2018

Directors’ 
independence

1/3   independent directors  in compliance 
with   the AFEP-MEDEF Code of corporate 
governance for listed companies(1 ).

Age of Directors 

Not more than one third of the directors 
are over 70 years old, in line with the 
recommendation for controlled companies 
contained in the AFEP-MEDEF Code of 
corporate governance for listed companies.

INDEPENDENT
DIRECTORS
55%

NON-INDEPENDENT
DIRECTORS
45%

OVER 70 YEARS OLD
18%

UNDER 70 YEARS OLD
82%

GENDER BALANCE

As of August 31, 2018, the Board of Directors had 13 members 
(including  two  directors  representing  employees),  of  which 
seven  are women, including one woman director representing 
employees (54 % of all Board members(2 )). The number of women 
directors demonstrates that women are well represented on the 
Board in compliance with  the requirements of the French Copé-
Zimmermann Act on gender-balanced representation on Boards, 
which states that at least 40% of all corporate Board members 
must be women and at least 40% men. The Board’s members 
include nationals of France, the United States, Canada and India.

EXPERTISE

The Board of Directors takes particular care in the selection of 
its members. Directors are chosen for their ability to act in the 
interests of all shareholders and for their expertise, experience 

and understanding of the strategic challenges in markets where 
the Group operates. The composition of the Board of Directors 
is intended to adhere closely to the principles of diversity and to 
reﬂ ect the geographic mix of the business (insofar as possible), 
to provide a range of technical skills, and to include individuals 
with in-depth knowledge of Sodexo’s activities.

On June 20, 2018 the Board appointed by cooptation Sophie 
Stabile as a director to replace Patricia Bellinger, who resigned 
after having served on the Board for 13 years (since 2005), 
effective  July  1,  2018.  As  the  former  Group  Chief  Financial 
Offi  cer and Chief Executive Offi  cer of  Hotel Services France , of 
AccorHotels, Sophie Stabile will bring to Sodexo her in-depth 
experience in finance and the services industry. She is also a 
director of several other major French corporations and has a 
good understanding of  Corporate Governance best practices.

1   Refer to the table “Comply or explain” available at the end of section 5.2 of this Registration Document related to the compliance with the AFEP-MEDEF Code of 

corporate governance for listed companies.

2   In accordance with the law and the AFEP-MEDEF Code of corporate governance for listed companies, the two directors representing employees are not included 
in the determination of the following: the minimum and maximum number of Board members, the representation of men and women on the Board, and the 
number of independent Board members.

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The following  matrix shows the number of directors who have skills considered important for the Board:

EXECUTIVE MANAGEMENT OF INTERNATIONAL COMPANIES

FINANCIAL EXPERTISE

SUSTAINABLE DEVELOPMENT, CSR AND HR

DIGITAL/NEW TECHNOLOGIES

MARKETING/SALES

STRATEGY AND MERGERS & ACQUISITIONS

KNOWLEDGE OF THE SERVICES INDUSTRY

INDEPENDENCE

7  directors

8  directors

4  directors

6  directors

6  directors

7  directors

7  directors

Analysis by the Board of Directors of each director’s status based on the independence criteria deﬁ ned in 
article 8 of the AFEP-MEDEF Code of corporate governance for listed companies

AFEP-MEDEF CODE INDEPENDENCE CRITERION

EMPLOYEE/
EXECUTIVE 
OFFICER OF 
THE COMPANY 
OR GROUP IN THE 
PAST 5 YEARS

DOES NOT HOLD 
A CROSS-
DIRECTORSHIP

NO SIGNIFICANT 
BUSINESS 
RELATIONSHIP 
WITH 
THE COMPANY 
OR GROUP

CLOSE FAMILY 
TIES TO AN 
OFFICER OF 
THE COMPANY

AUDITOR OF 
THE COMPANY 
IN THE PAST 
FIVE YEARS

DIRECTOR OF 
THE COMPANY 
FOR MORE THAN 
12 YEARS

NON-EXECUTIVE 
OFFICER OF 
THE COMPANY

SIGNIFICANT 
SHAREHOLDER

Sophie Bellon

Emmanuel Babeau

Robert Baconnier

Astrid Bellon

Bernard Bellon

François-Xavier Bellon

Nathalie Bellon-Szabo

Françoise Brougher

Soumitra Dutta

Cécile Tandeau 
de Marsac

Sophie Stabile

(cid:56)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:56)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:56)

(cid:57)

(cid:57)

(cid:56)

(cid:56)

(cid:56)

(cid:56)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:56)

(cid:57)

(cid:56)

(cid:56)

(cid:56)

(cid:56)

(cid:56)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

(cid:56)

(cid:57)

(cid:57)

(cid:56)

(cid:56)

(cid:56)

(cid:56)

(cid:57)

(cid:57)

(cid:57)

(cid:57)

In this table, (cid:57) indicates an independence criterion that is met and (cid:56) indicates an independence criterion that is not met.

During  Fiscal  2018,  six (1)  Board  members  were  deemed 
independent directors (see end of section 5.2 of this Registration 
Document ).  No  independent  director  has  any  significant 
business ties with the Company or any other Group entity. When 
the Board of Directors examined the independent status of its 
directors, it paid particular attention to any business relations 
existing between the Sodexo Group and the group or entity of 
which each independent director (as qualiﬁ ed based on the other 
independence criteria) is a member.

Based on this analysis, apart from Cécile Tandeau de Marsac 
and Emmanuel Babeau, no other independent director or the 
entity or group of which he or she is a member and in which he 
or she exercises executive powers, has any signiﬁ cant business 
relationship with the Company, its group or its management.

The Board carried out a quantitative and qualitative analysis 
of the situations of Cécile Tandeau de Marsac, Chief Human 

Resources Offi  cer at the Solvay Group, and Emmanuel Babeau, 
Deputy  Chief  Executive  Officer  of  Schneider  Electric  and  a 
director of Sanofi, as well as the business relations between 
Sodexo and  Solvay, Schneider Electric and Sanoﬁ  groups.

In this analysis, the Board of Directors found, on the one hand, 
that the contracts are negotiated between the parties at arm’s 
length  and on the other hand, that the business ﬂ ows between 
these groups (all activities combined and at the global level) are 
signiﬁ cantly lower than the 1% materiality threshold retained by 
the Board of Directors. Indeed, these business ﬂ ows represent:

• 

• 

less than 0.05% of the company’s consolidated revenues 
between Sodexo and Schneider Electric;

less  than  0.1%  of  the  company’s  consolidated  revenues 
between Sodexo and Sanoﬁ ;

1  In accordance with the law and the AFEP-MEDEF Code of corporate governance for listed companies, the two directors representing employees are not included 
in the determination of the following: the minimum and maximum number of Board members, the representation of men and women on the Board, and the 
number of independent Board members.

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• 

less than 0.05 % of consolidated revenues between Sodexo 
and Solvay.

Consequently,  the  Board  of  Directors  considers  that  Cécile 
Tandeau de Marsac and Emmanuel Babeau are independent 
directors  and  that  it  should  continue  to  benefit  from  their 
valuable experience in their respective ﬁ elds.

MANAGEMENT OF CONFLICTS OF INTEREST

Sop hie Stabile, who was appointed by cooptation as a member of 
Sodexo’s Board of Directors eff ective July 1, 2018, has also been 
a director of SPIE since 2014. In a certain number of limited and 
clearly identiﬁ ed cases within the technical services area, SPIE 
may be one of Sodexo’s competitors in Europe. Consequently, 
Sodexo’s Board of Directors has placed a number of restrictions 
on Sophie Stabile’s directorship and no commercially sensitive 
information concerning the activities in which Sodexo competes 
with SPIE may be disclosed or discussed in her presence.

 Accordingly, the Board of Directors  considers that Sophie Stabile  
complies with the recommendations of the AFEP-MEDEF Code 
of  corporate  governance  for  listed  companies  to  which  the 
company refers and with the provisions of the Internal Rules 
concerning conﬂ ict of interest situations.

DIRECTORS REPRESENTING EMPLOYEES

On January 21, 2014, the Shareholders’ Meeting decided on the 
conditions of appointment to the Board of Directors of one or 
more directors representing employees. Directors representing 
employees are appointed for a period of three  year s.

A ﬁ rst director representing employees – Philippe Besson – was 
appointed by the trade union that obtained the most votes in 
the ﬁ rst round of the most recent elections in France of union 
representatives and took his seat on the Board at its meeting 
on  June  18,  2014.  Philippe  Besson  was  re appointed  by  this 
trade union for a three-year term, effective from the Annual 
Shareholders’ Meeting held on January 24, 2017.

A second director representing employees  – Cathy Martin – 
was appointed by the European Works Council and became a 
member of the Board at its meeting on September 10, 2015. 
Cathy Martin was re appointed by the European Works Council 
for a three-year term, eff ective from the Annual Shareholders’ 
Meeting held on January 23, 2018.

5.2.1.4.2  Preparation and organization of the work 

of the Board of Directors

Sodexo is governed by a Board of Directors, which has been 
chaired by Sophie Bellon since January 26, 2016.

ROLE OF THE CHAIRWOMAN OF THE BOARD OF DIRECTORS

The  Chairwoman  of  the  Board  of  Directors  represents  the 
Board and organizes and directs its work, and reports to the 
shareholders at the Shareholders’ Meeting. The Chairwoman 
also represents the Board of Directors in matters concerning 
third parties such as employee representatives and external 
auditors. In addition, she is responsible for shareholder relations, 
particularly  concerning  Corporate  Governance  matters,  and 
reports to the Board of Directors on this role. The Chairwoman 

oversees  the  functioning  of  all  of  the  Company’s  Corporate 
Governance structures and, in particular, ensures that the Board 
members are able to fulﬁ ll their duties. Since January 23, 2018, 
she has played a direct “support and challenge” role vis-à-vis the 
Chief Executive Offi  cer, in order to leverage the complementary 
nature of the  skill sets inherent to Chairwoman/Chief Executive 
Offi  cer  roles. In addition to these duties, Sophie Bellon plays an 
important role as ambassador of  the Group.

OPERATING PROCEDURES OF THE BOARD OF DIRECTORS

In addition to the Company’s bylaws, the Board of Directors is 
governed by the Board’s Internal Rules, which deﬁ ne  the Board’s 
mission, the required number of Board members, the Directors’ 
C harter, the minimum number of Board meetings and the rules 
for allocating directors’ fees. The Internal Rules also set the 
criteria for assessing the performance of the Board, organize the 
delegation of powers to the Chief Executive Offi  cer, and deﬁ ne 
the policy for issuing guarantees. The principal elements of the 
Board’s Internal Rules are described in this section.

MISSION OF THE BOARD OF DIRECTORS

The Board of Directors defines Sodexo’s strategy, long-term 
objectives and overall policies in consideration of the social and 
environmental issues related to  its activities.

It  regularly  supervises  the  management  of  the  business 
(particularly progress made on metrics it has identiﬁ ed) and it 
appoints corporate offi  cers to manage Group general policies.

The Board of Directors ensures the existence and eff ectiveness 
of the management of commitments, risk  and internal control 
procedures, and oversees the quality of the information provided 
to  shareholders  and  the  financial  markets  in  the  financial 
statements and in connection with major ﬁ nancial transactions.

The  Board  of  Directors  ensures,  where  appropriate,  the 
implementation   of  a  mechanism  for  the  prevention  and 
detection of corruption and inﬂ uence peddling and receives all 
the information necessary for this purpose.

The Board of Directors also ensures that the Chief Executive 
Offi  cer implements a policy of non-discrimination and diversity 
and a vigilance plan.

As required by law, the Board of Directors approves the ﬁ nancial 
statements  for  publication,  proposes  dividends,  and  makes 
decisions on signiﬁ cant investments and ﬁ nancial policy.

At least five days ahead of Board meetings, each director  is 
given brieﬁ ng documents so that he or she can review and/or 
investigate the issues to be discussed.

The Group’s senior executives make regular presentations to the 
Board of Directors, in particular at the beginning of September, 
when the budget is discussed:

•  the Chief Executive Offi  cer and the other operational executives 
in each area of responsibility, discuss the potential for growth, 
competitive positions, the ambition, the strategy for achieving 
it and the principal elements of their action plans;

•  Group executives in each functional area (Human Resources, 
Finance   and  Strategy)  present  their  recommendations 
regarding  strategy  and  policy  developments,  progress 

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B o a r d   o f   D i r e c t o r s

a c h i e v e d   a n d   t o   b e   a c h i e v e d    a n d   a c t i o n   p l a n s   f o r 
implementation in the Group.

The Board of Directors performs periodic in-depth reviews of 
the ﬁ nancial statements at meetings attended as necessary by 
members of the Group’s operational and functional management 
teams as well as by the external auditors.

The Board of Directors holds at least one meeting a year that 
executive and internal directors do not attend.

The  Board  of  Directors  is  also  kept  regularly  informed  of 
questions, comments or criticism from shareholders, whether at 
meetings with shareholders or by mail, e-mail or conference call.

THE DIRECTORS’ CHARTER

The main elements of the Directors’ charter are described below.

Each director should constantly be mindful of the corporate 
interest,  exercise  good  judgment  (particularly  of  situations, 
strategies and people), and look to the future in order to identify 
the risks and strategic challenges that lie ahead. Each director 
should also be focused, active and engaged, and act with integrity.

Each director must personally own at least 400 Sodexo shares 
by  the  end  of  their  first  year  of  office  (except  for  directors 
representing employees to whom no such requirement applies 
in accordance with French law).

Except in cases of force majeure, all directors of Sodexo must 
attend Shareholders’ Meetings.

Directors are required to disclose to the Board all actual or 
potential conﬂ icts of interest and must abstain from discussing 
and voting on those matters.

Any director of Sodexo who obtains undisclosed information 
during the course of his or her duties is subject to insider trading 
legislation.  In  accordance  with  the  European  Market  Abuse 
Regulation, eff ective since July 3, 2016, the Company may draw 
up speciﬁ c insider lists if insider information has been identiﬁ ed 
but a decision has been taken to postpone the publication of the 
relevant information.

Directors are prohibited from trading in Sodexo securities as 
follows:

•  during  the  period  commencing  30  calendar  days  before 
the Board meeting that approves the half-year and annual 
consolidated ﬁ nancial statements for publication and up to 
and including the date of publication of those half-year and 
annual ﬁ nancial statements;

•  during the period commencing 15 calendar days prior to the 
date of publication of the consolidated ﬁ nancial information 
for the ﬁ rst and third quarters up to and including the date 
of their publication.

Transactions in the Company’s securities carried out by directors 
must be disclosed to the french securities regulator (Autorité 
des m archés f inanciers – AMF)  within three trading days of the 
transaction date. Consequently, directors are required to inform the 
Group Legal Department of all transactions in Sodexo securities.

INDUCTION AND TRAINING OF DIRECTORS

Upon joining the Board, all directors receive training aligned with 
their speciﬁ c needs. They meet the Chairwoman of the Board 
of Directors, the Chief Executive Offi  cer and Group executives. 

Meetings are also organized with certain executives and external 
advisors. Site visits are arranged to provide an overview of the 
Group’s businesses and a better understanding of each one. 
directors who so request may receive additional training on the 
Corporate Social Responsibility issues aff ecting the Group. Board 
members receive continuous training for as long as they remain 
on the Board.

In addition, in accordance with decree no. 2015-606 of June 3, 
2015, intended to ensure that directors representing employees 
are given the necessary time and training to enable them to 
fulfill  their  duties,  the  Board  of  Directors  has  decided  that 
directors  representing  employees  will  be  provided  the  time 
necessary to prepare their participation in each Board meeting 
and will also be given at least 20  hours’ training per year during 
their  mandate.  Since  joining  Sodexo’s  Board  of  Directors, 
Philippe Besson and Cathy Martin have participated in several 
training seminars organized by the French Institute of Directors 
(IFA) as well as in-house training delivered by several senior 
managers  of the Group ’s corporate functions. These training 
courses are open to all of Sodexo’s directors.

BOARD SPECIALIZED COMMITTEES

To support its decision-making process, the Board of Directors 
has created three specialized Committees of the Board, each 
with its own charter approved by the Board of Directors setting 
out their roles, responsibilities and operating procedures.

Broadly, the role of these specialized Committees is to examine 
speciﬁ c issues ahead of Board meetings and to submit opinions, 
proposals and recommendations to the Board of Directors.

Audit Committee

Composition as of August 31, 2018:

•  Emmanuel Babeau, who chairs the Committee in his capacity 

as a “ﬁ nancial expert”, independent director;

•  Robert Baconnier, independent director;

•  François-Xavier Bellon, director;

•  Soumitra Dutta, independent director;

•  Cathy Martin, director representing employees;

•  Sophie Stabile, independent director.

When Cathy Martin was appointed as a member of the Audit 
Committee, she was given specific in-house training on the 
Company’s accounting, ﬁ nancial and operating procedures.

All of the other Audit Committee members have recognized 
expertise  in  finance  and  accounting,  as  confirmed  by  their 
professional background (see section 5.2.1.3 ).

The  Audit  Committee  is  responsible  for  ensuring  that  the 
Group’s accounting policies (ﬁ nancial and extra- ﬁ nancial) are 
appropriate and consistently applied, particularly with respect 
to material transactions.

It examines the Company’s fraud detection procedures and its 
whistleblowing system. It is notably in charge of ensuring that 
a procedure is in place for dealing with complaints from third 
parties or employees (which may be anonymous) about any 
irregularities concerning accounting or internal control practices 
or any other area.

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It issues observations and recommendations to the Company’s 
senior management team about risk management governance, 
particularly  the  structure,  scope  and  organization  of  risk 
management.

It periodically reviews senior management reports on risk exposure 
(including social and environmental risks) and prevention, and 
ensures that eff ective internal controls are applied.

The Committee assesses proposals from external auditor ﬁ rms 
and submits candidate ﬁ rms for approval by the Shareholders’ 
Meeting.

It also performs an annual review of the fees paid to the external 
auditors of Sodexo and its subsidiaries and assesses auditor 
independence. In addition, it reviews the annual payment due 
under the service contract signed between Sodexo and Bellon SA 
(detailed in section 5.3.2 ), as well as any changes in its amount 
from one year to the next.

To perform its role, the Audit Committee is assisted by the Chief 
Executive Offi  cer, the Group Chief Financial Offi  cer, the Senior 
V ice President  Group Internal Audit  and the external auditors. 
It may also make inquiries of any Group employee, without any 
Company executives being present, and seek advice from outside 
experts.

During Fiscal 2018, the Chief Executive Offi  cer of Sodexo, the 
Group Chief Financial Offi  cer and the Senior V ice President Group 
Internal Audit  were regularly invited to attend Audit Committee 
meetings to discuss their activities and answer questions.

The Audit Committee met ﬁ ve times during the ﬁ scal year, with 
a 100% attendance rate.

Issues addressed by the Committee included:

•  review of the main risks and the risk management process;

•  progress report on the evaluation of internal control;

• 

Internal Audit plan for Fiscal 2018;

•  reports issued by the Internal Audit Department and progress 

reports on the implementation of its recommendations;

•  supervision of the independence, terms of engagement and 
fees of the external auditors of Sodexo and its subsidiaries 
in connection with the audit of the consolidated financial 
statements  for  Fiscal  2018.  The  Audit  Committee  also 
approved in advance all other engagements performed by 
the Group’s external auditors and by member ﬁ rms of their 
networks;

• 

follow-up  on  the  implementation  of  the  new  accounting 
standards on ﬁ nancial instruments, revenue and leases;

•  review of the annual payment due under the service contract 

signed between Sodexo and Bellon SA for Fiscal 2019;

•  ﬁ nancing;

•  the General Data Protection Regulation (GDPR )  compliance 

program;

•  organization of the Purchasing Department and its internal 

control system;

•  the compliance program for combating corruption;

•  review of the scope of consolidation;

•  review of the consolidated ﬁ nancial statements and notes, 

including note 4.24  on off -balance sheet commitments.

The Audit Committee also reviewed the annual consolidated 
ﬁ nancial statements for Fiscal 2017 and the interim consolidated 
ﬁ nancial statements for the ﬁ rst half of Fiscal 2018.

In addition to ﬁ ve formal meetings, the Chairman of the Audit 
Committee also had meetings during the ﬁ scal year with the 
Chief Executive Offi  cer, the Senior vice President Group Internal 
Audit , the Group Chief Financial Offi  cer and the external auditors.

Nominating Committee

Composition as of August 31, 2018:

•  Françoise Brougher, who chairs the Committee, independent 

director;

•  Nathalie Bellon-Szabo, director;

•  Sophie Bellon, director;

•  Cécile Tandeau de Marsac, independent director.

This Committee:

•  examines  proposals  made  by  the  Chairwoman  of  the 
Board  of  Directors  in  relation  to  director  nominations. 
The Nominating Committee assesses the knowledge and 
experience represented on the Board of Directors, as well as 
directors’ level of independence, and prepares a description 
of the skills that should be sought in new candidates for 
election to the Board. The Group may retain the services of 
external executive search ﬁ rms to identify a certain number 
of candidates, while ensuring that the backgrounds of short-
listed candidates are suffi  ciently diversiﬁ ed;

•  provides an opinion to the Board on director nominations. 
The  Committee  reviews  nominees  prior  to  their  election 
as directors, and where it sees fit assesses the situation 
of  directors  in  relation  to  the  criteria  concerning  the 
composition of the Board of Directors speciﬁ ed in the relevant 
legislation and in the Board’s Internal Rules. For compliance 
reasons, the Committee also provides the Board of Directors 
from  time  to  time  with  a  list  of  directors  qualifying  as 
independent;

•  provides  an  opinion  to  the  Board  of  Directors  on  the 
nomination of the Chief Executive Offi  cer and, as appropriate, 
one or more Deputy Chief Executive Offi  cers;

•  examines and provides an opinion to the Board of Directors 

on the Chief Executive Offi  cer’s succession plan;

•  ensures that succession plans are in place for the members of 

the Group Executive Committee;

•  regularly examines changes in the Executive Committee’s 
membership  and  the  succession  plans  in  place  for  the 
Committee’s members;

•  ensures that it is able to propose potential replacements at 
any time if the position of the Chief Executive Offi  cer were to 
suddenly become vacant, while maintaining conﬁ dentiality;

•  regularly reviews the training plans for directors as well as 

the welcome and induction process for new directors.

The  Nominating  Committee  met  four  times  in  Fiscal  2018, 
notably to review the appointment of a new independent director, 
the succession plans for the members of the Group Executive 
Committee, the training of directors representing employees, the 
composition of the Board’s specialized Committees, the Board’s 

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C O R P O R A T E   G O V E R N A N C E 

B o a r d   o f   D i r e c t o r s

The  Compensation  Committee  made  recommendations  to 
the  Board  of  Directors  on  issues  such  as  the  compensation 
packages  for  the  Company’s  corporate  officers,  executive 
incentive  programs  and  performance  share  grants  and  the 
related performance conditions. Accordingly, the Committee 
recommended to the Board that 917,880 free shares should 
be granted to 1,671 people on April 27, 2018 (with some of the 
shares subject to performance conditions), and expressed its 
opinion on the individual grants proposed and the performance 
conditions deﬁ ned for the Chief Executive Offi  cer.

BOARD MEETINGS DURING THE FISCAL YEAR

Board meetings

The Board of Directors met 13 times during Fiscal 2018, fulﬁ lling 
the minimum requirement of six meetings per year as stated in 
the Board of Directors Internal Rules. Before the Board’s annual 
September meeting, a full day is devoted to presentations given 
by the Group’s operations and corporate teams on strategic 
issues. Plans not reviewed during the September meeting are 
examined at subsequent Board meetings held during the ﬁ scal 
year.

The average attendance rate at Board meetings during Fiscal 
2018 was 92%.

diversity policy and its composition, the implementation of a 
skills matrix for directors, and director nomination proposals. 
The attendance rate at these meetings was 100%.

Compensation Committee

Composition as of August 31, 2018:

•  Cécile  Tandeau  de  Marsac,  who  chairs  the  Committee, 

independent director;

•  Emmanuel Babeau, independent director;

•  Philippe Besson, director representing employees;

•  Françoise Brougher, independent director.

This Committee makes proposals relating to the compensation 
policy  and  packages  of  corporate  officers,  the  executive 
compensation  policy,  performance-based  incentives,  and  in 
particular,  performance  share  grants  (including  the  related 
performance conditions), as well as employee share ownership 
plans. The principles and rules applied by the Board of Directors in 
determining the compensation and beneﬁ ts in kind provided to the 
corporate offi  cers are described in section 5.5.1  of this document.

In connection with its work, the Compensation Committee may 
use  external specialists .

The Compensation Committee met ﬁ ve times during the ﬁ scal 
year and the attendance rate was 88 %.

AGENDA AND ATTENDANCE RATE OF BOARD MEETINGS

DATE

MAIN ITEMS ON THE AGENDA

ATTENDANCE RATE

09/14/2017

Human resources
Benefits and Rewards activity
Energy & Resources Segment (On-site Services)
Personal and Home Services (concierge services and senior care)
On-site Services
Fiscal 2018 budget
Update on equal pay between genders
European Market Abuse Regulation
Update on acquisitions
Financing
Budget for directors’ fees

10/02/2017 and 10/10/2017 Acquisition files

11/14/2017

Approval of the Fiscal 2018 financial statements for publication
Finalization of the Board Report
Review of the annual earnings press release
Re-examination of regulated related-party agreements and commitments
Convening and preparation of the Annual Shareholders’ Meeting
Approval of the share repurchase program
Update on acquisitions
Financing

01/23/2018
Pre-Annual Shareholders’ 
Meeting

Business review for the opening months of Fiscal 2018
Chief Executive Officer’s compensation
Special unpaid assignment entrusted to Michel Landel as part of the handover process

01/23/2018
Post-Annual Shareholders’ 
Meeting

Share repurchase program
Chairwoman’s compensation
Arrival of the new Chief Executive Officer
Chief Executive Officer’s compensation
Board of Directors’ Internal Rules and limits on the Chief Executive Officer’s powers

02/22/2018

Financing

5

100%

100%

100%

93%

93%

71%

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DATE

MAIN ITEMS ON THE AGENDA

ATTENDANCE RATE

03/06/2018

Strategic agenda and operational governance
Defense Segment (On-site Services)
North America (On-site Services)
Approval of the fee payable under the service contract between Bellon SA and Sodexo 
for the period April 2018 to March 2019
Update on acquisitions

03/28/2018

First-half business performance

04/10/2018

Strategic agenda
Markets and competition
Approval of the interim consolidated financial statements for the first half of 
Fiscal 2018 for publication
Update on acquisitions
Update on share buybacks
Financing
Approval of the Interim Report for the first half of Fiscal 2018
Review of the first-half earnings press release.
Charter of the Compensation Committee
Meeting outside the presence of executive and internal directors

04/27/2018

Adoption of the 2018 free share plan

06/20/2018

Business review for the first nine months of Fiscal 2018
Financing
Health Care Segment (On-site Services)
Operational governance
Assessment of the Board’s performance: action plans
Update on acquisitions
Financing
Charter of the Nominating Committee

08/29/2018

Briefing on the Capital Markets Day (meeting with financial analysts and investors)

DIRECTORS’ ATTENDANCE RATES AT BOARD AND COMMITTEE MEETINGS DURING FISCAL 2018

93%

79%

100%

100%

93%

77%

Sophie Bellon

Emmanuel Babeau

Robert Baconnier

Patricia Bellinger*

Astrid Bellon

Bernard Bellon

François-Xavier Bellon

Nathalie Bellon-Szabo

Philippe Besson

Françoise Brougher

Soumitra Dutta

Michel Landel*

Cathy Martin

Sophie Stabile**

Cécile Tandeau de Marsac

BOARD MEETINGS

AUDIT COMMITTEE 
MEETINGS

COMPENSATION 
COMMITTEE MEETINGS

NOMINATING COMMITTEE 
MEETINGS

100%

100%

100%

67%

69%

100%

92%

92%

85%

100%

100%

100%

85%

100%

100%

100%

100%

100%

100%

100%

100%

60%

80 %

100%

100%

100%

100%

100%

100%

*  The directorships of Patricia Bellinger and Michel Landel expired on July 1, 2018.
**  The directorship of Sophie Stabile began as of July 1, 2018.

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Assessment of Board operating procedures

At least once a year, the Board of Directors devotes an agenda 
item to discussing its operating procedures, and every three 
years it organizes a formal external assessment.

The most recent formal assessment took place between April 
and May 2017 and its ﬁ ndings were presented and discussed at 
the Board meeting on June 14, 2017.

The general view of the Board’s operating procedures was very 
positive, with the directors emphasizing that the atmosphere 
on the Board of Directors is constructive, with active members 
free to express their opinions. The assessment also showed that 
there is a high degree of involvement in Board meetings and that 
over the past few years there has been a marked improvement 
in terms of performance and team spirit. In addition, t he Board’s 
membership structure has recently been strengthened with the 
arrival of new independent directors with signiﬁ cant expertise in 
ﬁ nance, human resources and operations.

The directors were generally satisﬁ ed with the Audit Committee’s 
operating  procedures  although  it  was  felt  that  more  time 
should be devoted to the Group’s risk mapping. The directors 
also expressed their conﬁ dence in the work performed by the 
Nominating Committee and the Compensation Committee and 
the general view was that these specialized Committees’ new 
membership structure and more frequent meetings will lead to 
further improvements.

The  directors  all  considered  that  their  fellow  members 
participate actively in the work of the Board of Directors. They 
appreciate the atmosphere at meetings of the Board of Directors 
and the climate of trust that prevails among its members. They 
indicated that they are willing to become even more involved 
and  suggested  certain  areas  for  improvement,  including 
discussing strategic issues in more detail, enhancing the talent 
management  process  and  continuing  to  make  progress  in 
relation to the Compensation Committee.

The  directors  were  unanimous  in  their  appreciation  of  the 
strategic review held in September with the presentation to the 
Board of business segments and they welcomed this unique 
opportunity  to  meet  and  discuss  with  the  members  of  the 
Group’s senior management team.

C O R P O R A T E   G O V E R N A N C E 

B o a r d   o f   D i r e c t o r s

ROLE OF THE CHIEF EXECUTIVE OFFICER AND 
THE EXECUTIVE COMMITTEE

The Chief Executive Officer has the authority to manage the 
operations and functions of the Group. Limits are placed on 
the powers of the Chief Executive Offi  cer. These limits are set 
by the Board of Directors based on the recommendations of the 
Chairwoman of the Board.

The Chief Executive Offi  cer is required to obtain the prior consent 
of the Board to pledge any security interest, endorsement or 
guarantee as follows:

•  term greater than 15 years, regardless of the amount (except 
in cases where the term is less than 25 years and the amount 
is less than 100 million euro, subject to prior approval of the 
Chairman of the Audit Committee);

•  term between 10 and 15 years and amount greater than or 

equal to 15 million euro;

•  term between 5 and 10 years and amount greater than or 

equal to 30 million euro;

•  term less than 5 years and amount greater than or equal to 

50 million euro.

The total amount for which the Chief Executive Offi  cer may give 
any security interest, endorsement or guarantee between Board 
meetings is limited to 150 million euro.

The Chief Executive Offi  cer must also obtain prior consent from 
the Board of Directors to commit the Company beyond certain 
amounts related notably to acquisitions of participations for 
more than 50 million euro per transaction (100 million euro 
with the approval of the Chairwoman of the Board), to disposals 
of  shares  in  companies  for  more  than  20  million  euro  per 
transaction, and for medium- and long-term new ﬁ nancing of 
more than 100 million euro. The Chief Executive Offi  cer must 
also obtain the prior consent of the Board for decisions relating 
to the startup of new activities. These limits are not enforceable 
against third parties, as the Chief Executive Officer has the 
broadest powers to bind the Company in its dealings with third 
parties.

Denis Machuel was appointed Group Chief Executive Offi  cer on 
January 23, 2018 to replace Michel Landel, who had held the 
position since September 1, 2005. Following his appointment as 
Chief Executive Offi  cer, Denis Machuel’s employment contract 
with a Sodexo subsidiary was terminated. To ensure a smooth 
transition, Denis Machuel was named Deputy CEO of Sodexo on 
September 1, 2017 and worked alongside Michel Landel until 
January 23, 2018.

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DENIS MACHUEL - CHIEF EXECUTIVE OFFICER

Born April 19, 1964

 Nationality: French

 Graduate of the École nationale supérieure d’informatique 
et de mathématiques appliquées de Grenoble (ENSIMAG)

 Holds  a Master  of Science degree in Computer Science from 
 Texas A&M University

Business address:
Sodexo
255, quai de la Bataille-de-Stalingrad
92130 Issy-les-Moulineaux (France)

 First appointed: January 23, 2018
Expiration of current term: Unlimited period 

Number of Sodexo shares held: 23,100 

Main role: Chief Executive Offi  cer, Sodexo

Background

Denis began his career with Schneider Electric in Egypt, before assuming a position as consultant at Altran, with Dassault Électronique 
as client. He remained with Altran for 16 years, holding several management positions including Altran Technologies UK’s Chief 
Executive Offi  cer, where he created the subsidiary. He then became Chief Executive Offi  cer of Altran Technologies France before 
becoming Director of Strategy and Off shore Operations.

In 2007, he joined Sodexo as Beneﬁ ts and Rewards Services Chief Executive Offi  cer for Central and Eastern Europe. In 2010, Denis took 
the lead of Beneﬁ ts and Rewards Services activity in Europe and Asia, before being appointed as Beneﬁ ts and Rewards Services Chief 
Executive Offi  ce worldwide in January 2012. Denis joined Sodexo’s Executive Committee in January 2014. In January 2015, he also became 
Group Chief Digital Offi  cer and in September 2016, Denis was also appointed as Personal and Home Services Chief Executive Offi  cer.

On January 23, 2018, Denis Machuel was appointed Chief Executive Offi  cer of Sodexo.

 Other positions and corporate offices held

Inside the Group

FRENCH COMPANIES

Outside the Group

FRENCH COMPANIES

•  Chairman  of  the  Board  of  Directors:  Sodexo  Pass 

None 

International 

FOREIGN COMPANIES

•  Chairman of the Board of Directors: Sodexo Pass Tunisie 
(Tunisia);   Shangai  Sodexo  Pass  Service  Limited  (China);  

Sistemas de Incentivos Empresariales (Panama) 

•  Member of the Board of Directors: Sodexo Pass Portugal 

Unipessoal Lda (Portugal);  Inspirus LLC (United States ) 

•  Member  of  the  Management  Board:  Sodexho  Pass 

Venezuela CA (Venezuela) 

•  Member of the Supervisory Board: iAlbatros Poland SA 

(Poland) 

FOREIGN COMPANIES

•  Member of the Board of Directors: Catalyst 

Other corporate offices held within the past five years but no longer held

•  Chief Executive Officer: Sodexo Pass GmbH  (Germany) 
•  Managing Director: Sodexo Pass Romania SRL (Romania) 
•  President: Sodexo Ventures France (France);  Amelis Développement et Franchise (France);  Déﬁ  Crèche (France);  Pro’formance (France);  AMD 

Réalisation (France) 

•  Chairman of the Board of Directors: Sodexo Beneﬁ ts and Rewards Services Polska SPP ZOO (Poland);  Sodexo Motivation Solutions 
Mexico SA de CV (Mexico);  Sodexo Pass CIS SARL (Russia);  Circles Sweden AB (Sweden);  Sodexo Avantaj Ve Odullendirme Hizmetleri AS 

(Turkey);  Sodexo Beneﬁ cios de Innovacion Panama SA (Panama) 

•  Member of the Board of Directors: Imagor SA (Belgium);  Sodexo Pass Belgium (Belgium);  Sodexo SVC India Private Limited (India);  Smart 
Prepaid (France);  Sodexo Travel and Business UK Limited (United Kingdom );  Sodexo Pass Do Brasil Gestao de Despesas e Frota Ltda (Brazil);  

Foco Sistemas Para Transaçoes Eletronicas Eireli (Brazil);  Motivcom (United Kingdom );  AYMTM Limited (United Kingdom );  My Family Care 

Vouchers Limited (United Kingdom );  P&MM Limited (United Kingdom );  Sodexo Beneﬁ ts and Rewards Services Taiwan Co Ltd (Taiwan);  Sodexo 

SVC Uruguay SA (Uruguay);  Sodexo Soluciones de Motivacion Espana SAU (Spain);  Conecs (France);  Sodexo Pass Do Brasil Servicos de 

Inovacao Ltd (Brazil);  Sodexo Pass France SA (France);  Sodexo Pass Do Brasil Serviços e Comércio SA (Brazil);  Sodexo Pass Ceska Republika AS 

(Czech Republic);  Sodexo Pass Luxembourg SA (Luxembourg);  CK Franchising Inc. (United States );  Sodexo Pass Do Brasil Corretora De Seguros 

Ltda (Brazil);  Sodexo Home Care Services UK Ltd (United Kingdom );  Circle Company Associates LLC (United States );  Prestige Nursing Limited 

(United Kingdom );  Prestige Nursing (Franchise) Limited (United States );  Prestige Medical Recruitment Limited (United Kingdom );  Padsca 

Limited (United Kingdom );  Elite Care (United Kingdom ) Limited (United Kingdom );  CK Holdco Inc. (United States );  Sodexo Pass Vietnam 

Company Limited (Vietnam);  Sodexo Pass USA (United States );  Vouchers Acquisiton corporate Holding BV (Netherlands);  SBR Services Asia 

Private Limited (Singapore);  Sodexo Pass Luxembourg (Luxembourg);  Vivaboxes UK (United Kingdom );  Sodexo Mobility and Expense Limited 

(United Kingdom );  Sodexo Circles UK Limited (United Kingdom );  Sodexo Motivation Solutions UK Limited (United Kingdom ) 

•  Chairman of the Management Board: Sodexo Ventures France (France);  Crèche Attitude (France) 
•  Member of the Management Board: Sodexo Beneﬁ ts and Rewards Services Austria Gmb H (Austria);  Circles France (France)
.

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B o a r d   o f   D i r e c t o r s

Executive Committee

The  Chief  Executive  Officer  is  supported  by  an  Executive 
Committee.

 The Executive Committee meets regularly, and is the linchpin 
of the management structure. It is responsible not only for 
discussing and developing strategies to be recommended to the 
Board of Directors, but also for monitoring the implementation 
of these strategies once the Board of Directors has approved 

them. The Executive Committee tracks the implementation of 
action plans, monitors business unit performance, and assesses 
the potential benefits of growth opportunities and the risks 
inherent in its business operations.

As of August 31, 2018, Sodexo’s Executive Committee had 19 
members (including Denis Machuel),  37% women  with  seven  
 diff erent nationalities:

Denis Machuel

  Chief Executive Officer 

Nathalie Bellon-Szabo

  CEO, Sports and Leisure 

Cathy Desquesses

Johnpaul Dimech

Lorna Donatone

Sean Haley

Nicolas Japy

Tony Leech

  Chief People Officer 

  Region Chair, Asia Pacific 

  Region Chair, North America, and CEO, Geographic Regions 

  CEO, Service Operations  and Region Chair, UK & Ireland 

  CEO, Energy & Resources 

  CEO, Government & Agencies 

Satya-Christophe Menard

  CEO, Schools & Universities 

Sylvia Metayer

  CEO, Corporate Services 

Belen Moscoso Del Prado

  Chief Digital and Innovation Officer 

Anna Notarianni

  Region Chair, France 

Marc Plumart

Marc Rolland

Dianne Salt

Didier Sandoz

Aurélien Sonet

Bruno Vanhaelst

Damien Verdier

  CEO, Health Care and Seniors 

  Chief Financial Officer 

  Chief Communications Officer 

  CEO, Personal and Home Services 

  CEO, Benefits and Rewards Services 

  Chief Marketing Officer 

  Chief Strategy and Corporate Responsibility Officer

The Executive Committee is supported by a Group Investment 
Committee whose members comprise the Group Chief Executive 
Officer,  the  Group  Chief  Financial  Officer  and  one  or  more 
CEOs depending on the investment projects concerned. This 
Committee considers and approves:

•  signiﬁ cant new contracts for the Group;

•  any plan to invest in property, plant and equipment or intangible 
assets as well as any cumulative overrun  of the  investment 
budget approved at the beginning of the ﬁ scal year;

•  any plan to invest in or acquire companies;

•  disposals of shareholdings.

In Fiscal 2018, the Group Investment Committee formally met 
34 times.

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COMPLIANCE WITH THE AFEP-MEDEF CODE OF CORPORATE GOVERNANCE FOR LISTED COMPANIES

Sodexo complies with the AFEP-MEDEF Code of corporate governance for listed companies, as amended in June 2018, except for the 
following recommendations:

AFEP-MEDEF RECOMMENDATIONS

SODEXO PRACTICE/EXPLANATIONS

Independence  criteria  for  Board 
members (section 8.5.6 of the Code) – 
Among  the  criteria  to  be  evaluated  in 
considering  whether  a  Board  member  is 
independent, is not having been a Board 
member for more than 12 years.

Proportion  of  independent  members 
o n   t h e   N o m i n a t i n g   C o m m i t t e e 
(section  16.1  of  the  Code)  –  The  Code 
recommends  that  the  majority  of  the 
members  of  Nominating  Committees  be 
independent directors.

On February 9, 2017, Mr. Robert Baconnier had been a director of Sodexo for more than 12 years.
Robert Baconnier is a financial expert and has contributed significantly to the Board’s discussions 
notably concerning the Group’s finances, acquisitions, tax issues, risk analysis and internal 
control. As a result of his in-depth knowledge of the Group, he chaired the Audit Committee for 
 several years until 2017.
The Board of Directors has considered  the objectivity that Robert Baconnier has always shown 
during the Board’s debates and discussions as well as his ability to convey his opinions and 
beliefs and make balanced judgments in all circumstances. It considers  that his personality, 
leadership qualities and underlying commitment are  all evidence of his independent mindset.
Taking all of these elements into consideration, the Board of Directors believes that Robert 
Baconnier makes significant and constructive contributions to the Board of Directors and 
 that  freedom of judgment constitutes the essential criterion for a director’s independence. 
His experience is essential to the Group in view of the recent  changes in independent directors and 
the inclusion  directors  representing employees on the Board of Directors. These qualities, along 
with his deep understanding of the Group’s challenges and goals, mean that Robert Baconnier 
continues to make an important contribution to  the Board’s discussions and perspectives on 
 decisions.
In view of the above, the Board of Directors has decided not to apply the independence criterion 
limiting Board members’ terms of office to 12 years and to continue to qualify Robert Baconnier 
as an independent director.
T he reappointment  of Robert Baconnier is proposed for a one-year term. Moreover, Robert Baconnier 
has informed the Chairwoman of the Board of his intention to no longer sit on the Audit Committee 
effective following the next review of its composition on January 22, 2019.

Sodexo’s Nominating Committee is chaired by an independent director  and currently 50% of its 
members are independent directors.
However, in its 2016 Activity Report the French national Corporate Governance agency (Haut 
Comité de Gouvernement d’Entreprise) specified that having a proportion of 50% independent 
directors on this Committee was not a serious shortcoming.

ATTENDANCE OF SHAREHOLDERS AT THE ANNUAL 
SHAREHOLDERS’ MEETING

INFORMATION THAT COULD HAVE AN IMPACT 
IN  THE EVENT OF A PUBLIC TENDER OFFER

Specific  procedures  pertaining  to  the  participation  of 
shareholders  at  the  Shareholders’  Meeting  are  indicated 
in  article  16  of  Sodexo’s  bylaws  (see  section  6.5.10   of  this 
document).

The Company considers that its ownership structure and voting 
rights, which are set out in section 6.3.1  of this document, are 
the items that it is required to disclose pursuant to article L.225-
100-3 of the French Commercial Code, which provides a list of 
items that require disclosure if they could have an impact in the 
event of a public tender off er.

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O t h e r   i n f o r m a t i o n

 5.3  OTHER INFORMATION 

5.3.1  Other information concerning corporate officers and senior 

management of the Company

Family relationships within the Board of Directors are as follows:

•  Astrid Bellon, Nathalie Bellon-Szabo and François-Xavier 
Bellon (directors) are the sisters and brother of Sophie Bellon, 
Chairwoman of the Board of Directors;

•  Bernard Bellon (director) is the uncle of Sophie Bellon;

•  Nathalie Bellon-Szabo (director) is a member of Sodexo’s 

Executive Committee.

No  loans  or  guarantees  have  been  made  or  given  to  either 
members of the Board of Directors or senior management by 
Sodexo or by any Group company.

No assets necessary for the Group’s operations are owned by 
either members of the Board of Directors or senior management 
or by their families.

There are no potential conﬂ icts of interest between the duties 
to  Sodexo  of  members  of  the  Board  of  Directors  or  senior 
management and their private interests. In particular:

•  Mr. and Mrs. Pierre Bellon and their four children control 
72.6% of Bellon SA, which in turn holds 42.2% of the share 
capital of Sodexo and 57.2% of the exercisable voting rights 
as of August 31, 2018. Agreements prevent them from selling 

their Bellon SA shares to third parties. Mr.  and Mrs. Pierre 
Bellon  and  their  children  entered  into  an  agreement 
in  June  2015  to  prevent  direct  descendants  of  Mr.   and 
Mrs. Pierre Bellon from freely disposing of their Bellon SA 
shares for 50 years. Bellon SA’s only asset is its holding in 
Sodexo; Bellon SA has no intention of selling this holding to 
a third party;

•  other members of the Bellon family hold 7.8% of the shares 

of Bellon SA.

As far as the Company is aware, no member of the Board of 
Directors or of the senior management has, during the past ﬁ ve 
years, been:

•  convicted of fraud;

•  associated with a bankruptcy, receivership or liquidation;

•  offi  cially incriminated and/or subject to any offi  cial public 

sanction issued by a statutory or regulatory authority;

•  prohibited  by  a  court  from  acting  as  a  Board  member, 
a  Supervisory  Board  member,  or  a  member  of  senior 
management  of  an  issuer,  or  from  participating  in  the 
management or business aff airs of an issuer.

Transactions in Sodexo shares carried out by executives, members of their 
family and related persons

As required under article 223-26 of the french securities regulator ’s (Autorité des m archés f inanciers – AMF) General Regulation, 
transactions in Company shares by executives, related persons and persons with close ties to these executives declared to the AMF 
pursuant to article L.621-18-2 of the French Monetary and Financial Code were as follows during Fiscal 2018:

5

Bernard Bellon (director) - Persons with close ties to him

Purchase of 10,000 shares

September 15, 2017

€100

TRANSACTION TYPE

TRANSACTION DATE

AVERAGE PRICE

Bernard Bellon (director)

Bernard Bellon (director)

Bernard Bellon (director)

Sale of 9,437 shares

September 22, 2017

€103.50

Sale of 563 shares

September 25, 2017

€103.50

Sale of 12,000 shares

September 29, 2017

€105.50

Bernard Bellon (director) – Persons with close ties to him

Purchase of 1,189 shares

October 11, 2017

€102.50

Bernard Bellon (director) – Persons with close ties to him

Purchase of 20,000 shares

November 17, 2017

€102.66

Bernard Bellon, director

Bernard Bellon, director

Bernard Bellon, director

Michel Landel (Group Chief Executive Officer until January 23, 2018)

Sale of 10,000 shares

November 21, 2017

€107.70

Sale of 10,000 shares

November 29, 2017

€109.80

Sale of 20,000 shares

December 5, 2017

€112.70

Exercise of 
120,000 stock options

December 8, 2017

€43.37

Bernard Bellon (director)

Sale of 20,914 shares

December 19, 2017

€113.92

Bernard Bellon (director) – Persons with close ties to him

Purchase of 20,000 shares

January 12, 2018

€105.50

Bernard Bellon (director) – Persons with close ties to him

Purchase of 8,879 shares

February 1, 2018

€100.80

Bernard Bellon (director) – Persons with close ties to him

Purchase of 1,121 shares

February 2, 2018

€98.82

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TRANSACTION TYPE

TRANSACTION DATE

AVERAGE PRICE

Bernard Bellon (director) – Persons with close ties to him

Purchase of 12,811 shares

February 20, 2018

€98.46

Astrid Bellon (director)

Purchase of 1,000 shares

April 26, 2018

€81.02

Michel Landel (director until July 1, 2018)

Sale of 115,017 shares

May 23, 2018

€85.44

Michel Landel (director until July 1, 2018)

Exercise of 
135,000 stock options

May 23, 2018

€51.40

Sophie Stabile (director as from July 1, 2018)

Purchase of 100 shares

July 30, 2018

€93.90

Controlling shareholder measures

Sodexo has put in place a series of measures in order to ensure 
that the control over the Company is not exercised in an abusive 
manner. Examples of these measures include:

(a)  the  presence  of  six  independent  directors  among  the 
13  members  of  the  Board  of  Directors  (including  two 
directors representing employees) as of August 31, 2018;

(b)  the fact that the Company has put in place three specialized 
Committees, which are all chaired by independent directors 
and  whose  members  include  independent  directors,  as 
recommended  in  the  AFEP-MEDEF  Code  of  corporate 
governance for listed companies;

(c)  the separation of the roles of Chairman of the Board and 

Group Chief Executive Offi  cer;

(d)  the disclosures within this document of the relationship 

between Sodexo and Bellon SA:

•  these  include  the  ownership  interest  of  Bellon  SA  in 
Sodexo (changes in which are disclosed in section 6.3  of 
this document),

•  the Sodexo shares are the only assets held by Bellon SA; 
consequently, the interests of Sodexo’s shareholders are 
aligned with those of Bellon SA’s shareholders and the 
capital ties between the two companies do not generate 
any conﬂ icts of interest,

•  since 1991, a service agreement between Bellon SA and 
Sodexo has been in operation (described below in the 
paragraph concerning related-party agreements). The 
fees payable under this agreement and changes in these 
fees are reviewed annually by the Audit Committee.

5.3.2  Related-party agreements and commitments

Agreements and commitments 
submitted for approval at the Annual 
Shareholders’ Meeting of January 22, 
2019

Agreements and commitments 
approved by the shareholders in 
previous years that remained in force 
during Fiscal 2018

Information concerning the commitments given by the Company 
to Denis Machuel in his capacity as the new Chief Executive 
Officer since January 23, 2018 concerning his non-compete 
commitments , supplemental pension plan and supplemental 
health and benefit plans, and which fall within the scope of 
article L.225-42-1 of the French Commercial Code, are described   
in  the  presentation  of  the  resolutions  submitted  to  the 
Annual Shareholders’ Meeting to be held on January 22, 2019 
(section 7.2  of this Registration Document) and in the Statutory 
Auditors’  Special  Report  (section  4.4.2   of  this  Registration 
Document).

Service agreement between Bellon SA and Sodexo, 
in which Sophie Bellon, Nathalie Bellon-Szabo, 
Astrid Bellon, Bernard Bellon and François-Xavier 
Bellon are corporate offi  cers and exercise control 
as deﬁ ned in article L.233-3 of the French 
Commercial Code.

The  service  agreement  between  Bellon  SA  and  Sodexo  S.A.  
which fall within the scope of article L.225-38 of the French 
Commercial Code, approved by shareholders in previous years 
has remained in force during Fiscal 2018. This agreement was 
subject to an annual review by the Board of Directors and the 
Statutory Auditors were informed thereof.

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Information on this service agreement is provided below as 
well  as  in  the  Statutory  Auditors’  Special  Report  set  out  in 
section 4.4.2  of this Registration Document.

the contract are the annual billed fees are reviewed every year 
by the Board of Directors (with the abstention from voting of the 
directors from Bellon’s family).

 A service agreement has been in place between the Company 
and Bellon SA since 1991.

At  its  meetings  on  November  15,  2016  and  July  10,  2017, 
the Board of Directors, on the recommendation of the Audit 
Committee, approved  changes to this agreement which were 
effective   on  November  17,  2016  and  was  approved  at  the 
Shareholders’ Meeting of January 23, 2018.

BENEFITS OF THE AGREEMENT FOR SODEXO

Under the terms of this agreement, Sodexo benefit from  the 
professional experience and expertise of the three Bellon SA 
Managers.

FINANCIAL TERMS OF THE AGREEMENT

Under the terms of the agreement, Bellon SA invoices Sodexo 
for  the  compensation  of  the  Chief  Financial  Officer,  Chief 
Human Resources Officer, and Chief Strategy Officer during 
the  secondment  period.  In  compliance  with  the  law,  their 
compensation is fully rebilled, including the ﬁ xed and variable 
portions, as well as any related payroll taxes.

The  total  fees  billed  under  this  agreement,  and  changes 
compared with the prior year, are reviewed annually by the 
Audit Committee. In addition, and in compliance with the law, 

The annual billed fees payable to Bellon SA are approved each 
year by the Board of Directors of Sodexo (without directors who 
are members of the Bellon family taking part in the vote).

In Fiscal 2018, the fees billed by Bellon SA under this agreement 
amounted  to  3,709 ,500  euro  excluding  taxes,  relating  to 
the compensation (including payroll taxes) paid to the Chief 
Financial  Officer,  Chief  Human  Resources  Officer,  and  Chief 
Strategic Planning Offi  cer.

Other agreements and commitments

Moreover, the commitments made by the Company to Sophie 
Bellon (concerning her supplemental health and beneﬁ t plans) 
and Michel Landel (concerning his indemnity for loss of offi  ce, 
supplemental pension plan, supplemental health and benefit 
plans and non-compete commitments  ) governed by article L.225-
42-1 the French Commercial Code and approved by shareholders 
in previous years have remained in force during Fiscal 2018.

These commitments were subject to an annual review by the 
Board of Directors and the Statutory Auditors were informed 
thereof. Information on these commitments is provided in the 
Statutory Auditors’ Special Report set out in section 4.4.2   of this 
Registration Document.

5.3.3 

 Vigilance Plan

The Vigilance Plan(1) presents  the measures put in place 
within  the  Group  to  identify  risks  and  prevent  serious 
impacts in term s  of (i) human rights and fundamental 
freedoms, (ii) the health and safety of persons, and (iii) 
 environment resulting from our activities and those of our 
subcontractors and suppliers.

Sodexo has been actively managing  these risks for a long 
time. The new legal requirements regarding the duty of 
vigilance therefore reflect the values and actions long 
championed  by  the  Group  and  its  founder,  Mr.  Pierre 
Bellon.

Sodexo operates in over 72 countries in a variety of complex 
economic and socio-cultural contexts.

The Vigilance Plan covers Sodexo and its subsidiaries’ activities 
and  is  perfectly  in  line  with   our  Corporate  Responsibility 
Roadmap. This ﬁ rst vigilance plan was constructed around the 
ﬁ ve obligations prescribed by law:

(i)  risk mapping derived from the Company’s activities and 
those of its subsidiaries, subcontractors, and suppliers;

5

(ii)  establishment  of  procedures  for  regular  assessments 
of the Company’s situation and that of its subsidiaries, 
subcontractors, and suppliers with whom the Group has an 
established commercial relationship;

(iii)  identiﬁ cation and implementation of appropriate actions 
to  mitigate  risks  or  prevent  serious  impacts  on  human 
rights and fundamental freedoms, health and safety, or the 
environment;

(iv)  establishment of an internal alert mechanism;

(v)  operational process for monitoring measures implemented 

to ensure the eff ectiveness of the Plan.

The diagram below details the measures implemented by the 
Group in accordance with the ﬁ ve obligations concerning three 
categories of issues (human rights and fundamental freedoms, 
health and safety, environment). These measures are described 
in  more  details    in  section   2  of  this  Document.  Information 
regarding the ﬁ ft  h obligation is also included in section  5.4 of 
this Registration Document.

Below are  long-standing initiatives already  implemented by the 
Group on certain measures and their evaluation .

1  In accordance with article L.225-102-4 of the French Commercial Code.

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MAIN ELEMENTS OF THE GROUP’S VIGILANCE PLAN

 RISK MAPPING

REGULAR E VALUATION PROCEDURES 
COMPANY-WIDE

•   Materiality Assessment
•   Risk management approach
•   Risk Mapping (see Risk Management 

Section)

•   Identification of 3 Risk categories: 
Textile: Uniforms; Seafood: Tuna; 
Agricultural products: Beef(1)

•   Responsible Business Conduct 

implementation

•   Materiality Assessment
•   Risk management approach
•   Risk Mapping (see Risk Management 

•   Sodexo’s global Health and Safety policy
•   Responsible Business Conduct 

implementation

Section)

•   Zero harm culture 

HUMAN 
RIGHTS

HEALTH 
AND 
SAFETY

•   Materiality Assessment
•   Risk management approach
•   Risk Mapping (see Risk Management 

Section)

•   Identification of 3 Risk categories: 
Textile: Uniforms; Seafood: Tuna; 
Agricultural products: Beef(1)

•   Standard Operating Procedures (SOPs) 

for Site Managers

•   Training on sustainable practices
•   Implementation of Group policies: Palm 

Oil,  Seafood, Eggs, Animal Welfare
•   Sodexo’s Supplier Code of Conduct
•   Risk management framework

ENVIRONMENT

1  These three product categories come from industries which are known to be at risk; more speciﬁ cally: risks related to the respect of human rights (forced labor, 
undeclared work, or child labor) and risks related to environmental impact (carbon emissions, conservation of natural resources, and the management of 
agricultural inputs).

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C O R P O R A T E   G O V E R N A N C E 

O t h e r   i n f o r m a t i o n

ALERT 
AND REPORTING  MECHANIS M 

APPROPRIATE ACTIONS 
TO MITIGATE RISKS  OR PREVENT 
SERIOUS HARM

FOLLOW UP ON IMPLEMENTED 
MEASURES AND EVALUATION OF THEIR 
EFFECTIVENESS 

•    “Speak up” grievance mechanism 

(extending from employees 
to suppliers)  

•      Respect of Ethical principles and Values
•   Work Contract clauses 
•   Statement of Business Integrity
•   Supplier Contract Management 

(Contract clauses; Right Supplier, 
R ight T erms)

•   Regular supplier review process 
(Certification, m itigation and 
remediation) 

•   Third-party independent Audit (KPMG)
•   Other Independent Audits
•    Biennial Engagement Survey
•   External certifications
•   Self-assessments 

•      Health and Safety Reporting 

•      Deployment of global workplace 

Tool (Salus)

•   “Speak up” grievance mechanism 

(extending from employees 
to suppliers) 

health and safety policies

•   Zero harm culture
•   Work Contract clauses 
•   Supplier Contract Management (Contract 

clauses; Right Supplier, R ight T erms)

•   Regular supplier review process 
(Certification, m itigation and 
remediation)

•   Third-party independent Audit (KPMG)
•   Other Independent Audits
•   External certifications and compliance 

to standards (e.g. OHSAS 18001)
          Self-assessments 

• 

•      “Speak up” grievance mechanism 

(extending from employees 
to suppliers)

•      Sales Academy (Environment)
•   Site Manager Academy (Environment)
•   Risk management framework for Sodexo 

buyers

•   Supplier Contract Management 

(Mandatory Signature and specific 
contract clauses)

•   Regular supplier review process 
(Certification, m itigation and 
remediation)              

•   Third-party independent Audit (KPMG)
•   Other Independent Audits
•    Biennial Engagement Survey
•   External certifications
•   Self-assessments 

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REGULAR EVALUATION PROCEDURES: SODEXO AND ITS SUPPLIERS

2008:  

2014:  

 Formalization and publication of the ﬁ rst Sodexo supplier c ode of c onduct , which is updated every 
three years. This updates process is vital to ensure that the Code of conduct remains in line with the 
Group’s internal policies and our stakeholders’ requirements. In addition, suppliers are required to share 
Sodexo’s expectations with their own supply chain.

 Creation of the Suppliers Guide to help suppliers, service providers, subcontractors and other partners 
(collectively referred to as “Suppliers” along with their subsidiaries), in understanding and applying the 
Sodexo supplier c ode of c onduct . All of our suppliers are also asked to adhere to this policy, which forms 
part of all of our contracts.

2017:   Most recent update of the Sodexo supplier c ode of c onduct  and its accompanying Guide.

2018:   Creation of the Code of Business Integrity.

2018:  

 Monitoring of Suppliers: Sodexo is continuing the deployment of its online registration tool in order to 
centralize information about its suppliers. This tool incorporates all of Sodexo’s requirements relating 
to capacity, certiﬁ cation, geographical coverage, and regulation. The tool is also used to collect data 
on social responsibility. Suppliers beneﬁ t from a simple interface, which enables them to provide all 
the required information easily. The advantage for Sodexo is that the tool provides a “gateway” for the 
collection of information adapted to the Group’s social responsibility requirements. Suppliers are invited 
to respond to various questions linked to our social responsibility commitments and are required to 
update them throughout their relationship with Sodexo.

At the end of August 2018, more than 11,000 suppliers were assessed using this tool.

MECHANISM FOR ALERTING AND COLLECTING REPORTS: “SODEXO SPEAK UP”

This internal alert mechanism allows employees,  worldwide, to report any suspicion of abusive practices, any 
violation of ethical standards, or any attack on a person’s integrity or safety. A procedure for processing the 
reports has also been established. Sodexo Speak Up provides an alternative channel for Group employees to voice 
their concerns either anonymously or not, according to each individual’s wishes and the local legislation, and in 
their own languages.

Furthermore, through campaigns across all of our sites, employees are encouraged to contact their manager 
or Human Resources Department  when they have concerns regarding ethics, respect for human rights, or 
compliance with safety procedures.

Sodexo Speak Up is currently being gradually rolled out in each country to replace the local alert systems that 
were already in place.

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GDPR COMPLIANCE MEASURES

As vigilance is a concern for everyone, and everybody is responsible, Sodexo has put in place a program to ensure 
the protection and security of the personal data of its employees, customers, and consumers.

What is GDPR?

2018 was the year of  the implementation of “GDPR” or the General Data Protection Regulation(1) , which entered 
into force on May 25, 2018, as well as the adaptation of the French “Informatique et libertés” law (Data Protection 
Act)(2). This new legal framework for the protection of personal data, applicable beyond the borders of the 
European Union, was an opportunity for the Sodexo Group to roll out governance and a comprehensive compliance 
management program for GDPR, as well as for other data protection laws applicable in other countries.

What measures have been implemented by Sodexo to comply with GDPR?

A  Group  Data  Protection  Officer  and  a  team  dedicated  to  the  roll-out  of  this  comprehensive  compliance 
program have been appointed. Together with the IT teams, an inventory of personal data processing operations 
implemented by Sodexo in Europe has been compiled. This inventory project is reﬂ ected in particular through the 
drawing up  of personal data processing records , a comprehensive policy on data protection, and a practical guide 
on GDPR compliance , intended to harmonize the roll-out  of Sodexo entities in  necessary measures.

Sodexo has also decided  to submit Binding Corporate Rules to the French supervisory authority for data 
protection, the  National Commission for Information Technology and Civil Liberties (CNIL). This is a legal 
framework proposed by GDPR, which allows multinational companies to submit a binding Code of conduct for 
personal data protection. Once approved by the CNIL, this Code will allow Sodexo to oversee intra-group ﬂ ows of 
personal data, to share common compliance management rules with all Group entities, but also to have the tools 
to ensure the eff ective application of these rules regardless of the country in which Sodexo is operating (audits, 
training, etc.).

5

1  Regulation (EU) 2016/679 of the European Parliament and of the Council of April 27, 2016 on the protection of natural persons with regard to the processing 

of personal data and on the free movement of such data, and repealing Directive 95/46/EC.

2  French Law No. 78-17 of January 6, 1978 relating to information technology, data ﬁ les, and civil liberties, as amended by Law No. 2018-493 of June 20, 2018.

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5.4  RISK MANAGEMENT

5.4.1  Group Policies

Sodexo  faces  a  number  of  internal  and  external  risks  and 
uncertainties  in  the  conduct  of  its  business  and  in  the 
implementation of its strategy. To confront these risks and 
uncertainties, the Group has established an organization and 
policies intended to identify, evaluate, prevent and manage 
these risks in order to limit any adverse impacts.

Internal control procedures are established by the Company 
and implemented under its responsibility, and are intended to 
ensure:

•  compliance with laws and regulations and application of 

Group policies;

•  the  effectiveness  of  the  Company’s  internal  processes, 
notably those concerning the safeguarding of its assets;

•  the reliability and integrity of financial and non-financial 

information.

Internal control procedures play a major role in the conduct of 
the Group’s business, by contributing to the prevention and 
management of risks.

Strategy, long-term objectives 
and general policies of the Group

The Group’s strategy, long-term objectives and general policies, 
as  defined  initially  by  Mr.  Pierre  Bellon  and  subsequently 
adjusted over the years by the Board of Directors, the Chief 
Executive Offi  cer and the Executive Committee, are set out in the 
ﬁ rst chapter of this Registration Document and are presented at 
the start of each Shareholders’ Meeting.

The Group’s internal control procedures rely on these principles 
and on the related policies.

General policies of the Group

Group policies cover such areas as strategic planning, human 
resources development, finance, procurement, consumer and 
customer focus, food safety and hygiene, sustainable development 
and Internal Audit . They comprise four parts: goals, procedures, 
improvement metrics, and research and innovation. The Group 
continues to develop its policies to make them easier to understand 
and apply. The Group is also continuing to work on adding new 
policies  on  internal  and  brand  communication,  research  and 
innovation and the development of digital technologies.

In light of the Group’s changing environment and its expanding 
portfolio of services and solutions, these policies are regularly 
updated and approved by the Board of Directors.

Strategic planning process

The Board of Directors and senior management work together to 
constantly improve the strategic planning process and promote 
buy-in at all levels of the organization.

The Group’s fundamental principles demonstrate how Sodexo 
was able to start from nothing in 1966 and then become a major 
international group with 460 ,000 employees, in 72 different 
countries, and the world leader in Quality of Life services. In 
a  profoundly  changing  world,  Sodexo  has  defined   priorities 
to enable it to continue to grow its revenues and underlying 
operating proﬁ t in the future.

Periodically,  and  particularly  during  the  September  Board 
meeting, the Group Chief Executive Officer, the heads of the 
Group  corporate  functions  and  the  Chief  Executive  Officers 
of the main segments and activities present their strategic 
plans. Through this process, directors and senior executives all 
contribute to evolving the strategy and policies of the Group.

The process leads to the preparation of a consolidated annual 
budget that is submitted to the Board of Directors for approval.

Human resources development policy

The Group’s three overriding human resources priorities are:

•  to meet staffi  ng requirements in terms of numbers, quality 

and competencies;

•  to rank among the world’s employers most appreciated by 

its employees;

•  to promote the emergence of a growing number of internal 

entrepreneurs by giving priority to internal promotions.

The main human resources policies are focused on: the proﬁ le of 
a Sodexo leader and senior manager, Group organizational rules, 
succession planning for senior managers, international mobility, 
senior managers’ training and skills enhancement, employee 
engagement, senior managers’ compensation, and innovation 
and research in the area of human resources administration.

Finally, annual tracking of improvement metrics by the Executive 
Committee  and  Board  of  Directors  should  serve  to  validate 
action  plans  aimed  at  advancing  these  policies,  including 
engagement surveys, employee retention, internal promotion, 
and the representation of women in senior management.

Sodexo  is  also  making  significant  advances  in  the  area  of 
diversity, particularly in relation to gender balance at all levels 
of  the  organization,  and  is  establishing  partnerships  with 
organizations for people with disabilities.

Financial policies

The Group’s ﬁ nancial objectives are twofold, namely:

TO PRESERVE THE GROUP’S FINANCIAL INDEPENDENCE.

Financial independence is a fundamental principle, because it 
enables the Group to hold ﬁ rm to its values, pursue a long-term 
strategic vision, ensure management continuity and guarantee 
the business’s lasting success.

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Sodexo’s financial independence is guaranteed by the family 
shareholder. As of August 31, 2018, Sodexo’s holding company, 
Bellon SA, held 42.2% of the shares and 58.2% of the exercisable 
voting rights. It is based on three simple principles:

•  choosing low capital-intensive activities;

•  continuously  maintaining  sufficient  liquidity  to  fund 
growth, reimburse medium-term debt, and pay dividends to 
shareholders;

•  preserving a strong balance sheet and sound ﬁ nancial ratios.

ENHANCING THE ATTRACTIVENESS OF SODEXO SHARES 
TO LOYAL, LONG-TERM SHAREHOLDERS

Financial policies establish rules applicable to areas such as 
investment approvals, and the management of working capital, 
cash and debt.

Group ﬁ nancial policies require all decisions involving external 
ﬁ nancing to be made by the Group Chief Financial Offi  cer, the 
Chief Executive Offi  cer or the Board of Directors, depending on 
the amount and type of the transaction.

The Group Finance Department prepares a ten-year ﬁ nancing 
plan for the Group each year.

Group ﬁ nancial policies are designed to prevent any speculative 
positions  being  taken  and  to  avoid  risk  in  connection  with 
ﬁ nancing and cash management activities.

Procurement policy

The objectives of the procurement function are documented 
in  the  Group’s  procurement  policies  and  processes.  The 
performance  of  Sodexo’s  procurement  teams  in  the  main 
countries where it does business is measured through savings 
metrics,  which  enable  the  Group  to  gauge  the  impacts  of 
procurement initiatives and demonstrate the savings achieved.

The Group’s priority is to ensure that suppliers and subcontractors 
that deliver Sodexo products and services have the right skills, 
capabilities and potential to carry out the tasks assigned to 
them. Our risk management guidelines set out the procurement 
procedures that our teams are required to follow in terms of 
working  with  and  managing  suppliers  and  subcontractors. 
The  level  of  initial  evaluation  process  and  type  of  on-going 
management  procedures  for  suppliers  and  sub-contractors 
directly depend on the product supplied or service rendered, and 
include verifying issues such as food safety and traceability.

In  line  with  the  Group’s  procurement  policy,  suppliers  and 
subcontractors must sign the Sodexo Supplier Code of conduct 
which sets out Sodexo’s requirements for adopting responsible 
best practices concerning ethical, social and environmental issues.

Statement of Business Integrity

The  Statement  of  Business  Integrity  sets  forth  the  Group’s 
standards for achieving business integrity. Adherence to these 
uncompromising standards is part of what it means to be an 
employee of an industry-leading, best-in-class company. Sodexo 
employees must never compromise adherence to this Statement 
for financial or other business objectives or personal gain. The 

company does not tolerate any practice that is not born of honesty, 
integrity and fairness, anywhere in the world where it does business.

Corporate Responsibility

Since its creation in 1966, Sodexo’s vocation has been to improve 
the Quality of Life for its employees and all whom we serve and 
contribute to the economic, social and environmental development 
of the communities, regions and countries in which we operate. In 
2009, the Group formalized its Corporate Responsibility roadmap, 
the Better Tomorrow Plan. A revised version of this roadmap, 
Better Tomorrow 2025 was released in 2016.

The roadmap focuses on Sodexo’s role as an employer, as a 
service provider and as a corporate citizen as well as on the 
impacts that it has on individuals, on communities and on the 
environment. It has 9 measurable commitments to action by 
2025 with interim targets.

Sodexo’s  commitment  to  the  environment  as  a  service 
provider  is  to  source  responsibly  and  provide  management 
services that reduce carbon emissions. Since 2009, Sodexo has 
implemented a low carbon strategy which is motivated by our 
desire to improve Quality of Life. Our strategy takes into account 
the business opportunities, risks and their ﬁ nancial implications.

In particular, these commitments are demonstrated through the 
following actions:

•  renewal of the technical partnership agreement with World 
Wildlife Fund (WWF) to work on carbon reduction throughout 
Sodexo’s supply chain;

•  membership of the Better Buying Lab initiative led by the 
World Resources Institute (WRI) to promote the consumption 
of more plant-based food;

•  combined management focus on achievement of the 34% 
carbon emissions reduction target by 2025, compared to 
2011 baseline year.

In  the  area  of  nutrition  for  the  health  and  wellness  of 
consumers,  Sodexo  is  committed  to  food  safety  and  the 
promotion of a balanced diet for its consumers. Sodexo plays 
a critical role in the ﬁ ght against obesity and malnutrition and 
provides solutions to make health and wellness a priority.

In  the  area  of  social,  economic  and  environmental 
development  in  the  cities,  regions  or  countries  where 
Sodexo is present, we focus on the following actions:

• 

for the past 20 years, Sodexo has been supporting the ﬁ ght 
against hunger and malnutrition through Stop Hunger;

•  working with local and small businesses and contributing to 
local economies through the Partner Inclusion program which 
allows thousands of local businesses s to integrate Sodexo’s 
value chain;

•  tackling waste by engaging with clients and supply partners 
to  provide  innovative  solutions  on  food  waste  through 
the deployment of the program WasteWatch powered by 
LeanPath;

•  promoting gender balance with a target of having at least 

40% woman among Sodexo’s senior leaders by 2025.

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Sodexo  is  committed  to  respecting  human  rights  wherever 
it  does  business.  This  commitment,  with  its  core  policies 
and procedures are based on international texts such as the 
Universal Declaration of Human Rights, the International Labour 
Organization’s Declaration of Fundamental Principles and Rights 
at Work, and by the principles set forth in the OECD Guidelines 
for Multinational Enterprises and the UN Guiding Principles on 
Business and Human Rights.

In  September  2018,  Sodexo,  world  leader  in  Quality  of  Life 
services, was named Global Sustainability Industry Leader in its 
sector for the 14th year in a row by the Dow Jones Sustainability 
Index (DJSI).

Health, safety and environment policy

A  world-class  HSE  performance  is  essential  to  our  future 
commercial success and our reputation as a responsible global 
business. More importantly, at the heart of our HSE commitment 
is our care for people, for our community of employees as well 
as for all the tens of millions of consumers we serve every day. 
Health and safety, is the founding pillar on which we base our 
mission to improve Quality of Life.

Sodexo’s global Health, Safety and Environment policy sets out 
the Company’s expectations and guides its actions in this area. 
In partnership with our clients, consumers, suppliers and local 
communities, we work towards a zero harm culture where we 
prevent injuries and ill-health and protect the environment.

Internal Audit policy

Internal Audit activities include reviewing and assessing the 
adequacy and eff ectiveness of governance, risk management and 
internal control systems and processes. This includes assessing:

•  the reliability of ﬁ nancial and non-ﬁ nancial information;

•  compliance  with  existing  policies,  procedures,  laws  and 

regulations;

•  the methods used to safeguard assets;

•  the eff ectiveness of operations and the resources used.

The  Internal  Audit  team  is  also  responsible  for  alerting  the 
Chairwoman of the Board of Directors, the Audit Committee and 
the Executive Committee to any material risks and informing 
them of the causes of identiﬁ ed weaknesses.

The  Internal  Audit  team  has  defined  several  procedures, 
primarily covering the identiﬁ cation of Internal Audit  priorities 
for the coming ﬁ scal year, the planning and execution of internal 
audit s, the draft  ing of Internal Audit   reports and the follow up of 
action plans to implement the team’s recommendations.

A  series  of  Internal  Audit    performance  indicators  has  been 
developed, covering such issues as the percentage of Internal 
Audit    recommendations  that  have  been  implemented,  the 
average time required to issue Internal Audit  reports, the annual 
audit plan completion rate, I nternal Auditor training and rotation 
rates, the satisfaction rate among audited units.

Information systems policies

Delegations of authority

The Group Information Systems and Technologies Department 
(Global IS&T) has deﬁ ned three core objectives:

• 

improve the productivity of the Group’s teams and bring 
them closer to their customers and consumers by leveraging 
new information and communication technologies;

•  resolutely focus on serving users and keep pace with their 

changing needs and expectations;

•  standardize  information  systems  in  order  to  continue 
to  support  Sodexo’s  growth,  while  also  developing  more 
robust  performance  measurement  systems  and  control 
environments for our activities.

To meet these three core objectives, the Information Systems 
and  Technologies  Department  has  deployed  numerous 
procedures, notably in the following areas:

•  Group Information Systems Governance;

•  Systems Security;

•  Mobile Terminal Allocation and Security;

• 

IS&T Capital Expenditure Programs.

Principles and policies in this area are supplemented by job 
descriptions, annual targets and, for senior executives, clearly 
deﬁ ned delegations, which are reviewed annually and formally 
communicated to each executive by his or her superior.

The Chief Executive Offi  cer delegates certain authority to the 
members of the Group Executive Committee, who themselves 
delegate to members of their executive teams.

Delegations of authority cover business development, human 
resources, procurement, investments and ﬁ nance.

Delegations of authority must comply with the Group’s policies.

Improvement metrics

All progress can be measured. Accordingly, Sodexo has developed 
improvement metrics allowing for progress to be measured 
in  five  main  areas:  Business  Development,  Management, 
Procurement, Human Resources and Corporate Responsibility.

The Group Finance Department coordinates the process and 
monitors operational improvement metrics for activities and 
entities using a Group scorecard.

Making progress in these areas is critical for future growth in 
operating proﬁ t, operating cash ﬂ ow and revenue.

The improvement metrics are presented each year to the Board 
of Directors and the Group Executive Committee in order to track 
progress in the areas concerned.

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Development metrics:

•  total growth potential for the Group over the next ten years, 
separated into potential by activity, by country and by client 
segment;

• 

internal promotion, which is measured by the number of 
employees promoted to site manager, to a middle manager 
or a senior management position;

•  representation of women in senior management;

•  client retention rate;

•  percentage reduction in LTIR;

•  client and consumer satisfaction rates;

•  comparable unit growth;

•  new business development rate compared to competitors;

•  return  on  investments  in  development  (particularly  non 

tangible investments).

Management metrics:

•  contract proﬁ tability;

•  proﬁ tability of the diff erent activities and client segments;

•  gross operating margin and on-site costs;

•  percentage of workforce working in countries implementing 
action plans to integrate people with disabilities into the 
workplace.

Nutrition, health and wellness metrics, including:

•  percentage  of  client  sites  implementing  actions  that 
proactively address the Sodexo 10 Golden Rules of Nutrition, 
Health and Wellness.

Economic, social and environmental development metrics, 
including:

•  percentage of spend with contracted suppliers having signed 

•  reduction  in  general  and  administrative  expenses  by 

the Sodexo Supplier Code of conduct;

subsidiary, by client segment and by function.

•  business value beneﬁ ting SMEs (Euro).

Procurement metrics:

Environmental protection metrics, including:

•  percentage of purchases made from referenced suppliers;

•  measure of the consumption of products, identiﬁ ed as having 

•  reduction in the number of referenced products, reduction in 

an impact on the environment (for example palm oil);

the number of deliveries on a site, etc.

•  percentage of sustainable ﬁ sh and seafood;

Corporate Responsibility metrics

Employer metrics, including:

•  employee engagement rate for which the Group has targeted 
a  level  comparable  to  that  of  firms  ranked  as  the  best 
employers worldwide. This indicator is measured every two 
years by an engagement survey;

•  employee retention for all personnel and for site managers;

•  percentage reduction in carbon emissions (compared to 2011 

baseline) intensity.

 Sodexo selected an independent ﬁ rm to audit a representative 
s e l e c t i o n   o f   s o c i a l ,   e n v i r o n m e n t a l   a n d   s o c i e t a l   d a t a 
demonstrating the progress made in the area of Corporate Social 
Responsibility. The conclusions of this audit are presented in 
chapter 3, page 99  of this document.

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5.4.2  Description of the risk management approach

5.4.2.1  Organization of the risk management and internal control model 

The risk management and internal control process is built using the 3 Lines of Defense model, as shown below:

SODEXO’S RISK MANAGEMENT AND INTERNAL CONTROL MODEL
The Three Lines of Defense

BOARD / AUDIT COMMITTEE

EXECUTIVE COMMITTEE

Report

Report

Report

Inform

FIRST LINE OF DEFENSE

SECOND LINE OF DEFENSE

THIRD LINE OF DEFENSE

OPERATIONAL
MANAGEMENT

Segment Directors, 

District Managers, 

Site Managers…

SUPPORT &
TRANSVERSAL
FUNCTIONS

Services Operations 

 Finance

Human Resources

Health & Safety

IT Security

Risk Management and Internal Control, 
Legal Affairs...

GROUP
INTERNAL 
AUDIT

E
X
T
E
R
N
A
L

A
U
D

I
T
O
R
S

|

R
E
G
U
L
A
T
O
R
S

Identify and manage risks 

• 
  within their activities 

•  Support our operators 
in risk management 

•  Put controls into place 

•  Provide tools and techniques 

•  Evaluates and makes 

recommendations for the 
improvement of risk management

The  first  line  of  defense  mainly  consists  of  our  operational 
managers who identify and manage risks within their activities. 
They put controls and action plans in place for the risks identiﬁ ed.

The second line of defense is our support functions who are there 
to support operators in their risk management. They deﬁ ne the 
procedures and standards and provide tools and techniques to 
enable operational staff  to put in place the appropriate controls. 

The  third  line  of  defense  is  Internal  Audit  ,  which  gives  an 
independent evaluation of the risk management and internal 
control  process  to  the  Executive  Committee  and  Board  of 
Directors. It makes recommendations to the ﬁ rst and second line 
of defense for the improvement of risk management and internal 
control, and carries out monitoring in relation to action plans.

Sodexo has put in place a robust procedure for the identiﬁ cation 
and assessment of major risks, designed to ensure that risks 
are evaluated and managed at the appropriate level within the 

organization. Measures to manage risks are implemented either 
at the local or the Group level, depending on their nature.

The Group’s internal control procedures rely on the fundamental 
principles deﬁ ned by the Board of Directors.

5.4.2.2  Approach to Risk Assessment

The risk identiﬁ cation process is carried out, in parallel, locally 
and at the central level for the Group:

•  the  Chief  Executive  Officers  of  the  main  Group  entities 
assess their main risks by potential impact and likelihood 
of  occurrence  and  describe  the  controls  in  place  in  order 
to  manage  them  and  evaluate  the  effectiveness  of  those 
controls;

•  these self-assessments are aggregated at Group level and 

presented annually to the Audit Committee;

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•  an additional risk assessment exercise is done by senior 
leaders within Sodexo, before combining these perspectives 
to  create  a  consolidated  risk  profile  for  the  Group.  In 
compiling this complete risk proﬁ le, consideration is given 
to risks that are external to our business, core to our day-to-
day operations, related to business changes and any other 
that may impact the achievement of our objectives. The 
consolidated risk proﬁ le is shared with the Chief Executive 
Officer  and  Group  Chief  Financial  Officer,  prior  to  being 
submitted to the Audit Committee and the Board of Directors.

The  main  risk  factors  to  which  the  Group  is  exposed  are 
described in section 5.4.3 of this Registration Document.

Internal control procedures are part of an ongoing process of 
identifying, evaluating and managing the Group’s risk exposures. 

The risk management and internal control process is based on 
the internal control reference framework recommended by the 
french securities regulator (Autorité des m archés f inanciers – 
AMF) . The ﬁ ve components of the reference framework are the 
control  environment  (integrity,  ethics,  competencies,  etc.), 
evaluation of risks (identiﬁ cation, analysis and management of 
risks), control activities (methods and procedures), information 
and communication (collection and sharing of information) and 
monitoring (follow-up and eventual updating of processes).

The  Group  Executive  Committee  and  the  Board  of  Directors 
strongly endorse the risk management and internal control 
process.

5.4.3  Risk factors

5.4.3.1  Principal Risks & Risk Management Measures

Summary of Sodexo’s Principal Risk Factors

AT STAKE

RISK

Growth

Commercial Risks related to On-site Services
Client Retention
Competition
Dependency on a client or supplier
Consumer Expectations
Acquisitions

Operational Efficiency

Food cost inflation and access to food commodities
Technology

Talent

People Management
Facilities management

Corporate Responsibility

Food, Services and Workplace Safety
Environmental Impact

Risks in relation to external 
environment

Regulatory Risk
Liquidity, interest rate, foreign exchange and counter-party risk
Participation in Multi-employer defined Benefit Pension Plans
Economic downturn
Litigation

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Description of Principal Risk Factors

RISK DESCRIPTION

MANAGEMENT OF RISK

Commercial Risks related to On-site Services
On-site Services contracts can vary significantly depending on the 
size, the geographies and the complexity of the scope encompassed.
The pricing model is defined in relation to the type of contract (fixed 
price/cost plus) and the type of services.
For fixed price contracts, the main risks relate to accurately pricing 
the unit rates per service and ensuring that all relevant variables are 
taken into consideration.
For cost plus or management contracts, the risk is to accurately 
establish the detailed scope of services.

Benchmark exercises, site visits, full due diligence and the use of 
technical expertise are all part of the process to establish unit costs, 
seasonality of services and base-line estimates.
Contracts include periodic indexation clauses which allow for price 
increases (such as labor or food costs) to be passed on to clients.
Sodexo focuses on principles and methods to efficiently manage the 
application of the contract, changes in scope, organization or service 
levels. The aim is that services are provided in line with commitments 
made to the client, so that any necessary changes identified are fully 
reflected in a new contract base-line or unit-cost.

Client retention risk
Sodexo’s business depends on retaining and renewing contracts with 
existing clients, and bidding successfully for new contracts. This 
depends on various factors including the quality, cost and suitability 
of its services, which contribute to Sodexo client satisfaction and its 
ability to deliver differentiating, competitive services.

To drive its client retention rate, Sodexo utilizes a client relationship 
management process to ensure alignment with client expectations 
on an on-going basis.
As of August 31, 2018, the client retention rate for On-site Services 
was 93.8%.

Competition
Given the number of countries in which the Group operates, and the 
wide range of services it provides, Sodexo has numerous competitors, 
at the local, national and international level. The operators competing 
against  Sodexo  in  On-site  Services  may  be  companies  offering  a 
single type of service (such as food services, cleaning or technical 
maintenance) or a range of services.
In addition, competition may arise when existing or potential clients 
opt to self-operate their On-site Services rather than outsource them.
In the 35 countries where Sodexo offers Benefits and Rewards Services, 
there is generally one global competitor and several regional or local 
competitors.

Dependency on a client or supplier
Over-reliance on one particular client may mean that, were Sodexo to 
lose that client, there would be a significant drop in revenues.
Equally over-reliance on one supplier would mean that, were that 
supplier unable to deliver or went bankrupt, Sodexo may not be able 
to perform services to meet its contractual obligations.

The  effects  of  competition  are  identified  through  knowledge  of 
markets and participants (evolution of market share) and addressed in 
particular by the differentiation and innovation strategies that Sodexo 
has put in place: the Quality of Life service offer and digital innovation. 
Sodexo also benefits from a large global footprint which allows it to 
offset the effects of competition.
For Benefits and Rewards Services, the key competitive advantage is 
the solid network of merchant affiliates in each country. In this activity, 
growth is reliant on geographic expansion, market penetration, the 
development of new service offerings, and brand recognition. The 
growing  convergence  between  Onsite  services  and  Benefits  and 
Rewards Services, with the digital content, widens the choice that 
can be offered to consumers in both activities. This will strengthen 
the Group’s competitive positioning in Quality of Life services for 
consumers.

The Group is broadly diversified both in terms of geography and the 
various business segments within which it operates.
Although business depends on Sodexo’s ability to renew existing 
contracts and win new ones on favorable economic terms, no single 
contract represents more than 2% of total Group revenues.
In addition, no industrial supplier represents more than 2 % of the 
total volume of the Group’s purchases. However, the Group’s ability 
to organize its supply systems, including purchasing and logistics, 
significantly affects its performance.
Sodexo’s activities are not dependent on any patent or licensed brand 
name of which Sodexo is not the legal owner.

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MANAGEMENT OF RISK

Consumer Expectations
The influence of the consumer is growing, particularly in relation to the 
role they play in the decisions of Sodexo’s clients. Consumers expect 
more personalized services which enhance their Quality of Life.
Equally there are expectations around the responsible conduct of 
economic players.
If Sodexo cannot anticipate and interpret consumer expectations in 
terms of personalization and innovation, or meet their expectations 
in relation to environmental impact or business conduct, its revenues, 
as well as its reputation, could be affected.

Numerous changes need to be taken into account: factors such as 
technology (expanded possibilities), lifestyle, and the desire for a 
certain quality of life have changed consumer expectations.
To meet these expectations in relation to social responsibility, Sodexo 
has set out its Better Tomorrow program. This Sodexo corporate 
responsibility  Roadmap  sets  out  9  commitments  based  on  their 
impact  on  individuals,  communities  and  the  environment,  and 
Sodexo’s role as an employer, service provider and corporate citizen. 
For more information on Better Tomorrow, please refer to chapter 1, 
and chapter 2 in this document.
In  business  conduct,  Sodexo  has  established  ethical  principles: 
business integrity and respect for human rights are also at the heart 
of our fundamentals.
In addition, digital transformation creates new opportunities to expand 
and personalize services that improve the Quality of Life of consumers. 
These new opportunities for innovation are identified both internally 
(innovation projects led by field teams) and externally (investment 
in startups).

Acquisitions
Business acquisitions contribute to Sodexo’s growth. Their integration 
and the achievement of the objectives and synergies defined at the 
time of acquisition are all subjects that must then be closely monitored 
to ensure that the initial objectives are achieved.

Each Sodexo activity – On-site services, Benefits and Rewards Services 
and Personal and Home Services – is responsible for integrating the 
acquired entities and ensuring that the objectives and synergies 
defined at the time of acquisition are properly achieved. In addition 
integration reviews are carried out at Group level.

Food cost inflation and access to food commodities
Sodexo can be exposed to fluctuations in food prices and difficulties in 
the supply of certain products. The price of food and its availability in 
the marketplace may vary in different regions of the world.

Technology
Our information technology systems and data are increasingly vital 
to how we market, develop, operate and grow our business. Sodexo 
recognizes the need to maintain the confidentiality, availability and 
integrity of our information technology assets and be able to assure 
our clients, consumers and regulators of our ability to efficiently 
provide innovative services whilst securely protecting sensitive data.
As our technology evolves, so do the risks. Traditional risks such as 
infrastructure failures and uncontrolled changes are joined by the 
challenges of managing systems in the Cloud and controlling access 
to powerful Big Data solutions.
In  addition,  digital  innovations  mean  that  we  are  increasingly 
collaborating directly with our clients and consumers, sharing access 
to data and systems across companies and borders, and working 
with an ever-increasing number of third party partners. At the same 
time cyber threats are increasing in volume and sophistication, and 
regulations  are  getting  stronger,  particularly  in  the  area  of  data 
privacy.

Sodexo negotiates supplier contracts for certain goods with price 
protections.
Client contracts provide for the pass-through of product costs; fixed 
price contracts provide for adjustments based on a referenced cost 
index.

In order to be effective in addressing our information security risks, 
our Group Information & Systems Security Policy adopts a risk based 
approach using the ISO 27001 framework of controls. This is supported 
by global security solutions and proactive security directives that 
provide best practice guidance on how to address specific challenges 
such as Cloud technology and key focus areas, such as logical access.
Our  IT  Governance  Process  supports  security  by  design  and 
incorporates risk and privacy impact assessments early in the project 
lifecycle. IT risk is clearly defined so that it can be aligned with our 
client’s needs and our business goals. This process also takes into 
account the risks related to privacy and the protection of personal 
data from the very beginning.
Sodexo selects suppliers who understand and support our security-
driven  culture,  and  select  solutions  that  can  adapt  to  the  new 
technological trends, emerging threats and increasing regulation. This 
supplier selection process also incorporates the protection of personal 
data by default by verifying our suppliers’ compliance with personal 
data protection rules and signing protective agreements for Sodexo 
and the data subjects.

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MANAGEMENT OF RISK

People Management
Service quality is largely dependent on the ability to attract, develop, 
motivate and retain the best talent. Sodexo therefore is committed to 
improving quality of life for its employees, so that they, in turn, can 
improve quality of life for our clients and consumers.

Facilities management
Although facilities management services have long been a part of 
the business, Sodexo’s strategy is to accelerate the development of 
these services, resulting in a larger contribution to revenue. These 
services require skilled personnel, particularly in the areas of building 
maintenance, electrical engineering, plumbing, heating systems and 
air conditioning. Consequently, the Group faces certain operational 
risks and has a need for qualified human resources. The Group’s 
capacity to grow in this highly specialized environment depends on 
its knowledge of these markets and its ability to find, attract, recruit 
and train suitable employees.

Food, Services and Workplace Safety
Every day, Sodexo serves a vast number of consumers worldwide, and 
is committed to the safety of the food and services provided.
In addition, workplace accidents may occur in food services and in 
facilities management services.
If  there  were  to  be  a  significant  incident  at  one  or  more  Sodexo 
sites, there could be an impact on the Group’s activities, profits and 
reputation.

Environmental Impact
Sodexo is aware of the potential environmental impact of its activities, 
even though most of the operations are on client sites. The Group 
makes every effort to manage and limit environmental risk.
The environmental impact of its activities arises mainly from:
•  potential environmental incidents in the provision of client services;
•  consumption of water and energy in the provision of services on 

client sites;

•  production of organic waste from food preparation;
•  consumer waste;
•  climate change impacting commodity prices and therefore operating 

costs.

Sodexo anticipates the need for resources and skills by setting up 
centers of expertise that train and prepare employees for their jobs 
today and tomorrow. In addition, Sodexo’s values and culture are 
strong attraction and retention factors for front-line employees.
Sodexo  pursues  its  training  policy  at  all  levels  of  the  company 
and places special emphasis on prevention and safety. Employee 
development contributes to the motivation and retention of our best 
talent.
Employee satisfaction and involvement is measured through the 
Sodexo Global Engagement Survey. The engagement survey is also a 
tool for developing action plans to meet the expectations of employees.
The diversity of backgrounds, cultures and skills among its people 
represents both a challenge and a major opportunity. Sodexo continues 
to capitalize on this diversity to create an inclusive work environment 
for all, a competitive advantage and to remain a truly global enterprise. 
Sodexo maintains numerous programs to support diversity.
As far as it is aware Sodexo is not exposed to any specific labor-related 
risk other than those arising in the ordinary course of business for an 
international group of its size.

Sodexo’s FM operational support platforms provide tools, and expertise 
to our managers, and encourages best practice sharing globally.
In  addition,  our  Global  Facilities  Management  Academy  helps  to 
develop the skills and knowledge necessary for managers to grow our 
facilities management business, to positively impact the Quality of 
Life of our consumers and the performance of our clients.

In order to protect against shortcomings in this area, Sodexo has 
implemented control procedures designed to ensure strict compliance 
with applicable regulations, sector standards and client requirements. 
Global food and workplace safety policies are rolled out in all countries 
in  which  the  Group  operates  and  include  appropriate  training 
requirements for all employees.

To constantly improve its role as a corporate citizen and to limit 
these environmental risks, Sodexo launched its revised Corporate 
Responsibility Roadmap, Better Tomorrow 2025 in July 2017. This 
program consists of 9 commitments as an employer, a service provider 
and as a corporate citizen to ensure constant improvement in the 
management of resources. For more info, please refer to section  1 
and 2 of this document.

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Regulatory Risk
The nature of Sodexo’s business and its worldwide presence mean that 
it is subject to a wide variety of laws and regulations including labor 
law, antitrust law, corporate law, anti-corruption law, data protection 
and privacy, and health, safety and environmental law.
Most services in the Benefits and Rewards Services activity benefit 
from favorable tax treatment in certain countries. These tax incentives 
may be adjusted to varying degrees by the governments concerned. 
A change in the related laws or regulations could have a direct impact 
on Sodexo’s business, either by creating opportunities or by posing a 
threat to existing services. As such, if tax incentives were to be reduced 
or abolished, this could lead to a significant reduction in issue volume 
for the services concerned.

Liquidity, interest rate, foreign exchange and counter-party risk
Sodexo has access to a wide variety of bank funding sources in addition 
to being able to raise funds directly from investors on the commercial 
paper and bond markets.

Participation in Multi-Employer Defined Benefit Pension Plans
We may incur significant liability as a result of our participation in 
multiemployer defined benefit pension plans.
We  operate  at  several  locations  under  collective  bargaining 
agreements.  Under  some  of  these  agreements,  we  are  obligated 
to contribute to multiemployer defined benefit pension plans. As a 
contributing employer to such plans, should a “complete” or “partial 
withdrawal,” be triggered, Sodexo would be subject to withdrawal 
liability (or partial withdrawal liability) for the proportionate share of 
any unfunded vested benefits. In addition, if a multiemployer defined 
benefit pension plan fails to satisfy the minimum funding standards, 
Sodexo could be liable to increase its contributions to meet minimum 
funding standards. Also, if a participating employer withdraws from 
the plan or experiences financial difficulty, including bankruptcy, 
Sodexo’s obligation could increase. The financial status of some of 
the plans to which Sodexo contributes has deteriorated in the recent 
past and continues to deteriorate. In addition, any increased funding 
obligations for underfunded multiemployer defined benefit pension 
plans could have an adverse financial impact on the Group.

Economic Downturn
Adverse economic conditions and weak commodity prices could affect 
the Group’s operations and earnings, in particular in the Corporate and 
Energy & Resources segments.
The  weight  of  national  debt,  government  deficits  and  continued 
unemployment could lead to significant pressures on economic activity 
particularly in the public sector, leading to a decline in demand for the 
services Sodexo offers its clients and thus have a negative impact on 
operations in Education, Healthcare, Justice and Defense.
Lastly, unfavorable economic conditions could result in a lengthening of 
payment terms or impair the solvency of Sodexo’s clients. Conversely, 
the economic situation could lead clients to increase outsourcing in 
order to achieve cost savings.

Legal teams are deployed at the central and local levels, and provide 
advice to operational staff to ensure compliance with applicable laws 
and regulations. Teams are specialized by area of   expertise, and also 
have recourse to external experts in legal firms.
Close monitoring of the regulatory environment allows the Group to 
anticipate changes in laws and regulations.

As Sodexo has operations in 72 countries, all components of the 
financial statements are subject to foreign currency translation effects. 
However, exchange rate fluctuations do not generate operational risk, 
because each subsidiary bills its revenues and incurs its expenses in 
the same currency.
Sodexo uses derivative instruments to manage its exposure to interest 
rate and foreign exchange risk. However the Group’s policy is to avoid 
any speculative positions.
Risk sensitivity analysis on exchange and interest rates is carried out 
and is outlined in notes 5.1, 5.2 and 5.3 to the consolidated financial 
statements in section 3.4 of this Registration document.

Sodexo monitors Multiemployer Pension Plans’ funding levels, closely 
controls new contracts to minimize entry into additional plans, and 
closely monitors certain potential triggering events such as contract 
termination or decertification of a union.

5

Sodexo’s presence in 72 countries and the spread of operations across 
different client segments helps to limit this risk. In addition, particular 
attention is paid to the economic/political situations in which Sodexo 
operates.
Client risk is regularly assessed by Segment and Regional Finance, 
both at the time of the tender offer and during the life of the contract.

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MANAGEMENT OF RISK

Litigation
Refer to note 4.28 of the notes to the consolidated financial statements 
in section 3.4 of this Registration document for information on these 
risks.
No additional risk was identified during Fiscal 2018.

Review of any current litigation is conducted jointly by Finance and 
Legal.

5.4.3.2  Risk coverage

5.4.3.2.1  Insurance cover

Sodexo’s  general  policy  is  to  transfer  non-retained  risks, 
especially intensity risks, to the insurance market. Insurance 
programs are contracted with reputable insurers.

The main insurance programs are as follows:

• 

liability insurance, which covers against personal injury, 
property  damage  or  consequential  loss  caused  to  third 
parties. This category notably includes operational, product, 
after-delivery  and  professional  liability  insurance.  Since 
June 1, 2016, Sodexo has implemented a worldwide liability 
insurance  program  benefiting  all  countries  in  which  the 
Group operates, including the U.S.A and Canada;

•  property insurance, which mainly covers the risk of ﬁ re and 
explosion, water damage, natural disasters, and (in some 
countries)  acts  of  terrorism.  As  a  general  rule,  the  sum 
insured is equal to the value of the insured property; however, 
some insurance contracts cap the amount paid out under the 
policy;

•  workers’ compensation. In countries with no government-
provided coverage (primarily the United States, Canada and 
Australia), Sodexo has contracted workers’ compensation 
programs;

•  crime insurance dedicated to Beneﬁ ts and Rewards Services, 
to partially transfer to the insurance market the risks of 
fraud, falsiﬁ cation and theft  ;

•  marine cargo insurance for covering loss or theft   of goods 

during their shipment;

•  employment practices liability which provides coverage for 
wrongful termination, sexual harassment, discrimination and 
workplace torts. This program was originally implemented in 
the U.S.A and Canada, but has been expanded globally from 
June 1, 2017.

In addition, Sodexo maintains compulsory insurance as legally 
required in the countries where it operates.

5.4.3.2.2  Self-Insured Risks

Retained or self-insured risks correspond to the deductibles 
speciﬁ ed in the insurance programs contracted by Sodexo. They 
consist for the most part of frequency risks (i.e., risks that recur 
regularly) but from time to time may also include intensity risks 
(i.e., risks representing substantial amounts). In some countries, 
these retained risks correspond to deductibles under employer’s 
liability, workers compensation, third-party automobile and 
property insurance. In North America, deductibles range from 
5,000 U.S. dollars to 5,000,000 U.S. dollars per occurrence. 

Outside  North  America,  deductibles  generally  range  from 
7,500  euro  to  2,000,000  euro  per  occurrence.  Sodexo  also 
self-insures frequency risks and low amplitude risks through 
two  captive  insurance  companies.  The  American  company, 
incorporated in the State of Hawaii, manages the deductibles of 
the Workers’ Compensation, Automobile Liability and General 
Liability  insurance  programs.  The  Irish  company,  based  in 
Dublin, provides:

•  direct insurance and re-insurance for motor own damage and 
third party liability risks up to 500,000 euro per claim and 
2,500,000 euro in aggregate per year;

•  reinsurance  on  the  property  insurance  program  up  to 

3,000,000 euro per claim and in aggregate per year.

5.4.3.2.3  Placing of risk and total cost

On  the  occasion  of  its  most  recent  policy  renewals,  Sodexo 
maintained  the  scope  and  level  of  its  coverage,  as  regards 
in  particular,  general  liability  insurance  and  professional 
liability insurance, especially for risks associated with facilities 
management activities.

The total cost of the main insurance programs and self-insured 
risks (excluding workers’ compensation) of fully-consolidated 
Group companies, represents around 0.25% of consolidated 
revenue.

5.4.3.3  Description of  internal 

control process, including 
controls relating to the 
preparation and accounting 
disclosure

The risk management and internal control approach applied 
within the Group consists of:

•  the identiﬁ cation and assessment of risks;

•  the description of the control environment, both at Group and 

subsidiary levels;

•  documentation and self-assessment of these control points, 

both at local and Group level;

• 

independent testing of the effectiveness of these control 
points, by independent persons.

A very large number of Group entities representing almost 97% 
of Sodexo’s revenues, prepare a detailed report (Company Level 
Control Report) on their control environment based on the ﬁ ve 
components of the reference framework and which includes 
an evaluation of the subsidiary’s principal risks, a description 
of  risk  management  measures  and  an  assessment  of  their 
eff ectiveness.

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The most signiﬁ cant Group entities together representing more 
than 93% of Group revenues, go beyond this initial phase, and 
evaluate the eff ectiveness of additional controls determined by 
their own risk assessment (Process Level Controls). Some of 
these controls are also subject to eff ectiveness tests performed 
by independent persons (Group Internal Audit ors).

An executive summary of the status of internal controls and 
the progress achieved is submitted to the Audit Committee 
at the end of the fiscal year. For Fiscal 2018 1,231 controls 
were independently tested by Group Internal Audit  in diff erent 
entities. 34 % of the recommendations made by Internal Audit 
 in Fiscal 2018 have already been satisfactorily implemented 
and conﬁ rm actual progress, while action plans are underway to 
implement the other recommendations.

5.4.3.4  Description of internal 

controls relating 
to the preparation of 
accounting and ﬁ nancial 
disclosure

The Group Finance Department is responsible for ensuring the 
reliability of ﬁ nancial and accounting information.

A  process  is  in  place  to  produce  and  analyze  financial 
information at both operational sites and in the Group and 
entities’ Finance Departments.

The  entities’  Finance  Departments  produce  monthly  a 
cumulative  income  statement  since  the  beginning  of  the 
ﬁ scal year, a balance sheet, and a statement of cash ﬂ ows. They 
also regularly produce projections for the full year. Financial 
statements are consolidated on a monthly basis by the Group 
Finance Department.

At the half-year, the external auditors conduct a limited review 
of the interim ﬁ nancial statements.

At the end of the fiscal year, the Chief Executive Officers and 
Chief Financial Offi  cers of the segments and regions certify the 
reliability of their ﬁ nancial statements, prepared in accordance 
with the IFRS standards adopted by the European Union. The 
external auditors of the main entities express a view on these 
ﬁ nancial statements in accordance with the mandate given to 
them by Sodexo’s shareholders. The Group Finance Department 
monitors changes to IFRS standards and interpretations and 
ensures that the accounting treatments applied by all entities 
are compliant with Group rules.

Twice a year, the Group Finance Department identiﬁ es the events 
that  may  have  led  to  one  or  several  assets  being  impaired, 
notably goodwill and intangible assets (in accordance with IFRS). 
Where appropriate, the carrying amount of the asset concerned 
is written down in the ﬁ nancial statements.

S e g m e n t   C h i e f   E x e c u t i v e   O f f i c e r s   a n d   t h e i r   E x e c u t i v e 
Committees,  as  well  as  Regional  Chairs  and  Regional  Chief 
Financial Officers review operational and financial reporting 
(comprising improvement metrics for client retention, sales 
development and revenue growth on existing comparable sites) 
before presenting it to the Group Executive Committee, and 
then to the Chairwoman of the Board of Directors. In addition, 

quarterly reviews with each of the Group’s segments and regions 
give the Group Chief Executive Offi  cer and Group Chief Financial 
Officer  insight  into  performance  trends  for  the  segments 
and regions based on the financial reporting and operational 
information.

Procedures  are  in  place  to  identify  off-balance  sheet 
commitments. This term covers all rights and obligations that 
may have an immediate or future impact on Sodexo’s ﬁ nancial 
position but are not recognized (or are only partially recognized) 
in the balance sheet or income statement. These include items 
such  as  assets  pledged  as  security;  guarantees  relating  to 
operating  contracts  (for  example  bid  bonds  or  performance 
bonds),  to  borrowings,  or  to  claims  and  litigation;  lease 
obligations not recognized in the balance sheet; commitments 
under call or put options, etc. Off -balance sheet commitments 
are presented regularly to the Board of Directors.

The Group Insurance Department works closely with the relevant 
executives in the entities to:

• 

implement global insurance programs, negotiated at the 
Group  level,  available  for  all  entities  and  supported  by 
insurance companies recognized for ﬁ nancial strengths by 
the Insurance Industry;

•  put in place insurance coverage to protect the interests of our 

employees, clients, shareholders and the Group;

• 

identify and evaluate the key insurable risks faced by Sodexo, 
with particular attention to the emergence of new risk factors 
associated  with  changes  in  our  activities,  especially  in 
facilities management;

•  reduce contractual risk, in particular by means of limitation 

of liability clauses or hold-harmless agreements;

•  achieve the appropriate balance between risk retention (self-
insurance) and the insurance market in covering the potential 
ﬁ nancial consequences of Sodexo’s risk exposure; and

•  achieve optimization by ﬁ nancing some of our risks through 

the use of captive insurance companies.

The  Sodexo  legal  function  (comprised  of  a  Group  team  and 
regional  and  local  teams)  works  pro-actively  with  business 
development and operational teams to ensure legal compliance 
and support contract negotiations, so that risks pertain solely 
to contractual obligations for services and are limited in value 
and duration.

L a s t l y ,   u s i n g   t h e   f i n a n c i a l   i n f o r m a t i o n   r e p o r t e d   a n d 
consolidated,  the  Chief  Executive  Officer,  assisted  by  the 
Group  Finance  Department,  prepares  the  Group’s  financial 
communication. The Chief Executive Offi  cer also relies on the 
operating data required to prepare the Registration Document. 
The interim and annual results press releases are submitted to 
the Board of Directors for approval.

To  enable  the  Chief  Executive  Officer  to  provide  reliable 
information on the Group’s financial situation, a Disclosure 
Committee  comprising  representatives  from  the  Group’s 
corporate  functions  reviews  all  financial  information  prior 
to  publication.  Members  represent  the  following  functions: 
Financial Control, Financial Communications, Legal, Human 
Resources,  Sustainable  Development,  Communications  and 
Board Secretary.

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5.4.4  Group Internal Audit Department

The Senior Vice President Group Internal Audit reports directly to 
the Chairwoman of the Board, thus ensuring the independence 
of the Group Internal Audit Department within the organization. 
The  Senior  Vice  President  Group  Internal  Audit  meets  the 
Chairwoman of the Board on a monthly basis and works closely 
with the Chairman of the Audit Committee, holding informal 
meetings (approximately four times per year).

Since 2015, Sodexo’s Group Internal Audit activities have been 
certified  by  the  French  Internal  Audit  and  Internal  Control 
Institute (IFACI). This internationally recognized certiﬁ cation 
attests  to  Sodexo’s  compliance  with  and  application  of 
30  general  requirements  of  the  Professional  Internal  Audit 
Standards  (independence,  objectiveness,  competence, 
methodology,  communication,  supervision  and  continuous 
assurance program).

IFACI certification is a high-level confirmation of quality and 
performance that:

•  powerfully conveys Sodexo’s rigorous approach to evaluating 

its risk management and internal control processes;

•  benchmarks  Sodexo’s  processes  against  best  market 

practices;

•  enables the Group to sustainably strengthen its Internal 

Audit practices;

•  unites employees around a challenging project.

The Internal Audit Department performs internal audits of Group 
entities based on an Internal Audit Plan established annually.

The audit plan is based on a risk assessment performed by Group 
Internal Audit, relying on the Group risk assessment process 
and input from the Chairwoman of the Board of Directors, the 
Group Chief Executive Offi  cer, the Group Chief Financial Offi  cer 
and other key stakeholders from Sodexo. The Audit Committee 
reviews and approves this annual audit plan.

The responsibilities of the Internal Audit Department include:

•  ensuring, with the related functional teams, that employees 
throughout  the  organization  are  aware  of  and  diligently 
apply Group policies;

•  ensuring that delegations of authority and procedures have 
been  established  and  communicated  to  the  appropriate 
levels of management, and checking that they are properly 
implemented;

•  helping to assess entities’ internal controls, issuing action 
plans designed to remedy identiﬁ ed control weaknesses, and 
monitoring implementation of these action plans.

The  Internal  Audit  Department  may  also  conduct  special 
assignments at the request of the Chairwoman of the Board, the 
Audit Committee, the Chief Executive Offi  cer or the Executive 
Committee.

Most (81%) of the Group Internal Audit Plan approved by the 
Audit Committee at the start of Fiscal 2018 was completed 

during the year. The Group Internal Audit Department, with 
an average of 26  staff, conducted 58 audits in 30 countries. 
In addition, a network is in place of some 85 internal control 
coordinators (many of whom report to the Finance Directors). 
This network is coordinated by a central internal control team 
and  enables  specific  support  to  be  given  to  Internal  Audit 
engagements and to rectifying weaknesses identified by the 
Internal Audit team.

The Internal Audit Department regularly tracks implementation 
of post-audit action plans by Group entities. An overall progress 
report is updated regularly and submitted on a semi-annual 
basis to the Chief Executive Offi  cer, the Group Chief Financial 
Offi  cer, the Chairwoman of the Board and the Audit Committee. 
Further progress was achieved in following up recommendations 
in Fiscal 2018. All audits are followed up within a maximum of 
12 months.

Around  90%  of  recommendations  made  in  years  prior 
to  Fiscal  2018  have  been  implemented  by  the  entities’ 
m a n a g e m e n t .   F o r   F i s c a l   2 0 1 7 ,   3 4 %   o f   t h e   1 , 0 3 4 
recommendations made by the Group Internal Audit Department 
have already been implemented and the other recommendations 
are addressed in action plans. In Fiscal 2018, the Internal Audit 
Department carried out a survey of a sample of entities. The 
vast majority (93%) of them considered that the quality of 
audits was satisfactory.  Every year, the Group Internal Audit 
Department  measures  the  savings  achieved  and  the  losses 
avoided  through  its  audits.  In  Fiscal  2018,  investigations, 
assistance engagements and process effi  ciency audits generated 
added value of 12.3 million euro.

The  Group  Internal  Audit  Department  also  conducts  an 
independent evaluation of internal control.

Finally, the Internal Audit Department assesses the external 
auditors’  independence  and  reviews  the  annual  budgets  for 
external auditors’ fees (for both statutory audit work and other 
engagements) prior to their approval by the Audit Committee.

Risk management and the reinforcement of internal 
control are a permanent strategic priority for the Group.

However, internal controls cannot provide an absolute 
guarantee that all risks have been eliminated. Sodexo 
nevertheless endeavors to ensure that the most eff ective 
internal control procedures feasible are in place in each 
of its entities.

In the preparation of this report, and in compliance with the 
recommendation issued by the French securities regulator, 
the  french  securities  regulator  (Autorité  des  m archés 
f inanciers – AMF) , in July 2010, Sodexo has notably relied 
on the “Reference Framework” produced by the French 
Market Advisory Group and published by the AMF.

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C o m p e n s a t i o n

5.5  COMPENSATION

The disclosures within this document comply with the recommendations contained in the AFEP-MEDEF Code of corporate governance 
for listed companies as revised in June 2018, and the recommendations of the French securities regulator (Autorité des marchés 
financiers – AMF) on Corporate Governance and corporate offi  cers’ compensation in listed companies.

5.5.1  Compensation policy applicable to corporate officers

This section constitutes the report required under article L.225-
37-2  of  the  French  Commercial  Code  on  the  principles  and 
criteria used to determine, allocate and award the ﬁ xed, variable 
and exceptional components of the total compensation and 
benefits payable to the Company’s corporate officers for the 
duties performed under the terms of their corporate offi  ce. At the 
Annual Shareholders’ Meeting to be held on January 22, 2019, 
the shareholders will be asked to approve, on the basis of this 
report, the compensation principles established  by the Board of 
Directors under the guidance of the Compensation Committee.

In all cases, these principles and criteria apply to any person who 
holds a corporate offi  cer’s position.

5.5.1.1  General principles 

for corporate offi  cers’ 
compensation

The compensation applicable to corporate offi  cers is determined 
by the Board of Directors on the basis of recommendations made 
by the Compensation Committee and is reviewed annually. The 
Compensation Committee is entirely comprised of independent 
directors  (including  its  Chairman),  except  for  one  director 
representing employees. The Compensation Committee may 
use the services of external advisors specialized in corporate 
offi  cers’ compensation. It also considers observations received 
from institutional shareholders.

The Board of Directors ensures that the compensation policy is 
adapted to the Company’s strategy and operating context and 
that its purpose is to enhance Sodexo’s medium- and long-term 
performance and competitiveness. The policy is based on the 
following principles: 

Compliance

The compensation policy for the Company’s corporate offi  cers 
is determined in compliance with the recommendations of the 
AFEP -MEDEF Code of corporate governance for listed companies.

Competitiveness

Research is regularly conducted – including with the assistance 
of  external  consulting  firms  –  in  order  to  benchmark  the 
Company’s compensation packages against panels of its peers 
(comparable  companies  in  terms  of  size  and  international 
scope), both in the French market (CAC 40 companies excluding 
banks and insurance companies) and in international markets 
(main competitors).

Completeness – Balance

A comprehensive analysis of all of the components of corporate 
officers’  compensation  and  benefits  is  conducted  using  a 
component-by-component  approach.  An  overall  consistency 
analysis is also performed to ensure that the best balance is 
achieved between ﬁ xed and variable, individual and collective, and 
short- and long-term compensation.

Alignment of interests

Aligning interests involves taking into consideration two main 
objectives: first, ensuring that the Company has the ability to 
attract, motivate and retain the talent that it needs, and second, 
meeting the expectations of the Company’s shareholders and other 
stakeholders, particularly in terms of social and environmental 
responsibility, transparency, and associating compensation with 
performance.

Performance

The performance conditions applicable to corporate officers’ 
compensation are rigorous and are based on the key factors that 
contribute to the Company’s proﬁ table and sustainable growth. 
They  are  also  in  line  with  the  Company’s  published  short-, 
medium- and long-term targets.

5

Transparency

The corporate offi  cers’ compensation policy is governed by clear, 
straightforward and transparent rules.

The  Compensation  Committee  ensures  that  all  of  these 
principles are appropriately applied in the work it performs and 
the recommendations it issues to the Board of Directors, both 
in relation to determining the compensation policy as well as 
when the policy is implemented and the actual amounts of the 
compensation packages are determined.

5.5.1.2  Compensation policy for 

the Chairwoman of the Board 
of Directors (non executive 
director)

Compensation package

The compensation package of the Chairwoman of the Board 
of Directors includes a fixed compensation payment and the 
beneﬁ t of collective health and beneﬁ t plans.

As the Chairwoman is a non-executive director, in line with market 
practices in France, she does not receive any short-term annual 
variable compensation or any multi-year variable compensation, 
and she does not beneﬁ t from any long-term incentive plan.

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Fixed compensation

The  fixed  compensation  of  the  Chairwoman  of  the  Board  of 
Directors is determined in line with benchmark studies and is 
awarded as payment for duties and responsibilities inherent to 
such a position.

5.5.1.3  Compensation policy 

for the Group Chief 
Executive Offi  cer (executive 
 corporate offi  cer )

Accordingly, the following factors are taken into account:

Compensation package

•  the  duties  specific  to  the  role  of  chairing  the  Board  of 
Directors, as provided for by Law and the Board of Directors’ 
Internal  Rules,  which  notably  involve  ensuring  that  the 
Company  is  properly  governed  and  that  its  governance 
bodies (Board of Directors, specialized Committees of the 
Board and Shareholders’ Meeting) function eff ectively;

•  the skills, experience, expertise and professional proﬁ le of the 

holder of the position;

•  m a r k e t   a n a l y s e s   a n d   b e n c h m a r k   s t u d i e s   o n   t h e 
compensation  awarded  for  comparable  positions  in  peer 
companies.

However, the compensation policy may be modiﬁ ed during the 
term of the corporate offi  ce and prior to its renewal if there is a 
signiﬁ cant evolution in the scope of responsibility, which may 
be related to the Company’s evolution, or if there is a major 
disparity with the market. In such speciﬁ c situations, the nature 
of any adjustment to the ﬁ xed compensation and the related 
reasons would be publicly disclosed.

Company car

The  Chairwoman  of  the  Board  of  Directors  has  the  use  of  a 
company car. The insurance, maintenance and fuel costs (related 
to her professional use) are covered by Sodexo.

Collective health and beneﬁ t plans

The Chairwoman of the Board of Directors is a member of the 
Company’s collective health and beneﬁ t plans, subject to the 
same terms and conditions as those applicable to the category 
of employees to which she has been assigned for the purpose of 
determining these beneﬁ ts.

Accordingly,  the  Chairwoman  of  the  Board  of  Directors  is  a 
beneﬁ ciary under the following plans, subject to the same terms 
and conditions as all of the Group’s employees:

•  an “incapacity, disability or death” beneﬁ t plan, ﬁ nanced in 
part by Sodexo, which, in the event of an employee’s death, 
provides for the payment of a death beneﬁ t equal to 215% of 
their ﬁ xed compensation, up to a maximum amount of eight 
times the French Social Security Code’s annual ceiling, and 
which is increased for dependent children;

•  an additional “incapacity, disability or death” beneﬁ t plan, 
ﬁ nanced in full by Sodexo, which is reserved for employees 
whose  annual  gross  compensation  is  greater  than  eight 
times the French Social Security Code’s annual ceiling and 
which, in the event of an employee’s death, provides for the 
payment of a death beneﬁ t equal to 200% of the portion of 
their ﬁ xed compensation that is greater than eight times the 
French Social Security Code’s annual ceiling;

•  a  supplemental  health  insurance  plan,  which  all  Sodexo 

employees are entitled to, ﬁ nanced in part by Sodexo.

Other components of compensation

The Chairwoman of the Board of Directors does not receive any 
directors’ fees for attending Board or specialized Committee 
of  the  Board  meetings.  In  addition,  she  will  not  receive  a 
termination beneﬁ t if her corporate offi  ce is terminated.

Based on the Compensation Committee’s recommendations, 
each year the Board of Directors ensures that the Group Chief 
Executive  Officer ’s  variable  compensation  –  which  is  based 
on specific performance criteria – constitutes a sufficiently 
signiﬁ cant portion of his ﬁ xed compensation.

The aim of the compensation policy for the Group Chief Executive 
Officer is to achieve a balance between long- and short-term 
performance in order to promote the Group’s development for 
the beneﬁ t of all of its stakeholders.

To this end, and with a view to keeping stakeholders’ interests 
in mind, the Company strives to ensure consistency between 
the Group Chief Executive Offi  cer’s compensation package and 
Sodexo’s performance trends.

Fixed compensation

The ﬁ xed compensation of the Group Chief Executive Offi  cer is 
awarded as payment for the duties and responsibilities inherent 
to such a position.

Consequently, the following factors are considered:

•  the level and complexity of the roles and responsibilities 
attributed  to  the  Group  Chief  Executive  Officer,  who  has 
the broadest powers to act on behalf of the Company in all 
circumstances and to represent the Company in its dealings 
with third parties;

•  the skills, experience, expertise and professional proﬁ le of the 

holder of the position;

•  m a r k e t   a n a l y s e s   a n d   b e n c h m a r k   s t u d i e s   o n   t h e 
compensation  awarded  for  comparable  positions  in  peer 
companies.

The Group Chief Executive Offi  cer’s annual ﬁ xed compensation 
is used as the reference for determining his annual variable 
compensation and long-term compensation. The amount of this 
ﬁ xed compensation is not systematically revised each year.

 Directors’ fees

In the case where the Group Chief Executive Officer is also a 
member of the Board of Directors of Sodexo , he does not receive 
any directors’ fees.

Annual variable compensation

CALCULATION METHODS

T h e   G r o u p   C h i e f   E x e c u t i v e   O f f i c e r ’ s   a n n u a l   v a r i a b l e 
compensation  is  intended  to  encourage  the  attainment  of 
the annual performance targets determined by the Board of 
Directors in line with Sodexo’s strategy.

Provided that all  applicable objectives are achieved, it amounts 
to 100% of his ﬁ xed compensation.

The variable component is based mainly on ﬁ nancial criteria.

For Fiscal 2019, the applicable criteria and weightings are as 
follows:

•  70% of the variable compensation is contingent on targets 
based on the Group’s ﬁ nancial performance for the ﬁ scal year, 
including organic revenues growth, consolidated underlying 
operating proﬁ t, Group net income and free cash ﬂ ow;

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•  30%  is  contingent  on  non-financial  targets,  primarily 
including quantitative targets (including occupational health 
and safety, talent management and the DJSI ranking).

The bonus is calculated and paid following the close of the ﬁ scal 
year to which it applies, and after the Annual Shareholders’ 
Meeting has approved the ﬁ nancial statements.

In the ﬁ rst quarter of each year, the Board of Directors, based on 
the Compensation Committee’s recommendations, conﬁ rms or 
determines the applicable criteria and their weightings, and the 
expected performance levels, including:

•  a trigger threshold under which no compensation is paid;

•  a  target  level,  corresponding  to  the  amount  due  when  a 

target is reached; and

•  a quantitative performance measurement, which also applies 

to non-ﬁ nancial criteria.

For Fiscal 2019, the Group Chief Executive Offi  cer’s performance 
bonus may represent up to:

•  100% of the annual variable compensation amount if the 

objectives are attained;

•  150% of the annual variable compensation amount if the 

objectives are exceeded.

The ﬁ nancial performance targets that are based on ﬁ nancial 
indicators are determined precisely by reference to the budget 
approved in advance by the Board of Directors and are subject to 
the above-mentioned performance thresholds.

The  achievement  levels  will  be  disclosed  on  a  criterion-by-
criterion basis once the Board of Directors has assessed whether 
the performance targets have been reached.

PAYMENT CONDITION

In accordance with French law, payment of the annual variable 
compensation is  subject to shareholder approval during the 
Annual Shareholders’ Meeting.

APPOINTMENT TO OR TERMINATION OF OFFICE

If a new Group Chief Executive Offi  cer is appointed or the existing 
Group  Chief  Executive  Officer ’s  term  of  office  is  terminated 
during  the  course  of  a  fiscal  year,  the  same  principles  as 
above will apply, on a proportional basis . However, if a Group 
Chief Executive Offi  cer is appointed during the second half of 
the fiscal year, the performance appraisal will be carried out 
on a discretionary basis by the Board of Directors, taking into 
account the recommendations of the Compensation Committee.

Long-term compensation

OBJECTIVE

T h e   B o a r d   o f   D i r e c t o r s   c o n s i d e r s   t h a t   t h e   l o n g - t e r m 
compensation system – which also applies to other key positions 
within the Company – is particularly suited to the position of 
Group Chief Executive Offi  cer in view of the direct contribution 
that he is expected to make to Sodexo’s long-term performance. 
It  is  based  on  (i)  the  Group  achieving  its  published  target 
growth rate for underlying operating profit over a period of 
several years, (ii) Sodexo’s share performance compared with 
its reference market, and (iii) Corporate Social Responsibility 
criteria. The system therefore helps to increase the Group Chief 
Executive Officer ’s motivation and loyalty while aligning his 
interests with those of Sodexo and its shareholders.

C O R P O R A T E   G O V E R N A N C E 

C o m p e n s a t i o n

LONG-TERM COMPENSATION SYSTEM

Sodexo’s long-term compensation system currently consists 
solely of free performance share grants. This performance share 
grant system is stricter than general market practices in France, 
as all of the free shares granted to the Group Chief Executive 
Offi  cer can only vest if he remains with the Group over a four-
year period and if during that period certain pre-deﬁ ned targets, 
relating  to  his  presence  within  the  Group  and  the  Group’s 
performance, are met.

The Board of Directors has capped the value of the performance 
shares granted to the Group Chief Executive Offi  cer at 150% of 
his total annual compensation (including ﬁ xed compensation 
and  annual  variable  compensation  at  objectives  attained). 
In addition, the performance shares granted to him may not 
represent  more  than  5%  of  the  total  number  of  free  shares 
granted by the Board of Directors in any given ﬁ scal year.

PERFORMANCE CONDITIONS 

The proportion of the performance shares that will vest  depend 
on the achievement of both internal and external performance 
c o n d i t i o n s   a s   m e a s u r e d   o v e r   a   f o u r - y e a r   p e r i o d .   T h e 
achievement levels will be disclosed on a criterion-by-criterion 
basis once the Board of Directors has assessed whether the 
performance targets have been reached.

The aim of the criteria used is to measure the Group’s overall 
performance and they are directly related to the Group’s main 
strategic goals, i.e.:

•  ﬁ nancial performance: 50%;

•  stock market performance: 30%;

•  Corporate Responsibility performance: 20%.

At its “Capital Markets Day” on September 6, 2018, Sodexo 
announced its ambition  of returning to market-leading growth. 
The Group plans to deliver organic revenue growth of over 3% as 
from Fiscal 2020 and then return its underlying proﬁ t margin to 
above 6% (excluding currency eff ects) on a sustainable basis.

For  performance  shares  granted  in   2019 ,  in  view  of  the 
need to restimulate growth, the Board has decided to add an 
organic revenue growth performance condition and to change 
the  underlying  operating  profit  target  to  a  target  based  on 
underlying operating profit margin so that the performance 
conditions are fully in line with the objectives announced to the 
markets.

The allocation of the shares contingent on the organic revenue 
growth and underlying operating profit margin performance 
conditions  will  be  subject  to  a  trigger  achievement  level 
corresponding to the objectives announced to the markets, with 
100% of the shares concerned only awarded if these objectives 
are exceeded.

As the Group has not announced any med ium-term objectives 
to the markets, the other target achievement levels are not 
disclosed for conﬁ dentiality reasons. 

However,  at  the  end  of  the  plan,   both  the  target  and  actual 
achievement levels related to these performance conditions will 
be fully disclosed.

For the performance shares to be granted in 2019, the following 
performance conditions will apply:

•  25% of the shares will be subject to a vesting condition based 

on average organic revenue growth;

•  25% of the shares will be subject to a vesting condition based 

on growth in underlying operating proﬁ t margin;

•  30%  of  the  shares  will  be  subject  to  a  Total  Shareholder 
Return (TSR ) vesting condition. Sodexo’s TSR will be compared 

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with that of a peer group comprising 12 companies (ABM 
Industries, Aramark, CBRE, Compass, Edenred, Elior, Elis/
Berendsen,  G4S,  ISS,  Jones  Lang  LaSalle,  Rentokil  and 
Securitas), selected based on their size, the similarity of their 
operations with those of Sodexo and the fact that they all 
operate in the outsourcing and shared services industry.

In line with the prior grant , the shares will be allocated depending 
on Sodexo’s ranking within the peer group.

QUARTILE ACHIEVED BY SODEXO IN 
RELATION TO THE PEER GROUP’S TSR

% OF THE SHARES SUBJECT TO THE TSR 
VESTING CONDITION THAT WILL VEST

Top quartile

Second quartile

Third quartile

Fourth quartile

100%

50%

15%

0%

•  20%  of  the  shares  will  be  subject  to  a  vesting  condition 
based on a diversity and inclusion objective set by Sodexo 
with a view to encouraging the promotion of women to top 
management positions.

For the purposes of this objective, and based on the Group’s 
current organizational structure, top management comprises 
all of the executives who report directly to a member of the 
Group Executive Committee or to a CEO of any of the Group’s 
businesses who is not on the Executive Committee.

Sodexo’s Corporate Responsibility objective is for 37% of its 
top managers to be women by August 31, 2022 and 40% by 
2025, compared with 32% as of  August 31, 2017.

The  conditions  now  reflect  a  good  balance  between  the 
Company’s performance, investor conﬁ dence in the Group and 
Corporate Responsibility performance.

CONTINUED PRESENCE CONDITION

In order for his performance shares to vest, the Group Chief 
Executive Officer must still be working with the Group at the 
vesting date. However, in accordance with article 24.5.1 of the 
AFEP-MEDEF Code of corporate governance for listed companies 
and the plan rules applicable to all of the other beneﬁ ciaries of 
the Group’s stock option and performance share plans, the Board 
of Directors may authorize the Group Chief Executive Offi  cer to 
retain his rights to any non-vested shares at the date of his 
departure, on a proportional basis. In such a case, the Board 
must disclose its decision and the underlying reasons why it 
was made. Any rights to performance shares thus retained by 
the Group Chief Executive Officer will remain subject to all of 
the rules of the applicable plans, particularly in terms of vesting 
dates and performance conditions.

LOCK-UP CONDITION

In accordance with article L.225-197-1 of the French Commercial 
Code, the Group Chief Executive Officer is required to hold in 
registered form, for the duration of his term of offi  ce, a number 
of  vested  shares  equal  in  value  to  30%  of  his  annual  fixed 
compensation at the date the shares are delivered.

In addition, as long as he remains in office, the Group Chief 
Executive  Officer  may  not  use  hedging  instruments  on  any 
performance shares granted to him.

Multi-year compensation

The Board of Directors has decided not to create any multi-year 
compensation system, preferring instead to use a long-term 
compensation system based on the use of equity instruments, 
which it considers to be more closely aligned with the interests 
of the Company’s shareholders.

However, the Board may envisage putting in place such a system 
if any regulatory changes or other changes in circumstances 
were  to  render  it  difficult  or  impossible  to  use  equity 
instruments. If a multi-year compensation plan were to be set 
up, it would be based on the same principles and criteria as 
those used for determining and allocating performance shares 
and  the  same  grant  cap  would  apply.  The  system  would  be 
structured based on very similar terms and conditions to those 
applicable to performance share plans.

Indemnity in the event of termination of offi  ce

If the Group Chief Executive Offi  cer’s term of offi  ce is terminated 
for any reason (other than resignation, retirement or gross or 
willful misconduct) then he will be entitled, subject to certain 
performance conditions, to an indemnity representing up to 
twice the amount of his gross annual compensation (ﬁ xed and 
variable) received over the 12 months preceding his departure.

This indemnity will only be paid if the annual increase in the Sodexo 
Group’s consolidated underlying  operating profit (based on a 
constant scope of consolidation and exchange rates) is equal to or 
higher than 5% for each of the three ﬁ scal years ended prior to the 
termination of the Group Chief Executive Offi  cer’s term of offi  ce.

Denis Machuel has expressly refused  this indemnity and therefore 
will not beneﬁ t from any payment in case of termination of offi  ce.

Non-compete agreement

The Company has entered into a non-compete agreement with 
a maximum term of 24 months in order to protect the Group 
by restricting the Group Chief Executive Officer ’s freedom to 
carry out certain activities following the end of his term as 
Chief Executive Offi  cer. The activities concerned include holding 
any position as an employee, executive offi  cer, or carrying out 
any consulting work, for any of Sodexo’s competitors, either 
directly  or  through  another  legal  entity.   As  consideration 
for these restrictions, the Group Chief Executive Officer will 
be  paid  an  indemnity  representing  up  to  24  months  of  his 
fixed compensation paid during the fiscal year preceding his 
departure. 

However,  the  Board  of  Directors  may  decide  to  waive  the 
Company’s right to enforce this agreement when the Group Chief 
Executive Offi  cer leaves the Group. In addition, the maximum 
aggregate amount paid to the Group Chief Executive Officer 
under (i) the non-compete agreement and/or (ii) his indemnity 
on termination of offi  ce may not exceed 24 months’ worth of his 
ﬁ xed compensation.

In any case, the payment of this indemnity is excluded if the 
Chief Executive Offi  cer retires, and in all circumstances, beyond 
the age of sixty-ﬁ ve (65).

Supplemental pension plan

The Group Chief Executive Offi  cer is a beneﬁ ciary of a deﬁ ned 
benefit  pension  plan  governed  by  article  39  of  the  French 
General  Tax  Code  and  article  137-11-1  of  the  French  Social 
Security Code, and which has been set up for the most senior 
executives employed by a French company of the Group. Under 
this supplemental pension plan (subject to a minimum of ﬁ ve 

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years of presence in the plan), as a member of the plan for at 
least 15 years, the pension paid can represent up to 15% of the 
average of his last three years’ ﬁ xed compensation preceding his 
retirement, to which are added the pensions due to him under 
compulsory pension plans, provided that he is employed by, or is 
a corporate offi  cer of, the Company at the time of his retirement.

The  Board  of  Directors  has  decided  that  the  Group  Chief 
Executive Offi  cer ’s entitlements under this plan (1% per year 
up to a maximum of 15%) will only accrue if the achievement 
rate for his annual variable compensation targets is at least 
80%. If this rate is reached, a 1% contribution to the deﬁ ned 
benefit plan will be accrued for the year concerned. However, 
if the achievement rate is less than 80%, no defined benefit 
contribution will be accrued for the year.

The entitlements under this plan are ﬁ nanced and provisioned 
through annual charges, which are revalued each year depending 
on new commitments and the balance of the account held by 
the insurer.

Company car

In his capacity as a representative of Sodexo, the Group Chief 
Executive Offi  cer has the use of a company car. The insurance, 
maintenance and fuel costs (related to his professional use) are 
covered by Sodexo.

Potential change of governance

If one or more Deputy Chief Executive Offi  cers were appointed, 
the  components  of  compensation  and  the  principles  and 
criteria  provided  for  in  the  Group  Chief  Executive  Officer ’s 
compensation  policy  would  also  apply  to  the  Deputy  Chief 
Executive Offi  cer(s). In such a case, the Board of Directors, acting 
on the recommendation of the Compensation Committee, would 
adapt the principles and criteria to the person(s) concerned in 
order to determine the applicable targets, performance levels, 
conditions, compensation structures and maximum percentages 
of the ﬁ xed compensation that their variable compensation may 
represent (which may not be higher than those of the Group 
Chief Executive Offi  cer).

Exceptional compensation

In  accordance  with  article  24.3.4  of  the  AFEP-MEDEF  Code 
of  corporate  governance  for  listed  companies,  the  Board  of 
Directors has decided that the Group Chief Executive Officer 
may receive exceptional compensation in certain circumstances 
(notably in the event of structural transactions) that must be 
precisely disclosed and explained.

In accordance with article L.225-37-2 of the French Commercial 
Code, the payment of any such compensation would be subject 
to shareholder approval.

Collective health and beneﬁ t plans

Signing bonus

The Group Chief Executive Offi  cer is a member of the collective 
health and benefit plans set up within the Company, subject 
to the same terms and conditions as those applicable to the 
category of employees to which he has been assigned for the 
purpose of determining these beneﬁ ts.

Unemployment insurance

As  the  Group  Chief  Executive  Officer  does  not  have  an 
employment contract, the Company has taken out a private 
unemployment insurance policy with the French association 
in charge of unemployment insurance for corporate officers 
(Association pour la garantie sociale des chefs et dirigeants 
d’entreprises  –  GSC).  Under  this  policy,  if  the  Group  Chief 
Executive Offi  cer were to lose his offi  ce, he would receive beneﬁ ts 
for a maximum period of 24 months.

Pursuant to article 24.4 of the AFEP-MEDEF Code of corporate 
governance for listed companies, if a new Group Chief Executive 
Offi  cer is recruited from outside the Group, the Board of Directors 
may decide to grant him or her a sum (in cash or shares) in order 
to compensate the new Group Chief Executive Offi  cer for any loss 
of remuneration (excluding pension beneﬁ ts) related to his or her 
departure from his or her previous position.

In accordance with article L.225-37-2 of the French Commercial 
Code, the payment of any such compensation would be subject 
to shareholder approval.

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5 C o m p e n s a t i o n

 5.5.2  Information on the components of compensation due or 

awarded to corporate officers for Fiscal 2018

5.5.2.1  Compensation of Sophie Bellon, Chairwoman of the Board of Directors

The amounts paid in Fiscal 2018 for the various components 
of Sophie Bellon’s compensation are presented in the tables 
below.

These amounts were set in line with the compensation policy 
for the Chairwoman of the Board of Directors approved at the 
January 23, 2018 Annual Shareholders’ Meeting (14th resolution).

SUMMARY OF COMPENSATION AWARDED TO THE CHAIRWOMAN OF THE BOARD OF DIRECTORS FOR FISCAL 2018

SOPHIE BELLON
CHAIRWOMAN OF THE BOARD OF DIRECTORS SINCE JANUARY 26, 2016
(in euro)

Fixed compensation

Variable compensation

Exceptional compensation

Directors’ fees paid by Sodexo S.A.  in her capacity as Chairwoman 
of the Board of Directors

Fringe benefits

TOTAL

For information, amounts paid by Bellon SA in her capacity as a 
member of the Management Board:

FISCAL 2018

FISCAL 2017

GROSS AMOUNTS 
DUE (BEFORE TAX)

GROSS AMOUNTS 
PAID (BEFORE TAX)

GROSS AMOUNTS 
DUE (BEFORE TAX)

GROSS AMOUNTS 
PAID (BEFORE TAX)

625,347

625,347

550,000

550,000

-

-

-

-

-

-

-

-

-

-

-

-

1,730

1,730

1,829

1,829

627,077

627,077

551,829

551,829

•  fixed compensation

•  directors’ fees

180,000

180,000

173,333

173,333

-

-

-

-

SUMMARY OF COMMITMENTS GIVEN TO THE CHAIRWOMAN OF THE BOARD OF DIRECTORS AS OF AUGUST 31, 2018

EMPLOYMENT 
CONTRACT

SUPPLEMENTAL 
PENSION PLAN

ACTUAL OR POTENTIAL 
LIABILITY FOR 
COMPENSATION 
OR BENEFITS RESULTING 
FROM TERMINATION OR 
CHANGE OF POSITION

COMPENSATION 
IN CONNECTION WITH 
A NON-COMPETE CLAUSE

YES

NO

YES

NO

YES

NO

YES

NO

Sophie Bellon

Date appointed: January 26, 2016

X

X

X

X

Expiration of current term: 
2021 Annual Shareholders’ Meeting

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5.5.2.2  Compensation of Michel Landel, Group Chief Executive Offi  cer until 

January 23, 2018

The amounts paid in Fiscal 2018 for the various components 
of Michel Landel’s compensation, including measurement of 
the value of performance shares granted, are presented in the 
tables below. Since Fiscal 2017, Michel Landel’s target variable 
compensation has been set at 120% of his ﬁ xed compensation.

The  amounts  presented  below  were  set  in  line  with  the 
compensation  policy  for  the  Group  Chief  Executive  Officer 
approved at the January 23, 2018 Annual Shareholders’ Meeting 
(15th resolution).

SUMMARY OF COMPENSATION AWARDED TO THE GROUP CHIEF EXECUTIVE OFFICER

Variable compensation(1)

252,383

1,092,528

1,090,118

MICHEL LANDEL
GROUP CHIEF EXECUTIVE OFFICER
(in euro)

Fixed compensation

Non-compete bonus

Directors’ fees(2)

Fringe benefits(3)

TOTAL

FISCAL 2018 (PROPORTIONAL)

FISCAL 2017

GROSS AMOUNTS DUE 
(BEFORE TAX)

GROSS AMOUNTS PAID 
(BEFORE TAX)

GROSS AMOUNTS DUE 
(BEFORE TAX)

GROSS AMOUNTS PAID 
(BEFORE TAX)

372,165

372,165

933,400

622,267

22,000

829

622,267

22,000

-

-

829

1,916

1,916

1,269,644

2,109,789

2,025,434

1,808,902

933,400

825,715

-

-

(1) Variable compensation corresponds to Michel Landel’s bonus for the year, to be paid the following year, and to travel allowances paid during the year (see table below 

for details).

(2) Michel Landel received directors’ fees for his position  as a director following the end of his term of office as Group Chief Executive Officer.
(3) Michel Landel benefited  from a company car.

BREAKDOWN OF VARIABLE COMPENSATION DUE FOR FISCAL 2018

70% based on financial 
targets

10%

10%

Organic growth

Growth in operating profit

Growth in Group net income

Free cash flow

Total financial targets

Health and safety target

Employee engagement rate

10% based on non-financial 
objectives

Dow Jones Sustainability Index

SUBTOTAL BEFORE HIGH-END OPERATING PROFIT GROWTH TARGET

ACHIEVEMENT OF HIGH-END OPERATING PROFIT GROWTH TARGET

TOTAL PERFORMANCE BONUS FOR FISCAL 2018

TRAVEL ALLOWANCE PAID IN DECEMBER 2017

TOTAL VARIABLE COMPENSATION FOR FISCAL 2018

WEIGHTING OF 
OBJECTIVES

MAXIMUM IN % 
OF OBJECTIVE

ACHIEVEMENT 
LEVEL

CORRESPONDING 
AMOUNT IN EURO

20%

20%

10%

20%

70%

10%

10%

10%

100%

50%

150%

175%

175%

175%

175%

175%

100%

100%

100%

150%

50%

200%

0%

0%

0%

0

0

0

175%

156,309

35%

156,309

0%

0%

0

0

100%

44,660

45%

209,969

0%

0

45%

200,969

51,414

252,383

5

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BREAKDOWN OF VARIABLE COMPENSATION DUE FOR FISCAL 2017

Revenue growth

Growth in consolidated operating profit

65% based on financial 
targets

Growth in Group net income

Free cash flow

Total financial targets

Health and safety target

Diversity target

10%

10%

15% based on non-financial 
objectives

Dow Jones Sustainability Index and 
employee engagement rate

SUBTOTAL BEFORE HIGH-END OPERATING PROFIT GROWTH TARGET

ACHIEVEMENT OF HIGH-END OPERATING PROFIT GROWTH TARGET

TOTAL PERFORMANCE BONUS FOR FISCAL 2017

TRAVEL ALLOWANCE PAID IN DECEMBER 2016

TOTAL VARIABLE COMPENSATION FOR FISCAL 2017

Percentages for achievement levels have been rounded.

PERFORMANCE SHARES GRANTED TO MICHEL LANDEL IN FISCAL 2018

No performance shares were granted to Michel Landel during Fiscal 2018.

STOCK OPTIONS EXERCISED BY MICHEL LANDEL IN FISCAL 2018

WEIGHTING OF 
OBJECTIVES

MAXIMUM IN % OF 
OBJECTIVE

ACHIEVEMENT 
LEVEL

CORRESPONDING 
AMOUNT IN EURO

15%

15%

20%

15%

65%

10%

10%

15%

100%

50%

150%

177%

177%

177%

177%

177%

100%

100%

100%

150%

50%

200%

0%

40%

0

67,205

177%

396,508

177%

297,381

104%

761,094

0%

0

100%

112,008

100%

168,012

93%

1,041,114

0%

0

93%

1,041,114

49,004

1,090,118

Michel Landel
Group Chief Executive Officer

DATE OF PLAN

12/13/2010
12/13/2011

NUMBER OF OPTIONS 
EXERCISED DURING 
THE FISCAL YEAR(1)

EXERCISE PRICE(1)

120,000
135,000

48.37
51.40

(1) Number of options and exercise price adjusted for capital transactions carried out since the grant date.

SUMMARY OF COMPENSATION AND STOCK OPTIONS AND PERFORMANCE SHARES GRANTED TO THE GROUP CHIEF 
EXECUTIVE OFFICER DURING THE FISCAL YEAR

MICHEL LANDEL
GROUP CHIEF EXECUTIVE OFFICER
(in euro)

Compensation due (gross, before tax)

Value of stock options granted

Value of performance shares granted

TOTAL

FISCAL 2018 (PROPORTIONAL)

FISCAL 2017

1,269,644

2,025,434

N/A

0 

N/A

3,258,860

1,269,644

5,284,294

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SUMMARY OF COMMITMENTS GIVEN TO THE GROUP CHIEF EXECUTIVE OFFICER AS OF AUGUST 31, 2018

EMPLOYMENT CONTRACT

SUPPLEMENTAL 
PENSION PLAN

ACTUAL OR POTENTIAL 
LIABILITY FOR 
COMPENSATION 
OR BENEFITS RESULTING 
FROM TERMINATION OR 
CHANGE OF POSITION

COMPENSATION 
IN CONNECTION WITH A NON-
COMPETE CLAUSE

YES

NO

YES

NO

YES

NO

YES

NO

Michel Landel
Group Chief Executive Officer

Date appointed: September 1, 2005

X*

X

X

X

No fixed term

*  Employment contract rescinded effective January 1, 2016.

5.5.2.3  Compensation of Denis Machuel, Group Chief Executive Offi  cer 

since January 23, 2018

The amounts paid in Fiscal 2018 for the various components of Denis Machuel’s compensation, including measurement of the value 
of performance shares granted, are presented in the tables below.

These amounts were set in line with the compensation policy for the Group Chief Executive Offi  cer approved at the January 23, 2018 
Annual Shareholders’ Meeting (16th resolution).

SUMMARY OF COMPENSATION AWARDED TO THE GROUP CHIEF EXECUTIVE OFFICER

DENIS MACHUEL
GROUP CHIEF EXECUTIVE OFFICER
(in euro)

Fixed compensation

Variable compensation(1)

Exceptional compensation

Fringe benefits(2)

TOTAL(3)

FISCAL 2018 (PROPORTIONAL)

GROSS AMOUNTS DUE 
(BEFORE TAX)

GROSS AMOUNTS PAID 
(BEFORE TAX)

545,768

245,595

N/A

7,531

545,768

N/A

7,531

798,894

553,319

5

(1) Variable compensation corresponds to Denis Machuel’s bonus for the year, to be paid the following year, (see table below for details).
(2) Denis Machuel has the use of a company car and is the beneficiary of an unemployment insurance policy.
(3) The gross amounts paid during the year including the pre-appointment period amount to 1,138,359 euro.

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BREAKDOWN OF VARIABLE COMPENSATION DUE FOR FISCAL 2018

Organic growth

Growth in consolidated operating profit

70% based on financial 
targets

Growth in Group net income

Free cash flow

Total financial targets

Health and safety target

Employee engagement rate

10%

10%

10% based on non-financial 
objectives

Dow Jones Sustainability Index

SUBTOTAL BEFORE HIGH-END OPERATING PROFIT GROWTH TARGET

ACHIEVEMENT OF HIGH-END OPERATING PROFIT GROWTH TARGET

TOTAL PERFORMANCE BONUS FOR FISCAL 2018

Percentages for achievement levels have been rounded.

WEIGHTING OF 
OBJECTIVES

MAXIMUM IN % OF 
OBJECTIVE

ACHIEVEMENT 
LEVEL

CORRESPONDING 
AMOUNT IN EURO

20%

20%

10%

20%

70%

10%

10%

10%

100%

50%

150%

175%

175%

175%

175%

175%

100%

100%

100%

150%

50%

200%

0%

0%

0%

0

0

0

175%

191,019

35%

191,019

0%

0%

0

0

100%

54,577

45%

245,596

0%

0

45%

245,595

PERFORMANCE SHARES GRANTED TO THE GROUP CHIEF EXECUTIVE OFFICER IN FISCAL 2018

NUMBER OF SHARES 
GRANTED DURING 
THE FISCAL YEAR

VALUE
OF SHARES(1) 
(in euro)

DATE OF PLAN

VESTING DATE

END OF LOCK-UP 
PERIOD(2)

PERFORMANCE 
CONDITION

Denis Machuel

04/27/2018

25,000(3)

1,600,438

04/27/2022

04/20/2022

Yes(4)

(1) Performance  shares  are  measured  at  the  estimated  fair  value  at  the  grant  date,  taking  into  account  the  terms  and  conditions  of  grant  (see  note  5.22  to  the 

consolidated financial statements). An accounting charge for the share grants is recognized over a period of four years.

(2) In light of the extension of the vesting period and in order to align the Group’s French and international plans, the shares are no longer subject to a lock-up period after 

the vesting date as was previously the case.

(3) Representing 0.016% of the Company’s share capital as of August 31, 2018 and 2.68% of all free shares granted during the fiscal year by the Board of Directors 
(within the limits defined in the 14th resolution of the January 2016 Annual Shareholders’ Meeting). The grants have no dilutive impact as only existing shares have 
been allocated to the plan.

(4) The vesting conditions for these shares are based on the following, as assessed over a four-year period: (i) growth in consolidated underlying operating profit (50% of 

the shares), (ii) TSR,  (30%), and (iii) a Corporate Responsibility objective (20% as described hereinafter).

The applicable performance conditions under this plan are as 
follows:

•  20% of the shares are subject to a vesting condition based on 

a Corporate Responsibility objective.

•  50% of the shares are  subject to a vesting condition based on 

growth in consolidated operating proﬁ t;

The methods for calculating the four objectives comprising the 
performance conditions are as follows:

•  30% of the shares are subject to a vesting condition based on 
Sodexo’s Total Shareholder Return  (TSR ) compared with two 
peer groups. Out of this 30%:

•  15% will vest based on Sodexo’s TSR compared with a peer 

group comprising CAC 40 companies,  

•  15% will vest based on Sodexo’s TSR compared with a 
peer group comprising 12 companies (Elior, Compass, 
Edenred, Aramark, ISS, JLL, CBRE, ABM, Elis, G4S, Rentokil 
and Securitas), 

(i)  Growth  in  consolidated  underlying  operating  profit: 
vesting condition applicable to 50% of the shares granted. The 
average annual growth in consolidated underlying operating 
proﬁ t (excluding currency eff ects and based on the consolidated 
ﬁ nancial statements) must be between 8% and 10% for four 
ﬁ scal years (Fiscal 2018, 2019, 2020 and 2021). The ranges 
that will apply are as follows:

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GROWTH IN CONSOLIDATED OPERATING PROFIT

% OF SHARES SUBJECT TO THIS CONDITION THAT WILL VEST

Less than 8% per year

Between 8% and 9% per year

Between 9% and 10% per year

10% or higher per year

0%

30%-60%

60%-100%

100%

Within the ranges set out above, the number of vested shares 
will be calculated on a linear proportional basis and rounded 
down to the nearest whole number.

Within the ranges set out above, the number of vested shares 
will be calculated on a linear proportional basis and rounded 
down to the nearest whole number.

(ii) TSR objective: vesting condition applicable to 30% of the 
shares granted and based on Sodexo’s overall stock market 
performance as measured by comparing its TSR with that of 
two peer groups. Out of this 30%:

•  15% will vest based on Sodexo’s TSR compared with a peer 

group comprising CAC 40 companies, and

• 

 15% will vest based on Sodexo’s TSR compared with a peer 
group comprising 12 companies (as deﬁ ned above).

The shares will vest based on Sodexo’s TSR ranking within 
each peer group:

QUARTILE ACHIEVED BY SODEXO IN 
RELATION TO THE TSR OF THE PEER GROUP 
CONCERNED

% OF SHARES SUBJECT TO THE 
TSR VESTING CONDITION THAT 
WILL VEST

Top quartile

Second quartile

Third quartile

Fourth quartile

100%

50%

15%

0%

Sodexo’s overall stock market performance compared with 
the overall stock market performance of each peer group will 
be measured over a period of 47 months.

The starting share price used will be the average of the share 
prices quoted over the 30 calendar days preceding the plan 
grant date. The end share price used to measure the overall 
stock market performance will be the average of the share 
prices  quoted  over  the  30  calendar  days  preceding  the 
performance assessment date (i.e. March 27, 2022).

(iii) Corporate  Responsibility  objective:  vesting  condition 
applicable  to  20%  of  the  shares  granted  and  based  on  a 
diversity and inclusion objective set by Sodexo with a view 
to encouraging the promotion of women to top management 
positions.

For the purposes of this objective, and based on the Group’s 
current organizational structure, top management comprises 
all of the executives who report directly to a member of the 
Group Executive Committee or to a CEO of any of the Group’s 
businesses who is not on the Executive Committee.

On  August 31, 2017,  32% were women.

Sodexo’s Corporate Responsibility objective is for women to 
account for 36% of its top managers by August 31, 2021.

SUMMARY OF COMPENSATION AND STOCK OPTIONS AND PERFORMANCE SHARES GRANTED TO THE GROUP CHIEF 
EXECUTIVE OFFICER DURING THE FISCAL YEAR

5

DENIS MACHUEL
GROUP CHIEF EXECUTIVE OFFICER
(in euro)

Compensation due (gross, before tax)

Value of stock options granted

Value of performance shares granted

TOTAL

FISCAL 2018 
(PROPORTIONAL)

798,894

N/A

1,600,438

2,399,332

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SUMMARY OF COMMITMENTS GIVEN TO THE GROUP CHIEF EXECUTIVE OFFICER AS OF AUGUST 31, 2018

EMPLOYMENT CONTRACT

SUPPLEMENTAL 
PENSION PLAN

ACTUAL OR POTENTIAL 
LIABILITY FOR 
COMPENSATION 
OR BENEFITS RESULTING 
FROM TERMINATION OR 
CHANGE OF POSITION

COMPENSATION 
IN CONNECTION WITH A NON-
COMPETE CLAUSE

YES

NO

YES

NO

YES

NO

YES

NO

Denis Machuel
Group Chief Executive Officer

Date appointed: January 23, 2018

X

X

X

X

No fixed term

5.5.2.4  Compensation and beneﬁ ts paid or awarded for Fiscal 2018 - Say on Pay

Compensation and beneﬁ ts paid or awarded for Fiscal 2018 to Sophie Bellon, Chairwoman of the Board 
of Directors

TYPE OF COMPENSATION OR BENEFITS

AMOUNT

COMMENTS

Fixed compensation

Fringe benefits

€625,347

Pre-tax gross amount 
due for the fiscal year

€1,730

Sophie Bellon has the use 
of a company car 

Sophie Bellon does not receive any of the following types of compensation or beneﬁ ts: directors’ fees, annual variable compensation, 
multi-year variable compensation, exceptional compensation, stock options, performance shares, indemnity for loss of offi  ce, or 
supplemental pension beneﬁ ts.

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Compensation and beneﬁ ts paid or awarded for Fiscal 2018 to Michel Landel, Chief Executive Offi  cer until 
January 23, 2018

TYPE OF 
COMPENSATION 
OR BENEFITS

Fixed 
compensation

AMOUNT

COMMENTS

€372,165

Pre-tax gross amount paid  for the fiscal year. Michel Landel’s fixed compensation had remained 
unchanged since January 1, 2011.
Michel Landel’s annual fixed compensation for Fiscal 2018 was unchanged at 933,400 euro; the amount 
allocated to him was calculated proportionately from September 1, 2017 through January 23, 2018, 
the date on which his term as Chief Executive Officer ended.

Variable 
compensation

€252,383

Variable compensation comprising (i) the bonus due for Fiscal 2018 (which will be paid in Fiscal 2019), 
corresponding to 45% of the fixed compensation due for Fiscal 2018, and (ii) travel allowances paid 
during Fiscal 2018, the amount of which varies depending on the countries visited and the duration 
of the stay.
The amount of Michel Landel’s variable compensation was calculated proportionately from September 1, 
2017 through January 23, 2018.

Directors’ fees

€22,000

Following the end of his term as Chief Executive Officer, Michel Landel received directors’ fees in his 
capacity as a member of the Board of Directors until July 1, 2018.

Stock options 
and performance 
shares

No shares 
or options 
awarded

Indemnity for loss 
of office

No amounts 
due or paid

Non-compete 
indemnity

€622,267

Supplemental 
pension plan

No amounts 
due or paid

Michel Landel did not receive any performance shares or stock options during Fiscal 2018.

As decided by the Board of Directors on November 6, 2008 and approved by the Shareholders’ Meeting of 
January 19, 2009 (fifth resolution), Michel Landel was  entitled to an indemnity subject to performance 
conditions in the event of the termination of his appointment as Chief Executive Officer (excluding 
voluntary termination or retirement and unless revoked for cause), for which a payment could have 
been  made to him up  an amount equal to twice the gross annual compensation (fixed and variable) 
received during the 12 months preceding the termination.
This indemnity would have been  paid only if, at constant consolidation scope and currency exchange 
rates, the annual increase in the Sodexo Group’s consolidated operating profit would have been  equal to 
or higher than 5% for each of the three fiscal years ended prior to the termination of the appointment.
As Michel Landel retired when his term as Chief Executive Officer ended, no indemnity for loss of office 
was paid to him.

Since Michel Landel’s term as Chief Executive Officer ended he has been subject to a two-year non-
compete obligation, expiring on January 23, 2020. As consideration for this obligation, he may be 
entitled to a non-compete indemnity amounting to two years’ worth of his annual fixed compensation, 
corresponding to a total of 1,866,800 euro.
The indemnity is payable in accordance with the terms and conditions set out in the non-compete 
agreement signed on November 14, 2017, which was duly authorized by the Board of Directors on that 
date and approved by the shareholders at the Annual Shareholders’ Meeting held on January 23, 2018.
If Michel Landel fails to comply with the obligations set forth in the non-compete agreement, he will not 
be entitled to the above-described indemnity. He will then be required to return any amounts already 
received and to pay to the Company a lump sum of 933,400 euro, corresponding to 12 months’ worth 
of his last annual fixed compensation.

Under Michel Landel’s supplemental defined benefit pension plan, which is governed by article 39 of 
the French General Tax Code and article 137-11-1 of the French Social Security Code and subject to a 
minimum of five years of presence in the plan, the pension paid can represent up to 15% (for seniority 
in the plan of at least 15 years) of his last three years’ fixed compensation preceding his retirement, to 
which are added the pensions due to him under compulsory pension plans, provided that he is employed 
by, or is a corporate officer of, the Company at the time of his retirement. 
Michel Landel met all of the above conditions to benefit from this plan as of  the date of his retirement 
on January 23, 2018.

Other benefits

€829

Michel Landel had  the use of a company car.

Michel Landel does not receive any of the following types of compensation or beneﬁ ts: multi-year variable compensation or exceptional 
compensation.

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Compensation and beneﬁ ts due or awarded for Fiscal 2018 to Denis Machuel, Chief Executive Offi  cer from 
January 23, 2018

TYPE OF 
COMPENSATION 
OR BENEFITS

Fixed 
compensation

AMOUNT

COMMENTS

€545,768

Pre-tax gross amount due for the fiscal year.
Denis Machuel’s annual fixed compensation has been set at 900,000 euro; the amount allocated to him 
for Fiscal 2018 was calculated proportionately as from January 23, 2018, the date on which he was 
appointed Chief Executive Officer.

Variable 
compensation

€245,596

Variable compensation comprising (i) the bonus due for Fiscal 2018 (which will be paid in Fiscal 2019), 
corresponding to 45% of the fixed compensation due for Fiscal 2018.
As Denis Machuel’s term as Chief Executive Office began on January 23, 2018, the amount of his variable 
compensation for Fiscal 2018 was calculated on a proportionate basis.

Stock options 
and performance 
shares

€1,600,438

Non-compete 
indemnity

No amounts 
paid

Supplemental 
pension plan

No amounts 
paid

On April 27, 2018, the Board of Directors used the authorization granted in the fourteenth resolution 
of the January 26, 2016 Shareholders’ Meeting to grant Denis Machuel 25,000 performance shares 
(representing 2.68% of the total number of free shares and performance shares allocated by the Board 
during the fiscal year).
These shares are subject to a four-year vesting period and the following vesting conditions:
•  for 50% of the shares, average growth in operating profit (excluding currency effects) amounting to 8% to 
10% per year, based on the financial statements for four fiscal years (Fiscal 2018, 2019, 2020 and 2021);
•  for 30% of the shares, a TSR objective based on Sodexo’s TSR compared with two peer groups. Of this 30%:
a)  15% will vest based on Sodexo’s overall stock market performance, assessed by measuring Sodexo’s 

TSR against that of a peer group comprising CAC 40 companies, and

b)  the other 15% will vest based on Sodexo’s overall stock market performance, assessed by measuring 
Sodexo’s TSR against that of a peer group comprising 12 companies (Elior, Compass, Edenred, 
Aramark, ISS, JLL, CBRE, ABM, Elis, G4S, Rentokil and Securitas);

•  for 20% of the shares, a Corporate Responsibility objective, whereby the proportion of women holding 

top management positions within the Group must represent at least 36% by August 30 , 2021.

These performance conditions are described in detail in section 5 .5.2.3  of this Registration Document.
No stock options were granted to Denis Machuel during Fiscal 2018.

On April 27, 2018, the Board of Directors authorized the signature of a non-compete agreement between 
the Company and Denis Machuel, its Chief Executive Officer, which would come into effect if his term of 
office is terminated.
This non-compete agreement covers a 24-month period directly following the end of the Chief Executive 
Officer’s term of office. Its purpose is to protect the Sodexo Group by restricting the Chief Executive 
Officer’s freedom to work for a competitor in the capacity of employee or corporate officer, or to carry 
out advisory engagements for a competitor, either directly or indirectly. The Board has drawn up a list 
of competitor companies for this purpose, which is included in the non-compete agreement signed on 
August 30 , 2018 and amended by way of an addendum signed on November 6, 2018 .
As consideration for this commitment, Denis Machuel will receive an indemnity, for the same 24-month 
period, representing 24 months of the fixed compensation paid to him in the fiscal year preceding the 
fiscal year in which his duties as Chief Executive Officer cease. The non-compete indemnity will not be 
paid if Denis Machuel retires, and in any event will not be paid once he reaches the age of 65.
The Board of Directors may waive the right to invoke this commitment at the time of the Chief Executive 
Officer’s departure.

Since he was appointed a member of the Group’s Executive Committee in September 2014, Denis Machuel 
has been a beneficiary of a defined benefit pension plan governed by article 39 of the French General Tax 
Code and article 137-11-1 of the French Social Security Code, set up for the Group’s senior executives 
who hold an employment contract with one of its French companies.
Following his appointment as Group Chief Executive Officer, at its meeting on April 27, 2018, the Board 
of Directors decided to authorize Denis Machuel to continue to be a beneficiary of this plan.
Under this supplemental pension plan (subject to a minimum of five years of presence in the plan), as 
a member of the plan for at least 15 years, the pension paid can represent up to 15% of the average of 
his last three years’ fixed compensation preceding his retirement, to which are added the pensions due 
to him under compulsory pension plans, provided that he is employed by, or is a corporate officer of, the 
Company at the time of his retirement.
Since August 7, 2015, under French law, supplemental pension benefits for corporate officers of listed 
companies (who are appointed or whose term of office is renewed after that date) must be subject to 
performance conditions. Consequently, the Board decided that the Chief Executive Officer’s entitlements 
under this plan (1% per year up to a maximum of 15%) will only accrue if the achievement rate for his 
annual variable compensation targets is at least 80%. If this rate is reached then an additional 1% 
contribution to the defined benefit plan will be accrued for the year concerned. However, if the achievement 
rate is less than 80%, no defined benefit contribution will be accrued for that year.

Other benefits

€7,531

Denis Machuel has the use of a company car and is the beneficiary of an unemployment insurance policy.

Denis Machuel does not receive any of the following types of compensation or beneﬁ ts: multi-year variable compensation, exceptional 
compensation or indemnity for loss of offi  ce.

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5.5.3  Compensation of  directors other than corporate officers

Except for  the Chairwoman of the Board and the Group Chief Executive Offi  cer, the members of the Board of Directors of Sodexo are 
not corporate offi  cers .

5.5.3.1  Directors’ fees paid to  directors other than corporate offi  cers

The total annual amount of directors’ fees available for payment 
to the directors of Sodexo was set at 900,000 euro at the Annual 
Shareholders’ Meeting of January 23, 2018. The total amount of 
directors’ fees actually paid to all directors (both executive and 
non executive) for Fiscal 2018 was 879,9000 euro, compared to 
732,750 euro for Fiscal 2017.

Directors’ fees were calculated and paid in accordance with the 
Board of Directors’ Internal Rules, based on the following criteria 
established for Fiscal 2018 :

•  20,000 euro ﬁ xed fee to each director;

•  4,000 euro per attendance at Board meetings;

•  5,500 euro ﬁ xed fee to each member of a Board Committee;

•  2,400 euro per attendance at Committee meetings;

•  1,250 euro travel allowance per Board meeting attended for 

directors traveling from the United States;

•  20,000  euro  fee  for  directors  who  chair  the  Board 
Committees  (Audit,  Compensation  and  Nominating 
Committees) in addition to their fee as a Committee member.

Directors’ fees paid to  directors other than corporate offi  cers in 
office as of August 31, 2018 for Fiscal 2018 and Fiscal 2017 
were as follows:

MEMBERS OF THE BOARD OF DIRECTORS

FISCAL 2018 (in euro)

FISCAL 2017 (in euro)

Emmanuel Babeau

Robert Baconnier

Patricia Bellinger

Astrid Bellon

Bernard Bellon(1)

François-Xavier Bellon

Nathalie Bellon-Szabo

Philippe Besson(2)

Françoise Brougher

Soumitra Dutta

Michel Landel

Cathy Martin

Sophie Stabile(3)

Cécile Tandeau de Marsac(4)

100,600

65,500

58,950

44,000

50,000

65,500

63,100

63,100

106,950

74,250

22,000

65,500

4,250

98,200

80,400

84,400

91,950

35,500

39,000

54,500

52,100

56,900

75,050

63,250

N/A

39,300

N/A

42,000

5

(1) This total includes 2,000 euro in directors’ fees paid by Bellon SA in Fiscal 2018 and Fiscal 2017 for his role as a member of Bellon SA’s Supervisory Board.
(2) Out of the directors’ fees due to Philippe Besson for his role as director representing employees, 21,249 euro were paid to him directly and 41,671 euro were paid to 

his trade union.

 (3) Sophie Stabile was appointed on July 1, 2018.
(4) Cécile Tandeau de Marsac was appointed on January 24, 2017.

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5.5.3.2  Compensation paid to non-executive directors by Bellon SA 

and Sodexo

No stock options or free shares have been granted to non-executive directors and they are not eligible for any supplemental pension 
plan or compensation or beneﬁ ts potentially resulting from the assumption, termination or change of position.

Astrid Bellon(2)

François-Xavier Bellon(3)

Nathalie Bellon-Szabo(4)

FISCAL 2018 (in euro)

FISCAL 2017  (in euro)

TOTAL ANNUAL COMPENSATION

TOTAL ANNUAL COMPENSATION

FIXED

VARIABLE(1)

FRINGE BENEFITS

FIXED

VARIABLE(1)

FRINGE BENEFITS

230,000

320,000

490,923

-

-

-

-

206,667

275,667

-

-

-

-

3,583

459,490

3,583

(1) Variable compensation is contingent upon meeting quantitative and qualitative targets.
(2) Compensation paid for her role as a member of the Management Board of Bellon SA.
(3) Compensation paid for his role as Chairman of the Management Board of Bellon SA.
(4) Compensation paid for her role as a member of the Management Board of Bellon SA (270,000 euro) and for her role as Chief Executive Officer of Sodexo Sports 
et Loisirs France and Chief Operating Officer of Sodexo Sports and Leisure worldwide (On-site Services) (220,923 euro). Nathalie Bellon-Szabo has the use of a 
company car.

5.5.4  Compensation policy for members of the Executive Committee

The compensation of the members of the Executive Committee 
comprises a ﬁ xed salary, a variable annual bonus, a long-term 
incentive (free share) plan and a travel allowance, the amount of 
which varies depending on the countries visited and the length 
of stay.

The  compensation  policy  applicable  to  members  of  the 
Executive Committee was changed in 2017 by decision of the 
Board of Directors, pursuant to the Compensation Committee’s 
recommendations. These modiﬁ cations aimed to:

•  weight the compensation  package  more  heavily  towards 

rewarding long-term performance;

•  raise the various qualiﬁ cation thresholds in order to increase 
the level required to attain the maximum annual bonus;

• 

introduce a stock market performance indicator – a Total 
Shareholder Return (TSR)(1) target – into the performance 
share  plan’s  performance  conditions.  This  condition  has 
been reinforced (i) since the 2017 plan, with Sodexo’s TSR 
performance  now  compared  with  that  of  the  companies 
making up the CAC 40 and (ii) since 2018, with Sodexo’s TSR 
performance also now compared against that of a peer group.

These changes were made in order to respond more eff ectively  to 
shareholders’ expectations.

The compensation  of the Executive Committee members for 
Fiscal 2019 comprises the following:

•  a  long-term  incentive  plan,  consisting  of  free  and 
performance share grants. All of the shares are subject to 
a  presence  and  performance  conditions  assessed  over  a 
four-year vesting period. The presence conditions has been 
reduced from 50% in 2015 to 40% in 2017 and to 20% in 
2018 to achieve 0% in 2019.

The  applicable  performance  conditions  and  the  number 
of  shares  subject  to  each  condition  are  described  in 
section 5.5.1.3 concerning the compensation policy for the 
Group Chief Executive Offi  cer.

In addition to this compensation, Executive Committee members 
may receive fringe beneﬁ ts (primarily a car) and pension plan 
contributions are paid under the following plans:

•  a defined contribution plan for holders of an employment 

contract with one of the Group’s foreign companies;

•  a deﬁ ned beneﬁ t plan for holders of a French employment 

contract.

Six new members joined the Executive Committee on July 1, 
2018.

Total compensation paid during Fiscal 2018 by the Group to 
members of the Executive Committee in offi  ce as of August 31, 
2018 (including the Group Chief Executive Officer, details of 
whose compensation are provided in section 5.5.2.2 of this 
document), amounted to 12,691,268 euro.

•  a fixed salary;

This amount comprises:

•  an annual performance bonus.

•  a ﬁ xed portion of 7,701,285 euro, including 56,635 euro of 

Depending on the Executive Committee member, the annual 
performance-based bonus represents between 50% and 80% 
of their ﬁ xed salary.

The bonus is calculated and paid following the close of the 
ﬁ scal year to which it applies and aft  er the Board of Directors 
has approved the ﬁ nancial statements. 

contributions to the above-mentioned pension plans;

•  a  variable  portion  of  4,989,983  euro  (comprising  the 
Fiscal   2017   performance-based  bonus  and  the  travel 
allowances of 131,592 euro paid in Fiscal 2018).

1  Total Shareholder Return (TSR) is a measure of the performance of diff erent companies’ stocks and shares over time. It combines share price appreciation and 

dividends paid to show the total return to the shareholder.

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5.5.5  Description of the long-term incentive plan for managers

The Group’s incentive compensation policy for managers has 
two objectives:

•  align ing the ﬁ nancial interests of managers with  those of the 

shareholders;

•  attracting and retaining the entrepreneurs needed to expand 

and strengthen Sodexo’s market leadership.

The number of unexercised stock options issued by the Company 
to managers in the Group in connection with various plans still 
in  effect  as  of  August  31,  2018  was  45,765  (around  0.03% 
of  the  capital  at  that  date),  representing  a  total  amount  of 
2,352,321 euro. All options were exercisable as of August 31, 
2018 and each option entitles the holder to one Sodexo share 
if exercised.

Stock option plans

Free share plans

Until Fiscal 2012, as part of this policy stock options were 
granted  at  regular  intervals  in  accordance  with  resolutions 
adopted at Shareholders’ Meetings. The plans met the following 
requirements:

•  options were generally granted at the same time of the year 

and their exercise price was not discounted;

•  option lives were six to seven years;

•  vesting of options was contingent upon the beneficiary’s 
continued  employment  with  the  Sodexo  Group  and,  for 
plans subsequent to 2007, to the achievement of an annual 
increase in Group net income at constant currency exchange 
rates of at least 6% over three years. However, this latter 
condition  applied  only  to  a  certain  portion  of  the  stock 
options granted to each beneﬁ ciary (between 0% and 50%, 
except for the Group Chief Executive Offi  cer, whose grant was 
wholly subject to the performance condition), the remainder 
of the options vesting in equal increments over four years.

Since Fiscal 2013, long-term incentive plans have consisted 
exclusively of free share plans.

The rules governing free share plans within the Group are as 
follows:

•  all free share grants are made in the same period of the year;

•  vesting of shares granted under this long-term incentive 
program is contingent upon the beneﬁ ciary’s employment 
with the Group through the vesting date;

•  performance conditions apply to a certain proportion of 

the grant, as follows:

•  100%  of  the  free  shares  granted  to  the  Group  Chief 

Executive Offi  cer, as explained above,

•  80%  of  the  free  shares  granted  to  members  of  the 
Executive Committee (excluding the Group Chief Executive 
Officer), as explained above (for the shares granted in 
April 2018),

•  tranches of the free shares granted to other beneﬁ ciaries, 
as explained below (for the shares granted in April 2018):

NUMBER OF SHARES GRANTED PER BENEFICIARY

% OF SHARES SUBJECT TO A PERFORMANCE CONDITION

Up to 250 shares

The vesting of 100% of these shares is only contingent upon continued employment

Between 251 and 1,000 shares

More than 1,001 shares

The vesting of all of these shares is contingent upon continued employment; 
30% of these shares are also subject to a performance condition

The vesting of all of these shares is contingent upon continued employment; 
50% of these shares are also subject to a performance condition

5

The performance conditions have changed gradually, with a TSR 
target introduced in Fiscal 2015 and a comparative TSR target 
in Fiscal 2016. Also in Fiscal 2016, the indicator for the ﬁ nancial 
performance condition was changed from Group net income to 
consolidated underlying operating proﬁ t in order to align this 
condition with the market guidance issued in relation to the 
Group’s medium-term targets.

In Fiscal 2016 the vesting period was extended to four years 
in order to align it with the four-year performance condition 
assessment period. This four-year vesting period applies to 
all free shares granted, irrespective of whether or not they are 
subject to performance conditions.

Further details of the plan are provided in section 5 .5.2.2.

In 2016 the vesting period for all plans was harmonized to four 
years and the lock-up period for French plans was removed in 
order to simplify the plans and align their durations. Previously, 

the shares granted under French plans were subject to a vesting 
period of two or three years followed by a two-year lock-up 
period.

Consequently, the shares granted by the Board of Directors 
on April 27, 2018 will be delivered on April 27, 2022, provided 
that the beneﬁ ciary is still working with the Group and that the 
performance conditions have been met.

The performance conditions for the April 27, 2015 performance 
share plans were met. 

Consequently, 252,682 shares granted under the French plans 
were delivered to their beneﬁ ciaries on April 27, 2018 but are 
subject to a two-year lock-up period expiring on April 27, 2020.

At August 31, 2018, 481,395 shares remained to be delivered 
to the members of the international plans. The delivery will take 
place on April 27, 2019 and the shares will not be subject to a 
lock-up period.

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5.5.5.1  Stock options granted to Group managers

DATE OF SHAREHOLDERS’ 
MEETING

DATE OF BOARD MEETING 
GRANTING STOCK OPTION PLAN(1)

TOTAL NUMBER OF 
OPTIONS GRANTED(2)

TOTAL NUMBER OF OPTIONS 
GRANTED TO CORPORATE OFFICERS 
(MICHEL LANDEL)

START DATE OF 
VESTING PERIOD

01/19/2009

12/13/2010 (A1a)

63,650

01/19/2009

12/13/2010 (A1b)

282,650

01/19/2009

12/13/2010 (A1c)

219,000

01/19/2009

12/13/2010 (A3)

120,000

120,000*

01/19/2009

12/13/2011 (A1a)

57,150

01/19/2009

12/13/2011 (A1b)

358,500

01/19/2009

12/13/2011 (A1c)

330,000

01/19/2009

12/13/2011 (A2a)

74,500

01/19/2009

12/13/2011 (A2b)

430,300

01/19/2009

12/13/2011 (A3)

135,000

135,000*

01/19/2009

12/13/2011 (Bb)

483,500

12/13/2011

70% of the options: 
12/13/2011
30% of the options: 
12/13/2013(4)

50% of the options: 
12/13/2011
50% of the options: 
12/13/2013(4)

100% of the options: 
12/13/2013(4)

12/13/2012

70% of the options: 
12/13/2012
30% of the options: 
12/13/2014(4)

50% of the options: 
12/13/2012
50% of the options: 
12/13/2014(4)

12/13/2012

70% of the options: 
12/13/2012
30% of the options: 
12/13/2014(4)

100% of the options: 
12/13/2014(4)

70% of the options: 
12/13/2012
30% of the options: 
12/13/2014(4)

(1) Beneficiaries of plans:

(A)  plan reserved for non-U.S. employees;
(A1)  plan reserved for employees resident in France;
(A2)  plan reserved for employees non-resident in France;
(A3)  plan reserved for corporate officers;
(B)  plan reserved for employees resident in North America;
(C)  plan reserved for U.S. employees non-resident in the United States.
(2) Total number of options granted by the Board of Directors at grant date.
(3) Exercise price adjusted after capital transactions carried out since grant date.
(4) Subject to achieving an annual increase in Group net income of at least 6% over three years at constant currency exchange rates.
(5) Total number of options cancelled as a result of departure of beneficiaries.
*  Under article L.225-185 of the French Commercial Code, the Board of Directors had  decided that Michel Landel, the only corporate officer (mandataire social) 

granted stock options, would be  required to hold a number of shares received upon exercise of the stock options related to these plans, equivalent in value to 30% 
of his base salary as of the date of exercise of these options for the duration of his term.

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CUMULATIVE NUMBER 
OF SHARES PURCHASED 
AS OF 08/31/2018

CUMULATIVE NUMBER OF 
OPTIONS CANCELLED(5)

OPTIONS OUTSTANDING 
AS OF 08/31/2018

50,837

12,813

247,537

35,113

219,000

120,000

0

0

0

0

0

0

42,138

8,747

6,265

270,530

48,470

39,500

280,000

50,000

62,287

12,213

387,499

42,801

135,000

0

451,057

32,443

0

0

0

0

0

5

EXPIRATION DATE

EXERCISE PRICE(3) 
(in euro)

12/12/2017

48.37

12/12/2017

48.37

12/12/2017

48.37

12/12/2017

48.37

12/12/2018

51.40

12/12/2018

51.40

12/12/2018

51.40

12/12/2017

51.40

12/12/2017

51.40

12/12/2018

51.40

12/12/2017

51.40

TERMS OF EXERCISE

25% at each 
anniversary date

17.5% at each 
anniversary date
30% at the 
3rd anniversary date(4)

12.5% at each 
anniversary date
50% at the 
3rd anniversary date(4)

100% at the 
3rd anniversary date(4)

25% at each 
anniversary date

17.5% at each 
anniversary date
30% at the 
3rd anniversary date(4)

12.5% at each 
anniversary date
50% at the 
3rd anniversary date(4)

25% at each 
anniversary date

17.5% at each 
anniversary date
30% at the 
3rd anniversary date(4)

100% at the 
3rd anniversary date(4)

17.5% at each 
anniversary date
30% at the 
3rd anniversary date(4)

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C O R P O R A T E   G O V E R N A N C E 

5 C o m p e n s a t i o n

Stock options granted to or exercised by members of the Group Executive Committee as of August 31, 2018

Options granted to or exercised by members of the Group Executive Committee under plans still in eff ect in Fiscal 2018 are detailed 
below:

NAME

Michel Landel

Sylvia Métayer

DATE OF BOARD MEETING 
GRANTING STOCK 
OPTION PLAN

NUMBER OF 
OPTIONS 
GRANTED(1)

EXERCISE 
PRICE 
(in euro)

EXPIRATION DATE

OPTIONS 
EXERCISED AS OF 
08/31/2018

OPTIONS 
EXERCISED DURING 
THE FISCAL YEAR

OPTIONS 
UNEXERCISED AS OF 
08/31/2018

12/13/2010 (A3)*

120,000

48.37

12/12/2017

120,000

120,000

12/13/2011 (A3)*

135,000

51.40

12/12/2018

135,000

135,000

12/13/2010 (A1b)

17,000

48.37

12/12/2017

17,000

12/13/2011 (A2b)

20,000

51.40

12/12/2018

20,000

17,000

8,500

0

0

0

0

(1) Total number of options granted by the Board of Directors at grant date.
*  Under article L.225-185 of the French Commercial Code, the Board of Directors had  decided that Mr. Michel Landel, the only corporate officer (mandataire social) 
granted stock options, would be  required to hold a number of shares received upon exercise of the stock options related to these plans, equivalent in value to 30% of 
his base salary as of the date of exercise of these options for the duration of his term.

Stock options granted to and exercised by the ten Group employees receiving or exercising the largest 
number of options (other than corporate offi  cers) during Fiscal 2018

Options granted during the fiscal year to the ten Group employees receiving 
the largest number of options

Options exercised during the fiscal year by the ten Group employees exercising 
the largest number of options(1)

(1) Including 37,400 options granted on December 13, 2010 and 113,000 options granted on December 13, 2011.

TOTAL NUMBER

WEIGHTED AVERAGE PRICE 
(in euro)

N/A

N/A

150,400

50.58

5.5.5.2  Free shares granted to Group managers

As of August 31, 2018, a total of 5,269,630 free shares has been granted to Group managers since 2013  (cumulatively representing 
approximately 3.57 % of the capital since the adoption of the resolution at the January 2013 Annual Shareholders’ Meeting) for an 
amount of 382,203,175  euros (based on estimated fair value at the grant date, taking into account the related terms and conditions).

Starting in 2016, the French and international plans were harmonized.

These grants concerned 1,123 beneﬁ ciaries in 2013, 1,200 in 2014, 1,307 in 2015, 1,282 in 2016,1,357 in 2017 and 1691 in 2018.

2014 PLAN

2015 PLAN

2015-2 PLAN

2016 PLAN

2016-2 PLAN

2016-3 PLAN

2017 PLAN

2017-2 PLAN

2018 PLAN

Date of Annual Shareholders’ 
Meeting

Date of grant by the Board of 
Directors

01/21/2013

01/21/2013

01/21/2013

01/26/2016

01/26/2016

01/26/2016

01/26/2016

01/26/2016

01/26/2016

03/11/2014

04/27/2015

12/01/2015

04/27/2016

09/30/2016

11/30/2016

04/20/2017

09/14/2017

04/27/2018

Total number of shares granted

840,000

848,875

15,100

866,075

11,950

10,000

884,895

14,000

917,880

Total number of beneficiaries

1,200

1,299

8

1,264

16

2

1,357

5

1,671

% of share capital

0.53%

0.54%

0.01%

0.56%

0.01%

0.01%

0.58%

0.01%

0.62%

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W W W. S O D E X O . C O M

C O R P O R A T E   G O V E R N A N C E 

C o m p e n s a t i o n

2014 PLAN

2015 PLAN

2015-2 PLAN

2016 PLAN

2016-2 PLAN

2016-3 PLAN

2017 PLAN

2017-2 PLAN

2018 PLAN

Performance conditions

F or grants of more than 
250 shares

Growth in Group net income

X

X

X

Growth in consolidated 
operating profit

Growth in consolidated 
underlying operating profit

TSR – Applicable only to 
members of the Executive 
Committee
(see description above)

FRENCH PLANS

Vesting date for shares 
subject to the condition of the 
beneficiary still working with 
the Group

Vesting date for shares subject 
to performance conditions

X

X

03/11/2016

04/27/2017

12/01/2017

03/11/2017

04/27/2018

12/01/2018

End of lock-up period

03/11/2019

04/27/2020

12/01/2020

Total number of shares granted

280,825

276,140

6,750

Number of shares granted to 
the corporate officer

40,000

40,000

% of share capital

0.03%

0.03%

Cumulative number of shares 
cancelled

Transferred shares 
(beneficiaries participating 
in the international mobility 
program)

(10,313)

(24,458)

(21,555)

0

0

0

Vested shares

248,957

251,682

3,725

SITUATION OF THE FRENCH 
PLAN AT AUGUST 31, 2018

INTERNATIONAL PLANS

0

0

3,025

X

X

0

0

X

X

0

0

X

X

0

0

X

X

0

0

X

X

0

0

X

X

0

0

5

Vesting date

03/11/2018

04/27/2019

12/01/2019

04/27/2020

09/30/2020

11/30/2020

04/20/2021

09/14/2021

04/27/2022

End of lock-up period/date 
available

03/11/2018

04/27/2019

12/01/2019

04/27/2020

09/30/2020

11/30/2020

04/20/2021

09/14/2021

04/27/2022

Total number of shares granted

559,175

572,735

8,350

866,075

11,950

10,000

884,895

14,000

917,880

44,000

0.03%

44,000

25,000

0.03%

0.00%

0.02%

(111,045)

(96,715)

(5,000)

(106,470)

(350)

(45,646)

(7,510)

Number of shares granted to 
the corporate officer

% of share capital

Cumulative number of shares 
cancelled

Transferred shares 
(beneficiaries participating 
in the international mobility 
program)

Vested shares

469,685

1,000

21,555

0

0

1,000

0

0

0

0

0

SITUATION OF 
THE INTERNATIONAL PLAN 
AT AUGUST 31, 2018

TOTAL OF THE PLANS 
AT AUGUST 31, 2018

0

475,020

3,350

758,605

11,600

10,000

839,249

14,000

910,370

0

475,020

6,375

758,605

11,600

10,000

839,249

14,000

910,370

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269

 
5

C O R P O R A T E   G O V E R N A N C E 

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6

SHAREHOLDERS 
AND SHARE CAPITAL

Financial communications calendar 

How to obtain information 

6.1 

Sodexo Share Performance 

6.1.1  Stock market performance 

6.1.2  Share and dividend performance 

272

272

273

273

275

6.1.3  Beneﬁ ts of being a registered shareholder 276

6.1.4  ADR program 

277

6.2 

Financial Communications Policy  278

6.2.1  Listening to our shareholders and the 

ﬁ nancial community 

6.2.2  Registration Document 

6.2.3  Annual Shareholders’ Meeting 

278

279

279

6.2.4  Regular meetings and ongoing dialogue  279

6.3 

Shareholders 

6.3.1  Changes in the distribution of share 

capital and voting rights over the last 
three years 

6.3.2  Employee share ownership 

6.4 

Additional Information about 
the Company’s Share Capital 

6.4.1  Share capital 

6.4.2  Evolution of the share capital in the 

last three ﬁ scal years 

280

280

282

283

283

283

6.4.3  Potential share capital  

6.4.4  Capital authorized but not issued 

6.5 

General Information about 
Sodexo bylaws 

6.5.1  Legal company name and registered 

offi  ce 

6.5.2  Legal form 

6.5.3  Date of incorporation and expiration 

(article 5 of the bylaws) 

6.5.4  Corporate purpose (article 2 of the 

bylaws) 

6.5.5  Registration 

6.5.6  Consultation of legal documents 

6.5.7  Material contracts 

6.5.8  Fiscal year (article 17 of the bylaws) 

6.5.9  Appropriation of earnings and 

dividend premium (excerpt from 
article 18 of the bylaws) 

6.5.10  Shareholders Meetings (excerpt from 

article 16 of the bylaws) 

6.5.11  Double voting rights (excerpt from 

article 16 of the bylaws) 

283

284

285

285

285

285

285

285

286

286

286

286

287

287

6.5.12  Share ownership disclosure thresholds 

(excerpt from article 9 of the bylaws) 

287

6.5.13  Identiﬁ cation of shareholders (excerpt 
from article 9 of the bylaws) 

6.5.14  Modiﬁ cation of shareholders rights 

287

287

S O D E X O   -   F I S C A L   2 0 1 8   R E G I S T R AT I O N   D O C U M E N T

271

S H A R E H O L D E R S   A N D   S H A R E   C A P I T A L

6  

Financial communications calendar

Fiscal 2019 f irst quarter revenues 

2019 Annual Shareholders’ Meeting 

Ex-Dividend  date

Dividend r ecord date

Dividend payment date

Fiscal 2019 h alf-year  results 

Fiscal 2019 n ine month revenues 

Fiscal 2019 a nnual results 

2020 Annual Shareholders’ Meeting 

January 10, 2019

January 22, 2019

January 30, 2019

January 31, 2019

February 1, 2019

April 11, 2019

July 8, 2019

November 7, 2019

January 21, 2020

These dates are purely indicative  and are subject to change without notice. Regular updates to the calendar are 
available on our website www.sodexo.com.

How to obtain information

By phone
Investor Relations – Tel.: +33 (0)1 57 75 80 54

By e-mail
financial.communication.group@sodexo.com

By mail
Sodexo, Investor Relations – 255, quai de la Bataille-de-Stalingrad – 92866 Issy-les-Moulineaux Cedex 9 – France

On the Sodexo website
www.sodexo.com 

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S H A R E H O L D E R S   A N D   S H A R E   C A P I T A L

S o d e x o   S h a r e   P e r f o r m a n c e

6.1  SODEXO SHARE PERFORMANCE

 _ Sodexo shares are listed on Euronext Paris (Euroclear code: FR0000121220) and have been 
included in the CAC 40 index since March 21, 2016. In addition, Sodexo off ers securities listed in U.S. 
dollars, in the form of American Depositary Receipts (ADRs) that are traded on the over-the-counter 
(OTC) market, ticker SDXAY, with ﬁ ve ADRs representing one Sodexo share.
 _  Sodexo had a Standard & Poor’s rating of A- long-term and A-1 short-term as of August 31, 2018.

6.1.1  Stock market performance

ADJUSTED SODEXO SHARE PRICE TRENDS FROM INITIAL LISTING THROUGH AUGUST 31, 2018 (in euro)

120

100

80

60

40

20

0

3

8

9

1

August, 31
89.72

August, 31
22.51

5

8

9

1

7

8

9

1

9

8

9

1

1

9

9

1

3

9

9

1

5

9

9

1

7

9

9

1

9

9

9

1

1

0

0

2

3

0

0

2

5

0

0

2

7

0

0

2

9

0

0

2

1

1

0

2

3

1

0

2

5

1

0

2

6

1

0

2

7

1

0

2

8

1

0

2

SODEXO

CAC 40 (indexed)

6

The initial listing was on March 2, 1983 at an adjusted price 
of 1.55 euro. As of August 31, 2018 (the last trading day of 
Fiscal 2018), the closing share price was 89.72 euro.

Since its first listing, the value of the Sodexo share has been 
multiplied by 58, whereas the CAC 40 index has been multiplied 

by only 14.5 over the same period, which means that Sodexo’s 
shares have signiﬁ cantly outperformed the CAC 40.

Since its listing on the stock exchange in 1983, Sodexo’s share 
value has appreciated by an average of 12.3%(1) per annum, 
excluding dividends.

1  CAC 40 index reconstituted from 1983 to 1987.

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S H A R E H O L D E R S   A N D   S H A R E   C A P I T A L

6 S o d e x o   S h a r e   P e r f o r m a n c e

SODEXO SHARE PRICE FROM SEPTEMBER 1, 2013 THROUGH TO AUGUST 31, 2018 (in euro)

130

120

110

100

90

80

70

60

50

August, 31
91.77

August, 31
89.72

August 2013

August 2014

August 2015

August 2016

August 2017

August 2018

SODEXO

CAC 40 (indexed)

Over the last ﬁ ve ﬁ scal years, Sodexo’s share price has increased by 34%, whereas the CAC 40 index has increased by 37% during 
the same period.

SODEXO SHARE PRICE FROM SEPTEMBER 1, 2017 THROUGH TO AUGUST 31, 2018 (in euro)

120

110

100

90

80

70

60

August, 31
104.22

August, 31
89.72

Sept. 2017

Nov. 2017

Jan. 2018

March 2018

May 2018

July 2018

August 2018

SODEXO

CAC40 (indexed)

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S H A R E H O L D E R S   A N D   S H A R E   C A P I T A L

S o d e x o   S h a r e   P e r f o r m a n c e

During Fiscal 2018, the share price decreased by 8.5% whereas 
the CAC 40 index rose by 6.3%. This underperformance is due to 
a 20% fall in the share price at the end of March following the 
announcement of a greater than expected decline in ﬁ rst half 
Underlying operating proﬁ t and a downward revision of annual 
guidance. The Guidance as announced in November 2017 was for 
organic revenue growth of between +2% and +4%, and a stable 
underlying operating margin at 6.5% excluding currency eff ects. 

On March 29, 2018, the Group  announced organic growth of +1 
to +1.5% and an Underlying operating margin of 5.7%, excluding 
currency impacts. 

More than half the fall was recovered by the end of August. 

As of August 31, 2018, the market capitalization of Sodexo was 
13.2 billion euro.

6.1.2  Share and dividend performance

Dividend policy

The Group’s dividend policy is aimed at securing long-term shareholder loyalty by regularly increasing the dividend, a dividend payout 
ratio of around 50% and a dividend premium for shareholders who have held their shares in registered form for an unbroken period 
of at least four years.

DIVIDEND (IN EURO) 

PAYOUT RATIO (IN %)

4.0

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0.0

56%

56%

57%

57%

63%

70%

60%

52%

50%

51%

49%

46%

48%

2.20 €

2.40 €

1.27 €

1.27 €

1.35 €

1.46 €

1.59 €

1.62 €

1.80 €

2.75 €

2.75 €

50%

40%

30%

20%

10%

0%

2 0 0 7-2 0 0 8

2 0 0 8-2 0 0 9

2 0 0 9-2 0 1 0

2 0 1 0-2 0 1 1

2 0 1 1-2 0 1 2

2 0 1 2-2 0 1 3

2 0 1 3-2 0 1 4

2 0 1 4-2 0 1 5

2 0 1 5-2 0 1 6

2 0 1 6-2 0 1 7

2 0 1 7-2 0 1 8

6

At  the  Annual  Shareholders’  Meeting  on  January  22,  2019, 
the Board of Directors will propose that shareholders approve 
the  payment  of  a  cash  dividend  of  2.75   euro  per  share  for 
Fiscal 2018, stable  compared with Fiscal 2017.

In addition, shares held in registered form for the past four years 
or more (i.e., since at least August 31, 2014) and which are 
still held in such form when the dividend becomes payable o n 
February 1, 2019  will be entitled to a 10% dividend premium, 
representing an additional 0.275  euro per share. The number of 
shares eligible for this dividend premium may not exceed 0.5% 
of the share capital for any single shareholder.

The distribution of dividends and the 10% dividend premium 
represent a payout ratio of 63 %.

The dividend and dividend premium (for eligible shares) will 
become payable on February 1, 2019, with a Euronext Paris 
ex-dividend date of January 30, 2019. The record date – i.e., 
the date before which an investor must own shares in order to 
receive the dividend – will be January 31, 2019.

Dividends not claimed within ﬁ ve years of the date on which they 
were payable to shareholders are forfeited.

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S H A R E H O L D E R S   A N D   S H A R E   C A P I T A L

6 S o d e x o   S h a r e   P e r f o r m a n c e

FISCAL 2018

FISCAL 2017

FISCAL 2016

FISCAL 2015

FISCAL 2014

SHARE PRICE (in euro)

Opening price as of September 1

98.26

104.75

77 .71

Closing price as of August 31

89.72

98.03

103.85

Market capitalization as of August 31 (in billions of euro)

13.2

14.8

78.10

96.02

114.05

123.60

16.0

70.45

106.7

75.03

78.43

12.3

69.49

95.76

67 .30

74.97

11.8

66.69

80.58

12-month low

12-month high

DAILY AVERAGE VOLUME OF SHARE TRADING

In number of shares

In value (in thousands of euro)

DIVIDEND AND SHARE PERFORMANCE

361,046

241,150

275,923

232,550

178,656

34,221

25,607

24,551

19,800

13,333

Total payout(2) (in millions of euro)

407 (1)

411 

371

335

276

Payout ratio including dividend premium 
(Total payout/Group net profit)

Dividend per share (DPS) (in euro)

10% dividend premium (in euro)

Earnings per share (EPS)(3) (in euro)

Payout ratio (DPS/EPS)

62.6 %

2.75 (1)

57%

2.75

0.275 (1)

0.275

4.40

62.5 %

4.85

57%

58.2%

47 .9%

56.3%

2.40 

0.24 

4.21

57%

2.20

0.22

4.60

1.80

0.18

3.23

47 .8%

55.7%

TOTAL SHAREHOLDER RETURN (TSR)(4)

-5.9%

-4.1%

36.5%

6.9%

13.8%

(1) Subject to approval at the Annual Shareholders’ Meeting on January 22, 2019.
(2) Theoretical payout for current fiscal year and actual figures for previous years. Includes dividend premium.
(3) Based on an average number of shares (quarterly average).
(4) Calculation of the Total Shareholder Return over a given period and calculated as follows: (market price at the end of the period – market price at the beginning of the 

period + dividends paid over the period, excluding the dividend premium)/market price at the beginning of the period.

6.1.3  Benefits of being a registered shareholder

Registered Sodexo shareholders are entitled to:

•  an  exemption  from  administration  costs  (for  directly-

•  double voting rights for registered shares held for at least 

four years;

registered shares only).

Sodexo share codes

•  a dividend premium of 10%(1) for registered shares held for 
at least four years (the number of shares eligible for this 
dividend premium may not exceed 0.5% of the share capital 
for any single shareholder);

•  automatic  invitation  to  Shareholders’  Meetings  and 
personalized  information  on  all  financial  transactions 
(capital increases, bond issues, etc.);

Sodexo bearer shares are traded under the code FR0000121220.

The code for registered shares already eligible for the dividend 
premium is FR0011532431. 

Diff erent share codes have been introduced for registered shares 
in order to reﬂ ect the period in which the shares were acquired 
and to determine eligibility for the dividend premium.

1   The dividend premium payment will be made on February 1, 2019 for the ﬁ scal year ended August 31, 2018 for shareholders holding registered shares (directly or 

indirectly) since August 31, 2014 and up until the payment of the dividend.

276

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S H A R E H O L D E R S   A N D   S H A R E   C A P I T A L

S o d e x o   S h a r e   P e r f o r m a n c e

The use of diff erent codes does not aff ect the tradability of the shares. When selling shares, it is advisable to sell the most recently 
acquired ﬁ rst in order to maintain the dividend premium rights on the highest number of remaining shares.

REFERENCE DATE FOR REGISTRATION OF SHARES TO QUALIFY 
FOR THE DIVIDEND PREMIUM

RIGHT TO DIVIDEND PREMIUM 
FOR FISCAL:

DIVIDEND PREMIUM FOR 
THE DIVIDEND PAID IN*:

ISIN CODES FOR 
REGISTERED SHARES

Before August 31, 2014 

August 31, 2015 

August 31, 2016 

August 31, 2017 

August 31, 2018 

August 31, 2019 

2018

2019

2020

2021

2022

2023

February 2019

FR0011532431**

February 2020

FR0012891414

February 2021

FR0013193125

February 2022

FR0013270261

February 2023

FR0013353075

February 2024

FR0000121220

*  Dates provided for indicative purposes only and subject to the approval of a dividend payment by the Annual Shareholders’ Meeting.
**  On  September  1,  2018,  Euroclear  merged  the  shares  held  under  the  code  SODEXO  ACTIONS  PRIME  DE  FIDÉLITE  2018  –  FR0012033199  into  the  code 

FR0011532431 (which will be eligible for the 10% dividend premium for the February 2019 dividend payment).

Contacts for registered shareholders

Directly-registered shareholder  accounts are managed by Société Générale, which also acts as transfer agent for all Sodexo shares.

For further information call:

Société Générale Nantes (France): +33 (0)2 51 85 67 89

or visit the Société Générale website: www.sharinbox.societegenerale.com

6.1.4  ADR program

Since Sodexo’s voluntary delisting from the New York Stock 
Exchange in 2007, Sodexo American Depositary Receipts (ADRs) 
are traded on the over-the-counter (OTC) market, ticker SDXAY, 
with ﬁ ve ADRs representing one Sodexo share.

Advantages for U.S. investors:

•  U.S. brokers purchase, sell and settle the ADRs in the same 

way as they would for the shares of a U.S. company;

•  the prices of the ADRs are quoted in U.S. dollars and the 

dividends are paid in U.S. dollars;

•  ADRs are a straightforward and eff ective way of enabling U.S. 

investors to invest in international companies.

KEY INFORMATION ON THE SODEXO ADRS:

ADR ticker symbol

Platform

CUSIP

DR ISIN

ISIN code

SEDOL

6

SDXAY

OTC

833792104

US8337921048

FR0000121220

7062713

Custodian bank

Citibank Europe Plc (Dublin)

ADR ratio

5 ADRs for 1 ordinary share

CONTACTS AT CITIBANK FOR ANY QUESTIONS CONCERNING 
THE ADRS:

New York

Michael O’Leary

London

Michael Woods

michael.oleary@citi.com

michael.woods@citi.com

Tel.: +1 212 723 4483

Tel.: +44 20 7500 2030

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6 F i n a n c i a l   C o m m u n i c a t i o n s   P o l i c y

6.2  FINANCIAL COMMUNICATIONS POLICY

 _ To respond more eff ectively to the expectations of its shareholders, Sodexo continuously works 
to improve its investor relations program  by developing new information channels and in the quality 
of its interactions  during the diff erent meetings with the ﬁ nancial community.

6.2.1  Listening to our shareholders and the financial community

I n   o r d e r   t o   c o m p l y   w i t h   a l l   a p p l i c a b l e   r e g u l a t i o n s   i n 
connection  with  its  listing  on  Euronext  Paris  (the  French 
stock exchange), Sodexo and all those involved in preparing 
financial  communications  have  committed  to  a  set  of 
transparency principles designed to ensure equal treatment of 
all shareholders.

Sodexo’s investor relations policy is based on four core 
principles:

•  equal treatment when disclosing quarterly financial 
information:  all  financial  press  releases  are  issued 
simultaneously in real time to all our stakeholders, both in 
French and English. These press releases are published on the 
Group’s website (www.sodexo.com) and relayed through the 
press, e-mail and via an authorized provider;

•  regular reporting: the financial community is informed 
of the ﬁ nancial publication schedule a year in advance, and 
updates are always available on the Group’s website;

•  ease of access to financial meetings: Annual Shareholders’ 
Meeting and revenue and results presentations are broadcast 
via a live webcast and subsequently available on the Sodexo 
website. In addition, all ﬁ nancial communication is available 
and archived on the website;

•  transparency: all information about the Group, including 
the bylaws, Registration Document, Interim Report, press 
releases,  presentations  and  share  price  trends,  is  also 
available on the website: www.sodexo.com.

6.2.1.1  Group spokesperson

Only the Chairwoman, the Group Chief Executive Officer and 
members of the Executive Committee are authorized to provide 
financial communications. The Group Chief Executive Officer 
appoints the Director of Financial Communication to act as 
spokesperson for the Group, within speciﬁ c delegated powers.

6.2.1.2  Preparation and publication 
of ﬁ nancial communications

All ﬁ nancial communications are reviewed prior to publication 
by a Group Disclosure Committee comprising representatives 
from   Group  Finance,  Legal,  Communications,  Corporate 
Responsibility, Board secretary and Human Resources .

Barring exceptional circumstances, all information with the 
potential  to  influence  the  share  price  is  published  before 
Euronext Paris opens for trading.

Aft  er approval of this information by the Group Chief Executive 
Offi  cer, the Group Chief Financial Offi  cer or the Board of Directors 
(depending on its nature), it is communicated to the markets 
via a press release issued simultaneously to the entire ﬁ nancial 
community and to the stock market authorities.

Sodexo does not communicate financial information 
during the following periods:

•  30  calendar days preceding the Board of Directors’ 
meeting to approve the annual and half-year ﬁ nancial 
statements up to the release of its consolidated annual 
and interim results;

•  15  calendar days before the release of its ﬁ rst and 
third quarter  consolidated revenue ﬁ gures up to the 
release of these quarterly publications.

6.2.1.3  Code of conduct for senior 

managers

To ensure Sodexo’s commitment to transparency and regulatory 
compliance, the Board of Directors adopted a Code of conduct 
for  senior  managers  in  2003.  Since  that  date,  the  Group’s 
Executive Committee members and key ﬁ nance executives must 
systematically and formally sign up to this Code and abide by 
its principles.

This Code of conduct sets out a core set of behaviors:

•  to avoid actual or apparent conﬂ icts of interest;

•  to comply with all laws, rules and regulations;

•  to protect the Group’s conﬁ dential information;

•  to conduct all business fairly;

•  to hold managers accountable for their behavior, and create 
an environment of trust where concerns can be reported 
without fear of retaliation or retribution.

The Group’s ethical principle of transparency means effi  cient 
communication with the Group’s shareholders, so that they are 
provided with full and accurate information about the Group’s 
ﬁ nancial condition and proﬁ ts. The Group is committed to timely 
communication and to complete, accurate, reliable and clear 
reporting.

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F i n a n c i a l   C o m m u n i c a t i o n s   P o l i c y

6.2.2  Registration Document

This document is an English-language version of the Document 
de référence ﬁ led with the french securities regulator (Autorité des 
m archés f inanciers – AMF)  in accordance with its General Regulation. 
The French-language Document de référence can be consulted on the 
AMF website (www.amf-france.org). It is also available, along with 

the English-language Registration Document, at www.sodexo.com 
(“Finance” section, “Presentations and publications” tab).

An interactive version of the Registration Document in French 
and English is also available on the Group’s website to facilitate 
reading.

6.2.3  Annual Shareholders’ Meeting

The  Annual  Shareholders’  Meeting  is  announced  in  official 
notices  published  in  the  press,  in  the  BALO  (Bulletin  des 
annonces légales obligatoires) in France and on the Group’s 
website, at www.sodexo.com.

The agenda is available in French and English at least 15 days 
before the meeting. It is sent to all registered shareholders, and 
to other shareholders upon request. It is also available at www.
sodexo.com.

A live webcast of the Sodexo Annual Shareholders’ Meeting is 
broadcast on our website, enabling shareholders who cannot 
attend in person to ask questions and observe the voting on 
resolutions.  The  webcast  of  the  last  Annual  Shareholders’ 
Meeting  has  been  archived  and  is  available  on  the  Sodexo 
website – Sodexo.com.

6.2.4  Regular meetings and ongoing dialogue

Sodexo is committed to genuine dialogue with its shareholders 
and with the broader ﬁ nancial community.

Lastly, the Financial Communications Department is always 
available to answer questions from analysts and investors.

In order to ensure that the ﬁ gures it releases each quarter are 
fully understood, the Group organizes conference calls led by the 
Group Chief Executive Offi  cer and Group Chief Financial Offi  cer. 
In addition, a program of regular meetings with investors and 
analysts is put in place each year, with the Group Chief Executive 
Officer and Group Chief Financial Officer holding sessions in 
Europe (in particular in Paris, London and Frankfurt) and also in 
the United States and Canada. These events create opportunities 
for more informal dialogue.

Themed brieﬁ ngs are also held periodically to give investors and 
analysts insight into front-line operations.

Sodexo also regularly participates in industry presentations and 
conferences organized by brokerage ﬁ rms in France and abroad.

On September 6, 2018, the Group organized its first Capital 
Markets Day in nine years. The event was held at the Yachts 
de Paris, on the banks of the Seine, with presentations on the 
strategy of the Group, and its various activities including a 
presentation by Sophie Bellon of her vision on  the Group. All 
the members of the Executive Committee, some representatives 
from other departments and the  Chairwoman of the Board were 
present throughout the day. More than 90 investors, analysts, 
bankers and ﬁ nancial journalists attended the event. All plenary 
presentations, recordings and transcripts are available on the 
website (www.sodexo.com). 

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6 S h a r e h o l d e r s

6.3  SHAREHOLDERS

SHAREHOLDER BREAKDOWN AS OF  AUGUST 31, 2018

VOTING RIGHTS BREAKDOWN AS OF  AUGUST 31, 2018

55.3%
PUBLIC

40.7%
NON-FRENCH
INSTITUTIONS

42.2%
BELLON SA

41.6%
PUBLIC

57.2%
BELLON SA

1.2%
EMPLOYEES

1.3%
TREASURY
SHARES

2.6%
INDIVIDUALS
SHAREHOLDERS

1.2%
EMPLOYEES

12.0%
FRENCH
INSTITUTIONS

Source: Nasdaq

6.3.1  Changes i n the breakdown  of share capital and voting rights 

over the last three years

AUGUST 31, 2018

AUGUST 31, 2017

AUGUST 31, 2016

 SHAREHOLDER

NUMBER OF 
SHARES

% OF 
CAPITAL

% OF 
THEORETICAL 
VOTING 
RIGHTS

% OF 
ACTUAL 
VOTING 
RIGHTS

NUMBER OF 
SHARES

% OF 
CAPITAL

% OF 
THEORETICAL 
VOTING 
RIGHTS

% OF 
ACTUAL 
VOTING 
RIGHTS

NUMBER OF 
SHARES

% OF 
CAPITAL

% OF 
THEORETICAL 
VOTING 
RIGHTS

% OF 
ACTUAL 
VOTING 
RIGHTS

Bellon SA

62,250,485

42.2 

56.7 

57.2 

60,900,485

40.4

55.2

55.8

60,900,485

39.6

54.0

54.8

8,019,726

5.4 

3.7 

3. 8

- 

- 

- 

- 

- 

- 

- 

- 

6,913,289

4.7 

3.1 

3.1 

4,218,962

2.8

1.9

1.9

4,143,755

2.7

1.9(3)

1.9

Artisan 
Partners(1)

First Eagle 
Investment 
Management(1)

International 
Value Advisers(1)

3,821,370

Employees(2)

 1,721,960

Treasury shares

1,869,352

2.6 

1.2 

1.3 

1.8 

1.1 

0.9 

1.8 

-  

-  

1.2 

1,599,407

0

2,205,010

1.1

1.5

-  

1.1

1.0

-  

-  

-  

1.1

1,383,773

0

3,074,444

0.9

2.0

-  

1.0

1.4

-  

1.0

0

Public

62,858,705

42.6 

32.6 

32.9 

81,906,585

54.2

40.8

41.2

84,238,682

54.8

41.7

42.3

TOTAL

147,454,887

100%

100%

100% 150,830,449

100%

100%

100% 153,741,139

100%

100%

100%

(1)  Acting on behalf of its managed funds.
(2)  This figure includes the shares held by employees in an account with Société Générale as a result of free share awards, in accordance with French Act no. 2015-990 of 

August 6, 2015 on growth, business and equal economic opportunities. 

(3)  First Eagle Investment Management made its declaration on September 25, 2015  having gone through the statutory threshold of 2.5% of the capital of the Company, 

owning as of September 17, 2015, 2.5 % of the capital and 1.8 % of the voting rights. This threshold resulted from the acquisition of 100,000 Sodexo shares as at that date.

The members of the Board of Directors together directly held less than 0.5% of the Company’s share capital.

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W W W. S O D E X O . C O M

 
 
 
 
 
S H A R E H O L D E R S   A N D   S H A R E   C A P I T A L

S h a r e h o l d e r s

Bellon SA

 During  the  Fiscal  year  2017-2018,  Bellon  SA  decided  to 
increase its stake in the Company and purchased 1,350,000 
Sodexo  shares  in  June  2018.  As  Bellon  SA  already  held  the 
majority of Sodexo’s voting rights, and was unable to increase 
its equity stake in the Company by more than 1% in a period 
of 12 consecutive months, Bellon SA had requested and been 
granted on June 26, 2018, an exemption by the French securities 
regulator  (Autorité  des  M archés  F inanciers  –  AMF)  from  the 
obligation to file a public exchange offer under article 234-9, 
paragraph 6, of the General Regulations of the AMF in order to 
increase its stake. 

Following the share buy-back program and the decision of the 
Board of Directors of August 29, 2018, to cancel 3,375,562 
treasury shares of the Company representing 2.2% of the share 
capital, the stake held by Bellon SA as of August 31, 2018, stood 
at 42.2 % of the share capital of the Company and 57.2 % of 
exercisable voting rights.

Mr & Mrs Pierre Bellon and their  four children control 72.6% of 
Bellon SA. Agreements are in place to prevent them from selling 
their Bellon SA shares to third parties. In June 2015, Mr & Mrs 
Pierre Bellon and their  children signed 50-year term agreements 
to prevent direct descendants from selling their Bellon SA shares. 
The only asset of Bellon SA is its stake in Sodexo and Bellon SA 
has no intention of selling its stake to a third party.

Crossing of legal and statutory thresholds 

In accordance with article L. 233-7, I of the French Commercial 
Code and article 9.4 of the bylaws of the Company, the following 
shareholders reported to the Company that they had exceeded 
the legal or statutory disclosure thresholds during the Fiscal 
year 2017-2018: 

•  on  May  8,  2018,  the  company  Artisan  Partners  Limited 
Partnership,  acting  within  the  scope  of  its  management 
activities on behalf of funds, reported that it had exceeded 
the statutory threshold of 2.5% of the Company’s share 
capital, holding 5,476,873 shares, representing 3.6 % of the 
share capital of the Company and 2.5 % of voting rights as 
of May 8, 2018. The threshold was exceeded following the 
acquisition of 1,856,807 Sodexo shares on that date;

•  on July 2, 2018, the company International Value Advisers, 
LLC, acting within the scope of its management activities on 
behalf of funds, reported that it had exceeded the statutory 
threshold of 2.5% of the Company’s share capital, holding 
3,821,370 shares, representing 2.5 % of the share capital of 
the Company and 1.8 % of voting rights as of July 2, 2018. 
The  threshold  was  exceeded  following  the  acquisition  of 
200,782 Sodexo shares on that date;

•  on August 31, 2018, the company Artisan Partners Limited 
Partnership,  acting  within  the  scope  of  its  management 
activities on behalf of funds, reported that it had exceeded 
the legal threshold of 5% of the Company’s share capital, 
holding  7,554,178  shares,  representing  5  %  of  the  share 
capital  of  the  Company  and  3.5  %  of  voting  rights  as  of 
August 28, 2018. The threshold was exceeded following the 
acquisition of 14,269 Sodexo shares on that date.

The  Company  is  not  aware  of  any  other  shareholder  that 
increased  or  decreased  its  shareholding  in  the  Company  to 
above  or  below  any  legal  or  statutory  disclosure  threshold 
during  Fiscal year  2018.

As of the date of this document, to the best of Sodexo’s knowledge:

•  since August 31, 2018, only Blackrock Inc., acting within 
the scope of its management activities on behalf of funds, 
reported that it had exceeded the legal threshold of 5% of 

the Company’s share capital, holding as at October 16, 2018, 
7,856,410 shares, or 5.3 % of the share capital and 3. 7% of 
the voting rights. On November 14, 2018, Blackrock Inc. 
reported that it had crossed below the 5% threshold, holding 
as at November 13, 2018, 7,360,951 shares, representing 
4.99% of the share cpaital and 3.4% of the voting rights; 

•  only  Bellon  SA,  Artisan  Partners  Limited  Partnership, 
Blackrock  Inc.,  First  Eagle  Investment  Management  and 
International Value Advisers, LLC hold 2.5% or more of the 
share capital or voting rights of Sodexo, directly or indirectly, 
individually, or in concert;

•  there  are  no  shareholder  agreements  in  place  and  no 
agreements that, if implemented, could result in a change of 
control of Sodexo.

Repurchases and disposals 
of Sodexo shares

By way of reminder: 

•  the Ordinary Annual Shareholders’ Meeting of January 24, 
2017  had  authorized  the  Board  of  Directors,  in  its 
 15th  resolution, to purchase or arrange for the purchase of 
Company shares within the limit of 5% of the total number of 
shares comprising the share capital as of January 24, 2017 
(i.e., a total of 7,687,056 shares), for a period of  18  months. 
The  maximum  purchase  price  of  shares  pursuant  to  the 
authorization may not exceed 150 euro per share and the 
total amount allocated to the authorized share buy-back 
program may not exceed 1.15 billion euro;

•  the Combined Annual Shareholders’ Meeting of January 23, 
2018,  had  again  authorized  the  Board  of  Directors,  in  its 
 17th  resolution, to purchase or arrange for the purchase of 
Company shares within the limit of 5% of the total number of 
shares comprising the share capital as of January 23, 2018 
(i.e., a total of 7,541,522 shares), for a period of  18  months. 
The  maximum  purchase  price  of  shares  pursuant  to  the 
authorization may not exceed 150 euro per share and the total 
amount allocated to the authorized share buy-back program 
may not exceed 1.15 billion euro. 

The above authorizations had been granted in order to cover 
stock option and free share plans, cancel the treasury shares by 
reducing the share capital and/or facilitate the Sodexo liquidity 
contract. For more information about the objectives targeted by 
the two authorizations mentioned above, please refer to section 
7 of the Fiscal 2016 Registration Document and/or section 8 of 
the Fiscal 2017 Registration Document. 

For  information,  during  the  Fiscal  year  2018,  the  Board  of 
Directors implemented the said authorizations as follows:

•  Sodexo repurchased 3,906,732 shares (representing 2.15% of 
the share capital) at an average price of 90.75 euro per share 
plus trading fees of 141,813 euro excluding taxes;

•  Sodexo transferred 1,051,528 shares on the exercise of stock 

options and for delivery under free share plans;

•  during its meeting on  August 29, 2018, the Board of Directors 
of Sodexo reduced the share capital of the Company through 
the cancellation of a total of 3,375,562 treasury shares, i.e., 
2.2% of the share capital, pursuant to the authorization 
granted by the Combined Annual Shareholders’ Meeting on  
January 23, 2018 in its  18th  resolution;

•  under the liquidity contract concluded between Sodexo and 
Kepler-Cheuvreux on October 1, 2016, in line with the charter 
of  ethics  established  by  the  french  securities  regulator 
(Autorité des m archés f inanciers – AMF) , Sodexo carried out 
the following transactions: 

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•  purchase  of  1,087,734  shares  for  a  total  amount 
of  104,544,019.85  euro  (average  purchase  price  of 
96.11 euro),

repurchase Sodexo shares pursuant to articles L. 225-209 et seq. 
of the French Commercial Code and the European rules under 

European Regulation no. 596/2014 of April 16, 2014. 

•  sale of 903,034 shares for an aggregate 89,024,048.25 euro 

The principal aims of the new share buy-back program, in line 

(average purchase price of 98.58 euro).

As of August 31, 2018: 

•  S o d e x o   d i r e c t l y   h e l d   1 , 8 6 9 , 3 5 2   o f   i t s   o w n   s h a r e s 
(representing 1.27% of the share capital) intended to hedge 
various stock option and free share plans set up for Group 
employees (for more information about stock option and 
free share plans, please refer to section 5.5  of the Fiscal 2018 
Registration Document); 

•  the total carrying amount of the treasury shares portfolio 

was 177 million euro as of August 31, 2018; 

•  t h e   S o d e x o   l i q u i d i t y   a c c o u n t   w a s   c o m p o s e d   o f 

184,700 shares.

Since August 31, 2018, the Company has not purchased any 
Sodexo shares other than through the liquidity contract.

Description of the share buy-back 
program subject to the authorization 
of the Annual Shareholders’ Meeting 
on  January 22, 2019

The  Board  of  Directors  will  prop ose  that  the  Combined 
Annual  Shareholders’  Meeting  on   January  22,  2019,  in  its 
 17 th  resolution, renews the authorization granted to the Board to 

with previous years, without this list being exhaustive, would be 

to honor the free allocation of Company shares to the employees 

and/or corporate officers of the Sodexo Group, to reduce the 

Company’s share capital through the cancellation of shares and 

to trade in the shares within the context of the existing liquidity 

contract. 

The  maximum  number  of  shares  that  may  be  purchased 

under this new share buy-back program would be set at 5% 

of  the  total  number  of  shares  comprising  the  Company’s 

capital as of the date of the Combined Annual Shareholders’ 
Meeting  on   January  22,  2019, i.e.,  a  maximum  number  of 
7,372,744 shares.

The maximum share purchase price under this share buy-back 

program cannot exceed  120 euro per share and the total amount 

allocated to the program cannot exceed 885 million  euro.

This authorization would be valid for a period of  18  months, 

replacing the authorization given for the same purpose by the 

Combined Annual Shareholders’ Meeting on  January 23, 2018, 
in its  17th  resolution.

For further information about th is authorization submitted to 

a vote at the next Combined Annual Shareholders’ Meeting on 
 January 22, 2019, please consult the draft   resolutions presented 

in chapter  7  of the Fiscal 2018 Registration Document. 

6.3.2  Employee share ownership

As of August 31, 2018, Group employees held 1.2 % of the Company’s share capital, i.e., approximately 1,721,960 shares, 51.6% of 
which was held in an employees’ mutual fund (FCPE).

As of August 31, 2018, the number of Group employee shareholders was estimated at 28,773.

Company Employee Savings Plans

The various proﬁ t-sharing agreements in force allow employees of the Group’s French subsidiaries to pay the amounts they receive 
in respect of these proﬁ t-sharing agreements into an employees’ mutual fund invested in Sodexo shares, or into a restricted savings 
account. To qualify for favorable tax and social security treatment, amounts due to employees are subject to a ﬁ ve-year lock-up period.

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S H A R E H O L D E R S   A N D   S H A R E   C A P I T A L

6.4  ADDITIONAL INFORMATION ABOUT 

THE COMPANY’S SHARE CAPITAL

6.4.1  Share capital

As of August 31, 2018, the share capital of the Company was an aggregate nominal value of 589,819,548 euro divided into 
147,454,887 shares of a nominal value of 4 euro each.  

6.4.2  Evolution of the share capital in the last three fiscal years

Since September 18, 2008 and until June 14, 2016, the share 
capital  of  the  Company  was  628,528,100  euro,  divided  in 
157,132,025 shares with a nominal value of 4 euro each.

Board of the authorisations approved by the General Meeting of 
January 26, 2016, in its 11th resolution, and January 23, 2018, 
in its 18th resolution. 

The  table  below  provides  the  evolution  of  the  share  capital 
over the last three ﬁ scal years following the utilization by the 

BOARD DECISION

June 14, 2016

June 14, 2017

NATURE 
OF THE OPERATION

NUMBER 
OF SHARES CANCELLED

NUMBER OF SHARES 
COMPRISING THE SHARE CAPITAL 
FOLLOWING THE OPERATION

SHARE CAPITAL 
FOLLOWING THE OPERATION

Share cancellation

3,390,886 

153,741,139

€614,964,556

Share cancellation

2,910,690

150,830,449

€603,321,796

August 29, 2018

Share cancellation

3,375,562

147,454,887

€589,819,548

6.4.3  Potential share capital 

As of the date of this Registration Document, there are no securities outstanding, other than existing equity securities and the 
remaining employee stock options, which carry immediate or future rights to Sodexo’s share capital.

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6.4.4  Capital authorized but not issued

As at the date of the present document, the Board of the Company had the following delegations and financial authoriz ations 
conferred to it by the decisions of the Annual General Meetings. 

CURRENTLY VALID AUTHORIZATIONS

Authorizations with preferential rights

MAXIMUM AGGREGATE 
NOMINAL VALUE OF 
CAPITAL INCREASE(S)(1) 
(in millions of euro)

MAXIMUM AMOUNT 
OF CAPITAL 
INCREASE(S)(1) 
(% of share capital)

DATE OF 

AUTHORIZATION DATE OF EXPIRATION

USAGE

•  Issuance of ordinary shares and/or any other securities carrying 

January 23, 2018 

rights to Sodexo shares

100

17%

(19th) March 23, 2020

Unused

•  Issuance of debt securities carrying rights to Sodexo shares

1,000

N/A

(19th) March 23, 2020

Unused

January 23, 2018 

Authorizations to issue shares to employees and managers

•  Issuance of ordinary shares and/or any other securities reserved 

January 23, 2018 

for members of Employee Savings Plans

About 9

1.5%

(21st)  March 23, 2020

Unused

•  Grant of free shares and performance shares 

About 15

2.5%

(14th) March 26, 2019

January 26, 2016 

See 
section 
5.5

Issuance of shares by capitalizing profit, reserves 
or premiums

100

17%

(20th) March 23, 2020

Unused

January 23, 2018 

Share capital reduction through cancellation of shares

(1) Adjusted amounts of share capital as of August, 2018. 

5%
of number of 
shares

January 23, 2018 

(18th) March 23, 2020

See 
section 
6.3.2

The  Board  will  propose  the  renewal  of  the  authoriz ation, 
previously  authorized  on  January  26,  2016,  at  the  Annual 
G e n e r a l   M e e t i n g   o n   J a n u a r y   2 2 ,   2 0 1 9 ,   t h r o u g h   t h e 
 18th    resolution, before its expiration, for the Board to proceed 
with free share attributions of existing shares or shares to be 

issued, for employees, Group executives, or sub-groups. More 
information on the resolutions to be submited to the Annual 
General Meeting on  January 22, 2019, is presented in Chapter 7 
of this present document.

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6.5  GENERAL INFORMATION ABOUT SODEXO 

BYLAWS

6.5.1  Legal company name and registered office

Legal company name: Sodexo.

Registered offi  ce: 255, quai de la Bataille-de-Stalingrad, 92130 Issy-les-Moulineaux (Hauts-de-Seine), France.

Telephone: +33 (0)1 30 85 75 00.

Nationality: French.

6.5.2  Legal form

Sodexo is a French public limited company (société anonyme) , subject to all  laws and regulations governing commercial corporations 
in France, and in particular to the provisions of the French Commercial Code.

6.5.3  Date of incorporation and expiration (article 5 of the B ylaws)

“The Company has a life of 99 years from December 31, 1974, save earlier termination or winding up.”

The date of expiration of the Company is December 30, 2073.

6.5.4  Corporate purpose (article 2 of the B ylaws)

“The objectives of the Company shall be, in France, the French 
overseas  departments  and  territories  or  abroad,  directly  or 
indirectly, on behalf of third parties or on its own account or in 
association with third parties, as follows:

•  the development and provision of all services related to the 
organization of foodservices and other essential services for 
corporations and public bodies;

•  the  operation  of  all  restaurants,  bars,  hotels  and  more 
generally all establishments connected with foodservices, the 
hotel industry, tourism, leisure and other services, and the 
ownership and financing thereof;

•  the provision of some or all of the services required for the 
operation, maintenance and management of establishments 
or buildings used for office, commercial, industrial, leisure, 
healthcare or educational purposes, and for the operation 
and maintenance of some or all of the equipment installed 
therein;

•  the execution of all installation, repair, refurbishment and 

replacement works on installed equipment;

•  the  provision  of  advice  and  of  economic,  financial  and 
technical surveys relating to all projects and to all services 
associated with the development, organization and operation 
of the establishments defined above, and in particular all acts 
in furtherance of the construction of such establishments and 
all related consultations and assistance;

•  the  formation  of  all  new  companies  and  the  acquisition 
by  whatever  means  of  equity  interests  in  all  companies 
irrespective of their corporate purposes;

•  and  more  generally  all  civil,  commercial,  industrial  and 
financial transactions, and transactions involving movable 
property  or  real  estate,  that  are  directly  or  indirectly 
associated  with  the  aforementioned  purposes  or  with  all 
similar or related purposes.”

6

6.5.5  Registration

Sodexo is registered in the  Trade and Companies Register of Nanterre  under no. 301 940 219.

Business identiﬁ er code (APE code): 5629B

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6 G e n e r a l   I n f o r m a t i o n   a b o u t   S o d e x o   b y l a w s

6.5.6  Consultation of legal documents

Documents  relating  to  the  Company  which  are  required  to 
be  made  available  to  the  public  (bylaws,  reports  and  other 
documents, historical individual company and consolidated 
ﬁ nancial information for at least each of the two ﬁ scal years 

preceding the date of this Registration Document) are available 
on our website (www.sodexo.com) and may also be consulted at 
our registered offi  ce at 255, quai de la Bataille-de-Stalingrad – 
92130 Issy-les-Moulineaux, France, preferably by appointment.

6.5.7  Material contracts

During the last two years, the Company has not entered into any material contract, other than those signed in the ordinary course of 
business, that create a material obligation or commitment for the entire Group.

6.5.8  Fiscal year (article 17 of the B ylaws)

“The fiscal year commences on September 1 of each year and ends on August 31 of the following year.”

6.5.9  Appropriation of earnings and dividend premium 

(excerpt from article 18 of the bylaws)

“[ ...]  2.  The  first  appropriation  of  net  income,  net  of  any 
accumulated losses from prior periods, must be an amount of at 
least 5% of net income to establish the reserve fund required by 
law. This appropriation ceases to be obligatory once this reserve 
fund is equal to one-tenth of the issued capital, but must be 
resumed if for any reason the reserve falls below one-tenth of 
the issued capital.

3.  Distributable earnings comprise net income for the fiscal year, 
minus any accumulated losses brought forward and any transfer 
to the legal reserve, plus any retained earnings brought forward.

Distributable earnings are appropriated in the following order:

a)  any sum that the Ordinary Shareholders’ Meeting, on the 
proposal of the Board of Directors, decides to carry forward 
as retained earnings or to appropriate to the creation of an 
extraordinary reserve fund, contingency fund or other fund, 
whether or not created for a specific purpose;

b)  the  surplus  is  distributed  among  all  of  the  shareholders, 
each share entitling its holder to an equal share of the profit. 
However, shareholders able to show that they have been a 
registered shareholder for at least four years as of the end of 
a given fiscal year, and who remain registered at the dividend 
date related to the said fiscal year, are entitled to a dividend 

premium on the shares so registered, equal to 10% of the 

dividend paid on the other shares, the resulting dividend 

premium being rounded down to the nearest euro cent where 

appropriate.

Similarly,  shareholders  able  to  show  that  they  have  been  a 

registered shareholder for at least four years as of the end of a 

given fiscal year, and who remain registered at the date of a capital 

increase by capitalization of reserves, income or share premiums, 

by distribution of bonus shares, are entitled to supplementary 

bonus shares equal to 10% of those to be distributed. In the case 

of odd lots, the number of supplementary shares will be rounded 

down to the nearest unit. The resulting new shares will qualify for 

the same treatment as the old shares from which they are derived 

for the purposes of calculating rights to the dividend premium and 

to receive supplementary bonus shares.

The number of shares upon which a single shareholder shall be 

eligible for these dividend premiums or supplementary bonus 

shares may not exceed 0.5% of the share capital.”

The above-mentioned 0.5% ceiling has been applicable since the 

payment of the dividend for the ﬁ scal year ended August 31, 

2013.

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6.5.10  Shareholders  Meetings (excerpt from article 16 of the Bylaws )

“1.  General Shareholders’ Meetings are called and deliberate on 
the terms stipulated by the law. They are held at the registered 
offi  ce or at any other place speciﬁ ed in the notice of the meeting.

For the purposes of calculating quorum and majority at General 
Shareholders’  Meetings,  shareholders  taking  part  in  said 
meetings via video-conferencing or electronic links allowing 
them to be identified in accordance with the definitions and 
conditions relating to such links as stipulated in the relevant laws 
or regulations are deemed to have attended the meeting.

2.  General  Shareholders’  Meetings  are  made  up  of  all 
shareholders  whose  shares  are  paid  up  to  the  extent  called 
and whose right to participate in the Shareholders’ Meeting is 
evidenced by an entry recorded, by the date and according to 
the procedure required by the applicable laws and regulations, 
in  a  share  register  or  securities  account  in  the  name  of  the 
shareholder or, for shareholders who are not resident in France, 
the shareholder’s accredited ﬁ nancial intermediary, showing the 
number of shares held.

Shares must be registered within the above-stipulated deadline 
either in share accounts in the shareholder’s name held by the 

Company or via the approved intermediary, or in bearer share 
accounts held by the approved intermediary.

Members are entitled to attend General Shareholders’ Meetings 
upon simple proof of identity and entitlement. The Board of 
Directors  may,  at  its  discretion,  issue  personal  admission 
cards to shareholders in their names and demand presentation 
thereof.

All shareholders may vote remotely as provided by law and the 
regulations.

Equally, all shareholders may take part in discussions when 
meetings are in session and vote via electronic data.

3.  General Shareholders’ Meetings are chaired by the Chairman 
of the Board of Directors, or in his absence by the Vice Chairman 
if one has been appointed, or failing that by the longest-serving 
director present.

If there is no director present, the meeting elects its own Chairman.

[…]”

6.5.11 Double voting rights (excerpt from article 16 of the Bylaws )

“[…] 4. Double voting rights, having regard to the percentage of 
issued capital that they represent, are conferred on:

voting rights, in the event of a bonus share issue carried out 
by capitalizing profit, reserves or premiums.

•  all  fully  paid  shares  registered  in  the  name  of  the  same 

[…]”

shareholder for at least four years;

•  registered shares allotted free of charge to a shareholder for 
the existing shares held by that shareholder that carry double 

6.5.12 Share ownership disclosure thresholds 

(excerpt from article 9 of the Bylaws )

“[…]  Any  shareholder  whose  direct  or  indirect  shareholding 
reaches 2.50% of the Company’s issued capital or any multiple 
thereof is required to inform the Company by registered letter 
with acknowledgment of receipt within ﬁ ft  een days. Failure to 

make such disclosure may result in the shares exceeding the 
threshold being stripped of voting rights on the terms stipulated 
by  law.  This  disclosure  requirement  applies  equally  when  a 
shareholding passes below any of the disclosure thresholds.”

6

6.5.13 Identification of shareholders (excerpt from article 9 

of the Bylaws )

“The Company can make use of the legal framework available for identifying the holders of shares which have, either immediately or 
in the future, voting rights at General Shareholders’ Meetings.”

6.5.14 Modification of shareholders’  rights

All modiﬁ cations to share capital or voting rights attached to the shares therein are subject to legal requirements, as the bylaws do 
not contain speciﬁ c provisions.

A full version of the Company’s bylaws is available in  the Group’s website at www.sodexo.com.

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7

COMBINED ANNUAL 
SHAREHOLDERS’ MEETING, 
JANUARY 22, 2019

7.1 

Agenda 

Ordinary business 

Extraordinary business 

7.2 

Resolutions submitted to the 
Combined Annual Shareholders’ 
Meeting of January 22, 2019 

Ordinary resolutions 

Extraordinary resolutions 

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290

290

291

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298

7.3 

Statutory Auditors’ report 
on the authorization to grant 
free existing or newly issued 
shares 

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7 A g e n d a

7.1  AGENDA

Ordinary business

1. 

2. 

3. 

4. 

5. 

6. 

7. 

8. 

9. 

Adoption of the individual company ﬁ nancial statements 
for Fiscal 2018.

Adoption  of  the  consolidated  financial  statements  for 
Fiscal 2018.

Appropriation  of  net  income  for  the  fiscal  year  and 
determination  of  dividend.

Approval  of   related-party  commitment  governed  by 
article L.225-42-1 of the French Commercial Code regarding  
a non-compete agreement with   Denis Machuel.

Approval  of   related-party  commitment  governed  by 
article  L.225-42-1  of  the  French  Commercial  Code 
regarding   Denis Machuel’s  collective supplemental health 
and beneﬁ t plans.

Approval  of   related-party  commitment  governed  by 
article L.225-42-1 of the French Commercial Code regarding  
 Denis Machuel’s  supplemental pension plan.

Reappointment   of   Emmanuel  Babeau  as   director  for  a 
period of three (3) years.

Reappointment  of  Robert Baconnier as  director for a period 
of one (1) year.

Reappointment  of  Astrid Bellon as  director for a period of 
three (3) years.

10.  Reappointment  of  François-Xavier Bellon as  director for a 

period of three (3) years.

11.  Ratiﬁ cation of the Board’s appointment by cooptation of 

 Sophie Stabile as  director.

12.  Approval of the compensation and beneﬁ ts paid or awarded 
for Fiscal 2018 to  Sophie Bellon, Chairwoman of the Board 
of Directors.

13.  Approval of the compensation and beneﬁ ts paid or awarded 
for Fiscal 2018 to  Michel Landel, Chief Executive Offi  cer, 
until January 23, 2018.

14.  Approval of the compensation and beneﬁ ts paid or awarded 
for Fiscal 2018 to  Denis Machuel, Chief Executive Offi  cer, 
since January 23, 2018.

15.  Approval of the principles and criteria used to determine, 
allocate and award the  components of the compensation 
and  benefits  payable  to  the  Chair man(woman)  of  the 
Board of Directors.

16.  Approval of the principles and criteria used to determine, 
allocate and award the  components of the compensation 
and beneﬁ ts payable to the Chief Executive Offi  cer.

17.  Authorization to the Board of Directors for the Company to 

purchase  shares  of the Company.

Extraordinary business

18.  Authorization to the Board of Directors to grant existing 
and/or newly issued free shares of the Company to all or 
certain employees and/or corporate offi  cers of the Group 
with an automatic waiver of shareholders’ preferential 
subscription rights.

19.  Powers to carry out formalities.

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7.2  RESOLUTIONS SUBMITTED TO THE 

COMBINED ANNUAL SHAREHOLDERS’ 
MEETING OF JANUARY 22, 2019

Ordinary resolutions

First and second resolutions: Adoption of the individual company 
and consolidated ﬁ nancial statements

Purpose

In the ﬁ rst and second resolutions, shareholders are invited to adopt the individual company ﬁ nancial statements of Sodexo for 
Fiscal 2018, which show net income of 4 8   million euro, and the consolidated ﬁ nancial statements of the Group, presenting  proﬁ t 
attributable to equity holders of the parent of 651  million euro.

First resolution
(ADOPTION OF THE INDIVIDUAL COMPANY FINANCIAL 
STATEMENTS, FISCAL 2018)

Second resolution
(ADOPTION OF THE CONSOLIDATED FINANCIAL STATEMENTS, 
FISCAL 2018)

Having  considered  the  Board  of  Directors’  Report  and  the 
Statutory Auditors’ Report on the individual company ﬁ nancial 
statements, the Shareholders’ Meeting adopts the individual 
company  financial  statements  for  the  fiscal  year  ended 
August  31,  2018  as  presented,  which  show  net  income  of 
4 81   million euro.

Having  considered  the  Board  of  Directors’  Report  and  the 
Statutory  Auditors’  Report  on  the  consolidated  financial 
statements, the Shareholders’ Meeting adopts the consolidated 
ﬁ nancial statements for the ﬁ scal year ended August 31, 2018 
as presented, which show proﬁ t attributable to equity holders of 
the parent of 651  million euro.

The  Shareholders’  Meeting  also  approves  the  transactions 
reﬂ ected in these ﬁ nancial statements and/or described in these 
reports.

The  Shareholders’  Meeting  also  approves  the  transactions 
reﬂ ected in these ﬁ nancial statements and/or described in these 
reports.

Third resolution: Appropriation of net income and determination  of    dividend

Purpose

In the third resolution, shareholders are invited to approve the Board’s recommended appropriation of net income and the 
distribution of  a dividend of 2.75 euro per share for Fiscal 2018, unchanged from  Fiscal 2017.

In accordance with the Company’s bylaws, shares held in registered form for at least four (4) years, i.e., since at least 
August 31, 2014, and which are still held in such form when the dividend for Fiscal 2018 is paid (i.e., on February 1, 2019), will 
automatically be entitled to a 10% dividend premium, representing an additional 0.275 euro per share. Where necessary, the 
amount of the dividend plus the premium will be rounded down to the nearest euro cent. The number of shares eligible for the 
dividend premium may not represent over 0.5% of the share capital for any single shareholder (corresponding to a maximum of 
737,274 shares per shareholder based on the Company’s share capital as of August 31, 2018).

The payment of the dividend and the 10% dividend premium, as described above, represents a payout ratio of 63 %, which is fully 
in line with Sodexo’s policy of giving shareholders a return on their investment over the long term.

The dividend payment schedule is as follows:

January 30, 2019:  Ex-dividend date, i.e.,  date on which the shares are traded without rights to the Fiscal 2018 dividend.

January 31, 2019: 

 Record date, i.e.,  date on which shareholders’ positions must be on record (upon closing  of stock market 
trading day) in order to be entitled to receive the Fiscal 2018 dividend payment.

February 1, 2019:  Payment date of  dividend and  for shares eligible  for  the dividend premium.

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Third resolution
(APPROPRIATION OF NET INCOME FOR THE FISCAL YEAR AND APPROVAL OF  DIVIDEND)

In accordance with the proposal made by the Board of Directors, the Shareholders’ Meeting resolves:

to allocate net income for Fiscal 2018 of

plus retained earnings as of the close of Fiscal 2018 of

Making a total available for distribution of

In the following manner:

€481,376,461 

€1,219,692,533 

€1,701,068,994 

•  dividend (on the basis of 147,454,887 shares comprising the share capital as of August 31, 2018)

€405,500,939

•  a 10% dividend premium (on the basis of 7,227,652  shares held in registered form as of August 31, 2018 that are 

eligible for the dividend premium after application of the limit of 0.5% of capital per shareholder)

€1,987,604 

•  retained earnings

TOTAL

€1,293,580,451 

€1,701,068,994  

 Accordingly, the Shareholders’ Meeting resolves that a dividend 
of 2. 75 euro will be paid for Fiscal 2018 on each share eligible 
for the dividend.

In the event that the Company holds any of its own shares on  
the payment date, the dividend due on these shares will not be 
paid and will be transferred to retained earnings.

In accordance with article 18 of the Company’s bylaws, shares 
held in registered form since at least August 31, 2014 and which 
are still held in such form when the dividend for Fiscal 2018 is 
paid, i.e., on February 1, 2019, will automatically be entitled to a 
10% dividend premium, representing an additional 0.275 euro. 
The number of shares eligible for this dividend premium may 
not  represent  over  0.5%  of  the  share  capital  for  any  single 
shareholder (corresponding to a maximum of 737,274 shares 
per shareholder based on the Company’s capital as of August 31, 
2018).

The dividend and dividend premium (for eligible shares) will be 
paid on February 1, 2019, with a Euronext Paris ex-dividend date 
of January 30, 2019. The record date will be January 31, 2019.

Similarly, if any of the 7,227,652  shares held in registered form 
that are eligible for the dividend premium as of August 31, 2018 
cease to be recorded in registered form between September 1, 
2018 and February 1, 2019 (the dividend payment date), the 
amount of the dividend premium due on such shares will not be 
paid and  will be transferred to retained earnings.

In  accordance  with  article  243  bis  of  the  French  General  Tax 
Code, the full amount of the recommended dividend (including 
the premium) will be eligible for the allowance provided for in 
article 158-3 2° of said Code to individuals domiciled for tax 
purposes in France, if they have opted for their overall income to 
be taxed in accordance with the sliding income tax scale provided 
for in paragraph 2 of article 200 A of the French General Tax Code.

The Shareholders’ Meeting notes that dividends paid for the last three ﬁ scal years were as follows:

Dividend per share*

Total payout

FISCAL 2017 
(PAID IN 2018)

FISCAL 2016 
(PAID IN 2017)

FISCAL 2015 
(PAID IN 2016)

€2.75

€2.40

€2.20

€410,658,908.28

€359,265,450

€334,962,161

*  Dividend fully eligible for the 40% allowance applicable to individuals domiciled for tax purposes in France, as provided for in article 158-3 2° of the French General 

Tax Code.

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Fourth to sixth resolutions: Approval of r elated-party  commitments 

Purpose

Related-party  commitments concluded between the Company and  the Chief Executive Offi  cer are subject to speciﬁ c approval by 
the Shareholders’ meeting  .

In the fourth to sixth resolutions, shareholders are invited to approve  three (3) related-party commitments  concerning  Denis 
Machuel, which were authorized by the Board of Directors when he was appointed as  the Group’s new Chief Executive Offi  cer 
on January 23, 2018 . These commitments are  part of the Chief Executive Officer ’s compensation policy approved at the 
Shareholders’ Meeting  held on  January 23, 2018.

Non-compete indemnity: T he Board of Directors authorized a non-compete agreement between the Company and  Denis 
Machuel that will apply if  Denis Machuel’s mandate  as Chief Executive Offi  cer is terminated.

The non-compete commitment  will cover a twenty-four (24) month period  following the end of his mandate  as Chief Executive 
Offi  cer. Its purpose is to protect  Sodexo Group by restricting the Chief Executive Offi  cer’s freedom to work for a competitor in the 
capacity of employee or corporate offi  cer, or to carry out advisory engagements for a competitor, either directly or indirectly. 
The Board prepared  a list of competitor companies , which is included in the non-compete agreement signed on August 30 , 2018.

As consideration for this commitment, the Chief Executive Offi  cer will receive, over the same period, an indemnity corresponding 
to twenty-four (24) months’ worth of the ﬁ xed compensation paid to him in the ﬁ scal year preceding his termination  as Chief 
Executive Offi  cer .

The Board may waive the right to invoke this commitment at the time of the Chief Executive Offi  cer’s departure.

In order to comply with the new recommendations of  article 23 of the AFEP-MEDEF Code of corporate governance for listed 
companies as revised in June 2018, an addendum  to the non-compete agreement was signed on November 6 , 2018 between the 
Company and  Denis Machuel in order to exclude the payment of the non-compete indemnity if the Chief Executive Offi  cer retires, 
and in all circumstances, beyond the age of sixty-ﬁ ve (65).

Supplemental pension plan: Following  Denis Machuel’s appointment as  Company’s Chief Executive Officer, the Board 
of Directors decided that he should continue to be a beneﬁ ciary of the deﬁ ned beneﬁ t pension plan  of which he has been a 
beneﬁ ciary since he was appointed as a member of the Group Executive Committee in September 2014.

Under this supplemental pension plan (subject to a minimum of ﬁ ve (5) years  presence in the plan), as a member of the plan for 
at least ﬁ ft  een (15) years, the pension paid can represent up to 15% of the average of his last three (3) years’ ﬁ xed compensation 
preceding his retirement, to which are added the pensions due to him under compulsory pension plans, provided that he is 
employed by, or is a corporate offi  cer of, the Company at the time of his retirement.

T he Chief Executive Officer ’s entitlements under this plan (1% per year up to a maximum of 15%) will only accrue if the 
achievement rate for his annual variable compensation targets is at least 80% each year. If this rate is reached then, an additional 
percentage of contribution to the deﬁ ned beneﬁ t plan will be accrued for that  year . However, if the achievement rate is less than 
80%, no deﬁ ned beneﬁ t contribution will be accrued for that  year.

Supplemental health and benefit plans: Following the termination of  Denis Machuel’s employment contract when he was 
appointed as Chief Executive Offi  cer, the Board of Directors decided that he should continue to  beneﬁ t from  the supplemental 
health and beneﬁ t plans set up by the Company in order to ensure the continuity of his  coverage. His membership in  these plans 
will be subject to the same terms and conditions as those applicable to the category of employees to which he has been assigned 
for the purpose of determining the related beneﬁ ts.

Details of these commitments are provided in the Board of Directors’ Corporate Governance  Report and the Statutory Auditors’ 
Special Report on related-party agreements and commitments,  in sections 5.3.2  and 4 .4.2 respectively  of this  Fiscal 2018 
Registration Document .

 Fourth resolution
(APPROVAL OF  RELATED-PARTY COMMITMENT GOVERNED BY ARTICLE L.225-42-1 OF THE FRENCH COMMERCIAL CODE REGARDING  
A  NON-COMPETE AGREEMENT WITH   DENIS MACHUEL)

7

H a v i n g   c o n s i d e r e d   t h e   B o a r d   o f   D i r e c t o r s ’   C o r p o r a t e 
Governance Report and the Statutory Auditors’ Special Report 
on  related-party  agreements  and  commitments  governed 
by articles L.225-38 and L.225-40 to L.225-42 of the French 
Commercial  Code,  the  Shareholders’  Meeting  approves, 
in  accordance  with  article  L.225-42-1  of  said  Code,  the 

commitment made by the Company to  Denis Machuel, Chief 
Executive Offi  cer, regarding  a non-compete indemnity payable 
to  him  as  consideration  for  a  non-compete  obligation,  as 
authorized by the Board of Directors on April 27, 2018  (amended 
on November 6, 2018) and  described in the aforementioned 
reports.

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Fift  h resolution
(APPROVAL OF  RELATED-PARTY COMMITMENT GOVERNED 
BY ARTICLE L.225-42-1 OF THE FRENCH COMMERCIAL CODE 
 REGARDING   DENIS MACHUEL’S  COLLECTIVE SUPPLEMENTAL 
HEALTH AND BENEFIT PLANS)

Having considered the Board of Directors’ Corporate Governance 
Report and the Statutory Auditors’ Special Report on related-party 
agreements and commitments governed by articles L.225-38 
and L.225-40 to L.225-42 of the French Commercial Code, the 
Shareholders’ Meeting approves, in accordance with article L.225-
42-1 of said Code, the commitment made by the Company to 
 Denis Machuel, Chief Executive Offi  cer, regarding  his supplemental 
health and beneﬁ t plan, as authorized by the Board of Directors on 
January 23, 2018.

Sixth resolution
(APPROVAL OF  RELATED-PARTY COMMITMENT GOVERNED 
BY ARTICLE L.225-42-1 OF THE FRENCH COMMERCIAL CODE 
REGARDING    DENIS MACHUEL’S    SUPPLEMENTAL PENSION PLAN)

H a v i n g   c o n s i d e r e d   t h e   B o a r d   o f   D i r e c t o r s ’   C o r p o r a t e 
Governance Report and the Statutory Auditors’ Special Report 
on  related-party  agreements  and  commitments  governed 
by articles L.225-38 and L.225-40 to L.225-42 of the French 
Commercial  Code,  the  Shareholders’  Meeting  approves, 
in  accordance  with  article  L.225-42-1  of  said  Code,  the 
commitment made by the Company to  Denis Machuel, Chief 
Executive Offi  cer, regarding  his supplemental pension plan, as 
authorized by the Board of Directors on April 27, 2018.

Seventh to tenth resolutions: Reappointment  of four (4) directors

Purpose

The  Board  of  Directors  currently  has    thirteen  (13)  members,  including  two  (2)  directors  representing  employees, 
six (6) independent directors  and seven (7) women.

The purpose of the seventh to tenth resolutions is to reappoint  the following members of the Board of Directors, whose mandates  
expire at the end of this Shareholders’ Meeting:  Emmanuel Babeau,  Robert Baconnier,  Astrid Bellon and  François-Xavier Bellon.

S hareholders are invited to reappoint    Emmanuel Babeau,  Robert Baconnier,  Astrid Bellon and  François-Xavier Bellon as directors 
of the Company in order to enable the Company to continue to beneﬁ t from:

•  the ﬁ nancial and operational expertise of  Emmanuel Babeau (reappointment  sought for a period of three (3) years);

•  the ﬁ nancial expertise of  Robert Baconnier and his signiﬁ cant contribution to the Board of Directors (reappointment  sought 

for a period of one (1) year);

•  the experience of  Astrid Bellon in the services sector and her in-depth knowledge of the Sodexo Group (reappointment  sought 

for a period of three (3) years);

•  the operational and ﬁ nancial skills and long-term strategic vision of  François-Xavier Bellon, who has been a director since 

1989 (reappointment  sought for a period of three (3) years).

  Emmanuel Babeau and  François-Xavier Bellon will continue to seat on  the Audit Committee.

 Bernard Bellon, who has been  director of the Company since February 26, 1975 and whose current mandate  expires at the end  
of this Shareholders’ Meeting, has stated that he does not wish to be reappoint ed as  director.  Sophie Bellon would like to thank 
 Bernard Bellon, personally and on behalf of the Board of Directors and all of the shareholders, for his  contribution to the Board.

Biographical information on these directors is provided in section 5.2.1  of the Fiscal 2018 Registration Document.

Seventh resolution
(REAPPOINTMENT  OF  EMMANUEL BABEAU AS  DIRECTOR FOR 
 A PERIOD OF THREE (3) YEARS )

Eighth resolution
(REAPPOINTMENT  OF  ROBERT BACONNIER AS  DIRECTOR FOR  
A PERIOD OF ONE (1) YEAR  )

Having considered the Board of Directors’ Report and noting 
that the directorship of  Emmanuel Babeau expires at the end of 
this meeting, the Shareholders’ Meeting resolves to reappoint  
him as  director for a three (3) year period expiring at the end of 
the Annual Shareholders’ Meeting  held to approve the ﬁ nancial 
statements for the ﬁ scal year ending August 31, 2021.

Having considered the Board of Directors’ Report and noting 
that the directorship of  Robert Baconnier expires at the end of 
this meeting, the Shareholders’ Meeting resolves to reappoint  
him as  director for a one (1) year period expiring at the end of 
the Annual Shareholders’ Meeting held  to approve the ﬁ nancial 
statements for the ﬁ scal year ending August 31, 2019.

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Ninth resolution
(REAPPOINTMENT  OF  ASTRID BELLON AS DIRECTOR  FOR  A PERIOD 
OF THREE (3) YEARS )

Tenth resolution
(REAPPOINTMENT  OF  FRANÇOIS-XAVIER BELLON AS DIRECTOR  
FOR  A PERIOD OF THREE (3) YEARS )

Having considered the Board of Directors’ Report and noting 
that the directorship of  Astrid Bellon expires at the end of this 
meeting, the Shareholders’ Meeting resolves to reappoint  her as 
director  for a three (3) year period expiring at the end of the 
Annual Shareholders’ Meeting held  to approve the financial 
statements for the ﬁ scal year ending August 31, 2021.

Having considered the Board of Directors’ Report and noting that 
the directorship of  François-Xavier Bellon expires at the end of 
this meeting, the Shareholders’ Meeting resolves to reappoint  
him as director  for a three (3) year period expiring at the end of 
the Annual Shareholders’ Meeting held   to approve the ﬁ nancial 
statements for the ﬁ scal year ending August 31, 2021.

Eleventh resolution: Ratiﬁ cation of the Board’s appointment by cooptation 
of  Sophie Stabile as  director

Purpose

Following   Patricia  Bellinger ’s  decision  to  terminate  her  directorship  on  July  1,  2018,  in  advance  of  its  term,  in  the 
eleventh resolution, shareholders are invited to ratify the Board’s appointment by cooptation  of  Sophie Stabile as a new director 
of the Company,  eff ective from July 1, 2018 for the remainder of her predecessor’s term of offi  ce, expiring at the end of the 
Shareholders’ Meeting held  to approve the ﬁ nancial statements for the ﬁ scal year ending August 31, 2019. 

Sophie  Stabile – who qualifies as an independent director –  will bring to the Board her extensive operational and financial 
experience in the services and hospitality sector. 

 Sophie Stabile is also a member of the Audit Committee.

Biographical information on  Sophie Stabile is provided in section 5.2.1  of the Fiscal 2018 Registration Document.

Eleventh resolution
(RATIFICATION OF THE BOARD’S APPOINTMENT BY COOPTATION OF  SOPHIE STABILE AS DIRECTOR )

Having  considered  the  Board  of  Directors’  Report,  the 
Shareholders’  Meeting  ratifies  the  Board’s  appointment  by 
cooptation of  Sophie Stabile as director  of the Company, eff ective 
from July 1, 2018 for the remainder of her predecessor’s term of 

offi  ce, expiring at the end of the Annual Shareholders’ Meeting 
held  to approve the financial statements for the fiscal year 
ending August 31, 2019.

Twelft  h to fourteenth resolutions: Approval of the compensation and 
beneﬁ ts of corporate offi  cers for Fiscal 2018 

Purpose

S hareholders  are invited to give their opinion on the compensation and beneﬁ ts paid or awarded for Fiscal 2018 to the corporate 
offi  cers.

Consequently, in the twelft  h to fourteenth resolutions, shareholders are invited to approve the compensation and beneﬁ ts paid 
or awarded for Fiscal 2018 to  Sophie Bellon, Chairwoman of the Board of Directors,  Michel Landel, Chief Executive Offi  cer until 
January 23, 2018, and  Denis Machuel, Chief Executive Offi  cer since January 23, 2018.

These compensation components are described in section 5.5.2 of the Corporate Governance Report of the Board of Directors in 
the Fiscal 2018 Registration Document.

Twelft  h resolution
(APPROVAL OF THE COMPENSATION AND BENEFITS PAID OR 
AWARDED FOR FISCAL 2018 TO  SOPHIE BELLON, CHAIRWOMAN 
OF THE BOARD OF DIRECTORS)

Thirteenth resolution
(APPROVAL OF THE COMPENSATION AND BENEFITS PAID 
OR AWARDED FOR FISCAL 2018 TO  MICHEL LANDEL, CHIEF 
EXECUTIVE OFFICER UNTIL JANUARY 23, 2018)

The Shareholders’ Meeting approves the total compensation 
and beneﬁ ts paid or awarded for Fiscal 2018 to  Sophie Bellon, 
Chairwoman  of  the  Board  of  Directors,  as  described  in  the 
Corporate Governance Report of  the Fiscal 2018 Registration 
Document.

The Shareholders’ Meeting approves the total compensation 
and beneﬁ ts paid or awarded for Fiscal 2018 to  Michel Landel, 
Chief Executive Offi  cer until January 23, 2018, as described in 
the Corporate Governance Report of  the Fiscal 2018 Registration 
Document.

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Fourteenth resolution
(APPROVAL OF THE COMPENSATION AND BENEFITS PAID OR AWARDED FOR FISCAL 2018 TO  DENIS MACHUEL, 
CHIEF EXECUTIVE OFFICER SINCE JANUARY 23, 2018)

The Shareholders’ Meeting approves the total compensation 
and beneﬁ ts paid or awarded for Fiscal 2018 to  Denis Machuel, 
Chief Executive Offi  cer since January 23, 2018, as described in 

the Corporate Governance Report of  the Fiscal 2018 Registration 
Document.

Fift  eenth and sixteenth resolutions: Approval of the compensation policy 
applicable to corporate offi  cers

Purpose

S hareholders are invited to approve  the compensation policy applicable to corporate offi  cers.

Therefore, in the ﬁ ft  eenth and sixteenth resolutions, shareholders are invited to approve the principles and criteria used to 
determine, allocate and award the ﬁ xed, variable and exceptional components, where  applicable, of the compensation and beneﬁ ts 
payable  to the Chairwoman of the Board of Directors and the Chief Executive Offi  cer. These principles and criteria will apply to any 
person who holds a similar position  and will be applicable as from Fiscal 2019 until the approval of a new compensation policy 
by the Shareholders’ Meeting. 

The compensation policies applicable to the corporate offi  cers are described in the Board of Directors’ Corporate Governance 
Report  in section 5.5.1  of the Fiscal 2018 Registration Document.

Fift  eenth resolution
(APPROVAL OF THE PRINCIPLES AND CRITERIA USED TO 
DETERMINE, ALLOCATE AND AWARD THE  COMPONENTS 
OF THE COMPENSATION AND BENEFITS PAYABLE TO 
THE  CHAIRMAN(WOMAN) OF THE BOARD OF DIRECTORS)

Sixteenth resolution
(APPROVAL OF THE PRINCIPLES AND CRITERIA USED TO 
DETERMINE, ALLOCATE AND AWARD THE  COMPONENTS 
OF THE COMPENSATION AND BENEFITS PAYABLE TO 
THE CHIEF EXECUTIVE OFFICER)

The Shareholders’ Meeting approves the principles and criteria 
used to determine, allocate and award the  components of the 
compensation and beneﬁ ts payable to the Chairman(woman) of 
the Board of Directors, as described in the Corporate Governance 
Report of  the Fiscal 2018 Registration Document.

The Shareholders’ Meeting approves the principles and criteria 
used to determine, allocate and award the  components of the 
compensation  and  benefits  payable  to  the  Chief  Executive 
Offi  cer, as described in the Corporate Governance Report of  the 
Fiscal 2018 Registration Document.

Seventeenth resolution: Authorization for the Company to purchase  shares 
 of the Company

Purpose

As of August 31, 2018, the Company held 1.27% of its share capital , corresponding to 1,869,352 treasury shares, chieﬂ y 
allocated to cover commitments to beneﬁ ciaries under stock option plans, free share plans and employee share purchase plans.

In the seventeenth resolution,  shareholders are invited to renew the eighteen (18)  month authorization granted to the Board of 
Directors to enable the Company to purchase treasury shares  other than during public tender off ers .

Although French law authorize s share repurchases of up to 10% of a company’s share capital, it is proposed that they be limited 
to 5% of the share capital as of the date of the Shareholders’ Meeting on January 22, 2019.

The maximum price of the shares that may be purchased under this share buyback program would be 120  euro per share and the 
total amount invested in the program may not exceed 885 m illion euro.

The shares purchased pursuant to this resolution would be used, inter alia, to (i) cover free share plans, (ii) reduce the Company’s 
issued capital by canceling shares, and (iii) carry out market-making in Sodexo shares under the liquidity contract entered into 
between Sodexo and Kepler-Cheuvreux.

For further information on the implementation of the previous share buyback authorization, see section 6.3.1  of the Fiscal 2018 
Registration Document.

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Seventeenth resolution
(AUTHORIZATION TO THE BOARD OF DIRECTORS FOR 
THE COMPANY TO PURCHASE TREASURY SHARES)

Having  considered  the  Board  of  Directors’  Report,  and  in 
accordance  with  articles  L.225-209  et  seq.  of  the  French 
Commercial Code and Regulation (EU) no. 596/2014 of April 16, 
2014,  the  Shareholders’  Meeting  authorizes  the  Board  of 
Directors – or any duly authorized representative of the Board – 
to purchase, or arrange for the Company to purchase, treasury 
shares, in particular for the following purposes:

•  to implement a stock option plan enabling beneﬁ ciaries to 
acquire – for consideration and by all authorized means – 
shares of the Company in accordance with articles L.225-
177 et seq. of the French Commercial Code or any similar 
plan, with the beneﬁ ciaries notably including (i) employees 
and/or corporate offi  cers of the Company or of companies 
or groupings affiliated to it under the conditions provided 
for in article L.225-180 of said Code, and/or (ii) any other 
beneﬁ ciary authorized by law to receive such stock options; 
or

•  to  grant  free  shares  of  the  Company  in  accordance  with 
articles L.225-197-1 et seq. of the French Commercial Code, 
notably to (i) employees of the Company or of companies or 
groupings affi  liated to it under the conditions provided for in 
article L.225-197-2 of said Code, and/or (ii) corporate offi  cers 
of the Company or of companies or groupings affi  liated to it 
under the conditions provided for in article L.225-197-1 II of 
said Code, and/or (iii) any other beneﬁ ciary authorized by 
law to receive such share grants; or

•  to allocate or sell shares to employees in connection with an 
employee proﬁ t sharing plan or a company or group share 
purchase  plan  (or  equivalent  plan)  under  the  conditions 
provided for by law, including articles L.3332-1 et seq. of the 
French Labor Code; or

•  to  transfer  shares  upon  exercise  of  rights  attached  to 
securities issued by the Company or, as authorized by law, by 
entities affi  liated to it, which give access to Company shares 
through reimbursement, conversion, exchange, presentation 
of a warrant or any other method; or

•  to cancel the shares by reducing the issued capital, pursuant 
to the eighteenth resolution of the January 23, 2018 Annual 
Shareholders’ Meeting or to any future resolution to the same 
eff ect that may be adopted during the period in which this 
authorization remains valid; or

•  to  transfer  shares  as  a  means  of  exchange,  payment  or 
otherwise in connection with mergers and acquisitions; or

•  to  carry  out  market-making  in  Sodexo  shares  under  a 
liquidity  contract  with  an  investment  services  provider, 
prepared in accordance with the Code of conduct recognized 
by  the  french  securities  regulator  (Autorité  des  m archés 
f inanciers – AMF) ; or

•  generally, to fulfill the obligations related to stock option 
plans  or  other  share  grants  to  employees  or  corporate 
offi  cers of the Company or an affi  liated company.

The program is also intended to permit the implementation of 
any market practices that may be authorized at a future date by 
the french securities regulator (Autorité des m archés f inanciers – 
AMF)  and, generally, the execution of any other transaction 
that  complies  with  the  applicable  regulations.  In  this  case, 
shareholders will be notiﬁ ed by means of a press release.

The transactions provided for pursuant to this resolution may 
be eff ected by any method, in particular on the stock market 
or over-the-counter, including through the use of any ﬁ nancial 
instruments,  options  or  derivatives  and  by  means  of  block 
purchases or sales or in any other way. The transactions may 
take place at any time, outside of periods of public tender off ers, 
subject to the limits imposed by the laws and regulations in 
force at the time.

The  Shareholders’  Meeting  resolves  that  the  maximum 
number of shares acquired pursuant to this resolution may 
not exceed 5% of the Company’s issued capital as of the date 
of this meeting (i.e., as an indication, as of August 31, 2018, a 
maximum of 7,372,744 shares), it being stipulated that if this 
authorization is used, the existing number of treasury shares 
must be taken into account such that the Company does not at 
any time have more treasury shares than the legally permitted 
maximum of 10% of its share capital.

The Shareholders’ Meeting resolves that the maximum price 
paid  for  shares  purchased  under  this  resolution  may  not 
exceed 120  euro per share. However, the Shareholders’ Meeting 
authorizes  the  Board  of  Directors  to  adjust  this  maximum 
purchase price in the event of a change in the par value of the 
Company’s shares, a capital increase carried out by capitalizing 
reserves, a bonus share plan, a stock split or reverse stock split, 
the distribution of reserves or any other assets, a redemption 
of capital, or any other transaction affecting the Company’s 
capital or equity, in order to take into account the eff ect of the 
transaction on the share price.

The  Shareholders’  Meeting  resolves  that  the  total  amount 
allocated  to  the  share  buyback  program  may  not  exceed 
885 m illion euro.

The Shareholders’ Meeting acknowledges that this authorization 
is granted for a period of eighteen (18) months as from the date 
of  this  meeting  and  cancels,  with  effect  from  this  day,  any 
unused portion of any prior authorization granted to the Board 
of Directors for the same purpose.

Full powers are given to the Board of Directors – or any duly 
authorized representative of the Board – to decide on and act 
on the present authorization, to clarify its terms if necessary 
and determine its speciﬁ c details, to carry out share purchases 
and to place stock market orders and enter into agreements, in 
particular for the keeping of share purchase and sale registers, to 
allocate or reallocate purchased shares to the desired objectives 
in accordance with applicable laws and regulations, to establish 
the procedures necessary to safeguard, should the need arise, 
the rights of holders of securities or options, in accordance with 
applicable laws, regulations or contracts, and to make ﬁ lings 
and carry out other formalities, and generally do all that is 
necessary.

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Extraordinary resolutions

 Eighteenth resolution: Free grants of existing and/or newly issued shares to 
Group employees and/or corporate offi  cers

Purpose

I n the eighteenth resolution, shareholders are invited to renew the authorization given in the fourteenth resolution of the 
January 26, 2016 Annual Shareholders’ Meeting (which is due to expire)  to carry out free grants of existing and/or newly issued 
shares of the Company to all or selected categories of employees and/or corporate offi  cers of the Group .

The number of existing and/or newly issued shares granted to employees may not exceed 2.5% of the issued share capital as of 
the date of the Board of Directors’ decision and 1.5% of the share capital during a single ﬁ scal year.

The free shares would only vest if the beneﬁ ciary remains with the Group throughout the four (4) year vesting period. In addition, 
for certain beneﬁ ciaries, the vesting of the shares would be subject to  performance conditions determined  by the Board of 
Directors, in accordance with the approved  compensation policy. 

 Shares granted to the Chief Executive Offi  cer may not represent more than 5% of the total free shares granted by the Board of 
Directors during each ﬁ scal year pursuant to this authorization and their vesting must be subject to (i) the Chief Executive Offi  cer 
remaining with the Group throughout the vesting period, and (ii) the achievement of several performance conditions determined  
by the Board of Directors.

The Board of Directors considers that the above conditions reﬂ ect a good balance between the Company’s performance, investor 
conﬁ dence in the Group and Sodexo’s Corporate Responsibility performance.

This authorization would be valid for a period of thirty-eight (38) months.

For further information on the implementation of the previous authorization given by the shareholders for this same purpose and 
on the performance conditions set for Fiscal 2019, see section 5.5.5  of the Fiscal 2018 Registration Document.

Eighteenth resolution
 (AUTHORIZATION TO THE BOARD OF DIRECTORS TO GRANT 
EXISTING AND/OR NEWLY ISSUED FREE SHARES OF THE 
COMPANY TO ALL OR CERTAIN EMPLOYEES AND/OR CORPORATE 
OFFICERS OF THE GROUP, WITH AN AUTOMATIC WAIVER OF 
SHAREHOLDERS’ PREFERENTIAL SUBSCRIPTION RIGHTS)

Having  considered  the  Board  of  Directors’  Report  and  the 
Statutory Auditors’ Special Report, the Shareholders’ Meeting:

1. 

2. 

3. 

authorizes  the  Board  of  Directors,  in  application  of 
articles L.225-197-1 et seq. of the French Commercial 
Code – or any duly authorized representative of the Board – 
to grant, on one or more occasions, existing and/or newly 
issued shares of the Company, free of consideration, to 
all or selected categories of employees and/or corporate 
offi  cers of the Company and/or entities and/or groupings 
of entities affi  liated to the Company within the meaning of 
article L.225-197-2 of the French Commercial Code;

sets  the  duration  of  this  authorization  at  thirty-eight 
(38) months from the date of this meeting;

resolves that the number of existing and/or newly issued 
shares granted pursuant to this authorization may not 
exceed 2.5% of the issued capital as of the date of the 
decision made by the Board of Directors and 1.5% of the 
share capital during a single ﬁ scal year, before taking into 
account any adjustments made to protect beneﬁ ciaries’ 
rights;

4. 

5. 

resolves that existing and/or newly issued shares may, 
under the conditions imposed by law, be granted to the Chief 
Executive Offi  cer in his capacity as a corporate offi  cer of the 
Company, provided that (i) these shares do not represent 
more than 5% of the total share grants made during each 
fiscal year by the Board of Directors and (ii) their vesting 
is subject to the Chief Executive Offi  cer remaining with the 
Group throughout the vesting period and to the achievement 
of several performance conditions determined  by the Board 
of Directors. The number of shares granted to the Chief 
Executive Officer in his capacity as  corporate officer that 
must be held in registered form for as long as he remains in 
offi  ce will be set by the Board of Directors;

resolves that (i) the shares granted will vest at the end of 
a vesting period that will be determined by the Board of 
Directors but may not be shorter than that stipulated in 
the French Commercial Code at the date of the Board of 
Directors’ decision, (ii) the beneﬁ ciaries will be required 
to retain their shares during a lock-up period that will 
be  determined  by  the  Board  of  Directors,  and  (iii)  the 
combined duration of the vesting period and lock-up period 
may not be shorter than that stipulated in the French 
Commercial Code at the date of the Board of Directors’ 
decision. However, if the vesting period for all or some of 
the free shares is at least two (2) years, the Shareholders’ 
Meeting authorizes the Board of Directors not to impose 

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•  determine the list of beneﬁ ciaries, or the category or 
categories of beneﬁ ciaries, and the number of shares 
to be granted in each case,

•  set the terms and conditions of the share issues to be 
carried out pursuant to this authorization and the cum 
rights dates of the new shares,

•  make all adjustments to beneﬁ ciaries’ rights that may 
be required in the event of transactions aff ecting the 
Company’s capital during the vesting period in order to 
safeguard said rights,

•  place on record the vesting dates of the shares granted 
and  the  dates  from  which  the  shares  will  be  freely 
transferable, taking into account the applicable legal 
restrictions,

•  place on record the completion of each capital increase 

and amend the bylaws accordingly,

•  provide for the possibility of temporarily suspending 
the grant rights in the case of a corporate action, and

•  generally,  do  everything  that  may  be  useful  or 
necessary under the applicable laws and regulations;

10.  acknowledges that this authorization cancels from this day 
the unused portion of the authorization to the same eff ect 
granted in the fourteenth resolution of the January 26, 
2016 Annual Shareholders’ Meeting.

6. 

7. 

8. 

9. 

a lock-up period for the shares concerned. The Board of 
Directors will be authorized to set different vesting and 
lock-up  periods  according  to  the  existing  laws  in  the 
countries of residence of the beneﬁ ciaries;

resolves  that  the  vesting  of  the  existing  and/or  newly 
issued shares granted may be subject to (i) the beneﬁ ciary 
remaining with the Group throughout the vesting period 
and  (ii)  the  achievement  of  one  or  more  performance 
conditions as set by the Board of Directors;

resolves that, if a beneﬁ ciary is subject to a category 2 or 
3 disability as defined in article L.341-4 of the French 
Social Security Code or the equivalent in another country, 
the shares granted to him or her will vest immediately, 
i.e. before the end of the vesting period, and will be freely 
transferable as from the date they are delivered;

notes  that  if  newly  issued  shares  are  granted,  this 
authorization  will  result,  as  and  when  the  shares  vest, 
in a capital increase by capitalizing reserves, profits or 
premiums for the beneﬁ t of the beneﬁ ciaries, and will entail 
an automatic waiver by the shareholders of their preferential 
subscription rights to the shares, in favor of the beneﬁ ciaries;

confers full powers on the Board of Directors, or any duly 
authorized representative, to implement this authorization 
under the conditions described above and within the limits 
prescribed by the applicable rules and regulations, and in 
particular to:

•  determine whether the shares granted will be existing 

or newly issued shares,

Nineteenth resolution: Powers

Purpose

The nineteenth resolution is a standard resolution conferring powers to perform all legal formalities and ﬁ lings relating to the 
resolutions approved at the Annual Shareholders’ Meeting.

Nineteenth resolution
(POWERS)

The Shareholders’ Meeting confers full powers on the bearer of a copy or extract of the minutes of this meeting to carry out all 
necessary formalities.

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C O M B I N E D   A N N U A L   S H A R E H O L D E R S ’   M E E T I N G ,   J A N U A R Y   2 2 ,   2 0 1 9

7 S t a t u t o r y   A u d i t o r s ’   r e p o r t   o n   t h e   a u t h o r i z a t i o n   t o   g r a n t   f r e e   e x i s t i n g   o r   n e w l y   i s s u e d   s h a r e s

7.3  STATUTORY AUDITORS’ REPORT 

ON THE AUTHORIZATION TO GRANT FREE 
EXISTING OR NEWLY ISSUED SHARES

This is a free translation into English of the Statutory Auditors’ report issued in French and is provided solely for the convenience 
of English speaking readers. This report should be read in conjunction with, and construed in accordance with, French law and 
professional auditing standards applicable in France. 

(Combined Shareholders’ Meeting of January 22, 2019 – 18th resolution)

Sodexo
255, Quai de la Bataille de Stalingrad
92866 Issy-les-Moulineaux Cedex 9, France

To the Shareholders,

In our capacity as Statutory Auditors of Sodexo, and in compliance with the provisions of article L. 225-197-1 of the French 
Commercial Code (Code de commerce), we hereby report to you on the proposed authorization to grant free existing or newly issued 
shares to employees and/or corporate offi  cers of the Company and related companies, which is submitted to you for approval. The 
total number of shares granted under the authorization may neither exceed 2.5% of the Company’s share capital as of the date on 
which they are granted by the Board of Directors nor 1.5% of the share capital in a single ﬁ scal year.

On the basis of its report, the Board of Directors invites you to authorize it, with the possibility of subdelegation in accordance with 
the law and for a period of thirty-eight (38) months, to grant free existing or newly issued shares. 

It is the Board of Directors’ responsibility to prepare a report on the proposed transaction. It is our responsibility to provide you with 
our observations, if any, in respect of the information provided to you on the proposed transaction.

We performed the procedures that we deemed necessary in accordance with professional standards applicable in France to such 
engagements. These procedures consisted primarily in verifying that the proposed terms and conditions described in the Board of 
Directors’ report comply with the applicable legal provisions.

We have no matters to report on the information provided in the Board of Directors’ report concerning the proposed authorization to 
grant free shares.

Neuilly-sur-Seine and Paris La Défense, November 7, 2018

The Statutory Auditors

PricewaterhouseCoopers Audit

Jean-Christophe Georghiou

KPMG Audit

Department of KPMG SA

Hervé Chopin

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8

APPENDICES

8.1 

Glossary 

302

8.3 

Reconciliation Tables 

8.2 

Responsibility for 
the  Registration Document 
and the Audit of the Financial 
Statements 

8.2.1  Responsibility for the Registration 

Document 

8.2.2  Responsibility for the audit of 

the  ﬁ nancial statements 

305

305

306

8.3.1  Appendix I of European Regulation 

no. 809/2004 

8.3.2  Annual Financial Report 

8.3.3  Management Report 

8.3.4  Governance Report 

8.3.5 

Information required by articles 
 R. 225-105-1 and L. 225-102-1 
of the French Commercial Code 
relative to the extra-ﬁ nancial 
performance declaration 

307

307

309

309

310

311

8.3.6  Global Reporting Initiative (GRI) guideline  314

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8 G l o s s a r y

8.1  GLOSSARY

ADR (American Depositary Receipts)

Comparable site growth rate

An  ADR  is  a  registered  certificate  issued  by  a  U.S.  bank  to 
represent ownership of a share or bond issued by a publicly-
traded  non-U.S.  company.  ADRs  are  quoted  in  U.S.  dollars, 
but the underlying shares or bonds are denominated in their 
original currency and are held in deposit by a bank, known as 
the custodian, in the country of issue. ADRs enable a non-U.S. 
company, subject to certain conditions, to be quoted in the 
United States. One Sodexo share is represented by ﬁ ve Sodexo 
ADR. Dividends and voting rights belong to the ADR holder.

Bearer shares

Shares held in a share account maintained by the shareholder’s 
bank or broker. Sodexo is not informed of the shareholder ’s 
identity. The share purchase and administration of the shares 
are handled by the shareholder’s bank or broker.

Beneﬁ ts and Rewards Services

Sodexo’s Benefits and Rewards Services – which are provided 
through  vouchers,  cards  or  digitally  –  cover  five  service 
categories:  Employee  Benefits,  Incentive  and  Recognition 
Programs, Employee mobility and Expense Management Public 
Beneﬁ ts and Gift   boxes  and cards.

Client retention rate

The client retention rate corresponds to the total amount of 
revenue generated from business with existing clients in the 
prior ﬁ scal year compared with total revenue for that year.

It  is  expressed  as  a  percentage  and  is  calculated  in  a 
comprehensive  way  by  deducting  the  revenue  generated  in 
the prior ﬁ scal year that corresponds to (i) contracts lost to a 
competitor or self-operation, (ii) contracts terminated by Sodexo 
and (iii) site closures. Other companies may calculate their 
retention rates on a diff erent basis.

The comparable site growth rate is the increase in revenues 
from sites that have contributed to consolidated revenue over 
two complete consecutive ﬁ scal years (sites with activity from 
September 1, 2016  to August 31, 2018 ).

Corporate offi  cers

Corporate Officer is the term used in English for the French 
mandataire social and refers to  Sodexo’s Chief Executive Offi  cer, 
Chairwoman  of  the  Board  and  the  Members  of   the  Board  of 
Directors.

 Development rate

The development rate is the annualized estimated revenue for 
new contracts signed during the ﬁ scal year, divided by prior year 
revenues.

Dividend premium

Any shareholder that has held registered shares for at least 
four years as of the end of the fiscal year including as of the 
dividend  payment  date  will  be  eligible  for  a  10%  dividend 
premium on those shares. The number of shares eligible for the 
dividend premium cannot exceed 0.5% of Sodexo’s share capital 
per shareholder.

Earnings per share (EPS)

Group net income divided by the weighted average number of 
shares outstanding.

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A P P E N D I C E S

G l o s s a r y

Employee engagement rate

Issue volume

Engagement is deﬁ ned as a level of commitment in a group or 
business, and refers to employees’ commitment to the success 
of the business, their loyalty and their pride in being part of the 
organization. As such the engagement rate is the percentage of 
employees having responded to the six engagement questions 
with an average rating of 4.5 or higher on an increasing scale of 
from 1 to 6 (methodology developed by Aon Hewitt).

Additional information is available in chapter 2 of this document.

Employee retention rate

The employee retention rate corresponds to the proportion of 
employees who remain with the Group during the year out of the 
overall average number of employees for the year.

Note that for purposes of this calculation employees leaving the 
Group do not include departures related to legal requirements or 
regulations concerning lost contracts, transfers between Group 
subsidiaries or the expiration of ﬁ xed-term contracts.

GRI

The Global Reporting Initiative (GRI) was created in 1997 by the 
Coalition for Environmentally Responsible Economies (CERES) in 
partnership with the United Nations Environment Programme 
(UNEP). The GRI’s vocation is to lift   sustainable development 
methods to a level equivalent to those of ﬁ nancial reporting, in 
the interests of comparability, credibility, rigor, frequency and 
veriﬁ ability of the communicated information.

Group net income

Group net income corresponds to the line “Proﬁ t attributable 
to equity holders of the parent” in the consolidated income 
statement. It is the Group’s total consolidated net income (i.e., 
the  net  income  generated  by  all  Group  companies)  less  the 
portion of net income attributable to interests held by third 
party shareholders in subsidiaries not wholly owned by Sodexo.

Issue  volume  corresponds  to  the  total  face  value  of  service 
vouchers, cards and digitally-delivered services issued by the 
Group (Beneﬁ ts and Rewards Services activity) for beneﬁ ciaries 
on behalf of clients.

Net debt

Net debt corresponds to the Group’s borrowings at the balance 
sheet date less operating cash. More details in section 3.5.1 
Financial Ratios.

OHSAS 18001

A standard developed in the United Kingdom (Occupational 
Health  and  Safety  Assessment  Series)  used  as  a  model  for 
occupational  health  and  safety  management  systems.  Its 
objective  is  to  provide  companies  with  assessment  and 
certiﬁ cation of their health and safety management systems, 
consistent with international management system standards.

On-site Services

Sodexo On-site Services respond to the needs of Sodexo’s  client 
segments  .

 Performance shares

Sodexo shares granted free of consideration by the Board of 
Directors to the Chief Executive Officer and Group managers 
in order to reward individual performance and whose vesting 
is  subject  to  the  beneficiary  still  forming  part  of  the  Group 
at the end of the vesting period as well as the achievement 
of performance conditions (for grants representing over 250 
shares). The proportion of performance shares within the overall 
number  of  shares  granted  can  vary  between  0%  and  100% 
depending on the number of shares making granted and the 
responsibilities of the beneﬁ ciaries concerned.

Intensity risk

Personal and Home Services

Risks  whose  frequency  and  severity  require  transfer  to  the 
insurance market.

Sodexo  Services  provided  in  three  main  areas:  childcare, 
concierge services and in-home care for dependent persons.

ISO

ISO  (International  Organization  for  Standardization)  is  the 
world’s largest developer of voluntary International Standards. 
International Standards give state of the art speciﬁ cations for 
products, services and good practice, helping to make industry 
more effi  cient and eff ective. They include ISO 9001 for Quality 
management,  ISO  14001  for  Environmental  management, 
ISO 22000 for Food Safety management, ISO 27000 (security IT 
standard) and ISO 55000 for asset management.

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A P P E N D I C E S

8 G l o s s a r y

Registered shares

TSR

Total Shareholder Return (TSR) is a measure of the performance of 
a company’s shares over time. The total return to the shareholder 
combines share price appreciation and dividends paid.

Registered shares are shares that are registered in the holder’s 
name in Sodexo’s share register (unlike bearer shares). They 
may  be  directly  or  indirectly  registered.  Registered  Sodexo 
shareholders are entitled to:

•  double voting rights for registered shares held for at least 

four years;

•  a dividend premium of 10% for registered shares held for at 
least four years, limited to 0.5% of Sodexo’s issued capital 
per shareholder;

•  automatic  invitation  to  Shareholders’  Meetings  and 
personalized  information  on  all  financial  transactions 
(capital increases, bond issues, etc.);

•  reduced administration costs (for directly registered shares 

only).

1.  Directly registered shares (French nominatif pur)

The shares are recorded in the holder’s name in a share account 
kept by the Company’s registrar, Société Générale, allowing 
direct communications between the shareholder and Sodexo.

2.  Indirectly registered shares (French nominatif administré)

In this case, the shares are registered in the holder’s name in 
a share account managed by his or her bank or broker, which 
is  responsible  for  the  related  custodial  and  administration 
services. The shares are administered in the same way as for 
bearer shares.

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R e s p o n s i b i l i t y   f o r   t h e   R e g i s t r a t i o n   D o c u m e n t   a n d   t h e   A u d i t   o f   t h e   F i n a n c i a l   S t a t e m e n t s

A P P E N D I C E S

8.2  RESPONSIBILITY FOR THE REGISTRATION 

DOCUMENT AND THE AUDIT 
OF THE FINANCIAL STATEMENTS

8.2.1  Responsibility for the Registration Document

Responsibility for the Document de référence (French-language 
equivalent of the Registration Document).

“Having taken all reasonable precautions, I hereby declare that 
the information contained in the Document de référence is to 
the best of my knowledge in accordance with reality and that 
nothing has been omitted that would alter its impact.

I  declare  that  to  the  best  of  my  knowledge  the  financial 
statements comply with the applicable accounting standards 
and present a true statement of the net worth, the financial 
position,  and  of  the  income  of  the  Company,  and  of  the 
consolidated entities.

The  Management  Report  described  on  page  309   presents  a 
true picture of the evolution of the business, of the results and 
the ﬁ nancial position of the Company and of the consolidated 
entities, as well as a description of the principal risks for the 
Group.

I have obtained from our Statutory Auditors an engagement 
completion letter in which they declare that they veriﬁ ed the 
information relating to the ﬁ nancial position and the ﬁ nancial 
statements which are presented in this document and that they 
have read this document in its entirety.”

Denis Machuel
Chief Executive Offi  cer

November 20, 2018

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A P P E N D I C E S

8 R e s p o n s i b i l i t y   f o r   t h e   R e g i s t r a t i o n   D o c u m e n t   a n d   t h e   A u d i t   o f   t h e   F i n a n c i a l   S t a t e m e n t s

8.2.2  Responsibility for the audit of the financial statements

AUDITORS

STATUTORY AUDITORS

PricewaterhouseCoopers Audit
Member of the Compagnie Régionale des Commissaires 
aux Comptes de Versailles
63, rue de Villiers
92208 Neuilly-sur-Seine, France
Registered no. RCS Nanterre 672 006 483
Represented by Jean-Christophe Georghiou

KPMG Audit
Département de KPMG SA
Member of the Compagnie Régionale des Commissaires 
aux Comptes de Versailles
Tour Eqho – 2 avenue Gambetta
92066 Paris La Défense Cedex, France
Represented by Hervé Chopin

DEPUTY STATUTORY AUDITORS

M. Jean-Baptiste Deschryver
Member of the Compagnie Régionale des Commissaires 
aux Comptes de Versailles
63, rue de Villiers
92208 Neuilly-sur-Seine, France

Salustro Reydel
Member of the Compagnie Régionale des Commissaires 
aux Comptes de Versailles
Tour Eqho – 2, avenue Gambetta
92066 Paris La Défense Cedex, France

FIRST APPOINTED

TERM OF OFFICE

TERM OF OFFICE EXPIRES

February 22, 1994

6 fiscal years

February 4, 2003

6 fiscal years

January 21, 2017

6 fiscal years

January 19, 2015

6 fiscal years

Shareholders’ Meeting to 
be held in 2023 to adopt 
the financial statements 
for Fiscal 2022

Shareholders’ Meeting to 
be held in 2021 to adopt 
the financial statements 
for Fiscal 2020

Shareholders’ Meeting to 
be held in 2023 to adopt 
the financial statements 
for Fiscal 2022

Shareholders’ Meeting to 
be held in 2021 to adopt 
the financial statements 
for Fiscal 2020

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A P P E N D I C E S

R e c o n c i l i a t i o n   T a b l e s

8.3  RECONCILIATION TABLES

To facilitate the reading of this document, the reconciliation 
tables below identify:

•  the disclosures constituting the Management Report of the 
Board of Directors deﬁ ned by the French Commercial Code;

•  the  main  headings  required  by  Appendix  I  of  European 
Regulation  no.  809/2004.  Disclosures  not  applicable  to 
Sodexo are marked “N/A”;

•  the information that constitutes the Annual Financial Report 
provided for under articles L.451-1-2 of the Monetary and Financial 
Code and 222-3 of the General Regulation of the french securities 
regulator (Autorité des m archés f inanciers - AMF );

•  the information required by article R.225-105-1 of the French 

Commercial Code ;

•  the GRI, ISO 26000 and UN Global Compact Indicators.

8.3.1  Appendix I of European Regulation no. 809/2004

IN ACCORDANCE WITH APPENDIX I OF EUROPEAN REGULATION NO. 809/2004

1. Person responsible for the Registration Document

2. Statutory Auditors

3. Selected financial information

4. Risk factors

5. General information on the issuer

5.1. History

5.2. Investments

6. Overview of business

6.1. Main activities

6.2. Main markets

6.3. Exceptional events

6.4. Dependency risk

6.5. Competitive position

7. Organization chart

7.1. Brief description of the Group

7.2. Significant subsidiaries

8. Tangible fixed assets

9. Financial position and operating profit analysis

10. Cash and capital

10.1. General information on the capital

10.2. Sources and amounts of cash flow

10.3. Information on borrowing conditions and on the structure of financing

10.4.  Restrictions on capital utilizations having materially affected or potentially materially affecting 

the operations of the Company

10.5. Expected sources of financing

11. Research and development, patent and licenses

12. Information on trends

13. Profit forecast or estimate

PAGES

305

306

36-39

236-248

32, 33, 285-288 

128, 149, 166

25-29, 78-82

17-19, 78-82

N/A

236-237

24-67

167 

154-156, 167, 187-188 

114, 115 ,125

74, 104

8

109-133

84-108

134-138

130-131

N/A

N/A

86

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A P P E N D I C E S

8 R e c o n c i l i a t i o n   T a b l e s

IN ACCORDANCE WITH APPENDIX I OF EUROPEAN REGULATION NO. 809/2004

PAGES

14. Board of Directors and Senior Management

14.1. Information concerning members of the Board of Directors and Senior Management

14, 204-231

14.2.  Absence of potential conflict of interest within the membership of the Board of Directors 

and Senior Management

15. Compensation and benefits

15.1. Amount of compensation of Corporate Officers

15.2. Total amounts provided for or recognized for the payment of pensions or other benefits

16. Duties of the Board of Directors

16.1. Date of expiration of current terms

16.2.  Service contracts between members of the Board of Directors and the CEO and the Company 

or one of its subsidiaries

16.3.  Information concerning the Audit Committee, the Nominating Committee 

and the Compensation Committee

16.4. Statement of compliance with the current principles of Corporate Governance

17. Employees

17.1. Number of Employees

17.2. Profit sharing and stock options

17.3. Employee participation in Share Capital

18. Principal shareholders

18.1. Shareholders holding more than 5% of the share capital or voting rights

18.2. Existence of different voting rights

18.3. Controlling interests

18.4. Pact known to the issuer that could, if implemented, result in a change of control of Sodexo

220, 229

151, 249-265

151, 252-253

205

N/A

221-223

228

1, 25-29, 40, 41, 89, 151 

249, 265-269

39, 280

39, 280

287

280

N/A

19. Related party transactions

150, 183,  192-195, 230

20. Financial information concerning assets, financial position and Company operating profit

20.1. Historical financial information*

20.2. Pro forma financial information

20.3. Financial statements

20.4. Verification of historical annual financial information*

20.5. Date of most recent financial information

20.6. Interim and other financial information

20.7. Dividend distribution policy

20.8. Litigation

20.9. Material change in financial or commercial situation

21. Other information

21.1. General information on the share capital

21.2. General information on the Company

22. Material contracts

23. Information coming from third parties, expert declarations and interest declarations

24. Information available to the public

25. Information relating to subsidiaries

32, 33, 36-39

N/A

104-157, 172-191 

158-162, 192-200 

August 31, 2018 

N/A 

275-276 

152 

N/A 

109, 133, 180, 189, 283 

217-225/285-288 

286

N/A

271-288

187-188

*  Pursuant to article 28 of Rule (CE) n° 809/2004 of the European Commission of April 29, 2004, the following information is incorporated by reference into this 

Registration Document:
-  Group Management Report, Group consolidated financial statements and Statutory Auditors’ Report on the consolidated financial statements for the year ended 
August 31, 2017 , as presented in  the Registration Document filed with Autorité des marchés financiers (French financial markets authority) on November 20, 
2017 , under number D. 17 -1057 ;

-  Group Management Report, Group consolidated financial statements and Statutory Auditors’ Report on the consolidated financial statements for the year ended 
August 31, 2016 , as presented in  the Registration Document filed with Autorité des marchés financiers (French financial markets authority) on November 21 , 
2016 , under number D. 16-0973 .

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8.3.2  Annual Financial Report

INFORMATION CONCERNING THE ANNUAL FINANCIAL REPORT – ARTICLES L.451-1-2 OF THE MONETARY AND FINANCIAL CODE 
AND 222-3 OF THE GENERAL REGULATION OF THE FRENCH SECURITIES REGULATOR (AUTORITÉ DES MARCHÉS FINANCIERS - AMF) 

1. Individual Company Financial Statements

2. Consolidated Financial Statements

3. Management Report

4. Declaration of Responsibility

5. Statutory Auditors’ Reports

A P P E N D I C E S

R e c o n c i l i a t i o n   T a b l e s

PAGES

170-191

104-157

75-88

305

158-162, 192-200

8.3.3  Management Report

Reconciliation table for the Management Report pursuant to articles L.225-100 et seq. 
of the French Commercial Code

MAIN HEADINGS OF THE MANAGEMENT REPORT OF THE BOARD OF DIRECTORS – FRENCH COMMERCIAL CODE

1. Activity of the Company

1.1  Situation and business activity of the Company and of the Group during the past fiscal year

1.2  Results of the business activity of the Company and of the Group

1.3  Progress achieved or difficulties encountered

1.4  Research and development activities

1.5  Foreseeable evolution of the situation of Company and the Group and future prospects

1.6 

Important events occurred since the end of the fiscal year

1.7 

 Objective and exhaustive analysis of the evolution of business, results and financial situation of the Company 
and of the Group

1.8  Key indicators of financial and extra-financial performance

1.9  Key risks and uncertainties

1.10  Objectives, policy of coverage and exposure of the Company

1.11 Injunctions or monetary penalties for anti-competitive practices

2. Social and environmental impact of the business activity

2.1  Description and management of environmental and climatic risks

2.2 

Internal control and risk management procedures established by the Company

3. Vigilance Plan

4. Subsidiaries and holdings

4.1  List of subsidiaries and holdings

4.2  Significant participation or control in companies headquartered in France

PAGES

75-88

75-88

75-88

N/A

86

85-152

75-88

36-43

236-248

153-154

N/A

241-246

245-247

231-235

187-188

149-152

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8 R e c o n c i l i a t i o n   T a b l e s

MAIN HEADINGS OF THE MANAGEMENT REPORT OF THE BOARD OF DIRECTORS – FRENCH COMMERCIAL CODE

5. Information on share capital

5.1  Structure and evolution of the share capital

5.2  State of employee participation in the share capital

5.3  Crossing of legal thresholds declared to the Company

5.4  Redemption and transfer by the Company of its own shares

5.5  Transactions carried out on the securities of the Company by executives, their relatives and assimilated persons

 6. Other information

6.1  Amount of dividends distributed over the last three years

6.2 

Information on terms of payment for suppliers and customers

6.3  Table showing the Company’s results in each of the last five fiscal years

PAGES

280-284 

203, 280-282 

280, 282 

281 

281-282 

229-230 

39 

131-132, 143-144 

37-39 

8.3.4  Governance Report

Reconciliation table for the Governance Report pursuant to articles L.225-37-4 and L.225-37-5 
of the French Commercial Code

MAIN HEADINGS OF THE MANAGEMENT REPORT OF THE BOARD OF DIRECTORS – FRENCH COMMERCIAL CODE

1.  Choice of method of exercise of the General Management

2.  Composition, conditions of preparation and organization of the work of the Board of Directors

PAGES

204 

204-225 

3.  List of all mandates and functions exercised in any company by each director during the last fiscal year

207-216, 226 

4.  Description of the diversity policy applied to directors

5.  Limitations on the authority of the Chief Executive Officer

6.  Agreements between a significant shareholder and a subsidiary

7.  Reference to a corporate governance Code and application of the “comply or explain” principle

8.  Specific conditions governing Shareholder’s attendance at Shareholders’ Meetings

9.  Remuneration and benefits of any kind paid during the past fiscal year to each Corporate executive officers 

by the Company

10.  Principles and criteria for determining, distributing and allocating fixed, variable and exceptional elements 

comprising total remuneration and benefits of any kind attributable to Corporate officer

217-219 

225 

230-231 

228 

287 

254-264 

249-253 

11.  Undertakings of any kind made by the Company for the benefit of its Corporate executive officers

230-231, 249-264 

12.  Information that may have an impact in the event of a public offering

13.  Summary table of currently valid delegations concerning share capital increases

14.  Annual Mixed  General Meeting of Shareholders of January 23, 2018

228 

 284

289-299 

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8.3.5  Information required by articles R. 225-105-1 

and L. 225-102-1 of the French Commercial Code  relative 
to the extra-financial performance declaration

EXTRA-FINANCIAL PERFORMANCE I CHAPTERS

PAGE NUMBER

1. Workforce-related data:

a

Employment:

b

Work organisation:

c

Labour/Management relations:

d

Health and safety:

e

f

g

Training and education:

Diversity and equal opportunity:

Promotion of and compliance 
with the core Conventions of the 
ILO relative to:

i

ii

iii

iv

i

ii

iii

i

ii

i

ii

i

ii

iii

i

ii

i

total workforce and distribution of employees by gender, age group and 
geographical area

new employee hires and dismissals

40-41

90

remuneration and any related changes

63,  249-270

working-time organisation

absenteeism

organisation of social dialogue including information procedures, 
consultation and negotiation with employees

summary of collective bargaining agreements

occupational health and safety conditions

summary of collective bargaining agreements signed with trade unions 
or workers’ representatives on occupational health and safety

occupational accidents, including accident frequency and severity rates, 
and occupational diseases

policies implemented regarding training and education

total number of hours of training

measures implemented to promote gender equality

ii measures implemented to promote the employment and integration of 

disabled people

iii

policy against discrimination

freedom of association and the right to collective bargaining

90

92

93

93

67,  92-93

67,  92-93

92-93

67,  91-92

67,  91-92

66,  89

66,  91

60-67,  91

92-93

non-discrimination in respect of employment and occupation

60-67,  237,  242

the elimination of all forms of forced or compulsory labour

60-67,  237,  242

the effective abolition of child labour

60-67,  237,  242

8

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2. Environmental data:

a

General environmental policy:

b

Pollution:

c

Circular economy:
i) Waste prevention and 
management:

ii) Sustainable use of resources:

the Company’s organisational strategy to factor in environmental issues 
and, if appropriate, the approaches to auditing/obtaining certification 
for environment-related performance

information and training measures for employees 
regarding environmental protection

PAGE NUMBER

94-96

94-96

resources allocated to the prevention of environmental risks and 
pollution

94-96,  244

amount of provisions and guarantees for environmental risks, unless 
such information is likely to cause serious harm to the Company in the 
event of ongoing litigation

Measures of prevention, reduction or repair of discharges into the air, 
water and ground, impacting severely the environment

consideration of noise and any other activity-specific pollution

94-96,  
244

98,  244

98,  244

Measures of prevention, recycling, reuse, other forms of recovery and 
disposal of waste

56,  58,  71,  95-96

Actions against food waste

56,  58,  71,  95-96

Water consumption and water supply adapted to local constraints

95

Consumption of raw materials and measures implemented to improve 
efficiency in their use

56,  58,  71,  95-96 

i

ii

iii

iv

i

ii

i

ii

i

ii

d

Climate change:

e

Protection of biodiversity:

iii

Energy consumption and measures implemented to improve energy 
efficiency and renewable energy use

iv

Land usage

i

ii

i

Significant greenhouse gas emissions items generated as a result of 
the Group’s activity, particularly by the use of goods and services they 
provide

Adaptation to consequences of climate change

measures implemented to protect or develop biodiversity

57,  95-96

98

57,  95-96

57,  95-96

94-96

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PAGE NUMBER

3. Social data:

a

b

Territorial, economic and social 
impact of the Company’s activity:

Relations with stakeholders, 
including associations 
for the promotion of social 
integration, educational 
institutes, environmental 
protection associations, consumer 
associations and local residents:

c

Subcontractors and suppliers:

i

ii

i

ii

i

ii

regarding regional employment and development

on local residents/communities

conditions surrounding dialogue with stakeholders

partnership or sponsorship actions

inclusion of social and environmental issues in the Company’s 
procurement policy

extent of subcontracting and the importance placed on social and 
environmental responsibility in relations with subcontractors and 
suppliers

63,  71,  96

63,  71,  96

63,  71,  96

63,  71,  96

69,  94-95,  
231-237

69,  94-95,  
231-237

d

Fair business practices:

i

anti-corruption policies and procedures

4-5,  245-248

e

Other actions implemented 
to promote human rights:

i

other actions implemented to promote human rights

ii measures implemented to promote consumer health and safety

94

69,  93

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SUSTAINABLE 
DEVELOPMENT 
GOALS AND 
PRINCIPLES OF 
THE UNITED 
NATIONS 
GLOBAL 
COMPACT

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8.3.6  Global Reporting Initiative (GRI) guideline

GRI SUSTAINABILITY REPORTING STANDARDS

IS0 26000

GRI 101: Foundation 2016

1.  Reporting 
Principles

1.1 The reporting organization shall identify its stakeholders, and explain 
how it has responded to their reasonable expectations and interests.
1.2 The report shall present the reporting organization’s performance in 
the wider context of sustainability.
1.3 The report shall cover topics that:
•  1.3.1 reflect the reporting organization’s significant economic, 

environmental, and social impacts; or

•  1.3.2 substantively influence the assessments and decisions of 

stakeholders.

1.4 The report shall include coverage of material topics and their 
Boundaries, sufficient to reflect significant economic, environmental, 
and social impacts, and to enable stakeholders to assess the reporting 
organization’s performance in the reporting period.
1.5 The reported information shall be sufficiently accurate and detailed for 
stakeholders to assess the reporting organization’s performance.
1.6 The reported information shall reflect positive and negative aspects 
of the reporting organization’s performance to enable a reasoned 
assessment of overall performance.
1.7 The reporting organization shall make information available in a 
manner that is understandable and accessible to stakeholders using that 
information.
1.8 The reporting organization shall select, compile, and report 
information consistently. The reported information shall be presented 
in a manner that enables stakeholders to analyze changes in the 
organization’s performance over time, and that could support analysis 
relative to other organizations.
1.9 The reporting organization shall gather, record, compile, analyze, and 
report information and processes used in the preparation of the report in 
a way that they can be subject to examination, and that establishes the 
quality and materiality of the information.
1.10 The reporting organization shall report on a regular schedule so 
that information is available in time for stakeholders to make informed 
decisions.

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DEVELOPMENT 
GOALS AND 
PRINCIPLES OF 
THE UNITED 
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GLOBAL 
COMPACT

PAGE

GRI SUSTAINABILITY REPORTING STANDARDS

IS0 26000

2.  Using the GRI 
Standards for 
sustainability 
reporting

2.1 The reporting organization shall apply all Reporting Principles from 
Section 1 to define report content and quality.
2.2 The reporting organization shall report the required disclosures from 
GRI 102: General Disclosures.
2.3 The reporting organization shall identify its material topics using the 
Reporting Principles for defining report content.
•  2.3.1 The reporting organization should consult the GRI Sector 

Disclosures that relate to its sector, if available, to assist with identifying 
its material topics.

2.4 The reporting organization shall identify the Boundary for each 
material topic.
2.5 For each material topic, the reporting organization:
•  2.5.1 shall report the management approach disclosures for that topic, 

using GRI 103: Management Approach; and either;

•  2.5.2 shall report the topic-specific disclosures in the corresponding GRI 
Standard, if the material topic is covered by an existing GRI Standard 
(series 200, 300, and 400); or

•  2.5.3 should report other appropriate disclosures, if the material topic is 

not covered by an existing GRI Standard.

2.6 If the reporting organization reports a required disclosure using 
a reference to another source where the information is located, the 
organization shall ensure:
•  2.6.1 the reference includes the specific location of the required 

disclosure;

•  2.6.2 the referenced information is publicly available and readily 

accessible.

2.7 When preparing a sustainability report, the reporting organization 
should:
•  2.7.1 present information for the current reporting period and at least 

two previous periods, as well as future short and medium-term targets if 
they have been established;

•  2.7.2 compile and report information using generally accepted 

international metrics (such as kilograms or liters) and standard 
conversion factors, and explain the basis of measurement/calculation 
where not otherwise apparent;

•  2.7.3 provide absolute data and explanatory notes when using ratios or 

normalized data;

•  2.7.4 define a consistent reporting period for issuing a report.

3.  Making claims 
related to the 
use of the GRI 
Standards

There are two basic approaches for using the GRI Standards:
1. Using the GRI Standards as a set to prepare a sustainability report in 
accordance with the Standards.
2. Using selected Standards, or parts of their content, to report specific 
information.

GRI 102: GENERAL DISCLOSURES 2016

1.  Organizational 

profile

102-1. Name of the organization
102-2. Activities, brands, products, and services
102-3. Location of headquarters
102-4. Location of operations
102-5. Ownership and legal form
102-6. Markets served
102-7. Scale of the organization
102-8. Information on employees and other workers
102-9. Supply chain
102-10. Significant changes to the organization and its supply chain
102-11. Precautionary Principle or approach
102-12. External initiatives
102-13. Membership of associations

6.2

SDG 8

2. Strategy

102-14. Statement from senior decision-maker
102-15. Key impacts, risks, and opportunities

4.6; 6.2
3.4.2

Cover Page
24-31
285
37
280-282,  285
24-31,  36-41
36-41
40-43,  60-67
69,  94-95,  231-237 
69,  94-95,  231-237 
236-248
71-72
66,  71-72 

12-13,  20-21
236-248 

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SUSTAINABLE 
DEVELOPMENT 
GOALS AND 
PRINCIPLES OF 
THE UNITED 
NATIONS 
GLOBAL 
COMPACT

PAGE

3.  Ethics and 
integrity

102-16. Values, principles, standards, and norms of behaviour
102-17. Mechanisms for advice and concerns about ethics

4.4
6.6.3

SDG 16

4-5,  69
4-5,  69,  236-248 

6.2
7.4.3
7.7.5

SDG 5
SDG 16

6-11
68-72
201-270 

4. Governance

5.  Stakeholder 
engagement

6.  Reporting 
practice

102-18. Governance structure
102-19. Delegating authority
102-20. Executive-level responsibility for economic, environmental, and 
social topics
102-21. Consulting stakeholders on economic, environmental, and social 
topics
102-22. Composition of the highest governance body and its Committees
102-23. Chair of the highest governance body
102-24. Nominating and selecting the highest governance body
102-25. Conflicts of interest
102-26. Role of highest governance body in setting purpose, values, and 
strategy
102-27. Collective knowledge of highest governance body
102-28. Evaluating the highest governance body’s performance
102-29. Identifying and managing economic, environmental, and social 
Impacts
102-30. Effectiveness of risk management processes
102-31. Review of economic, environmental, and social topics
102-32. Highest governance body’s role in sustainability reporting
102-33. Communicating critical concerns
102-34. Nature and total number of critical concerns
102-35. Remuneration policies
102-36. Process for determining remuneration
102-37. Stakeholders’ involvement in remuneration
102-38. Annual total compensation ratio
102-39. Percentage increase in annual total compensation ratio

102-40. List of stakeholder groups
102-41. Collective bargaining agreements
102-42. Identifying and selecting stakeholders
102-43. Approach to stakeholder engagement
102-44. Key topics and concerns raised

102-45. Entities included in the consolidated financial statements
102-46. Defining report content and topic Boundaries
102-47. List of material topics
102-48. Restatements of information
102-49. Changes in reporting
102-50. Reporting period
102-51. Date of most recent report
102-52. Reporting cycle
102-53. Contact point for questions regarding the report
102-54. Claims of reporting in accordance with the GRI Standards
102-55. GRI content index
102-56. External assurance

GRI 103: MANAGEMENT APPROACH 2016

General 
requirements

103-1. Explanation of the material topic and its Boundary
103-2. The management approach and its components
103-3. Evaluation of the management approach

GRI 201: ECONOMIC PERFORMANCE 2016

5.3

7.5.3
7.6.2

2.  Topic-specific 
disclosures

201-1. Direct economic value generated and distributed
201-2. Financial implications and other risks and opportunities due to 
climate change
201-3. Defined benefit plan obligations and other retirement plans
201-4. Financial assistance received from government

6.5.5
6.8.1
6.8.2
6.8.3
6.8.7
6.8.9

SDG 2
SDG 5
SDG 7
SDG 8
SDG 9
SDG 13

6-11
71-72 

97-103
315-321
Last page 

97-103 

32-43
32-43

236-248

249-253 

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GOALS AND 
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THE UNITED 
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GLOBAL 
COMPACT

SDG 1
SDG 5
SDG 8

IS0 26000

6.3.7
6.3.10
6.4.3
6.4.4
6.8.1
6.8.2

6.3.9
6.6.6
6.7.8
6.8

SDG 1-3
SDG 5
SDG 7-11
SDG 17

6.4.3;6.6.6
6.8.1;6.8.2
6.8.7

PAGE

40-43
60-67  

46-72  

94-95 

GRI SUSTAINABILITY REPORTING STANDARDS

GRI 202: MARKET PRESENCE 2016

2.  Topic-specific 
disclosures

202-1. Ratios of standard entry level wage by gender compared to local 
minimum wage
202-2. Proportion of senior management hired from the local community

GRI 203: INDIRECT ECONOMIC IMPACTS 2016

2.  Topic-specific 
disclosures

203-1. Infrastructure investments and services supported 6
203-2. Significant indirect economic impacts

GRI 204: PROCUREMENT PRACTICES 2016

2.  Topic-specific 
disclosures

204-1. Proportion of spending on local suppliers

GRI 205: ANTI-CORRUPTION 2016

2.  Topic-specific 
disclosures

205-1. Operations assessed for risks related to corruption
205-2. Communication and training about anti-corruption policies and 
procedures
205-3. Confirmed incidents of corruption and actions taken

6.6.1
6.6.2
6.6.3
6.6.6

SDG 16

245-248 

GRI 206: ANTI-COMPETITIVE BEHAVIOR 2016

2.  Topic-specific 
disclosures

206-1. Legal actions for anti-competitive behavior, anti-trust, and 
monopoly practices

246 

GRI 301: MATERIALS 2016

2.  Topic-specific 
disclosures

301-1. Materials used by weight or volume
301-2. Recycled input materials used 7
301-3. Reclaimed products and their packaging materials

6.5.4

SDG 8
SDG 12

94-95 

GRI 302: ENERGY 2016

2.  Topic-specific 
disclosures

302-1. Energy consumption within the organization
302-2. Energy consumption outside of the organization
302-3. Energy intensity
302-4. Reduction of energy consumption
302-5. Reductions in energy requirements of products and services

GRI 303: WATER 2016

2.  Topic-specific 
disclosures

303-1. Water withdrawal by source
303-2. Water sources significantly affected by withdrawal of water
303-3. Water recycled and reused

6.5.4
6.5.5

6.5.4

SDG 7
SDG 8
SDG 12
SDG 13

SDG 6
SDG 8
SDG 12

57, 95, 98 

95 

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DEVELOPMENT 
GOALS AND 
PRINCIPLES OF 
THE UNITED 
NATIONS 
GLOBAL 
COMPACT

GRI 304: BIODIVERSITY 2016

2.  Topic-specific 
disclosures

304-1. Operational sites owned, leased, managed in, or adjacent to, 
protected areas and areas of high biodiversity value outside protected 
areas
304-2. Significant impacts of activities, products, and services on 
biodiversity
304-3. Habitats protected or restored
304-4. IUCN Red List species and national conservation list species with 
habitats in areas affected by operations

GRI 305: EMISSIONS 2016

2.  Topic-specific 
disclosures

305-1. Direct (Scope 1) GHG emissions
305-2. Energy indirect (Scope 2) GHG emissions
305-3. Other indirect (Scope 3) GHG emissions
305-4. GHG emissions intensity
305-5. Reduction of GHG emissions
305-6. Emissions of ozone-depleting substances (ODS)
305-7. Nitrogen oxides (NOX), sulfur oxides (SOX), and other significant air 
emissions

GRI 306: EFFLUENTS AND WASTE 2016

2.  Topic-specific 
disclosures

306-1. Water discharge by quality and destination
306-2. Waste by type and disposal method
306-3. Significant spills
306-4. Transport of hazardous waste
306-5. Water bodies affected by water discharges and/or runoff

GRI 307: ENVIRONMENTAL COMPLIANCE 2016

2.  Topic-specific 
disclosures

307-1. Non-compliance with environmental laws and regulations

GRI 308: SUPPLIER ENVIRONMENTAL ASSESSMENT 2016

6.5.6

SDG 6
SDG 14
SDG 15

6.5.5

SDG 3
SDG 12
SDG 13
SDG 14
SDG 15

6.5.3
6.5.4

SDG 3
SDG 6
SDG 12
SDG 14

PAGE

94-96 

95, 98 

95, 98 

97-103 

2.  Topic-specific 
disclosures

308-1. New suppliers that were screened using environmental criteria
308-2. Negative environmental impacts in the supply chain and actions 
taken

6.3.5
6.6.6
7.3.1

Principles
7; 8; 9

69, 94-95, 
231-237 

GRI 401: EMPLOYMENT 2016

2.  Topic-specific 
disclosures

401-1. New employee hires and employee turnover
401-2. Benefits provided to full-time employees that are not provided to 
temporary or part-time employees
401-3. Parental leave

6.4.3

SDG 5
SDG 8

GRI 402: LABOR/MANAGEMENT RELATIONS 2016

2.  Topic-specific 
disclosures

402-1. Minimum notice periods regarding operational changes

GRI 403: OCCUPATIONAL HEALTH AND SAFETY 2016

2.  Topic-specific 
disclosures

403-1. Workers representation in formal joint management-worker health 
and safety committees
403-2. Types of injury and rates of injury, occupational diseases, lost 
days, and absenteeism, and number of work-related fatalities
403-3. Workers with high incidence or high risk of diseases related to their 
occupation
403-4. Health and safety topics covered in formal agreements with trade 
unions 

32-43
60-67
236-253 

60-67 

6.4.6
6.8.8

SDG 3
SDG 8

67
92-93 

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GRI 404: TRAINING AND EDUCATION 2016

SUSTAINABLE 
DEVELOPMENT 
GOALS AND 
PRINCIPLES OF 
THE UNITED 
NATIONS 
GLOBAL 
COMPACT

2.  Topic-specific 
disclosures

404-1. Average hours of training per year per employee
404-2. Programs for upgrading employee skills and transition assistance 
programs
404-3. Percentage of employees receiving regular performance and career 
development reviews

6.4.7
6.8.5

SDG 4
SDG 5
SDG 8

PAGE

60-67
89-92 

GRI 405: DIVERSITY AND EQUAL OPPORTUNITY 2016

2.  Topic-specific 
disclosures

405-1. Diversity of governance bodies and employees
405-2. Ratio of basic salary and remuneration of women to men

GRI 406: NON-DISCRIMINATION 2016

2.  Topic-specific 
disclosures

406-1. Incidents of discrimination and corrective actions taken

GRI 407: FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING 2016

2.  Topic-specific 
disclosures

407-1. Operations and suppliers in which the right to freedom of 
association and collective bargaining may be at risk

GRI 408: CHILD LABOR 2016

2.  Topic-specific 
disclosures

408-1. Operations and suppliers at significant risk for incidents of child 
labor

GRI 409: FORCED OR COMPULSORY LABOR 2016

2.  Topic-specific 
disclosures

409-1. Operations and suppliers at significant risk for incidents of forced 
or compulsory labor

GRI 410: SECURITY PRACTICES 2016

2.  Topic-specific 
disclosures

410-1. Security personnel trained in human rights policies or procedures

GRI 411: RIGHTS OF INDIGENOUS PEOPLES 2016

2.  Topic-specific 
disclosures

411-1. Incidents of violations involving rights of indigenous peoples

GRI 412: HUMAN RIGHTS ASSESSMENT

6.2.3
6.3.7
6.3.10
6.4.3

SDG 5
SDG 8

66
89-92 

60-67
246-248

237,  242
246-248 

237,  242
246-248 

237,  242
246-248 

93-94 

71
246-248 

2.  Topic-specific 
disclosures

412-1. Operations that have been subject to human rights reviews or 
impact assessments
412-2. Employee training on human rights policies or procedures
412-3. Significant investment agreements and contracts that include 
human rights clauses or that underwent human rights screening

6.3.3
6.3.4
6.3.5
6.6.6

Principles
1, 2

69
93 

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GRI 413: LOCAL COMMUNITIES 2016

2.  Topic-specific 
disclosures

413-1. Operations with local community engagement, impact 
assessments, and development programs
413-2. Operations with significant actual and potential negative impacts 
on local communities

GRI 414: SUPPLIER SOCIAL ASSESSMENT 2016

2.  Topic-specific 
disclosures

414-1. New suppliers that were screened using social criteria
414-2. Negative social impacts in the supply chain and actions taken

6.3.9
6.5.1
6.5.2
6.5.3
6.8

6.3.5
6.6.1
6.6.2
6.6.6
6.8.1
6.8.2
7.3.1

GRI 415: PUBLIC POLICY 2016

2.  Topic-specific 
disclosures

415-1. Political contributions

GRI 416: CUSTOMER HEALTH AND SAFETY 2016

2.  Topic-specific 
disclosures

416-1. Assessment of the health and safety impacts of product and 
service categories
416-2. Incidents of non-compliance concerning the health and safety 
impacts of products and services

GRI 417: MARKETING AND LABELING 2016

2.  Topic-specific 
disclosures

417-1. Requirements for product and service information and labeling
417-2. Incidents of non-compliance concerning product and service 
information and labeling
417-3. Incidents of non-compliance concerning marketing 
communications

GRI 418: CUSTOMER PRIVACY 2016

2.  Topic-specific 
disclosures

418-1. Substantiated complaints concerning breaches of customer 
privacy and losses of customer data

GRI 419: SOCIOECONOMIC COMPLIANCE 2016

2.  Topic-specific 
disclosures

419-1. Non-compliance with laws and regulations in the social and 
economic area

SUSTAINABLE 
DEVELOPMENT 
GOALS AND 
PRINCIPLES OF 
THE UNITED 
NATIONS 
GLOBAL 
COMPACT

Principle 1

PAGE

71
96 

69, 
94-95, 
231-237 

67
92-93 

246 

246 

246 

320

S O D E X O   -   F I S C A L   2 0 1 8   R E G I S T R AT I O N   D O C U M E N T

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