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Fiscal 2010 Reference Document Making every day a better day Page Page Message from Michel Landel 2 08 Legal Information 199 Summary 01 History 7 General Information about Sodexo and its Issued Capital 200 02 Condensed Group Organization Chart 208 Our Group 9 09 Profi le 10 Shareholders – Fundamentals 13 Financial performance 15 Financial Communication 209 Financial Communication 210 Sodexo Shares 214 03 Capital 217 Our strategy 21 Our positioning 22 10 Our ambition and strategy 22 Our growth potential 23 Corporate Governance 221 Chairman’s Report on the Operating Procedures of the Board of Directors 04 and on Internal Control and Risk Management Procedures 222 Our Quality of Daily Life Solutions 25 Other information concerning On-site Service Solutions 26 the Corporate Offi cers and Senior Motivation Solutions 41 Management of the Company 245 Personal and Home Solutions 45 Compensation 247 Audit fees 263 05 Social and Environmental 11 Responsibility 47 Combined Annual Shareholders’ Social Responsibility 49 Meeting, January 24, 2011 265 Environmental Responsibility 59 Board Report 266 Resolutions submitted to the Combined Annual Shareholders’ Meeting 06 of January 24, 2011 269 Consolidated information 69 Fiscal 2010 Activity Report 70 12 Sodexo Consolidated Financial Statements as of August 31, 2010 85 Glossary 275 Notes to the Consolidated Financial Statements 90 Statutory Auditors’ report 13 on the Consolidated Financial Statements 160 Supplemental information 162 Responsibility for the Reference Document and the audit of the Financial Statements 279 07 Responsibility Information on the Issuer 171 for the Reference Document 280 Sodexo SA Individual Company Financial Responsibility for the audit Statements 172 of the Financial Statements 281 Notes to the Individual Company Financial Statements 174 Supplemental Information on the 14 Individual Company Financial Statements 194 Reconciliation table 283 Reference Document Fiscal 2010 This Reference Document (Registration document) was fi led with the Autorité des Marchés Financiers on November 10 , 2010, in accordance with Article 212-13 of its General Regulations. It may be used in support of a market transaction if supplemented by an information notice approved by the AMF. This document was prepared by the issuer and is under the responsability of its signatories. This document is available on Sodexo’s website, www.sodexo.com or on the website of the Autorité des Marchés Financiers, www.amf-france.org. Message from Michel Landel Chief Executive Officer, Sodexo November 10, 2010 In a still challenging economic environment, Fiscal 2010 proved to be a satisfactory year, marked by important achievements and signifi cant progress in pursuing our growth strategy and deploying our new strategic positioning. 1. CHALLENGES AND OPPORTUNITIES FOR SODEXO The macro economic and social environment is but also the growth of the middle class in emerging changing, with a number of issues that we must countries. Globalization is also synonymous with address today to be prepared for tomorrow: migration of the workforce in an environment also characterized by talent shortages; The year 2010, despite some economic improvement, particularly in emerging countries, remained beset • another trend involves the environment; the by crisis. Initially fi nancial and economic, the crisis depletion of natural resources in the face of has increasingly affected labor markets with growth unlimited demand which will have a major impact remaining weak in Europe and North America amid on consumption and production patterns; rising unemployment. The accumulated debt of • fi nally, in this diffi cult environment, there is a governments also suggests that economic growth genuine quest for well-being. Quality of Life is will not return for many years. Hence, the context becoming an increasingly important criterion for remains fragile. individuals and governments that are seeking new indicators with which to truly measure national Beyond this diffi cult environment, we see several wealth, beyond purely fi nancial indicators. major trends both medium and long term, which These trends impact all of our activities, as well as represent both challenges and opportunities for those of our clients, regardless of industry sector. Sodexo, including: This highly volatile environment is leading • fi rst, a shift of economic centers of influence toward an increasing number of companies to look to Asia. China is today the world’s second greatest outsourcing solutions. These trends that I have power and will soon be its fi rst. It is no coincidence mentioned represent, without a doubt, opportunities that we see a growing number of research and for Sodexo. Our strategic position is perfectly aligned development centers being established in Asia. to take advantage of these challenges. And beyond In fact, innovation is increasingly coming from the our positioning, there is the very identity of our East and it is a trend that is accelerating. Through company and our deep conviction that Quality of globalization, the world is becoming ever more Daily Life contributes to the progress of individuals integrated and interconnected through four major and performance of organizations, responding to the fl ows: capital, talent, trade and information; global issues of today and tomorrow. We are inventing • a second important trend: the profound a new business sector that meets the needs of our demographic changes taking place, not only the clients – on whom we are focused now more than overall aging of industrialized country populations ever. 2 SODEXO Reference Document Fiscal 2010 2. SODEXO’S TRANSFORMATION Sodexo is a company in the midst of transformation. It is a transformation that signifi es a true “revolution,” Last year, I presented the redefinition of our strategic which relies on our teams’ ability to deliver a unique positioning. It is a strategic positioning that is fully offer of comprehensive service solutions. Sodexo is coherent with the mission established by Pierre the only company in the world to offer both On-site Bellon when he founded Sodexo in 1966: to improve Service Solutions and Motivation Solutions. This the Quality of Daily Life and to contribute to the transformation has begun but it will take time and economic, social and environmental development its success will rest heavily on our employees’ of the communities we serve. commitment and engagement. In providing our clients with comprehensive service Steering this transformation is primarily a work of solutions, we are positioning ourselves as their teaching and coaching. We have implemented a strategic partner, contributing to their performance number of processes to help our teams to understand and progress, be it in the economic, social or and appropriate our new strategic positioning and to environmental spheres. implement it within their daily operations. This new positioning is the result of over two years Our clients also are often undergoing major changes. of work and research. Our priority now is to deploy Through our unique offering and expertise, Sodexo it throughout the organization. also can act for them as a change agent. This positioning opens new perspectives for us and new territories in which we are able to create ever more value for our clients. 3. IMPLEMENTATION OF OUR STRATEGY In 2005, we announced our desire to double Group • strengthen our leadership in Foodservices, which revenue by 2015 and we are well on track. Our remains a central component of our On-site progress is very encouraging and I am fully confident Service Solutions; in our ability to achieve the objective, or even exceed • become the global leader in Motivation Solutions it. In 2005, we set an annual average revenue growth – and we are making good progress on this path; target of 7% and we are today, at mid-term, at more • steadily grow Personal and Home Solutions. These than 6%. Regarding operating profi t, the target was offerings for improving individual quality of life 11% and we have already slightly exceeded it. (These are divided into into four main service categories: fi gures are at constant exchange rates.) childcare, tutoring and lifelong training, concierge To meet our objectives, we must continue to focus services, and senior care. on our growth strategy, which rests on four pillars: To implement this strategy, we are following a • become a global leader in On-site Service Solutions; roadmap built around six strategic imperatives. Let me briefl y summarize each of them: SODEXO Reference Document Fiscal 2010 3 First imperative: accelerate profi table Third imperative: live our values. organic growth Sodexo is a company that was founded on strong • After redefining our strategic positioning and values - service spirit, team spirit and spirit of our value proposition, we have entered a progress – values that we take to heart by living them phase of execution and implementation of our every day. comprehensive service solutions. It is a phase that We have begun to deploy the Better Tomorrow Plan, has started very well, with deployment planned developed to provide us with a true structure with in every country. specifi c goals for the future. Multiple actions are • We have made signifi cant investments in many being carried out in terms of the environment, local countries, to enable us to develop our technical community development and nutrition, and health Facilities Management platforms. We have and well-being in the 80 countries where we operate. reinforced our investment in Asia, particularly in China as well as in India where we made a major acquisition that was seamlessly integrated. We are Fourth imperative: become the also continuing to invest in Brazil and Russia, reference benchmark for Quality of countries that are important for us and will be Daily Life solutions even more so in the future. To meet this imperative, we have undertaken a major • Regarding Motivation Solutions, thanks to the effort this year to increase the visibility of our brand incredible spirit of innovation, dynamism and on the 34,000 sites that we manage around the world.