Sodexo S.A. (SW) Earnings Call Transcript & Summary

Ladies and gentlemen, dear shareholders, good afternoon to everybody. Welcome to [indiscernible]. It's a great pleasure to meet you in this exceptional place again this year for our Annual Shareholders Meeting. I'm speaking to you today alongside Sebastien De Tramasure, who is our Chief Financial Officer; and Florence Negrel, who is Secretary of the Board of Directors and who is handling the General Meeting secretarial duties. I would also like to inform you of the presence of the general meetings 2 scrutineers, that is Francois-Xavier Bellon, who represents the holding company, Bellon S.A.; and Véronique Debarge, who represents FCPE Groupe Sodexo Peps, which is one of the mutual funds for Sodexo employees, who are the shareholders with the largest number of votes, having accepted the role of scrutineer. I will now officially open this annual meeting, of which I am the Chair, as Chairwoman of the Board of Directors and Chief Executive Officer. The members of the Board of Directors and Sodexo's leadership team who could attend are also present, either physically in this room or remotely. The audit firms Ernst & Young Audit and KPMG represented by Madam Caroline Bruno-Diaz of KPMG, will share the reports with us during this meeting. I would now like to hand the floor to Florence Negrel, Meeting Secretary, who will present the agenda.

Thank you, Sophie. Hello, everybody. I'm delighted to be with you as Secretary for this meeting. First of all, I'd like to remind you that this shareholders' meeting will be held in French and that simultaneous translation into English is available. As usual, this meeting is also accessible to the deaf or hard of hearing, thanks to sign language interpreters. I also remind you that this meeting is being broadcast live from our website, www.sodexo.com, and will also be available for replay in the coming days. I'd like to that the number of shares mentioned on the attendance sheet in the name of the shareholders present represented or having voted by correspondents amounts to 124,699,254 shares. That's 85.63% of the shares bearing voting rights. The legal quorum is 36,406,184 shares. Therefore, the shareholders meeting can validly to liberate. If latecomers come to attend the meeting before 4:15 p.m. that is this provisional quorum will be modified and the final quorum will be taken into account when voting on resolutions. I have before me all the documents, which attested the regulatory of the convening and deliberation of this meeting and the documents that must be made available or communicated to shareholders have been made so under the legal conditions and deadlines. Please also be informed that a bailiff is present in the room. The agenda of the shareholders' meeting as well as the draft resolutions were presented in the preliminary notice of meeting published on November 6, 2024 in the French BALO gazette. The final notice of meeting was published in BALO and in the journey of legal announcements on November 29, 2024. Please note that following the publication of the preliminary notice of meeting, no request for the inclusion of points or draft resolutions on the agenda has been submitted by the shareholders. As usual, in the interest of the debates, we propose that you exempt the Chairwoman from the exhaustive reading of the Board of Directors' report. The full report can be found in the fiscal 2024 universal registration document available on our company's website, and its main components will be presented to you during the shareholders' meeting. I would now like to give the floor to Sophie Bellon, Chairwoman of the Board of Directors.

Dear shareholders, dear Board members, dear colleagues, dear friends of Sodexo, this year, we've made significant progress and established a strong strategic set of foundations for a future that will create value for all of our stakeholders. Our results reflect the major steps we've taken towards our ambition of becoming the leader in sustainable food and valued experiences. In 2024, Sodexo once again delivered solid performance. Our revenues reached EUR 23.8 billion, an organic growth of 7.9% compared to the previous fiscal year. Our UOP margin at 4.7% increased by 40 basis points. Our new development reached a decisive milestone, hitting a record level of EUR 1.9 billion. Adjusted net income increased by 17.6% to EUR 775 million, translating to an adjusted net income per share of EUR 5.29. Based on this, underlined with Sodexo's 50% distribution policy, the Board of Directors proposes an ordinary dividend of EUR 2.65. You will have the opportunity to vote on this proposal during the resolutions. This will be voted on alongside the exceptional interim dividend of EUR 6.24 per share paid in August 2024, following the sale of Sofinsod. Our Chief Financial Officer, Sebastien De Tramasure, who we are pleased to welcome to his first shareholders' meeting today, will present the details of our economic performance shortly. I want to warmly thank the 423,000 Sodexo employees who have been fully committed throughout the year to supporting our clients, our consumers and our partners in a complex and demanding environment. I also want to congratulate our teams for their key role in the success of the Paris 2024 Olympic and Paralympic games. As you saw in the video before the start of the shareholders' meeting, this event was exceptional. Together, we met our logistics, culinary and human challenge, demonstrating our expertise in food services on a massive scale with up to 40,000 meals served daily. Thank you, and congratulations to our 6,000 dedicated employees who, with passion and creativity provided all of our guests with a unique experience. We can give them, I think, a round of applause. 2024 was marked also by structural transformations aimed at strengthening our market position. During this fiscal year, we took decisive steps to simplify and refocus Sodexo. In line with our 2022 commitment to accelerate Pluxee's profitable growth, we completed the spin-off and delisting of this business activity, a strategic operation that enhances our agility and strategic focus. Furthermore, the sale of our subsidiary, Sofinsod, which held a stake in Bellon S.A., allows for greater clarity and transparency in our shareholder structure. You will be asked to approve the regulated agreement regarding the sale of Sofinsod to Bellon S.A. during the vote on the resolutions. I want to express my deep gratitude to the Board members for their decisive contributions to the success of these 2 operations. With our simplified structure now organized by geography and focused on food services and facilities management, Sodexo is well positioned to seize opportunities in a global market estimated at over EUR 600 billion. Our strategy is now built around 2 pillars: refocusing on food services and targeted growth in Facilities Management; and strengthening our impact as market maker and sustainability. Throughout the year, we made significant progress in executing our strategic plan. We rebalanced our business portfolio with food services now accounting for 66% of Sodexo's revenue. We've also made major strides in modernizing our food offer. Our brands like Modern Recipe, the Good Eating Company and Kitchen Works generate 37% of our food services revenue. These brands redefine the culinary experiences we provide, driving efficiency gains and increased competitiveness. I invite you to watch a brief testimonial from Michael Jelley, one of our British chefs and an ambassador for The Good Eating Company. [Presentation]

We're also transforming our production model by deploying innovative workshops that combine culinary excellence, efficiency and sustainability. This year, we launched in France, Prêt-à-cuisiner, inspired by the culinary model in Chile. In India, our master kitchen already produces over 45,000 meals a day. Simultaneously, we're evolving our distribution models with a multichannel approach to ensure availability at any time of the day. In the United States, our largest market, we strengthened our enrich convenience offer through strategic acquisitions in 2024. In the U.S., convenience encompasses various grab and go and tech-based distribution options, a priority development area with a $30 billion market potential. The innovative offerings we develop enable us to better respond to changing consumer behaviors across all of our segments. In Business & Administrations, for example, the decline in remote work is a notable trend. Our offerings support clients as their employees return to on-site work, helping us to recover the revenue loss during COVID. Transforming our food offerings is not optional. It is essential. Food is one of the most powerful levers to reduce the environmental impact of human activities. And as a global player, we have a major responsibility to accelerate the shift towards sustainable production practices and healthy planet-friendly eating habits. This is a strong expectation indeed from consumers. Our second edition of the sustainable food barometer published last month confirms that individuals are ready for this transition. They seek inspiration and rely on us for guidance. Among those able to drive change, food players rose from ninth place in 2023 to fourth place in 2024, a significant improvement that encourages us to stay mobilized. Our thousands of chefs, true ambassadors of responsible culinary practices play a key role in this transformation, training them, valuing their expertise and supporting responsible food choices are central to our mission. Last month in Paris, we celebrated the Cook for Change Grand Finale, as you may have seen we keep on offering new flavors, new taste to our guests. So the Cook for Change Grand Finale that you perhaps saw yourselves was an international competition dedicated to sustainable and delicious cuisine. This emotional event showcased the talent of our chefs. After a global selection process, the event brought together 8 finalists in Paris, to demonstrate how Sodexo combines culinary creativity, environmental respect and taste. This competition illustrated our team's unwavering commitment to promoting responsible eating. The dishes presented as tasty as they were bold reflected the spirit that drives us, transforming culinary practices to build a more sustainable future without compromising on taste or experience. So congratulations to all of our participants, finalists and the jury members who took part in this contest, a big hand for them all. In terms of facilities management services, we are also committed to helping our clients enhance the experience of their employees on their sites. Through a range of complementary services such as reception, concierge services and space management, we enriched the food experience. We're also proud to provide our clients with high value-added services tailored to the specificity, sorry, of their environments, such as smart building solutions and sustainable energy management. The renewal of our contracts with major international companies reflects the essential role we play in creating attractive work environments for our clients. We also contribute to their operational efficiency while helping them to achieve their sustainability goals. To name just a few clients, we are particularly proud of renewing several of our multi-country contracts, including Microsoft and AstraZeneca, totaling more than EUR 500 million worth of revenues in 2024. The complementarity of our food services and our expertise in facilities management has been key to these renewals. Our social, societal and environmental contributions are also progressing very well. Reducing our carbon footprint throughout our value chain remains an absolute priority. Once again, this year, we worked with our suppliers, our teams and our clients to optimize energy consumption to offer low-carbon meals and strengthen our actions against food waste. We've made significant progress in implementing our holistic approach aimed at having a positive impact on people, society and the planet. Supporting our on-site employees is a strong focus. This is illustrated by the deployment of our VITA program, which offers a common base of social benefits to our employees. We are the first global group in our sector to make such a broad commitment, which has become a differentiating factor in our bids. Regarding health and safety at work, we recorded a historic performance for the second year in a row in the lost time injury rates. We will continue our efforts to moving closer to 0 accidents. We're also intensifying our initiatives on diversity, equity and inclusion. Sodexo has long been recognized particularly for gender balance, which is both a moral imperative and a performance issue. Unique to our group since its creation and key to our differentiation for clients, our environmental, social and societal commitments, make Sodexo an attractive employer for talent. They also lead to regular recognitions by institutions. Sodexo is the only company in the sector listed among the global leaders of the CDP climate ranking with an A score. And in 2024, we also entered the world's most ethical companies ranking by the Ethisphere Institute. To achieve our goals, we can rely on a major asset, the commitment of our teams worldwide, measuring -- measured biannually through our voice survey. And this commitment is reflected in a significant improvement in employee retention rates, demonstrating the effectiveness of our employee policy. Every day, our employees embody our values and bring their passion and expertise to serving our consumers. Before handing over to Sebastien, who will present the details of our financial performance over the past fiscal year, I would invite you to watch a video about our sustainability progress. [Presentation]

Ladies and gentlemen, dear shareholders, it's a great pleasure for me to address you for the very first time as Chief Financial Officer of our group. I am delighted to share with you our solid financial performance for the past fiscal year. Before diving into the details, I'd like to remind you that the figures I will present today pertains solely to our continuing operations, excluding Pluxee. The contribution of this entity for the first 5 months remains unchanged from our half year report and is detailed in our annual financial report. For fiscal 2024, our organic growth reached 7.9%, equally driven by inflation-related price adjustments and the addition of new contracts and volumes. Revenues amounted to EUR 23.8 billion, supported by outstanding performance in our Food Services segment, which achieved organic growth of 9.3%, and now accounts for 66% of our revenue. On the profitability front, our operating margin improved by 40 basis points, reaching 4.7% and our adjusted net income increased by 17.6%. These results demonstrate our ability to combine growth and operational discipline. Another key point of satisfaction is our management of the group's financial position. Following the spin-off of Pluxee, we committed to reducing our net debt ratio to below 2x EBITDA. And I'm pleased to announce that we have achieved this goal 1 year ahead of schedule. Thanks to strong cash flow generation, our net debt ratio now stands at 1.7x, within our target range of 1 to 2. This robust balance sheet positions us to face the future with confidence. Our growth momentum is reflected in strong regional performance. In North America, revenues reached EUR 11.1 billion, with organic growth at 8.7%. North America now accounts for nearly half of the group's revenue. This momentum was driven by the gradual return of employees to workplaces, strong growth in the Healthcare segment, an exceptional performance from Sodexo Live!. Europe posted organic growth at 7.2%, revenues at EUR 8.5 billion, representing over 1/3 of the group's business. This performance was fueled by multiple factors, including the positive impact of the Olympics and Rugby World Cup, increased volumes driven by upgraded offers, contributions of new contracts and the effects of price revisions. For the rest of the world, revenues reached EUR 4.2 billion. Organic growth stood at 7.3%. This performance was notably supported by significant growth in India and Australia. Let's just now turn to our operating margin, which reached 4.7% up 40 basis points compared to the previous year. This increase was driven by 3 main levers. The operating leverage from revenue growth; enhanced on-site productivity and more efficient procurement; and finally, rigorous management of overhead costs, including an 11% reduction in HQ costs following the spin-off of Pluxee. All our regions contributed to this improved margin. In North America, the margin reached 5.9%, up 30 basis points, driven by productivity gains and optimized procurement. In Europe, the operating margin rose to 4%, also up 30 basis points, probably due to price revisions, particularly in France, where further adjustments were necessary. For the rest of the world, the operating margin was up 20 basis points at 4.9%, supported by successful pricing negotiations in Australia and the termination of less profitable contracts in Brazil. If we now look at our performance in terms of cash flow and debt reduction. Free cash flow reached EUR 661 million, up almost EUR 290 million compared to the previous year. This improvement reflects higher operating income and better working capital management. Our CapEx represented 2% of revenue, slightly down compared to the prior year. As a result, we reduced our net debt by EUR 318 million at EUR 2.6 billion. Combined with an EBITDA increase of 11.5%, as I said in my introduction, we successfully lowered our net debt-to-EBITDA ratio to 1.7x in an environment with higher interest rates. We also repaid EUR 800 million of bonds during the year using our cash surplus. For fiscal 2025, free cash flow is expected to be lower than in fiscal 2024, primarily due to anticipated higher CapEx to sustain growth and an exceptional tax cash outflow related to the completion of a tax audit in France. This was fully provisioned as of August 31, 2024. Despite these factors, we plan to repay at least part of the EUR 700 million bond, which reach maturity in April 2025 using cash reserves depending on the level of our M&A activity. The group's strong financial performance is also reflected in attractive shareholder returns over the past few years. Total shareholder return, TSR, which combines stock price appreciation of the share price and dividends paid out stood at 29% for fiscal 2024. While it stood at 33% for fiscal 2023. This impressive performance for 2024, partly reflects a 16.3% increase in our stock price over the fiscal year, but also the special interim dividend paid in August following the sale of Sofinsod and the stake in Bellon S.A. in addition to the ordinary annual dividend paid in December '23. Today, we are submitting to this AGM, the approval of the special interim dividend of EUR 6.24 and the ordering dividend of EUR 2.65 per share, up 18% versus last year. This dividend represents a payout ratio of 50% of adjusted net income in line with our historical dividend policy. Our capital allocation strategy focuses on 3 key priorities: delivering attractive shareholder returns; supporting sustainable growth; and investing in strategic opportunities. First, we maintain our dividend payout policy of 50% of adjusted net income. Second, we invest in the future by allocating around 2.5% of our revenues to CapEx to sustain long-term growth. And finally, we have the capacity to accelerate growth through targeted acquisitions backed by a strong balance sheet and rigorous financial management. We're in a position to allocate between EUR 300 million and EUR 500 million annually to external growth opportunities while maintaining our leverage targets. Our acquisition strategy focuses on 3 areas: consolidating our position in food services in key markets, such as the U.S., Europe and major emerging markets like Brazil and India; developing new production and distribution models in food services to meet changing client and consumer expectations; and finally, strengthening Entegra, our group purchasing organization, which is a key asset in our strategy. In conclusion, I'd like to share our stock price performance over the past 12 months as of last Friday. Over the period, our share price was up 16.3%, significantly outperforming the CAC 40, which dropped by 2.5%. Despite the geopolitical and economic challenges that have been severe in 2024, Sodexo's share price demonstrated notable resilience, reflecting the strength of our fundamentals. Thank you for your attention. I'll now hand over to Sophie who will present the group's outlook. Thank you.

Thank you very much, Sebastien. Ladies and gentlemen, the 2024 has been a year of considerable progress for our group, and I'd like to acknowledge the exceptional commitment and dedication of our leadership team. So we approach this new year with great confidence. 2025 will be a pivotal year as we work on our next strategic plan for 2028. This plan will focus on continuity and acceleration. I'm convinced that with the strong foundations we've established, our values and our commitment to innovation and sustainability, we will grasp future opportunities. We can count on the exceptional mobilization of our teams to implement our strategy. We also have essential levers to hand. We have Sodexo's commercial excellence that's supported by a global sales process and sound technology in which the group continues to invest. In 2024, we invested more than EUR 600 million in technology, digital and data. We're embedding artificial intelligence into our operations and strengthening our direct relationship with consumers. For example, artificial intelligence significantly improves our ability to predict restaurant attendance and identify peak times using our PowerChef tool. We're also developing our centers of expertise and innovation to support growth across all countries. Finally, this year, we advanced the transformation of our supply chain with a disciplined approach to catalog rationalization. We, therefore, have ambitious goals for Sodexo in fiscal 2025. Organic revenue growth is expected to be between 5.5% and 6.5%. And underlying operating profit margin improvement is expected to be between 30 and 40 basis points, upwards, of course, at constant rates. Our achievements from the foundation on which Sodexo's future will be built. They will shape the next chapters of our story. 2025 will be an extremely important year for our group, and I know I can rely on the talent and dedication of our teams to elevate Sodexo's reputation even further. Thank you. Thank you. And now we will hear the presentation on our corporate governance, and I'd like to bid the opportunity to express my gratitude to the members of the Board for their support and their trust. And it's been a very busy year, and we've had to make some structural decisions for the future of the group. And I'd like to particularly warmly thank Philippe Besson who is attending his last shareholders' meeting this time around, for his commitment and valuable contributions during his 10-year term. Thank you, Philippe for all of the work you've put in over that number of years. So let's now watch a video about your corporate governance first. [Presentation]

Thank you. As the video explained just now the renewal of the term of office of Francois-Xavier Bellon, a member of the audit nomination committee is proposed to you today as well as the renewal of the term of office of Jean-Baptiste Chasseloup de Chatillon, Chairman of the Audit Committee and member of the Compensation Committee. I would also like to welcome [ Olivier Marchal ], who is a Sodexo employee in France, who will join the Board of Directors as a new director, representing the employees. Ladies and gentlemen, I suggest that we continue our shareholders' meeting now by inviting Luc Messier, who is our Independent Lead Director, to come on stage to present to you an overview of his activity during fiscal 2024.

Chairwoman, Ladies and gentlemen, dear shareholders, dear directors, dear employees. It's a great pleasure very to present myself to you today in my duties as Independent Lead Director to share my activity report for the fiscal year 2024. As you know, I was appointed in my position on March 1, 2022, and I'm a member of the Audit Committee, the Appointment Committee and the Sustainability Committee. The only committee I'm not a member of is the compensation committee. All of these meetings are conducted without the presence management. And in 2024, I implemented the recommendations from the formalized valuations over the committee and counsels proceedings, resulting in the creation of the Sustainability Committee, which held its first meeting in October. The organization of a strategic seminar with workshops, visits and expert presentation, the drafting of a training plan organized in 3 categories, namely climate, ethics and cybersecurity. We also coordinated a new internal evaluation of the Board's work as well as that of its committee. More generally, I ensure the independence of the Board. And in this regard, I'm consulted on board meeting agendas, I organized an executive session. Pursuant to the meeting of December 2023, I met with shareholders and voting agencies. I worked on the prevention of conflicts of interest by chairing the ad hoc committee that was created in the Sofinsod, a spin-off to Bellon S.A. I chaired the meeting of the committee, took part in meetings with internal and external experts, including the independent financial expert. This year, once more the activity of the Board of Directors has been particularly rich. And I would like to pay tribute to the commitment of each of our directors and the collective intelligence that drives them. Thank you very much for your attention. And now back to Sophie Bellon.

Thank you, Luc. Dear shareholders, as usual, I also wanted to present to you the work of the Compensation Committee today. I suggest that Cécile Tandeau de Marsac, Chairwoman of the Compensation Committee, should now join us and present to you a summary of the committee's activity.

Greetings to all. I'm delighted to be with you to tell you about the Compensation Committee's work. During the past fiscal year, in addition to the usual points, the committee spent time on the following topics. The impact of the Pluxee spin-off on variable compensation, the consideration of vote results on the same pay at the last shareholders' meeting as well as a review and the composition of peer groups, both in France and internationally, but more about that in a moment. This year, we have 4 resolutions pertaining to the compensation of corporate officers that are submitted to your approval. They are up on the screen. Sodexo compensation policies are stable in both amounts and structure. I'll just briefly remind you of the components and will underlying changes that are proposed to you. Elements of compensation for the Chairwoman for fiscal 2024 are in line with the compensation policy as approved by the shareholders at the AGM in 2023. Compensation breaks down into a fixed and a variable annual compensation, long-term compensation and benefits. The fixed compensation amounted to EUR 900,000. The variable compensation, which I should go into the final details of which in a moment, could represent 120% of the fixed compensation. And in the event of outperformance could be increased to 170%. Objective set at the start of the fiscal year were established on a scope that did not include Pluxee avoiding any adjustment of the objectives after the effective date of the spin-off. With regard to the variable compensation due for fiscal 2024, the achievement rate for the variable element is 49.8% of the fixed compensation. This rate demonstrates the challenging nature of the SAR target set by the Board. Internal objectives were ambitious. And despite the group's strong financial performance, which you just heard about, which was also recognized by the market, the financial targets in terms of organic growth, revenue, client retention, operating profit margin and group net income were not met. The target on cash generated from operations has been largely achieved. Regarding the achievement of nonfinancial objectives. The health and safety target has been partially achieved. The target for the NMIR incident ratio, the NMIR, which we added last year, and that aims to develop a culture of accident prevention has been largely met. Although the excellent results contributed to a further reduction of minus 14.5%, as Sophie said earlier, of the LTIR, loss time injury rate, it was not sufficient to meet the highly ambitious target we had set. The sustainability objective evaluated by the implementation of our internal food waste measurement program, WasteWatch, has also been reached. The program now covers almost 77% of the raw material cost for food. And finally, the objective in terms of talent management consisting of 3 indicators: focus on the group's leadership scope, namely gender diversity and operational positions the rate of departures considered regrettable and the ratio of internal appointments versus external hires has been achieved. A strong result highlights the continuous focus by senior management from the management of its leadership teams, development of succession plans and the promotion of diversity, equity and inclusion. The variable portion to be paid following the shareholders meeting vote would therefore amounts to EUR 448,200. Please note that the acquisition of annual rights for supplemental pension plan is subject to an achievement rate of the annual variable compensation targets of at least 80%. Therefore, Sophie Bellon does not acquire any right to a lifetime annuity for 2024. In addition, the Board of Directors has granted 34,500 performance shares to Sophie Bellon in accordance with the compensation policy for fiscal 2024. The performance condition of the plan in line with the 2025 strategic plan are shown on screen. Activated attribution, the valuation of performance shares amounted to EUR 1,978,368, equivalent to 100% of the target annual fixed and variable compensation, in line with allocation practices for executive corporate officers at Sodexo. The elements of the Chairman and CEO's compensation for the year 2025, fixed, variable and long-term remain unchanged, as is the structure which, of course, you're familiar with it. This is a slide that we show every year, but the structure is aimed to balance out short-term and long-term performance. So I won't go into the final details, but only describe changes for the coming fiscal year. Let me return my peer group comparison panel. As you know, our Chairwoman and CEO, is benchmark operation is benchmarked, and we have worked on that and revised it after the Pluxee spinoff. What we're trying to achieve is to reflect the group's new profile, a new global player in food services and facility management with high employee density. And therefore, the France peer group used to position the compensation of corporate officers, now includes the 20 lowest market caps in the CAC 40 and companies from the CAC NEXT 20, meaning that the peer group has 20 plus 20. The international peer group, which we also reviewed to compare the compensation structure of Sodexo with comparable companies has been expanded and now includes 8 companies. The names are up here on screen. It should also be noted that the target total compensation for the Chairwoman and CEO, fixed salary, annual variable compensation performance shares, is positioned between the median and the upper quartile of the peer panel in line with Sodexo's positioning within these peers. Regarding the annual variable compensation targets, the talent management criterion has been simplified and now comprises 2 indications rather than 3. The indicator related to internal appointments, to executive positions is not to be continued this year. For next year, succession planning is now well established, for reference, the internal appointment rate reached 80% by the end of fiscal 2024, which is extremely satisfactory. As regards other elements of compensation, they remain unchanged and continue just of the benefit of the supplementary retirement plan, collective social protection schemes and health coverage, as well as a benefit in kind, which is namely a company car. Let us now move on to the directors' compensation. Let me remind you that the global allocation of compensation and for Sodexo Directors was set at EUR 1.3 million in 2024. And the rules of allocation of fixed and variable compensation for directors would be maintained as is for 2025. And turning the Sustainability Committee, set up at the start of fiscal 2025. The compensation allocation is aligned with the one of the Appointments Committee and the Compensation Committee. Finally, I would really like to thank all of the members of the Compensation Committee for their active participation and unwavering commitment during this year. I would also like to invite you to consult the universal registration document, where you'll find additional information about the compensation of corporate officers and directors. Thank you for your attention.

Thank you, Cécile. For this presentation. Dear shareholders, I suggest that now we should give the floor to our auditors. Caroline Bruno-Diaz from KPMG, will present the statutory auditor's report.

Thank you, madam Chair. Ladies and gentlemen, dear shareholders of Sodexo, good afternoon. I have the pleasure today on behalf of the joint auditors to report to you on our engagement on our assignment and on the report we've issued for the fiscal year that ended on the 31st of August 2024. We've issued several reports and in accordance with market practice, I suggest that I do not read out these reports in full, but instead that I should give you a summary. So let's start off with the report on the consolidated accounts and the annual financial statements. These reports have been made available for the purpose of the shareholders' meeting and can be found respectively on Pages 174 to 178 and 197 to 200 of the universal registration document. We'd like to remind you that the aim of our work is to obtain reasonable assurance regarding the fairness, regularity and the fair vision of the accounts and to verify that they do not contain any material misstatements. Reports on the annual and consolidated financial statements include the key audit matters. Now for the consolidated financial statements, the key audit matters are as follows: the assessment of the recoverable value of goodwill and tax risks. For the annual financial statements, the key audit matter is the valuation of equity investments. Our reports on the accounts include for each of these key audit matters, a description of the risks identified and the response that we have provided. As a conclusion, we've searched for the consolidated accounts and the annual accounts of your company for fiscal 2024 without any qualifications or comments. Our reports on the accounts also include the conclusions of certain specific verifications that are required by law that we've carried out on information required in the management report. In this regard, we adjust the accuracy and fairness of the information provided regarding the compensation and benefits paid to corporate officers as well as the fairness and consistency with the annual accounts of the information relating to the payment terms. We also searched by the inclusion of the consolidated nonfinancial statement, required by the French Commercial Code in the management report. Lastly, as part of the ESEF regulation, we verified that the presentation of the accounts included in the annual financial report complies with the European Single Electronic Format, that is ESEF requirement. So I suggest at this stage that we move on to our special report on related party agreements, which can be found on Pages 201 and 202 of the universal registration document. A new agreement is submitted for approval to your meeting today. This agreement relates to the share purchase agreement signed on July 23, 2024, between the company and Bellon S.A., concerning the transfer by the company to Bellon S.A. of all of the shares in Sofinsod, whose only asset on the balance sheet is a 19.6% stake in the capital of Bellon S.A. This transfer contributed to put an end to a cross-shareholding loop and simplifying the company's shareholder structure. Our report also refers to the coordination and service agreement between your company and Bellon S.A., already approved by the shareholders' meetings during the previous session. The expense book for fiscal 2024 amounted to EUR 5,131,113, excluding taxes. Finally, we have issued a special report required by law concerning the 14th resolution regarding the delegation of power requested by your Board of Directors concerning the proposed capital reduction. We have no comments to make on the causes and conditions of the proposed capital reduction through the cancellation of purchased shares. Ladies and gentlemen, dear shareholders of Sodexo, thank you for your attention, and I shall hand the floor back to the chairwoman.

Thank you, Caroline, for your contribution to our shareholders before opening the Q&A session. I suggest that Florence Negrel should present the resolutions that we will submit to you to vote upon. So maybe Florence Negrel, who is our meeting secretary could take the floor.

Ladies and gentlemen, the first 2 resolutions aimed to approve the individual and consolidated financial statements for Sodexo for fiscal 2024, showing, respectively, a net profit of EUR 1,545,281,879, and a consolidated net profit group share of EUR 168 million. For the third resolution, you are proposed to approve the appropriation of the net income and a set dividend amount at EUR 8.89 per share for fiscal 2024, including the special interim dividend of EUR 6.24 paid on August 29, 2024, and the ordinary annual dividend of EUR 2.65 to be paid on December 23, 2024. In accordance with our bylaws, a dividend premium of 10% of the ordinary dividend will be allocated to shares held in registered form for at least 4 years on the payment date. Fourth resolution, ordinary business item is the approval of a regulated agreement concerning the transfer of all shares of Sofinsod to Bellon S.A. Fifth and sixth resolution, ordinary business items. We propose the approval of the renewal of 2 directors, Francois-Xavier Bellon and Jean-Baptiste Chasseloup de Chatillon for a time of 3 years. Seventh and eighth resolution. It also proposed that you approve the appointment of Ernst & Young Auditors and KPMG, as statutory auditors responsible for certifying sustainability information as part under the CCLD directive. Resolutions 9 to 12. We suggest that you approve compensation elements attributed to the Chairwoman and CEO and directors fiscal year 2024 and to approve the compensation policy for directors for 2025. All information pertaining to compensation were presented during this meeting by the Chairwoman of the Remuneration Committee, Cécile Tandeau de Marsac and are available in the universal registration document for 2024. 13th and 14th resolutions, the shareholders are called upon to renew the authorization given to the Board to allow the company to purchase its own shares outside of a period of public offer and to authorize the Board of Directors to cancel said shares. 15th resolution. You're invited to approve the amendments to Article 11 of the bylaws deliberations of the Board of Directors. And finally, ordinary business item, you're also called upon to rule on the 16th usual resolution on the delivery of powers necessary for the completion of publications and legal formalities. Ladies and gentlemen, let me remind you that you have the option to receive your invitation and to vote electronically through the vote access platform. As every new year, we encourage shareholders who have not yet done so to contact their financial institution to subscribe to this service, which will allow them to exercise their rights in an easier and quicker way. Thank you very much.

Thank you, Florence. I suggest that we should now open the Q&A session. And before taking questions from the room, I'd like to inform you that the company did not receive any written questions from any shareholders. So ladies and gentlemen, there are wholesome hostesses in the room to hand you a microphone if you wish to ask a question.

This is a question about Sodexo Live! and the Olympics of 2024. We provided food services in the Olympic Village. And it was very good both for the image and for financial performance. The Rugby World Cup in September and October 2023, allowed Sodexo to strengthen its standing in sports in France and internationally. And with an $80 million per annum contract for food services in the future Titan stadium in Nashville that may host the Super Bowl in 2027. Hence, my question. Are there any such contracts in the pipeline?

Thank you for this very good question. Indeed, we were very happy with the performance of Sodexo Live! this past year. As you said, with the Rugby World Cup at the start of our fiscal year, then of course, the Olympic Games that were a fantastic event. An historic moment here in France and also for our teams, equally historic. They were lucky enough to serve more than 15,000 Olympic athletes at the Olympic Village, and we were present in 14 competition sites, and it was indeed a contract where we recruited more than 6,000 people for the whole duration of the Olympic and Paralympic Games. And as you said, it was indeed a fantastic way to showcase the excellence of Sodexo Live!, which I must say also supported by all the teams in France because you can imagine mobilizing 6,000 people just like that overnight is not an easy thing to do. So you need everybody to feed into your efforts, and that was done. So Sodexo Live! also signed a contract that's an iconic one, as you mentioned, there are very interesting things in the pipeline for Sodexo. But unfortunately, I cannot talk any more about them until everything is finalized. But what I can say is that the year has got off to a head start for Sodexo Live!, especially in the U.S. with a lounge activity that's become very active after COVID, of course. Obviously, there was a dip during COVID in the airports, there wasn't much traffic. But now it's become very dynamic again and they've signed a fine contract with American Airlines in the U.S. last year. And Sodexo Live! is therefore operating this, and is developing very nicely. And also concerts by Taylor Swift that have been very successful. And we were lucky enough to operate in the arenas where she held her concert. And another event that we're very happy about is the Super Bowl, which will take this early February. And this year, the Super Bowl will take place in New Orleans in a fantastic stadium there, the Superdome in New Orleans, and we're lucky enough to operate in that stadium as well. So that's the next major event on the horizon for Sodexo Live, in the Superdome in New Orleans. And I'll be lucky enough to go there with my sister Nathalie and I'd like to thank her for all of the speeding up of our growth that she's been doing for Sodexo Live! in the last 12 performing very well indeed. We move to microphone #2. Otherwise, it won't be fair if I just keep on taking microphone number 1. Number two, first start. And then we go back to number 1. Yes?

Yes. Thank you, [ Charlie Gags ], individual shareholder. First of all, congratulations for on the whole, managing with such gusto, the world's largest restaurant. But your generosity seems better for the shareholders and for the athletes. First question. About the insufficient amount of meat and protein. How could such carelessness of the specifications be possible because the amounts had to be multiplied by 3. Second question about quality. Two products were hugely successful. Everyone is familiar with them. Chocolate muffins, on the one hand, and industrial power chocolate. So did you also offer conventional pastries from our traditional French bakeries. And third question about competition. What is your positioning versus Compass who seem to have a very strong ambitions?

Thank you for asking these questions. Now at the start of the Olympic Games, there was a bit of an issue regarding animal proteins. Now the Olympic Games with the intent of the organizing committee of the Paris Olympics that the Olympic games would be green with a strong commitment concerning sustainability. And we worked for 2 years with the different both organizations, with the organizing committee of the Olympic Games, and we were given certain figures per dish to build into the meals that we would serve. Well, you're right, the athletes do need animal-based proteins. And well, we were given information that wasn't precise enough. And the idea was that there was a strong intent to have recipes that would be sustainable and plant-based. But unfortunately, it's not what athletes want to eat. So there was a bit of adjustment, a bit of fine-tuning necessary at the start of the Olympic games. But within the space of 2 days and 24 hours even, this fine-tuning was done remarkably well, and we were then capable of feeding the athletes as they wanted to be fed. I mean, at least don't have a 2 or 3 egg omelet. It's 8 to 10 or the size of the steaks they eat is much bigger than what other people might eat. So we adapted very quickly to their needs, thanks to the agility of our teams. Then you asked me a question about the -- well, Danish pastries as they might be called [indiscernible] as we call them in French. They were French. There was a baker in the Olympic Village. And on request, they made the [indiscernible] which is delicious, and bread as well with nice and warm and crunchy. I eat too many of them myself, they were really nice. And the baker was there throughout the day with the team, of course, and gave lessons to help people to learn how to make the famous French baguette. And for the athletes of the world, they could learn how to make French bread. And they came and relax, chilled out in the Boulangerie area afterwards and got to taste the fine [indiscernible] made in French style there and made bread themselves, actually. And the last question was on Compass. What was your question exactly about Compass, if you don't mind repeating the performance of Compass versus the performance of subjects or the ambitions are? Was that your question? Was it the ambition of Compass? Okay. Well, we're 2 food service groups. Firstly, we're French, they're English. So we're not quite the same originally. We're 1 of the leading global players ourselves in our market. And Compass actually put in a very good performance in the last 15 years, especially in the U.S. now for the last 3 years, we're narrowing the gap between their performance and our performance in the U.S. And there's another big competitor in called Aramark. And in fiscal 2024, the -- both report their accounts a month after as ours are published at the end of August, and they published theirs at the end of September. And in the U.S., we exceeded Aramark's growth in 2024. And when it comes to Compass, the differential in terms of growth is being narrowed. Now they have strong ambitions for Europe right now, you've perhaps read some newspaper articles on that. So have we. When I took the steer of the Sodexo group a couple of years ago, 2.5 years ago now, I said the priority we had was to get back to basics. We changed our organization, as you've seen also. We've streamlined our organization. We've put out the P&L responsibility into the regions. We spined off [indiscernible] with the Pluxee to the Pluxee spin-off, as you know, and our childcare and personal care activities, also we don't have any more. So our priority has become not acquisitions, even though we made some tuck-in acquisitions in the area of convenience food, in the area of the global purchasing organization where we also move forward in China as well, by the way, we continue to believe a lot in China. And the other companies left China, but we believe a lot in China, and we believe a lot on Brazil as well, and they have exited from the Brazilian market. So as we speak after those couple of years, as I said in my original presentation, earlier on this afternoon. We've made some structural decisions and now we're ripe and ready to embark on a more aggressive acquisition, more proactive, I would say, acquisition policy going forward. And Sebastien, could maybe chip in on that too, if he likes.

Well, as regards to our external growth policy, I said so earlier, but we have around EUR 300 million to EUR 500 million earmarked for that per annum in order to strengthen our position in our target markets, the U.S., Europe and a few emerging economies such as Brazil and India because really, our ability to invest really allows us to strengthen our position in new distribution models, new production models in catering, in food services. And we talked also about the importance of our procurement services or in-house procurement, which can help us to boost our growth.

Microphone #5 now, please.

Madam Chairwoman. Hello, [indiscernible] for the APAI, the association for individual shareholders. I have 2 observations and 2 questions if you will allow me. First. I have noted that as part of your variable compensation CSR brought in much more money than employee talent, which I find surprising. Second observation, if you'll allow me. I met this morning with the captain of industry, Mr. Levy, who noted that in the world, CSR criteria, we're now weakening, notably in the U.S. because these criteria contravened the efforts made to achieve the best possible financial results. Is that also a trend for Sodexo because you have chosen to benchmark yourselves internationally in a way that reflects this. Now to my 3 questions. First, what is the impact for Sodexo of the Olivier Gregoire legislative amendment that wishes to expand the use of lunch vouchers to purchase all sorts of food stuff? Second question, in November, you revealed the results of the second addition of the International Barometer of Sustainable Food. The results are that individuals are persuaded that more sustainable food is better, but are not prepared to pay the price. How can you comply with your corporate purpose? The corporate purpose being we are committed to offer tasty food and quality experience at every moment of your lives in all sorts of sectors. And my final question. You're about to acquire CHR Catering, an American player in convenience. What drives that idea? And what is the potential for that sector?

Well, thank you for your remarks, and thank you also for your 3 questions. Now concerning the first question, the amendment by Olivier Gregoire that turns Pluxee's business operations and Pluxee was spun off on the 1st of February, and it's living its own life, which has its own specific governance, its CEO, its Chairman and so on, and its Board of Directors, which I said, but I'm not here to -- I'm just a Board member there. I'm not here empowered to speak about Pluxee so I would refrain from commenting on that. It's not my role. Then the only thing I can say concerning Pluxee's business operations is that it's always been -- a lot of its activity has been regulated over the years, and it's always been agile in adapting to regulatory requirements, the Pluxee organization. So it's not up to me to comment on your remarks. Now the CHR Catering topic that you mentioned, this is an acquisition we made recently. And to what extent the convenience activities are interesting for us a worthwhile. As I said earlier, it's a market worth USD 30 billion in total. And I'll give the floor to Sebastien, perhaps for further comments on that.

Thank you, Sophie. Indeed, it's an extremely attractive market. Growth accelerated just after COVID. There's a lot of demand for hybrid offerings with more flexibility, 24/7 on sites. So it's a fast-growing market. We started to grow in that market in 2022 through the acquisition of Accent, a company that really helped us in terms of serving as a technological platform. And since then, we have continued to make a certain number of minor acquisitions. This is one that would allow us to strengthen our market position. And it, in fact, gives us greater density on the East Coast, which also improves our profitability.

And then regarding your question about the Harris Interactive barometer, which confirms that everybody wants to have a positive impact on the environment and people these days are aware that via the food they eat, they can have an impact, strong impact even. And yes, there is a lot of greenhouse gas emitted from the farm right down to people's plate. So it's about 30% of greenhouse gas emissions that are accounted for by the agri food industry. So we've all got to be mindful of that and put in efforts to reduce these greenhouse gas emissions. Now when you say it could drag down their performance because it costs more. Well, it's true that some products will cost more. But I'd like to recall that 1 of the ingredients in more sustainable food is the fact of avoiding waste. We've got to take action on food waste because there's a lot of that goes on. So from the fork on the farm right down to the fork beside the person's plate, we've got to take action. And a lot of food is wasted percentage-wise these days. At the time of harvesting, at the time of cooking, at the time of when people don't finish what's on their plate, essentially. So we can take lots and lots of initiatives to make sure we drive down food waste. So some products may cost more, but we can, nonetheless, manage to serve meals at reasonable affordable prices, quality meals, I mean. And we as I said, we won't change the world by forcing people to do something. We've had to change the world by serving people tasting meals if people try out new recipes with new ingredients and they know they're doing the right thing, it will become a virtuous circle. And we've been putting in a lot of efforts on that. We want to have a very positive impact on all of this between now and 2040 and our -- not given the same commitment as ourselves. So that's the way forward for us. It's an opportunity. And earlier, another of our shareholders talked about Compass. That is a key differentiator between ourselves and Compass as it happens. Thank you for raising that point. So I'll go back now to microphone #1, if you like.

[indiscernible] I'm shareholder. I have 2 questions. One of the criteria for your variable compensation is recruitment. Your CFO, was he promoted in-house? Or did you find him elsewhere? He'll tell you about his career himself. Sebastien?

In fact, I started working for Sodexo in 2006. So yes, it's an internal promotion. And prior to that, I was CFO for North America.

And perhaps you could also add the fact that you left the post in North America. I mean there was a kind of like a domino knock-on effect. There was a whole cascade of internal promotions when he left the job in the U.S.

So yes, we had actually prepared a succession plan for quite some time. And when I took up my new position, we had a CFO from India, who is in charge of the University segment, who then became the CFO for North America. He, himself was replaced by woman, who was in charge of the senior business who replaced him as CFO for the university segment. So thanks to these changes, and we do that quite often. We have succession plans in-house, which allow people to be promoted in-house.

In your presentation, you talked about a drop in the cash flow generation due to a tax audit and the auditor also mentioned a number of tax risks. Could you tell us a little bit more about the nature of this tax orders and how much money is concerned?

Initially, it was for 2016 to 2018, and it was then extended to fiscal year 2021. And we signed an agreement with the tax authorities for the entire period, from 2018 to 2023. Basically, 8 fiscal years that were covered by this tax audit. The main issue there was transfer prices. It's a highly technical matter and a highly complex matter for these transfer prices as they are conducted within holding companies. This was entirely provisioned, as I said in the accounts. So already was a provision that had been set aside in the past, and we complemented that at the end of 2024. The total amount should reach around EUR 160 million for the period concerned. So about EUR 20 million a year.

Thank you. Do we have other questions in the room? Yes, up at the top through #6, please.

Thank you. I would like to know whether it will be possible in addition to the cocktail to have a little box of chocolates because we really enjoyed the chocs in previous years. And I think the shareholders who asked them. Of course, the drinks, the cocktail reception. I hope that the shareholders did not ask for that to be got rid of.

Well, this time, it will be a bit complicated to get all that organized for today, but I'll refer that to my team.

My second question, so thanks for the nice drinks reception, but they were in kind of Olympic mode last year. What about people with disabilities. Do you have any tricks for them to grab the canopies, the food animation was also very interesting, but could that be made accessible to people with disabilities.

Well, you've raised a very valid point here. We'll try and take care of that. As of this evening, we'll try to identify those persons. But please make yourself known to us and we'll take care of you. So I'd ask all the teams to take account of this. I can't do it myself all along, but everybody on the team will help us, I'm sure. Are there other questions from the room here? Well, thank you very much for asking all of those questions and making remarks. To our shareholders, if there are no more questions, then I suggest we close our Q&A session. And I'd like to remind you that the shareholders relations department is at your disposal, of course, throughout the year to answer your questions. And of course, they are with us here in the room today as well. You can talk to them during the cocktail party, if you like. I'll give the floor back to Florence Negrel now for the poll on the resolutions.

Thank you, Sophie. So the quorum that was stated at the start was a temporary quorum. This is now the final quorum that we've taken into account for the vote of the resolutions. The number of shares currently represented by shareholders who were here, 124,770,656 shares, 85.6% of shares with voting rights. So the legal quorum both for the ordinary and extraordinary shareholders' meeting has been reached. The vote of revolution -- of resolutions can therefore be expressed validly. We're now going to proceed with the vote. We're going to start by watching a short film that will show you how the tablets work. [Presentation]

Ladies and gentlemen, first resolution, approval of the accounts for the fiscal year ending August 31, 2024. You may now vote. [Voting]

Voting is closed. Resolution is adopted at 99.9% of votes. The second resolution, adoption of the consolidated financial statements for fiscal 2024, the voting is open. [Voting]

Voting has ended. This resolution is adopted, 99.9% of votes. Third resolution, preparation of net income for fiscal 2024 determination of the dividend amount and payment date. You may now vote. [Voting]

This resolution is adopted at 99.81% of votes. Resolution 4, approval of a related party agreement pertaining to the sale by the company of all shares in Sofinsod to Bellon S.A. You may now vote. [Voting]

End of vote. This resolution is adopted at 90.28% of votes. Resolution 5, reappointment of Mr. François-Xavier Bellon as a Director for a 3-year term. You may now vote. [Voting]

End of vote. This resolution is adopted with 85.91% of votes. Resolution 6, reappointment of Mr. Jean-Baptiste Chasseloup de Chatillon as Director for a 3-year term. You may now vote. [Voting]

End of vote. This resolution is adopted with 96.18% of votes. Resolution 7, appointment of Ernst & Young Audit as statutory auditor responsible for certifying sustainability information. You may now vote. [Voting]

End of vote. This resolution adopted with 99.89% of votes. Resolution 8, appointment of KPMG, our statutory auditor responsible for certifying sustainability information. You may vote. [Voting]

End of vote. This resolution is adopted with 99.09% of votes. Resolution 9, approval of the components of compensation paid during or awarded for fiscal 2024 to Mrs. Sophie Bellon, Chairwoman and Chief Executive Officer, you may vote. [Voting]

End of vote. This resolution is adopted with 93.11% of votes. Resolution 10, approval of information related to the compensation of corporate offices and directed as referred to in article L22 1091 of the French Commercial Code. You may vote. [Voting]

End of vote. This resolution is adopted with 99.17% of votes. Resolution 11, approval of the compensation policy applicable to directors. You may vote. [Voting]

End of vote. This resolution is opted with 96.47% of votes. Resolution 12, approval of the compensation policy applicable to the Chief Executive Officer. You may vote. [Voting]

Vote is closed. This resolution is adopted with 91.91% of votes. Resolution 13, authorization given to the Board of Directors to purchase shares of the company. The vote is open. [Voting]

The vote is closed. This resolution adopted with 99.66% of votes. Resolution 14, authorization to the Board of Directors to reduce the company's share capital by canceling treasury shares. The vote is open. [Voting]

The vote is closed. This resolution is adopted with 99.68% of votes. Resolution 15, amendments to Article 11, deliberations of the Board of Directors of the company's bylaws. The vote is open. [Voting]

The vote is closed. This resolution is adopted with more than 99.99% of votes. Resolution 16, powers to carry up legal formalities. The vote is open. [Voting]

The vote is closed. This resolution is adopted with more than 99.99% of votes. Thank you for your attention. Now back over to Sophie Bellon.

Thank you very much. Thank you for voting on the poll. Thank you, Florence. Ladies and gentlemen, thank you for the confidence you've shown in the Board of Directors through your votes. The agenda is now exhausted so I can declare the meeting adjourned. I'd like to thank you for attending today, and I'd like to invite the shareholders present with us here physically today to attend a cocktail reception prepared by the Lenôtre teams. Thank you.