Half Year 2022 Sodexo SA Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Karl Green - RBC Capital Markets, Research Division - Analyst : Just 2 questions from me. Firstly, Sophie, I think you mentioned that you'd introduced a new long-term incentive scheme for the U.S. leadership team. If you could perhaps provide a little more detail about the criteria there, that would be helpful. And then the second question, again, just coming back to inflation. Are you able to indicate the magnitude of the gap between what your food and consumable suppliers are actually asking for and what you're actually agreeing to? Just trying to get a sense there as to how the pressure is being shared upstream rather than obviously you passing on the price increases downstream.

Question: Karl Green - RBC Capital Markets, Research Division - Analyst : That's very helpful, Marc. But just to be clear there, so typically, if a food supplier is asking for x percent increase year-on-year, you're typically accepting that. So they're not having to forbear the greater elements of the food in place. So... REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 01, 2022 / 7:00AM, EXHO.PA - Half Year 2022 Sodexo SA Earnings Call

Question: Harry Martin - Sanford C. Bernstein & Co., LLC., Research Division - Analyst : I've got 3 questions, if I may. The first one is on the sort of the cadence of growth for the rest of the year. And you're sort of particularly thinking about versus 2019 levels. Just any comments you have trying to square the comments of rapidly going back above pre-COVID levels compared to the sort of the lower end of the organic growth guidance range, which, on my numbers, seems to suggest that we might get a little bit of a step back from the sort of 95%, 96% that we saw in Q2. The second question is just on CapEx going to 2.5% of sales. I mean that will be a high level, obviously, than you've seen in the past. Can you give any commentary on sort of what level of net new wins that relies on and how quickly you expect to get there? And then the final question, a bigger picture question. Just any sort of thoughts you have on the sort of long-term growth algorithm that Sodexo can do sort of beyond the pandemic, what level of organic growth, margin expansion and any sort of cash returns that you think you can sort of deliver on an ongoing basis. I'd love to hear your thoughts on that.

Question: Jaafar Mestari - BNP Paribas Exane, Research Division - Analyst : It's Jaafar Mestari. And just one question for me on gross new business. So if I calculate correctly, 3.7% annualized is EUR 650 million signed in the last 6 months. And if my math is correct, this is stepping up from around EUR 620 million in H2 last year and EUR 540 million in H1 last year. So definitely continuing to nudge up. But in a normal year before COVID, you would routinely sign EUR 1.4 billion of new business. So my question here would be, what's not getting you there? What's not getting you to over EUR 700 million per half year? Is it because the pipeline of opportunities is not as big, which would sound strange. Is it because your win rates are lower? Or is there any timing factor? Are you bidding for larger stuff, more first-time outsourcing that takes more time to materialize?

Question: Jaafar Mestari - BNP Paribas Exane, Research Division - Analyst : Yes. I thought that actually helped you to actually if the opportunity out there is bigger today if the win rates are similar on -- than if you win something similar on the lower base, it should be a bigger number.

Question: Jaafar Mestari - BNP Paribas Exane, Research Division - Analyst : Yes. So 7% on the repaired revenue base, so really quite big, not 7% on your current revenue base.

Question: Jaafar Mestari - BNP Paribas Exane, Research Division - Analyst : It fluctuates. It was 1.3 in '19, 1.4 in '18, et cetera. Yes, no, you're right, there's differences.