Good morning. Thank you for standing by. Welcome to the Sodexo's third quarter fiscal 2023 revenues conference call. As a reminder, all participants are in listen-only mode. The conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero. At this time, I would like now to hand the conference over to the Sodexo team. Please go ahead. Thank you. Good morning, everyone. Welcome to our Q3 fiscal 2023 revenues conference call. I'm here with Marc Rolland and Sophie Bellon. They'll go through the presentation and then take your questions. The slides and press releases are available on our Sodexo. com site, and you'll be able to access this call on our website for the next 12 months. The call is being recorded, but may not be reproduced or transmitted without our consent. Please get back to the IR team if you have any further questions after the call. I now hand you over to Marc to take us through the numbers. Thank you, Virginia. Good morning, everyone. I'm pleased to be here with you this morning to cover the third quarter numbers. In slide four, you can see that Q3 revenues were EUR 6 billion, up 9.1%. There was a 1.2%- currency impact, as the dollar performance continued to reverse from the highs of last September, together with a strong euro, generally against most other currencies. Net scope change has fallen to only a negative 0.2% as the effect of the sale of the childcare activities disappears. Organic growth came out at 10.5%, a bit lower than in H1, at 13.4%, as expected, given the higher comparable base, but still very solid. On-site services was up 9.9%. North America was up 12.1%, Europe was up 4.4%, and the rest of the world plus 16.3%. Food sales were up 13.8%. Even with the negative impact of the closing of the testing centers in the U.K., FM services growth was at 3.6%. Excluding this, the FM underlying growth was very healthy at 6%. Benefits and reward services organic growth accelerated again this quarter to 25.5%, up 24% in Europe and up 28.1% in Latin America. This quarter, we've had our share of good news in terms of new business, renewals, and extensions. I would like to highlight a few of them. In North America, Renown Health, we will bring best-in-class dining and FM services to all four of its hospitals this summer. We are building new and expanded menu options for patients, presenting a new look and feel to the dining space, adding mobile ordering options, and above all, developing new healthier meals and a world-class program for patients with allergies and dietary restrictions. For the Deerfield Retirement Community, the 600 residents and 300 staff members can expect delicious food, plant-based menu items, and increased choice and flexibility. In Westminster College in Utah, the designing program will provide students with wholesome, made-from-scratch menus, on-trend dining options, innovative scan-and-go technologies with contactless payment. Partnership with Salt Lake City area businesses and restaurateurs will bring local food favorites to campus to build upon community engagement. We are also increasing our airport lounges presence with three more Virgin Atlantic Clubhouses. For British Airways, we now have eight lounges with a pre-flight food offering that will feature more nutritious alternatives than traditional airport fare. We have also prolonged our 18-year relationship with NYC Health + Hospitals, which is the largest public health system in the U.S. Both our organizations value the critical impact of reducing carbon emissions through the advancement of a plant-based diet and new meal delivery technology, and the implementation of Experiencia to enhance the patient experience. In Europe, we have renewed our 10-year partnership with Eli Lilly for another five years to deliver integrated facilities management to nine of Lilly's office, manufacturing and R&D sites. The catering, retail, and soft services FM contracts at Queen's Hospital Romford has also been expanded for a further five years. We will also implement new portering technology and the Protecta cleaning technology to enhance hygiene and patient flow. In the rest of the world, a new contract for a leading software company in China, but also in India for a global tech company, where we have opened two new buildings in Bangalore in January and March for 3,300 users. In Hyderabad, we are opening our biggest food operation yet with this tech client. This building will have six cafes and 17 break spaces with a sitting capacity of 2,500 users. The building will be able to accommodate nearly 20,000 users in multiple shifts. We have also renewed the Bayer contract to serve 11 food sites and 17 FM sites with services including cleaning, gardening, maintenance, third-party management, et cetera. It was the holistic IFM solution that Bayer was looking for. The price revisions in Q3 were in line with our expectation at more than 5%, and should remain above 5% for Q4, too. We are seeing progressive softening of food cost inflation in the U.S. and Brazil since the beginning of the calendar year. On the other hand, in Europe, inflation has just peaked during Q3. The exception is the U.K., where inflation is still plateauing at high levels. As a result, food costs over the first nine months before mitigation is now at 11% year-on-year, down from 12% in H1. Labor inflation is estimated at around 6% year-on-year at the end of Q3. As usual, mitigation is being implemented on a permanent basis. Let's look at the key elements that are driving the Q3 organic growth. Net new in-year revenue contribution was, as we had already indicated, close to 2%. Pricing, I have just detailed, is above 5%. We had the final effect of the loss of the testing center contract for -0.9%, like-for-like volume, including cross-selling of close to 4%, to take us up to the 9.9% on-site organic growth. Now let's take it zone by zone, starting with North America. Q3 revenues were EUR 2.7 billion, up 12.1% organically. Organic growth in business and administration was 20.1%, boosted by the continuous volume growth in corporate services. In sports and leisure, there was a substantial increase in attendance in sports events and at cultural destination, + 28% higher passenger counts in airline lounges. Inflation pass-through also contributed across the board. Strong growth in Entegra revenue was visible, but contributed to a lesser extent. In healthcare and seniors, organic growth was 9%, driven by pricing and further retail volume growth. The net new contribution was also slightly positive. In education, organic revenue growth was 7.2%. Like-for-like growth in food services in university was strong, with volume and price increases due to higher level of board plans, retail sales, and more event catering. School was more or less flat, the impact of price adjustments being offset by the reduction in volume of government-subsidized meals. Europe revenues amounted to just over EUR 2 billion, up 4.4% organically. The organic growth would have been 6.9% without the impact of the testing centers. This is the last quarter to be impacted. In business and administration, organic growth was +7.5%, boosted by strong price revisions in food, continued improvement in the return to the office in Belgium and Germany, combined with new business and significant IFM project work, especially in Central Europe. Sodexo Live! was boosted by strong corporate events activity and the contribution of the World Baseball Classic Hospitality, which took place in Japan in April. This was slightly offset by the lower level of activity in France, affected by the loss of a large prison contract last year and three working days less due to bank holidays, plus a regular strike during the period against a new pension reform. In healthcare and seniors, organic growth was -0.8% due to the testing centers. Excluding the testing centers, the rest of the segment was solid, up 8.3%, with strong level of new openings, especially in Spain, recovery in retail sales, and solid occupancy in seniors in France. In education, organic revenue growth was -1.1%, reflecting the reduction of two working days in the U.K. and three in France in May, due to the bank holidays. Activity in France was also impacted by strikes and delays in price revisions. The indices used for pricing in schools in France are not reflecting the full cost increase. Therefore, the contracts are currently not playing their role in protecting our P&L. Third quarter fiscal 2023 revenues in the rest of the world were EUR 1.1 billion, up 16.3% organically. Business and administration was up 17.1%, driven by the impact of the new openings in corporate services, particularly in India, in food services for the tech sector, as I explained earlier. Growth was solid in all regions and segments, especially in Latin America, boosted by inflation pass-through. China remains a bit more difficult, with a combination of a return to normality, but with some clients facing downsizing. Healthcare and seniors revenue was 1.3% organically, with strong development and project work in India and Latin America being offset by a decrease in China due to low post-COVID development, and in Brazil, due to the exit of low-performing contracts. In education, organic growth was 45.5%, as Chinese schools reopened fully. Let's go to BRS. Sophie, I hand over to you to present the newly branded Pluxee. Thank you, Marc Rolland. Hello, everyone. It's very good to be with you this morning. The decision to create a new brand was made more than a year ago. Pluxee is the result of an extensive consultation of our leaders and market research. The output was clear. In order to stand out and be recognized, we needed a brand that represents our personality and our position in the business. This brand project has been part of our strategy to accelerate growth and become more autonomous. It has three main objectives. First, to be trusted, a trusted partner for our clients and help them enhance their employees' experience. Also, to capture the potential of an extremely dynamic and largely under-penetrated market. Lastly, this new brand will give us the visual autonomy of our new pure player status. Now, looking at the brand name itself, why Pluxee? Pluxee is for our ambition to bring more plus to our stakeholders, to help consumers enjoy more of what really matters for them, to help clients strengthen their relationship with their employees, to enhance engagement by bringing ever more complete and diverse solution accessible via a highly performing digital ecosystem, and at the same time, bring more traffic to our affiliates merchants points of sale through apps and data. He translate the heart of the group's expertise, focused on employee experience and employee engagement, and the X position the group as a catalyst to amplify opportunities. Pluxee represents a new and important milestone in the spin-off journey, and it will help the team to unleash the full potential of the business. Back to you, Marc, for the numbers. Thank you, Sophie. Before we go into the normal detail of the Pluxee revenues, I wanted to highlight the quarterly acceleration we've seen since the beginning of fiscal 2022. As you can see in the left-hand side of the slide, operating revenues have accelerated progressively quarter by quarter. This is due to solid operational improvements linked to portfolio growth, net new business, and strong efforts by our teams to convince clients to raise face values to protect their employee purchasing power. On the right, you have the financial revenues, which have been growing very strongly as rates have increased progressively around the world, first in Brazil, then in the rest of Latam and the eastern part of Europe, then in the Eurozone. We should have another very good quarter in Q4 until rates start to stabilize at these higher levels. Next slide. Here, you have the analysis between operating revenues and financial revenue for the first half, and I will not come back on it. Let's now go to revenue by service on slide 16. In slide 16, organic growth of employee benefits on the left was 28.4%. This compared to an issue volume up 17.8%, which has also accelerated quarter by quarter and is a combination of strong growth across meal, food, and gift benefits, supported by strong face value increases, portfolio growth, and solid net new business. Services diversification was up 11.9%, resulting from strong performance of fuel and mobility cards activity, as well as the positive contribution from public benefits, partially offset by a soft quarter in incentive and recognition. In Europe, Asia, and USA, organic revenue growth was 24%. This performance was consistently good across all major markets, notably in Romania, Germany, and Turkey, of course, helped by the very strong increase in euro rates year-on-year. In Latin America, organic growth was 28.1%, boosted by the strong net new business, face value increases, like-for-like volumes, and interest rates that are still increasing. I now hand you over to Sophie for an update on the spin-off and the outlook. I'm really pleased to be able to announce that we have progressed strongly on the Pluxee governance work stream. First, we have found the future chairman, Didier Michaud-Daniel, has strong leadership and operating experience as a CEO in B2B services. He will be able to support Aurélien Sonet, who is confirmed as CEO of Pluxee, in the spin-off journey. We have also appointed Stéphane Lhopiteau as CFO, who will bring his experience across different industries. Pluxee has a solid top team for this very important step. Didier is also working on building the future Pluxee board and recruiting board members. On the governance side, we have advanced strongly. We have also been making significant progress across all the other work streams. The teams are all working very hard to make the necessary progress. There are still a number of customary steps that have to be taken. I confirm that we are on track to complete the spin-off and listing of Pluxee during 2024, as we announced. Let's turn to our fiscal 2023 guidance, which we have refined to reflect the solid in-line performance of on-site services in the third quarter and strong Pluxee performance. Pluxee organic revenue growth will now be above 20%, as we don't expect any significant decline in growth in the fourth quarter. Given the better growth, the underlying operating profit margin should now be above 32% at constant rate. We maintain our group organic revenue growth at close to 11%. Just to be very clear, I remind you that the Pluxee growth had a minimal impact on the group overall revenue. for Onsite, we believe that the Q4 growth exit rate should be between 7% and 8%. As for the group underlying operating profit margin, taking into account the revised number for Pluxee, we are now at 5.5% at constant rate versus the previous close to 5.5%. Thank you very much for your attention. Now it is time to answer your questions. Operator, can you please launch the Q&A session? Thank you. This is the conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star one on their touchtone telephone. To remove yourself from the question queue, please press star two. Please pick up the receiver when asking questions. Anyone who has a question may press star 1 at this time. The first question is from Vicki Stern with Barclays. Please go ahead. Yeah, morning. I've got three questions. Just starting off with retention. I think that previously in the releases you've put that you were expecting a 95% retention for the full year. I didn't see that in the release this morning, so I just wanted to check if that still is the target. More broadly, I know this is obviously quite a key time of year for retention, so just curious how things are going on that front right now. Secondly, on the net new, so you said close to 2%. I think we all sort of expected that you'd be delivering around the 2% level. Is that coming in still a little bit light of your own expectations? If so, why is that? Is that sort of slower ramp up of the new contracts or perhaps a bigger drag from lost contracts? Just a bit more color, please, on that key KPI. Then finally, on the demerger, any other understanding at this stage you could share with us on some of the key elements? Debt allocation, you know, how the debt pushdown process is going, and particularly whether it's likely that Sodexo may end up keeping a stake in BRS. Thanks. Hello. Thank you, Vicki. I will take your first question. On retention, we didn't talk about it, but the momentum at the end of the first nine months remains solid. As we said, you know, we wanted to, we want to increase our retention from last year and the 95% retention target is still the objective for the end of the year. Yeah. On net new, nothing wrong. We said that we will have an H2 at 2%. In Q3, we are gently below 2%, and in Q4 we will be above 2%. It will make 2% for H2, so nothing special. We are in line with our expectation. On the demerger, we can't tell you more at that stage. We're still working hard on the details and. Yeah, it's too early. At a later date. Mm-hmm. Thank you. Just sorry, coming back on that retention. Given that the time of year is quite an important one for retention, just any update on, particularly in the U.S., I guess, those higher education contracts? Any update on sort of how the season's going in terms of retention, given it's such an important time of the year? Well, for university, you know, everything is pretty online, with what we expected. The only thing, and I started talking about it in H1, in North America, is we're seeing some bankruptcies in healthcare, in NorAm, and higher than it used to be. That's the only. Beside that, you know, no surprise in North America. Okay. Thanks very much. The next question is from, Julien Richer with Kepler. Please go ahead. Yes. Good morning, everyone. A few ones for me. First, in terms of the European education price negotiation contained during summer, could you please give us an update on how it is evolving, and especially in France? Second one, have you been able to quantify the positive impact of inflation on your BRS growth? Do you have any idea of the remaining potential for positive inflation impact on BRS face value in the months to come? Last, in terms of the 7%-8% OSS exit rate, in terms of organic growth that you mentioned, is there any reason for that level not to be also the one we will have at the beginning of next year? Maybe because of inflation, food inflation, that will maybe slow down a little bit, it might be below that. Thank you. I'll take the question on Europe education. It's mostly in France, Europe education, our biggest business now in education in Europe is in France. Yes, we are in the process of adjusting pricing, from a verbal agreement to a written agreement, it takes time. Right now, we are not scoring a lot of, let's say, written agreement, we will get them between now and end of calendar year. If it doesn't come this year, it will have to come at the beginning of Q1 next year. We are working hard on it's a slow process. We've made good progress in our conversations with mairie, in France, and I think we will see positive development. The inflation on BRS growth, when I look at the volume growth, it's about 8.5% year to date, so I think something like a good volume of growth in volume in BV comes from average face value increase. 7%-8% exit rate. Why we are actually qualifying this exit rate because we believe this will be the growth, it's a good indication of the growth in Q1 next year. Why wasn't, didn't we say that at the beginning, for the beginning of the year? Because our growth and our retention indicator has been improving and our development too, so which was not the case the prior year. It's ramping up, you know, of all the efforts that have been made in the last 12 to 18 months. 12 months, actually. Okay, thank you. The next question is from Jamie Rollo with Morgan Stanley. Please go ahead. Yes, thanks. Morning. Three questions for you. First, thanks for the helpful bridge on the OSS revenue. Just on the 4% from like-to-like and cross-selling, it'd be helpful maybe to break that down a bit. I'm assuming most of that like-for-like is still the return to work, but if you could sort of break it down, that would be helpful. Secondly, just on the full year margin guidance, clearly the group it's gone up and the BRS it's gone up, so has Pluxee. I just wanna double check that your original OSS margin expectations are the same as they were. There's no sort of decline there, given the comments on France and so on. Finally, there was an article on Reuters just a couple of weeks ago, quoting your Pluxee CEO talking about hiring 1,000 new tech specialists, about 20% increase in group employee count. Just wondering about any comment on that and any impact on margins. Thank you. The 4% like for like, there is clearly a return to work and good work in Sodexo Live! with lots of corporate events and attendance in stadium and concerts venues. It's true that when we were comparing it with the Q3 last year, it was not as dynamic. The like for like is very much made of those activities. As I quoted, in every region, we have better numbers in corporate services, which is very encouraging. Now, there was also a little bit of cross-selling. You know, we are aiming for 1% cross-selling year on year, and I think we are in line after P9 for cross-selling. I would say, three quarters like for like volumes and one quarter cross-selling. The group on-site margin expectations, yes, because we have a little bit more growth in Pluxee, it obviously drives a bit more operating margin. That's why we refine the UOP guidance for the group. What we're saying for on-site, is that it's in line with what we told you at the end of H1. Right now, so far, we are in line. For on the BRS question, on the comment of Aurélien on the new tech company, you know, it's a growing company, and we had a huge. Actually, we also hired, I think quite a similar number of people. It's not a net number, you know, because they are in tech and data. There are also people that, you know, sometimes leave the company. Yes, it's to, you know, support the transformation and the growth of the organization. Really in Pluxee, you know, the profile are marketing, commercial, digital data, finance. So yes, it's a, it's a big part of the, of the resource, and it's a big part of the growth and the transformation. Pluxee margins should still be at least 32% in the next financial year? Yeah, Pluxee. Oh, yeah. Pluxee margins should increase in the coming years. Great. Thank you very much. The next question is from Jarrod Castle with UBS. Please go ahead. Good morning, everyone. Three as well. I'm just coming back to Pluxee. You still retain the, you know, kind of the demerger spin-off 2024. I mean, do you think it's going quicker or a bit slower than you expected? Sophie Bellon, why aren't you chair lady, given I think you said the Bellon SA would retain at stake? Just a question around that. Secondly, M&A. You know, could we see some further M&A over the next 12 months, given at the moment, net M&A is negative? Obviously a lot of talk about economic slowdown and, you know, you obviously service a lot of different industries, and it'd be interesting to get your thoughts on how you see the economic backdrop at the moment. Thanks. On Pluxee, you know, as I said, you know, we're not, we're on track. As I said, the work stream are working very actively. I think the work stream on governance was very important. Didier Michaud-Daniel is starting Monday. Our CFO is also starting early in July. I think we are very happy with that. It is very important, you know, to get ready for the next step. We are happy with the way things go. On Bellon SA, I can only say that Bellon SA will stay an important shareholder of Pluxee. we don't have, you know, we don't have finalized all the details now, so I cannot tell you more. The third question was on M&A? On M&A, we've been working on a few things. It didn't materialize. We are still active in the U.S. on buying some assets, and we're very focused on building our convenience market share. We are active there. It's true that this is a year so far where the net is negative. There will be more M&A in the next 12 months. In a reasonable quantity. There will be more. In terms of impact of recession, I would say we are suffering a little bit in China. Part of it is because of the post-COVID situation was very fluid. Part of it is also because some of our tech clients are downsizing. We are sensing this in China. We're not experiencing the same in the U.S., we've not. We are watching it carefully, but we've not seen any signs. In Europe, we're not seeing any signs at all. Right now, I would say it's. Yeah. I t's limited to China. You know, as I explained, during the call, we've had some fantastic success in tech in India, for instance. Yeah. Globally, I don't see any signs. Locally, I would say some signs in China. Yeah. You know, I, to add to that, I say that Sodexo is a very resilient, you know, because we are in different geography and with a different situation. I think, you know, the fact that in some countries it is still difficult, you know, that's also the time when clients really look for outsourcing. For example, I can say that in Noram, this quarter, 50% of our new development came from outsourcing. I think also the context, you know, for BRS, it's a very well, a very strong environment, very supportive. The inflation, the increase of interest rates, you know, as you've seen in the figures, are really supporting the growth and the profitability. Yeah. As Marc said, not for now, we're still confident. thanks very much. The next question is from Leo Carrington with Citi. Please go ahead. Good morning. Thank you. If I could ask three as well, please. Firstly, on capital allocation, Sodexo's obviously steadily deleveraging. Could you outline the capital allocation plans that you mentioned M&A, but also in terms of looking forward to any capital return, in terms of Pluxee, would you want to establish the leverage of the Pluxee entity ahead of any further capital return or any considerations around that would be really interesting. Secondly, on the guidance itself for Pluxee, is the above 20% organic growth trying to signal some risk of slowdown in Q4? From your comments, it sounds very much not, but I think, you know, 20% itself would be hit with just 5% organic growth in Q4. Any comments on the near-term outlook would be great. And lastly, in terms of the pricing of just above 5%, how do you see this tracking into Q4 and 2024? Clearly, you know, slowing inflation is a theme, and be interested to hear how you think your pricing mechanisms will react to that. Thank you. On the capital allocation, shareholder returns, leverage of Pluxee, I think it's too early for me to comment, and we'll provide you more comments with the annual results. On the guidance for Pluxee, earlier we were at close to 20%. It's clear that with the momentum we've seen after the first nine months, the close to 20% is too pessimistic, so we said above 20%. Pluxee is also facing a stronger Q4 like-for-like base from last year, the interest rate that started to go up and so forth. I think close to 20% is right. Now the question is how much higher than 20%, but we will see that at the end of Q4. On pricing. Just to conclude, I'm not expecting a slowdown in Q4, but 24%, 25% is pretty high. But it's just a like for like base comparison. On the pricing, as we said in H1, at the end of H1, pricing is more dynamic in Q3 and Q4 in H2, so we are above 5%. I think it will ease gradually during 2024. You know, we said that earlier, that our expectation of pricing was 2%-3%, 3% maybe. It will start at a higher point and gradually decrease, over 2024. Thank you. Thank you. The next question is from André Juillard with Deutsche Bank. Please go ahead. Good morning. Just one question from you about governance. Did you change anything in your view about the cross participation between the Bellon SA and Sodexo? Do you have a clear idea with Pluxee as well? Thank you. No, we are not changing. You know, it's a, it's a very separate operation, so we are not changing anything at this moment with the, with the cross-holding participation. The fact that, with Sofinsod. We are not changing anything. Regarding Pluxee, still too early to have some clarification? What do you mean clarification on Pluxee? What's? Well, you were mentioning that the Bellon SA would remain an important shareholder, but is there any quantification we could have? Bellon SA shareholding in Sodexo is meant to be the same tomorrow. The proportions will be the same. You know, they will. If we distribute 100 shares, they will get 42.8% of the shares we distribute. Depending on how many we are distributing, their contribution into the float will be the same. Okay. Obviously, it all depends whether it's a full or partial spin-off, and this is too early for us to comment on that, so. Okay. As a reminder, if you wish to register for a question, please press star and one on your telephone. Once again, if you wish to ask a question, please press star and one on your telephone. The next question is from Estelle Weingrod with JP Morgan. Please go ahead. Hi, good morning, everyone. Just a quick question from me. I know there's been some recent events in France in the last couple of days. I mean, what can you say about it? Can you quantify what sort of impact it could have in, I don't know, within education or somewhere? Thank you. We're very much at the end of the school year in France. You know, students are already into exams mode and end of the year. We're not expecting much impact on education. Now, if there was a shutdown of La Défense, there would be some impact, but, I mean, it's too early to comment on this. Yeah. So far we have not seen. Any impact? It really depends of the level, you know, of. It can impact, you know, work in the office. Schools, as Marc said, it's the end of the year, so it should not impact more and. I think it's, yeah. So far, it's good. Okay, thank you very much. For any further questions, please press star and one on your telephone. There are no more questions registered at this time. I turn the conference back to you. Okay. Thank you all for being with us this morning. Looking forward to talking for the year end on the 26th of October. Take care. Bye-bye. Thank you very much. Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.