Sodexo Announces 9.2% Organic Revenue Growth for First-Half Fiscal 2008

Regulatory News: -- Food and Facilities Management Services: -- Robust performance in North America -- Organic growth accelerating in Continental Europe -- Strong contribution from 2007 Rugby World Cup corporate hospitality contract -- Increased growth momentum in Asia, Latin America and Remote Sites -- Service Vouchers and Cards: continued strong growth SODEXO (PARIS:SW) (OTCBB:SDXAY), a world leader in Food and Facilities Management Services, today announced consolidated revenue for the first half of Fiscal 2008, ended February 29, 2008. Revenue by activity (in millions of euro) First Half Fiscal 2007   First Half Fiscal 2008   Organicgrowth (1)   Currency impact (2)   Acquisitions   Total change Food and Facilities Management Services:             -- North America 2,890 2,759 5.8 % -10.9 % +0.6 % -4.5 % -- Continental Europe 2,236 2,416 8.0 % +0.1 % -0.1% +8.0 % -- UK and Ireland 720 827 22.3 % -7.4 % - +14.9% -- Rest of the World 766 816 11.2 % - 3.6 % - 1.0 % +6.6%   6,612   6,818   9.0 %   -6.0 %   +0.1%   +3.1 % Service Vouchers and Cards 211   267   17.3 %   - 1.6 %   +10.5 %   +26.2% Intra-group eliminations -4   -5                 TOTAL 6 ,819   7, 080   9.2 %   - 5.8 %   +0.4 %   +3.8 % 1) Organic growth: revenue growth, at constant scope of consolidation and exchange rates. 2) The currency impact was a negative -5.8%, but contrary to exporting companies, the revenues and expenses of Sodexo subsidiaries are denominated in the same currency. Consequently, foreign exchange variations do not result in operating risks. Commenting on revenues for the first half of Fiscal 2008, Sodexo’s CEO Michel Landel said: "Sodexo’s organic growth continued to gather pace, reaching 9% compared with 8.2% for the first-half of last year. This renewed performance is a clear illustration of our solid position permitting us to expand in high potential markets that are less subject to cyclical swings: we accelerated our penetration of growth markets such as healthcare and education, bolstering our worldwide position in Facilities Management and Service Vouchers and Cards and benefited from significant growth drivers around the world. Let me remind you Sodexo does business locally and unlike exporting companies, revenues and operating expenses of our subsidiaries are in the same currency. Negative exchange rate variations recorded in this first half (-5.8%) only reflect a translation impact on our financial statements and therefore do not represent any operational risk. The strong performance of our teams in this first half gives us confidence that we will achieve our objectives for the current fiscal year of annual organic revenue growth of more than 7%, and around 12% for operating profit, at constant exchange rates, despite existing uncertainties in the current economic environment.” Analysis of organic revenue growth See table in appendix 2 and selected new customer wins in appendix 3. Food and Facilities Management Services North America (+5.8%): continuing strong performance in Healthcare and Seniors and good growth in Business & Industry Continental Europe (+8%): further demonstration of Sodexo’s leadership in high growth potential Healthcare and Education segments United Kingdom and Ireland (+22.3%): strong impact of 2007 Rugby World Cup corporate hospitality contract Rest of the World (+11.2%): accelerating activity in Latin America, Asia and Middle East, and in Remote Sites In North America satisfactory growth in the Business & Industry (+4.5%) was achieved through improved client retention during the previous year and a number of new contracts won in fiscal 2007, including USAA, Pfizer and Sanofi. Activity levels in Leisure were also strong with increased attendance at many sites. New business development was encouraging, including the contract won with the Dallas Museum of Art. The 8.5% organic growth in the Healthcare and Seniors segments mainly reflects increased comparable unit growth as a result of an offering carefully adapted to clients’ and patients’ needs, and also the ramping up of contracts that began in fiscal 2007. New clients that have chosen Sodexo include Asbury Methodist Village (Gaithersburg, Maryland), Acute Care Hospitals (Minneapolis-Saint Paul, Minnesota) and Marin General Hospital (Greenbrae, California). Education grew by 4.4% as rising student enrollment generated healthy comparable unit growth on university campuses. Growth in Facilities Management Services was more moderate in comparison to the first half of Fiscal 2007 that had included reconstruction projects following the Louisiana hurricanes. Application of revenue recognition criteria on certain contracts also weighed on the growth rate. Sodexo won several distinctions in North America, including: In the US, Sodexo was named "One of the Top 200 Intern Employers” for 2008 and "One of the Top 50 Entry Level Employers”, as identified by CollegeGrad.com in recognition of its efforts in favour of development and training programs designed to create a professional path in the company. In Continental Europe several countries and activities contributed to the 6.6% growth in Business & Industry, almost twice the pace registered in the first half of the previous fiscal year. This performance was driven notably by: the KLM contract in the Netherlands, in Facilities Management Services, sales wins in Central Europe, notably in Poland, in Spain, and in Scandinavia, in both Business & Industry and in Defense, a very good performance within Leisure activities in France, with the Paris Lido, Bateaux Parisiens and the Eiffel Tower. Recent contracts won include Gillette Deutschland GmbH in Germany, Telenor in Norway, GE Healthcare in Sweden, Continental in France and Moscow City Block C in Russia. The 9.3% growth in the Healthcare and Seniors segments reflects the previous year’s sales successes, especially in France, Spain, and Sweden. Recent wins include the Albert Schweitzer Hospital in Dordrecht (Netherlands) and the Centre Hospitalier Sud-Francilien (a major hospital in the Paris region) in France and Hospital San Juan de Dios in Spain. The growth in Education (+11%) reflects improved client retention and sales made in fiscal 2007, especially in Italy, the Netherlands and Germany. New clients include UT Twente Enchede (Netherlands) and the schools managed by Sète Town Council (France). Distinctions received by Sodexo’s Continental European teams included in Poland, Sodexo’s ranking for the second year in a row as the first company in Facilities Management and Foodservices categories in the "Book of Lists 2008” published by the Warsaw Business Journal. In the United Kingdom and Ireland Business & Industry registered 29.3% growth as a result of the corporate hospitality contract for the 2007 Rugby World Cup in the first quarter. This contract was for the sale of hospitality programs for corporate clients and travel services. Sodexo also provided Foodservices at several stadiums in connection with the World Cup. While the Business & Industry segment was not as dynamic, there was significant growth in Defense with the ramping up of the Sovereign Base contract in Cyprus and growth in Correctional Services activities. Recent contract gains include a contract extension with Glaxo Smith Kline South, Newcastle Building Society in Newcastle and the Scottish Courts. In the Healthcare segment, revenues mostly come from large Public-Private Partnerships (PPP) where growth is less linear. The growth in Education (+6.2%) reflects both recent contract wins in universities and the success of offerings in schools and confirms the return to growth. New contracts won include the Prior Pursglove College in Guisborough and the London School of Pharmacy. Distinctions won by Sodexo in the United Kingdom and Ireland include: Sodexo has been selected as an official partner for nutrition for the Year of Food and Farming campaign that aims to explain children the importance of a balanced diet and quality of countryside food. Sodexo Ireland was awarded the prestigious Hotel and Catering Review Gold Medal Award in the Industrial Catering category for 2007. Hotel & Catering Review is one of Ireland's leading magazines for the hospitality sector Business and Industry teams in Scotland received the 'Hospitality Assured Award' for the second year running. In the Rest of the World Food and Facilities Management Services registered 11.2% revenue growth. In Remote Sites and in Latin America, the continuing strength of raw materials prices boosted ongoing growth. The impact of construction project completions in Africa and the Far East which slowed growth in the first months of the fiscal year is now starting to fade, as forecast, resulting in an acceleration of revenue growth. Sodexo won several significant contracts; for example with Seadrill, which has made Sodexo its partner for services aimed at improving living conditions on its numerous barges across the world. Other new contracts were signed with Woodside Petroleum and Pilbara Iron Company in Australia as well as mining companies Antofagasta Minerals, Los Pelambres and Esperanza as well as BHP Billiton Escondida in Chile. Sodexo continued its rapid expansion in Asia, particularly in China and India where the company continued to achieve a high level of growth. New contract awards include HSBC Tseung Kwan O and SVA Fujifilm Opto-Electronic Materials Co. Ltd in China and Unilever and Tata Consultancy Services in India. Finally, Sodexo received a number of recognitions, including: In Brazil, Sodexo received for the third consecutive year the "Top Hospitalar 2007” Award in the Outsourcing Company category, the highest national recognition in the hospital sector. As recognition to its business contribution to Peruvian educational and cultural development, Sodexo was awarded the Luis Hochschild Plaut prize, Medium-size Company category. In China, Sodexo won the "Award of Best Partnership” from its client Sinopec Qingdao Refining & Chemical Co. Ltd. Sodexo has been awarded with several recognitions in the field of safety: In Madagascar, Sodexo has been recognized by its client Rio Tinto for its contribution to achieving 1,000,000 hours worked with no lost time injuries. In Chile, Sodexo has been recognized by ACHS (Safety Chilean Association) for reaching the significant milestone of 4 years without accident. In Colombia, Sodexo was recognized for 1 year without accidents on the Argos site. Service Vouchers and Cards Service Vouchers and Cards registered a strong increase in issue volume which was close to 5 billion euros for the first half of fiscal 2008. It includes since January 2008 the contribution of the new contract won with the Office pour l’Emploi en Belgique (Belgian Labor Bureau) for Home Service Vouchers, and volumes from Tir Groupé, which was acquired in October 2007. On March 3, 2008, Sodexo completed the acquisition of Grupo VR’s Service Vouchers and Cards activity in Brazil, making Sodexo the leader in the Service Vouchers and Cards business in Brazil, the world’s largest market in this activity. Sodexo’s total issue volume in Brazil represents 2.3 billion euro. VR will be consolidated from March 3rd, 2008. Organic growth: + 17.3% The following factors contributed to vigorous organic growth during the period: Increased numbers of beneficiaries in many countries such as Venezuela, Robust sales development based on innovative offerings in Europe (gift passes, motivation and assistance passes). Recently, a number of clients have put their confidence in Sodexo Service Vouchers and Cards including Telekomunikacja Polska in Poland (Gift Pass, 11,400 beneficiaries), Colruyt in Belgium (Meal Pass, 1,300 beneficiaries), AGIRC-ARRCO in France (CESU-Home services voucher, 20,000 beneficiaries) and Shanghai Huizhong Automotive in China (Gift Pass, 5,600 beneficiaries). Other major events The Group has been honoured with a triple distinction, in Sustainable Asset Management’s (SAM) 2008 "Sustainability Yearbook," which identifies companies that combine economic performance with sustainability, among the world's 2,500 largest corporations. Sodexo was named SAM Worldwide Supersector Leader 2008, SAM Gold Class 2008 and SAM Sector Mover 2008. Sodexo is the only France-based company among the 10 global leaders. Sodexo was included in the FTSE4Good index after the March 2008 review, confirming its commitment to meet social, ethical and environmental criteria of the FTSE Group. Since the creation of the FTSE4Good index in 2001, Sodexo has always been included. First-half fiscal 2007-2008 results Following approval by the Board of Directors, first-half results will be published on April 17, 2008. Publication will be followed by a conference call. Telephone conference call SODEXO will hold a conference call by telephone to comment on its revenues for the first half of Fiscal 2008, at 8:30 am (French time) today. Persons wishing to take part are invited to dial + 33 1 72 28 08 88. The press release and presentation of results will be available for consultation on the Group website: www.sodexo.com, under "latest news” beginning at 7:00 am. A recording of the conference call will be available by dialing +33 1 72 28 01 49, code 217 729#. About SODEXO SODEXO was founded in Marseille by Pierre Bellon in 1966. It is the world leader in most of its Food and Facilities Management markets, employing more than 340,000 people on 29,300 sites in 80 countries. SODEXO reported revenues of 13.4 billion euros for fiscal 2006-2007, which closed August 31, 2007. The Group is listed on Euronext Paris, with a current market capitalization of 6.21 billion euro. This press release contains statements that may be considered as forward-looking statements and as such may not relate strictly to historical or current facts. These statements represent management's views as of the date they are made and we assume no obligation to update them. You are cautioned not to place undue reliance on our forward looking statements. Appendix 1: Comparison of Consolidated Revenue             2006/2007 2007/2008     FIRST QUARTER (Sept. to Nov.) . Food and Facilities Management - North America 1,541,151 1,486,082 - Continental Europe 1,151,281 1,240,430 - United Kingdom and Ireland 365,713 499,606 - Rest of the World 396,810 416,220 . Service Vouchers and Cards 98,321 122,754 .Elimination of intragroup Revenue (1,765) (2,231) 3,551,511 3,762,861   SECOND QUARTER (Dec. To Feb.) . Food and Facilities Management - North America 1,348,714 1,273,319 - Continental Europe 1,084,770 1,175,216 - United Kingdom and Ireland 354,209 327,209 - Rest of the World 369,136 400,186 . Service Vouchers and Cards 112,899 143,876 .Elimination of intragroup Revenue (2,106) (2,885) 3,267,622 3,316,921     % Variations atcurrent at constant TOTAL HALF YEAR exchange exchange rates rates . Food and Facilities Management - North America 2,889,865 2,759,401 -4.5% 6.4% - Continental Europe 2,236,051 2,415,646 8.0% 8.0% - United Kingdom and Ireland 719,922 826,815 14.9% 22.3% - Rest of the World 765,946 816,406 6.6% 10.2% . Service Vouchers and Cards 211,220 266,630 26.2% 27.8% .Elimination of intragroup Revenue (3,871) (5,116)     TOTAL 6,819,133 7,079,782 3.8% 9.6%     This growth is made up as follows : - Organic growth 9.2% - Acquisitions (*) 0.4% - Currency effect -5.8% (*) net of disposals Appendix 2: Food and Facilities Management services by segment Consolidated Group   In millions of euro First Half 2006-2007   First Half 2007-2008   Organic Growth (1)     -- Business and Industry 3 184 3 406 10,8 % -- Healthcare 1 660 1 679 8,4 % -- Education 1 768   1 733   6,2 % TOTAL 6 612   6 818   9,0 %   North America   In millions of euro First Half 2006-2007   First Half 2007-2008   Organic Growth (1)   -- Business and Industry 649 628 4,5 % -- Healthcare 995 968 8,5 % -- Education 1 246   1 163   4,4 % TOTAL 2 890   2 759   5,8 %   Continental Europe   In millions of euro First Half 2006-2007   First Half 2007-2008   Organic Growth (1)   -- Business and Industry 1 308 1 395 6,6 % -- Healthcare 516 565 9,3 % -- Education 412   456   11,0 % TOTAL 2 236   2 416   8,0 %   United Kingdom and Ireland   In millions of euro First Half 2006-2007   First Half 2007-2008   Organic Growth (1)   -- Business and Industry 522 635 29,3 % -- Healthcare 119 113 1,8 % -- Education 79   79   6,2 % TOTAL 720   827   22,3 %   Rest of the World   In millions of euro First Half 2006-2007   First Half 2007-2008   Organic Growth (1)   -- Business and Industry 705 748 10,8 % -- Healthcare 30 33 12,7 % -- Education 31   35   18,5 % TOTAL 766   816   11,2 % Appendix 3: Selection of new clients Food & Facilities Management services North America Business & Industry Lowe’s Companies, Inc., North Wilkesboro, North Carolina (Vending services); Principal Financial Group, Inc., four sites (7,230 customers, Foodservices); U.S. Army Medcom, ten hospitals (201,000 patients, Foodservices); Dallas Museum of Art, Dallas, Texas (2,040 customers/day, Foodservices) Healthcare and Seniors Acute Care Hospitals, Minneapolis/St Paul, Minnesota (436 beds, Foodservices); Marin General Hospital, Greenbrae, California (235 beds, Food and Facilities Management services); Asbury Methodist Village, Gaithersburg, Maryland (1,571 residents, Food and Facilities Management services); New Hanover Regional Medical Center, Wilmington, North Carolina (628 beds, Foodservices); Georgetown University Hospital, Washington, DC (386 beds, Facilities Management services) Continental Europe Business & Industry Siemens Elektromotory S.R.O., Czech Republic (1,800 employees, Foodservices); Finnair, Finland (Facilities Management services); CNES, Kourou, France (Food and Facilities Management services); Continental, France (1,200 employees, Foodservices) ; Gillette Deutschland GMBH &CO. OHG, Germany (1,200 employees, Foodservices); Solvay, Netherlands (500 employees, Food and Facilities Management services); Telenor, Norway, (5,800 employees, Foodservices); Somacca Renault, Morocco (Foodservices); Moscow City Block C, Russia (8,700 employees, Foodservices); GE Healthcare, Sweden (1,000 meals/day, Foodservices) Correctional Services Justizvollzugsanstalt, Germany (600 people, Foodservices) Defense Försvaret Gtbg, Sweden (1,500 meals/day, Foodservices) Healthcare and Seniors AZ ST Maarten, Belgium (Foodservices); Centre Hospitalier Sud Francilien – Site Gilles de Corbeil, France (382 beds, Foodservices); Clinique de l’Estrée, France (541 meals/day, Foodservices); Clinique Sainte-Marie, France (125 beds, Foodservices); Centre Clinical de Soyaux, France (87 beds, Foodservices); Adapei 22 – ESAT Les Ateliers Briochins, France (108 people, Foodservices); Polyclinique Vauban, France (420 meals/day, Foodservices); Albert Schweitzer Ziekenhuis, Netherlands (1,500 beds, Foodservices); Hospital San Juan de Dios, Spain (150 beds, Foodservices); Hospital Parque San Antonio, Spain (55 beds, Foodservices); Education Mairie de Sète, France (2,000 meals/day, Foodservices); UT Twente, Netherlands (10,000 students, Foodservices) Remote Sites Seadrill, Norway (14 offshore units, 375 people, Food and Facilities Management services) UK & Ireland Business & Industry Newcastle Building Society, Newscastle, UK (500 people, Food and Facilities Management services); Scottish Courts, Scotland (three sites, 500 people, Foodservices) Healthcare and Seniors Walsall Metropolitan Borough Council, Walsall, UK (100,000 meals/year, Foodservices); Fournier Laboratories Limited, Cork, Ireland (170 people, Foodservices); Dairygold Food Ingredients, Cork, Ireland (300 people, Foodservices) Education Prior Pursglove College, Guisborough, UK (1,000 students, Foodservices); London School of Pharmacy, London, UK (150 students, Foodservices) Rest of the World Business & Industry AXA, Melbourne, Australia (1,800 people, Food and Facilities Management services); Emerson Process Management Flow Technologies Co., Ltd., China (100 people, Food and Facilities Management services); Saint-Gobain Performance Plastics Co., Ltd., China (200 people, Foodservices); SVA-Fujifilm Opto-Electronic Materials Co., Ltd., China (350 people, Foodservices); HSBC-Tseung Kwan O, China (800 people, Foodservices); Nokia, India (30,000 people, Foodservices); Tata Consultancy Services, India (24,000 people, Food and Facilities Management services); Unilever, India (300 people, Facilities Management services) Healthcare and Seniors Bumrungrad Hospital, Bangkok, Thailand (500 beds, Foodservices) Remote Sites Woodside Petroleum, Australia (1,350 people, Food and Facilities Management services); Compania Minera Los Pelambres, Chile (3,000 people, Food and Facilities Management services) ; Minera Escondeda, Campamento 2000, Chile (2,300 people, Food and Facilities Management services) ; Proyecto Esperanza, Chile (3,000 people, Foodservices); SNC Lavalin, Qatar (300 people, Facilities Management services); Global Santa Fe, Saudi Arabia (250 persons, Foodservices); Service Vouchers and Cards CENTRAL EUROPE: Bulgaria: British American Tobacco (Meal Pass, 260 beneficiaries) Czech Republic: Unipetrol (Leisure Pass) Poland: KGHM Polska Miedz (Gift Pass, 4,300 beneficiaries); Telekomunikacja Polska (Gift Pass, 11,400 beneficiaries) Romania: General Authority of Social Assistance and Children Protection (Gift Pass, 620 beneficiaries) WESTERN EUROPE: Belgium: Allianz (Meal Pass, 1,000 beneficiaries); Colruyt (Meal Pass, 1,300 beneficiaries) France: AGIRC-ARRCO (CESU, 20,000 beneficiaries); LCL (Meal Pass, 1,000 beneficiaries); PSA (CESU, 150 beneficiaries) Luxembourg: Citibank (Meal Pass, 330 beneficiaries) Spain: Axa (Meal Pass, 300 beneficiaries); Philips (Meal Pass, 100 beneficiaries) Tunisia: Henkel (Meal Pass, 140 beneficiaries) Turkey: Sandoz –Novartis Group (Meal Pass, 200 beneficiaries) LATIN AMERICA: Brazil: Contax (Food Pass, 14,000 beneficiaries); Defensoria Pública do Rio de Janeiro (Meal Pass, 710 beneficiaries); Universidade do Estado do Para (Food Pass, 1,485 beneficiaries) Chile: Junaeb (Solidarity, 40,000 beneficiaries) Mexico: Comisión Nacional Bancaria y de Valores (Food Pass) Uruguay: UCAA (Food Pass, 51,000 beneficiaries) Venezuela: Government of Merida (Food Pass, 14,000 beneficiaries) ASIA: China: Shanghai Huizhong Automotive (Gift Pass, 5,600 beneficiaries) India: United Beweries Group (Meal Pass, 250 beneficiaries); Xansa (Meal Pass, 2,000 beneficiaries) Indonesia: Microsoft (Gift Pass, 200 beneficiaries)