Sodexo S.A.

Pierre Benaich - Investor Relations Michel Landel - Chief Executive Officer Sian Herbert-Jones - Chief Financial Officer

Jaafar Mestari - JP Morgan Vicki Stern - Barclays Sabrina Blanc - Societe Generale Ian Rennardson - Jeffery Jarrod Castle - UBS Guillaume Rascoussier - Exane Jamie Rollo - Morgan Stanley Nadia del Kasir - Berenberg

Thank you, good morning all, Pierre Benaich speaking. Welcome to our nine-month revenue call for fiscal '15.

On the call today are Chief Executive Officer, Michel Landel; and Chief Financial Officer, Sian Herbert-Jones. The slide and press release as usual can be downloaded from the Web site and most of you have received those.

We also run the live audio webcast, available on the Web site. There will be an audio reply of this call later today after 10:30 AM Paris Time.

And to replay, please dial 44-1452-550-000, and the access code will be 68529059 and that will be available through to July 23. The webcast will be archived on the web for the next 12 months.

This call is being recorded and may not be reproduced or transmitted without our consent. As you all know, this call relates only to revenues, and we want to today discuss our profit performance.

This presentation 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. I would now like to turn the call over to Mr.

Michel Landel.

Thank you Pierre, and good morning everyone. Thank you for joining, Sian and I, this morning for this conference call.

So if you move on Slide 5, you can see that for the first nine months, Sodexo delivered a set of revenue numbers that are in line with our performance over the last couple of quarters. Our total revenue are up by close to 10%, driven by an organic performance of 2.2 and a positive currency effect of 7.3% spending primarily from the U.S dollar, and the pound.

So now if we go to Slide 6, you can see that our organic growth performance is split between 1.9% on On-Site services and a solid 9.1 progression for benefits and reward services. So at 1.9%, our On-Site activity organic growth is overall much in line with trends similar to the first half in many geographies but also reflects an ever more challenging environment in Latin America and in some parts of Europe.

However, on the encouraging side, facilities management globally continues to grow strongly up more than 6%. In Benefits and Rewards, our growth is at 9.1%, and the dynamics in benefits and rewards remain particularly strong despite some slowdown in momentum in Brazil.

Indeed, in Brazil our growth in this activity remains double-digit, but it is now in the low teens as opposed to the high teens recorded in fiscal '14. As you are all aware, our group organic growth has also been impacted by our choices to exit some underperforming contracts and activities in the context of our operational efficiency program.

These choices has impacted our organic revenue growth by over €135 million for the nine months. So excluding these impacts, our organic revenue growth would be around 100 basis points higher or above 3%.

So, let me rapidly now share with you some of our recent commercial successes that frankly reinforced my confidence in the relevance of our strategy of quality of life services. On the corporate side, we have signed the House of Representatives in Washington DC which is a very prestigious reference in food service in America.

And a few other references, Lacoste here, full quality of life services, Unilever in Asia which is an addition of our full integrated service contract in Europe, in America, and in some parts of South America, and Zurich Insurance in the U.S on five sites with full quality of life service offering, very comprehensive here. In healthcare, we have had some good success in the States.

LHP Group in Texas which also is a fully integrated service contract, and as we said in previous quarter, we continue to see good development in emerging markets. So we signed a new contract in Singapore, continuing our development in Brazil as well, this specific contract in Brazil is a very large, 1,400 bed hospital.

In education, in the U.S, we've signed also a few nice contracts, and in the UK as we've seen also in the previous quarters, we've seen some development and we signed this very prestigious account, Wycombe Abbey, and also continuing developing our business in emerging markets in Asia, specifically with developments in Hong Kong with this North Penglia International School. In remote sites, we have expanded our contract with Shell, which is a full also IFM integrated facility management contract.

This is very good news for us, and benefits and rewards as you see, very good performance. The first example here, hospital Santa Paula is a very good example of synergies between On-Site services and benefits and rewards.

Following our New York quality of life conference in May, the owner of this hospital has decided to extend the full scope of services to Sodexo which is a great win. And as we said also business is growing fast in Turkey, I think we had over 20% organic growth for that last quarter in Turkey.

So at this stage, I would like now to hand over to Sian to comment on revenue numbers in more details. Sian?

Thanks Michel, good morning to you all. Let me start by commenting on our On-Site services revenue numbers for the nine months by geography, and as Michel already said, our trends are very much in line with the half year numbers that we shared with you back in April.

With 10% organic revenue growth, the UK and Ireland remains year-to-date our top performing geography. Growth has accelerated in the nine-month numbers compared to the 8.4% achieved in the first six months of the fiscal year.

In this geography growth comes from all segments and it's driven by the relevance of our quality of life positioning with clients as a real integrator of services. Acceleration in the last quarter is largely driven by the ramp up of our business and justice services.

As we told you in April we commenced our work under the UK government transforming rehabilitation program in six UK regions at the beginning of February 2015. In North America our organic growth has been 1.4% for the nine months.

Once we achieved solid performance in corporate. Terms have continued to be modest in the last nine months both in healthcare and in education.

But in healthcare as expected we've returned to positive growth in the last three months as the impact of the late fiscal '14 exit from our ManorCare contract is progressively being offset by other new business. In Continental Europe our revenues for the nine months are broadly flat versus the prior year, so a trend similar to the first half and this continues to reflect decreasing volumes in food services in most countries but is continuing to be largely offset by our solid growth in facility management services.

As Michel said for the group as a whole growth in facility management is about 6%. Finally in the rest of the world which as you know includes Asia, Australia, Latin America, Africa and the Middle East and also our remote site activities across the world.

In this region our nine months revenue growth stands at 3.1%. It's now around 1% weaker than that achieved for the first six months of the year and the macro environment is proving increasingly challenging principally in two countries Brazil and Chile.

In Brazil our industrial and even FMCG clients have significantly reduced their activity levels often by 10% or 20%, and in Chile client concerns over potential social or fiscal reform are now weighing increasingly on our growth rate. If we move on to Slide 11 and look at our organic growth by client segment you can see in corporate and I remind you that corporate includes defense, sports and leisure, justice and remote sites.

Our organic growth has been close to 4% and this solid growth reflects the strong contribution of our integrated Quality of Life service offers. Most particularly in North America where growth stands at 6% and in the UK and Ireland it achieved over 10% growth.

This solid level is also driven by a return to growth in remote sites with a confirmed momentum this year it's now up for the nine months by 7.3%. In healthcare and seniors our Group wide revenues are up 0.4%, as I said this reflects on the current growth of around 1% in the last three months as the impact in the USA of our ManorCare contract is progressively being offset by new business development.

In Europe our performance remains weak but in emerging markets our revenue growth albeit still slow at the scale of our Group remains very robust, particularly in Brazil and other parts of Latin America. In education our revenues are down slightly minus 0.3%, here again revenue performance for the last three months has improved as expected versus the tension of the six months.

The impact of last year's decisions of non-renewal of some school business is Southern Europe weighs less significantly on our third quarter. However, the prior exit from Detroit Public School to the U.S.

given the solvency issues still weighs on a North American numbers. Looking now to our top-line revenue performance in more detail by geography.

As you can see Slide 12, revenues in North America was €6.2 billion. But as I said, organic growth of 1.4%.

We also benefit from more than 15% of positive currency movement year-on-year, so total growth is over 16%. In corporate services, our organic revenue growth trend has continued to be very solid, up 6% for the nine months.

Our growth comes mainly from new business and from the expansion of our service offering and facility management services including technical services or hard FM, providing to a prestigious array of clients including Alcatel-Lucent, Boeing, Disney Resorts, Bloomberg and Citibank. In Healthcare and Seniors, revenues decreased by 0.1%.

And as I said earlier and would repeat again, the ManorCare partial exit as well as discontinuation of some laundry industrial facilities weighs less on our last three months performance. In education, organic growth for the nine months stands at 0.2%, Q2 in the last quarter we’ve seen a slight uptick in growth.

This includes solid increases in student participation on school sites in the U.S. and the increased sales of board plans in universities across North America.

On Slide 13, you’ll see that the Continental Europe revenues reached €4.4 billion. This is broadly in line both with the prior year comparable period and also our growth for these nine months is similar to the last year in first half.

Our performance continues to be varied by geography, indeed in the last few months growth to Sodexo has proved to be more challenging than we have foreseen in some countries, particularly the France and in the Netherlands. Client downsizing, client budget cuts, continued to prevail and weigh on our food volumes that are still declining by around 4%, notably in Italy, France, and Finland.

On a brighter note, Sodexo’s success in more comprehensive facility management and technical services has helped offset these factors. In Corporate Services, our organic growth in the first nine months stands at 2%, thanks to new business and integrated food and facility contract ramp up, particularly with international clients such as GSK in the Belgium, Johnson & Johnson or indeed Carlsberg.

In Healthcare and Seniors our revenues were down versus the prior by 3.3%. In a complex environment where short-term outsourcing demands drivers remains still too weak, where maintaining our selected stance regarding new business with strong commercial profitability and cash flow requirements.

That said future growth is fuelled by recent new business wins in Sweden, such as Ostergotland Hospital and also with the signature of a further medical aid equipment contract in Sweden. These new business wins will give a boost to healthcare revenues in Europe in the last quarter of our fiscal 2015 and also beyond.

In Education, our revenues were down 3.1%, these reflects pressures on public sector budgets throughout Europe and our fiscal 2014 choices made last year not to renew several contracts at lower prices across Europe, notably in the public sector and in Italy. In these markets, we remained vigilant so to ensure that our quality of life offering is valued at the appropriate price.

Contract exit dates means that these prior year effect should neutralize and growth is scheduled to strengthen in the next quarter and the last three months of this fiscal year. Let me turn now on Slide 14, to our operations and growth trends in the rest of the world.

Our revenues were close to €2.6 billion, and I said previously the organic growth stands at 3.1% after nine months as compared to 4.1% after six months. Our growth in remote sites continues to back to positive territory; it stands at 5.1% within these regions.

This is driven by new business wins in energy, infrastructure, and with some mining clients, for example, Woodside Energy and BHP in Australia and Compania Minera Nevada in Chile. It also includes good short-term barge activity in the North Sea.

The drop in oil prices doesn’t yet effect of our growth in this sector, but current increase in offshore and onshore exploration projects will understandably weigh on our remote site development rates in fiscal 2016. Over to remote site sector, growth in corporate in the rest of the world has fled down in this last quarter.

Now also organic growth has remained solid double-digit in Southeast Asia, we've seen a more serious deceleration in our activities in Brazil and Chile as I said earlier. Indeed growth in the rest of world has decelerated by around the 100 basis points in the last three months and since the end of the first half.

These worsening economic challenges impact our current view on fiscal 2015 revenue growth outlook as Michel will shortly explain. That said our new business momentum in these geographies remained encouraging and still very solid.

We've had new client wins such as Vipshop in China, with Heinz in Brazil and Hyundai in the UAE. In healthcare and seniors our organic growth continues strong it's actually reached an impressive 20.3%, benefiting from the continued leverage of our global healthcare expertise and solid new business wins and development in Latin America, notably in Brazil.

In education, our growth also remains very robust at 5.5%, driven by good performance both in India and in Latin America. To conclude with our On-Site activity, let me now comment our revenue growth in the UK and Ireland.

Slide 15. Our revenues reached €1.3 billion, and as I said earlier our organic revenue growth was a solid 10%.

This is driven by stronger client retention but above all from significant growth coming from new contract awards. In corporate services our growth stands at 10.3% driven by the strength of our offering and facility management and technical services, new and existing business in corporate services for clients such as GSK, Rexam, Carlsberg and more recently with DSU.

In corporate our growth is also driven as I said earlier by successful new business awards and in justice services. We started globalizing six of the community rehabilitation company contracts part of transforming rehabilitation on the 1st of February, and this reform program is aimed at changing the way offenders are managed in the community, so as to bring down reoffending rates.

Year-to-date the impact of this contract is close to €50 million and full year the impact is around 100 million. In healthcare our organic revenue growth is also double-digit, actually 11.9% and this is both thanks to a ramp up of PFI coming forward in the previous years, as well as a new contract awards at the Imperial College Healthcare which covers six hospitals sites in Central London.

Finally in education our growth is 3.9%, so back to positive and our teams have had encouraging successes over the last 12 months, particularly in the University market, including a University College in London, City of London University and in the independent school sector as Michel said Wycombe Abbey. Turning now to benefits and rewards, which is a key component of our overall Quality Of Life services offering.

The dynamics here remains particularly strong as you can see on Slide 17. Our issue volume has been €12.8 million with organic growth of 7.6% and our revenues up €636 million which represents revenue growth for the nine months of 9.1%.

This very strong and sustained performance is driven again primarily by our chosen presents and investments is high performing teams in Latin America. Market research, innovation and technology continued to drive growth; digital solutions also declined consumers and affiliates today accounts for close to 65% of this activity.

In Latin America our organic growth remains very solid, is 11.8% for issue volume and close to 15% for revenues as you can see on Slide 18. This growth is driven around 80% by ongoing face value increases in Brazil and Venezuela, and this also takes accounts of recent interest rate revenues a short-term benefit.

The remaining growth component represents new business and cross selling successes notably in Chile. In Europe and Asia organic issue volume growth is 4% and organic revenue growth stands at 2.7%.

This overall performance includes encouraging new business trends in Turkey, in Central Europe for example in Romania and also very encouraging double-digit growth in Asian markets such as India and China. Thank you for listening to these comments on our nine months revenue performance.

And let me now hand back to Michel to give some closing remarks and to conclude on our outlook for the full fiscal 2015 year.

Thank you Sian, thank you for this detailed overview. I also would like to take the opportunity to thank our team around the world that remained very focus on our business demonstrating the value of Sodexo positioning in a very volatile and changing world.

At Sodexo we are extremely confident to achieve for fiscal 2015 and organic growth in revenue of around 2.5% and an increase in operating profit of around 10% excluding exceptional items and currency effects. So as to reach a 5.7% operating margin at fiscal 2014 rate and this represents as you know an overall improvement in operating margin for the year of 30 basis points and an improvement of 80 basis points over a two year period between fiscal '13 and fiscal '15.

So let me step back one minute on our organic growth objectives. The positive factors flagged in April are coming through as we go through the year, and there is no surprise here and as Sian said the mobilization of transforming rehabilitation in the UK is moving ahead very well.

Our contract at [Bernard] here in France is also moving well. We will also feel lesser impact from contract exits in our numbers in the last part of this fiscal year.

We also reopen the Lido it's effective now it's going well. So we are moving on well in all our development program.

However as Sian explained in the last three months we've seen an ever more challenging environment both in Brazil where we experienced deep declines in food volumes for some of our industrial clients. And also in Chile where we suffer from new behavior of corporate anticipating changes impact and labor regulations.

In some parts of Europe as well and not to blame France our top-line has also been week. So accordingly we are revising our top-line revenue guidance for the full fiscal year from around 3% previously indicated to around 2.5%.

We are confident and to some acceleration in the next few months and of course we also confirm our overall objective of 10% operating profit growth for the full year. So thank you for listening and now with Sian we're ready to answer your questions.

I have two questions. The first one is on the contract exits.

Do you still plan to exit a total 165 million worth of revenue for the full year. Is that the case, I think it should imply something like 32 million in Q4, and you just said in the outlook statement that the impact in Q4 would be lower, so just trying to reconcile that please.

And then second question in Chile. Could you just elaborate on bit on the regulatory changes affecting the OSS business which you are flagging in the press release and you operate specifically subsidized contracts or what exactly has been the impact?

Sure, in terms of contracts exits, what we said back in November is the estimated impact for the full year was actually 160. As Michel said, for the nine months, the impact has been 135.

So mechanically it's 25 million quarter four.

So the impact in Q4 would be in line with Q3?

A little bit less, it was around -- yes it's a little bit less.

In Chile, we've seen for the last I would say 18 to 24 months., a very strong pressure, social pressure in our mining business, and we've been historically a very strong market share in Chile in that business for some of our larger clients. And it is clear that now as we speak, clients are diversifying their suppliers, and so because of that, through some rebids we've lost some important contracts, so that weighs significantly on our growth in Chile, and we've seen this phenomenon, it's not because -- I think we do a very good job in Chile, we have a very good reputation, but because of our position and because of you know the labor reform which is coming up and which creates some fears among the clients, this is what we've seen.

Right?

Just a question around organic growth picking up on some of the comments that you made looking into 2016 and particularly a few things to call out on some of the regions. So just for the rest of world, how should we think about the impact from oil and gas and some of the macro factors?

What's your sort of best guess looking into next year there? Europe, same sort of question, but around volumes and new business wins.

And North America, should we expect a sort of more normalized growth rate in that region? Finally, obviously UK, any comments there for next year?

Well, of course, we will give you our guidance for next year in November. So, we're working on of course these numbers, but what I can say is you started with the rest of the world.

We frankly -- we see the situation not getting better in South America. In Brazil, there's a lot of tension.

We have clients who are really literally closing plans or delaying their investments, so it's very-very weak. And Chile, we don't see also any sort of recovery here, so it's got very volatile.

In terms of the oil industry, as we've seen we've not seen any investments by the big oil companies, specifically in research and drilling. So, our activity here has decreased, so it will have an impact next year of course.

On the other hand, in the rest of the world, we also see some very large contracts going out to bid. So we have a lot of negotiation going on, on very large businesses.

So, it's very-very early on to see what, to tell what we can see, but on one side, we have some very good contracts that we are negotiating, and who knows we might be successful. On the other hand, we also see as I said a very weak activity and volatile activity in South America.

In the UK next year, we'll be of course -- we'll have the Rugby World Cup, okay, which would have an impact on our business. If you exclude Rugby World Cup, we'll probably be in the low-single digit, because we've seen this year an acceleration on the ILAs , and you know large accounts, we are going to continue to see some good business development in FM, but probably not as good as this year.

In Europe, the environment is weak. There's no real reason for acceleration.

We will continue to see good developments in FM, probably growth would be the same range that we’ve seen this year, maybe 0% to 1%. North America will be a stabilization, corporate is doing well, healthcare will beneficiate from the fact that we'll be out of ManorCare not for the first quarter maybe but after that we'll see, we'll be out.

So you know next year looks of course better, but again we will give you the guidance in November. Hope it clarifies to you.

Sabrina Blanc speaking from Societe Generale. I have two questions.

The first one is you mention in the UK market non-recurring facilities management contracts. Can you provide more figures concerning this point?

And secondly, in the B&I market, and notably in the Latin American market, we see that the growth in issue volumes is slightly lower than the growth in revenues. And can you come back on this impact and potentially what is the impact of the face value increase and the impact of the increase of the interest?

To come back to your first question on the UK, I'm not quite sure what you mean by non-recurring but I think what you mean is what as we've explained in the past with many of our clients we have recurring ongoing services and then we have a lot of punctual project work where clients have renovation plans or different construction, different projects, project work is a part, a regular part of facility management services. In the UK because we have a very strong facility management business in the UK, the project work represents a more important component and I'm afraid I can't quantify for you is part of our 10% growth but it's not a significant part of the 10%.

And in terms of some international benefits and rewards your second question, as we’ve explained in previous quarters, there are timing differences which account for differences in growth between issue volumes and revenue volume. Because this interest rate cycle of the benefits and rewards business, our revenue components our output client commission, affiliate commissions and interest income on the slope.

We record the issue volume on issue. In revenue, we record a client commissions on issue.

The interest income over the 60 days on average of the growth and then the affiliate income at the end of the 60 days when the affiliate asks for reimbursement. So, because of that cycle, you get some timing differences striking the difference in growth rate between issue volume and revenue.

There is one further factor in Europe, which impact the differential in growth, and that relates to our very sizable ONEM contract in Belgium. In Belgium annually, the ONEM contracts represents around €2.6 billion in issue volume.

That’s more on clients and it has a small impact in revenue that depending on how growth is going in that contract. You can see some variations sometimes in our European numbers between issue volume and revenue.

Hope that answer to your question.

I have three questions. The first one is, you are significantly underperforming your biggest competitors in North America, 1.4% organic sales growth plays against 8% plus I think for Compass.

Could you give us a little bit more detail on why that would be please and when that might close the gap? Secondly, 2.5% organic sales growth for the year implies nearly 3.5% in Q4.

That's the significant acceleration on the previous three quarters. What are you seeing that would give us -- give you confidence that can be achieved?

And then finally, can you give please the overall retention rates, new contract wins and like-for-like sales growth for the nine months?

For the first part of your question, we’ve explained these several times here Compass as we’ve seen different businesses. They have performed extremely well, I agree and in the last 18 months much better than last, our growth has been effected by a series of disappointments in healthcare, specifically couple of years ago, we lost a sanction which had a big effect on for us, ManorCare also last year was also disappointment.

So clearly they have over performed us in that dimension which is -- I don’t think is the case in the corporate site where we have a very solid growth, because of our position in facilities management. So we have taken decision in the U.S.

have said that next year we should see better performance in this part of the world. We will see acceleration in Q4, but that’s struck the fact and we're learning from some of our mistakes and we’re making the necessary change.

Now on Q4, if 2.5% means that we'll be close to 3.5% in Q4. That’s the consolidation of an acceleration of the transforming rehabilitation in U.S.

will follow. Some of the large international contracts Johnson & Johnson, Zurich which is very big contract in U.S.

and also we see the impacts of the business that we’ve exited which is weighting less. So overall we’re confident that we can get to that number.

And in terms of retention we compared relatively similar to year ago, and we’ll see -- we’ll give the number at the end it is not very, very accurate to give that number at this stage during the euro, because it’s selling season, but what we see is like-for-like shares are not very strong, and we see as I said before in previous answers to questions specifically regarding South America that we have lost some significant contracts because of the situation and the social reform in Chile and that of course effects some of these retention rates in the rest of the world.

And also the current situation in Brazil clearly weighs in terms of reduced volumes in our like-for-like.

Three questions, if I may. Kind of just following on from some of the other questions I guess.

Just in terms of how you would do medium-term outlook in terms of organic growth. Can you give any color if you look out over the next five years how we could think a little bit about what kind of organic growth relative to GDP we could expect from Sodexo in terms of opportunities in that?

Second, just in Benefits and Rewards, has there been any pressure in terms of Client Commission or Merchant Commission rates in that business with regards to Brazil. And then just Europe, any concerns in terms of not going to impact from Greece overall in your business and what is the direct impact from Greece if any at the moment?

On the mid-term, we're still confident to reach what we said previously, reaching revenue growth between 4% and 7% and we can see -- start to see that FY16 we'll be probably close to 4%. And an EBIT growth between 8 to 10 we've said that in last November which means an increase of EBIT of between 15 basis points and 20 basis points, so we’re still very confident that we can achieve these numbers.

In terms of pressure in benefits and rewards not really, not really in Brazil. I think the context and the competitive landscape has not changed and frankly nothing specific.

And in terms of Europe as you know we don't have any business in Greece, we exited Greece I think seven years ago, and so it should not have direct impact on our business, of course it will probably have an impact on European economy but that’s a different story, right? It might have an impact on the interest rates in Europe maybe, but nobody knows it won't create probably important [bliss] for all the creditors of Greece that’s for sure.

And politically I think it would be a huge setback for Europe and probably Europe will lose some international standing, in the international community. But for us no direct impact at all.

If I may just have one quick follow-up. You have reduced your organic growth rate target but you've maintained your operating profit growth targets of around 10%, but I mean relative to where you were 1H versus the end of the nine months period, I mean is it fair to say there is obviously more skew to slight negative other than the slight positive if we go back to 1H results in terms of where potentially that operating profit number would have been or should we not read too much into it?

There is no change at all whatsoever in our operating profit guidance.

No, absolutely no change.

Two questions from my side. First on the U.S.

education. I think you've mentioned that you are seeing some kind of improvements and we don’t really see it on your quarterly figures.

I think there is a bit of a slowdown there, and I was wondering where it comes from? Did you lose some more contracts at the end of the Q3, what is your prospect is into the year bit more bullish from spend declines and we still don't see it, so is it for next year maybe?

Second question on Brazil can you tell us how much is same parameter growth in Brazil now in Q3, how negative is it? And how do you started to adjust cost, how is it to adjust your staff cost there?

In Brazil, it's flat, but yes we absolutely are working as we speak adjusting our cost massively and yes absolutely very, very strong action plan and working hard on this dimension.

And is there any cost attached to it, sorry, that we could know?

Well it's included in our guidance of reaching our operating profit of around 10%.

Guill if I come back to your first question in terms of U.S education. When you look at the numbers one thing to remember is you know we exited Detroit Public School given solvency issues of Detroit at the end of the last school year.

So basically we exited and it's still at the end of the third quarter last year. So that weighs on quarter three growth still.

What I can say is throughout the year we've seen in our education business in the U.S increasing enrollment after two or three years or rather flat enrollment. A slight increase in enrollment good successes in our board plans sales and we've seen that picking up.

So that’s encouraging. But Detroit is weighing in the numbers.

What I can also say that has weighed and I think we told you about it in previous quarters a little bit in the nine months if you now K-12 business. The HHKA Healthy Hunger Free Kids Act if I am right, came in two ways and we suffered from that around 18 months ago when kids not over one thing to spend so much in school on the healthy school lunch today there is no regulation around the smacking in the schools market and that weighs a little bit in settlements of our K-12 business.

But overall what is weighing a little bit still in Q3 is Detroit?

Just in response to an earlier question, I think you said you'd expect 2016 organic growth to be towards the low end of 4% to 7%. I think you said around 4%, if you could just confirm that please?

And also, would you also expect the 15 to 20 basis points of medium-term margin growth next year? And then the second question, just on BRS and Venezuela, your statement references strong growth there.

If you move from the 56 bolivar rate you've used to the SIMADI rate of more like 200, what's the impact please?

I said that I will confirm the targets for growth in FY16 in November. I've said that and I'm confident that as we move forward we will have a revenue growth between 4% and 7%.

And that next year we should be close to that, that’s what I said. But I was confirming these numbers so I'm not confirming it today.

I will confirm these numbers in November as we do regularly right. In terms of profit growth I have said and we have said back in November 2014 that our expectations medium-term was to continue to grow operating profit around 8% to 10%.

So I confirm that now which means that it is a 15 to 20 basis points margin improvement on a year-to-year basis. So again we'll give you that indication in November if we confirm that absolutely.

In terms of Venezuela as you all know we are present in Venezuela on in our benefits and rewards business. We have exited 2008 converted our earnings at the rate which we extract cash we have not yet moved on to the SIMADI money market.

But SIMADI currently is trading around 200 to the dollar and we've disclosed at the half year the sensitivity you can calculate it also in our reference document. But just in the reference would have around 25 million impact on our revenue it would have around 10 million impact on our operating profit and it would have pretty much €300,000 impact on our net income because we've applied high inflation.

So as you can see is very insignificant in terms of EPS or net income.

Two questions from me please. In North America could you please talk about the volume trends in the corporate and healthcare division?

And my second question is regard the benefits and rewards. Could you please quantify how much of the organic growth is related to the increase in face value?

Yes sure, in terms of your second question what I said in my comments was if you split between Latin America and Europe, in Latin America I said roughly three quarters, a bit more than three quarters actually 80% is related to increases in face values in the various Latin American countries. If I turn to Europe increase in face value is very low, actually pretty much zero I think the most recent impact in face value has just come into effect in Italy so it will be more for next year.

In terms of NorAm's volumes in corporate and healthcare, they are growing very slowly I would say. It's not the growth again in this business is coming mainly from FM business, right but you know compared to Europe and South America where food volumes are declining, continues to decline it's not the case in North America.

No questions, I'd be happy to answer them.

If there're no questions let me just remind you that if you want to replay this call you need to dial 44-1452-550000 with the access code 68-52-90-59.

So thank you very much for participating today and we'll talk to you in the fall and in the meantime hope you enjoy the summer.

Thank you.

Thank you and bye-bye, thank you very much.