Sodexo S.A.

Virginia Jeanson - IR Michel Landel - CEO and Chairman Denis Machuel - Deputy CEO Marc Rolland - Group CFO

Jamie Rollo - Morgan Stanley Julien Richer - Kepler Cheuvreux Jarrod Castle - UBS Simon LeChipre - Raymond James Jaafar Mestari - JPMorgan Tim Ramskill - Credit Suisse Vicki Stern - Barclays Geoffrey d'Halluin - Deutsche Bank Najet El Kassir - Berenberg James Ainley - Citi Richard Clarke - Bernstein Angus Tweedie - Bank of America Sabrina Blanc - Societe Generale Kean Marden - Jefferies Jarrod Castle - UBS

Thank you. Good morning, everyone.

Welcome to our Full Year Fiscal 2017 Results Call. On the call today we have CEO, Michel Landel; Deputy CEO Denis Machuel and CFO, Marc Rolland.

As usual, if you haven't already done so, the slides and press releases are available at sodexo.com and you'll be able to access this call on our website for the next 12 months. The call is being recorded and may not be reproduced or transmitted without our consent.

I remind you that 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. Before I hand over to the team, don't hesitate to get back to the IR team if you have any further questions after the call.

I remind you that the next announcement will be the first quarter figures on January 11, 2018. I now hand you over to Michel.

Thank you.

Thank you, Virginia and good morning to all of you. Thank you for joining us this morning.

So I will introduce this presentation; then Marc will go into the details of our financial performance and Denis will end the presentation talking about the outlook and the future. So overall, we had a solid fiscal '17 year with a strong increase of our net income and dividend of around 15%.

Now for organic growth, revenue growth was 1.9%, in line with our revised guidance, with Q4 up 6.8%. And excluding the one-off boost of the 53rd week in North America, Q4 was still up 3.5%.

This improved revenue performance in Q4 was helped by a strong recovery in French tourism. Remember Q4 in FY '16 was impacted by floodings and terrorist attacks, but more broadly, France turned positive as predicted, because of much improved retention rate in all segments and the start-up of new business, for example, the Air France business that we signed in the third quarter.

Second reason, energy and resource is continuing to improve, as we explained at the end of last year, with a strong Q4, up 5%, and this is the ramp-up of several contracts that we have signed, namely Collahuasi in Chile, but also Rio Tinto. Third reason is the very strong, or strong growth in energy in emerging markets, China, but also the onsite business in Brazil has been good this year, and Benefits & Rewards and also an excellent year at 7.7%, helped by strong developments of the incentive and motivation business in Europe and the U.S.

And from the second half, we've seen some sign of stabilization of the number of beneficiary in Brazil, as unemployment appears to be stabilizing. Now in terms of profitability, on Slide 6.

We have achieved strong growth in operating profit, i.e., 8.4%, and this is before Adaptation and Simplification program and also the currency effect. This is in line with line with our objectives and this represents 40 basis point improvement in the margins.

Again, the Adaptation and Simplification program is on track and has delivered €150 million of cost savings this year against only €32 million last year. We have invested to boost our growth in digitalization, in new offers, in sales and in mobility activities, in Benefits & Rewards.

Net profit before non-recurring items is up 14%, or 13% excluding currencies and EPS is up even more, at plus 15.7%. And finally, M&A, as we planned, has picked up with a gross spend of €306 million, €268 million of net of disposal.

But as cash flow has also been particularly strong, our balance sheet remains also very strong, despite a further €300 million share buyback. And I will come back on M&A at the end.

On Slide seven, let's look at our growth indicators. Client retention has improved 40 basis points, with improvements in France in Energy & Resources and in most of the segments and regions.

However, it has not been the case in healthcare and mostly in education in North America and in also some government contracts in the U.K. for which we have refused unacceptable conditions.

Comparable unit growth was 1.5%, excluding the 53rd week and it has been impacted by several items. First, the very low inflation, close to zero on average, but it is showing sign of reversing at the moment with inflation accelerating in Q4 in the U.K.

and the U.S. Second reason, there has been some good cross-selling, specifically in healthcare and universities in NorAm, and also in the U.K.

and in developing economies, but not as good in existing accounts in Energy & Resources. As you know, the offshore business is still suffering quite a bit.

And on the new business development side, our performance is disappointing, we are below last year by 60 basis points. I remind you that last year Rio Tinto accounted for more than 80 basis points on its own.

And we clearly need to sell more going forward and hopefully, the investments that we have done and that we are going to reinforce should pay off as we move forward. Talking about new business.

Let me share with you some of our good successes. There is clearly a sustained demand for Sodexo expertise in facilities management and integrated quality of life solutions.

And as an example, we won the largest integrated contract for the Department of Work and Pension in the U.K. to provide an integrated asset and estates management services for more than 900 properties across the U.K.

We also signed a good contract with Campbell in the U.S. which is a very good win.

In terms of comparable unit growth, we extended our Master Integrated Service Agreement with Johnson & Johnson to provide services at approximately 250 sites in 42 countries across Europe, Middle East and Africa. And this is in addition of the 36 sites that we already had in the region.

We also had some very good success in foodserivce contract, only foodservice contract. For example, Mishla in France, which is a contract that we've never had in the history of Sodexo.

We're very proud of that. It's a very good contract.

So Google in India and many others. In Benefits & Rewards, growth has been strong, specifically in Europe.

I will mention the Belgium Transit Authority, where Sodexo is providing meal cards to close to 8,000 employees. I also want to mention some key contract renewals.

For example, the Justice Service in France where Sodexo has renewed its contract with the French Prison Authority for a seven-year term to provide food and maintenance services for seven correctional facilities in the north of France. In Chile, I would mention this very important contract renewal with the National -- with JUNAEB, which is a very interesting contract, it is the National Board of Student Aid and Scholarship and we serve 300,000 students in that country.

So as you can see, we have some good success and we have pipelines, which are reasonably solid as we start this new fiscal year. Now corporate responsibility, on Slide 11, is a cornerstone of our business strategy and of our mission.

It becomes more and more a differentiator and a competitive advantage. And the recognition we have received this past year are again a testament of our continued commitment to being a responsible company.

For the 10th consecutive year, we received the highest score in our sector in RobecoSAM's Sustainable Yearbook and we were named the top-rated company in our sector on the Dow Jones Sustainability Index for the 13th year in a row. In June, Sodexo became a constituent of the FTSE4Good Index, which is good news.

And again, we are among Fortune World's Most Admired Companies. And actually this year we are honored to be part of the Fortune's 2017 list of companies that are changing the world.

On Slide 12 you can see that our commitments in that corporate responsibility are built into our future strategy in a tangible way. We have chartered our roadmap, Better Tomorrow 2025, in alignment with the UN's sustainable development goals to produce actionable change in the following key areas: In the area of hunger, of gender, and waste.

We are contributing our expertise to fight against hunger, both through our own operation and through the voluntary work of our teams. Last year, Stop Hunger distributed more than 5.7 million meals to people in need.

Sodexo's partner inclusion programs drives diversity in all countries where Sodexo operates. We actively support women and minority-owned businesses and work to help create sustainable economic opportunities for those communities around the world.

And we are a founding member of the International Food Waste Coalition, which is a collaborative farm-to-plate approach against food waste throughout the foodservice value chain. So we continue to invest in this space.

And for example, we work to reduce food waste through the creation of WasteWatch using LeanPath technology and we are committed to waste measurements at all our sites of Sodexo. And last but not least, we also want to continuously reinforce our leadership in advancing the quality of life for the population we and our clients serve every day.

And our services are built on thoughtful research and collaboration with partners and customers to create future forward-tangible solutions. Last month, we hosted our second Quality of Life Conference in London, where hundreds of leaders from various sectors gathered to learn, discuss and share best practices about quality of life for a variety of audiences, and our investments in research is paramount to meeting our clients' needs.

This is a key differentiator for Sodexo, as our offerings are designed with a careful understanding of the factors that influence the population we serve. This year we launched exciting research surrounding Generation Z and university lifestyle around the globe.

We also worked with the University of Ottawa to research the senior population. And we also released the first Global Workplace Trends report, detailing the most critical factors affecting the world's workers and employees.

So I will end this introduction by talking about what we do in the area of M&A that, as you know, we have accelerated after several years of very little activity, while we were focusing on our on-sites reorganization. So as I told you before, in FY '17, we spent 306 million in acquisition and sold it for about 50 million.

As a result, the net investment is €268 million. And since the year-end, we have continued with a further actual commitment of €650 million for this fiscal year.

On the Slide 14, you can see how strategically we classify our acquisitions. First, we have enhanced our offer with companies such as Inspirus or PSL, which is a GPO in the U.S.

-- in the U.K., or Peyton and Byrne and the Good Eating Company, widening our offer in London. Also to reinforce our expertise, with Tadal, Mentor and very recently Kim Yew in Singapore, these are mainly FM technologies business.

We also have consolidated our position in Alaska and China, but also recently in the UK with Prestige Nursing and Care, which is a very important one on this homecare market, a senior market, which has a lot of potential. We also announced recently Morris in Australia, which really position us as number one in Australia, but also reinforce our number one position in mining in the world.

And finally, we have made a couple of strategic moves with the building of our business in travel and expenses management, end-to-end digital platform. And recently we have invested yesterday in the Sports & Leisure business in North America.

The Northern American Sports & Leisure business is the largest in the world. It has a lot of potential.

Acquired Centerplate, which is the fourth-largest operator by revenue in that country. So it really position us worldwide because we are doubling our position in the world in that business, which again has a huge potential.

Now when you turn to Slide 17. Let me tell you about the contribution to our financials.

So Centerplate should bring us around €500 million of revenue in fiscal '18. It will bring the contribution of external growth of net of disposal to at least 2.5%.

It will have a minor dilutive impact of just a few bps on our margin, but will be accretive at net income level. Post synergies, it will produce margins at group level for North America.

It has a negative working capital, so it's very, very in line with our business model. CapEx was historically around 2.5%, but we have modeled at least 3% to allow for growth.

And on the balance sheet, it will double our net debt. It will be financed on existing cash and credit lines and it should not affect our rating.

So at this point, I would let Marc comment more in detail on our financial performance.

Thank you, Michel, and good morning everyone. I'm very pleased to be here with you this morning.

Please note that we have defined all alternative performance measures in appendix. Now, let's start with revenue growth.

We are on Slide 19. Total revenue growth for the year is 2.2%.

Currencies were more or less neutral with the weakness of the sterling being offset by the strength of the U.S. dollar and the Brazilian real.

This scope change of 0.4% reflects a 0.7% contribution from acquisition, offset by 0.3% of disposals, including certain activities in Africa, Hungary and minor activities in different markets. [Indiscernible] will come out of the figures in fiscal '18 only.

As a result, organic growth is 1.9%, in line with our revised guidance of 1.5% to 2% announced in July. We indeed finished the year much stronger than at the beginning.

Just to remind you, in the first quarter we had a very tough comparable base with the Rugby World Cup revenue in the previous year. We were flat by H1, up 0.5% after the nine months and then by the end of the year we are up 1.9% in total.

In the fourth quarter, the 6.8% growth came not only from the very favorable one-off impact from the 53rd week, but we also had stronger growth in the businesses and especially in the Rest of the World and in Europe, generally compared to a low Q3. And here, in particular in France, which was also helped by the pick-up in sports and leisure.

The plus 3.6% for Q4 excluding the 53rd week is high, reflecting seasonal effects, comparable basis which turned positive and favorable contract outcome and it should not be extrapolated as is into Q1 and Q2 fiscal '18. For those of you who don't know what this 53rd week is, let me explain.

It is an adjustment linked to the fact that we are changing from weekly to monthly accounting in North America from September 17. Weekly accounting has a side effect of losing one or two days a year, depending upon whether there is a leap year or not.

These lost days are usually recovered in the account in one-off every five to six years. In fiscal '17, this 53rd week effect is the equivalent of six days of trading, amounting to a positive impact of 0.7% in organic growth.

On our margins, the 53rd week has a minor dilutive impact. So coming back to the growth, on-site services were up 1.7%.

Excluding the two exceptional events of the year, which more or less canceled each other out, on-site services revenue was finally up 1.6%. Benefits and Rewards was up a strong 7.7%.

I shall come back on this a bit later. If we now move to Slide 20, you can see that despite this modest growth in revenues, operating profit before exceptional costs linked to the Adaptation and Simplification program was up 10.2%.

Excluding the currency effect, it is up 8.4% in line with our guidance from the beginning of the year. As a result, the full year margin is now at 6.4%, helped a little by currencies and in particular, the positive mix effect resulting from the recovery in the reais.

But even at constant rate, the margin improved by 40 bps. Despite the softer top line than expected at the beginning of the year, this strong performance is due among other things to the many initiatives throughout the group as part of the Adaptation and Simplification program to improve productivity and reduce SG&A.

Moving to Slide 21. The Adaptation and Simplification program has been successful and is perfectly on track.

There were hundreds of projects of very different sizes with approximately one third of the overall program affecting gross profit and two thirds SG&A. The projects came from all around the group, both in terms of mix of businesses and regions.

At the end of fiscal '17, 2 years into the plan, we are even very slightly ahead in terms of savings with a total amount of €150 million achieved this year, representing a step-up of narrowly €120 million versus last year. We are confident that we should be able to deliver the expected €220 million of sustainable annual cost savings in fiscal '18.

The exceptional expenses of €245 million has all been booked by the end of the first half. So no change.

This represented €137 million for fiscal '17. Of the €245 million plan, €20 million are non-cash items and €180 million are now being cashed out, of which €130 million in fiscal year '17.

The balance will be cashed out next year. If we now move to the P&L on Slide 22.

Revenues at €20.7 billion were up 2.2% or 2.3% excluding the currency effects. Before exceptional items, the operating profit reached €1,326,000,000, up 10.2% or up 8.4% excluding currency.

The margin before exceptional expenses was up 50 bps. This was helped by the Brazilian reais recovery, which increased the share of the higher BRS profit margin.

But even excluding the currency mix impact, the margin was up 40 bps. We are now up well over the 6% mark.

After taking into account the €137 million of exceptional cost linked to the Adaptation and Simplification program, versus €108 million in the preceding year, the operating profit was €1,189,000,000, up more than 8% relative to the previous year. Net financial expenses were down €6 million at €105 million.

Our net borrowing costs are down €8 million versus last year, due to a lower average cost of debt of 2.4% for the year versus 3.2% last year. The reduction is due to the debt restructuring in August and September last year and also helped by very attractive negative interest rates on the commercial paper borrowing.

Other financing costs included the €11 million indemnity for the U.S. PP tranche redeemed in September.

As usual, with financial charges there were also a lot of both positive and negative variances, which more or less offset each other. The tax rate is down 200 points to 31.7%.

This improvement versus last year is due to a tax rebate on prior year's European subsidiary dividend tax, a reduction in the UK tax rate and the end of the exceptional surcharging trend, as well as some adjustment of tax provision deferred taxes. Therefore, net profit before net non-recurring item is up 14% and 13% excluding currencies.

These non-recurring items includes the exceptional expense of our plan and the indemnity of the second tranche of the early debt repayment, together a net of FX for €99 million versus €84 million last year. After net non-recurring items, net profit is up 13.5%.

In the next slide you can see the leverage from share buybacks, with EPS before non-recurring items up 15.7%. We completed the last share buyback in February, having acquired 2.9 million shares or 1.9% of the capital at an average price of €103.

The average share count for fiscal '17 was then down 2.9%. The full detail of the shares is in the appendix, And please note that EPS before exceptional expenses is up 65% since 2014.

Next slide, you can see that the dividend proposed by the board is €2.75 per share, up 14.6% on last year, in line with net profit growth pre non- recurring items. It has actually increased by 53% since 2014 and the payout before non-recurring item is very stable at 50%.

Now if we look at our cash flow on Slide 25. Operating cash flow is up significantly.

The change in working capital is very positive after a previous period which was impacted by two big events, the timing of the cash in and out of the Rugby World Cup and the Rio Tinto start-up working capital requirements at the very end of fiscal '16. So in a way, this is back to a more normal performance.

This year CapEx is low at 1.5% of revenue, reflecting a lower level of development. Last year the Rio Tinto CapEx and the acquisition of the Rugby licenses had brought the rate up to 2%.

As expected, we have spent quite a bit more during the year, first on M&A, an investment which ended up at €360 million net of the disposals. I'll remind you that over the last three years we had been running at below €50 million per annum.

We now also completed another €300 million share buyback and of course there's dividend. Therefore the net debt rose by €204 million during the year.

As a result of this strong free cash flow, our cash conversion had gone back up over the 100% level which should continue to be our goal. This year, we generated a cash conversion of 123%.

As a result of this very strong cash flow, despite M&A and share buybacks, net debt increased by only 204 million to reach 611 million. Gearing has increased to 17% and the net debt ratio to 0.4% -- to 0.4, still well below our target levels of between one and two.

With this robust balance sheet, we can continue to make acquisitions. In the beginning of fiscal '18, we have already committed around €650 million and our pipeline has some more opportunities.

The increase in cash and gross debt in the balance sheet since August last year reflects the fact that we were working on quite a few acquisitions opportunities this summer. Obviously, some of the cash has already been committed with the acquisition of Kim Yew and Morris in October, and now Centerplate.

Now let us move on to the review of operations. Firstly, the On-Site business.

Starting with business and administration on Slide 29. You will note that older figures in green boxes are excluding the Rugby World Cup and 53rd week impact.

The organic growth in revenue was 1.3%, or more importantly plus 2.1%, excluding both the Rugby and the 53rd week. In North America, the trend was plus 3.4%.

We continue to achieve high single digit growth in Corporate Services, thanks to the development of large accounts in the region and more and more FM activities. However, Energy & Resources remained challenging right up to the end of the year.

In Europe, sales were down 1.6%, excluding the Rugby, due to lack of new businesses, particularly in the U.K. and offshore businesses in the North Sea, which remains very weak and with no immediate signs of recovery.

On the positive side, French tourists picks up as expected against a particularly weak comparable basis a year before. Africa, Asia, Australia LATAM and the Middle East were strong throughout the year, up 9%, thanks to double-digit growth in Corporate Services, driven by strong development and retention.

The momentum in Energy & Resources has also picked up with the Collahuasi start-up in Chile, for instance. And the ongoing ramp-up of the Rio Tinto contract was also with some improvement in same-site sales in onshore and mining.

Offshore remains negative like in all other regions. I would just like to take this opportunity to say that Rio Tinto is on track and should be generating average group margin for fiscal '18.

Also the operating margin on Slide 30 was only up 10 basis point. This reflected a much better performance in the second half as we expected.

With the benefits of the Adaptation and Simplification program kicking in, cost control has also remained very rigorous. Now moving on to Health Care in Slide 31.

Excluding the 53rd week, organic growth was 1.5%. Growth in North America remained depressed in Q4, due to a lack of new business and the retention issues in Q3.

As a result, what has started out as a decent growth of 4.4% in H1, sales were only 1.8% for the full year. I just want to point out that even if there are some uncertainty in the health care market today around the future of Obamacare and super strong reforms, the market is still growing.

There's still a lot of opportunity out there for us to grow this business. In Europe, organic growth was minus 0.8%.

Some comparable unit growth was achieved, but this was offset by the shortfall in new business, as the teams remained highly selective in their bids, due to very competitive pricing. In Asia, Latin America and Brazil, Health Care was up 13.1%, thanks to strong new business and comparable unit growth.

Despite a softer top line in H2, margin increased to 6.6% for the year, up 30 basis points, helped by continuous improvements in on-site efficiencies, consolidating on an already high comparable base in H2 last year, as the Adaptation and Simplification program has already begun to kick in, particularly in North America. Excluding the 53rd week, Education was flat in North America, but was flat in Europe too.

In North America, new contract in schools in Chicago and Washington compensated the decline in universities due to net losses. While the revamping of the sales team has led to some good wins this year, the segment has also lost some business, of which some due to closure of underperforming contracts.

We clearly need to sell more new business to grow. In Europe, the stability was principally due to less school days of role in France and to a minor extent, in Italy.

There was also a limited new development contribution in France and the UK during the year, due to weak new business signed in the previous year. On the other hand, in Asia, there was very strong growth in activity at 11.3% for the whole region with new contracts starting up in China, Singapore and India, even though it remains a small region.

On Slide 34, the operating margin in Education was up 30 basis points for the full year, reflecting strict control of SG&A, helped by rigorous management of low-performing contract. To be noted that H2 remains a very small semester in euro value for this segment.

Moving to Slide 35, you will find the organic growth by region, excluding the 53rd week in North America and the Rugby World Cup in Europe. Plus 1.8% for North America with strong Corporate Services performance, but lackluster growth in Health Care and Education and continued pressure in Energy & Resources.

Minus 1.3% for Europe, which reflects on the one hand, the continued decline in the offshore North Sea activities of about 16% each quarter. And on the other hand, a gradual improvement quarter-on-quarter with positive growth in Q4, helped particularly by the stronger activity in France and the U.K.

The 9.4% for Africa, Asia, Australia, Latin America and the Middle East is demonstration that there is still a lot of opportunities in all segments to grow the business in this region, now that the communities crisis is stabilizing. Energy & Resources was particularly strong in H2 with the ramp-up of the Rio Tinto contract and many others progressively in Q3 and Q4, even if the offshore activity remained weak.

In this region, Corporate Services was also strong all year round. Now let's move on to Benefits & Rewards performance.

Issue volume organic growth was plus 6.1%. Revenues organic growth is up 7.7%, and operating profit at constant rate was at 8.9%, helped by the contribution of the capital gain of the sale of Vivabox for €16 million.

Please note that the total growth was 9.3% for issue volume, 16% revenue and 16.7% for operating profit. To understand this performance, we need to look at the region, as the trends differ substantially.

Starting with Latin America on next slide. Issue volume organic growth in Latin America was 7.1%, thanks to strong base value increases, even though Brazilian inflation is declining and growth in the number of beneficiaries in the region was handicapped by rising unemployment in Brazil.

On this we think that unemployment did top out in April, May in Brazil. In the last two quarters of the year, we saw the number of beneficiaries stabilize first and then start to rise slightly in Q4.

As a result, in H2, the increase in portfolio compensated the lower growth in sales value. Growth in all other countries in the region was strong.

Revenues organic growth at 3.2% was more limited, due to the still very competitive environment in Brazil, which put pressure on client commission. This pressure should ease up progressively as volumes pick up.

Still on Brazil, financial revenues held up relatively well, although interest rates have declined strongly in the last quarter of the year, down to 9.25% by the end of August. Merchant commissions remained strong.

In Europe, Asia and U.S.A., the remarkably strong growth in the revenue was due to a combination of good progress in the traditional meal and food activities, demonstrated by the solid increase in issue volume of 5.4%, but also very strong momentum in the new incentive and recognition activity in the U.K. and the U.S.A., which by nature does not impact the issue volume.

The acquisition of Inspirus in the U.S. has also significantly boosted the share of this activity within the region.

Benefits & Rewards profit on Slide 39. The 16.7% increase in operating profit is due (inaudible) of the Brazilian reais, and another 1/3 and another one third to the Vivabox capital gain.

Excluding both these elements, the operating profit was only up about 3%. Therefore, at constant rate and excluding the Vivabox capital gain contribution, the operating margin is down about 200 basis points during the year.

Now half of this decline in margin is due to the mix effect resulting from the exceptionally strong performance of the incentive and recognition activities in the UK and the U.S. and the first time integration of Inspirus, which has lower margin than its traditional businesses.

The other half of the decline is related to the ramp-up of our investment in mobility and expense management offers, with the work being done to launch new end-to-end digital platforms and through the accelerated card migration at the same time in Czech Republic, Romania, India, while it's still very much ongoing in trend. Margins of the traditional meal and food business was solid and remained at high level.

Now I would like to introduce the new indicator to follow our performance, the underlying operating profit. And we are on Slide 41.

As many of you pointed out, in the past few weeks the capital gain on the disposal of Vivabox is not a recurring operating profit item, nor rather cost of the Adaptation and Simplification program or M&A costs. Up to now we have focused our financial communication and our guidance on the operating profit all in, usually only excluding exceptional cost of a plan when there was one.

In the interest of own, we want to focus our communications, our internal objectives and our guidance on the recurring operating profit drivers. We want to also be more comparable to our competitor who all seem to be excluding similar items.

So we have this idea to adapt our P&L and introduce the underlying operating profit and then other operating income and other operating expenses, which will be linked to non- recurring events, such has gain or losses related to perimeter change, pure settlement of post-employment benefits, restructuring costs or M&A costs, impairments, the source to amortization of intangibles derived from M&A activity. If we had implemented this a year ago, the underlying operating profit growth at constant rate for fiscal year '17 would have been 7.3% versus an operating profit reported growth at constant rate of 8.4%.

We believe that it will be more transparent for you all. So from fiscal year '18, our P&L will change, the segment information will go to underlying operating profit and our guidance will be based on underlying profits.

To help you in this change, on Slide 42, you will find the pro forma fiscal year '17 P&L. Revenues, of course, are the same and operating profit at the bottom of the page is set, but in between things will change.

The underlying operating profit will be €1,340,000.000 and the operating margin is 6.5%. On the positive side, we had gains related to perimeter changes of €21 million, including the €16 million of Vivabox.

On the negative side, over and above the restructuring cost that you recognize, we had M&A cost of €6 million and we accelerated our M&A activity, post-employment benefits, gains, and losses, and the amortization of client relationships. We have put the pro forma H1 table and segments reporting in the appendices to help with your modeling for fiscal year '18 will now be based on the fiscal year '17 underlying operating profit of EUR 1.340 billion and underlying operating margin of 6.5%.

I hope you will appreciate this extra transparency. Thank you for your attention and I now hand over you to Denis who is going to cover the outlook.

Thanks, Marc, and good morning to all of you. It's a real pleasure to be with you this morning.

So, let's look at this new fiscal year 2018. As you've seen, there are several trends, which will continue as we move on into fiscal '18, some positive growth trends and of course some near-term changing areas.

And so what we believe is, we believe that we can achieve an organic growth in revenue in fiscal year '18 between 2% and 4%, excluding the 53rd week impact. In addition, the fiscal year '17 M&A and the current deals that we closed recently and also the ones that we are currently working on, net of disposals, all these should give us an additional plus 2.5% growth this year.

On the cost side, we decided to reinforce our investments to enhance growth and accelerate our digital transformation. Therefore, we will be reinforcing our investments into these efforts and for fiscal year '18, we aim at maintaining our underlying operating margin at 6.5%, excluding currency impact.

So after the last five years, where we have really achieved and uninterrupted growth in the margin, think of this objective as a pause. We have the means, we have the strategy, we have the energy to accelerate our growth, no doubt, and we need to do it now.

This also means that we have to reinforce our investments to enhance growth and accelerate our digital transformation. So on Slide 45, you'll see what I mean.

We will reinforce our investments, because over the last two years, as you know, we have transformed our organization, we have broadened our horizons, thanks to the segmentation. We've also engaged at a faster pace into a digital world and as we moved on, we've identified more and more new ideas, new opportunities, new markets to develop our offers and to deploy them more efficiently.

So if we look at the offers that we are now ready to be progressively deploying globally, let me give you three examples out of the things that you have on the slide. Typically, the smart kitchen, the evolution offer on smart kitchen, this is a very innovative oven technology that had been initially developed by our Peruvian teams and this speeds up food preparation, this reduces kitchen space, as well as electricity and water consumption and it also enhances security for our people.

This offer is currently, as we speak, being rolled out in South America. And our teams are also working on the global deployment of the offer, starting in India, Eastern Europe, with a creation of specific recipes that are adapted to the new ovens.

Protecta: Protecta is an offer that we develop in our Health Care business. It's a proprietary cleaning protocol that drastically reduces nosocomial disease in hospitals, which as you might know, is a really serious problems for our clients.

Protecta basically involves total disinfection within specific approach to pathogen removal. It's being tested in selected hospitals.

We are gathering data and first results are really encouraging. So as we move on, we will really go into full deployment.

We've also developed a great offer, which is called Camp Living for remote sites and with this offer, camp residents can use their mobile phones to book ahead of time their rooms, they can check out, that really reduces admin for the clients and it gives to the residents more leisure time. It's implemented in our famous Rio Tinto contract in Australia and the next step is to deploy it particularly in Latin America at Collahuasi.

Of course, I could go on and on, but the goal today was just to say that there are lots of very good ideas and prototypes which are ready for global deployments, and of course this requires investments. So if we look at the next point, which is how we strengthened sales and marketing, because we operate in global segments, we need more and more consistent sales and marketing across all our operations.

We also have at the same time to accelerate on digital marketing and sales. So regarding training, we have launched our new sales academy which up-scales and boosts our sales forces.

We've also launched, across the organization, training sessions on digital marketing data and design thinking and more to come, more to follow. We have launched and deployed several consumer apps and platforms, which deliver consumer information, they secure financial transactions and they support consumer services.

These apps are now moving into large-scale deployment stage and we have more than 100,000 consumers on these apps. And again, more to come.

We've also made significant steps into digital marketplaces, like the food delivery offer that we have in Israel, our Rio Tinto FM platforms, or our sports and leisure prestige events, venues, marketplace. We are also opening up our ecosystems to reach out to the start-up world with our Sodexo Venture Fund, our participation in the camp in France, our presence at VivaTech and our hub in San Francisco.

And we have created recently our Sodexo's data lab to explore big data and analytics. So on this field, you can see that there are lots of things going on and those things are absolutely essential to our growth.

At the same time, in terms of processes and back offices, we are building our digital food and FM platforms in data infrastructure that will enable in turn more efficient services and prepare for the future. These platforms will provide nutritional information on recipes, implements pack management of air, eating, lights, reservations in FM and they're very promising.

So we've leveraged the best of technology to improve our operational excellence as well. We have leveraged our partnership with Wynd, which is a start-up, which is also a Sodexo venture investments to optimize our digital food experience.

We are working also very closely with Microsoft to reinforce and scale our digital integrated FM platform. We are developing the use of IoT solutions for workspace management, cleaning process improvements.

We use drones for roof inspections, we use virtual reality to reduce accidents in kitchens. We have tested robotics in several use cases to leapfrog and also test the impacts on our operations and consumers.

There are several expense on this field. And the last element regarding Benefits & Rewards, and Marc explained that in depth a bit earlier.

You saw that the operating margin was down last year. And this is in part a mix issue, as we bid our offers in incentive and recognition and mobility, where margins are high, but not quite as high as in the traditional food and restaurant businesses.

So for this fiscal year, we will continue to invest in bidding this end-to-end digital platforms for all our mobility offers, whether they be fuel card and fleet management on one side or business, travel and expense management on the other side. In Benefits & Rewards, we're also very much engaged into this dematerialized world, and we are also moving to the next stage towards full digital offers in a lot of countries.

And we continue to invest and diversifying offers in incentive and recognition. The markets are there, it's promising and there are really growth opportunities.

So now if we look at the medium-term objectives on Slide 46. I must say that we are very confident that there is a significant further outsourcing potential, no doubt in all regions and in all segments.

We have a lot of ideas to develop our markets and we have a wide range of services, covers so many areas that provide us with a lot of opportunities. Our segments organizations that has been implemented two years ago really helps us identify these opportunities, because we get closer to our clients.

We understand their business at a more granular level and we can more rapidly transfer know how and best practices across the world. So we have also a very recent announcement, Centerplate, which is also very exciting for us.

We've been a bit surprised by some of the prices that some of the competitors are prepared to pay in the deals, but I think this one was a very good deal, as well as Morris as well. So overall, in terms of midterm objectives, we confirm our objective of an average annual rate of growth of revenues between 4% and 7%, excluding currency effects.

And our growth in underlying operating profit between 8% and 10%, again excluding currency effects. So we are very confident in the future.

And as we move on in this year, we have exciting opportunities and I plan to organize an Investor Day, which will be organized probably around summer, yet have to fix the date, but we'll come back to you to confirm that date. And of course, looking forward to meeting you at that moment.

Now we are open for questions. Thank you, Denis.

It's just a question, first of all, on the sales guidance of 2% to 4%. I'm just wondering if you think that is an optimistic number, because you talk about a weak outlook in Europe and North America Education and North America Health Care, those three are about two thirds of your revenue, which might make 2% to 4% perhaps generous.

And also what is the cadence of growth during the year, is it fair to say that the first half will be below the bottom end of that number? You talked about Q1 and Q2 on the call.

Yes, actually, the first half would be towards the low end of the 2% to 4%, right, because, as Marc mentioned in his remarks, Q4 was strong and was probably influenced by a few factors. But clearly in this beginning of the year, NorAm is going to be soft in Education and Health Care.

Also we've beneficiated in Q4 for a strong business growth in government business and specifically in defense. That will evolve over the year, because the UK business in defense has been put out to bid in different bucket by the Department of Defense.

We've won some of them, we've lost some of them, but in the end it will affect our growth in that business this year. There is no effect from Rio Tinto also in this first quarter.

And on the other hand, France is going to be much better. We clearly for the last couple of years had a decrease in our revenue in France.

The last quarter was pretty good. And we are going to see growth coming back.

We have the Rest of the World, which is also growing very, very well. Asia, China, in particular, but also India and Brazil.

Brazil in On-Site is very strong. So we have very, very good signs.

So we should see in the second part of the year, growth really kicking in. And so that's why we gave this 2% to 4% growth potential.

And we are confident, right. So we have good pipelines.

We have signed some very good contracts in the beginning of the year, for the last two months. And in corporates, large contract, but also contracts in specific countries.

So we are confident.

So still above 2% in the first half, it sounds like. The second question is on the guidance for flat margins this year.

Is it fair for us to quantify that as about a €70 million reinvestment that being the remaining Simplification and Adaptation plan savings? And is there any sort of downside risk to the flat margin guidance?

For example, if then you decide to change the strategy or to go back to the original organizational structure, or is flat margins, you're very confident in that number?

Jamie, yes, I think you're quite right about the quantum of the reinvestments, as we said. And as Denis said in his slide, with the four boxes, I will say, in term of changing the strategy or not changing the strategy, I'll let Denis answer on that.

Just to be very clear, I think we have a very solid strategy, we know where we're going. We will continue.

We believe in this integrated services strategy, no doubt. And I won't change the organization, it's bearing fruits, and there are more fruits to come.

So we would continue as we promised, yes.

And one final one on -- just on Centerplate. The historic revenues have been pretty flat for a few years.

So why is that going to change the company's growth rate? And also could you give us the historic operating margin for the company, please, so the pre-synergy EBIT?

Thank you.

Yes, Centerplate actually had some growth signs in the past few years, around -- I think it was around 3% on -- the CAGR, over the past three years, four years was north of 3%. And we expect Centerplate to build on that growth.

What we want to do also is that Centerplate was actually investing about 2.5% of their revenue in CapEx and we want to be more generous and probably cross the 3% mark, so that we can win more contracts. And I mean, the EBIT margin is currently slightly below the -- our group average, but given that the proximity of that business with our big NorAm business, we will drive synergies up and we expect that within two to three years this business will turn up the same type of margins as our existing NorAm business.

So this is a very encouraging trend for profitability on that business being --

And there is also the potential of selling other services, which is an opportunity, because we have competencies in other services that we can really add to the offer here.

Two questions from me. The first one in terms of underlying volume on- site.

Do you see any change in improvement in Europe and especially in France? And the second one on Centerplate, could you please give us the average duration of contract and the revenue generated by the top three clients for that one, please?

On the last question, the average duration of contract is between three and ten years. And the three largest clients, typically a big stadium is around [15 million, 20 million] that could be the average.

And the underlying volume on- site, any change in France and Europe, yes, we can see some improvement in that underlying volume, yes absolutely.

Especially in France.

Especially in France, yes.

And just a follow-up if I may, in terms of your guidance for 2018, if we combine both the flat margin and the growth you mentioned in terms of revenue, it means that the EBIT like-for-like will grow around 6%, 8%. Is it right in terms of math or is there something that will help?

It will depend on the organic growth in the end, but 8% maybe on the high side. We said that there is 2.5% coming from external growth, 2% to 4% -- but careful of the impact of the 53rd week.

So I will say, I think 8% is probably on the high side.

Just in terms of the balance sheet, seems like you would rather undertake M&A than undertake capital returns. But you still are under the 1 times net debt-EBITDA.

So just want to get a bit of color in terms of your thinking for 2018, in terms of capital returns versus M&A? You said the pipeline was quite strong at the moment.

Well, we are not changing our philosophy and our strategy. We prefer to do M&A, and that's why we are not going to do any share buyback this year.

And we will see if we are able to continue a strong level of M&A, we will continue that. Otherwise, at one point, we might be in a position to do a share buyback, but it will be -- really depends -- depending on the opportunities that we have in M&A and our ability to close them also.

We currently, I mean, with Centerplate to be closed, we will be doubling our net debt. So pro forma ' 17 would mean that our ratio of net- debt-to- EBITDA will have been 0.8, if it had been done in August.

We still have a pipeline in M&A. We are seeing more on-site NCRs target to be had.

Obviously, price is an issue, so we need to find the right price. But we believe we can do more M&A in this fiscal year and this is what we've elected to do.

And as we said, we were not doing share buyback, we were doing share buybacks when there was no M&A, not as an end. So we will prefer to do M&A.

And obviously, I mean our guidance of 1% to 2% is still the right guidance.

And the good news is that we have the ability to do it quick.

My first question will be regarding your retention rate. Do you expect further improvement next year?

And what is the low value you're targeting going forward? My second question would be on Brazil, if you could maybe give us some color on what you are expecting for next year, both in the on-site services activity and the B&R activity?

And my last question would be regarding the tax rate, what is your expectation for next year?

On the retention rate, yes, we would absolutely expect further improvement. We have slightly improved this year, notably in France, in Energy & Resources.

The drop has been mainly in Education in the U.S., which is an unusual low retention rate. I think we will be stronger this year and we'll recover the typical retention rate that we have had in the U.S.

for many years, which is around 95% plus. So yes, we're making good progress.

And in terms of Brazil, Marc, you want to answer that question?

I will start with the onsite business. Whereas onsite Brazil has seen very significant growth in fiscal year '17 with a high single digit organic growth, and should do very much the same in fiscal year '18, we've seen an environment, which is a lot better from our client side and Brazil is building also on its margin, and a much stronger margin than we had.

So I think on the on-site side, it's getting good, it's very good. On the BRS side, we still have the client commission pressure and the environment where, because there is a lack of volume growth, I mean the competition is fierce.

Now we do expect, though, with the number of beneficiaries being better and so forth that the competition will ease off a little bit and prices will remain high. Now there is one element, which is significant is the drop in interest rate.

I mean, at the beginning of the year, before in fiscal year '16, in October of the year before, the interest rates were at 14%. They were 9.5% at the end of August, and now they are down to 7.5%.

So we are suffering on the financial revenue, and we will lose quite a bit of revenue on that side. So the BRS -- while the BRS was relatively flat in fiscal year '17, it will be a little bit negative in fiscal year '18.

But what we are expecting is that the general economic environment being better in Brazil, there will be a recovery, maybe a little later, but there will be a recovery. So two contrasted vision of the two businesses, which are seeing different moments in the environment in Brazil.

And historically in this business the recovery, Benefits and Rewards has always been lagging behind the recovery of the on-site business. So Brazil is a very important country, potentially huge and at one point it will come back.

And on the tax rate was a significant improvement this year for various reasons, as I explained, but projecting ourselves forward, I will say, as a guidance for fiscal year '18, you should take our fiscal year '17 ETR for your projection, so 31.7% or around 32% is a good projection.

Firstly on the strategy, Denis Machuel, obviously the management transition has started in May, but you will become CEO at the end of January. I think you just said answering one of the questions that the strategy was not really up for intense debates or discussions.

I'm just wondering what is -- what are the areas that you're looking at, because surely you do have a mandate to reassess the group's position and take any action you seem to conclude is needed. So what are the areas we can expect to be discussed internally and then shared with us at the summer Investor Day, please?

I won't have to debate on the Investor Day today, but what's for sure is we have -- we're doing a good transition with Michel, visiting the teams and going deep into all the segments and activities. Of course, one of the key focus is growth, as you know.

And there will -- part of the actions that we will share in several months will be around growth. That is something that we have to accelerate.

And then a sort of related question on the brand strategy. I'm assuming you'll keep the Centerplate brand at least in the U.S.

You've also said that you would keep the Good Eating Company brand in the UK. Is that a sign that maybe you think you need to have a more diverse brand portfolio to address the variety of client needs across sectors?

Do you feel, for example, sometimes you're missing out by bidding with a Sodexo umbrella brand in some of the more niche end markets?

It's exactly right. And frankly, we will keep those brands and we have a plan to review our old branding strategy and clearly being focused on those niche is extremely important.

So, yes, absolutely.

So to wrap it up, the brand strategy is one of the things you could be reviewing, the integrated strategy is one of the things you will not?

Yes. Exactly.

Growth is about being different, different thinking ourselves and branding is one of the levers.

My first question is around Slide 7 where you kind of outline your growth indicators, you're already asked about retention. But just in terms of business development Michel, you deserved -- it's disappointing.

I just wondered if you could share with as your thoughts on kind of how that improves and whether to some extent the reorganization has been an impediment to that business development? And then on the comparable unit growth, if there is a bit more inflation around in the world is that a good thing for you guys, how do you see inflation?

Well on the new business, yes, it's clearly disappointing. And frankly, yes, the fact that we have reorganized have taken the eye off the outside.

We were very concentrated internally and I've shared that with you several times in the past. So this is not a surprise clearly, and so we have suffered from that definitely.

On the other hand, as you know, we have also had an initiative for the last 18 months on our sales process, on our sales training. We have now trained I think 100 people in the sales forces by new programs.

So I think we are moving in the right direction, but it takes time. It takes time and we should be probably around -- between 7% and 9% in terms of new sales and I think we'll get there.

We have again some very solid pipeline, I think we are more strategic than we have been before. And Denis is going to reinforce his efforts in the future.

So we are confident, the market is there. Clearly this disappointment in development rate is -- absolutely is due to internal reasons, okay.

But we can fix it and we will fix it. So really -- and we are, I think, doing the right thing as we speak.

Now the inflation, we're starting to see inflation in the U.K. for obvious reasons, the U.S.

as well. The rest of the world is still low inflation, [the play] in the new economies ,it's low.

Brazil is really declining, China as well, India as well. But as we move forward, inflation has always been good help for growth, because we have [escalation in] closing all our contracts.

And when we pass this inflation to our clients, of course it has an impact on our same-store sales.

Okay, great. And then my next question is around the kind of margin sort of dynamics medium term.

Obviously the guidance for the next 12 months is for margins to be flat. You've been talking in the past about an expectations that margins would rise of around 30 basis points per annum.

Do you expect this necessarily reinvestment in margins to continue or do you still believe the 30 basis points of margin expansion problem is realistic?

So I'll let Denis respond to that question.

Well, we -- the investments as we progress will continue, because we have no other choices than again investing in our offers, investing in our capabilities. Particularly in digital there are -- big money is being spent by our competitors, but also by other new players.

So, of course this will continue, but at the same time, I am absolutely conscious that we have to work on our margins, as well as we work on the growth, so it's a balance. We very much all believe into profitable growth and -- because it demonstrates our efficiencies and clients need efficiencies as well.

So it's a balance, but we need this pause to get ready for the acceleration that we want to generate.

Okay, great. And then my last question was around M&A.

If we look at a market like the U.S., without stating the obvious. I guess the growth differential between yourselves and particularly Compass is being very significant.

Do you see M&A as a solution to fix that gap and perhaps asking the question slightly differently, do you not need to more focus on fixing the call rather than having to be integrating M&A, or is it complementary service or the same [indiscernible]?

I think it's both. And frankly, we have some issues to fix internally and we've started this and we have to continue, but we're in good shape.

And we will also take advantage of potential M&A, of course yes, it's really both.

Just sort of relating back to the investments point. Denis, how are you thinking about the group CapEx going forward versus the 1.5% base from 2017?

Appreciate there's a bit of a mix impact from Centerplate acquisition, but just more broadly, how should we think about CapEx to sales? And the second question is around CICE.

There are obviously a lot of changes, I guess, that have been announced by 2018, but then again from 2019. Any indication from you at this stage around how you see the impact to you both EBIT and bottom line?

I think previously, there was a view that it might be a 15 million to 20 million net income hit from 2019, but obviously the regulations have changed somewhat since then.

Regarding CapEx, I think when CapEx helps develop business, this is good CapEx. We have really cash position that allow us to move forward, so CapEx will be up, specifically in business development.

And this is also one of the levers that we have with Centerplate, which is to increase with a bit of CapEx and get more business development. So this will go up.

Remember Rio Tinto, we invested big amount of money and good CapEx is good profitability.

Yes, absolutely. Regarding CICE, maybe Marc.

Yes, regarding the CICE, it's a very complex thing to comment, but I will try to make it as clear as possible. There is a limited impact in fiscal year '18, because the rate is going down from 7% to 6% and I think that negative impact is, as I said, to be between €4 million and €5 million for us.

Now the transformation of the [indiscernible] into a reduction of social charges and not the tax credit has a much further impact for us, because currently, the pace here, even though it's going to shrink, it's treated as a tax credit, so it's a non-taxable tax credit. Tomorrow when it will be a social charge, it's going to be a reduction, but it's going to become the gain, it's taxable.

So the impact for us in this year, fiscal year '18, is relatively modest, 4 million to 5 million, but the impact in fiscal year '19 could be north of 15 million, so it could be between 15 million and 20 million depending, because there is a sales year, there is a tax impact, it has an impact on the participation we share with employees and so far there is a social uplift from various things, which is actually quite a significant impact in fiscal year '19. Now in fiscal year '19 in France, there are lots of things which are going to change, the interest -- the tax rates are going down, we also have this 3% tax on dividend, which is now removed, so this impact is €12 million on its own.

And we have potentially a gain coming back from prior year, as well. So it's going to be a very complex things in fiscal year '19.

But at least for fiscal year '18, we have a minor impact which is included in our guidance of 4 million to 5 million and there is more to come in positives and negatives for the year after, but then we will need to know a bit more on the detail.

My question has been taken. Thank you.

Just a quick question with regard to -- there is a lot of tax changes in the U.S. as well in France as you just mentioned.

Can you just give us a little bit of color in terms of what impact should we expect in France, specifically in the U.S.? Also my second question is in relation to the working capital.

It seems to have been very positive this year. Should we expect slightly similar level over next year?

As I said, we will benefit from the removal of the 3% tax on dividends and this is weighing €12 million in fiscal year '18. We will not suffer that much from the exceptional surcharge, because we -- the profiting front is relatively small and the tax basis front is relatively small.

The tax rate in France will go down, as it is expected to get down to 28%, and in fiscal year 22%. So the tax rates will go down.

Now in the U.S. it's very early to say, but the tax rate obviously I mean the proposition which is there will have long term benefits for us, because we currently pay almost 39% and we could get down to between 25% and 30%, given the exclusions and so forth.

But it may have a tie-in difference, because the way we understand it is going to apply, it is going to apply towards only for fiscal year '19, because our tax here has already started and it will start potentially with an impact on a different tax, because we -- the different tax assets will actually reduce because of the reduced tax rate. So we may end up having a small hit, before we get long term benefit.

But the long term benefit we expect, if everything is voted, in the U.S. alone it's between 5% and 8% improvement on our ETR for North America, so it is going to be significant in value.

But It's a bit early days, I might say. We are watching this on a weekly basis, but it's to be voted.

It's clearer in France than it is in the U.S. And on the working capital, this year was an exceptional year, because the year before was not good.

The year before we had the changes in the Rugby in and out, we have the working capital for Rio Tinto. So I will say it's a correction of the past couple of years of working capital, which probably be -- was a little sluggish.

So this year is exceptional. Now, going forward, we expect the working capital buy-ins to be slightly positive, but not to that extent.

Just if I can follow up with regard the 53rd week, what is the impact on margin, please?

The 53rd week, the six days being in summer, it is not our best moment to generate revenues. So there is a misshape between the revenue line and the cost line.

It is a profitable six days, but we believe it has a margin, let's say, maybe 100 basis points or 150 basis points lower than our normal margin for that six days. So it has a minor dilutive impact on the overall margin, but it's very small.

The first one to Denis. I'm interested in your perspective, particularly on what you think has been going wrong in the North American health care and education businesses the last couple of years, what your action plan is to turn that around?

And then two questions for Marc. One is, one of your competitors talked about hurricane impact in North America.

I just wonder whether there would be any drag in Q1 from that for you? And secondly, could you quantify the drag from the financial revenue in Brazil in the year ahead?

Well Michel has explained also one of the reasons. Of course we have reorganized our business, we made significant changes in people and that's taking a bit of time to pick up.

Just be assured that this is a very important focus for all of us and for me in the future, no doubt, and it's -- the lead time to recover is also linked to our capacity to transform businesses, it takes a bit of time with our clients. So we are progressing, but, yes, it's just -- be assured that it's really an important focus.

And to add on this, I just want to say that the reorganization that we have made has probably affected more the U.S., because we have made profound changes, and frankly, probably have underestimated the time that it takes to recreate those teams and really put them in full action. So that's the reason.

The markets are good and there is absolutely no reason and we will get there. In terms of hurricane impact, in terms of revenue, it is probably around $15 million, because of course we have a lot of business in Texas and in Florida.

So we had a lot of units which were closed and so hopefully, now it's coming back on track.

And, in term of financial revenue in Brazil for BRS, when we look at the trend of the interest rates and we are seeing the interest rates going as low as 6.5%, 7% by the end of the year and we factor the fact that we have maturity, which are above one year in average. It has already come down a little bit, but in this year was -- given the majority of the investment was good.

So our, let's say, like-for-like without volume growth impact, we see an impact of around €15 million on the financial revenue.

Can I just come back on this Health Care and Education point? I mean would -- I am interested in Denis' perspective, whether you think it's the sales team, or the processes, or the structure of the offer has not been right, and are there further changes that need to be made, or are those changes -- are you satisfied those changes have now been made for the rising trend?

Well, definitely, sales and retention are critical elements. Give me a bit of time to continue to deep-dive.

But yes, we know that -- we've lost businesses, that some businesses that we've lost were not making profit. So we don't -- this was not a real problem to lose them, but some were profitable, so we have to analyze that, and definitely the focus on the efficiency of the sales team, efficiency of -- and the capacity of our teams to retain the business, to come up with new offers, to recreate a positive dialog with -- and [creating] new offers with our clients is essential in the coming months.

Yes, we have changed many people. We need to continue to do a few changes, but we've made some -- I think some changes, which will make a difference, definitely.

Two questions from me. The first one is on the Rio Tinto contract.

I think previously you've said this year was looking -- it can be about breakeven. What's your expectation for that coming into the current year and going forward, and over the 10-year contract, how do you expect that kind of profitability to improve?

And then the second question, you have the slide on the investments you're making, and it seems like you're putting all of those investments through as OpEx rather than CapEx. How much is that a sort of selective choice, and how much [of a tax] could we read that as, investing in a year of CEO transition in the margin for [indiscernible] so you can share your future growth going forward?

Thanks very much.

On the Rio Tinto, we are on track with our business plan, absolutely on track. So we are good, and we've said that.

Because it's a 10-year contract, as we get used to this very complex operation, and it is complex, but we're doing a very good job, our clients are very pleased, we are going to improve our margins. Those margins will be absolutely on par with the rest of the group.

And so we are on track, absolutely on track. And as far as the reinvestment, Denis?

Yes, as far as the investments, I think it's true that there is significant investments in OpEx, just because you have CapEx in systems, but certainly the point of having systems is to deploy them. When you create offers and you deploy them, it's about people, and given the magnitude of the group, you need a little bit of manpower and brains and efforts to deploy.

So yes, sure it's -- CapEx is significant, but OpEx, as you deploy is quite significant.

There's a lot of training.

Yes, training.

The first one is around M&A. If you could just discuss what do you think is the top end of your leverage that you'd be happy to run with?

I mean, it's probably fair to say you had two fairly large and strategic acquisitions in the last month. Can we have assume that you would have completed both, and you've been successful and pushed up leverage on that?

And probably attached to that, do you feel any acquisitions like the [indiscernible] have changed your outlook on competition in the market? And the second question is just on facilities management and on-site.

I mean, you normally give us a breakout of the revenues between them. Apologies, if I can't find this in your report today, but could you provide that?

And could you also give us any idea of the different levels of retention rates between the two segments? Thanks.

And on [indiscernible], we clearly bid on that. We were very keen to make that acquisition.

To be honest with you, the price paid became at one point too high. And frankly, it was not enough to change our mind.

We still have huge opportunity in that business and we will take them. There are other opportunity and there will be.

So it's not the end of the world. And it doesn't change fundamentally the environment.

And we know that in terms of procurement in the U.S. we have some progress to make, but like everyone, and like everywhere in the world and we are working on it.

So we are confident.

And on that, I will add that we have an EBITDA today, which is roughly 1.5 billion, next year it will be significantly higher. So 1 to 2 means, we can have a net debt of up to €3.4 billion.

So we will be at 611 million. We are 611 million, we are doubling it, but we'll still have a lot of cash to do more acquisitions.

And if we could have done adventure at the right price, we will have done it. We will have done both.

But as Michel said, it has to be the right price and we've got to make a return out of it.

And this is something that we've learned not to compromise on.

Breakdown between food and FM, I think the FM this year is 31% and 69% on food. And whether the retention is different, do you want to comment?

Well, I think that the growth first is higher in FM, and I would say the FM, probably the retention gives us more stickiness in our client side when we have the entire portfolio of services. And frankly, one good sign is that on these large accounts that we have signed, historically, our retention has been very, very, very strong.

Actually 100%. So it's good and so it gives us more stickiness.

I have two questions and both are regarding Benefits & Rewards. Firstly, could you provide more color concerning the growth behind Europe, country-by-country?

And secondly about margin, we have seen some digital impact and half come from the incentive and recognition. Could you estimate that at this level we are close to a plateau, or could we expect more downside on this part?

On the Europe, to be honest, I mean in Europe the BV growth, I think, is 5.4% and it is a reflection of the fact that Europe in general, it goes better. I think we have seen volume growth in many, many different countries.

So now it's true that in Central Europe, BV growth is pretty strong. But it is also good in the Western Europe countries.

So the growth there is really present and we can feel it. In term of incentive and recognition, it's very much on the back of motive comp, and in the U.S., U.S.

we had a business with Vivabox that we sold now, we got in Inspirus. Incentive and recognition is particularly strong between the U.S.

and the U.K. And we've seen some good program sales in the U.K., for instance, which boosted the growth, especially in Q4.

The difficulty there is with incentive and recognition is, it's not very stable, contrary to the volume growth, where it's monthly business, day-in, day-out you order the incentive and recognition programs. So you sell a program.

You've got good revenue for a couple of quarters, then it drops and it goes up. So expect a bit more irregularity with INR business in Europe.

Now in terms of margins what I explain is that, we brought in Motivcom, we are bringing in Inspirus. Those businesses usually have margins in the mid-teens.

And so when you compare it to a meal and food business which can have margin seriously high, and so the mix of the two incentive and recognition has grown a lot in our business in the past two years. So that's why it's diluting.

Now giving you a guidance on margin is difficult, because it will all depend on how it grows and what we buy and so forth. So we will prefer in the future to talk about operating profit growth for BRS rather than operating profit margin for BRS, because it's going to become almost impossible to comment on a quarter-to-quarter basis.

And because these margins are higher anyway, it will have an impact on the group level.

And it is quite relative anyway at the group level, because when we grow incentive and recognition, it drops BRS margin, but it helps the overall group margin. So I think we will drive towards a change in follow-up in the coming quarters and years.

I've two questions on Centerplate please. So first of all, I think the business had quite a lot of debt and lot of management churn and then wanting to provide private equity ownership over the last 10 years.

So I'm just wondering how well invested you feel the asset is that you're acquiring? Secondly, referring back to a question earlier on.

So I thought revenue growth as well from the data I was looking at, was pretty subdued in 2016. Does that suggest from the data that you've given us in the slide for the revenue to the 12 months to June 2017, the pickup in organic revenue growth was hurt in sort of late 2016 early 2017 and therefore, you've got the animalization of some wins to benefits to come through this year?

First of all, on the teams that you mentioned, there was a lot of turnover and everything. I just want to mention that the CEO of this organization has been in the company many years, he has 35 years of experience in the industry.

The senior management team average over 10 years with the company and over 20 years with the industry. So we have a very engaged and motivated team.

And part of the reason of the acquisition is also because this team will stay with us and we are, very, very excited about that. The fact that the private equity was leading this business and we mentioned it before, maybe the 2.5% in CapEx is too low.

So that's why we are absolutely keener to increase that level of CapEx and we will and we are committed to that. So we feel very, very comfortable about this organization.

And it's a significant asset that we are adding to the big asset that we already have. This is a market, which has a huge potential, and which also is growing -- leisure business is going anywhere in the world.

In term of profitability, we are 10 times bigger than Centerplate in the U.S. and so we can bring them synergy on purchases, on back office or processes.

I mean the level of things we can bring to that business, today it's run as a standalone business, North American business. So being our size, we can bring them a lot in term of margin improvement.

The question on revenue growth. Marc?

The question on the revenue growth -- this is a business where, as Michel mentioned earlier, between three and 10 -- the tenure of the contract. They are bidding every time, it's a question of putting CapEx.

I will say, now we have a portfolio currently. I mean the portfolio we've seen the last 12 -- trailing 12 months to June '17 was about €1 billion and there is some seasonality effect now we've got to get into the more details on the rebates and CapEx and so forth, but we are not worried about the revenue and we think that this business should generate the revenue growth around 4% year-on-year.

Just to come back on the Health Care segment in North America. Have you been able to gain some contracts, for instance, in the purchasing operations and what do you expect in terms of organic growth for 2018 in this segment?

Well, we have lost some contracts, because we were not willing to reduce our prices, definitely. We have reorganized purchasing operation and we are going to -- and we are winning new business, of course, and hopefully we will win more, but it will be probably -- the effect will be more at the end -- at the tail end of this fiscal year.

And again, we've made some significant changes in management over the last, I would say, eight months, not only in the sales force, but in the operational force. And we are continuing and doing other changes.

So again, the business is good, the market is there, it's purely internal issues that we know how to fix and it takes some time, because it's a big market, it's a big country, but we will be there, we will be there definitely.

Just two quick ones. One, any slowdown in sales to UK employees, i.e.

is there any pressure on your B2C side of the business in the UK? And then just secondly, just in terms of the gearing in the business, are you thinking any differently when it comes to IFRS 16, and what is the impact on your net debt?

Thanks.

To us the first question. Frankly, it's difficult to answer this question.

We don't see, not really a slowdown in B2C in the U.K. I mean the Brexit is really a driver for higher inflation, clearly that's -- we might see some difficulties in hiring people moving forward.

So far it's been okay, but not specifically in the number of people that we serve. And in terms of IFRS...

Yes, in term of IFRS 16, I think there is a footnote in our -- not a footnote, there is a section in our accounts, where you can see the commitments we have on the leases. It is not very significant at the group level, so it will not change the way we look at acquisitions or gearing, because of implementation of IFRS 16.

Thank you. Thank you all.

That closes the meeting. Do you want to have a last…

No, just want to say thanks to everyone who has been with us this morning.