Sodexo S.A.

Virginia Jeanson - IR Denis Machuel - CEO Marc Rolland - Group CFO

Simon LeChipre - Raymond James Jamie Rollo - Morgan Stanley Jarrod Castle - UBS Investment Bank Jaafar Mestari - Exane BNP Paribas Kean Marden - Jefferies James Ainley - Citigroup Timothy Ramskill - Crédit Suisse Harry Martin - Bernstein David Holmes - Bank of America Merrill Lynch Johanna Jourdain - ODDO James Clark - Barclays Bank

Thank you. Good morning, everyone.

I'm very sorry because I gathered some of you have had some delays in connecting. So we're starting a little bit late.

Very sorry to those who were on time. Welcome to our full year fiscal 2018 results call.

On the call today are 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.

Please get back to the IR team if you have any further questions after the call. And I remind you that the next announcement will be the first quarter figures on January 10, 2019.

I now hand you over to Denis. Thank you.

Good morning to all of you and thanks for being with us this morning. So since it's been only two months since our Capital Markets Day, we thought we would keep this call short, given that we communicated extensively with you at that time.

But of course, we are very open to all your questions. So let's now get into the figures.

Firstly, we have these figures that are in line with the revised guidance that we issued on March 29. Organic growth was 2%, excluding the 53rd week in North America, and the underlying operating profit margin was 5.7% on 2017 currencies.

So on the Slide 6, you will see the breakdown of this 2% growth. In On-site Services, we have achieved 1.9% with North America down 1.1%.

But outside of North America, we are up 4.5%. In Benefits & Rewards Services, our growth was 5.1%, with Latin America positive at 2.4%.

And excluding Latin America, strong growth of 7.5%. What is interesting is that Q4 was strong in both Benefits & Rewards and On-site Services with a good summer season in France and the expected board days shift from Q3 to Q4 in Education.

And this was also helped by the really strong pickup in Benefits & Rewards in Brazil in the second half, but much more strongly in Q4. India Benefits & Rewards activity also bounced back now that the card migration is over.

In this context, on Slide 7, you can see that although profits are strongly impacted by the underperformance in Education and Health Care in North America and in a few large accounts, our financials are very much under control with strong free cash flow, a solid balance sheet, despite €697 million of M&A and €300 million of share buybacks. As a result, the board had decided to maintain the dividend at €2.75, which implies a payout ratio on underlying net profit of 58%, slightly above the historic norm, and this confirms the board's confidence in our strategy.

So on Slide 8, you can see that I -- I'm really confident that in the second half of the year, we put in place the necessary measures to get Sodexo back on track. The acceleration in growth in Q4 is good news but not necessarily sustainable at the same levels going into the first quarter of fiscal '19.

I'm very proud of our teams, particularly finance teams, who have strictly controlled our cash, delivering a record free cash flow. All the action plans that we announced over the past year, whether they were for accelerating growth or improving productivity, are strongly underway.

And my #1 priority, as you know, is to get North America back into sustainable growth. And we know that the full turnaround will take time.

Overall, we're confident that we are going in the right direction and we have the right teams to take us there. The board shares this confidence and decided to propose -- to maintain the dividend, which would be voted at the AGM in January.

So I'll now pass you over to Marc to go through the financials, and I'll come back later to talk about the business. Thanks, Marc.

Well, thank you, Denis, and good morning, everyone. I'm very pleased to be here with you this morning.

As usual, you will find the alternative performance measures definition in the appendix. Now let's start with the performance in the P&L on next slide.

This has been a tough year for our P&L. It's been impacted by a severe currency translation although we don't to the P&L due to the strengths of the euro relative to most of our major other currencies.

Revenues at €20.4 billion was down 1.4% or up 4.4%, excluding the currency effect. The underlying operating profit at €1,128 million was down 15.8% or 8.6% excluding currency.

The underlying operating profit margin at 5.5% was down 100 basis points but 80 basis points excluding the currency impact. This is in line with our revised guidance of 5.7% at constant exchange rates.

I would like to remind you that currencies have a translational effect on our P&L as all our costs are in the same currencies as our revenues. However, there is also a mix effect from the BRL because of the very high profitability of BRS in Brazil.

So when the BRL falls, the weight of this highly profitable business decline and the margin rate decline. On the other hand, the opposite is true when the BRL goes up.

The average BRL euro rate fell by 13.5% on average in fiscal '18 versus fiscal '17. Other operating income and expenses, we are at €131 million, €20 million better than last year, and I shall come back to this in the next slide.

Financial expenses improved by €15 million. Last year, we had paid an exceptional indemnity of €10 million due to the early redemption of some debt.

And this year, we cashed in late interest for €7 million related to the prior year dividend tax refund in France. The effective tax rate was significantly down at 27.1%.

This was due to the reimbursement of past dividend taxes in France for €43 million which we got back in January. Then we had a lower rate in the USA with a blended tax rate of 25.7% for our fiscal year '18.

But we've had some negative one-offs in the USA with the impact of the deemed repatriation tax and the deferred tax adjustments. Because of all of this, the underlying net profit was €706 million, down 8.6%, excluding currencies.

Net profit was €651 million, down 4%, excluding currency. The earnings per share benefited from a lower share count due to the ongoing share buybacks.

Now I would like to come back on the other income and expenses. Restructuring costs were €42 million.

As expected, they were substantially below the previous year's €137 million of exceptional costs. However, they were up relative to the first half of the year where it was €7 million.

After the disappointing result in H1, we have taken a number of measures and made some changes in Europe and in the U.S. linked to performance but also to start simplifying the organization.

We will do what is necessary in the coming quarters to continue to manage performance and simplify our organization. In line with the Capital Markets Day messaging, you should model about €40 million of ongoing restructuring spend in the two coming years.

The M&A costs and perimetric changes are not much different than H1. We have also written down the value of some intangible, but they were already there in the first half.

Moving on to cash. The good news in our figure is that cash generation was very strong in fiscal year '18.

Operating cash flow was up 5.9%, helped by much improved cash tax, thanks principally to the reimbursement of the dividend tax and the positive impact of the tax reform in the U.S. The positive inflow of working capital of €221 million was due to improvements of the confidence of the working capital throughout the group with a particularly strong contribution, although not recurrent, in Benefits & Rewards.

Capital expenditure, including the net impact of client investment, amounted to €286 million, representing 1.4% of revenues compared to 1.5% last year. As you know, we have not been signing enough business, especially in Education.

So free cash flow reached €1,076 million, up €189 million versus last year. This is a great year, and please do not count on such a high cash conversion every year.

As you already saw in H1, net acquisition and disposal of subsidiaries increased significantly to €697 million from €268 million last year. The big one was Centerplate for a total of €610 million.

After taking into account the share buyback of €300 million, the dividend payment of €411 million and other changes principally linked to currency impact and perimeter changes, net debt rose by €648 million. As the result of the very strong increase in free cash flow, cash conversion reached 165% compared to 123% in fiscal '17.

For fiscal '19, we aim to be above 100% but not a lot above it. So with net debt increasing by €648 million to €1.260 million, our gearing has increased to 38% and the net debt-to-EBITDA ratio is just now into our targeted 1% to 2% range.

During fiscal year '18, we issued a 5-year U.S. private placement for $400 million at 3.7% to finance Centerplate, and we also issued a 7-year bond for €300 million at 1.125% to finance the share buyback.

Despite this increased debt level, the average rate at the end of the year on our gross debt was 2.5% against 2.4% last year, and we have an average maturity of 5.6 years. At the end of fiscal '18, the group had an operating cash position of €2.7 billion.

This cash position includes almost €2 billion from BRS, including restricted cash for €615 million, financial assets for €427 million and €28 million of bank overdraft. In next slide, you can see that the dividend proposed by the board is €2.75, stable on last year.

Despite the decline in profits, the board felt that given the good performance on cash and its confidence in group strategy that the dividend should be maintained. As a result, the payout will be a bit higher than usual at 58% on underlying net profit and 63% on published net profit.

Let's go on to the review of the operations. Let's start with revenue growth on Slide 17.

This year, revenue was down 1.4%, impacted by the 5.9% negative currency effect due to the strength of the euro against our main currencies. Net acquisitions contributed plus 2.9%, more significant than in the last few years, due to the size of the Centerplate acquisition.

Its contribution from January to August amounted to almost €500 million or 2.4% to this growth. On the other hand, there were also negative effects among which the disposal of Vivabox.

As a result, organic growth is 1.6%, or 2% excluding the 53rd week, slightly above our revised guidance of 1 to 1.5. We effectively finished the year with the fourth quarter that was up 3.5% and 3.3% just for On-site Services, excluding the 53rd week.

On-site Services were up 1.9%, excluding 53rd week. And Benefits & Rewards was up 5.1%.

Let's look at the KPIs. In fiscal year '18, new business reached 6.8% and retention, 93.8%, both up by 30 basis points.

Same-site sales growth improved by 110 basis points to 2.6%. We've had strong momentum in contract extensions.

And in the release, you can see a lot of good example. The really good news is that we've seen a significantly better retention in universities in North America, driving an improvement of 300 basis points for Education globally and some better developments, too, especially in Schools.

So we start the fiscal year '19 with a neutral net new business impact from prior year in Education. We have also seen some signs of improvements in Health Care wins in the last quarter, but we remain prudent because retention has not been particularly good in fiscal year '18.

There were no significant changes in the performance of Business & Administrations overall in fiscal year '18 versus fiscal year '17 in terms of retention and development. On this slide, you see the underperformance of activities in North America, down 1.1%, due mainly to the significant downturn in Education.

Outside North America, Europe is up 1.5%. And our activities in all other regions are up double-digit at 11.7%.

The growth outside North America amounts to 4.5%, in line with past quarters' performance. Starting with Business & Administrations on Slide 21.

You will note that all these organic growth figures in green are excluding the 53rd-week impact. Organic growth was plus 4.1%.

In North America, organic growth was 1.7%, excluding the 53rd week. The Airline Lounges and Corporate Services continued to generate solid growth with further development of facility management services.

However, Energy & Resources remain challenging due to a significant site closure in Canada. Government & Agencies was flat due to generally weak demand in some contracts and mess closure in the Marine Corps.

And as you may have noticed, we were successful in retaining the U.S. Marine Corps contract.

In Europe, sales were up 1.5% organically. The tourists were back in Paris which boosted our Sports & Leisure activity.

Corporate Services has done well with new business and particularly strong growth in same-site sales in Southern and Eastern Europe, and this has helped to compensate for several losses in the Benelux region. Government & Agencies was impacted by the British Army losses in the U.K.

Energy & Resources are stabilized in the second half but was still negative for the year. In Africa, Asia, Australia, Latin America and Middle East, organic revenue growth remained strong at 11.2%, reflecting strong new business and same-site sales in Corporate Services in all regions and a better environment in Energy & Resources, particularly in mining.

Moving on to Health Care. Excluding the 53rd week, organic growth was plus 1%.

In North America, organic growth was minus 0.5%, excluding the impact of the 53rd-week due to slow new business and weak retention this year. The second half activities though was better than the first due to an easier comparable base.

The management team and new sales organization are now well in place. New business start -- signatures started to pick up this summer.

The 0.6% in Europe is due to solid progress on existing sites, particularly in the U.K. On the other hand, net new business in Europe was slightly negative in the year due to a lack of significant development opportunities.

There was an improved trend in Seniors in France, in Hospitals in Belgium and the Nordics. In Africa, Asia, Australia, Latin America and Middle East, the plus 17.2% organic growth reflects many new contract start-ups in Brazil and particularly strong same-site sales growth in Asia.

We do expect the rhythm of openings to calm down a little bit going forward, especially in Brazil, although we still expect above-average growth. The 2.5% decline, excluding the 53rd week impact in Education on Slide 23, was due to poor performance in North America, which still accounts for 75% of the segment's revenue.

North America was down 3.9%, excluding the 53rd week impact. Schools were up due to new business and strong same-site sales growth.

Universities suffered from the high level of contract losses of the previous year which was not offset by enough new business or growth in same-site sales in fiscal year '18. As I said earlier, the good news is that retentions have increased by 300 basis points in the recent selling season, so that for Education overall, net new business going into fiscal '19 is neutral.

In Europe, organic growth was plus 3%, driven by prior year contract wins, same-site sales growth in the U.K. and Spain and additional base in Italy.

France was flat due to weak prior year development. In the rest of the world, Education is principally focused in Asia, where organic growth was almost 15%, thanks to strong contract wins, better retention and contract extension and same-site sales growth particularly in China, Singapore and India.

Now let's move on to Benefits & Rewards performance, where we are introducing some new disclosure. But first, let's go through our traditional figures.

Issue volume organic growth was plus 6.8% and revenue growth of 5.1%. On Slide 26 in Europe, Asia and the USA, you will see the very sustained growth in revenue of 7.5%.

On issue volume, up 6.7%. We've seen rapid growth from solid phase value increases in the traditional meal and food activities across Western Europe, rising to double-digit growth in Eastern Europe and around the Mediterranean.

The weakness in India, due to the massive digital migration at the beginning of '18, is now behind us and we saw a good acceleration in Q4. Incentive & Recognition and the Mobility & Expenses activities are also continuing to generate good growth.

In Latin America, on Slide 27, the year started with a very competitive Brazilian market due to the lack of recovery in employment and much lower interest rates. However, there was a much improved environment in the second half, accelerating in the fourth quarter.

As a result, organic revenue growth in Latin America was plus 2.4% for the full year on issue volume growth, ending the year up 7%, and this was helped by increases in face value and a number of beneficiaries in the second half. From the third quarter, inflation and interest rate in Brazil have been progressively stabilizing and the comparative base has become easier.

To meet some of your requests on additional disclosure for BRS, we shall now break down the revenue in three ways. On Slide 29, firstly, the split by service line between employee benefits and the service diversification, including Incentive & Recognition, Mobility & Expenses activity and the public benefits.

On Slide 30, you will see that revenues for the employee benefits grew by 4.9%, while the new services grew by 5.9% due to the development of Incentive & Recognition and the Mobility & Expenses offers which are widening as we speak. We should continue to give you the issue volume for employee benefits which you can see was up 7.2% and represented a total of €13.1 billion.

However, the issue volume on the other activities is either nonexistent or much less homogenous between offers. So we do not believe the information is useful anymore, so we should no longer provide you the issue volume of the other activities going forward.

On Slide 31, you will find our traditional geographical breakdown, which I have already commented. On Slide 32, we shall now also provide the breakdown between operating revenues and financial revenues.

And you can see, operating revenues were up by 7%, while the financial revenues were down 11%, which is mainly due to the fall in interest rates in Brazil in the recent quarters. We should now provide all this on a quarterly basis.

On Slide 34 now. I would like to finish up with the underlying operating profit.

Our underlying operating profit was down 8.6%, excluding the currency effect. As a result, the underlying operating margin was 5.5%, down 100 basis points relative to the previous year.

Excluding the currency impact, the margin was 5.7%, down 80 basis points, in line with the revised guidance provided on March 29. We had explained at the start of the year that BRS margins will be down due to lower interest rates in Brazil, higher cost linked to digital migration and the investment in Rydoo's Travel & Expense of their launch.

The recovery in H2 in Brazil has helped mitigate somewhat the annual decline. In On-site Services, the positive news is that there was an improvement in the margin in Health Care & Seniors and in Business & Administrations in the second half versus first half.

This is a result of the many operational action plans put in place. However, the second half comparative base from last year was very high.

The issues for the first half have not fully gone away, but we've made some improvements and keep on working at it. With regard to the ramp-up of profitability of some of our large contracts, we have resolved some of those issues and it has led to improvement in the second half.

But we must not stop our efforts on all of these contracts. Even though the plans are now in place, there remains a shortfall in Education and Health Care & Seniors, particularly in North America, due to the slow start in execution during the first half.

Corporate expenses are up due to the announced investment in marketing, digital and innovation. Now let's go into the detail by segment and Slide 35.

In Business & Administrations, the underlying operating profit margin fell to 4.2% by 70 basis points due to execution issues in some of our larger accounts as well as investments in sales, marketing and new offers that are being launched in order to boost our growth. I think you saw some of these initiatives at the Capital Market Day.

In Health Care & Seniors, the margin declined by 30 basis points to 6.4%. This reflect the weakness in the top line, particularly in North America, and delays in the delivery of efficiencies from the productivity programs.

Productivity is improving now and should accelerate into fiscal '19. As we said, earlier, the new global segment management team and the North American team as well as the sales structures are now all in place.

In Education, the underlying operating margins fell by 90 basis points. This was directly linked to the much lower retention in North America, while the labor scheduling and SKU management programs are starting to come through.

Their impact in H2 was limited due to low level of activities in the second half linked to the high seasonality of this business. Inflation and labor costs, which affected us seriously in H1, was covered by productivity measures and we've seen pricing adjustments, confirming the labor inflation has been passed through recently.

In Benefits & Rewards Services, the underlying operating profit margin was severely impacted by currencies 410 basis points. Excluding the currency impact, the margin was down 180 basis points for the full year.

After a first half where -- which was down 320 basis points due to the cost of digital migration, particularly in India and Czech Republic, the lower interest rates in Brazil and investments in the Mobility & Expenses. However, the second half was better, down only 60 basis points, benefiting from the strong recovery in the volumes and progressive stabilization of the interest rate impact both in Brazil.

I thank you for your attention, and I now hand you to Denis, who is going to cover the outlook.

Thank you, Marc. In the following slides, I want to give you a first update on the focus on growth strategic agenda that I presented during our Capital Markets Day and some of the different initiatives that we launched to better position our business to take advantage of growth opportunities, to get back to excellent execution and, thereby, accelerate our growth rates back up to best-in-class.

So out of the several initiatives that we've -- have on our strategic agenda, I will only highlight a few examples today, and we will update you regularly on other initiatives. So let's focus on new food offers that are there to meet the latest consumer trends, on the top left corner of the slide.

Over the past few years and months, we have invested to drive innovative change and, hence, our offers and meet the latest consumer and food trends. We've started to use a multibrand approach, which goes back to the heart of being client- and consumer-centric.

So I'm typically talking here about urban professionals, who expect the same top-quality seasonal food at their company restaurants as at their favorite trendy bistro or busy people on the go who need the convenience of anywhere, anytime food delivery. And there's also a growing demand across the board for locally sourced sustainable ingredients and more vegan and vegetarian options.

So let's talk first about The Good Eating Company. It really carries a sophisticated urban offer and the -- in the U.K.

We acquired the Good Eating Company in 2017. And with that company, we can compete in the High Street in London with a very sophisticated food offer.

Since the acquisition, The Good Eating Company has operated as a stand-alone business, keeping its own brand and with distinctive culinary propositions that are there to capture the premium end of the market in workplace dining. In only a year, we have achieved strong results, together with 100% client retention, 100% management retention, 20,000 daily consumers and new clients like MSC Cruises, you probably know, it's the world's largest privately held cruise company.

And also Nomura Bank. And with Nomura, we are particularly proud of this win because The Good Eating Company will manage the restaurants for their 4,200 employees at their London head office as well as the fine dining, hospitality, conferencing and events business and the on-site convenience store.

So in fact, we have grown The Good Eating Company business now by over 20%. When we look at optimizing overhead costs, and it's the top right corner.

I just want to highlight that since the Capital Markets Day, we have moved into education mode in North America, in France and in the U.K. in terms of our Fit for the Future program.

We have identified €100 million run rate of costs that can be taken out to redeploy on boosting sales. In the accounting program that Marc has presented at the CMD, the new Porto center is live and the U.K.

accounting has been transferred. The next country to transition will be The Netherlands.

Now the -- on our nurturing talents, the bottom left corner. We shared with you in the Capital Markets Day that nurturing talent is a fundamental pillar of our strategic agenda.

And in this pillar, we have used a joint approach to develop the digital passport program. We started with an initial test and learn phase with 1,500 users.

It's now ready to be deployed across the organization, targeting connected employees and covering digital topics that are impacting the world we live in and Sodexo's business. And among them, of course, consumer experience, big data, innovation mindset, data analytics, Internet of Things, robotics, virtual reality, digital, food and FM, design thinking.

A lot of topics. It's a very impressive virtual learning program, which aims at supporting our employees on the deployment of digital solutions in their countries, in their regions or segments.

Now on the anchor corporate responsibility pillar, on the bottom right corner. I'd like to highlight the recent launch of 200 new plant-based menus across hundreds of university, Health Care and Corporate Services accounts in the U.S.

with -- I have to highlight that, delicious and trendy dishes like typically, carrots, ossobuco, tiramisu made with cashew nut cream, et cetera, and the likes. Very well-received.

These offers, they respond both to consumer trends and environmental concerns. You may know that food production accounts for a quarter of all greenhouse gas emissions.

And so helping people increase the share of plant-based foods and reduce meat in their diets is a critical step in reducing those emissions. So let's now turn to the outlook and the fiscal '19 objectives.

So while the growth rates of the fourth quarter is not immediately sustainable particularly at that rate going forward, we are convinced that growth in Europe should be maintainable at between 1% and 2%. We expect to see continued solid growth in developing economies, even if it may not be double digit.

And we certainly expect to see some improvements in North America. The Education selling season was better in terms of retention.

So even if the business doesn't grow in fiscal '19, it certainly shouldn't be down. However, I repeat that the full turnaround in North America is going to take time.

So all this leads to an expected organic revenue growth of between 2% and 3% for fiscal '19. Our action plans are delivering.

The efficiency gains that the teams are driving across the group with the Fit for the Future project and many other initiatives will be reinvested in growth initiatives. So we expect to generate an underlying operating profit margin of between 5.5% and 5.7%, excluding currency effects.

I'll remind you that our strategic agenda is aimed at delivering market-leading growth. The first steps to return to this performance are to achieve organic growth of more than 3% from fiscal year '20 and then improve margins back up over 6% sustainably.

And as we explained during the Capital Markets Day, margin improvement will come with the right levels of growth. So thank you for your attention, and I now open up the call to your questions.

Thank you.

I have three questions, if I may. First of all, regarding Q4, if you could please give us the level of contribution to organic growth of the shift in the timing of board days in Universities in the U.S.

And also just would like to know if you did benefit from any other additional factors during the quarter? My second question, regarding organic growth for next year.

Is it fair to assume that it will be back-end loaded with organic growth at the low end of your target in the first half and then accelerating in the second half? And finally, if you could also give us some additional color on your performance in Benefits & Rewards in Brazil in Q4, especially in terms of the evolution of the level of commission please?

Thank you for your questions. Yes, in Q4, there was a few elements.

We estimate that the recurrent parts in our Q4 results is more around 2%. And the gap to 3.3% or the difference to 3.3% comes from various items, one of which are the transfer of dates from Q3 to Q4 in Universities.

But there was also a number of project during the summer in Education whether it's in Schools or Universities which contribute punctually to Q4. We also had a very strong Sports & Leisure activity in Q4 in France.

We also saw some very good attendance in our corporate sites in France in Q4, which was actually more than what we had expected or experienced in the previous quarter, so we don't want to capitalize on this becoming recurrent. And then there were some technical issues because we did a lot of claims with a number of clients.

And some of those claims turned out as extra billing, retroactive billing and so forth, and they were booked in Q4 as revenue. And when we had forecasted, we were not too sure that this will go through revenues or whether it will go through improvement of our cost.

But some of them went into revenue. So we do expect for H1 to be, I will say, at the bottom of the range of 2% to 3%.

And then with H2, to increase gradually. Now if I want to speak about BRS, if I may.

BRS Brazil actually saw some high single-digit growth in Q4 which was very strong, much stronger than what we had seen in Q3, where it was more low -- small single-digit growth and where it was very neutral at the end of H1. So we see a momentum building in Brazil.

It's hard to project it into the next year, but we do expect that Brazil will grow in revenues next year. Maybe not at the same rhythm than Q4 for the entire year, but we see solid growth in Brazil next year.

The first question is just on Slide 19. You helped to give us the breakdown of sales in the year.

I think I'm right in saying that implies about 3.2% organic sales in 2018. Obviously, you delivered something below that in OSS.

But I think also some of your business development numbers and retention figures are sort of year-end number rather than in the year number. So could you just help us understand the sort of mathematical mechanics of those numbers?

Because they do imply a nice acceleration to come, but that's not sort of what you're talking about for next year. Secondly, on margins for U.S.

labor costs, you're saying for Education that had been passed through for 2019. How about in the other mark -- other parts of the market in North America, please?

And then finally on the balance sheet. You talked about IFRS 16 adding 0.7x leverage.

You're obviously doing more acquisitions. How much balance sheet upside do you have from more acquisition spend, or indeed, buybacks, please?

Jamie, thanks for your question. When you look at the -- at our indicators on Slide 19, they are full year indicators, okay?

So definitely we are -- I would say we are reasonably pleased with the 30 basis improvement both in retention and in business development. But I'd say that we are still not satisfied with the level of retention that we have currently.

You know that we target to be closer to -- no, above 95 as a more midterm target. But it's true that we've improved our retention, particularly in the Universities, because we enter this year with a neutral net new loss indication, which is much better than last year.

We were still cautious about retention in Health Care in the U.S., particularly. Business development will also -- we have a 30% increase.

And I'd say that we would ideally target a 7% -- we'd like to be above 7% this year. But to be clear, I don't want to sign contracts for the sake -- for the sole sake of top line growth without the margin potentials that goes with it.

So we will be, of course, boosting sales, but we are -- we'd be careful about ensuring that what we sell is sold at the right level of margins. And regarding the what we call the comparable unit growth, we are 2.6% and it's pretty much a good level.

So being in the same range would be satisfactory to us. That's how we could -- you could look at those 3 KPIs for the year to come.

And for your second question, I would say the dynamics in Business & Administrations, as I said in my comments, we have seen very steady development rate and retention rates in the corporate world. So I think we can expect a similar type of growth that what we've experienced in fiscal year '18 into fiscal year '19, which was a decent growth.

The balance between regions might be slightly different, because we are expecting more growth in North America and maybe not such a dynamic growth in Asia, where it was very, very strong. But we are expecting broadly the same type of growth in Business & Administrations.

In Health Care & Seniors, I would say the difficulty that we have is that retention has not been too good in Health Care in North America and the picture in fiscal year '19 will depend on how we can control that retention going forward. As we said, we've seen better wins.

So this is very encouraging because it means that the new sales organization that we put in place is -- seems to be producing better each rate, better results that what we had experienced 1 year before. So the good news on the sales, on the retention, we've got a lot of work to do, but the team is focused on this.

So it will depend on the quality and the results of work, of our work on retention. And in Education, as we said, schools had a very strong selling year last year, retention was much improved, so we expect Education to be -- especially in North America, not to be dragging the North American results, but to be very neutral in the coming year.

And as you may have seen in France, we had a number of wins or retention successes in Education. We retained Marseille, we retained - and we extended the CD 78, which is the evening department.

Now we got all the schools. It will only start in January, but it's a big win for us.

And we also retained one of the districts in Paris. And so we should have a very, very decent year in Education in France next year.

And on the balance sheet, we discussed with the board recently about buybacks. And right now we decided to pause on the buybacks.

But we have a decent envelope for M&A. I mean, we were discussing with the board to be spending another €500 million potentially on M&A this year.

So the leverage shall increase gently. I mean we are currently at 1.

I think it will probably increase gently above 1, but I don't expect a massive jump to 2 immediately. So I think it's going to be a gentle increase of our leverage.

If I could, can I please just clarify my question on North America? It was really about -- the second question was about margins and passing on U.S.

labor costs. You say that's passed on in Education in 2019.

But how about in B&A and Health Care? And on the question about organic sales breakdown, that's Slide 19.

If they are in-the-year numbers, implies 3.2% organic sales growth and you reported 1.4% excluding the extra week. So I'm just wondering what the difference is.

Yes, on margin. So I think I had explained that the very sensitive issues we had last year was in Education, because we started having the hourly labor inflation impact in Q1, while most of the anniversary of our contracts are during the summer.

So this was really where the most acute squeeze was in term of inflation. And what we see is that during the summer and, recently, we passed inflation very nicely to our clients.

And so at least we've rebalanced the pass-through rate right now. If inflation carries on in an explosive way, we'll still have another squeeze.

But what is very reassuring is that even though there is a lag, we pass it on. In the other segments in North America, because the contracts start in every period, so the passing on the inflation is the more linear, so to speak.

And so we felt some impact, but there was more passing on quickly. So -- but in general, we are experiencing and we experienced an inflation in labor last year about 2.8%.

And we are passing it on. The risk we have is that inflation comes back or maintains in North America for Education, there are still dislike to pass it on, but so far so good.

Regarding your question on KPIs, CUGR, comparable unit growth, is in-year but retention and development are not. So these KPIs will impact revenue as when the deals really started.

So that's where you have to do that. It's difficult to extrapolate.

Yes, on this one, it's because when we calculate development rates, we calculate the pro forma 1-year revenue, but the contract -- let's take CD78. We won it in August.

It will only start in January with the ramp-up. So we will not see the full effect of that significant contract before H2.

Well, actually, it's actually booked in development in fiscal year '18. Retention is the same.

Retention, we book it full year when it happens. But it happens when it happens.

It can be 3 months later or 6 months later. What is important, and your calculation is right, is if we keep on having a sum of KPIs above 3%, it's an advance sign that we should be able to reach 3% in the future.

And I think you're right that the signs are telling us then reaching 3%, if we maintain KPIs like this, should be in our reach.

Three for me as well. You've spoken about M&A, but can you give a bit of color in -- on your thoughts in terms of disposals and country exits first?

Secondly, you've also spoken about phasing of €100 million redeployable cost. So maybe you could just talk a little bit about where you see that being redeployed?

And then lastly, the Brexit question, just in terms of how you feel about your own preparation going into next year in the U.K. for Brexit.

And also, if you've seen any change in client behavior in the U.K. related to next year?

Jarrod, thanks for your question. So regarding disposals and country exits, we are active in terms of identifying pieces of the business, not massive ones but that we could dispose of.

You've seen that last year, we've done some. Regarding country exits, we have -- you know that this is sensitive.

So we have 4 countries identified: 2 actively and we've launched the exit process; 2 more are being finalized in terms of how we would exit. So this is the first phase.

Marc said that we would be around 50-plus countries permanently and probably a dozen more into project mode, where we go there only for a project and exit afterwards. So this is in process.

As I said, 4 countries identified: 2 processes launched; 2 more finalizing how we will do it. And we will continue.

I cannot promise that this -- that all of them will be done by this year because we are talking about people, we are talking about client contracts. So there is a sensitivity about that.

There's also, of course, a people issue. But we have rhythm in -- we put rhythm into it.

And we'll update you as we move on. For the moment, we don't communicate, of course, on the countries, the name of the countries, because it's sensitive.

You can imagine that. So but it's -- we're doing good progress here and we will keep the momentum.

And yes, that's it.

In term of the redeployable cost. So we -- what we explained at the Capital Market Day is that we focus first on France, U.K.

and NorAm. This is where we identified €100 million of redeployable cost.

What we're trying to do is because this is also a deep transformation, most of the savings are relying to investment in IS&T being significant and being deployed. So we do expect some impact in term of redeployment in fiscal year '19, but it will not be more than €20 million.

The -- we have a number of things in terms of transformation of our system to do, and we expect the bulk of the redeployment to be in '20 and '21. So those are relatively very deep transformation that we need to do.

But we will do them.

And regarding Brexit. I'd say that we don't see particular signs or changes in our client behavior for the moment.

I think there is a big question mark into what's going to happen. No one knows, actually, where we will land.

I'd say, yes, we're as prepared as we can. We -- I remind you that our business is very local.

So the impact that we have in a country remains local. So we are -- as I said, we are already as ready as we can.

But so far, no changes in any planned behavior.

I've got two questions, please, if that's okay, and I'd like to ask them one after the other. So just on margins.

I'm slightly confused by the outlook and the order of priorities in the next 3, 4 years, because there are many statements where you reiterate that the margins will come after the top line is fixed, will only come at the right level of growth, that the productivity benefits will be reinvested in growth, et cetera. But then separately, you seem to be guiding on a constant-currency basis for actually a slight year-on-year improvement in '19.

So to clarify this for '19, '20, the short-term, are you promising any sort of margin improvements before your explicit guidance of 6% in 2021?

We've guided a 5.5% to 5.7%. It will be for this coming year.

And this -- it's a range which we are confident about. What we've said in the Capital Markets Day that we would -- our objective is to reach 6%.

I think our fundamental objective is to deliver more than 6% margin sustainably. And we said at Capital Markets Day, ideally by 2021, okay?

Definitely, we had a exchange-rate impact on our margins, I think you noticed that. The impact of the currency is -- shouldn't be more than 20 basis points overall, given the split of our revenue portfolio.

So of course, 2017 was our reference when we mentioned that. But I want to say that our objective is to deliver more than 6% margin sustainably, whatever the rates.

That's -- and of course, there's a little bit of swing on that linked to currencies. But fundamentally, our objective is to sustainably deliver more than 6%.

And then just to clarify, in the full year '19 margin outlook, 5.5% to 5.7% is constant currency when you...

Yes, constant rate. Constant rate fiscal year '18.

And when you mentioned at no more than 20 basis points currency impact, it's the potential negative currency impact in full year '19?

When we model -- the currency impact we've seen this year is due to the severe drop in the reais but also the severe drop in the average rate of the dollar. And the U.S.

and Brazil are our 2 highest-margin country. So I think a 13% to 12% drop in both currencies, giving 20 basis points, this is what we see as the worst it can get.

Now, it can go the other way. But what we say is that the currency impact should not be more than plus or minus 20 basis points on a yearly basis, and that's why Denis says, look, the 6% we alluded to is -- it is a 6% whatever what, so on the currency, because we need to be more than 6% anyway.

Okay. And it could go both ways, obviously.

At current exchange rates is it a negative or a positive?

Yes. Currently -- I mean, currently, when we look at the exchange rate at the end of right now, after two months, we still see a slight deterioration in the reais, probably 4% to 5%, but we see an improvement in the dollar by another 4% to 5%.

So one is minus, one is plus. But it's very early.

We calculate the rates as an average of every month and for a year, so it will depend. And what's happening in Brazil from a political point of view and a currency point of view, will have a great influence, obviously, on the reais average rate, but it's too early to say.

The dollar is getting better.

Yes. At the moment, we lose in Brazil.

And my second question is on the brand strategy. So as you mentioned for the last year or so now, you seem to have explored the idea of having dedicated B2B brands at certain sectors.

You did spend a bit of time on The Good Eating Company in this presentation. If I remember correctly, when you acquired it, though, it was a GBP 20 million business.

So if I take The Good Eating Company and Novae and even if I consider Sojurest de France to be newish because you've relaunched it and Centerplate, all together it's less than 10% of group revenue. So my question is, where do we go from here?

You've tested it on a small scale, you keep buying small brands. Do you start launching sub-brands of a bigger scale organically?

Or do you aim for the same results without the brands, so a different sales force organization, a different segmentation, et cetera?

I think it's -- thanks, it's a very good question. Yes, definitely, you understood that we are shifting our brand strategy.

We keep the brands, of course, when they are relevant. So we will keep the Novae brand in Switzerland.

Yes, we keep the -- we've kept the Centerplate brand and The Good Eating Company. We plan to develop further The Good Eating Company and export that brand into new markets, because the best brand carries an offer, as I said, that is very relevant for typically urban clients and employees.

So -- and typically, if we do that, we will do it with different sales teams, because it's quite specific. So we will enter into that.

It's too early to give you an order of magnitude of that development, but it's very precisely something that we have in mind. And it's true also, of course, for Centerplate, particularly in -- wherever the consumer centricity is important, the brand is important.

So typically, in corporate, so this is -- we've launched -- we've won recently and it's still not to be fully published, but we won a very important account on the West Coast in the tech sector with our brand, which is called Local Artisan. We will deploy Local Artisan at a greater scale in the U.S.

So there are -- we're moving ahead on that.

May I return again to Brazil? I just wonder if you can give us background on whether the improvement in revenue momentum that you've seen, is that due to your market share change in competitive dynamics?

Or is that the economy picking up? And then secondly, a quick question for Marc.

It's -- if my calculation is correct, the change in the French subsidy regime that we've seen proposed, would that lead to about a €10 million headwind to your EBIT in the fiscal '19 year?

Regarding Brazil, I think we've seen -- yes, we definitely see a pickup into the economy. We see -- so we've suffered from a lot of our clients laying off staff.

And of course, that has an impact on the number of beneficiaries that we serve. We see that.

We see also a good dynamic coming from our sales team. We put typically in place a strong digital marketing and sales machine that helps us capture small and medium companies in a very efficient way.

So that helps. It helps also the margins because, of course, margins are better, commissions are better with smaller companies than big ones where fight the fight can be sometimes a bit tough.

So I think those 2 elements are explaining this, I would say, promising pickup of our results in Brazil.

And now on the French SA-CO, as you said, we've actually already suffered in fiscal year '18 a negative impact at UOP level, but about €4.5 million. And we are expecting a further impact next year by €8 million, which is factored in, in our guidance.

There is also a secondary impact that is tricky, is that it does also affects our ETR, and it's costing us actually also an extra €9 million of tax, because now the SA-CO being a social charges reduction, it's actually increasing our profit base taxable, while before it was a tax credit, so it was actually not -- it was not taxed. So we -- this is why also we guided for an ETR of 29% because if -- without this, we would have been at 28%, but it cost us 100 basis points of ETR as well.

So €8 million on UOP and 1 full percentage point in ETR.

Yes, agreed. And so just got to follow up on that, Marc.

Do you feel now that that's the end to the change in the subsidy regime in France? You've had a degree of disruption over the last 18 months or so.

Is that it now? Can we look forward to something a little bit more stable for a while?

I wish I could tell you it was the end. On the tax side, it is not the end because there will be a further impact because of our split years and so forth.

We will have another 50 basis point impact on the ETR the following year. In term of reforms, now the government is reforming left, right and center, you can expect more.

But I cannot tell you where it is going to come from. It could also be positive, I'm hopeful.

But right now, on this one, the EBIT impact, I think we shall almost see the full of it in '19. The ETR is back there, there is a further impact in '19 -- in '20.

Two questions remaining for me, please. First is on margin outlook.

You've given us clear guidance for the full year, but could you talk about a phasing of the margin improvement between the first and second half of the year? In other words, should we expect margins to dip in the first half?

And then secondly, moving on to the recent GPO wins in the U.S. Is that going to be a driver of margin improvement as we go into 2019?

And secondly, is that also -- are you finding that helping to drive new business at this stage? Or is it too early to make that call?

James, regarding your first question, we give a guidance on the margins for the full year. We don't particularly give any outlook in terms of the phasing of between the halves.

I think we still have -- the margin factors in many, many different criteria, and I wouldn't take any risk or anything in giving any information on phasing. I think we appear where we aim to be at the end of the year, and that's it.

Marc? On the...

On the GPO. So you've seen we announced it in August, we signed a partnership with Dining Alliance.

This partnership is progressively starting from October. It's going to be a ramp-up and we have to onboard all their merchants, which will take time.

But we do expect a revenue uplift from that partnership. We expect this uplift to be €30 million to €40 million in this year.

We -- as you know, I mean, because of IFRS 15 and the fact that it's not a growth revenue recognition but a net revenue recognition, this is not a lot of revenue. From a margin point of view, it's going to be positive, but not highly positive in the first year.

What is important is that it has a lot of billions of potential purchasing to our current volume. And this is a long game.

I mean, we have to work the catalog, we have to renegotiate with suppliers and we will improve purchasing income because we are buying more now. Now, in this current fiscal year, the impact will be there, positive, but it's not going to be a great impact.

But this is more a long-term, strategic move that we wanted to do to increase our volume and our purchasing power in North America.

What's good though in this win is that it demonstrates that our current GPO was competitive. And that's -- I think, that was a good sign.

To be able to win Dining Alliance demonstrates that even though our volume specifically compared to food buy were lower, that we could be competitive on pricing. And I think it's a good sign of our competitiveness, which will be improved, as Marc said, as we move on, thanks to the volumes.

I've got three questions, please. The first is just back to Slide 19, which Jamie asked about earlier.

The improvement in comparable unit growth, can you just talk a little bit about whether that's driven by volume or pricing? Second question is, I know you've had lots of discussion and debate about the margin guidance and the impact of FX, but just to make it really simple, so your comments about getting back to 6% margin, when you account for current interest -- sorry, current exchange rates, does that leave that at 5.8%?

Is that a kind of some simple sort of yes or no? And then finally, just in terms of cash tax, which was low in the first half and low for the whole of this year, do you expect the difference between cash tax and P&L tax to come into a much more sort of similar band going forwards into 2019?

So thanks, Tim. Regarding the CUGR, it's driven by a compound effect of many parameters.

It's a -- so it's a multi-criteria indicator. Inflation, of course, comes in, but also cross-selling, consumer trends, employment growth on the site, et cetera.

So it's really a mixed bag of things. What I can say is roughly, inflation is more or less around 2/3 of that.

And the rest being all the other parameters that I mentioned. Regarding our margin guidance, when -- yes, we reduced 20 basis points, so we landed at 5.7%.

So -- and so published is 5.5%. So if we were strictly censored to say, we've communicated on 6%.

6% mathematically means with the new exchange rate, 5.8%, okay? That's mathematically.

Now, what I just said, was 6% sustainably as our target was to be understood whatever the rates. Of course, it can switch rates.

But what we want is to be sustainably over 6% whatever the exchange rates, okay? So that means then with a plus or minus, around these 20 basis points.

So that's our target. We're not there.

We clearly stated that we have to do 2 things. We have to reignite top line growth, because top line growth helps the margins.

We also have to do all the work on our efficiencies, reducing admin costs and investing in sales and marketing and digital and everything and systems. So that's the fit for the future program.

It's all that, that will help us to be sustainably at 6%, again, whatever the rates. That's our objective.

And on the cash tax. Yes, there is a massive difference this year, I think it's about €140 million between the P&L tax and the cash tax.

And I will say, no, you cannot expect this to reproduce itself in the coming year. There could be a positive difference still because of the timing of the improvement on the tax rates and so forth.

But this was really an exceptional year in fiscal year '18. So do not expect such an impact in the future.

Okay, great. And then just one last clarification.

So the phasing of those FX impacts on margins was a little bit greater in the second half of the year than it was in the first half of the year. But still, that -- you don't -- I suppose what I'm trying to get to is your guidance for next year on margin, as you talk about it in terms of constant currency, do you still expect, again, based on what we're seeing at the moment in terms of FX rates, there to be a further pressure stemming from FX or not?

You know the -- when we were at H1, the real had dropped by 8.7%. And at the end of the year, it's 13.5%.

But the 13.5% applied to the full year. The 8.7% applied to 6 months.

So you have a 13.5% on H2. And then you have a gap between 13.5% and 8.7% on H1.

And the difference in margin in H1 was 10 basis points. But it turned out to become 20 basis points because of that.

The same applies to the U.S. where the gap at H1 was much lower than the gap for the full year.

So the dramatic effect in H2 was very, very strong because the deterioration of the currency accelerated. Now, when we are simulating the impact for fiscal year '19 based on what we know today, and we are very early in the year because we only -- we took the rate at the end of October, what I said is that the impact on the dollars today on average, if I reproduce the current rate I see until the end of the year, the impact is plus 5% on the dollar, minus 5% on the reais.

This should have a neutral impact in margin. But again, it's by reproducing for the rest of the year the rates I observe today.

And I will not dare projecting currency in the future, it's not my job. But what I can tell you is right now, the trend is minus 5%, plus 5%, it should be relatively neutral.

Two questions on free cash flow, please. Firstly, how much of the €100 million improvement in working capital is underlying versus some one-offs?

A bit more color on that would be useful. And then sort of on the CapEx.

Presumably, going into next year, an acceleration in organic rate growth probably comes with a bit more CapEx. So could you just talk a bit about the sort of -- the longer-term run rate of CapEx to sales and also guidance into next year?

So on the working capital, I alluded to the fact that our teams did pretty well. I think we did a good work on the basic components of the working capital, collecting the cash, increasing supplier payment terms and so forth.

And I will say, it accounted for probably half of what you see. The other half comes from a fantastic BRS working capital improvement, but some of it is linked to the cut-off of issue volume and reimbursement for a few services.

I'll give you an example. In Romania, we should only the Pass and we collected a lot.

But it was not reimbursed before the new year. So this is a one-off, and it's actually going to reverse a year after.

So I am not expecting a very strong working capital improvement next year because we will have some of those balancing effects. What I can tell you is that the basics of collecting cash and managing our payment terms is well under control, and it contributed positively.

But for next year, it's going to be a bit more challenging because of those cut-off issues. Now when I look at CapEx, this year was a very low year.

You will see also, we created an appendix to show you how to take our net CapEx to sales into growth CapEx to sales. I think it's Appendix 10.

We'll let you look into it. And if you have any question, you can get back to Virginia and Tai on that.

What we are seeing is that we will have more CapEx next year. This was really a low point.

We have a few CapEx to pay dedication. We've won contracts.

We know we have -- we committed CapEx in Education. We committed CapEx in Sports & Leisure with Centerplate because of some wins.

And we've encouraged our corporate team to also spend more CapEx for retention, so there will be more CapEx in fiscal year '19. It's now difficult to tell you exactly how much.

But I expect this to be significantly higher in fiscal year '19 than in fiscal year '18.

And just a follow-up on that. Are you seeing -- you say you're encouraging your teams to spend a bit more CapEx to win contracts.

Are you seeing the higher CapEx put in upfront allowing you to win sort of higher quality and longer-term contracts? Or is it sort of a fairly similar mix to what you would have had before?

I think it -- what we see is if we have low CapEx, it was because we have low sales activity and low wins. So we've always put -- we have no problem to put CapEx if we have good pro forma proposals with good margins coming up.

So that's for us in terms of wins. It's -- we've -- we -- as Marc have said, we are really encouraging our teams to come up with -- and specifically, Universities, a little bit in corporate services, but Universities and Sports & Leisure.

CapEx can also be used for retention purposes. When we innovate with our clients ahead of any tender, that helps retain the client.

And sometimes putting a little bit CapEx is interesting. So those are good practices, when we have good contract, good margins, that -- it's something which is really good CapEx, I would say.

So we hope as sales pick up, as -- in the segments that I mentioned, that we'll have more CapEx.

Earlier in the year, you called out a handful of large contracts as contributing to your margin declines. I just wanted to get an update on how those specific large contracts are developing into next year.

Yes, we've -- I can tell you we've put quite significant efforts on that. I would say it's giving -- given the complexity of those large contracts, it's a permanent focus.

We've done -- I think we've sold some of our critical underperforming large contracts. As I said, it's a constant focus.

And always, we have to be cautious every day. What we've done is, for some of them, we've renegotiated with the clients, we've renegotiated contract terms, we've renegotiated scope sometimes.

And you -- we've turned around some of them. That's the first action that we took.

With a few of them, we've exited, because we thought that there was no possible negotiation, there was no possible outcome. So we exited.

And for a very few, we've put the necessary provisions on those ones. But we are talking very, very few contracts.

But our main goal is to roll up our sleeves, get into constructive talks with the clients, adjust the scope if necessary, adjust contract terms. And in the vast majority of the cases, the clients wants us to be successful because it's also his interest.

So with the right level of conversations, provided, of course, we deliver the service that is expected, we are able to have -- to turn them round.

Two questions from me, please. First one regarding the margin outlook for '19 and the mix effect.

Given the fact that you are reinvesting in growth in the On-site Services division in particular, should we expect some margin improvement in this division? Or should margin improvement come mostly from the Benefits & Rewards division?

And my second question is regarding France. Could you revert on the pricing situation there?

And as well your organic growth in '18? And also in Q4 in particular, please?

Regarding the -- thanks, Johanna, for your question. The -- in terms of margins outlook, I would say that we don't expect significant margin improvement in On-site.

We are focusing in really having them under control. As I said, operational efficiency actions are critical.

We see -- we are seeing positive things typically in Health Care in North America, which, as you know, was an issue in the past year. So -- but you shouldn't expect -- should expect marginal mix improvement on the margins in On-site.

But it's true that BRS can contribute with its development. Regarding France.

France, I would say that the French market has been very, very challenging. It still remains, even though maybe the situation has calmed down a little bit on the pricing, but it's still -- it's in one of the challenging market.

We have to improve. We have to improve our -- particularly on retention, I think we can improve.

We have a better overall growth, but still not at the level that we expect. And in terms of splits, Marc, do you want to?

Yes, Q4 in France, as I mentioned, contributing to our strong Q4 at the group level because of a good Sports & Leisure activity and good attendance in Corporate Services. But overall, when we look at France, I mean, the last 4 quarters have all been positive.

I won't say the momentum is strongly picking up, but Q4 was good for the reason I described. We are expecting next year to be gently positive.

And as the markets soften a bit on the pricing, we will expect growth to pick up. But it's too early to really see a very, very strong momentum in France.

But it is positive. It's growing quarter after quarter.

So it's steady.

Yes, France is back to, let's say, a reasonable growth after several years of decrease. So we see that as a positive sign.

Yes.

Just a couple of quick questions, please. Are you sticking with your effective tax rate guidance of between 28% and 30% after the 27.1% you had this year?

And then secondly, on the comparable unit growth that you saw, I think you said 2/3 pricing and the rest volume. Can you just remind us of how that compares to last year?

And if possible, how that sort of -- that 2/3, 1/3 in FY '18, how that phased throughout the year, if that's possible?

The ETR. So it's -- actually, we will need to sit down and we -- I need to do you a little graph.

Because the U.S. tax rate is going to go down further for us, because this year was what we call a blended rate.

Because we were 4 months in fiscal year '17 and 8 months in fiscal year '18. For calendar year '17, it'8 months.

So last year was 25.7%, and it will become 21% next year. But at the same time, we had €43 million of dividend tax credit.

And that €43 million alone is about 400 basis points of ETR. And then we have the SA-CO being factored in next year, which is costing us 1%.

So when you factor all of this, the range of 28% to 30% is actually what we see currently. I mean I think we should be around 29% and without the SA-CO we will have been at 28%.

So I'm aiming for 29%. If we can do better, we'll do better, but this is what I'm aiming for at the moment.

Regarding the CUGR, we -- the 2/3 of pricing- and inflation-related increase, it's more or less something that we see as an average. This year was helped by several project work on some sites.

And so this has helped. We particularly had the FEMA project in Energy & Resources that helped CUGR, the special project work.

But you should know for this coming year, I think you should estimate that this would be more or less in that range.

I think this should be the last question, please.

Well, thank you very much for your questions. Just want to reiterate the confidence that we have in the action plans that we put, both on consolidating the way we deliver our business, doing all the consequence management decisions that we have to take into ensuring that we have all the right people at the right place.

We see, let's say, positive trend on H2 that will make us -- that makes us confident for this year to come. Still, as I said, North America turnaround will take some time.

We see positive signs. But North America is a big business.

But we put all the necessary efforts and I think we're doing all the right things. The Executive Committee is absolutely aligned, absolutely focused on executing our plans.

And so looking forward to this year, and of course, to exchanging with you in a couple of months, actually. Thank you very much to all of you.

Thank you for your questions.

Thank you. Bye, bye.

Bye, bye.