Sodexo S.A.

Thank you. Good morning, everyone.

Welcome to our 9 months fiscal 2019 revenues call. On the call today are Denis Machuel, CEO; and Marc Rolland, CFO.

As usual, the slides and press release can be downloaded from the website, and the website will remain available on our website for the next - sorry, the webcast will remain available 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. I just want to ensure that you all have the date for the full year results announcement, which will be on November 7, the 7th of November.

Please note it in your diaries because the date has changed. Thanks.

I now turn the call over to Denis Machuel. Denis?

Thank you very much, Virginia, and good morning, everyone. Thanks a lot for joining us for this first 9 months fiscal year '19 revenue call.

And let's go straight to Slide number 5 where you will see that we have delivered a 3.5% organic growth, and this is better than expected. The On-site organic growth for the first 9 months was at plus 3.2% with the U.S.

improving each quarter from 0.2% in Q1 to 2.4% in Q2 and 3% in Q3. Outside North America, organic growth was 4.4%, benefiting from continued strong performance in the developing economies and a very solid Europe.

Benefits & Rewards also performed well with Europe taking up the slack to cover the expected lower growth in Brazil. I'll now pass you to Marc Rolland, our CFO, for the detail of the revenue figures.

Marc?

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

Please note that as usual, we have defined all alternative performance measures in the appendix. Now let's turn to Slide 7.

Slide 7 shows how we got to the €16.7 billion for the first 9 months. Total growth was 7.7%, helped by an M&A contribution of 3% and currencies of 1.3%.

The M&A is principally the impact from Centerplate in the first 4 months of the year and the smaller acquisition made this year. We now expect the M&A impact to be around 2.5% for the full year.

The modest but positive currency impact is due in particular to the strength of the dollar compared by the negative impact of the weakness in the Brazilian reais. Organic growth was 3.5% with On-site Services up 3.2%, thanks to a very strong Q3; and Benefits & Rewards up 9.7% despite the fact that Brazil had a much stronger comparative base as Q3 was a period in which the business started to pick up strongly last year.

As you can see on Slide 9, North America is doing much better, up 1.8%. This was 1.2% at the end of H1 and then up 3% in Q3.

Europe is steady at 3.4%. The Africa, Asia, Australia, Lat Am and Middle East businesses are still growing fast at plus 6.8% and despite the base becoming much more significant.

The organic growth of On-site Services outside North America remained strong at 4.4%. On Slide 10, you will find Business & Administrations, which I remind you represents 56% of our On-site Services revenues.

B&A organic growth was up 3.2% when restated for intersegment reclassification. North America, which represent 26% of B&A, was up 2.1% as the impact of a major one-off Energy & Resources contract in Q1 last year is diluted.

This was a really good performance from Corporate Services driven by same-site sales growth, new contracts and solid retention. As I have now said for the last quarters, Government & Agencies activities impacted by the renewal of the Marine Corps have lower comparable unit sales.

However, the segment has improved a bit in Q3 due to better volumes. The organic growth of Centerplate is now included in the figures.

The team has successfully completed a major round of renewals. Most contracts have been renewed successfully and often expanded to new services, while some less profitable ones have been exited.

In Europe, which represents nearly half of B&A revenues, organic sales growth was steady at plus 2.3%. Corporate Services remains helped by cross-selling in most countries.

After an excellent start to the year from the third quarter, Sports & Leisure is impacted by the loss of a significant contract in France in the tourism segment, which impacts particularly the third and fourth quarters. Government & Agencies on the other hand, benefited from an easier comparative base now that the exited British Army contracts are no longer in the base.

Energy & Resources performance in the North Sea is stabilizing. Organic growth has continued to be strong in Africa, Asia, Australia, Latin America and Middle East at plus 5.8%, thanks to same-site sales and net new business wins in Corporate Services, particularly in Brazil.

Energy & Resources remains impacted by the end of several large construction projects and the lack of new ones to replace them. Moving on to Health Care & Seniors in Slide 11.

Organic growth was 2.7% for the first 9 months. In North America, which represents 63% of the business, growth was plus 2.2%, improving quarter-after-quarter due to solid comparable unit growth, helped by some inflation pass-through and cross-selling.

However, our prudence on retention last quarter has now been validated with the loss of several midsized contracts and one large contract, which together account for about €200 million of annualized loss revenues. This will start to impact the performance in the fourth quarter progressively.

Development has not been enough to cover the lost contracts in the coming quarters, so you should expect a weak Q4. In Europe, organic growth was plus 1.4%, supported by inflation pass-through in France.

However, the end of the ramp up of the hospital win in Benelux, the negative net new business in the Nordics and lack of bid opportunities in the U.K. are hampering growth.

Growth in Africa, Asia, Australia, Latin America and Middle East remains very strong at plus 16.8%, reflecting many new contract start-ups in Brazil, India and China. Looking now at Slide 12 and Education.

Revenues for the first 9 months rose 4% on an organic basis. North America, which accounts for three quarters of the Education segment, was up 1.4%.

This would have been plus 3%, excluding the IFRS 15 impact. I remind you that the IFRS 15 impact for the group is minimal, but it does impact universities in North America because of the commission and concessions adjustments required under IFRS 15.

While net new business from last year's selling season was neutral, same-site sales growth has been solid, helped by inflation pass-through and extra working days in school in the third quarter. In Europe, organic growth was plus 12.4%.

This very strong performance is driven by wins in the U.K., the new schools contract in the Yvelines in France which started in January and extra school days. On the working days, be aware, there were two extra days in Q3 in France, which will reverse out in Q4.

In Africa, Asia, Australia, Latin America and the Middle East, organic growth remains strong at plus 9.2% despite an ever higher comparable base resulting from the opening of several new school and university contracts in China and India. Turning to Benefits & Rewards.

If you remember from a previous slide, organic growth was plus 9.7%. I just want to point out that in BRS, we had a significant currency effect of minus 5.1% due to the weakness of the Brazilian reais and the Turkish lira.

Also, the Brazilian reais have stabilized in the last quarter. You can see this impact, which is predominantly in the employee benefits chart.

Going back to organic growth. Employee benefits organic growth was 10.4% compared to total issue volume, up 8%, due to improved growth in Europe and Asia and solid growth in Brazil despite a tougher comparable base.

Services diversification was up plus 7.2% with strong double-digit growth in Mobility & Expenses and a rapid development in Corporate Health & Wellness products. Momentum in Incentive & Recognition remains weak.

Organic revenue growth in Latin America is 9.6%, reflecting a strong recovery in activity in both the traditional meal and food card, as well as the fuel card in Brazil from third quarter fiscal '18. However, the growth rate slowed in the third quarter after four strong quarters.

Combined with the loss of one big client, this should slow further in Q4. However, momentum in particular in Mexico and Chile was strong.

In Europe, Asia and the USA, organic growth in revenues is strong at plus 9.9%, particularly in the fourth quarter. Those results are due to solid performance in Western Europe, double-digit growth in Eastern and Southern Europe, Turkey and India.

Incentive & Recognition activities were weak during the period. On the other hand, Rydoo, the end-to-end travel and expense management system, is growing very strongly as are the Health and Wellness offers.

The increase in financial revenue of 11.3% was better than the operating growth of 9.6%. This is a result of the exceptionally high issue volume in Romania in Q4 last year and particularly strong growth in Turkey in the third quarter where interest rates are high.

Before I hand over to Denis, I would just like to remind you of the key elements for modeling for the year-end. You will find all this in the appendix of the slide pack.

Other income and expense for the full year should be in the region of €140 million. This is made up of restructuring costs, which I have said will be around €40 million, but in fact they will be more like €40 million to €45 million this year; around €40 million of recurring amortization of client relationships; and around €40 million of non-cash impairment of assets.

Net financial expenses, no change. This will be about double the first half number.

And finally, the tax rate is still expected to be between 28% and 30%. Thank you for your attention.

I now pass you back to Denis for the rest of the presentation.

Thank you, Marc. And let's move now to Slide 18 where I'd like to give you an update on our focus on growth strategic agenda.

If we look at the client and consumer-centric pillar on the top left part of the slide, I'd like to talk about Rydoo, which is our end-to-end solution to manage business travel and expenses, which we launched one year ago in June '18. With Rydoo, our objective is to eliminate administrative tasks, which are time-consuming for our clients and don't add value.

We offer a unique and innovative end-to-end solution. Combining Travel & Expense management, Rydoo helps create the most seamless flow for all involved, from booking trips to expensing and reimbursement, employees and organization gets - get the best of both worlds, enjoying a best-in-class experience.

Rydoo is a very intuitive app. The adoption rate by employees is 93% in the first month compared to traditional solutions, which have a 50% adoption rate.

The reduction in processing time is 87%. For expense reports, for example, employees on the go take a picture of their receipt and send it for approval.

Rydoo operates in more than 60 countries. It's a full SaaS application and supports more than 550,000 users.

The range for this end-to-end solution has attracted market interest and is performing very well with plus 50% organic growth in the first 9 months of fiscal year '19. Rydoo already has 6,500 corporate clients, including Deloitte, La Fosse, Brussels Airlines, Mövenpick [ph], Mytheresa.com, et cetera, and we signed a worldwide contract with one of the leaders in the strategic consulting industry.

Internally, the Rydoo team has grown from 150 to 300 employees and has opened two new hubs in Lisbon and Manila. And the independent global B2B software evaluation organization has also acknowledged Rydoo in their 2019 top 100 leading software’s.

Let's talk now about operational efficiency in the top right corner. Part of our Fit for the Future program is the shared services project to centralize our European accounting in Porto, Portugal and, at the same time, move to standardize, digitized and cloud-based solutions.

In January, we successfully transferred the U.K. activity, which included some team members moving from Manchester.

In June, we went live from - for the Netherlands, our accounting transfer, along with the implementation of a series of new IT enablers such as, of course, leveraging Rydoo to manage travel and expenses. The transition has been very smooth.

We have also implemented a ticketing tool to support the communication between the service center and the countries and to provide a dashboard to monitor the proper KPIs. The next transition will be Germany.

If we now talk about our nurturing talent pillar, I can say that we've now launched Aspire, which is a new simplified performance development framework to accompany our renewed culture of performance through empowerment and accountability. Starting in September, all managers will have the majority of their objectives on an individual basis linked to their specific positioning within the organization.

The objectives are directly related to their challenges each year and based on STEP KPIs. To ensure that these objectives are actively pursued and regularly monitored throughout the year, a continued dialogue and feedback has been put in place as well as the development of competencies and skills to grow individuals.

In addition, we have a newly designed composition policy aimed at rewarding individual contributions to our success. For the past year, through the annual bonus, and for the future, through performance shared wins.

In the latest plan for 2019, performance shares have been allocated to more than 2100 managers around the company. And finally, in terms of anchoring corporate responsibility, the top right - the bottom right corner of the slide, I'd like to focus on one very interesting example, the recent 10 year extension of the Drake University contract, which demonstrates how anchoring corporate responsibility supports growth.

In June, we announced a 10 year extension with our long-time partner, Drake University, based in Des Moines, Iowa. The implementation and promotion of sustainability initiatives, which include recycling cooking oil, composting food and paper products, offering biodegradable straws and utensils and providing reusable to-go containers were clear elements of our current contract.

And we're committed to pursue our efforts even further, particularly on food waste reduction, which was also a differentiator. We are very proud of this renewal.

It is one example amongst many others of how we are proactively developing services and initiatives that our clients and the consumers we serve value and want to engage in as part of our shared sustainability journey. We are absolutely [ph] convinced that fully embedding sustainability in the services that we offer is key to our growth.

If we move now to Slide 20, I'd like to mention now several evolutions that I've made within the Group Executive Committee after roughly a year and a half into my mandate. To strengthen the group's go-to-market strategy, I have appointed Sylvia Metayer as Chief Growth Officer effective September 1.

Since she joined Sodexo in 2006, Sylvia has delivered growth in her successive roles by forging very strong client relationships within the Corporate Services segment, giving her a direct view into the needs and aspiration of both clients and consumers. Working with Bruno Vanhaelst and Belen Moscoso del Prado, Sylvia will have responsibility for aligning strategy, marketing and sales around a cohesive client and consumer centric go-to-market strategy, and all of that powered by digital.

Sunil Nayak will succeed Sylvia as Chief Executive Officer for Corporate Services worldwide, joining the Group Executive Committee. Sunil joined Sodexo in 2009 as the entrepreneurial CEO of RKHS in India at the time of its acquisition by Sodexo.

And he was then given the reins of Sodexo On-site Services India. As CEO of Corporate Services in Asia Pac, Asia Pacific, since 2015, Sunil drove significant growth, positioning the region as the third largest for Corporate Services after France and North America.

I'm convinced he will bring his dynamic both to global Corporate Services segment and to the Executive Committee. Simon Seaton is appointed CEO, Energy & Resources worldwide, joining the Group Executive Committee.

Simon succeeds Nicolas Japy who is retiring after 28 impactful years with Sodexo. Simon joined Sodexo in 2012 as Chief Operating Officer for Remote Sites for the United States and the North Sea countries.

In 2015, he was appointed CEO, Onshore Energy Worldwide, and in 2017 assumed additional responsibility as Head of the Middle East. Simon will bring his years of unique experience in the oil and gas and remote sites sector and his particularly strong track record in health and safety.

Damien Verdier, who was previously in charge of strategy, will focus now on being the Chief Corporate Responsibility Officer. He will thus dedicate his substantial experience and knowledge to help us further anchor our corporate responsibility policies and actions for the benefit of our clients, consumers, employees, shareholders and society at large.

This is an important role as corporate responsibility is one of the pillars of our focus on growth strategic agenda and is at the core of the services we offer. These changes are invigorating for me, for the Executive Committee team and for the organization.

This team is increasingly diversified with one third women and half of its members coming from countries other than France, including the U.S., Canada, India, Australia, Belgium and the U.K. And now on Slide 22, I'd like to conclude the presentation on the guidance for the year.

As you've understood, our growth in the first 9 months of fiscal year '19 at plus 3.5% was above expectations, thanks to Business & Administrations and Health Care & Seniors segments. Education and Benefits & Rewards were in line with our expectations.

However, the comparable base in the fourth quarter is more challenging due to some contract losses, particularly in North America and Sports & Leisure globally. As a result, the group expects organic revenue growth for the full year to be around 3%, the top end of the guidance.

The action plans that we are putting in place are delivering, and the investments to reinvigorate growth are continuing. As a result, the underlying operating profit margin for the year, excluding the currency impact, is expected to be around 5.5%, the bottom end of the guidance.

Our focus on growth strategic agenda is aimed at delivering market leading growth. As I have often said on a regular basis, the first step must be to achieve organic growth sustainably above 3%.

Margin improvement will come with the right levels of growth, the objective being a return to an underlying operating margin sustainably above 6% ideally in fiscal 2021. I now open the call for your questions.

So operator, can you please open the Q&A session? Thank you.

Thank you and good morning. Just firstly, you talk about above 3% organic and 6% plus margin.

My understanding was this was hopefully achievable in 2020, but now it sounds like 2021. So if you could expand on why the change?

Then secondly, can you just talk about what you're doing to improve retention, especially in the Health Care business, given the losses? And related to the Health Care business, what does this mean for 2020 organic growth as the impact finds its way through?

I leave it at that. I've got some other questions, but I'll let some other analysts ask.

Thanks.

Thank you, Jarrod, and hello. We've said that we wanted to be above 3% sustainably.

I would say that I'm confident for next year. We've said that our objective would be to be sustainably above 3%.

I think we are very confident for this year to be at the top end of our guidance, and I remain confident for next year. On the 6% operating margin, I've never said that it will be in 2020.

I've said in the Capital Market Day that it will be ideally in 2021, and I said that again today, ideally in 2021. But it's true that we've repeatedly said that we have to be sustainably above 3% to really see margin improvement coming up.

In terms of your second question, I think the - I can tell you that the team in Health Care, particularly in North America is really all hands on deck. In the H1 call and different meetings, I've mentioned that we were at risk in retention, particularly in Health Care, essentially linked to the fact that we had some operational issues back 2, 3 years ago with our clients, and we're closing in part the difficulties that we had 18 months ago.

And then that would have - then there was a risk from the clients. We had went through these difficulties in our personal efficiency.

And some clients decided to go to bid, and we couldn't keep all our clients. We've done everything we could.

In some cases, there were - we wanted also to protect our margins, so we decided not to go below some levels to secure our margins. But I can tell you the rest, apart from these contracts that we lost, I think the team is doing very good work.

It's a renewed team, as you know, in Health Care. They are doing all their efforts to keep the clients.

I must say that we have a good dynamic even though retention is a big impact. Marc mentioned the €200 million of impact for next year.

That's - it's, of course, significant. But apart from that, I must say that the development dynamic is improving, same-store sales also.

So it's going to be, of course, difficult to offset -- to fully offset this €200 million losses, but the - apart from that, I'm reasonably positive on the dynamic that the team is delivering on the rest of the portfolio.

Okay. Thanks very much.

Thank you, Jarrod.

Morning, hi. Just following through on some of those themes actually.

Thinking about the saving into 2020, I guess the question really is how much of that Q4 consideration is coming from the seasonality, the comp, versus how much you think will flow through to the 2020 full year, and then if you can give some color around the shape of that in H1 over H2? And then sticking with margin progression, just a sort of -- to clarify the sort of expected levels of growth at this stage.

Is it, therefore, fair to assume something more in the order of a flat organic -- a flat margin for next year more than any gray [ph]? Thanks.

Yeah. Hi, Vicki, well, of course, having a weaker Q4 compared to the first 3 quarters that we had will have us enter 2020 in a - with a not as a flamboyant Q1.

You would - I think the phasing, you will see more as it probably is stronger growth more in the H2 than in the H1. I think that's what you can expect.

And in terms of margin progression, we'll talk more about this when we - we don't give any guidance on margins for next year until we publish the results in November 7. So you have to wait a little bit in terms of what we see in terms of margin progression.

Just coming back on the organic growth piece. So yes, I should have seen the shape should be more skewed to H2.

But in terms of the implied exit rate that we're thinking about to Q4, should that low level persist already into Q1 and Q2? Or you think already we can start to see Q1 and Q2 quite a bit better than the exit in Q4?

Well, there are some timing and seasonal and base effects, as you mentioned. So for instance, if I take the large Sports & Leisure contract in France, the biggest quarter is in Q3 and Q4, a bit in Q1, but then it will dilute a little bit.

We have also the - in BRS, I mean there was a lot of base effect, which will normally continue in Q1. But last year, for instance, U.S.

Marine Corps was renewed. And from November, there will be no base effect on the pricing.

We have also the Yvelines Schools, which will restart in September. Last year, we didn't have them.

So it -- right now, it's -- there are lots of balls in the air, but we -- yes, we can expect Q1 to be slightly better than Q4 at the start of the year. And also, some of the losses in the Health Care will not kick in before months two or three in the coming years, so a more - maybe a more balanced Q1 than Q4.

Thank you. And just one other on like-for-like.

So it seems like you keep referring to quite strong volume and price dynamics. Just perhaps a little bit more color on that in your key geographies, any evidence of any softening of volumes or indeed any -- whether it's sort of particularly strong right now?

The same-store sales have actually been pretty strong and much stronger than last year. We showed you at H1, we had made an improvement versus last year, and it's confirmed in Q3.

The growth KPI which has suffered is retention because of Health Care and a little bit of Sports & Leisure. But other than that, development is improving and CAGR is improving.

So the dynamic is still there. It's really we had - I would not want to call it a blip, but we really had this impact in the Health Care North America.

We knew about it. Actually, we thought it will come and kick in, in Q3 and it will rather be more in Q4 and Q1.

But we know there was a lot at stake in Health Care North America. I would say the retention of the rest of the business is good.

Okay. Thanks very much.

Good morning, everybody. So three questions from me, please.

Just kind of reflecting back onto the sort of weakness in the margins first half over in the second half. Are you happy that you've made all the investments you need to in growth initiatives?

And have we now reached the most sustainable level of margin or sustainable base kind of margin? And secondly, could you give us an updated view on FX guidance for the year, please?

And then third, could you just comment a bit more detail around what you're seeing on the ground in Brazil given the economic challenges there and sort of volume and employment trends? I mean some color on that would be helpful, please.

So, hi, James, in terms of the margin, I think we - in the investments, we continue to make investments. We actually have to make these investments.

We said that we would concentrate in sales, in marketing, in digital, in IT. There's - we have significant efforts to make in those areas, so they are ongoing.

We have to - we are reengineering our marketing approach. You heard me say in the past, we also have to work on our brands and accelerate the digital transformation of the group.

It's true in On-site. It's also true in Benefits & Rewards.

So I think we are - we will continue to invest in those more or less the same level as we have for the past 2 years because it's actually critical to our future. Regarding CapEx, Marc, maybe...

Yes. The trend in CapEx is still there.

We've seen some CapEx in Q3. So we are still aiming at 2%, around 2%, to be honest.

Then the timing of some CapEx will be critical, but let's assume about 2%.

Right. And regarding Brazil, we - there are two things.

I think, of course, we are very cautious on the economy. We see some macro indicators that are not so favorable.

So far, I think Benefits & Rewards has done very well, particularly in the development of small and medium enterprises as clients. So we think we're quite satisfied on that.

And - but it's true and Marc mentioned it, we lost one big contract. It's more of an impact on the volumes than on the margins because the margins were tied on this big contract.

But still, it will have - we will see, let's say, we'll see the impact. It's not massive, but we will see it.

But it's true that we are cautious on the economy. There were, I think, more positive expectations with the new government.

It seems that it doesn't turn into positive outcomes, so we remain cautious on Brazil.

Okay. Thanks very much.

On-site is doing pretty well, both in Corporate Services and Health Care. So that's - I think it's a good sign.

It's a sign also that the outsourcing rate is not - we have some leeway there. We have some space to - and there is appetite for those things.

So I'd say positive on the trend in On-site, and - but overall, it's always linked to the health of the economy.

Okay, very good. Thank you.

Thank you, James.

Hi, good morning. Two questions from me, please.

Firstly, on U.S. Health Care, you are so cautious.

It seems to be materializing a little bit more with that large contract, in particular, and €200 million is a big number. So I was wondering if you could maybe quantify the volume of revenue that is up for renewal in the next 12 months, for example, that would sort of help us get a sense of the risk there.

And secondly, you just mentioned that part of the investments were going into your work on France. Some of the new appointments have been around marketing.

When should we expect you to maybe communicate on an updated brand strategy? Is there something we could hear about around your full year results?

So the - yes, it's definitely a big number when you talk about €200 million. And as Marc mentioned, it's not only one contract, but within this €200 million, there is one significant one.

I would say that the volume for renewals next 12 months is less than we have for this half of the year, what we anticipate would be a difficult moment. So again, this will have an impact, but the development is encouraging.

The same-store sales, as Marc mentioned, is also pretty good. So - and I think the team is doing a good job.

So I'm - I warned everyone at the beginning of the year and then in the H1 call that we're at risk, so this is a confirmation. But I'd say I'm more positive for the next 12 months.

Regarding the brands, yes, I think we are entering into an exercise, as I've said. I think you will hear about that.

I don't know if it's exactly at the full year results or during, but it's definitely during fiscal year '20, you will hear much more about our new brand strategy.

All right…

We'll also comment on it. Thank you, Jaafar.

Yeah, good morning. Just looking into next year, how confident are you on hitting that organic growth without the Rugby World Cup?

So I think that was around about a 75 basis point tailwind at the 2015 World Cup. I know you've got this year's as well.

And also, could you remind us what margin tailwind that provided? I think it was around about 10 basis points or so in 2015?

Thanks.

Just so that - thank you for your question because we wanted to give you some numbers about the Rugby World Cup. First, it's in Japan, so it's a little further away from the rugby world.

And so we are not expecting the same volume that what we had in the U.K. Currently, we estimate the volume at around €75 million for next year.

And the margin we enjoyed in the U.K, we are not too sure yet exactly what it means the rugby for -- in Japan, so we believe it's going to be neutral on the margin and it's not going to be accretive.

Okay. Thank you very much.

Good morning, everyone. One quick question for me, please.

Could we have an update on the Education segment in North America? How do you see the recent tender?

And what's the outcome for 2020, please?

Well, I think Education in North America is improving. I'd say the schools segment is having a very good dynamic and we were very proud of that.

The universities part is more challenging. We are improving.

We are not fully there yet at the level that I would like in terms of both retention and development. What you will see as for next year is entering - us entering into more of a neutral net new loss.

So nothing fantastic, but let's say, we stop bleeding and we have a more solid business. Still, efforts have to be made in the universities.

That's where we put many of our efforts because the school dynamic is very good.

Thank you.

Good morning. Sabrina Blanc speaking from Societe Generale.

I have two questions. The first one is regarding the Education segment.

I think you have mentioned some positive impact in terms of calendar. Should we have a reverse impact in the coming quarter?

And the second question is regarding your contract that you have mentioned in the Leisure segment in France. Could we have an idea of the size of this contract, please?

Yeah. Good morning, Sabrina, in Education, what I mentioned is that we had a couple of extra days in France in Q3, and they were reversed out in Q4.

So you can expect a negative impact in Q4 were the 2 factors in our guidance. In the Sports & Leisure contract, the Q4 is the most significant contract - most significant quarter, and I think we are talking about €15 million a quarter for Q4.

€15 million, you said?

Sorry?

You said 15, 1-5?

15, 1-5, yes.

Okay. Thank you very much.

On Q4 - on a Q4. Just to go back on Stuart's question on the rugby.

Whenever we give a guidance or whenever - we don't give guidance for 2020, but whenever we give indications for 2020, it's not including the rugby. We've always been looking at without rugby and with rugby.

So whatever we say is not including the €75 million of rugby.

Yes, good morning. Two questions for me, please.

The first one is regarding the - your level of confidence to achieve flat margin guidance for the full year. So what do you expect in H2, especially given the lower operating leverage that we should expect in Q4?

And my second question is regarding the prescription on the M&A pipeline towards the end of the year. And any potential addition of shareholder return that you could announce by the end of the year?

Thank you.

Morning, Johanna. I think regarding the margin guidance, we've been through the forecast process at this stage.

So what we know is that our margin will be tied to around 5.5%. It's true that our growth has been better than expected, but we could qualify both as imperfect because we believe that our retention is not good enough.

So we have to maintain our investment in growth. We have - for the developments to come will bear the fruit later on.

But I can tell you, all hands are on deck. The teams are managing their business very tightly to meet the objectives.

And everyone's bonus depend on the top line, of course, but also on the margin. So I can tell you everyone is focused to secure the margin for the year.

On the M&A pipeline, there is nothing significant in our M&A pipeline. We have a few deals here and there.

We are also active selling, so don't expect anything major. And we have not planned any share buyback right now.

So...

Thank you.

Thank you. Just another question.

You mentioned some loss of Sports & Leisure contract in France. And I'm just wondering, in terms of the competitive dynamics, have you seen any changes now that Elior is kind of solely focused on contract catering?

Thanks.

Well, no. I - no, I don't - I haven't seen any changes in Elior's behavior lately.

And the contract that we lost in Sports & Leisure, yes, some contracts that we lost in France, but also some contracts from Centerplate that we exited or that we lost and we didn't want to retain because of profitability issues. So - but I haven't seen any particular change in competitive behavior.

Thank you.

Okay. Maybe one last question or not.

Okay. So...

No more questions, okay. I'd like to thank all of you again for attending this call.

And I want to confirm the confidence that we see in our capacity to continue the - on the growth path that we have started to generate. I think we've significantly improved our growth.

Definitely, you understood we have a bit of a weaker Q4, but overall, the growth dynamic is there. We had anticipated that some of our contract could be lost in Health Care.

It's happening. But the rest of the company has a strong dynamic.

I'm confident into our - the way we will enter next year. We committed to really doing everything to achieve an organic growth sustainably above 3%, and I'm confident that this commitment is achievable.

Thank you very much. And so we will exchange again on November 7 for the full year results.

I wish you a very nice week and a very nice summer for those who are in the Northern Hemisphere.

Thank you. Bye-bye.

Thank you. Bye-bye.