Sodexo (SW) recently reported its third quarter earnings and discussed the following topics in its earnings conference call.
Benefits and Rewards
Vicki Lee – Barclays Capital: I just had a few questions. Firstly, on Benefits and Rewards, just trying to understand how we should think there about the outlook. Should that Q3 run rate be more relevant for coming quarters or would you be a little bit more cautious than that, as you told, on Latin America? Second question is on OSS. In terms of just the underlying trading conditions in Europe and perhaps you could break out a little the negative 4% to 5% volume declines you talked about, particularly with some color if possible around France. I’m just curious to know there if anything has stabilized in any way within the third quarter, about sort of lower run rate or just Germany, what was sort of most recent direction of travel is that?
Michel Landel – CEO and Executive Committee President: On the Benefits and Rewards, as we said, the run rate has accelerated in Q3. We remain confident that for the year, we should be between 5% and 10% as we’ve said previously. The activity again in South America is strong, but this is still our outlook. We are very confident, of course, in this business. For the On-site business, the European decline of volumes is similar to what we have seen in the first part of the year. We said 4% to 6%. It really varies in countries like, of course, France, but also we said Germany, Italy, now Spain, Holland. These are the same countries that we mentioned in the previous calls. I think it is – is it stabilized or not? I think it is stabilized because we have not seen any more degradation. So this is a same situation and as you heard, we are adapting, of course, to this situation.
Vicki Lee – Barclays Capital: Perhaps just follow-up. I appreciate the sales call, but anything along those lines you’re able to say about margins in H2 for Europe, or any of the points that you’ve highlighted in terms of cost cutting likely to impact already in H2 or should we think about margins in Europe staying (multiple speaker) to H1?
Michel Landel – CEO and Executive Committee President: Margins in Europe, we’ve again said that in the last several months, they have dropped by 1% in the first half, we don’t see actually for the year…
Sian Herbert-Jones – Group EVP and CFO: As we said in April…
Michel Landel – CEO and Executive Committee President: …as we said in April, any improvement we’ll see there – start coming – it will start to ramp up next year on that one.
Tim Ramskill – Credit Suisse: I also have three questions please. The first is, I’m sure you are aware Compass had an Investor Day a couple of weeks ago and talked there at length about how they both segment the market in the U.S. to tackle different customers and also have a very proactive approach to retention, so I just wondered if you’d share with us your perspectives on how you approach those two items? Secondly, just listening, Michel, to your comments thereabout the pay back on the exceptional costs, if I look this year, you’ve probably got a consensus EBIT of roundabout EUR950 million, is it fair to say then with the 100% payback on that EUR200 million of spend we can comfortably expect sort of EUR1.15 billion of profit in a couple of years’ time, second question. Then the third question is really just around the public sector where I guess again you have to (technical difficulty) that budgets remain under pressure, I don’t expect that’s going to change any time soon, so in your opinion, at what point does the opportunity you can offer public sector clients now sourcing really start to take hold?
Michel Landel – CEO and Executive Committee President: So your first question on Compass, I mean reflections. In the U.S., like we are in all parts of the world we are a segmented approach by different customers type, we’ve always been very keen to segment our business, because we believe that our clients won’t have specialist in front of them. So we are clearly very, very focused on the segmentation and in terms of retention we are also very proactive, so I can say that in the U.S. for the last several years actually probably five years our retention rate has been 95% plus and in some segments actually higher than that, you know 97% in Education for example. So very, very strong retention rates, as you know it’s a very important part of our growth drivers. In terms of payback, what we’ve said is we will recover the level of exceptional cost in the next couple of years…
Sian Herbert-Jones – Group EVP and CFO: The EUR180 million to EUR200 million. We said the 100% payback by 2015.
Michel Landel – CEO and Executive Committee President: In terms of public sectors, sector budgets cuts of course that’s a massive trend. We believe that as you know as a very strong provider of comprehensive service solution, we can really help this sector. We’ve seen that in the U.K. where the demand is quite strong. In Europe, of course, we’re ready as you know in Europe you have also governments, which are facing social issues. So, of course, these move in the market are taking a long time, of course, but we are very confident that we can offer significant value to the public sector as we has redeveloped our offering; and we have seen some openings here and there, but again, this is very political and it takes time.
Tim Ramskill – Credit Suisse: Can I just come back very quickly on the point about U.S. segmentation. Do you do that with sort of sub-brands or is that just with sort of sector teams that are specialized in certain business groupings?
Michel Landel – CEO and Executive Committee President: No, we have – I know that in Compass have brands, but complete different brand strategy than we have. They have many – they made some – many acquisitions and they have kept basically all these acquisitions in their brands names. We have not, of course, this strategy, we’ve explained that many times. We have a global brand worldwide strategy, but we segment by client types. Of course, within Healthcare, we will sub-segment by type of hospitals or of course seniors versus acute care. In the Corporate, we will set segment by client specialties and by sector of activity. Of course, segment and sub-segmentation for us is a driver for growth.