Sodexo : PR Fiscal 2024 Results

Press

Release

Issy-les-Moulineaux, October 24, 2024

Sodexo (NYSE Euronext Paris FR 0000121220-OTC: SDXAY)

Sodexo: strong financial delivery in Fiscal 2024

• Organic revenue growth +7.9%
• Underlying operating profit +16% at constant currencies, margin up +40 bps at 4.7%
• Strong free cashflow resulting in a net debt/EBITDA ratio of 1.7x
• A proposed ordinary dividend of 2.65 euros, up 17.8%, in line with the Group dividend policy of 50% of Underlying net income
• Fiscal 2025 guidance:
• • Organic growth expected between +5.5% and +6.5% (underlying trend1 between +6% and +7%)
  • Underlying operating profit margin improvement expected between +30 to +40 bps, at constant currencies

At the Board of Directors meeting held on October 23, 2024, chaired by Sophie Bellon, the Board closed the Sodexo Consolidated accounts for Fiscal 2024 ended August 31, 2024.

Fiscal 2024 key figures and highlights

(in million euros)				DIFFERENCE
FISCAL 2024	FISCAL 2023	DIFFERENCE	CONSTANT RATES
Revenues	23,798	22,637	+5.1%	+7.0%
Organic growth	+7.9%	+11.0%
UNDERLYING OPERATING PROFIT	1,109	976	+13.7%	+16.0%
UNDERLYING OPERATING PROFIT MARGIN	4.7%	4.3%	+40 bps	+40 bps
Other operating income and expenses	(58)	(129)
OPERATING PROFIT	1,051	847	+24.1%	+25.6%
Net financial expense	(63)	(101)
Tax charge	(249)	(181)
Effective tax rate	25.4%	24.6%
GROUP NET PROFIT FROM CONTINUING OPERATIONS - Group share	738	560	+31.8%	+33.6%
Basic EPS from Continuing Operations (in euros)	5.04	3.83	+31.6%
UNDERLYING NET PROFIT FROM CONTINUING OPERATIONS - Group share	775	659	+17.6%	+20.2%
Basic Underlying EPS from Continuing Operations (in euros)	5.29	4.51	+17.3%

For more detail on the Group Net Profit including discontinued operations, please refer to section 1.1.5 of the Financial Report

• Excluding the base effect of the Olympics, the Rugby World Cup and leap year in Fiscal 2024

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Sodexo Chairwoman and CEO Sophie Bellon said:

"2024 has been a year of structural transformation with two decisive steps to further focus the Group : the spin-off of Pluxee and the unwinding of the cross-shareholding with Bellon SA, returning the proceeds to shareholders. With our simplified structure, reorganized by geography, as a pure-player in Food and FM services, we are mobilized on enhancing our operational execution to drive profitable and sustainable growth.

We delivered a strong set of numbers, at the top-end of our guidance, achieving organic growth of +7.9% and a 40 bps improvement in margins. This was driven by effective inflation management, positive net new business, a standout year for Sodexo Live! and strong operating leverage from productivity gains, supply chain momentum and cost reduction. Finally, we reduced our Net debt to EBITDA ratio to 1.7 times, firmly back within the target range.

We achieved a record year for new signings, exceeding 1.9 billion euros including cross-selling, and at above-average margins. While retention was impacted by the loss of a large global contract, our disciplined approach and structural improvements have laid strong foundations. We are determined to recover our trajectory at over 95% already in Fiscal 2025.

Looking forward, I am confident that our progress on deploying our culinary food expertise through our food brands and our new production and distribution models, combined with strong digital features, will help us make a difference for clients and consumers. In the meantime, we are reaping the fruits of our efforts to optimize our supply management, and we are continuing to seek out efficiencies.

I want to thank our teams for their hard work and dedication in driving the Group's transformation."

Financial highlights

• Fiscal 2024 consolidated revenues reached 23.8 billion euros, up +5.1% year-on-year, driven by organic growth of +7.9%, offset somewhat by a net contribution from acquisitions and disposals of -1.0% mainly linked to the sale of the Homecare activities in October 2023 and a negative currency impact of -1.8%.
• Organic growth of +7.9% was driven by 4% of pricing and close to 4% of new volumes, including the net new contribution. Pricing decelerated progressively during the year, and volume growth slowed as the Covid recovery in volumes came to an end. The year benefited from two major sporting events with the Rugby World Cup in the first quarter and the Olympics in the fourth quarter. Excluding these events, organic growth would have been +7.5%.
• Food services organic growth, at +9.3%, outperformed FM services, at +5.5%. Food services now represent 66% of Group revenues.

By geography:

• In North America, organic growth was +8.7%. The ongoing return to the workplace, a solid momentum in hospitals and a strong performance of Sodexo Live!, particularly in the airline lounges, continue to drive growth, as well as the contribution of new business and pricing.
• In Europe, organic growth was +7.2%, or +6.0% excluding the Rugby World Cup and the Olympics, with increased volumes and the contribution of net new business, and despite the sequential slowdown in the price increases.
• In Rest of the World, organic growth was +7.3%, resulting from strong growth in India and Australia, somewhat offset by a slowdown in China and Chile.

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• Underlying operating profit was 1.1 billion euros, up +13.7%, and the Underlying operating margin was 4.7%, up +40 bps, driven by the operating leverage from higher revenue, rigorous inflation management and enhanced on-site productivity. Margin improvement was at +30 bps in North America and Europe, and +20 bps in Rest of the World. HQ costs were also reduced by -11% due to strict cost control and the spin-off-linked transfers of employees to Pluxee.
• Other operating income & expenses amounted to -58 million euros against -129 million euros in Fiscal 2023. In Fiscal 2024, the gain on the sale of the Homecare services partly offset the spin-off costs, restructuring expenses principally linked to the reduction in HQ and central costs, and amortization of acquisition-related assets.
• Operating profit was up +24.1%, or +25.6% at constant currencies, at 1.1 billion euros compared to 847 million euros in the previous year.
• Net financial expense was 63 million euros, against 101 million euros in the previous year. While net interest costs remained pretty stable year-on-year, the improvement was mainly due to last year's Pluxee-related bond consent costs, as well as several Fiscal 2024 specific elements such as favorable currency impact and equity investment revaluations.
• The Effective tax rate was 25.4%, against 24.6% in the previous year. The effect of the non taxable capital gain on the Homecare disposal and the utilization of previously unrecognized tax assets was offset by the update of the risk related to the tax exposure in France.
• Net profit from continuing activities was up +31.8% to 738 million euros. Underlying net profit, adjusted for Other Operating income and expenses net of tax and for exceptional tax, amounted to 775 million euros, up +17.6%. The resulting EPS were respectively 5.04 euros and 5.29 euros.
• The Board proposes an ordinary dividend of 2.65 euros, up 17.8%, in line with the Group dividend policy of 50% of Underlying net income. Both the ordinary dividend and the 6.24 euros special interim dividend paid in August 2024 will be proposed at the Shareholders Meeting on December 17, 2024.
• Free cash flow was strong at 661 million euros, up +287 millions euros in the previous year, with significant improvements in Operating cash flow and working capital. Net capital expenditure2 at
  469 million euros, representing 2.0% of revenues, was slightly below last year, due to lower client investments this year.
• Net debt decreased to 2.6 billion euros, from 2.9 billion euros at the end of Fiscal 20233. As a result, the Net debt to EBITDA2 ratio was 1.7x, compared to 2.2x at the end of Fiscal 2023, back to pre-spin-off levels and well within the target range of 1-2x.

Commercial momentum

• Net new business signed during the year was positive at 1.6%, lower than the previous year at 2.2%, but still well above pre-Covid levels and at better terms and margins than the previous year.
• New development was 7.4%, with a record year in signings, exceeding 1.9 billion euros including cross-selling, compared to 1.7 billion euros last year.
• Client retention was 94.2%, down from the previous year, affected by the loss of one large global FM contract for 60 bps, as well as two in Energy & Resources in Latin America, due to a very competitive environment, for 30 bps.

• New definitions of Net Capital expenditure and EBITDA, please refer to section 1.2.10 of the Financial Report.

• Net debt as of August 31, 2023, was adjusted to reflect the post spin-off situation, please refer to section 1.2.2 of the Financial Report.

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Leading the way in sustainability

In Fiscal 2024, Sodexo's solid financial performance was accompanied by continued progress on its sustainability commitments:

• Further improvement in the performance on safety of our People. At the end of Fiscal 2024, Sodexo achieved 0.47 Lost Time Injury Rate (LTIR), representing a -14.5% reduction compared to Fiscal 2023. This is a second consecutive year with double-digit LTIR reduction.
• 81.5% workforce retention confirming a positive trend for the third consecutive year.
  Retention rate for total workforce and for site managers increased significantly compared to previous years. These results are correlated with the improvement in training indicators as well as with the continued deployment of Vita by Sodexo.
• Increased share in renewable electricity in our direct operations. Further progress has been achieved in the share of the Group's direct electricity consumption that is renewable at 73%,
  well above the 60% target for the year and therefore facilitating the achievement of our target of 100% by 2025.
• Continued progress in GHG emissions reduction. The year-on-year Scope 1, 2 and 3 reduction in Greenhouse Gas (GHG) emissions was -2.5% in Fiscal 2024 while the absolute reduction compared to 2017 was at -16.4% and the reduction in intensity was at -29.6%. This achievement was possible thanks to Sodexo's ability to mobilize its entire ecosystem around four decarbonization levers: sustainable supply chain, low-carbon meals, responsible use of energy and the fight against food waste.

Sodexo Governance

At the Shareholders meeting on December 17, 2024, approvals of the following resolutions will be proposed:

• the renewal of the mandate of François-Xavier Bellon, who would then be confirmed as a member of the Audit, Nominating and Compensation Committees,
• the renewal of the mandate of Jean-Baptiste Chasseloup de Chatillon, who would then be confirmed as Chairman of the Audit Committee and a member of the Compensation Committee,
• the related party agreement regarding the sale of Sofinsod to Bellon SA.

All the resolutions and Governance details will be presented in the Universal Registration Document to be filed with the AMF (French stock market authorities) on November 5, 2024.

Outlook

Looking ahead to Fiscal 2025, we anticipate sustained growth and continued margin improvement.

Growth will be driven by:

• contribution from net new business of around 2% for the full year, expected to accelerate during the year due to the momentum of the signings and a robust pipeline;
• pricing expected to average around +3%, as we continue to pass through inflation;
• positive volume growth fueled by rising demand for new or upgraded services as well as higher attendance in Corporate Services, despite lapping strong comparatives linked to the leap year and the major sporting events in Fiscal 2024.

We will drive further efficiencies and support margin improvement by our disciplined commercial approach, investments in data and digital, supply management optimization, deployment of our branded offers, and scaling of new production and distribution models, combined with rigorous cost control and reinforced efficiency of our support services.

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As a result, our guidance for Fiscal 2025 is as follows:

• Organic growth expected between +5.5% and +6.5%.
  The underlying trend should be +6% to +7%, excluding the base effect of the Olympics, the Rugby World Cup and the leap year in Fiscal 2024.
• Underlying operating profit margin improvement expected between +30 and +40 bps, at constant currencies.

******************

Conference call

Sodexo will hold a conference call (in English) today at 9:00 a.m. (Paris time), 8:00 a.m. (London time) to comment on these Fiscal 2024 results.

Those who wish to connect:

• from the UK / International, please dial: [phone]
• from France, please dial: [phone]
• from the USA, please dial: [phone]

Access Code: 07 26 13

A live audio webcast is also available on www.sodexo.com.

The press release, presentation and webcast will be available on the Group website www.sodexo.com in both the "Newsroom" section and the "Investors - Financial Results" section.

Sodexo Fiscal 2025 financial calendar

Fiscal 2024 Annual Shareholders Meeting	December 17, 2024
Fiscal 2025	First quarter Revenues	January 7, 2025
Fiscal 2025	First half Results	April 4, 2025
Fiscal 2025	Third quarter Revenues	July 1, 2025
Fiscal 2025	Full year Results	October 24, 2025
Fiscal 2025 Annual Shareholders Meeting	December 16, 2025

These dates are indicative and may be subject to change without notice. Regular updates are available in the calendar on our website www.sodexo.com

About Sodexo

Founded in Marseille in 1966 by Pierre Bellon, Sodexo is the global leader in sustainable food and valued experiences at every moment in life: learn, work, heal and play. The Group stands out for its independence, its founding family shareholding and its responsible business model. Thanks to its two activities of Food and Facilities Management Services, Sodexo meets all the challenges of everyday life with a dual goal: to improve the quality of life of our employees and those we serve, and contribute to the economic, social and environmental progress in the communities where we operate. For Sodexo, growth and social commitment go hand in hand. Our purpose is to create a better everyday for everyone to build a better life for all.

Sodexo is included in the CAC Next 20, Bloomberg France 40, CAC 40 ESG, CAC SBT 1.5, FTSE 4 Good and DJSI indices.

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Sodexo Key figures

• 23.8 billion euros Fiscal 2024 consolidated revenues
• 423,000 employees as at August 31, 2024
• #1 France-based private employer worldwide

• 45 countries
• 80 million consumers served daily
• 11.2 billion euros in market capitalization (as at October 23, 2024)

Contacts

Analysts and Investors	Media
Virginia Jeanson	Mathieu Scaravetti
[phone]	[phone]
[e-mail]	[e-mail]
Juliette Klein
[phone]
[e-mail]

SODEXO - FISCAL 2024 RESULTS

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Fiscal 2024 Activity Report

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1.1 Fiscal 2024 Performance of Sodexo

1.1.1 Consolidated income statement

(in million euros)				DIFFERENCE
FISCAL 2024	FISCAL 2023	DIFFERENCE	CONSTANT RATES
Revenues	23,798	22,637	+5.1%	+7.0%
Organic growth	+7.9%	+11.0%
UNDERLYING OPERATING PROFIT	1,109	976	+13.7%	+16.0%
UNDERLYING OPERATING PROFIT MARGIN	4.7%	4.3%	+40 bps	+40 bps
Other operating income and expenses	(58)	(129)
OPERATING PROFIT	1,051	847	+24.1%	+25.6%
Net financial expense	(63)	(101)
Tax charge	(249)	(181)
Effective tax rate(1)	25.4%	24.6%
GROUP NET PROFIT FROM CONTINUING OPERATIONS(2) - Group share	738	560	+31.8%	+33.6%
Basic EPS from Continuing Operations (in euros)	5.04	3.83	+31.6%
UNDERLYING NET PROFIT FROM CONTINUING OPERATIONS - Group share	775	659	+17.6%	+20.2%
Basic Underlying EPS from Continuing Operations (in euros)	5.29	4.51	+17.3%

(1)cETR based on Pre-tax profit excluding share of profit from Equity method of 983 million euros in Fiscal 2024 and 737 million euros in Fiscal 2023.

1. Profit attributable to non-controlling interests were 9 million euros in Fiscal 2024 and 8 million euros in Fiscal 2023.

1.1.2 Revenues

Revenues by region

REVENUES				ORGANIC	EXTERNAL	CURRENCY	TOTAL
(in million euros)	FISCAL 2024	FISCAL 2023		GROWTH	GROWTH	EFFECT	GROWTH
North America	11,111	10,479	+8.7%	-0.4%	-2.3%	+6.0%
Europe	8,448	8,071	+7.2%	-2.2%	-0.3%	+4.7%
Rest of the World	4,239	4,087	+7.3%	+0.1%	-3.7%	+3.7%
SODEXO	23,798	22,637	+7.9%	-1.0%	-1.8%	+5.1%

Fiscal 2024 consolidated revenues reached 23.8 billion euros, up +5.1% year-on-year, including a negative currency impact of -1.8% resulting from the appreciation of the euro against most currencies and a net contribution from acquisitions and disposals of -1.0% mainly linked to the sale of the Homecare activities in October 2023. Consequently, Fiscal 2024 organic revenue growth was +7.9%, which was driven by effective inflation pass-through, accelerated net new contribution, some ongoing post-Covid recovery and a standout year at Sodexo Live!. This included both the Rugby World Cup and the Paris Olympics as well as multiple lounge openings especially in North America. The Olympic contract boosted Fourth quarter Fiscal 2024 revenue by 66 million euros, and together with the Rugby World Cup, accounted for +0.4% in full-year organic growth.

Food services were particularly strong with an organic growth of +9.3%, now representing 66% of Group revenues, increasing from 64% in Fiscal 2023, and back up to pre-Covid levels. FM services were up +5.5% organically.

The commercial momentum was strong in Fiscal 2024:

• Net new signings during the year were 1.6%, a -60 bps drop compared to last year, but still a significant improvement compared to pre-Covid levels. This net new will contribute to Fiscal 2025 growth.
• New sales development was 7.4%, well within the target range of 7-8%, and up +40 bps versus last year. Total new signings during the year, including cross-selling, was the highest ever at 1.9 billion euros compared to 1.7 billion euros in Fiscal 2023. The renewed pipeline of targeted contracts has helped boost the volume of signings and has also been accretive to the gross margin.
• Client retention rate ended at 94.2%, -100 bps lower than the previous year. This drop is largely attributed to the loss of a large Global FM contract for 60 bps, as well as two losses in Energy & Resources in Latin America for 30 bps, due to a very competitive environment.

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North America

REVENUES BY SEGMENT			RESTATED ORGANIC
(in million euros)	FISCAL 2024	FISCAL 2023	GROWTH(2)
Business & Administrations(1)	3,036	3,866	+11.8%
Sodexo Live!	1,428	-	+23.4%
Healthcare & Seniors	3,411	3,440	+5.1%
Education	3,236	3,173	+4.2%
NORTH AMERICA TOTAL	11,111	10,479	+8.7%

1. Since the first half of 2024, the Group has been reporting Sodexo Live! revenue separately; it was previously included in the Business & Administrations segment.
2. As part of the streamlining of the organization during Fiscal 2023, some contracts or operations have been reallocated between segments.

Fiscal 2024 North America revenues totaled 11.1 billion euros, up +8.7% organically. This strong growth resulted from a continued trickle of consumers returning to the office, more travellers in the airports, an acceleration of net development, some cross-selling and pricing averaging around 3.5%.

Restated organic growth in Business & Administrations (excl. Sodexo Live!) reached +11.8%, driven by the contribution of new business, strong growth in Food services and price adjustments. Entegra also contributed to the momentum with strong organic growth.

Sodexo Live! restated organic growth was +23.4%, driven by robust activity in all venues, and in particular strong per capita spend in sports stadiums. Airport lounges activity also grew strongly with increased passenger count, added services and mobilization of new business.

In Healthcare & Seniors, revenues were up +5.1% organically, driven by price increases, volume & retail growth, and favorable net new contribution. This growth was somewhat offset by a negative contribution in Seniors due to the impact of sites lost at the end of the prior fiscal year.

In Education, organic growth was +4.2% benefiting from price increases as well as growth in meal count, retail and catering events, particularly in Universities. However, the performance was impacted by the reduction in the number of sites of a large school contract from March 2024 and the impact of some contract demobilizations in the fourth quarter in universities.

Europe

REVENUES BY SEGMENT			RESTATED ORGANIC
(in million euros)	FISCAL 2024	FISCAL 2023	GROWTH(2)
Business & Administrations(1)	4,681	5,337	+5.3%
Sodexo Live!	750	-	+25.5%
Healthcare & Seniors	1,885	2,026	+6.1%
Education	1,132	708	+6.9%
EUROPE TOTAL	8,448	8,071	+7.2%

1. Since the first half of 2024, the Group has been reporting Sodexo Live! revenue separately; it was previously included in the Business & Administrations segment..
2. As part of the streamlining of the organization during Fiscal 2023, some contracts or operations have been reallocated between segments.

Fiscal 2024 Europe revenues totaled 8.4 billion euros, up +7.2% organically. The growth was driven by increased food volumes, pricing of just below 5% and the contribution of the Paris Olympics and the Rugby World Cup. Excluding these large sporting events, organic growth would have been +6.0%, slowing in the second half due to the sequential slowdown in pricing and the negative effect of the Paris Olympics on some tourist and corporate activities.

In Business & Administration (excl. Sodexo Live!), restated organic growth was +5.3%. This was supported by Corporate services benefiting from both price increases and higher attendance, coupled with new business in Government in the United Kingdom and strong growth in Türkiye, driven by inflation pricing pass through.

Sodexo Live! restated organic growth stood at +25.5%, or +8.8% excluding the Rugby World Cup and the Olympics. In the first half, the growth was primarily driven by improved attendance and pricing

in sports and cultural destinations in France, by increased volumes in the United Kingdom in airport lounges, as activity was only just starting to pick-up in early Fiscal 2023 post-pandemic, and stadiums, helped by price increases. In the second half, the collateral effect of the Olympics on the peak season tourist activity in Paris, such as boat tours, impacted organic growth in Europe, for about -4.1% in the second half.

In Healthcare & Seniors, restated organic growth was +6.1%, driven by price revisions and new openings in Spain, Belgium and France.

In Education, restated organic revenue growth was +6.9%, reflecting the significant positive impact of price revisions especially in the UK and France from the start of the school year, somewhat offset by the exit of low performing school contracts in France.

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Rest of the World

REVENUES BY SEGMENT			RESTATED ORGANIC
(in million euros)	FISCAL 2024	FISCAL 2023	GROWTH(2)
Business & Administrations(1)	3,694	3,659	+6.9%
Sodexo Live!	46	-	+102.8%
Healthcare & Seniors	337	337	+3.6%
Education	162	91	+11.2%
REST OF THE WORLD TOTAL	4,239	4,087	+7.3%

1. Since the first half of 2024, the Group has been reporting Sodexo Live! revenue separately; it was previously included in the Business & Administrations segment.
2. As part of the streamlining of the organization during Fiscal 2023, some contracts or operations have been reallocated between segments.

Fiscal 2024 Rest of the World revenues were 4.2 billion euros. Organic growth was +7.3% with double digit growth in APAC, driven by Australia and India. The fourth quarter was boosted by 8 points due to the base effect from the prior year's retroactive impact of an accounting change on a large Energy & Resources contract. Barring that, there was a slowdown in the second half due to decelerating price increases and flat activity in China.

Business & Administrations (excl. Sodexo Live!) restated organic growth was +6.9%. Growth in food in India has continued to be very strong, driven by both new and existing business, and in Australia notably from price renegotiation. Brazil and Latin America are still growing in high single digit, although with a slight deceleration in the second half due to a lower pricing impact and a slowing market growth. Chile was impacted by the end of several fixed-term Energy & Resources contracts and lower price increases, while China continued to be impacted especially by downsizing in the tech sector.

Sodexo Live! revenues (principally airport lounges) doubled due to strong activity as Covid restrictions in airlines were lifted only from January 2023 combined with the opening of new lounges in Hong Kong.

Healthcare & Seniors restated organic growth was +3.6%, with a ramp up of a few contracts in India, offset by slowdown in China and the impact of the exit of low-performing contracts in Brazil during the second quarter last year.

Education restated organic growth was +11.2%, fueled by sustained growth in Brazil and India, boosted by both new business and volume growth in existing sites, along with acceleration of growth in China in the fourth quarter of Fiscal 2024.

1.1.3 Underlying Operating Profit

Fiscal 2024 Underlying operating profit was 1.1 billion euros, up +13.7%, or +16.0% excluding the currency effect. The Underlying operating profit margin, including corporate expenses, was 4.7%, up +40 bps. The currency mix effect was negligible.

						DIFFERENCE
	UNDERLYING		DIFFERENCE	UNDERLYING		IN MARGIN
	OPERATING		(EXCLUDING	OPERATING		(EXCLUDING
(in million euros)	PROFIT		CURRENCY	PROFIT MARGIN	DIFFERENCE	CURRENCY
FISCAL 2024	DIFFERENCE	EFFECT)	FISCAL 2024	IN MARGIN	MIX EFFECT)
North America	650	+11.7%	+14.4%	5.9%	+30 bps	+30 bps
Europe	339	+13.5%	+14.2%	4.0%	+30 bps	+30 bps
Rest of the World	206	+7.3%	+9.9%	4.9%	+20 bps	+10 bps
UNDERLYING OPERATING PROFIT BEFORE CORPORATE
COSTS	1,195	+11.4%	+13.6%	5.0%	+30 bps	+30 bps
Corporate expenses	(86)	-11.3%	-11.3%
UNDERLYING OPERATING PROFIT (continuing activities)	1,109	+13.7%	+16.0%	4.7%	+40 bps	+40 bps

The increase in profitability in Fiscal 2024 was driven by operating leverage from higher revenue, enhanced on site productivity, supply efficiencies, and rigorous cost control in central costs, in a normalizing food cost inflation environment.

• North America Underlying operating profit increased by +11.7% or +14.4% excluding the currency effect, and the Underlying operating margin was up +30 bps to 5.9%, fueled by higher revenue, a focus on labor efficiency, scale up in purchasing within the operations, further supported by strong volume growth from Entegra, the Group's GPO.
• In Europe, Underlying operating profit was up +13.5% or +14.2% excluding the currency effect, and the margin was up +30 bps to

4.0%. This was due to inflation mitigation measures, SKU reduction and enhanced supplier compliance combined with price revisions, particularly in Education and in France where there was still a catch-up required.

• In Rest of the World, Underlying operating profit was up +7.3% or +9.9% excluding the currency effect, and the margin was up +20 bps, or +10 bps excluding the currency effect, to 4.9%. Improvements were driven by cost control, successful price negotiations especially in Australia, and turnaround and/or exit of underperforming contracts in Brazil and in the Middle-East, somewhat offset by demobilization costs in Latin America and by acquisition-related integration costs in China.

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