Sodexo Announces Organic Growth of 8.4% For the First Nine Months of Fiscal 2008

Paris, 2 July 2008 - Sodexo, a world leader in Food and Facilities Management Services in most of its markets, today announced consolidated revenue for the first nine months of Fiscal 2008, ended May 31, 2008.

Revenue by activity and geographic area

Commenting on the figures, Sodexo CEO, Michel Landel, said, "Sodexo has maintained a sustained growth rate thanks to a comprehensive portfolio of services and the breadth of its international network despite a more challenging economic environment. All of our segments are progressing in all geographies. In Service Vouchers and Cards, our progress is much faster than that of the market. We therefore reaffirm our organic growth and operating profit objectives for this fiscal year and remain confident in our medium term prospects."

Food and Facilities Management Services (organic growth analysis):

• North America, + 5.2% : Steady performance from Healthcare and Seniors and new growth in Business and Industry
• Continental Europe, + 7.9% : Sodexo’s leadership maintained in Healthcare and Education
• UK and Ireland, + 16.8% : strong impact of Rugby World Cup 2007 hospitality contract
• Rest of the World, + 11.8% : continued strong momentum in Latin America, Asia, the Middle East and Remote Sites

In North America, in a more challenging environment, growth has continued in Business and Industry (+ 3.9%), as a result of improved client retention during Fiscal 2007 and new contract wins during the last twelve months. Among the recent successes: Blue Cross & Blue Shield of Florida, Procter & Gamble in Jackson, Tennessee, and Aerospace Corporation, California.

The excellent organic growth achieved again in Healthcare (+ 8.3%) resulted from continued success in comparable unit growth, particularly in Facilities Management services, of an offer well-adapted to meet the expectations of consumers (patients, visitors and hospital staff). Recent sales successes include Clarian Arnett Hospital, Indiana and Saint Vincent Catholic Medical System, New York.

The Education segment (+ 3.4%) grew steadily as a result of the continued increase in enrollment which generated good comparable unit growth on university campuses and in schools. However, progress in Facilities Management services has been more moderate compared to Fiscal 2007 which featured numerous renovation projects following the hurricanes in Louisiana. Application of criteria for revenue recognition on certain contracts also continued to have an effect during the past nine months. Recent new contract wins include Millard Public Schools, Nebraska and University of Arkansas.

Finally it should be remembered that the fourth quarter of Fiscal 2007 included a 53rd week of activity in North America, consistent with industry practice. This element added about 1.2% to organic growth in North America and about 0.6% to Group organic growth for the full fiscal year. A 53^rd week will not be included in Fiscal 2008.

In the US, Sodexo received several recognitions:

• the Women's Foodservice Forum (WFF) awarded Sodexo the prestigious "Jackie B. Trujillo SOAR Award” for its role in the advancement and empowerment of women;
• DiversityInc® magazine ranked Sodexo in the top 50 "Companies for Diversity" for the fourth consecutive year;
• The magazine Edge Diversity ranked Sodexo in the top 10 “Companies for Diverse Graduates."

In Canada, Sodexo received the "Mayor's Volunteer Service Award” for the work of its volunteers in implementing its "Feeding Our Future” program in the city of Winnipeg.

In Continental Europe, the 6.7% increase in Business and Industry resulted mainly from:

• the contribution of the Facilities Management services contract with KLM in the Netherlands;
• sales success achieved in Central Europe and Sweden, in both Food and Facilities Management services;
• continued excellent performance in Leisure in the Paris region (the Lido, Bateaux Parisiens, the Eiffel Tower).

Business and Industry also benefited from improved comparable unit growth in almost all countries. This is partly a result of the application of contractual indexation clauses to compensate for food inflationary pressures.

In addition, Sodexo won many new contracts such as Volvo Group in Sweden, BNP-Paribas, Sagem and Olympique Lyonnais in France and Martinair in the Netherlands.

Healthcare continues to grow vigorously (+ 8.5%), a result of the significant increase in growth on sites and the positive impact of contracts won in Fiscal 2007. Recent successes include the Ospedale di Mestre (Venice) in Italy, Orbis Medical Park in the Netherlands and Clinique des Franciscains (Versailles) in France.

With growth of 11.1%, Education benefited from new contracts won in 2007 and 2008, good comparable unit growth and improved client retention. Recent successes include the schools of Cholet, Agde and Amiens in France and Espoon Kaupunki Koulut (Espoo) in Finland.

Among the distinctions obtained by Sodexo in Continental Europe during this period:

In Poland, for the fifth year in a row, Sodexo was ranked by the business newspaper “Puls Biznesu” and Coface Poland among the “Business Gazelles” for its dynamic economic development.

In the UK and Ireland, the increase of 21.8% in Business and Industry (which includes Defence and Correctional Services) resulted mainly from the Rugby World Cup 2007 hospitality contract during the first quarter of Fiscal 2008. The contract included the sale of travel packages and corporate hospitality programs. In addition, Sodexo provided Foodservices at several of the event venues.

Activities with a high component of Facilities Management services such as Defence (with the start-up of the Sovereign Base contract in Cyprus) continued their solid growth..

Organic growth in Healthcare was 3.1% and accelerated in the third quarter, with the opening of new contracts such as Hillingdon and Mount Vernon.

The Education segment (+ 5%) continued to benefit on the one hand from contracts won last year (Abingdon School and Truro High School) and the beginning of the current fiscal year as well as from progress in comparable unit sales through the success of offerings in schools, such as "Club Joules," which couples balanced nutritional menus with physical exercise programs.

Sodexo’s recent recognitions in the United Kingdom and Ireland include:

• several employees from Sodexo Sports and Leisure teams received " Stadium Experience Official Football Hospitality Awards";
• in Scotland, the British Safety Council awarded Sodexo’s Remote Sites teams with the "International Safety award” for its work safety policy.

In the Rest of the World (+ 11.8%), all geographies again recorded double-digit growth. In parallel, current raw material prices continued to drive comparable unit growth in the Middle East, Latin America and in Remote Sites. Several new contracts were won including Santos Dumont Hospital and San Paolo Hospital (Brazil), Hindustan Unilever Ltd. and Vodafone (India), Tetra Pak Asia (Singapore) and Dubai Waterfront Al Nakheel Services (United Arab Emirates).

Sodexo received the following recognitions:

• In Colombia, Johnson & Johnson recognized Sodexo, as "outstanding service provider Foodservices and Cafeterias." Sodexo also obtained ISO certifications 9001-2000 and OHSAS 18001-1999;
• In Peru, for the fourth consecutive year, Sodexo was named "Best Business of the Year" in the Foodservices category by the non-profit Asociacion Civil Empresa Peruana del Año;
• In Gabon, Shell recognized the Sodexo team with the "Hazard Awareness award” for their commitment to safety in the workplace.

Service Vouchers and Cards

Issue volume reached 7.6 billion euros for the first nine months of Fiscal 2008, an increase of 35.3% over last year, representing an above-market growth rate. The Service Vouchers and Cards activity of Grupo VR in Brazil was consolidated for the first time during the third quarter.

Organic revenue growth of 17.4% reflects the following principal trends:

• continued strong momentum in Latin America. An improvement in face value and an increase in the number of beneficiaries helped generate strong growth in several countries.
• strong development in Europe, linked to innovative offerings such as Gift Vouchers and Flexi Pass in Central Europe as well as the contribution from the Vouchers for Services program of the Belgian Employment Office (ONEM).

Recent commercial successes include ING in Belgium (Leisure Pass), UniCredit Bank in Slovakia (Restaurant Pass and Gift vouchers), the Municipality of Almirante Brown in Argentina (Assistance Pass) and 24/7 Customer in India (Restaurant Pass).

Sodexo received in Spain :

The Alares award from the Alares Foundation and the EFR (Empresa Familiarmente leader) certificate from the Fundacion+Familia in the large company category .These rewards honored Sodexo for its Human Resources policies for its commitment to work life balance.

Third quarter events

• Acquisitions

On March 3, 2008, Sodexo completed the acquisition of the Service Vouchers and Cards activity of Grupo VR in Brazil, becoming the leader for this activity in the world’s leading market. As Sodexo and VR share the same values, the integration of VR employees in Brazil within Sodexo has been progressing very satisfactorily.

On June 16, 2008, Sodexo acquired 90% of Yachts de Paris, a high-end cruises company on the Seine in Paris, for 23 million euros. The Group reinforced its presence in the heart of France’s capital in the Sports and Leisure segment.

• Equity transactions

On April 17, 2008, the Group announced the launch of a simplified tender offer for up to 7.8% of its capital. This operation which ran from May 16 to May 29 resulted in the repurchase of 1.7 million shares (slightly more than 1% of the capital) for 71 million euro. These shares were subsequently cancelled on June 19, 2008.

Sodexo will pursue its objective to have shareholders participate in the growth in its results. In this framework, the program to repurchase shares in the market as approved by shareholders on January 22, 2008 will be continued until the next Annual Meeting with the objective of cancelling the shares purchased and under financial conditions that are in the interest of the Group and its shareholders.

Finally, on June 13, 2008, Sodexo announced the launch of an International Savings Plan proposed to its employees in 24 countries.

• Financial Situation

As stated at the time of the first-half Fiscal 2008 results publication, the debt ratio of the Group (net financial debt to equity) stood at 30% as at February 29, 2008 after taking account of the acquisition of VR. The other acquisitions and the share tender offer have not materially altered this debt ratio during the last quarter.

• Awards

The Group has been ranked fourth in the world among the best performing services companies by the International Association of Outsourcing Professionals (IAOP), an international professional outsourcing organization. This is the third consecutive year that Sodexo ranks in the Top 5 of this international ranking.

Objectives for Fiscal 2008

Sodexo confirms the following objectives for the current year:

• organic revenue growth exceeding 7% and
• an operating profit increase of around 12%, at constant exchange rates.

The currency impact noted during the first nine months of the year (-6.5%) results from the depreciation of several currencies, particularly the U.S. dollar against the euro (the average FY 2007 rate was $1.32 for 1€). This trend will weigh on the euro conversion of the Group’s full year financial statements as expressed at current exchange rates.

Annex 2: Food and Facilities Management services by segment
Consolidated Group

North America

Continental Europe

United Kingdom and Ireland

Rest of the World

(1) Organic growth : increase in revenue at constant consolidation scope and exchange rates

Annex 3: Selection of new clients

Food & Facilities Management services

North America

Business & Industry

Blue Cross & Blue Shield of Florida – Medicare, Jacksonville, Florida (2,000 employees, Food and Facilities Management services); The Aerospace Corporation, El Segundo, California (6,500 employees, Foodservices and Vending)

Healthcare and Seniors

Driscoll Children’s Hospital, Corpus Christi, Texas (180 beds, Foodservices); Clarian Arnett Hospital, Lafayette, Indiana, (300 beds, Food and Facilities Management services); Manatee Memorial Hospital, Bradenton, Florida (300 beds, Foodservices); St. Vincent Catholic Medical Center, New York City, New York (890 beds, Facilities Management services); St. Lukes Hospital, Jacksonville, Florida (110 beds, Facilities Management services); Saint Mary Home, West Hartford, Connecticut (400 beds, Food and Facilities Management services)

Education

Georgia Gwinnett College, Lawrenceville, Georgia (790 students, Foodservices); University of Arkansas, Fort Smith, Arkansas (6,610 students, Foodservices); Alcorn State University, Alcorn State, Missouri (2,700 students, Foodservices); Millard Public Schools, Omaha, Nebraska (34 schools, 30,000 students, Foodservices); Keller Independent School District, Keller, Texas (32 schools, 19,000 students, Foodservices); Floresville Independent School District, Floresville, Texas (6 schools, 3,600 students, Foodservices); Richland School District, Richland, Washington (14 schools, 9,000 students, Foodservices)

Continental Europe

Business & Industry

General Motors, Belgium (1,150 meals/day, Foodservices); BNP Paribas Les Grands Moulins de Pantin, France (3,450 meals/day, Foodservices); Crédit Agricole Ile-de-France, France (825 meals/day, Foodservices); Sagem SA, France (900 meals/day, Foodservices); Toyota Motor Manufacturing, France (850 meals/day, Foodservices); Braun AG Marktheidenfeld, Germany (1,500 employees, Foodservices); Step Stuttgarter Engineering Park Gmbh, Germany (2,000 employees, Foodservices); Martinair, The Netherlands (300 employees, Foodservices); Vasakronan-Samhall, Sweden (1,850 meals/day, Foodservices); Volvo Group, Sweden (4,000 meals/day, Foodservices)

Sports & Leisure

Camping Océliances, France (capacity of 540 camping lots, Foodservices); Monastère Clarisses, France (Foodservices); Zoo de Doué, France (1,200 meals/day employees, Foodservices)

Defense

EPIDE, France (2 sites, 320 meals/day, Foodservices)

Healthcare and Seniors

Sanatorium Hera, Austria (560 employees, Foodservices); CASIP COJASOR, France (300 meals/day, Foodservices); Clinique des Franciscaines, France (250 meals/day, Food and Facilities Management services); Clinique du Bien Naître, France (120 meals/day, Foodservices); Clinique Saint-Damien, France (220 meals/day, Foodservices); Croix Rouge MAS – Foyer de l’Escarene, France (120 meals/day, Foodservices); Fondation Caisses d’épargne pour la Solidarité – Résidence les Champs, France (280 meals/day, Foodservices); Internat du CHU de Bordeaux – Foyer Léo Saignat, France (285 meals/day, Foodservices); Médipole Saint Roch, France (360 meals/day, Foodservices); Maison de retraite Sainte-Marie, France (190 repas/jour, Foodservices); Maison de retraite Notre Dame du Blauberg, France (Foodservices); Ospedale di Mestre, Italy (2 sites, 680 beds, Food and Facilities Management services); Orbis Medical Park, The Netherlands (350 beds, Foodservices); Saint Philadephia – Stella Marris, The Netherlands (Foodservices)

Education

Espoon Kaupunki Koulut, pk ruoka Ryhmä A, Finland (6,680 meals/day, Foodservices); Ville d’Amiens, France (7,520 meals/day, Foodservices); Collège Sainte-Marie Saint-Justin, France (800 meals/day, Foodservices); Collège et lycée Sainte-Marie de Neuilly-sur-Seine, France (750 meals/day, Foodservices); University of Norrköping, Sweden (Facilities Management services); City of Linköping, Sweden (Foodservices)

Remote Sites

Schlumberger Tyumen, Russia (1,200 consumers, Food and Facilities Management services); Seafox Contractors, The Netherlands (2 sites, 215 consumers, Food and Facilities Management services)

United Kingdom and Ireland

Business & Industry

Jacobs Engineering Ltd, Immingham (600 employees, Foodservices); Transport for London, London (4 sites, 3,000 employees, Foodservices); J. Sainsbury Distribution Centre, Sherburn (1,000 employees, Foodservices); J&E E Davy, Dublin, Ireland (350 employees, Foodservices); Montupet UK Ltd, Belfast, Ireland (650 employees, Foodservices)

Sports & Leisure

Southwark Cathedral, London (20,000 visitors/year, Foodservices)

Defense

RAF Lyneham, Lyneham (1,200 consumers, Food and Facilities Management services); Portsmouth Navy Base, Portsmouth (3,000 consumers, Food and Facilities Management services)

Healthcare and Seniors

Staffordshire Combined Services, Staffordshire (6 sites, Foodservices); Wolverhampton PCT, Wolverhampton (2 sites, 240 beds, Foodservices)

Education

Exeter Deaf Academy, Exeter (80 pupils, Food and Facilities Management services); The Reading School, Reading (879 pupils, Foodservices); Clongowes Wood College, County Kildare, Ireland (450 students, Foodservices)

Rest of the World

Business & Industry

GSK R&D Center, China (230 employees, Facilities Management services); Schaeffler Co. Ltd., China (1,200 employees, Foodservices); Four-Points by Sheraton, China (600 employees, Foodservices); DSM Limited, China (500 employees, Foodservices); BASF Chemicals Co. Ltd., China (300 employees, Foodservices); Citrix, India (3 sites, 340 employees, Food and Facilities Management services); Hindustan Unilever Ltd., India (650 employees, Food and Facilities Management services); Vodafone, India (210 employees, Food and Facilities Management services); Tetra Pak Asia, Singapore (600 employees, Foodservices)

Healthcare and Seniors

Hospital Santos Dumont, Brazil (500 consumers, Foodservices); Hospital San Paolo, Brazil (900 consumers, Food and Facilities Management services); Buraimi Hospital, Oman (90 consumers, Food and Facilities Management services)

Remote Sites

Ausco Building Systems Pty, Australia (250 consumers, Food and Facilities Management services); Rawabi Dalma Co. Ltd., Saudi Arabia (7 sites, 550 consumers, Food and Facilities Management services); Barclay Mowlem PTY, Saudi Arabia (420 consumers, Food and Facilities Management services); Dyncorp International, United Arab Emirates (500 consumers, Foodservices); Dubaï Waterfront Al Nakheel Services, United Arab Emirates (1,000 consumers, Foodservices)

Service Vouchers and Cards

EUROPE:

Poland: Anwil (Gift Pass, 2,500 vouchers); Zaklady Chemiczne police (Gift Pass, 2,900 beneficiaries)

Slovakia: Unicredit Bank (Meal & Gift Pass, 1,300 beneficiaries)

Belgium: ILC (Meal Pass, 1 620 beneficiaries); ING (Lesiure Pass, 11,000 vouchers); Leonidas (Meal Pass, 308 beneficiaries)

France: CRIT (Meal Pass, 800 beneficiaries)

Italy: Neos Banca Gruppo Intesa San Paolo (Meal Pass, 600 beneficiaries)

Spain: Swatch Group (Meal Pass, 95 beneficiaries)

LATIN AMERICA:

Argentina: Municipality of Almirante Brown (Assistance, 7,963 beneficiaries)

Brazil: Agencia de Defesa agropecuaria do Estado Pará (Food Pass, 1,963 beneficiaries); Terracom (Food Pass, 1,199 beneficiaries)

Mexico: Fondo de Garantia y Fomento para le Agricultura (Food Pass); Johnson & Johnson (Food Pass)

Peru: Alcatel Lucent (Incentive Pass, 700 beneficiaries); Scotiabank (Incentive Pass, 3,500 beneficiaries)

Venezuela: Makro (Food Pass, 3,158 beneficiaries)

ASIA:

China: Autodesk (Gift Pass, 1,530 vouchers)

India: 24/7 Customer (Meal Pass, 1,870 beneficiaries); PTC (Meal Pass, 1,175 beneficiaries)

Philippines: East West Bank (Gift Pass, 1,000 vouchers)