Sodexo reports steady growth in Q3, confirms full-year outlook By Investing.com

Sodexo (EPA:) (SW.PA) has announced its Q3 fiscal 2024 earnings with revenues reaching EUR 6.1 billion, marking a 5.6% increase from the previous year. The company has shown robust organic growth across various regions, with North America leading at 9%. Sodexo confirmed its full-year guidance, projecting organic revenue growth at the higher end of its 6% to 8% target and an operating profit margin improvement between 30 to 40 basis points.

Despite the loss of a significant FM contract, which is expected to affect the year’s retention rate, the company remains optimistic about future retention goals and its pricing strategy.

Key Takeaways

• Sodexo’s Q3 revenues were EUR 6.1 billion, a 5.6% year-over-year increase.
• Organic growth stood at 6.8%, with strong performance in North America (9%) and Europe (5.4%).
• The company aims to maintain organic revenue growth at 6% to 8% and improve the operating profit margin by 30 to 40 basis points for the full fiscal year.
• A large global FM contract loss will impact the fiscal year 2024 retention rate by approximately 60 basis points.
• Sodexo is experiencing a deceleration in food and labor inflation and expects full-year pricing to increase by about 4%.
• The U.S. education market is in an active selling season, with no significant RFPs from universities currently.

Company Outlook

• Sodexo remains confident in achieving a 96% retention rate in the future.
• Full-year guidance for fiscal 2025 is confirmed, with expected organic growth and margin improvement in line with previous projections.

Bearish Highlights

• The company will see a 60 basis points impact on the fiscal year 2024 retention rate due to the loss of a large FM contract.
• In China, the Corporate Services segment is strong, but a slowdown is observed in the tech sector.

Bullish Highlights

• Sodexo has secured successful contracts, including U.S. university partnerships and a long-term renewal with Wellington College in Europe.
• The net new business trend is positive and will remain above 2% on a full-year basis.
• Sodexo Live! is performing well, with a large contract win to be reflected in fiscal year-end numbers.

Misses

• There was some deceleration in Q2 compared to Q3 due to a high comparable basis from the previous year and seasonality in the Sodexo Live! business.

Q&A Highlights

• The company clarified that Japan ticketing sales are considered volume, not net new business.
• Pricing contributed to over half of the organic growth, with the rest coming from volume and net new business.
• There is no specific timeline provided for reaching the mid to higher end of the new development range.

Sodexo’s performance in Q3 demonstrates the company’s resilience and strategic focus on growth, despite challenges in certain segments and contract losses. The company’s commitment to improving its operating profit margin and maintaining a strong retention rate reflects its confidence in its business model and long-term strategy. With a positive outlook for the remainder of the fiscal year and into 2025, Sodexo continues to adapt to market changes and capitalize on new opportunities. The next earnings announcement is scheduled for October 24, where the company will likely provide further insights into its performance and strategies moving forward.

InvestingPro Insights

Sodexo’s Q3 fiscal 2024 earnings reflect a company navigating through various market conditions with a strategic eye on growth and profitability. Delving into the InvestingPro data and tips, we can glean additional insights that may further inform investors about the company’s financial health and market position.

InvestingPro Data shows that Sodexo’s market capitalization stands at $12.66 billion, with a price-to-earnings (P/E) ratio of 44.28. However, when adjusted for the last twelve months as of Q2 2024, the P/E ratio presents a more modest figure of 16.6, suggesting a potentially more attractive valuation for investors considering long-term horizons. Additionally, the company’s revenue growth for the same period was 7.3%, indicating a steady upward trajectory in its earnings capability.

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Full transcript – Sodexo (SDXOF) Q3 2024:

Operator: Good morning. Thank you for standing by, and welcome to the Sodexo Third Quarter Fiscal 2024 Revenues Conference Call. [Operator Instructions] I advise you that this conference is being recorded today on Tuesday, July 2, 2024. At this time, I would like to hand the conference over to the Sodexo team. Please go ahead.

Virginia Jeanson: Thank you. Good morning, everyone. Welcome to our Q3 fiscal 2024 revenues call. Sebastien de Tramasure, our new CFO, will host the call. He’ll start with the presentation and then open up the call to your questions. The call, the slides and the press release are all available on sodexo.com. Specifically, the call will be available for the next 12 months and may not be reproduced or transmitted without our consent. Don’t hesitate to get back to the IR team if you have any questions after the call. And I remind you that the fiscal 2024 results will be announced on Thursday, 24th of October. So, I now hand over to Sebastien.

Sebastien de Tramasure: Thank you, Virginia. Good morning. Very pleased to be here with you today. So, I propose going through the presentation and then taking your questions. So, let’s start with Slide 4. Here, you can see that Q3 revenues were EUR6.1 billion, up 5.6%. The currency effect has fallen to only minus 0.2% after minus 3.3% in the first half. The dollar has now stabilized year-on-year, but there have been fluctuations in other currencies with the strength of sterling offsetting the weakness of the Turkish lira and the Chilean peso. Net scope is also negative at minus 1% due to the sale of the Homecare activities. They consolidated from November, more than offsetting the acquisitions in convenience in North America and the partial contribution from the Chinese acquisition consolidated from April. Organic growth came out at a solid 6.8%, in-line with our expectations and lower than in Q2 at 8.9%, which was boosted by the extra day from the leap year. In addition, in Q3, the price increases were lower and we also had a base effect due to the strong growth in H2 last year. Excluding the impact of the change in revenue recognition and project activity in Energy & Resources, organic growth was 7.2%. I will come back to the detail by region in the next few slides, but here are the numbers. North America was up 9%. Europe was up 5.4%, and the rest of the world plus 3.6% or plus 5.9%, excluding the accounting change I mentioned earlier. Food organic growth remained very dynamic at 8.6%, while FM sales were up 3.5% organically or 4.7% excluding the impact of the accounting change. I would like to highlight some interesting accounts on this quarter. So, in North America, Sodexo Campus and Sodexo Live! have been working together to win and extend existing contracts in universities that have strong sporting teams and facilities. And Cincinnati University is a good example of this. We have also teamed up for the hospitality contract for the University of Texas. In Europe, we have renewed our 60-year partnership with Wellington College for domestic and food services. We are introducing carbon labeling to help the children understand and adopt a more sustainable diet, and we will deploy our WasteWatch program for reduced food waste. In the rest of the world, we are very proud to be back serving Mosaic Group in Brazil, with Sabor Brasil offer in their 18 sites for more than 6,600 consumers and providing our digital solutions to enhance consumer interaction, promote healthy eating and improve services. We will also be supporting Mosaic Institute through food donations and joint actions focused on food, water, education and local development. So, as you can see, the commercial momentum remains positive. Of course, as usual, the next few weeks are key for the education segment, which is currently in full selling season with many ongoing negotiations with existing and potential clients underway. We are on track for development in the range of 7% to 8% for the year-end. In food services, as the momentum on net new is solid, running ahead of last year. However, in FM we recently lost one large global FM contract, which will impact our fiscal year 2024 retention rate by circa 60 basis points. And just to be clear, this will have no in-year impact on revenue for fiscal year 2024 and this doesn’t change our ambition to reach 96% retention rate in the year to come. Now, let’s move to Slide 6 to talk about the deceleration in inflation. Food inflation is now averaging low single digits due to further deceleration in Europe. However, in contrast, we are seeing a pickup in North America and in Brazil. Labor inflation is decelerating slightly, now below 5%, with softening in most countries, except the U.K., where the increase in the living wage is still very strong. We have seen a deceleration in the price increase from close to 4.5% in H1 to below 4% in Q3, as expected. The deceleration is everywhere, but more significant in Europe and in Latin America. And we are still expecting pricing for the full year to be up close to 4%. So, now let’s take zone by zone, starting with North America on Slide 8. So, Q3 revenues were EUR2.9 billion, up 9% organically. In Business & Administrations which, I remind you, no longer includes Sodexo Live!, organic growth was 12.1%. This reflects the favorable impact of new business, a continued trickle of consumers returning to the office, some cross-selling and strong retail sales. The 30.7% organic growth in Sodexo Live! was due to the combination of strong per capita spend in stadiums, high attendance level at conference centers and cultural destinations and increased passenger counts in airline lounges, as well as the mobilization of new lounge contracts. In Education, organic revenue growth was 2.4%, impacted by an earlier than usual closure of universities in May, offsetting the extra leap year day we had in Q2. And the performance was also impacted by the reduction in the number of sites of a large school contract from the month of March. In Healthcare & Seniors, organic growth was 5.6%, driven by solid trend in healthcare with a combination of price increase, retail sales growth and the net new contribution. However, this was partially offset by the impact of contract losses last year in Senior. Europe revenues amounted to EUR2.1 billion, up 5.4% organically. It’s a bit slower than in H1 due to the sequential slowdown in pricing and a major event for our ticketing business last year. However, activity levels remain very solid. In Business & Administration, organic growth was 5.9%, boosted by price increases, higher volume and new government business in the U.K. We also saw strong growth in Turkey, driven by inflation and pricing pass-through. Sodexo Live! was down 0.4%, impacted by last year’s ticketing contract for the World Baseball Classic. Excluding these events, Sodexo Live! would have been up 6.2% with strong growth in France across the board. In Education, organic growth was 7.7%, reflecting the positive impact of price increases, especially in the U.K. and France from the start of the school year. In Healthcare & Seniors, organic growth was 4.4% due to a combination of inflation pass-through in the U.K., new openings in Spain and new business in Senior & Hospital in France. So Q3 revenues in rest of the world were EUR1.1 billion, up 3.6% organically. For the third consecutive quarter, as you will all remember, we had the impact of the change in revenue recognition on project activity in energy and resources from last year. I remind you that as we took the full effect in Q4 last year, this year’s Q4 will benefit from the reversal of the year-to-date correction, thereby boosting Q4 growth in the rest of the world by 8 percentage points. Excluding this accounting change, growth would have been 5.9%. The slowdown from 8.4% in the first half is due to deceleration in price increase and the slowdown in China and Chile. Business & Administration was up 2.7%, 5.3% excluding the accounting change. Growth continues to be very strong in India, driven by new business and strong volume growth, and in Australia due to the new contracts and price renegotiation. On the other hand, Chile is currently being impacted by the end of several fixed-term energy and resources contracts and lower price increases, while China continues to be impacted especially by downsizing in the tech sector. Sodexo Live! almost doubled due to the opening of new lounges in Hong Kong, but I remind you that this is still a very small business there. In Education, organic growth was 10.8%, with sustained growth in Brazil and India. Finally, Healthcare & Seniors revenue was up 3.9% organically. Strong growth in India and Latin America was somewhat offset by lower activity in China and Brazil. And finally, on Slide 11, so we confirm our fiscal year 2024 guidance. So for organic revenue growth at the top of the range of 6% to 8%, and 30 to 40 basis point improvement in the OP margin at constant currencies. So thank you for your attention. And now it’s time to answer your questions. So operator, you can please launch the Q&A.

Operator: Thank you, sir. This is the conference operator. We will now begin the question-and-Answer session. [Operator Instructions] The first question comes from Simona Sarli of Bank of America.

Simona Sarli: All right. Yes, good morning and thanks for taking my questions. I have two. So first of all, if you can provide a little bit more color on the contribution and the split in volume growth and specify if net new business win is sequentially decelerating or not versus H1? And how comfortable you are in still achieving more than 2% for fiscal year 2024? Secondly, for underlying volume growth, if you can please provide a little bit more details on China, and especially which segment in technology you see the softness coming from? And for Chile, if you can please quantify the impact from the end of the fixed-term contract? Thank you.

Sebastien de Tramasure: Thank you. So for first question on the impact of contribution from the net new business. So basically, if we look at the trend quarter after quarter, we see — if we look again at the net impact from pricing and volume, and as you know, we don’t give the split between the volume impact and the net new, okay, it’s all in one bucket. So there is some deceleration if we look Q2 compared to Q3. But as I mentioned during the speech, this was really due to a very high comparable basis from Q3 last year and some seasonality in the Sodexo Live! business. And again, I mentioned the ticketing event we had in Q3 last year. If we look at the net new trend, again, I’m not disclosing the number, but I can say that the trend is positive, obviously, and it will remain above the 2% on a full year basis. So on the — second question was in terms of underlying volume growth in China, in which segment. So this is strong in the Corporate Services segment. As I said, the slowdown is impacting mainly the tech sector. So the Corporate Service segment. But overall, our position in the market remains very solid. And again, we strongly believe in the potential of China long-term. And the last question was about the change — well, impact of some short-term contract in Chile. This is — honestly, it’s a very low impact, I would say, in terms of organic growth for Q3 in rest of the world. So it’s a few basis points, I would say, impacting the organic growth.

Operator: The next question is from Vicki Stern of Barclays.

Vicki Stern: Hi, morning. Just firstly, on retention. I wanted to come back on your comments there, Sebastien. You mentioned a large contract loss in FM costing you around 60 bps. Can we just get more details on that? So when will that actually start to hit the revenue contribution and the retention rate? And where does that leave you now sort of versus the 95.5% retention that you talked about at the first half? I guess this is quite the sort of key quarter that you’re entering now in terms of retention for education contracts. So just trying to tease out your level of confidence on retention as we look forward over the next six, 12 months? I appreciate your comment on the 96% longer-term targets. And second question is just on the Sofinsod, the cross-holding. I believe you managed to secure sort of favorable tax outcome in the event that, that state gets sold. How should we be thinking about any time frame for that being purchased? And any sense you could give us on how you’re thinking about the right sort of discount and use of proceeds? And then the final one, on the last call, Marc sounded pretty positive about the landing spot for organic growth next year in the 6% to 8% range and with margins again up 30 to 40 bps. Just wanted to again find out how you’re feeling about those targets now one quarter on, especially given sort of political developments since then in France. Thanks.

Sebastien de Tramasure: Okay. Thank you, Vicki, for your questions. So to your first question on the loss of this large contract. So as I said, it will impact our retention rate for the year, our KPI by 60 basis points. So it will hit our retention rate for the year. It will have no impact on our fiscal year 2024 revenue, and it will have a progressive impact in our fiscal year 2025 revenue depending on the timing and the sequence of the demobilization and this is still under discussion with the client. In terms of retention, again, the underlying trend in retention, especially in food, remains very solid. I’ll remind you that the retention rate rolling 12 months at the end of H1 was 95.5%. So this underlying retention rate remains very strong. And again, it will be impacted by 60 basis points for fiscal year 2024. To your second question on Sofinsod. So I have nothing to add. Again, you mentioned that we have a favorable tax decision. So there is no more [order] (ph) on the tax side. But I have nothing to say in addition to what we said already during the H1 publication. And last question on the guidance for fiscal year 2025. So we said that would be top of the range for fiscal year 2024 in terms of organic growth and bottom of the range for fiscal year 2025. So we are not changing our guidance for 2025, remains the same with bottom of the range from 6% to 8%. And the same in terms of margin, and we confirm our guidance on margin improvement, 30 to 40 basis points for this year and for next year as well.

Vicki Stern: Thank you. Sorry, just a follow-up on that retention question. Just on the contract loss. What was the sort of reason behind that loss? Was that something that you chose to voluntarily exit or that was a surprise loss for you?

Sebastien de Tramasure: So it was not a surprise loss. Again, it’s a bit early to comment more than that, but as I mentioned, it’s FM. It’s true that it’s a large contract, part of our global strategy accounts. We have around 20 global strategic accounts with usually a contract duration between four to five years. So every year we have this type of renegotiation with clients, and on that one, we could not find an agreement with the client.

Vicki Stern: Great. Thanks very much.

Operator: The next question is from Julien Richer of Kepler.

Julien Richer: Yes. Good morning, everyone. Two questions for me, please. The first one regarding Paris and the activity in Paris. The leisure activity seems to be quite weak since a few weeks now and it seems that July will be weak. Regarding the Olympics and the attendance to the Olympics, have you seen any change to what you initially expected? And do you have more visibility on the corporate activity in Paris during the Olympics? And second question on the pricing impact. So, the pricing impact initially was at around 3% for next year, 4% for this year. Maybe it’s just a question of wording, but it seems that you are maybe a little bit more conservative on this year to be around 4%. Is there any slowdown in pricing that you expect also for next year? And is the pricing impact still at around 3% for 2025? Thank you.

Sebastien de Tramasure: Okay. Thank you, Julien, for your question. So on your first question about the leisure activity, for us, at this stage, there is really no change in terms of expectations. As you know, we are expecting around EUR60 million of revenue related to the Olympics in Q4. So, there is no change about this expectation. And we factor some collateral impact from the corporate activity in the region around Paris and in Paris. And again, at this stage, we are not expecting something different from what we factor in our forecast and guidance for this year. Regarding your second question regarding pricing impact. So, the pricing impact was around 4.5% in H1. It’s now below 4% for Q3. Again, this is really in line with our expectation, and we are expecting a pricing impact around 4% for this year and around 3%, as you mentioned, for next year. So again, the deceleration is not a surprise and fully factored in our forecast and guidance.

Julien Richer: Okay. Thank you. Perfect.

Operator: The next question is from Leo Carrington of Citi.

Leo Carrington: Good morning. Thank you. Just two questions for me. Firstly, on FM organic growth. Separate to the retention issue discussed already, the organic growth in Q3 was approximately around the level of pricing and like-for-like volumes, implying limited net development. Is this just timing, or are you finding most attractive growth in food or perhaps a retention issue? And separately on acquisitions, these seem to be very consistently focused on vending in North America. Is this, in effect, the primary area where you think there is a need to accelerate your growth? Thank you.

Sebastien de Tramasure: Thank you, Leo, for the question. So, in FM, again, the trend is very consistent with our strategy. We have been investing in food and focusing in food. And when we look at the weight of food in our development, it’s obviously much higher than in FM. So, there is obviously a translation of this strategy into our organic growth number. When we look at the underlying organic growth for FM and when we look at it, again, offsetting the impact of the accounting change in rest of the world, it’s pretty steady, I would say. For Q3, we are at 4.7%. It was around 5% in — it was 5.4% in H1, year-to-date is at 5%. And the year-to-date in food is at 10%. So I would say that there is, again, no surprise regarding this trend, and it really reflects our strategy in focusing in food. On your question regarding M&A. So, as you said, we have been focusing over the past two years in convenience solution in the U.S. So, the activity for this fiscal year is fully in-line with the strategy. We closed during Q3, two additional small acquisitions, I would say, in the U.S. So, if you look at the activity since the beginning of the year, we are now at five acquisitions in convenience solutions in the U.S., and we have a very solid pipeline, and we’ll continue to strengthen this activity in the U.S. In terms of M&A strategy, so as you know, we have done a small acquisition in China, only food. It will really help to strengthen our position there. We have done a small acquisition in Sweden as well in food in order to help us to strengthen our market share and bring also some innovative offers in this market. For the future, we’ll continue on this strategy. I mentioned already convenient solutions. We are looking at also opportunities for Entegra in the U.S. and in Europe. And then we’ll focus also on key markets depending on the opportunity to gain market share and scale, obviously, in the U.S., but in Europe as well.

Leo Carrington: Thank you.

Operator: The next question is from Jaafar Mestari of BNP Paribas (OTC:).

Jaafar Mestari: Hi, good morning. I just wanted to come back on the organic growth bridge. Sorry to be the person who asks the decimal questions. First of all, can we maybe just clarify if the Japan ticketing sales are considered to be volumes or to be net new business?

Sebastien de Tramasure: At this point, it is volume, because it’s a very short project, but it’s a short contract. So it impacts volume.

Jaafar Mestari: Very clear. So then, if I take the comments you’ve made for this quarter, pricing, I cannot imagine being more than 3.8% or 3.9%. You said about half, and you said below 4%. And then volumes, you said some volumes, if anything, there’s some negative there. There’s the calendar effect in education that’s negative. You just said the EUR10 million of Japan ticketing sales were in volumes. So I cannot imagine volumes being more than 0.5, maybe a bit closer to one. So I’m not quite sure why you’re not more clearly talking about net new business effectively continuing or even ticking up 6.8%, minus 3.8%, 3.9% of pricing, minus 0.5% north and 1% of volumes, it looks like it’s comfortably 2 point something, 2.5%, could even be close to 3%.

Sebastien de Tramasure: Okay. So thank you, Jaafar, for your questions. So Q3 organic growth at 6.8%. If you exclude the one-off, the accounting change were around 7.2%, okay? A little bit more than half of it came from pricing, okay? So it’s close to your 3.8%, okay? And then the remaining part is coming from volume and net new, okay? And as you said, the net new — the trend in net new is good, it’s above 2% for the quarter, and it’s above 2% for the year-to-date as well.

Jaafar Mestari: Okay. Great. That’s very clear. Apologies, it sounded a bit more uncertain whether we’re ticking further up. Thank you very much for clarifying. And then more fundamentally, in terms of U.S. education, a big selling season. Just curious if you can elaborate a little bit in terms of what you’re seeing there? Is it some rebids and some small first-time outsourcing like it’s been for the last couple of years? Or are you already starting to see some of the really big universities finally progressing to the RFP stage? Is that now or is that more for next year?

Sebastien de Tramasure: Okay. So I start with your last question. I mean, there is no big RFP in universities coming from self-op at the moment. Again, it will be more for the coming years, okay? Then to your question on where we are today on the saving season in education. So it’s a lot of moving parts. Again, it’s a very active education season, a lot of rebid, a lot of potential new win. It’s a little bit too early to say more than that. But again, it’s a very dynamic selling season for the moment in term of — on the education market, especially in the U.S.

Jaafar Mestari: Thank you very much.

Operator: The next question is from Estelle Weingrod of JPMorgan.

Estelle Weingrod: Hi, good morning. Thanks for taking my questions. Just a couple. Another one on organic growth and new development specifically. Just to understand when you expect new developments to get towards the, let’s say, mid or higher end of the range, let’s say, 7.5% or 8% just in terms of the timeline to get there? And just another question, you mentioned in the release strong per capita spend in sports stadium. This is a trend we’ve seen for some time. Could you just elaborate a little bit more on this? And it does not look like comps are particularly easy there. So just want to understand better what’s happening and maybe for how long it’s going to be there? Thank you.

Sebastien de Tramasure: So thank you for your question. So, in terms of development, and as you know, sales KPI is not the in-year impact in terms of development. So we are still focusing between 7% to 8%. So there is a lot of initiatives to strengthen our sales activity, especially in North America. And this range, I would say, will remain the same for the coming years between 7% to 8%. Then regarding your second question on the spend per capita. So it’s true that this is a trend, and this has been improving over the past year. It’s really driven by the new technology, okay? We are really able, with our digital solution, helping really to capture much more spend per capita and spend by consumer, I would say, on the stadium. And it’s really driven by technology, it is really the sale for the consumer.

Estelle Weingrod: Okay. Thank you.

Sebastien de Tramasure: And if you want, I can give you — I can give one example. We were in Seattle recently with the executive leadership team. We went to the stadium that we manage with Sodexo Live!. We had a few Amazon (NASDAQ:) Go retail shops there. It’s very, very convenient, frictionless. And this is definitely helping to increase the spend per capita. This is one example among many examples, I would say, that technology has really help us to increase spend per capita.

Estelle Weingrod: Okay, great. Thanks.

Operator: The next question is from Neil Tyler of Redburn Atlantic.

Neil Tyler: Yes. Good morning. Thank you. Two left from me, please. Firstly, on the net new contribution, either at the in-year contribution, but I think more pertinently the development, the KPI. Can you offer any perspective by business line, how that’s developing, not obviously quantitatively, but perhaps qualitatively where you’re most pleased with those developments? And then second question, coming back to the FM contract, but in the context of you being more selective on those contracts. I just wonder, if you look at the sort of development in FM revenues at Sodexo over the last four or five years, they’ve grown very substantially since 2018. Is there potentially some business that was won over that period that no longer quite makes the grade in terms of the sorts of margins and returns that you want to achieve. And so, might we be seeing more of these contracts where it’s more difficult to come to agreeable terms. Thank you.

Sebastien de Tramasure: So, if I start with your second question, I would say that you know that we had a very positive impact during COVID, I would say. Well, the growth in — the organic growth for FM during COVID was better than for food. Obviously, the FM activity was much more resilient during the COVID period. So this was really explaining also — while when you compare the food organic growth versus the FM organic growth in 2018, you have this evolution. So this is really one of the key reasons, I would say. But again, more recently, when you look at the evolution of the FM organic growth versus food from last year and this year, we clearly see, as I mentioned before, a very strong dynamic in food compared to FM, okay? And then on the FM contract and the loss of this FM contract, again, it’s just one big contract. Again, as I mentioned during what I mentioned earlier, we had issues to find the right agreement for the client and for us. But we are still in all the large contracts. I mentioned that we have 20 global strategic accounts overall. And every year we are extending and renewing some of them on a yearly basis, I would say, okay? And on your first question, it was about the trend — regarding the KPIs and net new contribution in terms of KPIs. I would say that the trend is pretty good and positive in all segments. And obviously, we have a very strong year in Sodexo Live!. So Sodexo Live! is doing better than the other segments. Retention in Sodexo Live! is pretty good. And in terms of development, we spoke about big contracts and in airline launches in the U.S. And as you know, also, we won a large contract in Sodexo Live!, and this will be in our numbers by the end of the fiscal year.

Neil Tyler: Thank you. That’s very helpful.

Operator: [Operator Instructions] Sodexo team, there are no questions registered at this time. I’ll turn it back to you for any final remarks.

Virginia Jeanson: Okay. So thank you all for being with us today. Since there are no more questions, again, I would like to thank you for being with us this morning. I remind you that the next announcement will be our fiscal 2024 results on October 24. And in the meantime, I wish you a great Olympics, whether in front of your TV or physically here in Paris. So thank you again.

Operator: Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.

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