Sodexo S.A. (EPA:SW)

Investor Day 2020

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Nov 2, 2020

Hello, and welcome to our investor day. Thanks for so much for being with us. My name is Diane Salt, and I'm the Chief Communications Officer. And a member of Sodex's Executive Committee. I have the pleasure of being your MC for today's broadcast. Welcome back to those of you who are with us 2 years ago, and welcome to those who are joining us for the first time. Obviously, with COVID, we're not able to host this event in person, but it's great that so many of you could be with us here virtually. Because our speakers are connecting from wherever they're based, there may be moments when you experience a slight delay. Please bear with us and the technology. We're doing our best to make this a dynamic experience. As you can see, we're not wearing masks. This is so that we can engage with you in a more personal way. But rest assured, we have all the necessary safety protocols in place here at the studio, including the appropriate social distancing. This Investor Day is being recorded for those who are unable to attend. The recording will be posted on our website shortly after the broadcast. I'd like to start off by introducing our CEO, Denis Machrel, who is here with me. Hi, Diane. Hello, everyone. We have a packed agenda for you and we've worked hard to try to make this a worthy investment of your time. We intend to finish promptly at 5:30 pm, Paris time. Today, you'll hear from a number of our executives. We also have some great videos and client testimonials to share with you as well. Now some of these visuals we're using today were captured before COVID hit. So you'll see a mix of people with and without masks as well as varying degrees of social distancing. We'll also have 4 Q and A sessions, one after each set of speakers. For those of you who wish to ask questions, you'll need to connect to the conference call. You have the numbers, but if not, they're on sodexo.com. However, as there is a lag between the webcast and the call, we strongly recommend participating in the meeting for the webcast until the Q And A sessions begin. So Denis will kick things off momentarily with an update on what we've accomplished since our last Investor Day. After that, you'll hear from Katie Discas, our Chief People Officer and Marc Rolland, our CFO. On our human centric and our cash generative business model. After that, Denis will then present his perspectives on what comes next followed by a Q and A session with Mark and Cati. We'll then hear about some of the major trends we're seeing in our markets from Susiya Metallier, our Chief Growth Officer Francois Blancard, our Chief Procurement Officer and Bruno Van Health, our Chief Sales And Marketing Officer, who will be connecting with us from the U S. This will be followed by another Q and A session. After that, we'll have a short break before the second part of the broadcast. After the break, you'll hear more about how we're responding to some major trends in our business, particularly in corporate services from 3 of our global executive committee members. Namely, Sunil Niak, our Corporate Services CEO worldwide, who will be connecting from London. O'Reignan Sanae, our CEO benefits and reward services worldwide, and Sarush Mystery, our Regent Chair for North America, who will connect from the U S. Their remarks will be followed by Q And A. After that, we'll end the day with Denise wrap up and a final Q and A with both Didi and Mark. So let's get started. As in all Sodexo meetings, we'll begin with a safety moment and this one is I hope you enjoyed that video showcasing some of the exceptional work our teams are doing in today's new COVID context to create a safe environment. Thanks, Diane, and hello, everyone. Welcome to our virtual Investor Day. Thanks for being with us. While a virtual gathering can never replace an in person meeting, we felt it was important for us to have this update and I want to thank you for being here. In this time together, we'll share with you how Sodexo is navigating through 2020. And what we can see for the future. No one has been spared at tsunami that is COVID. And as the American Academy John Cabazian says, you can't stop the waves, but you can learn to surf. The story we want to share with you today is about how we're facing these peaks and troughs, how we are investing and preparing for long term growth. So DEXO is resilient. We're going to tell you about how our clients increasingly need and want integration of service Our integrated model at the heart of our DNA has been a key stabilizer in the crisis and gives us confidence in our horizon or so in our DNA, the Benoit family's control provides essential stability and independence and protects a culture that is unique. Today, we will showcase our progress since the 2018 capital market state. And in particular, I want to start with how we tackled the deep executional issues that we had. So what have we done over the past 3 years? With a strongly renewed executive committee I have reboosted the business. We have worked with 1 single overarching goal to execute our focus on growth agenda, specifically concentrating on addressing areas of underperformance. And here is what we tackled. First, no surprise, we focused on the challenges in North America Healthcare And Education. We've done a lot to turn the situation around and are starting to see results. What actions did we take? 1st, some drastic changes in the leadership teams. We made changes in both health care and universities from the CEOs down to several site managers we simply needed a new approach, driven by new leadership skills, discipline with fresh creative thinking and a renewed focus on winning. Filtering this to the business takes time, but here are some metrics of our progress. In health care, retention is up 130 basis points since 2018. And in universities, excluding one voluntary exit, we've been over 95% retention for the past 2 years, even though we are not yet back to where we want to be. We exited unprofitable contracts. For Healthcare And Universities, this has meant a purposeful reduction of more than 1,000,000 of revenues. We measure and we track our performance management dashboard step introduced at the last Capital Markets Day is helping improve productivity in several segments already. For example, pre COVID in 2020, In schools, in North America, we gained 98 basis points on our GP to labor cost. And in health care, we gained 200 basis points on our GP to food costs. Overall, in fiscal year 2020, The redemption in North America went up 230 basis points despite several significant contract exits in Healthcare And Universities. We are advancing in this key market. We have rebalanced our offer between food and FM, global and local. We have put food services back into the heart of everything that we do. We have reasserted our excellence in food by driving innovation in our offers, in our menu choices, making a strong place for organic, locally produced and seasonal products. We have rebalanced our portfolio of contracts between global and local, single service, multi service, and food NFM. By being much more selective on the last contracts, particularly in Corporate Services. And in H1 20, the ratio of the food only and local contracts was around 75% 50%, respectively. On the global contracts, we are only targeting the right ones and being more demanding on margin expectations. At the same time, we remain focused on our FM offer and on our integrated offer. Integrating our broad spectrum of activities has never been in such demand as it is today. Clients have realized and welcomed the breadth and depth of these solutions that Sodexo provides. And we are well positioned in places that have showed resilience be it our strategic accounts that continue to outperform or our position in developing economies that have also provided growth and more recently resilience FM Services represents 40% of on-site revenues in fiscal year 'twenty. For global strategic account, FM is around 75%. So as we continue to sign, retain, or extend these accounts, The FM activity continues to gain share. And as we cross sell, the integrated FM has expanded. The COVID crisis and the work from home phenomenon has given a massive boost to client requests for on benefits and reward joint offers to serve employees at work and at home, BRS's digitized and agile and is definitely an engine for profitable growth. Finally, our 3rd major area that we tackled we renewed the culture of discipline and accountability by a relentless focus on execution. Our step program at its dashboard is now online available across 19,000 sites in 17 country, countries, so far it tracks 80 percent of Sodexo's revenues. We will have it fully deployed by October 21 as planned. Step is easy to use and fully integrated So we can see the performance of the activities at each level from the site to global. We have improved targeting and signing discipline together with improved execution on underperforming large contracts. I mentioned this earlier for North America, but more generally across geographies and segments, we are renegotiating underperforming contracts and eradicating any us making contract globally. Our signing discipline is better. We don't go near unprofitable contracts anymore, and our targeting is much stricter and carefully aimed towards quality. And ultimately, all of this will boost underlying profitability. So besides tackling tough spots, let's look now at how we're driving our growth agenda. As you know, 4 key initiatives are really driving performance: number 1, we are streamlining the organization to improve operational efficiency and productivity. We have desegmented in certain countries to optimize the allocation of resources. We have rationalized our portfolio we continue to exit non strategic countries. Our geographic footprint is down from 80 countries to 64 as of today, and we are close to reaching our stated objective of 50 core countries. With concentrated back offices in finance in three centers. There are even more efficiencies to be had through our ongoing savings program. Final aspect of our drive towards operational efficiency, we've invested annually an additional million to conciliate our IT Enterprise Architecture. Number 2, we've created client and consumer centricity. Especially on food services. Thanks to our new insights and AI, we know so much better what our consumers want so that we can anticipate full trends, improve sourcing and standardize our processes. We streamline our offers and concepts by nearly half Our sourcing is even more virtuous. This means better product standards, tracking of progress against our menu and CSR targets. We have reinvested to make SOLIFO more digitized and consumer centric. And in digital, I'm excited by our investments in our 2 strategic partners. With Maison in China, we created a brand new consumer experience for Chinese and with Zita, we have a platform to leverage the full potential of digitization of benefits and awards and on-site food services. And you will hear more from Aurinia on this later. During the crisis, we accelerated new FoodTech solutions, such as Click and Collect and food delivery. We launched our daily express in Brazil and in Singapore. We created 70 partnerships between our BRS activity and major delivery platforms. And in the US, we recently invested in Alkemista, which offers new multimodal multichannel experience to food, especially where clients do not have on-site food options available to them. Finally, we overhauled our sales culture and how we market and win business. And we are rapidly digitizing, which is a huge strategic boost. In 2018, I appointed Brinovant Health to develop a holistic approach to marketing and sales and thus sharpen our sales culture Under Bruno's leadership, we have reignited the sales obsession at Sodexo. We've also deployed in North America an updated version of clients for life. This is going well with retention up, bringing us closer to our group wide target of 95%. 3rd, driving initiative, anchoring corporate responsibility into everything that we do, which differentiates our offer and our value proposition. Corporate responsibility has been part of our DNA and the way we do business since our creation, and we are uniquely leading our industry with our strong ambitions, some key points of pride. In 2019, we were number 1 in our industry for the 15th consecutive year on the Dow Jones Sustainability Index. In 2020, we achieved the highest marks in Sam's sustainability yearbook for the 13th consecutive year. As well as goal class recognition by echo Vadis. Our food offer is more sustainable than ever, Francois will come back on this. Reducing waste is also an environmental and business priority, waste watch, our game changing, food management program, as an ambitious objective of reducing food waste on our sites by 50% by 2025, and this commitment is a win win. In 2019, we were the 1st Global Food Services company to connect its financing towards actions to premium full waste. This environmental commitment has been key to winning For example, this year, we won a contract with a French leader in food products for their head shoe in France or a global contract with 1 of the largest pharma digital leaders in the world. It is a key differentiator for Sodexo. And last, we have an ambitious climate change emissions target. Most companies talk about Scope 1 and Scope 2, but it's not strong enough. We made a commitment on Scope 3. We were the 1st company in our sector to publish and set objectives for Scope 3 emissions accounting for 98% of our total emissions. Now people As you know, people are the essence of our services, our growth, and our success. We employ 420,000 people worldwide, and we take their learning and development seriously to help them grow and serve our clients better. We invested massively in sales training. 2 years ago, we launched our sales academy. 500 people have been through it. Chef training at our chef academy has already enriched 2500 chefs across Sodexo. We invested in digital and innovative culture training to enhance agility as our people must be our main change agents. Performance management has also improved, thanks to the step dashboards that enable a more tailored approach to incentives. To conclude, in fiscal year 2019, we registered our best growth trajectory for the last 7 years. And up to the end of February, we were on track to deliver our fiscal year 2020 guidance and our objective of increasing the margins to over 6% in the coming years. We have transformed our execution culture in less than 3 years, We've made great strides in addressing the issues in North America, and we have delivered on a large part of our strategic agenda. This pandemic is certainly the most serious crisis that Sodexo has faced in its 50 years of history, the teams rose to the occasion and demonstrated that even in the last structure, they can be agile. And I want to warmly thank them and show you in the next couple of minutes what they've done. No one was ready when COVID 19 changed our world overnight. We were there on the front lines, supporting our clients first in Asia, then Worldwide. We saw it coming. We learned, and we were prepared. We responded We went to work and we stood tall. With team spirit, service spirit, spirit of progress. We were there on the front line, always inspiring, dedicated, cleaning, feeding, supporting, protecting, but above all, caring. We adapted redeploying team members from schools, events, stadiums, and offices, to where we were needed most, to hospitals, to seniors, home, to testing centers, and to all those places that absolutely needed to continue to operate. And where we were needed, Donating and redistributing food to support those who needed our help. Our clients, consumers, and our communities. And our clients recognize that more than ever, we stand together with them, improving the quality of life. We launched a global Sodexo relief program, funded by contributions from Sodexo leadership teams. To help our people We adopted, anticipating, and planning, bringing our expertise in innovating to support our clients face with challenges. Create safe environments in an uncertain world. Our mission became essential to the world, bringing our people out of the shadows and making them our everyday hero. We imagined Rise with Sodexcel, using our expertise and agility to help our clients create confidence reopen and create safe environments to bring their employees back to work. Their students back to the classroom, their fans back to sporting events. Through innovation, we develop new services and offers responding to new sanitary restrictions and evolving consumer needs. Bureau Veritas hygiene verification level to build confidence, a certificate of safety and quality assurance, for all Sodexo procedures and services, and our medical advisory council to advise on health and safety protocols and standards, the way we engage with people and encourage safe behaviors. The latest information to ensure continuous adoption of best practices We salute our people who are committed to our mission. In such difficult and uncertain conditions, and are proud of everyone who cares enough to stand tall and stand together. Often putting others before themselves and their families, to continue to work when and where they are needed most. We thank and stand together with our people who were affected by the pandemic, both personally and professionally. And in a world that remains uncertain, our people are the heroes behind the mask and are essential to bringing our expertise today and tomorrow to the communities we serve. We have proved our commitment our agility, our values, to ensure quality of life. We responded. We care for each other. We stand up. We stand tall. We are united and we continue to care for each other. We were fonded. We stood tall. We stand tall. This video epitomizes our great people. And the critical importance of our services. So our biggest advantage is a resilient business model that allows us to seize market opportunities as they emerge in an environment, which is likely to remain very difficult for a while. Diane? Thank you, Denis. That video really does capture the team spirit at Sodexo as well as the efforts of all the employees during the crisis. So as we move to the next part of our agenda, I'm pleased to pass the floor to Katie Deschez and to Marc Colon, over to you. Good afternoon. Thank you, Diane. Hello, everyone. Mark and I are going to cover the solidity of our financial structure. And importantly, how we continue to manage our teams in the context of this challenging environment, adjust our workforce to meet the changing needs of our business, and ensure we stay true to our values and commitment to people being the alpha and the omega of Sodexo. And as you know, our business is by design funded on 2 pillars. On the one hand, human centric and labor intensive, and on the other hand, asset light and cash generative. Those two pillars are fundamental to Sodexo's sustainability and our confidence in the future. A couple of days ago, we announced that in 2020, we generated cash, 1,000,000 despite the worst crisis that we've ever seen. This includes a positive 1,000,000 of government adds through delayed payments and a negative 1,000,000 make wall linked to the USPP earlier reimburse When we got it in March by the drop in cash sales, we were still paying the suppliers from the time when everything was normal and client paid a little more slowly. During H2, we maintained our payments to suppliers and we pushed hard on collection and reduced over dues in value. Our working capital is by design negative in BRS of course, but in on-site as well. And both PRs and on-site generated a positive free cash flow in the second half. Additionally, I would like to highlight key strengths of our balance sheet. Our net debt is amounting to 1,000,000,000, which is better than at the end of each one, but million higher than last year. Our net debt ratio is now 2.1 turn. We have no covenants anymore on our 1,000,000,000 gross debt, and average maturity is 5.7 years. On cash collection, here, We are showing how we used our cash for the period 2017 to 2019. There was no surprises. In line with what we said during the 2018 Capital Markets Day, it was balanced. About one search, shareholder returns, One third CapEx and 1 third M and A. In 2020, we buckled on on cash. While the dividend was voted and paid before the COVID crisis had arrived, we paused on M and A and CapEx. In the second half, our CapEx was half of what was planned by pushing back projects. Only PRS IT and digital CapEx were maintained at pre COVID levels. As a result, the CapEx to sales ratio was maintained at circa 2%, despite the reduction in revenue. We still expect the run rate to increase to around 2.5% in the midterm as we expect to invest With only EUR 18,000,000 spent this year, we were extremely selective in our M and A in fiscal 2020 to sell the list. But going forward, we will look at opportunities to support our acceleration in the new food models and GPO, to support PRS Digital Transformation and consolidate its positions, to continue selective PHS acquisition, especially in Home Care, and to take advantage of opportunities to consolidate our positions and activities. We believe this could be around 1,000,000 of acquisitions per year. For 2021, we are also very focused on selling non core activities and geographies. No buybacks are planned despite the share price. I like that this is not because we don't believe that our shares are seriously undervalued. As we will come progressively out of the crisis in fiscal year 2021, we want to allocate our cash in priority to investments to prepare the future. Thank you, Mark. You've explained how we've been impacted financially by COVID, and I'd like to spend some time talking about our people. Overall, the number of our employees is down 50,000 to date due to COVID. Going from 407 1000 in fiscal 2019 to 420,000 today. This is due to multiple factors: attrition, layoffs, performance management, tightening of short term contract usage, and of course, less recruitment than normal. Our teams swiftly responded to adjust our global workforce as volumes fell, always with respect and fairness. When we look at the departures due to COVID, the majority of that impact has been felt in North America. Our teams in Asia Pacific Latin America and Middle Eastern Africa have also been impacted, of course, but not as heavily as in North America. Our teams in Europe have suffered too, but to a lesser extent than the other parts of the world. When we look at this slide, it's easier to understand why the impact varies so much across our different geographies. The impact has been felt hardest in North America, as I said, when there have been no government funded unemployment measures in place. Then in Asia Pacific, Latin America And Middle East Africa. Whereas in Europe, where most governments have implemented furlough schemes and partial employment measures, the impact on our people has been lower until now. Very early on in the crisis, we understood that COVID would have a significant social impact on our people. Our first priority was to maximize business volumes in order to keep people employed as much as possible. And when we could not keep them employed, we mitigated the impact by creating an employee relief program. Committing 1,000,000 to supporting our most vulnerable employees. The program was enabled by our senior leaders, forgoing their annual bonus for about 1,000,000 and the rest by the company. Many governments in Europe are progressively extending their follow programs to 2021, but they are adding more conditions. At the same time, we have to be realistic in our planning and the actions we take. We must adapt our labor costs to our volumes To remain agile and protect our profitability going forward, we decided to activate a number of restructuring plans as part of our group effectiveness and transformation program. We call it get. It is get program further adjust our on-site labor costs to revenues, protecting our gross profit. Much of the benefit will be in the form of cost avoidance as a furlough programs lift. It also achieves a sustainable reduction of our SG and A through simplification of our structures. The program started in H2 and will be implemented by the end of fiscal 2021. The total cost is estimated at 1,000,000 of which EUR 158,000,000 in fiscal 2020 saw another EUR 192,000,000 in fiscal 2021. The program will achieve cumulated annual savings of 1,000,000 in 2022, half of which in recurrent SG and A the rest being on-site cost avoidance. I now hand you back to Kathy. We don't make any of these decisions lightly. We make them decisively. There's no denying that the next few months are going to be tough. We're going to make some further difficult decisions that will impact our people, but we're wholly committed to treating them with respect and fairness and doing whatever we can to minimize the social impact, while ensuring we continue to motivate those people who will remain with us. Our diverse workforce is a real differentiator, grounded in our values since Sodexo was founded. In our recent engagement survey, 82.4 percent of our people are saying that they feel that Sodexo values diversity and inclusion. And I would just like to highlight that 40 percent of our 200 senior leaders are women. And that brings me to my final point about engagement. We launched our global survey at the beginning of September, with a response rate of 59%. We achieved an engagement rate of 80%. Which is not only significantly higher than last time, but it also tells us that even in these difficult times, employees are engaged with our purpose. Those results give us confidence that we are taking a fair and respectful approach. As leaders of this business, we have the duty to make the hard decisions, but we do it with real care for those people leaving us and importantly, for the talent remaining who are critical to our future success. As the job market reopens, I am convinced that candidates and employees will favor those organizations who treated their people well during this time of crisis. Brand authenticity, business integrity, culture, values, will be key levers in the war for talent. Thanks very much, Katy, and thank you, Mark. It's great to hear how we have our focus on people while delivering results. So I'm happy now to turn the floor back over to Denis who will share his perspectives on what lies ahead. Denis, the floor is yours. Thank you, Diane. Thank you, Kathy and Mark. Before we wrap the section of the day and head to our first Q and A session, I wanted to reemphasize that our model has proven its relevance in this year's crisis. We have all worked brilliantly together, and stepped up to serve our clients, offer new ideas and negotiate well to find win win solutions for everyone. The Sodexpertines have been truly agile and entrepreneurial. From day 1 of the crisis, we had 3 priorities: people clients and cash, and we moved fast. Mark and Kat here have already explained how we managed our people and how we secured our cash position. I want to spend a few minutes talking about how we supported our clients. For clients, the focus was on securing business continuity, ensuring consumer safety and thus safeguard retention. We've done really well on all fronts, serving our clients in very challenging conditions. Let's have a look at this testimonial from one of our healthcare clients in Nebraska. We've always had a strong partnership with Sodexo. They've been on campus for over 30 years, they provide our housekeeping services as well as our food and nutrition services for the health system. And as well as the food choices. They also made sure that, there was plenty of linens, that they were, rooms stocked appropriately, as well as even did the little extras like birthday parties and celebrations for anniversaries, all the little things that none of us even thought about. They took the time to get to know who these guests were and what they needed. During this difficult time being away from their homeland, as well as away from their families. An administrator, I was extremely impressed with their ability to handle on these to take on these new duties, but also continue to maintain the operations throughout the health system. I mean, this is a big health system. There were we still had needs on the main campus and they, worked with their staff, had tons, tons, volunteers picking up extra hours to be able to meet the needs of Camp Ashland, as well as meet the needs of the health system. And they provide an an exceptional experience to our guests. We also won important new business, including testing centers in the UK, additional disinfection cleaning services for our global accounts, as well as supplementary FM services for our mining contracts to ensure they could offer social distancing to their employees. The opportunity ahead is now to turn our activities into a Let's now look at how that our transformation has to keep up with this relentless pace of change. Effectively, we are doing 3 things: we rationalize, we enable, and we transform. Let me focus on how we rationalize the cost base to safeguard the bottom line. Mark has already set out how we are going to achieve this through our get global effectiveness and transformation program launched in July. So what are we doing? 1st, we optimize our portfolio of services. Our Hard FM review is done and we are rationalizing our Hard FM portfolio to keep only contracts where we know we can add value. Ruthlessly. Number 2, we optimize our country portfolio. We are focused only on geographies with the biggest potential for us. Number 3, we safeguard our gross profit. As a result of the crisis, we've been forced to right size our labor force, and we are continuing to keep a close eye on this. And number 4, we continue to have a strict focus on execution. As we redesign and optimize, our structure becomes even more agile. We are reducing HQ and transversal functions centralizing them where it makes sense. This means thinner global segments to drive investment and resources closer to the front line. All these measures will generate about 1,000,000 of SG and A savings. Then what do we mean by Enable? We're investing in sales, retention, marketing, digital, and IT to accelerate top line growth as well as continuing to invest to enhance our execution. And Sylvia Bruno and Francois will tell you more in a few moments. Rationalize and enable will bring SG and A to our lowest level in 15 years. While making sure we maintain the necessary level of investment to generate growth and support local recovery. As a result, we will be more competitive and we will enhance growth. And finally, Transform. We are transforming our core food business, Sunil, O'Reya and Sarush, will develop on how we are creating holistic offers that combine all our solutions to gain market share and grow the top line. We know that we can deliver great performance going forward. Let me remind you that our total addressable market across our food activities and segments is measured in trillions. Thanks, Denis. And what a great testimonial from the client? Yep. So we'll now open it up for Q And A. Denique, Kathy, and Mark are ready to take your questions. Over to you, Dulce, to get us started. Thank And your first question comes from the line of Simon Landshipper from MainFirst. Your line is open. Please ask your question. Three questions if I may. 1st of all, in North America, you mentioned what you have done to address your issues. So just wondering how happy are you right now with the performance of the specific health care and university businesses? And what are the key aspects you need to further improve to achieve the right performance? And secondly, in terms of profitability, which proportion of the savings you announced this morning you expect to I mean, you need to reinvest over the next 2 years. And related to this, when do you margin to be back to the level of 2019? And lastly, you mentioned CapEx would accelerate notably driven by new food models. How do you see the return on this incremental CapEx compared to the historical return of the industry? Thank you Simo and thanks for being with us. Regarding, I'll take the first one, I think, talk about the margins. Mark will talk about profitability and CapEx. As far as North America is concerned, I think we've, we've, definitely stabilized the business. We have much stronger operations, both in Healthcare And Universities, and it shows by a small solid gross margins. When you have a gross, a solid gross margin, you know that your operations are more solid. We've improved retention. I mentioned that earlier, We still have to improve the momentum in sales. We are reconnecting sales, but the development is still an area of of progress that we have to do there. But overall, I think I'm confident in the efforts that we are doing there. In terms of margin and Mark will go into more details on the profitability, but in terms of margins, you know, what what I can tell you is we've stabilized our margins pre COVID, and we were, on track to improve the margin from fiscal 2021 onwards. And of course, the COVID crisis has stopped this momentum. However, overall, no fundamental things have changed, despite the COVID, And, I still absolutely believe that, once the crisis is over, we can rebuild our margins back up again and the group efficiency and transformation program will definitely support this. Mark, in terms of, yes, in terms of the settings, as we explained and Denis mentioned, it's 50% of the program is really focused delivering savings at SG And A levels. So we are expecting savings of 1,000,000 on the SG and A and this will be achieved by 2022. So that that will help build up the margin as we move forward. With regard to the CapEx, the CapEx on the new food model and the CapEx on GPO or They will have high returns. I mean, we already have CapEx in central kitchens, in commissaries, and we know how to run those operation. We will just invest more because this is what's needed to support the growth in food, and we are expecting the ROACE to remain our target for Roche is 15% and this does not change. Okay. Thank you. And your next question comes from the line of Richard Clark from Bernstein. Your line is open. Please ask your question. Hi, good afternoon. Thanks for taking my questions. Just in a previous annual report, I think under your predecessors, I used to highlight that a 1% retention increase led to a 1% gross margin increase. Is that something you still agree with that maths? And given you've kind of highlighted some good moves on retention, when would you expect that benefit from retention to come through? Second question, you highlighted quite a few you've made in the new food offers? Is there going to be a plan to bring that under one umbrella to have one sort of leading delivery offer to offer to clients and what's the process to get to that? And then also on your ESG criteria, how often does this come up in discussions with clients. How much do you think that is an operational advantage to have those that greater investment in the ESG criteria? Right. Mark will answer the retention margin and I'll take the 2 other ones. Regarding investment in new food malls, we definitely we're we're bringing them together. And, you know, will it be at the moment, we have a common group that oversees that. I have nominated, for example, Bruno Vonnell to lead that group in North America in terms of how we accelerate the new food models, and of course you'll see later that, Sunil and Orlean on, you know, what remains the critical corporate services, domain they're working very well together. We are, putting our systems together as well to create joint offer that is seamless for our clients? Will it be, one day, only one umbrella, one head possibly, but at the moment, we are concentrating on accelerating and scaling up all the initiatives that we have there. Regarding, EST, definitely, we see, a great, great momentum, in, the discussion that we have with our client. I mentioned earlier, this, this great win that we've had with a major, food product manufacturer, and we have lots of conversations with our strategic accounts. Even in energy and resources, this is a big top pick now. And we believe that we really have market advantage there. We've been in, and Francois to come back to that. We've been sustainable sourcing for many, many years, and, we will really accelerate that because we will take market share thanks to our positioning. Yes, and the math does not work. I mean, I'll check on where when we did say that, but 1% of revenue is 1,000,000. And 1% on margin, it's also 1,000,000. So it's not possible. What we always said is that in margin, there is obviously a greater advantage to keep the business we have because it is less costly to keep what we have than to re sign and ramp up the margin. So there is a margin differential between an existing contract and a new contract. Margin varies. So if you assume it's 500 basis points and I don't want to be quoted on that further than this call, 500 basis point on 200,000,000 is only 10,000,000. So there is an advantage to keeping existing contracts, but the maths do not work. And I would add that, of course, retention varies, I mean, upon the, the portfolio that you have, we want to retain, of course, the most profitable contracts. Exactly. That's for sure. And, and of course, we tend, depending as all segments do not have the exact same profitability, there is, there are different ways that retention impacts the margins. Thanks, Mark. Just so you've got the references on page 33 of your 2017 annual report. It says a 1.6% client retention increase would lead to a 1.7. Increase in gross margin, but it's a few years ago now one to check whether that was still with you. Thanks, Richard. We look at it. And your next question comes from the line of James Henley from Citi. Thank you. Yes, two questions, please. I just wanted to ask you about the new business environment in why you think that Sodexo can win, win better than it has done in the past, and maybe why the kind of post COVID environment suits your business better than your competitors potentially? And then secondly, on the cost savings, Should we think about these as defensive or offensive? In that sense, are these designed to offset cost pressures that you're seeing or potentially lost business that you see or how much of this should we expect to flow to the bottom line? Mark will answer this one. I'll just say quickly that we are both defensive and offensive, but he'll go in greater details As far as the new business environment, let me, let me just sum up what I see as being the 4 key takeaways of that ongoing crisis, actually. And why we I believe we'll be well positioned. That crisis has highlighted that digitization is, critical to operate, critical to liaise with our, consumers and also reassure our clients. And digitization will help, increase consumer spend. And Sunil will get back to that later. The second is we accelerate the flexibility of our production model and of our delivery model and the convergence, between on-site and BRs. And, that will help us a company, work from home. And again, you'll hear about this later. We can also, take a bigger share of what happens in small and medium companies because they also want simple offers, sometimes even on-site offers with convenience, more, more to come on this. Definitely, that crisis has demonstrated that the integration of services is a great asset and a great strength when we talk to our clients. And particularly, you know, COVID is very complex to manage. And when you, if you have to manage with 10 suppliers, the, the, all your workplace or all the hospital or or the universities, it's very complex. When you talk to one supplier that can embed all the services, it's very, very strong. And last but not least, and we mentioned that with Richard just a few minutes back, sustainability and Silvia will talk about the sustainability that the core of what consumer expect. And, no, that will put us in a great place and sustainability can also help improve consumer spend. So lots of elements that put us in this new environment in a great place. Yes. And when we are looking at labor costs on-site, obviously, our cost savings program is defensive. We are We are going to take over the programs and the furloughs will hand. And so we need to protect our gross profit. On the SG and A side, what started as a defensive move, you know, we had to adjust to the volume going down actually was transformed into an offensive move And this is the get program is actually meant to be supporting the rebuild of the margin over time and that achieve our midterm objectives in terms of margin. And your next question comes from the line. We'll take one more question. I think we need to move on afterwards. And next question comes from the line of Jamie Rollos from Morgan Stanley. Your line is open. Please ask your question. Yes, thanks. Hello, everyone. I'm sorry, 3 quick ones, please. First is just a 95% retention target in the medium to long term. Second, can you talk about incentives and how you're switching from the current environment on incentivizing people to reduce costs and maximize margin and how you're going to transition to accelerating, again, the top line growth, what is the old target? Then is there anything you can say on the dividend? What's a spot for the company paying a dividend in the current financial year, in terms of leverage targets, and what might the payout be? Thank you. Thanks, Jamie. Yes, definitely the 95% target is still there. And, I can tell you, I want to be significantly above it's going to take time, but I, I want to improve that retaining the clients demonstrate that you have solid services. As Mark said, it's great for the margins, and, and it's what we owe to, to our clients and to our people. So, definitely, it's very high in the agenda. As far as the incentives, I think we don't we don't necessarily talk to the same people. We, of course, incentivize our teams to retain the clients we incentivize also other teams to develop the business. And when we reduce cost, we ensure that we reduce costs on the sites while maintaining client satisfaction. Let me give you a very simple example, Jamie, during that crisis, we've simplified our menus and clients understand that very well. But as we simplify the menus, We've also demonstrated a lot of culinary experience that has satisfied our clients a lot. And we've really managed our costs really well. So this will help retention. At the same time, when we are already starting to, incentivize our teams on the development we have a more solid pipeline. We can get back to that later, and, the rise with Sodexo offer that that Bruno will talk about in a minute and, I think it's going to be very interesting to look at this, demonstrates that we can at the same time be efficient and reduce our costs, but also create a dynamic with our clients to capture the opportunities that we have ahead of us. As for the dividend, Martin, as for the dividend, yes, we stopped the dividend for this year because we felt it was inappropriate to pay a dividend for fiscal year 2020, it doesn't mean there will not be any dividend in the future on the contrary. And when we look at the balance sheet today, we have no covenants We have large liquidity. Yes, we have a net debt to EBITDA ratio above 2. And we said we would like to stay between 1 and 2. But today, we don't come out of a board meeting with a serious constraint on the balance sheet. We have ample liquidity and no covenant. That's it. Thanks so much for that robust exchange. Really great Qs and As. So now we're ready to move to the next part of our agenda. So now I'm pleased to welcome Sylvia Metair, Chief Growth Officer who'll talk about key market trends impacting our business, particularly working from home because we know that's on everybody's mind these days. Francois Blancard, our Chief Procurement Officer on how supply management has become an important growth driver, And we're also joined by Bruno Van Helst, our Chief Sales And Marketing Officer, who will share more around our sales and marketing transformation. Sylvia, the floor is yours. Thanks, Diane. Good morning. Good afternoon. Good evening to all. And happy to be sharing with you some insights today on Sodexo's growth perspective. The COVID crisis has not changed. Our fundamental belief that our markets are sizable and that we can capture growth by targeting growing geographies, by increasing the share of outsourcing, by partnering with clients in dynamic sectors and, of course, the lighting are consumers. At the heart of this crisis, we've demonstrated the resiliency of our portfolio, and we are well equipped to respond to 2 new factors: sanitary restrictions in the short to medium term and the acceleration of working from home, which will be a long term shift. So first, how long will the crisis last? Well, clearly, until widespread therapeutic solutions are available, any new infection wave will be contained by social distancing and lockdown. Limiting activity on non essential sites and for non essential services. And this will play out very differently by country in terms of infection rates and local regulatory response. The length of the lockdown, government stimuli, and pre existing economic drivers will also determine very locally the scale of the economic impact. So predicting short term is a challenge, but We do project China and Asia recovering first from the crisis, remaining our fastest growth market, and regaining its pre COVID 10% trajectory. The U. S. Economic environment should improve next, and this is key as it continues to be structurally the largest and the most profitable of our markets. LATAM and Europe will probably lag the U. S. So given the uncertainty, our priority is to be close to our clients engaging with them digitally or directly at top level and continually surveying our consumers. And Bruno will show you how we've done that. Let me share with you now how we're responding to the current change in demand. First, as you can see, hygiene very unsurprisingly tops the list of demand. Nearly 90% of consumers surveyed want to see the evidence of hygiene before they return to any site. Leveraging our Healthcare business and our expertise in infection prevention, we are deploying clinical grade protocols worldwide and across all of our services, including food services. And these protocols are audited by Bjrogeritas with a visible on-site label for consumers. 2nd, contactless is gaining ground, especially as it is seen as a prevention measure of infection. So we are accelerating existing digital services, such as click and collect, food delivery and digital payments. And of course, benefits and rewards is our ultimate contact with service and a great solution for our on-site clients. Then we see traceability of supply and local sourcing increasingly drive consumer choices. And this is coupled with clients' need for global scale and supply. And Francois will explain how the transformation of the supply management in which we engaged pre crisis resonates perfectly with this demand. Last but not least, outsourcing requests are increasing. Cross selling, more integrated services, larger regional or global integration, and first time outsourcing. In fact, in our US marketing and sales distribution center, 1 in 3 of the digital requests received since the beginning of the year has been the first time outsourcing. First time outsourcing is a key factor for growth. In FY 2019, it represented 40% in value of our North American development. And we always expect first time outsourcing to increase when the economy gets difficult, but what we are seeing now are clear requests for expert and scale solutions. Most of these trends will continue once the crisis is over. You can see it on this slide, and this will mean continued service adaptation especially on delivery and digital. If we want a better understanding of longer term growth, we need to drill down by client vertical as the impact on each market is different post crisis. As you can see on this slide, we will revert largely to pre crisis market growth once the sanitary crisis is resolved. I do, however, want to call out the acceleration on health care and seniors markets. Our clients continue to operate throughout the lockdown, they continue to operate now, and they will continue to operate post crisis. Retail food services were shut down, but this is actually a small part of our business. More importantly, our clients are critically reliant on our services to ensure 20 fourseven business continuity, and this translates into increased volumes, especially for FM, In fact, those services were up 7.4% in Q4 FY FY2020. VING the best is to hear a client explain it. Hollandville review is Canada's largest pediatric rehabilitation hospital, and And we serve more than 8500 families every year through both inpatient and outpatient services. We're a top 40 Canadian research hospital, and We have an impact on the lives of children and youth, not just in Ontario and Canada, but around the globe. Sodepso has been a really valued service partner to Hallum's overview for for over 30 years. And we rely on the Sodexo Canada team for patients in retail food services, as well as environmental services, which include housekeeping and infection prevention and control. So that so really utilized its global expertise, and immediately provided its on-site hospital teams, including their team here at Holland, Bloorview, with direction and tools and support that were of equal quality and rigor to the protocols that we put in place ourselves across the hospital. Our Sodexo team was was proactive and creative in deploying their environmental services staff to address new pandemic requirements, and in ensuring that we had ample cleaning and other supplies to weather whatever the pandemic storm brought us. They worked closely with their home and review infection control and facility management colleagues to really fully integrate their practices with ours, and they sat and they continue to sit at our pandemic planning tables as equal contributors. We really don't distinguish who works for Sodexo and who works for Holland Bloorview. From the very beginning, we've been one team. And, on the food services side to support our frontline workers and the broader home interview community during the pandemic, Sodexo introduced a grocery to go program to provide our staff as well as clients and families with healthy and nutritious ready made meals and, grocery purchasing options. Well, if anything, I I think it's reinforced in my mind the value of this model, at least for Holland Bloorview. You know, it can be a real struggle if your service provider doesn't share the same organizational and operational philosophy and goals as you do. And and I I would say throughout our business relationship with Sodexo to date that that has been the key to their success in the serving hall in Bloorview. There is much in our style of work and culture that seems to align with Sodexos. And that's why we've extended our relationship with him for another 5 years. So as I thought, the client does say it much better than we can. This, partnership led demand will continue in health care beyond the crisis. And with the return of retail food services, new services as the ones in testing centers and also first time outsourcing, we are looking to sustainable growth in the health care market. Now the market dynamics are much more contrasted for our business and administration clients. On-site services for manufacturing, production and remote sites are very resilient. These clients have largely not shut down, and our services are even more critical now for them. We expect continued growth in these markets, especially in integrated facility management. Two examples: pharma clients, which represent a majority of our global strategic accounts, are increasing their number of production sites, and the volume of outsourced services. And we are also seeing and will continue to see good growth on mining sites. However, the speed and shape of the recovery for the on-site services we deliver in offices will be dictated by the long term shift in working from home, Before we dig down into work from home and on-site services, I did want to highlight that it doesn't impact the growth in benefits and reward services. Is not linked to the number of employees on-site. And in fact, we see growth in BRS as our on-site clients understand that this is a solution for employees at home and turn to us as the only partner who can provide both solutions. So how does work from home impact Sodexo's business? First, you should know that pre crisis the revenues from food services on office type sites were of about 1,000,000,000. Which is less than 10% is not weighted to single service food provision, tech clients, or large city centers, all of which are very exposed. So to understand the magnitude of the impact of work from home on this portfolio, we've run since April 24,000 consumer interviews and more than 1000 client interviews. And I'd like to highlight 2 caveats to this data. First, employers are still finalizing their policies, and in fact, they're actually quite keen to hear from Sodexo what our insights are. 2nd, consumer data at this stage is still sentiment and it's evolving. The number of respondents wanting to work exclusively from home, for instance, has been dropping regularly and significantly since April. But what the data tells us and what is clear is that employees do want to go back to the office, and they are happy once they are back at the office. They miss the collaboration, they miss the comfortable workspace, and they do perceive a deterioration of their work life balance when they are working from home. And employers want employees back at the office. So the numbers on this slide speak for themselves. But I will highlight the key reasons. So also collaboration, just like preemployees, but also ability to innovate protection of company culture and the personal engagement of employees. But what is also clear is that office workers will not come back 5 days a week to the office. Our data shows the rate of working from home will stabilize globally at a mean of 2 days a week with a wide standard deviation by country and by industry. Now pre crisis, office employees had already started to work from home. So what we need to look at is the net effect And the net effect pre and post pandemic is also very contrasted by country. For Sodexo's portfolio of countries and clients, This would translate to a 27% reduction of the time employees spend in the office compared to pre COVID. So you might do the math quickly. 27 percent of 1,000,000,000 is 1,000,000. Does that mean that we lose 1,000,000 1,000,000 of revenue because of working from home policies, well, actually, we think not. And the first reason is that our data shows us that employees miss the food services at work. And that tells us that we can capture greater share of wallet the days they are at the office with targeted offers. And the beauty of the data in a survey in consumers regularly is that we already know what they want. And you can see it on this side. The surprise to me is that affordability is not coming out as a top factor, as we would have seen pre crisis. So lots of opportunity to capture share of wallet. 2nd, Employees are requesting food services at home. It's not just that they will need to be fed, but they want their employers to continue feeding them. That's a key part of the relationship. And that's great news for Sodexo because we can uniquely help our clients bring solutions to their employees. With BRS in the countries where we're present, just look at that 26% of respondents asking for vouchers and cards. And also with the capabilities that we are developing around food delivery or have already developed. It's interesting to note that there's also a demand for employee funded health and wellness support for employer funded. Especially on mental health. And our ecosystem of partners can be a solution for this need, and you'll be able to see it when Bruno presents a rise with Sodexo offer. And our third reason for confidence is that our clients are seeking our help as they rethink the purpose of their office space. Our people centric approach and offers in facilities management workplace services, energy management and space analytics are really unique on the market to make offices the most engaging, flexible and productive places to be. So as you can see, we are really well placed to dress work from home, and you'll be hearing more from Ohelan Saroche and Sunil, how we are doing this innovatively and proactively. I will end on that note hoping you now have a better understanding of our vision for the business. Maybe 3 takeaways from this presentation. Our portfolio is resilient. The market fundamentals remain solid and Sodexo is uniquely placed to embrace a shift to working from home. I'll now hand it over to Francois Blancard. As I mentioned to you, supply management is key to our growth strategy, pre and post crisis, and he will give you a perspective on what we're doing. Hello, everyone. It's a pleasure to be here with you today. I'm going to share more about how supply management has become a strategic asset for Sodexo. Both to respond and anticipate consumer expectations and of course, to improve our cost base. Today, our procurement team of 850 people runs 1,000,000,000 of spend every year for both SODEXO and Entegra from approximately 150,000 suppliers around the world. We have 3 objectives: to improve our costs, gain efficiencies, raise competitiveness, then to bring value for consumers to drive top line growth. And all this while ensuring safety and quality and mitigating risk. We are investing 1,000,000 over 3 years through the P and L to create efficiencies, accelerate the digitalization of the function and consolidate our approach to responsible sourcing. Fiscal year 2020 was year 1 of this transformation, and we already see the benefits. Our supply management team was on the front line in the middle of the COVID crisis, they stepped up and secured supply of materials to ensure business continuity and supply of critical protective equipment to keep our people safe. And despite this heavy crisis management activity, we stayed on track on our investment. First, we see real efficiencies. We delivered on last year's ambition, we improved cash management, control cost inflation and delivered the expected cost savings in all areas of spend. And the good news is that the payback on this investment is extremely fast. 2nd, we are accelerating the digitalization of the supply chain as planned with the deployment of new solution. And today, I want to focus on the 3rd, our clear, responsible sourcing strategy, which is centered around 3 key pillars and ambitious commitments that truly distinguish Sodexo. The first pillar is health and well-being. That sourcing the healthiest ingredients in conformity with our high nutritional standards. Social Equity is the second one, especially when it comes to our relationship with Small And Medium Enterprises, we are committed to spending 1,000,000,000 with SMEs by 2025. And the 3rd pillar is to protect and restore natural ecosystems. Our key priority in this area is to engage in a low carbon supply chain to help deliver our target of cutting emissions by 34% on scope 1, 23. To achieve these ambitious commitments, we are taking 3 lines of action. So first, we are strengthening our foundation. This is about continuing to ensure food safety and qualities for regular audits and testing. Then it's about ensuring the proper due diligence for human rights and ethics, close to 96% of our global spend is with contracted suppliers who have signed the Sodexo supplier cutoff conduct. And you know, food is not all what we buy for in for uniforms, a high risk category when it comes to working conditions and quality, we have our own Sodexo team on supplier side to ensure compliance. The second line of action is to go upstream to deliver more value to the business. And we go where the innovation is. Whether we are talking about large supplier or small companies, they both can bring value. And when it comes to local supplier, whether with farmers, bakers, and food producer, as well as plumbers and electrician for FM services, We spent 1,000,000,000 this year. It's up from 1,300,000,000 last year, and we are on track to deliver our 2,000,000,000 spend commitment with SMEs. You know, it can be difficult for SMEs to enter the supply chain of large organizations. We won't sacrifice our standards when working with smaller companies. So therefore, as we do in France, we help them. Through training, coaching and support to integrate them smoothly. And you might have seen, we were one of 10 companies recognized by the French government and cited, as an example, for virtuous and inclusive way, we manage our supplier during the COVID crisis. This is some of the value brought by our partner inclusion program. The 3rd line of action is to create accretive partnerships. We face very complex challenges, such as food waste, carbon emissions, animal welfare, human rights, diversity, and we are just a tiny part of a vast supply chain. Many challenges cannot be addressed alone. This is why we partner whether it's with our suppliers, other companies or NGOs. Let's take our partnership with WWF as an example. For a decade, they have to help us work on a range of leading positions on different commodities, such as seafood, palm oil, and more recently on deforestation to help us to meet our carbon footprint target. For food waste, we have chosen to partner with several organizations, to tackle all aspects of this complex issue. Together with our partners we are transforming our supply chain and making it a decisive advantage for Sodexo. We want our clients to know that when they sign with Sodexo, Aside from getting a competitive offer at the right price, they are also fostering health and well-being. Social equity and a lower environmental impact. Embelling much better responsible sourcing in our offer to clients and consumer is why I team up with Bruno who is going now to tell you more about our marketing and sales road map. Over to you, Bruno. Everyone, and thank you, Francois. I'm pleased to be with you today. And just like Francois did with supply management over the last 2 years, we've been investing aggressively in the transformation of our marketing, sales and retention activities to implement a consistent approach with best in class capabilities keeping our clients and consumer needs at the heart. First, let me tell you about the world in which we operate pre and post COVID. The B2B marketing and sales world that has experienced more changes in the last 5 years than in the previous 25, leaving in an increasingly tech driven world selling has gone digital and social. The buyer's journey is now a mix of physical and digital touch points, building the right engagement with the right content for the right clients at the right time is essential. And most importantly, with the right services built on actionable insights, Therefore, we've started to rebuild a broad and omnichannel approach, a mix between the best in person and digital. Using the power of data and technology to build a more interactive and personalized journey for our clients and more relevant services for our consumers. This combination of very relevant digital interaction with the Sodexo human touch is strengthening our go to market strategies enhancing sales effectiveness and ultimately, really truly building unique relationships with our clients. Now what does that mean exactly? Well, over the last 2 years, we have reset our marketing and sales approach to be more proactive, gaining agility and scalability, and truly leverage our global footprint. How did we do this? We focused on 5 key actions. First, actionable client and consumer insights at the heart of everything we do. For example, we launched the Harris interactive tracker across eight countries around the world, which allows us on a quarterly basis to have a deep understanding of evolving consumer needs. We've also built through primary research for many of our segments a formalized understanding of buyer's journeys. 2nd, we have a consistent marketing strategy across all segments and regions. Tenant around clear value propositions, delivering strong consumer experiences, building on trends like sustainability and health and wellness. This is improving deployment speed and scalability. 3rd, we are building a stronger, more concentrated service portfolio. In the last year, we have reduced our portfolio of food offers by nearly 50%. Today, we have 65 internal brands 35 external brands which are leveraged across all our segments. We're focusing on resources on building robust brands with more impact. 4th, we're transitioning to an account based marketing and sales approach. So the concept is simple. Instead of selling everything to everyone, we're focusing on selling our top services to high value accounts. Instead of going after every RFP, we're going after those that make the most sense, we're going deeper instead of going wider. For instance, in North America, over the last 18 months, We've clearly identified the ideal client profile for each segment, leading to a clear target account list, and we're now proactively engaging with these accounts to boost conversion and upselling. And then finally, we're building in more proactive digital and physical engagement with target accounts throughout the sales and contract life cycle. This human digital balance gives us the ability to better allocate our resources. Using best in class technology, we can better rate the buyer intent from a scale to from 0 to 100, qualify the lead and determine the ideal way to allocate sales resources. For instance, a small cleaning contract worth $1,000,000 in value could be closed without virtual selling team, but for a much larger contract, $35,000,000, including food and FM services, would engage the field sales team in the process. This is a much more effective use of our resources. Now to do this, we've been investing in 3 key enablers 1, we have deployed in 9 months a group wide CRM across all regions for our on-site services. This is truly the backbone of our sales, marketing and retention structure, enabling far better tracking of pipeline management, conversion rates and retention. We're starting to read the benefits. We now have more than 2500 daily users across the world for whom we organize dozens of regional training sessions doubling data quality and tripling usage rates in the last 12 months. And we're also complementing our CRM with additional layers of technology, address marketing automation, predictive analytics, content management, data enrichment, social media intelligence and overall online tracking. 2, we're expanding our digital marketing and inside sales capabilities with the launch of the marketing and sales distribution centers, what we call our MS VCs, in North America and in Europe. These are regional centers with 20 dedicated digital marketing and inside sales professionals. These are champions of lead generation and qualification. Each person can reach up to 75 interactions per day, To date in North America, we've had more than 15,000 virtual interactions with clients and prospects, building an incremental pipeline of more than $200,000,000 in the US alone in a few weeks. In the recent COVID context, these teams are actually already in place to virtually connect with prospect and client, which was a tremendous competitive advantage. And 3, we're investing in retention We're revamping clients for life, our group wide retention program with an enhanced process, new technologies, integration into the CRM for better trucking, as well as the usage of data analytics to gain more insights. Furthermore, we're piloting a new client life cycle management team in North America regrouping all our client retention experts, building a 360 view of our clients, leveraging, again, technology. This has already started showing promising results. Although all these actions have just been implemented, we've already seen the potential of the approach showcased in rise with Sodexo, as you will see in this video. Rising is a process. It starts with that simple first step. And as we arise from never before imagined circumstances, we are all taking the same steps individually and collectively as we venture out to embrace this new normal. We are ready for the challenge. Confident that each day will move us forward. No matter where on this planet we call home. Because although we come from different places, we are all in the same moment. And along the way, we'll need some help from the service teams, chefs, technicians, and care workers. Every individual playing a role in helping safeguard our lives and restoring our livelihoods. Helping all of us get back to what we love doing, how we live, learn, work, play, or care. Even though for a while, It'll be a different kind of together. Wherever you work, and whatever you do. Sodexo is ready to help you rise. With a thorough and thoughtful approach to creating safe environments and lending a helping hand. From restarting our world safely, to protecting people and providing healthy food, life conveniences, wellness, and transforming our spaces. Plus, those touches that will welcome people back to their jobs. And we're always there to listen. Offer advice, or to just be there for each other. We say rise because it enables businesses, communities, and people to experience the possibilities of a positive new world. And when we all rise together, anything is possible. Rise with confidence. With our new approach, in a matter of few weeks, we were able to develop and launch this traversal program focused on solutions for our clients to get back to business in absolutely unique competitive position in the market, answering the need for optimal integration of multiple food NFM services. We use cutting edge insights from our operations and external partners to understand what was needed and how we could contribute to protect the health and well-being of our employees, clients and consumers. And with the synergies between on-site services, benefits and rewards and personal and home services, We built a truly client and consumer centric solution to respond to their needs and pain points unique in the market. The program was also sent by a medical advisory committee and by the Bureau Veritas label Rysafe. And we get to the market quickly by focusing on a target list of prospect and clients enabled by digital marketing and inside sales teams, which was essential given the restrictions on face to face meetings. As you can see, with the support of the MSDC, For corporate services alone, we held over 15 webinars, reaching over 2000 attendees across 12 countries. Globally, the rise with Sodexa digital campaign has led to a 51 share of voice in, social media among our competitors, COVID related programs and has been the most mentioned across social media sources. The rise with Sodexo program clearly demonstrates the unmatched value of our service portfolio and its relevance across segments and regions. Over the last two years, we've been setting the foundation to strengthen our go to market strategies, build the right services, enhance our sales effectiveness and drive better retention. We've seen the early signs of progress with more impact expected in the medium to long term. Back to you, Diane. Thanks very much, Bruno. And thank you, Sylvia and Francois. So now let's get started on our next Q and A question. Thank session. And your first question comes from the line of Jarrod Castle from UBS. Your line is open. Please ask your question. Maybe I'll limit it to 2, if I may. 1, you kind of gave at least the 6% plus margin target. Do you mean, would you be prepared to give some color in terms of B and R versus, on-site in terms of where you could get to And by how much do you think you can close the gap in terms of best in class in each business? And then In terms of 3rd party procurements, you kind of referred to the $20,000,000,000 number. Where are we at the moment relative to the GBP 20,000,000,000? And, how much of that number now comes from procurement for your own contracts versus third parties, please? Thanks, Jarrod. And of course, Francois will answer to the second question. I'll take the first one. Definitely, I think reaching 6% plus margin is, as I said, is still a serious target The question is not whether, but when? When? What I can say, it's going to be, of course, a combination of both on-site, improving its margins, and the get program is definitely, support to this. At this moment, of course, margins of VRs have decreased. They can rebuild progressively. Australia will give a little light on this, as, in the next session, but I think that on both, on both activities, our target is to progressively restore them and to be a very close or at peer level to, to really progressively be best in class, yes, of course, I mean, it's really an objective and we're working hard on this. In on-site, we're working hard on the gross margin as well as on our cost as well. And, definitely BRS will leverage the volumes as they as they come back. On the on the 20,000,000,000, to be clear, the breakdown of the 20,000,000,000, We have $6,000,000,000 for food and supply, $3,000,000,000 to support our FM business and $11,000,000,000 for Entegar. Indeed, the 3rd party part is very important, and it's an important part of the investment we are making in supply management to really help to develop and support Next question please. Your next question comes from the line of Paul Rameshuri from Exane BNP Paribas. Your line is open. Hi, good afternoon. It's Jafar from Exane. I've got two questions if that's okay. Firstly, on the risk assessments on remote work. Can you just help us reconcile minus 27% reduction in office hours? With the other statements that only less than 10% of your corporate volumes are Of course, I see that minus 27 percent applies only to office, which is only half of corporates, but then even with that, And it sounds like you're assuming that you're going to recoup a third of the volume impact to higher spend per customer. Is that correct? And what gives you confidence that there's such an increase in spend per customer? And secondly, on medium term profitability, if your revenue to EBIT drop through remains the same at around 20%. Then with 1,000,000 cost savings, you could in theory deliver your full year 2019 margin, which I calculate something like 8% total reduction in group revenue, but that doesn't seem to be what you're expecting. So if corporate volume comes down 10% and the rest is not permanently impaired. So, is it right to assume that in full year 'twenty two, could have a significant net increase in the margins already because you will have delivered those savings? And lastly, on the cost savings, investors will have 1 or 2 experiences with cost savings at Sodexo. 2014, 2015, you deliver significant margin improvements, but then we find out that this has impaired the group's ability to grow. Or more recently, you've delivered on savings that they have been mostly defensive. They haven't really benefited the bottom line. So on that spectrum, where do we think this new cost savings ends up? And what have been the lessons learned from the previous cost savings program? Let me, thanks Jafar and let me answer to the last two questions and then Sylvia will answer the first one. Regarding the, the savings that we are doing first, as Mark said, half of the gate program is around gross margin, the cost avoidance. So it's a protection of our gross margin. It doesn't generate an immediate bottom line impact. So it's more half of it that, that helps us increase the margins and also mitigate some of the pressure that we can have, on the, on on the top line and the gross margins. Definitely, our goal is to, you know, the 21 will still be there's still uncertainty, a lot of uncertainty out there and it's hard to fully predict. That's why we've given a guidance only on the first half what I what we all believe is that, as a, as a vaccine come, and as a vaccination is deployed across our 3 main markets. We will see things progressively stabilizing, recovering our volumes progressively And of course, from, hopefully, from 22 onwards, our margins improving. In terms of, of what you said about the cost savings program, the lessons learned are that, we you know, we had cut costs particularly very close to, to the field. And one of the reasons and that I mentioned at that time, was, when right after the profit warning was that, particularly North America, we had cut costs in operational in operations, just above sites, and that has been a mistake because we were not controlling and supporting our business anymore. What we do here is first, you know, it's a sizable, impact, but we take the time to do it well. As Mark said, we started, at the end of fiscal year 2020 and it will last until, 21 the end of fiscal 2021. So it's going to we take time to adjust our structure. What we do mainly is, we we, we, sort of reduced the global structures that have caused it a lot and not necessarily deliver all the the impact that we wanted. So we're going, we put the resources closer to the field, really streamline the global resources. And I think in doing so, we keep, we keep the power, let's say, close to the operations So that makes me more confident, that this is a sustainable savings and that we'll also sustain the business. Sylvia on the first one? Yes. Thanks, Rafael. Let me go through the math again. So work from home will only impact food services on office sites. So no impact projected on production sites and no impact projected for FEM spend. That's the 1,700,000,000 throughout the group, which is less than 10% of group revenues. The 27% is basically saying on those sites, probably, the consumers or employees we'll be there 27% less of the time. So it's just a straight mathematical application of 27% onto that 1.7 1,000,000,000 portfolio, which is only office sites and only food services. So in fact, there's no recuperation which is, embedded in that 27%. As I've told you, my optimistic thought is that actually we can recoup all of it. But that's optimistic. Yes. And it's going to be a mix, it's going to be a mix, you know, that the mix of services that we will have and the way we deliver our services will evolve, with on-site, with BRs, with more FM, you know, it's the whole mix that will evolve. And food delivery. And food delivery, yeah. Thank you for that. So it's actually just to clarify. So minus 27% I think is very clear from your presentation what this represents. And what I was, trying to ask is, how do we go from minus 27% reduction in office hour in food services, corporate services, office type, from this to the other figure, which is minus 10% volume risk which you are referencing in the press release What's the bridge there, please? I believe, but we will check that the 10% that's referenced this morning is 10% of total group revenues. And so we'll, let's have, we'll come back to you in the next year. The 500,000,000 that you mentioned, right? The 490,000,000 that you mentioned represent 10% corporate services volume. So it's not the same 10%. Okay. And if it's that 10% that you referenced to, Jafar, and, and, and, you know, I think you have to also take into account the the portfolio that we have. In corporate services, we have a significant part of our business, which is done in manufacturing in a significant part, and that, that part is not impacted by working from home. If we look at particularly what we do, in Latin America, for example, in In Italy, in the UK, we have a much more, much more, proportion, much greater proportion in manufacturing in blue collar. And this is not impacted by working from home. So the takeaway is minus 10% doesn't include any mitigation or increase in spend per head. Anything like that? Yes. No, no, exactly. 10% is the impact and we can compensate partly or hopefully, fully this impact. Thank you. That makes sense. Thank you very much. And your next question comes from the line of Richard Clark from Bernstein. Your line up, and please ask your question. Yes. Good afternoon, everybody, again. Just a quick question on Slide 70. That you presented with the different color, the different traffic light colors, and how we should interpret that going forward. You've got to sort of gray bars next to universities and office sites. Are we to conclude that, therefore, those are not growth targets going forward and growth should really be more in health care a bit in sports production sites, and the BRS business. And just on the point that you can recoup some of the the working from home revenues. I'm just wondering what the evidence is to date on that higher take up for those that are in the office. Is that happening through the pandemic or is that more of a hope, looking beyond it? So on the traffic lights, definitely, we believe that universities and office space in corporations are still very interesting, areas. That we will explore, that we will continue to develop. There is still a big question on, on, in the next 2 years on, how universities will deal with the pandemic, as I said, until vaccine is are there and vaccination is redeployed, as you know, the enrollment, is decreasing in the U. S. And you all know that, you know, the vast majority, you know, the credit totality of our businesses in universities in the U. S. So still a lot of question mark moving forward. But once the pandemic is over, we will have to look at, what's the propose, you know, how universities adapt to a new normal well, will online remain and to what extent, what will be the proportion between borders and commuters students and it's still there's still uncertainty there, but we believe still that it's a profitable segments where we have a lot to bring We know that students from, from, also our surveys, they are, they're willing to have a nice dining options. They want to have a campus life and dining is part of the Compass Life. So we still believe that, it's an interesting area, segment to, to, to develop. And of course, office and back to what Sylvia was saying in offices, definitely, we will continue incorporate services to be very relevant the workplace is critical for our clients. Life at the workplace is critical, and food services are an important part of the workplace life. It's a place where people gather, people exchange, And, of course, we'll get back to a new normal after vaccination. As far as the evidence of higher take up, I think, I would leave this question to the next session because, Sunil, well, we'll give you, I think, some will give you some light on this in the next session, I think. So how should we interpret the traffic lights then? Is this sort of a medium term outlook the next couple of years after containment rather than a longer term outlook. Absolutely. That is how you should interpret it. Okay. Thanks very much. Terrific. That's the end of the Q and A session on the first half of our agenda. So now we'll have a 15 minute break. During the break, we're going to be playing a video on our love of food, and it's showcase is our exceptional capabilities, and it will make you hungry. And a second video on the importance of preventing food waste. Both these topics are key to what we do and how we do it. After the break, you'll hear from some of the trends we just looked at and how they're translating into our business. So get up, stretch, grab something to drink or eat, and check out the videos. What a year it's been. One of incredible highs, and shocking change. It's been a year where we learn so much. Tried new things. And relied on each other. We are together. And through it all, we held tight to our values, reached out, lent a hand. Gabe of ourselves, to make someone else's life better. We are together. We were there serving our guests, keeping them safe, bringing them joy, and easing their minds We are together. Even without our kitchens, we help those in need, offering dignity, caring for those who need it at most, giving love of food its highest meaning. We are together. We are together. And rather than sitting away, riding it out and hoping for the best, we've looked to the end of the tunnel, and saw what would be needed in the new world to come. We're together. We didn't say it can't be done. We said, how can we do it? We worked it out and did it together. We are together. We never lost our passion, our drive, hardly to serve. No matter what, we kept going. We are together. We're putting the past behind us, nose to the grindstone, yet heads held high, making plans, moving forward, We are together. And now, it's a new day. One built upon what we know and our determination to accelerate and come back stronger than ever. We are together. We're pulling ourselves up. It's our great challenge today, but we know we'll do it because we love what we do. We are together. We all together. And today, we say, what's next? What a year it's been. One of incredible highs. And shocking change. It's been a year where we learned so much. Tried new things and relied on each other. We are together. And through it all, we held tight to our values, reached out, lent a hand. Gave of ourselves, to make someone else's life better. We are. We were there serving our guests, keeping them safe, bringing them joy and easing their minds. We are together. Even without our kitchens, we help those in need. Offering dignity, caring for those who need it most, giving love of food its highest meeting. We are together. We are together. And rounded and sitting away, riding it out and hoping for the best, we looked to the end of the tunnel, and saw what would be needed in the new world to come. We're together. We didn't say it can't be done. We said, how can we do it? We worked it out and did it together. We are together. We are together. We never lost our passion. Are dry, are new to serve. No matter what, we kept going, We are together. We're planning to pass behind us. No to the ground stone, yet heads held high, making plans, moving forward. We are together. And now, it's a new day. One built upon what we know and our determination to accelerate and come back stronger than ever. We are together. We're pulling ourselves up. It's our greatest challenge today, but we know we'll do it because we love what we do. We're are together. We are together. And today, we say, what's next? What a year it's been. One of incredible highs, and shocking change. It's been a year where we learned so much. Tried new things. And relied on each other. We are together. And through it all, we held tight to our values, reached out, lent a hand, gave up ourselves, to make someone else's life better. We are together. We were there. Serving our guests, keeping them safe, bringing them joy, and easing their minds. We are together. Even without our kitchens, we help those in need, offering dignity Caring for those who meet at most, giving love of food its highest meaning. We are together. We are together. And rather than sitting away, riding it out and hoping for the best We've looked to the end of the tunnel, and saw what would be needed in the new world to call. We're together. We didn't say it can't be done. We said, how can we do it? We worked it out and did it together. We are been. We are together. We never lost our passion. Our drive, our need to serve. No matter what, we kept going, Listen to the oil crackling, the timer ticking, the cutlery clinking, the blade chopping. Touch each fruit vegetable, herb, the heart, the cold, the ice, the texture, smell, the spice the zest, sweet, spicy hot, the baking, and aroma, taste The seasonings, the cooking, the garnishes, the balance, the finesse, and the flavor Look. As the wasted food, all that's not used. Every leftover, every scrap. Together, we can stop food waste. Let's open our eyes and act. Food waste doesn't make sense. Join the Movement. Thank you Listen to the oil crackling, the timer ticking, the cutlery clinking, the blade topping. Touch, each fruit, vegetable, herb, the hot, the cold, the ice, the texture, smell, the spice, the zest, sweet, spicy hot, the baking, and aroma, taste, the seasonings, the cooking, the garnishes, the balance, the finesse, and the flavor. Look. I still wasted food. All that's not used. Every leftover, every scrap. Together we can stop food waste. Let's open our eyes and act. Food waste doesn't make sense. Join the Movement. Welcome back, everyone. I hope you had a chance to move around a little as well as take in the videos. As we begin this next part of the agenda, we'll hear from 3 of our group comics members. 1st, Sunil Niak, our Corporate Services CEO Worldwide, and Sunil will present on some of the opportunities that lie ahead for our Corporate Services segment. Our CEO benefits and reward services worldwide will share what's new in his activity as well as the synergies with on-site services. And they'll be joined by Sarush Mystery, our Regent Chair for North America. He'll tell us more about how Sodexo plans to grow in the important North America market over the next few years. And immediately following their remarks, we'll have another Q And A. So let's get going. Sunil, over to you to start us off. Thank you, Diane. Hello, everyone. I'm happy to be with all of you today. Before I start, let me remind you that corporate services represents 26% of our global revenue, providing food and essential services to local, regional and global companies and their employees around the world. Since Sodexo's foundation over 50 years ago, our mission has been to improve the quality of life of our people and those we serve. And this has really driven our strategy. We've diversified our services for food to FM, rebalanced our client mix between Global and local and invested in emerging markets. Today, our global study accounts contributed 26% of our revenue. FM services have grown significantly and contribute 40% of the mix. And we've had really good success in emerging markets, which now represent to serve our clients. But more importantly, as Denis said, has helped us remain relatively resilient during the crisis. And in fact, looking at the trends, the crisis has thrown open, we believe our portfolio is really well prepared to support a faster recovery for us in the future. We know that the market is still worth over 350000000 even though our revenues were impacted this year. The top 5 players only contribute to 7% of the market. And it is still very fragmented with local and single service providers. But this market is shifting, following some really key trends Silvia has gone into the details, so I am only going to highlight those that are particularly significant to our business segment. The first trend is flexibility. It's not only about work from home because flexibility is driving the need to optimize spaces offices and restaurants and, of course, reduce costs. But simultaneously, and that's important. Leaders and HR professionals are trying to find ways to keep employees engaged and strengthen the culture and DNA of their organization. After COVID they are looking to provide best in class services, both at their workplace and for employees working from home. And this is driving the growth of the market towards outsourcing, integration of services and a big focus on employee services. So armed with a really resilient portfolio in a hugely fragmented market. I do believe we are best positioned to leverage the opportunities that have emerged. We expect to get back to around 6 So let me talk you through our strategy on how we're going to achieve this. So we know food contributes 60% of our revenue, And as you've seen earlier, we expect a 20% impact from work from home on our office food portfolio over the long term. So 10% of our corporate services total revenues. So our plan is first to recover this. We do recover it, but then also grow in this big market. The first step of recovery is to reduce our cost of delivery. We're doing this by supplying more of our food from selling kitchens cloud kitchens and commissaries, and we have around 200 off-site production units around the world. This will help us enhance our margin on food through a commercial model that requires less labor on-site and more of food delivery. The second step is to increase the share of wallet and create more touch points with consumers. By digitalizing our services with pre order, prepaid, COVID safety pickup, we have already seen an increase in spend and participation between 5% to 10%. And we have a great example in China, where we partnered with Meishan to offer a digital platform, allowing customers the flexibility to choose best in class food brands in or outside their workplace. And likewise in France, our proprietary digital platform so happy is used daily by 250,000 consumers with numbers growing rapidly. And we have similar partnerships underway with technology platform companies in other parts of the world. Moreover, let's not forget, Digital pre order and prepay systems generate less food waste, and that's completely in line with our better tomorrow goals. But we want to grow. We want to grow by winning new customer and new markets like sites without kitchen. And to do this, give investors are partnering with local boutique companies who have commissaries like alchemists in the U. S. And food sharing in France. To modernize corporate dining and bring high quality and healthy menus that are locally sourced. And finally, a big opportunity lies in the complementary of activities with with VRS as employees work from home. Clients want to give benefits to their employees on food and other services. In the last few weeks, we've secured contracts in France providing meal cuts to employees who can use them, either when they're working from home or in the Sodexo restaurant, when in the office. And this demand is growing fast, and our key clients see the value in the integration of systems providing a seamless solution. For example, for our client, auto BHF, we are providing access to the entire catering offer. They can have lunch at the office or have it delivered with an omnichannel payment option either with a restaurant pass card, the company badge, mobile payment or credit card. In addition, information is provided to the kitchens regarding days off and homeworking, really helping to reduce waste. This integrated seamless solution is a unique offer we can provide. Back to our strategy. Unlike the food business, FM and a specialty workplace are pure growth place for us. Today, 40% of our revenues come from FM Services, And this will continue to grow through local, regional and global contracts as companies integrate their services, including food. The IFM market is expected to grow to be at 15% by 2025. And in the U S, there's a large opportunity in 1st generation outsourcing. We do believe it's going to be a busy market. And we've had really good growth in the past, and we want to accelerate this. So we're doing 3 key things. First, we're launching vital spaces an integrated service offer that shifts the conversation from FM to broader workplace solution. This offer helps our clients better engage their employees and optimize costs by providing an ecosystem of services like workplace design, workspace management and work life services for their employees. 2nd, we're expanding WX, our own startup to provide specialized consulting services on workplaces as clients rethink the design and the use of their spaces. This is also part of our vital spaces offer and is a great entry point for integrated FM development. Lastly, we need to improve client and customer stickiness through enhanced and seamless workplace experience. And continue to drive efficiency using data. We have successfully launched our 1 to digital platform at four hundred sites and we want to expand this with new and existing clients, one app for all services, really driving customer engagement and experience. And moreover, these comprehensive, more complex offers will also increase stickiness and therefore retention in our business. Before I finish, I just want to add to what Denny said earlier about sustainability. We have a role to play other than in food, as 30% to 40% of energy consumption is generated from buildings. For example, with one of our strategic accounts where we provide FM services, We were able to generate savings for the plant, giving them a payback within 2 years and support them in reducing their carbon footprint. This is very important for We began with food and food will always be core to our business model, but quality of life is our ambition and to grow in this market, we not only need to reinvent our food business, but also expand our FM services into the workplace. Always keeping people and care at the center of everything we do. So now let me now hand over to Orillan who'll explain what we're doing in Benefits And Rewards business. Thank you, Sunil, and hello, everyone. My objective today is to explain how we fully form benefits and reward services over the past 3 years into a digital business. And this has allowed us to ensure business continuity with our client, but also it prepared us for growth and new opportunities going forward. Our goal for the next 3 years is to reinforce our leadership position as number 1 or 2 in each of our employee benefits market. But before I go into the detail, Let me set all this into context. Our BRS activity and particularly our employee benefits core business that represent 80% of our total revenue as shown good resilience through the crisis, even if we were impacted mainly because of temporary unemployment. Over the last quarter, our business volume growth showed a very good recovery to reach minus 4% and we saw an encouraging positive trend in September. This resilience can be explained by 3 main reasons: 1st, our clients want and need our product. They have continued to offer benefits to their employees wherever they were. Benefits like mill or food carts are no longer considered discretionary expenses, but more way to address critical basic needs in addition to being tax efficient. Today's is our must ask for organization as well as for public authorities who have used them for COVID-nineteen related social programs. Secondly, we are benefiting from our wide geographical spread across the 34 countries in which we operate. The situations differ, and governments have been taking multiple COVID measures that impact our clients and merchants differently. That allows us to better mitigate the consequences of the crisis. Certainly, our digital transformation helped us to quickly adapt our products to the COVID crisis. In fact, All these recent events have confirmed and accelerated the trends on which our transformation strategy and our products were funded. So how did we transform our business, creating the platform for future growth? 1st, After a slightly slower start, we fully embrace the digitization alongside best in class providers. And I'm very pleased to share that we are now 86% digital compared to 73% 2 years ago. This fast move is much more than a response to a market trend, It's also about entering a new era of opportunities to develop new products as well as modernizing pre existing ones. Over the past few years, we invested up to 9% of our revenues in technology and data to digitize our consumer's journey. And therefore, to provide them a seamless customer experience. For that, we developed our own mobile payment our own contactless payment and add to app payment solution, which have now already been deployed in 24 countries. We entered into a strategic partnership with Zita, a leading and digital native payment platform. Working with detail has enabled us to develop a unique digital and scalable platform that strongly improves the robustness and the user centricity of our products. We have also invested to capitalize on the data we have, from serving 36,000,000 consumers daily with over 1,000,000,000 digital transaction per year. Data is also key to track and measure our performance in real time, allowing us to be more predictive in our analysis and faster in our decision making. Thanks to all these digital assets, we are reducing our time to market and improving our product scalability. And for instance, from the first success in India, we've just launched a multi benefits product in Brazil with a promising start already 100 contracts signed in the 1st months, and we are about to roll it out in 3 other markets. Beyond technology, we have enriched the quality of our products to deliver personalized employee experience at work and beyond. And taking advantage of the digital ecosystem that we built, we have already integrated over 70 partnership with e commerce stores and mean and grocery delivery platform. We saw a 30% increase in deliveries since July, and every day, more than 120,000 deliveries are done through these partners. Our consumers are asking for more choice, which we can address with our new digital products, like the multi benefits platforms that I mentioned earlier. These kinds of products provides the client with more flexibility to adapt to different work situations could be at home or at the office. And on this work from home topic, by leveraging our existing digital products, we were able to quickly respond to our on-site services client looking for our Milled solution for their employees who in the same week would work in different places. As Sunny mentioned, we already have some concrete successes with some first contract sign. And last but not least, we have also been investing in our people. Switching to a digital company means that we have to accompany our team along this journey with training on agile method as well as onboarding new tenants. It's a major shift in our way of thinking and in our way of working. And today, our team is ready to drive it. Thanks to this achievement, and despite the lack of visibility, we remain ambitious. Our goal is to reinforce our market share by focusing on 3 key levers. First, our client retention with a target to reach 95% in fiscal year 2021 versus 94% in fiscal year 2020. We know that the pandemic is likely to cause the market to contract. We know we need to stay very close to our 500,000 client, large and small. We are obsessed with the user experience, challenging ourselves to identify and progressively solve for client and consumer pain points through innovation and data. And because our products are relying on our digital platforms that is scalable by design, We are cost effective, and we can keep a competitive price. Secondly, our ability to win new clients remain critical. So we are continuing to grow our share of SMEs. In spite of the current crisis, we have opportunities and leads still coming in every day. And thanks to our digital marketing investments. We are moving fast on our joint on-site NBRS solution. As Silvia mentioned, this work from home joint offers are a real differentiator and a future source of growth for Sodexo. And our third lever is around delivering extra value for our 1,300,000 merchant partner, who play a key role in our ecosystem. In this time, where the smallest ones, mainly restaurants are seriously hit by the crisis, we want to stand by that side and to support them. That's why we have several initiatives to reduce air costs, such as the use of the QR code payment and to increase their revenues via our digital platform. So now what is the outlook? Our total employee benefits market estimated that approximately 1,000,000,000 pre COVID will remain significant. Being the number one player in 'seventeen of our markets, we know that there is a good demand for our products and that we are well placed to meet the flexible working We believe the opportunities lie in increasing our market penetration and offering innovative, flexible and user centric solution. To secure and grow our position, we'll continue to invest in OpEx and in CapEx in technology this year at around 20% of the revenue. We are also reviewing our priorities, improving our efficiency and optimizing our costs to help going back to a pre COVID level market. In conclusion, I would say that we are ready with the right combination of state of the art technology, talent and agile mindset, to make the most of our product and market opportunities. And we expect to get back to run rate growth of 5% to 10% in revenues and double digit in operating profit once the crisis is over. Thank you. And I now hand over to Sarush. Thank you, Aurelian. Hello, everyone. I'd like to take some time today to talk about how we have managed the challenges of the last few months and more importantly, how we intend to grow moving forward. But first, for some context, since the last Capital Markets Day, as Denis said, we have been laser focused on execution, reasserting discipline in terms of processes and contract signing and putting in place step. Client retention improved 230 points in FY 2020. We have significantly changed the regional leadership team and are investing in our digital commercial capabilities. And lastly, we have managed to resolve the issues in larger loss making contracts, either by turning them around or as a last resort, exiting them, particularly in education. Leading into March of this year, We were confident that this work would start to show in the numbers, and then COVID hit. While COVID has obviously taken a toll, on our revenues and profits, we believe that our strategic choices of the last few years and our actions specifically in the last several months have helped us weather the storm with resilience. Also aiding our strength during the crisis is our diverse mix of clients. It's important to note that in North America, corporate services makes up just 14% of our revenues. And within this, more than 44% is FM and 50% of our clients' employees are blue collar, a group that was called to work throughout the crisis. So the work from home trend and any contraction in corporate real estate is not a make or break issue. In fact, for Sodexo, it's more of an opportunity to explore. During the pandemic, we mobilized experts provided flexibility to our supply chain across the region Butter, we managed our financials extremely well. We paused our CapEx. We acted quickly on staffing, and significantly protected our cash. As a result coming out of the crisis, we have the resources necessary to ramp up efficiently and make strategic investments. So where do we go from here? While retention will always be top of mind, our focus over the next few years must be on growth. And we have all the right tools to deliver against this. Interestingly, Sunil already mentioned 2 of the pieces that will drive this growth, not just for corporate services, but for the North America region. Namely new food models, and a modernized approach to facilities management. Focusing on our food model first we are developing our existing convenience offers specifically around pantry services and micro markets. Giving consumers on-site a flexible, simple and always ready food solution This approach also allows us to bring consumers local, natural and high end brands. This is a massive addressable market, which is growing very fast. And to deliver it, we are leveraging our existing client base and finalizing the recruitment of key talent second, we are upgrading our production capabilities with upside production through commissaries and ghost kitchens. This improves productivity and increases capacity. Generally speaking, a 250 square foot ghost kitchen can produce up to 1200 different meals per day. Compared to just a few 100 in a more rigid on side model. By improving the flexibility of production It also allows us to produce shorter runs tailor made to individual consumer needs. We are taking a targeted regional approach to building out this capability, and we have the potential to very quickly stand up a national network in 22 of the top 25 markets in the U. S. Finally, digital consumer interfaces for ordering and payment allows us to maximize our full range of capabilities to serve consumers exactly when and where they need to be served. On-site at their desk or at home, and we are building stronger platforms for this. I'm proud to say that we are applying that same energy to evolving our work in facilities management as we are to transforming our approach to food. The facilities management space was 27% of Sodexo North America revenue in FY 2020. This is an enormous addressable market estimated at more than 24,000,000,000 in corporate services, education, and health care alone. And with only 30% of RFM outsourced in the U S, we can continue to grow at a pace by targeting the most profitable parts We're in the process of redesigning our FM go to market approach in corporate services and health care to leverage technology like IoT, robotics, and analytics. We're building FM Talent through technical school alliances and specialized training initiatives. And as you heard from Francois, we're making our supplier strategy more agile and we are raising our sustainability standards for instance in energy management in support of shifting client priorities. In summary, We know that North America is the most important market in the world by its size, its opportunity, and its strength setting. At our last Capital Markets Day, we shared our plans to return to growth. The pandemic hit. And clearly, it took a short term toll on our business, but it also validated our existing top priorities and as a result, we will be stronger for it. Yes. We have work to do, but we are poised to move North America to the next level. Before I turn it over to Q And A, I would just like to show you a video from one of our new clients in Florida which really made me proud of our teams in North America. Thank you. Simply amazing. Sandwich is what's awesome. I am amazed. Absolutely amazed. It's fabulous. 1st class. It's wonderful. Yes, ma'am. It is great. This is incredible. Worth the wait. Wow. Really cool. Looking good. It's like I died and went to I came and called this the cafeteria with a fine dye in heaven. I just keep looking up ceiling. I can't imagine the detail. Places like a cruise ship. It's great. It's beautiful place. You know, we got a lot of options, and I really like it. I'm gonna try something out, and I'll let you know how it is later. They have ramen bowl. I have the spicy ramen noodle bowl with shrimp. It looks Fantastic. I am trying the, brick oven pizza, and I figure I'll try something new every day. We're at the on chair. The Mexican bowl right in front of you. We have pork chicken beef. I'm very impressed and I got the Mexican bowl. I got an impossible burger. It is a beacon burger. That's a mashed burger with sweet potato. Can wait to try it. I got the grilled chicken sandwich. It's awesome. That's a hamburger there. Everything has gone excellent so far. Everybody decided to be here. We've been watching this building go up in the last 3 years, and today is finally here, and we couldn't be out here. Amazing. This is gonna be spectacular, and you can order lunch before you get here. Which is gonna be even better, and you can pick your time. So I'm looking forward to that. Everything looks beautiful. This is our exciting new grill station. One of the two stations where you can place your mobile orders ahead of time from your death. So you can skip the lines, grab your food, food's already prepaid, or you don't have to pay in the check line, and it's custom made to order. And it's the same as the point of sale with the self check. You pay with the bite app. The bite app is actually the fastest form of payment on there. It'll take all forms of credit. Apple Pay, Google Pay, Samsung, regular credit cards. Awesome space. Think this will be the hub for, associates to eat and meet and work. You're just gonna be whelm. I mean, just building is beautiful. It's bright. There's just there's something there's something for everybody in here. I think this is spectacular It's beautiful, and there's so many auctions to eat. We love it. It is lovely. It's large and open and spacious. Filled with light and everybody's smiling. Wow. I sleep. What else did he say? Tomorrow, I gotta come back and get a pizza Cal Jones. Please come here. It's awesome. A lot of diversity. You're gonna love it. Thanks very much. What a great video. Thank you, Sunil, O'Hreal and Suraj. So now I'd like to open things up once again for Q and A with our audience. So say over to you. And your first question comes from the line of Jamie Rolla from Morgan Stanley. Your line is open. Ask your question. Yes, thank you. A few questions, please. First, just on BRS, in markets where, they've got the employee benefits model. What is your client overlap between BRS and OSS please? Whether by far numbers or by revenue just between the two businesses? And how has that overlap changed over time? Secondly, could you please give us a feeling for what the size of the delivery, part of BRS is at the moment, please? And then finally, on, North America Corporate Services or even North America OSS, Could you just scale for us to sort of vending in micro markets, opportunity, please, and what your share revenues at the moment are coming from those verticals? Thank you. Thank you, Jamie. And I propose that, O'Brien answers the first two ones. And then, I think Sunil and And so, Roche, you can manage the third one, I guess. So, Aurinia? Yes, sure. Look, regarding the number of clients that we are sharing with on-site series, just a few, so far. And so there is, I mean, the room for, potential is significant. Even though BRS is managing a lot of large client, still, it remains a small portion. So what we plan to see over the next few months, few years is to increase our portion of a large account coming from on-site clients. And that will be shared with on-site services. As you're right, regarding the size of delivery part of, for BRS, Actually, I was sharing with you is that, we clearly, since we developed our partnerships with many of those players could be global, regional or local. And since the COVID crisis, beginning of the COVID crisis, we've seen a quite significant increase in the usage of, of this platform. But still it represents only 3% of our total transaction. So it remains not so significant But the trend is there and the market demand is there, and we're definitely happy to answer this demand. And well positioned. And well positioned. Yes, absolutely. So Sunil and Sarush, on the scale of the vending market environment? Yes, I'll talk about corporate services first. So first of all, I think the good part is that we're in many client sites and we're seeing our clients shift in the way they're actually consuming food. They're moving, they're moving also part of their business from on side to micro kitchens, vending, we, have a huge potential in this market, and that's what I shared and explained to you as part of strategy. Our presence is still smaller, and I think we can go a lot more with our existing client, and that's really baked into our recovery plan going forward in our business. So the opportunity is larger, and the good part is we have a big client base. Sarat, I don't know if you want to add to that. Thank you, Sunil. The market within North America for vending micro markets is a huge opportunity. It's a 26,000,000,000 addressable market. And at present, we have around 1% of the market share. As the needs of our clients are changing, more and more clients are looking for these services. And at the end of the day, We want to be that trusted advisor to our client and be there for them. So we are scaling up on these services to be able to grow with them. Thank you. And your next question comes from the line of Johanna Shukda from Your line is open. Please ask your question. Yes, good afternoon. Two questions on the IRS as well for me. So the first one regarding the CapEx. So you had net CapEx of more than 9% in 2020. So that's a strong acceleration of that last year. So how should we think about your investment strategy in this division in the coming years in terms of CapEx? And what does the 20 percent of revenue invested in tech refers to? And my second question is from DRS. So which technology do you need or miss at the moment? And could it come with targeted acquisition or would you rather, favor CapEx? Thank you. So maybe, I mean, regarding this, this acceleration, yes, as I mentioned, we have clearly to complete our digital transformation, we are we have accelerated our level of investment moving from 5% 3 years ago to this 9%. And we have in tested. So the 20% refers to the OpEx plus the CapEx. And definitely, we're investing this money not only to build up our payment solutions that I, that I mentioned, but also to, to develop our digital platform, you know, from the front end solution to the back office. We are also building our data platform and, and of course, we also need to invest in cybersecurity. So it refers to all those, all these topics And the third question was about In terms of, do we have the technology that we need, or do we need to acquire some some more or put CapEx? Look, look, what we know is that our model, I mean, moving to digital is more CapEx intensive. But the partnerships that we set up with a company like Zeta, which is a payment platform payment platform, you know, technology does help us to continue on this trend with that increasing more. Our need of, both CapEx and OpEx in percentage of our revenues. So we have solid foundation But definitely, we need those technology, you need to, you need to upgrade it. Constantly. It's a new model, a new life in which we are living in. But definitely, we are well adapted to, to, to continue on this trend. And I must say that the speed at which we've been able to leverage the platform, we invested a lot in securing the platform in India at the beginning and the speed at which we've been able to, transfer the platform and operate the platform in Brazil and now in several countries in Europe has been really impressive. Thank you. And maybe just a follow on regarding the 20 percent of revenue that needs to be invested in tech. How long do you think you will need to have kind of target. So how should we think about the margin improvement going forward? Look, you know, we, we, I mean, we are part somehow of the get planned. So we have, We are currently running our cost reduction plan. And to do this, we had to review our priorities, taking into account the, you know, the impact from the COVID crisis. But not the less, I mean, we, we, we want to maintain the investments that we are doing both in, intake and in marketing. So it's really we are finding pocket of efficiencies and cost optimization so that we are in a position to reinvest in intake and in marketing as well. And I must compliment, to say that pre COVID, BRS was investing that type of, that type of amounts in the last 2 years and we sustained very high margins. Definitely, of course, COVID has hit our margins But, as we, as we look forward and then look at, you know, post COVID, we can recover the sort of margins, the sort of order of scale of margin that we had, and continue to invest because that's what we had before pre COVID. Thank you. And your next question comes from the line of Leo Carrington from Credit Suisse. Your You may ask your question. Thank you. Firstly, could I just ask a follow-up on BRS and digitalization? How much margin accretion would you say you've seen from digitalization so far Is the bulk done, or is there, is there more to flow through as you, you optimize this? Is there more to flow through as you convert the 14% paper business that's left, to give further tailwinds. And then secondly, on separate topic, corporate services, with delivery, how do you interpret the recent launches of the business to business delivery offerings from the food delivery players, who seem to specifically try to be tackling the business lunch market? And then as a follow on, in terms of the delivery economics, when delivery does form part of your offering, would you be willing to offer this where you have a P and L contract or just say it's more a kind of part of a employee benefit. So perhaps pass the cost plus contract. I suggest that, Oren, you take the first one and Sunil, you take the last the other 2? So, you know, for BRS, what we noticed is that So it's a digitization of our business as a negative impact on our gross profit. Till we reach 75% of our volume in a specific market. And so actually in many markets, we've gone above this 75%. So we are already getting some positive and positive return from this digitization. And now, where you're right is that when we'll get rid of paper when we'll be 100 percent digital, yes, of course, the gross profit will be, will be improved. Sunil? Yes. So first of all, just from a delivery perspective, the cost of delivery companies struggle is because the cost of marketing and the cost of logistics is really high. For us, we are in a confined environment with our clients and their employees. And our objective is to capture as many consumption points as the consumer may have, either through eating in the restaurant, eating in a cafe, eating in a micro kitchen, eating through a vending machine, or now getting food delivered to their to the office. And through a couple of things, we're actually capturing the revenue first through digitization because when you digitalize your food service, you give that option to that customer and he or she can order food delivery, and we have an ecosystem of partners with which we work with who can bring that food and bring it to our clients sites. And in many cases, now we've got these really nice lockers where the food, when it gets delivered, is delivered in a very, you know, organized manner in lockers through a digital platform which they can use to pick up and the consumer can use to pick up. So we're actually spending more and more consumer points using and leveraging the understanding of our clients and the strong understanding of the employees on our clients, premises. And of course, we want to extend it to all kinds of contracts because there's a big opportunity in that. Yeah. And we, we own those clients. So it's by being proactive. I think the whole the whole name of the game is to interact with our client and our consumers, understand what is the actual need of the consumers? How the consumer behavior shifts? What is the policy of the client with regards to, again, working from home and what the client wants to happen in the workplace. So it's that dialogue that helps us to create stickiness And as we bring those different channels, we increase the stickiness. We partner with those delivery players that can come to B2B. But, they are more tuned to, at the moment, really, addressing the B2C market. So we can be a channel for them but at you know and we but we own the client relationship and that's what's what's very important. And in terms of model because you asked about the P and L, yeah, it can work for a cost plus contract as it can work for a P and L contract. I think we should take the last question, before we move to the next part. And your next question comes from the line of Jared Castle from UBS. Your line is open. Please ask your question. 3 for me, but if you're short for time, you can leave it to 2. You've spoken about digital delivery competition, competition from similar catering companies and FM providers. Can you give any comments in terms of the more convenience providers, I. E, your clients step out the door. Are these, are you seeing less competition or a number of them going bankrupt? Any any comments on how you see that competition developing? You also mentioned that twothree of your top management's being renewed. Are all the changes now done? And how have you gone about trying to maintain the culture with such a big change? And then just lastly, this might be a quick one. I mean, where do you see the outsource trend now in the North American market? Do you expect kind of on a more normalized basis and acceleration in that trend or stabilization now? Yeah. Thanks, George. I'll take the second 1 and, I'll ask, Sunil, to take the first one and, and Siroj to take the third one. In terms of, management changes, indeed, we did in North America quite an important change, are so renewed the executive committee, and the executive committee is, is overall stable. Of course, there can be some, some changes, but, things I have a solid team, and in North America, we've really I think, upgraded the team and we were in a good shape. Sodexo has a strong culture. And as always, I had a strong brochure and a strong DNA and very strong values. And, you know, we take a great care in, first, in people that we recruit in how we integrate them, there's a strong induction program, we take the time to integrate our leaders so that, so that they really get the culture. We also, of course, that management revamp has also been powered by internal promotion. And, in Sanito, it's also very strongly in our DNA. And Of course, when you raise people and grow them and promote them in the, in the company, it keeps, the culture together. On the first question, Yes. So the first question on the convenience. Yes, absolutely on convenience. So first of all, just to remind our business is mixed between manufacturing, R and D and offices. So the convenience, really, competition, as you call it, would typically be around more around the offices in lesser manufacturing, and R And D. So within the office environment, we've been modernizing and Bruno talked about it a little bit earlier, but we've been modernizing our food offers and really making it high street retail, changing the format, really going to market and modernizing the food all the time. So I think that's a big shift we're making in the way we are actually, delivering the food. But the second big advantage is through digitalization, as we digitalize our services and our food, we know our consumers better. We have better understanding of what they like. We know better what they want to buy. And this allows us the flexibility and agility to quickly change our food menus, our food offers and capture the consumers as they eat on their premises. And in the short term, we've seen that the teams would prefer to be at their workplace then getting exposed to external environment And so with the clients also like that, just from a safety perspective, in the long run, will that stay or not stay? We'll have to see. But we're adjusting really the way we deliver and serve our food. And there is consolidation to be done in convenience, definitely. It's a very fragmented market and will be moving on this. And, Sarush, on the outsourcing. Sure. Thank you, Denis. Well, let me start by reiterating what I shared with you earlier. Norm is the largest market for us and the most important market not only from a size standpoint, but also from an opportunity standpoint. And we look at what's happening presently as an opportunity. As I had mentioned earlier, just when you look at vending micro markets, etcetera, that market is growing double digit and triple digit. And presently, we have 1% of the market share. So there's tremendous opportunity to grow in that market and more and more clients are asking for that service. Now, when you look at FM also, as I mentioned, FM in corporate services, health care, and education is only 30% outsource. And we feel So we truly believe our future is bright. Terrific. Well, thank you very much for that, Frank exchange, certainly some great questions as always. So as we move to the last part of our agenda, I'm pleased passed the floor one last time to Denis so he can provide some final perspectives and wrap up for the day. Denis over to you. Thank you. Thank you, Dion. Thanks again to Orelia, Sunil and Sarush. We're now coming to the end of our virtual Investor Day. In a few final words before our final Q and A session, with Mark. I want to thank you for hearing us this far and for your engaging and thoughtful question throughout today. We enjoy your perspective and your challenge and value that, you take the time out of your week to, allow a broader team of Sodek's sole leaders to share their insights with you. It means you get to see and test the courage of the women and men who run things at SodexoN understand their ambitions. We started our journey today on a wave, opening ourselves to you on how we are surfing through the tough times and getting our whole operations geared towards generating the growth that we are aiming for. We shared where we are in this transformation journey, what commitments we made and continue to make to take Sodexo safely to good port. If I had to sum up everything that you heard today, like to make the following three points. 1st, Sodexo is resilient. Our company is really a solid part of the services landscape globally and had really fantastic opportunities to occupy the space, invest and grow into developing areas and stay at the forefront of our industry. We told you about how our clients increasingly need and want integration of services, our integrated business model, which is at the heart of our DNA, is a fundamental engine for growth. Number 2, our company is currently in the throes of a profound transformation, a transformation led by how our clients and consumers choose to live their lives and the trends that emerge from those choices. Our transformation is on two levels, transformation from the past and addressing our legacy issues, We all know about the deepest executional issues that we've had, and you've heard today what we've done about this. And you know that once the journey is made, we have the scale, the strategy, and the people to thrive. And more exciting, our company is in the throes of a profound transformation towards the future, completely digitized client centric, consumer centric focused, disciplined, agile, despite our global footprint, Alexo is a constellation of caring, smart, and skilled people, bringing quality of life to clients and places across society. Hopefully, you got a strong message today through our words but also through the people who carry those words that our executive committee is renewed and re invigorated with setting the business and future looking, together with all our teams, We're working with 1 single overarching goal to reignite sustainable growth. Aside from resilience and positive transformation, the 3rd strong message we wanted to leave you with is this one. The results and the financial muscle are there. You can't get see the transformation in two figures because of the massive COVID pandemic setback. But we entered the crisis in 2020, in a much better shape than we wear. We have a cash generative business model by design. We have a diverse team whose engagement rate is very high in a difficult environment. We have client traction and real solutions to offer them today, despite the crisis, so Dixo is building on its promise. The team and I are creating a collective momentum and a clear path to greater shareholder and stakeholder value. Thank you. Thanks very much, Denis. And now for our final Q and A with Denis and Mark and with the help as always of our operator. Thank you. And our first question comes from the line of James Inley from Citi. Your line is open. Please ask your question. Great. Thank you. I had three questions, please. The first one, Denise, you mentioned earlier that some of the SG and A savings were coming from reducing the global structures. I guess the question is, are we returning to a business where the geographies have more dominance, as they had in the past? And can you talk about the balance between geography and And second question is, just on those SG and A savings, can you just give us a bit more flavor of kind of what programs will underpin those cost savings? I mean, is it principally headcount reduction? And then the third question is, that was mentioned earlier about Central Ghost Kitchens. Is there an opportunity to service B2C delivery platforms with that capacity in the evenings and at the weekends when, I guess, your B2B clients may not be active. So been interested in some thoughts on wider scope for that central or ghost kitchen capacity? Thank you. Thanks, James. And So Mark will take the second 1, then I'll take the first and the third one. Regarding, this, your question on the balance between is in segment. I must say this is something that I've been working a lot since the past 3 years, definitely the segmented model brings a lot of value by being, you know, client centric. But of course, our business is very local. That the weight of the geographies is very important in coordinating and being close to the clients. So what we are doing is concentrating the segments and particularly the global structure in really building relevant strategy, of course, fed by what comes from the regions, and concentrating on that. The segments are, of course, present in the regions. And it's the local regional leadership committees that really make things happen. And that balance is a subtle one, but I think we've made good progress We've made good progress in, in the coordination of all our dimensions, and definitely putting more, much more weight and many more resources close to the field, keeping that strategy being global because the strategy is a mix of what you get from the field and global thinking. On the on the 3rd your third question regarding, central kitchens, yes, central kitchens and off-site production units, is a way that accelerates, definitely to be clear. B2B will be the massive endeavor on this, the massive volumes, we have here and there done some some actions to put some of our services, some of our food offers on B2C platform, but it's I think it's going to remain very small you don't create a brand, it's not a question, it's not to put an offer on the platform, it's to let it known So you need, you need the advertising, you need so, so, the immense majority of the business that we'll do will remain B2B. But of course, with at the end, a consumer that we serve through a client Yeah. And on your second question, the bulk of the reduction is, is people related. We estimated and it's part of the slide that 90% of the restructuring cost will be a cash restructuring cost so paid, to to to get those, those hefty reduction. And the balance is some assets tangible or intangible licked real estate to IT that we will have to write off, but it's 90% cash impacting and it's 90% people related. And next question comes from the line of Biki Stern from Barclays. You scoped that for quite helpfully that potential size of the working from home shift in terms of food volumes. And in North America and in the conversation there, you talked about fact that corporate services is quite small. So you don't see a big issue coming from the contraction of corporate real estate, but just curious around your assumptions on the impact from FM or 4 FM. If you see the sort of knock on effect from work from home being something that leads to a contraction of real estate or office space, And then just two questions around the off-site production. Just firstly, the net margin, on producing in coastal central kitchens, when you add in that of reentment, just how does that compare to preparing on-site? And also curious just to know how material you see that off-site production being in the future versus on-site? I'm not sure today what your mix is in terms of how much is produced on-site versus off-site, but just be curious to know where you think that goes. Thanks. On on, thanks, Kiki. On the first question, definitely, as Sarush and, Sunil pointed out, and the market is immense. So, a contraction of some real estate can have some impact but the market is so big that the opportunities of development are there. So I think I'm not worried about about this and we see this coming and going. So, and we, you know, we already see that in our strategic accounts. Sometimes they reduce a little bit their their footprints, they are just and we when we accompany them, and then we grow in other places. So, it's something where again, that there are huge development areas. On the net margins on delivery, I think we know that once you, once you've reinvented your processes, once you put them in place, it, of course, it takes a bit of time. But the ramp up in margins is good, and, and we know that we can be more productive, you know, labor cost on-site is a significant part of our cost and, that mix between the off-site production and the reduced staff on-site is definitely, progressively accretive to margins. I don't know if Mark, if you want to You know, those cloud kitchen in urban centers, if you manage to really meet the number of menu items they produce on a daily basis you can reach high productivity out of them. And if the delivery is really nearby and that you're not spending hours delivering the food, then it becomes very productive. So it is a very good alternative to on-site production provided. You have this proximity. So We are talking midsize kitchen. We can't have a massive kitchen and deliveries spreading over tens of kilometers. You really have to be in city centers and And like in most of our business, as you know, density is and simplicity. If we can keep it simple with density margins are pretty good. Thank you. And then just how material do you see that being in terms of the mix of on-site versus off-site production? All right. It's too early to say. We have several models. We are ramping up those kitchens We were using some already existing kitchens that we have. We were using some facilities where we were building some we are renting. So this is the whole thing is, is building up. It's it's really too early to say, we have different trajectories and, the future will tell us on which territory we will be. But definitely, we have momentum on that. And your next question comes from the line of Jamie Rollo from Morgan Stanley. Thanks. Three questions again, please. First, I think earlier in the presentation, you said 1 in 3 requests in North America. Are from first time outsourcing. I think you also said first time outsourcing is 40% of the North American pipeline. Just wondering how those tickets compare to sort of a normal year, please? Secondly, getting back to the working from home, 27% drop in revenue. I appreciate that's only sort of 1,000,000 as your sort of worst case, only 2% of sales, but that sort of drop would make most catering contracts unprofitable. Much you have to exit some complete contracts, such that the revenue loss could be nearer to the 1,700,000,000 figure. Or or or what can you do with the cost base, or what can you do with the contract type to protect your margins in in that scenario? And the final one, it's a bit left field, but you spoke at the beginning about the benefits of the Bellon Holding. And of course, Sodexo owns effectively 8% of its own shares through the stock and sold stake, which had a big stake at Bellon. I mean, do you need to have that stake? Can you not simplify the structure and reduce the shares and issue at some point? Okay. As far as the, request for first time outsourcing, yeah, we see this as very encouraging. We see this also as a result of 2 things, of course, a natural market trend, but also the efforts that we've put in targeting our business and And Bruno was mentioning, you know, how we have revamped our particularly in North America, how we've revamped our sales approach So I'm, I'm, I'm quite positive. So I would say it's higher than normal, and, it reflects, actually, as I said, market trend and our efforts to also target first time outsourcing, and it's encouraging. In terms of the number of reduction in number of days, first, you have to know that at this at that moment, we've renegotiated a lot a lot of our contracts, if not all of them, the immense, proportion of them And, what we know is the new ways of, of operating, help us, manage our cost in, you know, in our, you know, in the more, in the most efficient way, we've learned a lot during the first wave of the crisis. We've learned a lot and that will help us a lot during this second wave definitely, but that will help us also moving forward. We've invented new ways of of, of producing food, being sometimes more focused, pleasing our consumers in, in difficult moments, And, so that's, I think this is manageable. And of course, we said, we have decided to exit few contracts linked to the crisis, but we've kept the vast majority of them because we believe that these contracts, even though they are less profitable at the moment, they can really help us ramp up the volumes once the sanitary crisis is over. I don't know if you want to compliment on this question, Mark. Yeah, if truly nothing changed, but the volume drops. Obviously, you have an impact on margins. But as the volume drops, we are rediscussing. And for instance, the offers becomes different. You don't get all the choices you had before when it was a full building. You have a different offer to bring from outside and so forth. There is more digital which, you know, increase the average ticket. So It's a question of redesigning the offer. It cannot just be the same offer with less volume. But once redesigned, we believe the margins will be the same. And for the 3rd question, do we need it? We have it. I mean, it doesn't bother us. It's there. Right now, we we haven't had a recent discussion on this. I don't know. I can't I can't tell you more than that at at this stage. Okay, thanks. Your next question comes from the line of Ian Martin from Jefferies. Your line is open. Please ask your question. Thank you. I had a question for Mark. And I appreciate this. This might be rather difficult to calculate in detail. When we think about the evolution in CapEx as a percentage of sales, from about 2% of revenue, pre COVID to your 2.5% that you mentioned on slide 38. Can you just help us understand that the building blocks there? So maybe pre COVID, you had more growth CapEx and then a baseline of maintenance CapEx, but maybe very little investments in new food models. And then how we can compare those proportions, to build up to the 2.5% because I guess when we look at your presentation, there are a lot of great initiatives there on micro markets and digital investments, and our kitchen for those tends to have slightly higher capital intensity. Can you just help us write that down, please? Yes. 1st, in CapEx, so you have BRX and we said BRS is 9.1% and we'll potentially get to 10%. So BRS alone is about, let's say, 75 to 1,000,000. So there is that increase that we need to factor in because a few, a few years ago, they were at 4%, 5% So that contributes. Then as we said, we are investing more in IT. So there is what I would say, it's not so much more so much front office. It's I will qualify it as back office, but it's not totally true because a lot of IT CapEx is used for front office. But let's say infrastructure, IT, security and applications, we've decided to increase on that and that was what we said 2, 3 years ago and it very true today. And I think we said that we were investing 1,000,000 in IT and part of it is increased CapEx. And then there are what I will qualify as the front office CapEx, the one we find at clients. And then this is probably about 2 third of our CapEx. In the past 2 years ago, what we thought is that university and sports and leisure will be the bulk of our CapEx increase in the next 2 years. But right now, universities and sports and leisure, we've commented on it, So there will be some CapEx because we have maintenance CapEx. We have contractual CapEx in universities. We've made some CapEx in September. Coming back from agreements we had a few years. So there will be maintenance CapEx, but you need to win new contracts, new deals to be spending significant additional CapEx. But so this we may not sign a lot of sports and leisure in the next year, or maybe a little less university, so we will have less CapEx on this. But at the same time, since we are picking up and what we call the new food model items, we will invest in more central kitchen, cloud kitchen, commissary, trucks and deliveries capabilities and so forth. That's why we believe the 2.5 is not exactly going to be done the way we thought about it 2 years ago. On universities and sports and leisure, more new food models for the next 2 years. But then after 2 years, universities and sports and leisure will kick back and they will pick up So 2.5 seems to be a good target for us going forward. And the fact that Kitchen have a higher capital intensity, it shows that higher capital intensity, it depends because sometimes we invest in a client kitchen and then we can only use it for that client tomorrow, we use it outside and we can use it, let's say, with a lot more flexibility, assess kitchen of a midsize is not a huge CapEx investment, but we need quite a few midsize. We don't want to have gigantic key kilometers and 100 of kilometers of deliveries route to attend to we need smaller units close to the urban centers. You can sort of rent some spaces. We can rent and yes, I am not worried about kitchen's CapEx. I think we can take a last question. Our next question comes from the line of Richard Clark from Bernstein. Your line is open. Please ask your question. Thanks very much. Thanks for sneaking in there. A couple of questions to finish if I may. Just on the working from home trends again, just coming back from that, you seem to be suggesting that's only going to be on the food side. Would we, I'd be wrong to assume that the F FEM services must have some correlation with the population in the office. And therefore, what are you thinking in terms of the FM flex if we do see more, more flexible working. And then you've also commented that you're going to dispose of noncore activities and geographies. Obviously, you've said before you've gone from 80 to 64 countries. If there's anything that's noncore today, that wasn't noncore before the crisis? And maybe if you could give us some hints as to what that might include in the timeline and scope of those disposals? Yes, thanks, Richard. Of course, FM services are of course, linked to the, to the square meters that we run. When square meters are reduced, we, we, we, you know, there's an impact what I'm what I'd like to say is, as Sunil pointed out, clients want If they reduce their real estate, they want great spaces for people to work and, and collaborate and, and have a, have a great time. And that means extra services, extra integrated services because you cannot create a full workplace experience if you deal with 25 suppliers. So that capital city of ours to bring everything together and create a, a great workplace experience is unique, and together and, of course, linked with also the food experience. So again, the impact of work from home can be compensated partly by the the new, the new, the new food models and new ways of addressing the convergence, but also by this really active, FM, demand, that, that, on which we are absolutely irrelevant. And on the disposals, Mark, do you want to say a word? No, we, we, we just revisited, our assets, our geographic footprint and the opportunity to dispose of some assets. And we've increased the list But I would say we kept the spirit of the list we had 18 months ago. It's just that the list has become longer But again, we are talking small assets. It's more a question of us being more focused, less distracted and so forth. So we're not talking 100 of 1,000,000 of revenues, but it's still happening and we are going to make it happen. And it's released as a lot longer. And it's bringing efficiencies because it's bringing more focus I think you understood that being more focused on what's core has been a really a driver to our decisions. Just before Diane wraps up the day, I just wanted to leave you with 4 key takeaways that we have from that crisis saying moving onwards. Search digitization is key, and will be key in the future, and we've done great progress, and we are accelerating on that. Both in on-site and BNBRS. 2nd, having flexible production and delivery models accelerated by the convergence, between BRIS and On-site is a critical asset to capture more, you know, of the consumer spend and to be closer to, the new consumer's weight of weight of life. 3rd, integrated services and and the potential of facilities management and integrated facilities management services is massive, and we are, again, uniquely placed on that. And 4th, sustainability is is, already embarked in our offers, we are leading our industry on this and that's going to be a critical asset moving forward, a critical ask for client and consumers, and we are also accelerating on this. And the COVID crisis has confirmed that all the efforts that we've made in the past on this are absolutely relevant and will help us lead the pack on this. Terrific. Thank you, Denis. What a great, great summary of 4 key takeaways. So it's been a real pleasure hosting this virtual investor say. I'd really like to thank everybody for joining us. I'd also like to thank the Sodexo teams and those in the studio who helped put this event together. I hope you now have a much clearer idea of how we're going to, reignite profitable growth going forward As I mentioned at the beginning, today's broadcast will be available on our website shortly. So please enjoy the rest of your day and stay safe. Goodbye.

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