Sodexo’s Plan: A Better Tomorrow Starts Today

Sodexo12 –

GROUP KEY FIGURES (FY 2014)

3 –

€ 18 bn revenues

419,317 employees

18 th

largest employer worldwide

75 million consumersserved daily

32,659 sites

80countries

SODEXO

IS THE WORLD’S LEADING

QUALITY OF LIFE SERVICES

COMPANY

4 –

On-site Services

Benefits and Rewards

Services

Personal and Home Services

ON-SITE SERVICES

5 –

Corporate

Defense

Justice Services

Remote Sites

Sports and Leisure

Health Care

Seniors Education

Across 8 client segments

BETTER TOMORROW PLAN

OUR SOCIAL & ENVIRONMENTAL COMMITMENT

6 –

our Corporate Social Responsibility road map, setting our social and environmental commitments around 4 priorities

Contribute to local communities

Develop our employees and

promote diversity

Promote nutrition, health and well-being

Protect the environment

Global DJSI Industry Leader for 10 years in a row

RATINGS AND REPUTATION

Economic

Environment

Social

Overall

0 10 20 30 40 50 60 70 80 90

Industry AvgSodexo

Carbon Disclosure Project(Sodexo reports to CDP’s climate change &

forests programs)

7 –

GLOBAL COMPACT

For the third time Sodexo has qualified for the Global Compact Advanced level, meeting all 24 criteria.

The ‘Moral’ Firm28 –

Most simple calculation:

HOW DO WE KNOW WHAT A COMPANY IS ‘WORTH’?

Cost for a share of stock

Number of shares

outstandingx

9 –

Tangible Values

Intangible Values

Financial Capital Physical Assets

(Generally Audited Financial Information)

(Generally Non-audited, Non-financial Information)

Intellectual property

Unallocated goodwill

Labor environment

Customer loyalty

Employee engagement

Community support

Brand Image

Reputation

Value is based on your relationships with

■Customers

■Employees

■Owners/Investors

■Suppliers

■Competitors

■Communities

■Government agencies/regulators

INTANGIBLE ASSETS

11 –

To improve company valuation, improve relationships with stakeholders.

Good stakeholder relationships are necessary for and lead to a Sustainable Corporation

THEREFORE…

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MCKINSEY GLOBAL SURVEY 2014

management of corporate reputation for sustainability

• increasingly important to executives

• highest value-creation potential for their industries over the next five years.

Needed for quality income

Necessary to get low cost of capital

Critical to hire/retain the best employees

Gets you through rough times

Avoids commodity pricing/builds value added

REPUTATIONAL CAPITAL (BRAND EQUITY = GOODWILL)

14 –

15

70% of market value (avg)

80% for S&P 500 Companies

90% for technology companies

INTANGIBLE ASSETS – MORE THAN MEETS THE EYE

Brand Finance Monks/Lajoux, Corporate Valuation

Company Market value Balance sheet assets

Goodwill

Microsoft $279 billion 33.7% 66.3%

Best Buy $26.3 billion 39% 61%

Starbucks $27.8 billion 12% 88%

Goldman Sachs $61.7 billion 1.1% 98.9%

Burlington Northern and Santa Fe

$29.2 billion $30.3 billion (103%) None

Caterpillar $49 billion 95.9% 4.1%

Apple $58 billion 19.8% 80.2%

2005: BEFORE THE CRASH

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17 –

THEORY OF THE MORAL FIRM

(self interest considered upon the whole)

ReputationalCapital

SocialCapital

FinancialCapital

PhysicalCapital

HumanCapital

ConversionProcess

Output(Goods/

Services)Customers

$$$Sustainable

profits; maximum

value

INP

UT

S

RETURN ON CAPITAL(preserve adequacy of capital inputs)

18 –

The Social Responsibility of Business is to Increase its Profits

There is one and only one social responsibility of business–to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.

Milton Friedman, 1970, New York Times Magazine

MILTON FRIEDMAN

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MILTON FRIEDMAN

The Social Responsibility of Business is to Increase its Profits

There is one and only one social responsibility of business–to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.

That responsi bility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while con forming to the basic rules of the society, both those embodied in law and those embodied in ethical custom.

Milton Friedman, 1970, New York Times Magazine

20 –

THEORY OF THE MORAL FIRM

(self interest considered upon the whole)

ReputationalCapital

SocialCapital

FinancialCapital

PhysicalCapital

HumanCapital

ConversionProcess

Output(Goods/

Services)Customers

$$$Sustainable

profits; maximum

value

INP

UT

S

RETURN ON CAPITAL(preserve adequacy of capital inputs)

21 –

22 –

Five Keys To Build Reputational Capital3

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FIVE KEYS TO BUILD REPUTATIONAL CAPITAL

1. Alignment with your core business model (why)

2. Integration with day-to-day operations (how)

3. Employee Engagement and Empowerment (who)

4. Tangible Local Benefits (where)

5. Maximize Stakeholder Engagement (what)

24 –

© John Friedman

1. ALIGNMENT WITH YOUR CORE BUSINESS MODEL

Our Vision 2020Financial Objectives

Expand premium offer to capture higher profit sales

Increase sales volume of existing customers

Improve margins Reduce DSOsEnsure compliance

Operational Objectives

Identify best practicesIntegrate best practices

throughout company

Increase market share Reduce raw materials costsReduce transportation costsReduce lost time accidentsReduce fines/mediation

Sales Objectives

Expand share of business with existing clients

100 percent retention of existing clients

Win new business Competitive analysis

Cultural Objectives

Attract / hire / retain the best talent

Culture of continuous Improvement

Align HR processes and incentives with desired outcomes

Increase productivity

Reduce turnover

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1. ALIGNMENT WITH YOUR CORE BUSINESS MODEL

CR objectives

Bus

ines

s pr

iorit

ies

1. ALIGNMENT WITH YOUR CORE BUSINESS MODEL

2. INTEGRATION WITH DAY TO DAY

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2. INTEGRATION WITH DAY TO DAY

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2. INTEGRATION WITH DAY TO DAY

30 –

2. INTEGRATION WITH DAY TO DAY

31 –

InfluenceHow our values are integrated into

business

ActionsHow we live our values

ExpertiseHow we encourage others to adopt

Brand promise of standards/innovationsBe the benchmark for Operational Excellence

Our culture as differentiatorBrand promise standards/innovations

Be the benchmark for Operational Excellence

Leverage the strength of our peopleOur culture as differentiator

Promise Plan Program Performance

• Business practices (labor, d&I, etc.)

• Food Industry

• Supply chain • 18 Commit-ments

• Goals• Timelines• Milestones

• Initiatives• Programs• Efforts

• Measurement• Reporting• Third party

validations

• Drive client actions• Drive customer decisions

• Drive public awareness/expectations

• Behavior change

Health & Wellness

• Suppliers/partners creating alternative ingredients; ensuring a market for these new products

• Research based

• Health & Wellness Solutions

• Varied & Balanced Food Options

• Reduced Intake of Sugar, Salt and Fats

• Dietitian Expert Network

• 10 Golden Rules

• Recipe co- development

• Expertise• Public

engagement

• USDA food guidelines

• Percent of accounts w/ dietitians

• % offering MN• Bucket list • Results

releases

• Outcome Results

• Partnership for a Healthier America

Environment • WasteLESS Week • Sustainable supplies

• Energy & Emissions

• Water & Effluents

• Materials & Waste

• Site Wins (best practices)

• Value Chain

• Grow energy business

• WasteWatch

• Endocube

• EquiLulnch

• Take One!

• WasteLESS Week

• Case Studies

• Pilot Programs

• Universal Roll Out

• International Food Waste Coalition – founding member

Local communities

• Safety training• Quality training• Expertise sharing• Access to markets• Economic

empowerment• Standard of Living• Quality of Life

• Stop Hunger

• Local community development

• Fairly Traded Certified Products

• Engage suppliers

• Social, env & economic development

• Economic development

•Supply Chain Inclusion Program

• # and % of SMEs

• % of spend shared with SMEs

• Access to markets

• Increasing markets

3. EMPOWER AND ENGAGE EMPLOYEES

33 –

1

Inspire long term behavior change

3

5,364 sites participated in WasteLESS Week in 2014

Raise awareness of the work Sodexo has been doing to

reduce the waste of resources

Encourage employees and consumers to take action

1

2

What is WasteLESS Week? • WasteLESS Week is a five day campaign that runs

during October at Sodexo sites around the world.

• It empowers consumers, clients and Sodexo employees to reduce waste by celebrating the benefits of wasting less food, water, energy, paper and raw materials.

• It supports our overall waste reduction efforts, using the site survey results to create customized messages for clients based on local actions and results.

Why is Sodexo doing it? • We know that the best way to encourage a new habit is to

show people the benefits of the new behavior, making it easy, simple, rewarding and desirable.

How does it work? • On-site materials such as posters, videos and

activities, we showcase the quality of life benefits they experience when they waste less.

You have the Powerto turn trash into treasure© 2014, Sodexo

SUPPLY CHAIN INCLUSION PROGRAM

Launched in 2013

All countries will develop strong and sustainable relationships with suppliers in at least one of the following categories:

• Small and Medium Enterprises (SME’s), including social and micro-enterprises;

• Suppliers from minority and other under-represented and/or protected groups, with an emphasis on women-owned businesses;

• Major Sodexo suppliers demonstrating a diverse workforce composition, actively embracing diversity and inclusion and promoting local supply chain inclusion.

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SUPPLY CHAIN INCLUSION PROGRAM

Sodexo set 2020 targets for supply chain inclusion based on progress to date, including:

• 26 countries have specific initiatives to integrate SMEs (Small and Medium Enterprises) into their supply chains;

• 148 active agreements are in place with local communities, clients, NGOs and associations to promote inclusion of SMEs in Sodexo’s supply chain;

• 7 countries have a system in place to track which of their suppliers are SME's (Small and Medium Enterprises);

• 20 countries have conducted Diversity and Inclusion training for supply team members.

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4. TANGIBLE LOCAL BENEFITS

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5. MAXIMIZE STAKEHOLDER ENGAGEMENT

Simple, clear, direct messages

• Does not ‘talk down’ or ‘shame’ them for prior behavior

Positive reinforcement

• Show them WHAT they can do

• Tell them HOW

• Show them WHY it matters - that they CAN make a difference with customizable messages about what they have done and achieved

Make it fun, interesting

38 – Title of the document or activity name – Month XX, 2012 – Insert tab > Header/Footer

LAYAR EXAMPLE

The poster

39 –

WATCH THE VIDEO

MAXIMIZE STAKEHOLDER ENGAGEMENT – WHAT DO WE WANT THEM TO DO?

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Stakeholder Group Desired Outcome Approach

Site Managers

Think: This is an important opportunity to engage my client and inspire my teamFeel: Enabled, supported and confidentDo: Engage client, lead team

Make it easy, inspiring and effective

Employees

Think: Sodexo cares about sustainabilityFeel: Proud, this is funDo: Run the week, participate, engage consumers

Make it fun, make it simple

Clients

Think: This adds value to my organisationFeel: Sodexo are helping me achieve my objectivesDo: Give permission and support, engage with manager post WasteLESS week

Make it effectiveShow clear benefits

Consumers

Think: Sodexo cares about sustainability and is taking actionFeel: This is fun and inspiring, sustainability can improve my quality of life.Do: Participate, change behaviors

Make it fun but also meaningful and relevant, show me the impact I've made, show me that I'm not the only one doing this

Sodexo’s Plan: A Better Tomorrow Starts Todayand it starts with you