In order to adapt to its rapidly changing business sector and to respond to long-term structural challenges, Sodexo is accelerating its transformation to progressively adjust its organization, increase its agility and seize the numerous opportunities for future growth.
The shock wave from the global health crisis has accelerated Sodexo’s transformation. The Covid-19 crisis strongly impacted the Foodservices activity in many segments and accelerated certain consumption trends.
In line with major global trends (see page 30), Sodexo is refining its strategy to capitalize on the increasing outsourcing of services and account for demographic changes, particularly in developing economies, while responding to societal forces such as changing consumption choices or resource scarcity.
To maintain its competitiveness and increase its agility and ability to act, Sodexo is pursuing and accelerating the transformation initiated in 2018. The Group, which has already reduced its international presence from 80 to 64 countries, is thus continuing to optimize its geographic footprint, with an emphasis on regions with the greatest potential for growth and profitability. The Group thus intends to strengthen its efforts in its main markets, the United States, the United Kingdom and France in particular, and to accelerate its investments in the markets with strong growth potential such as Brazil, China and India.
Additionally, having successfully rebalanced its market dynamics and the balance between global/local contracts and Facilities Management and Foodservices, Sodexo is continuing to rationalize its technical services portfolio to focus its efforts on those with the greatest potential and highest added value.
To meet new post-crisis challenges, particularly the impact of working from home in the Corporate Services segment, the Group is adapting its workforce to the volumes of on-site activity. Sodexo is also embarking on a program to optimize and simplify its central structures, including transitioning from 12 to 7 regions and pooling support functions. This program, which should generate about 175 million euro of SG&A savings, will increase the company’s agility and efficiency, to be closer to client needs on the ground.
Building on the initial gains in terms of operational efficiency and commercial relevance, the Group is continuing its efforts to anticipate and respond ever better to the needs of its clients and to strengthen their loyalty, around a unique portfolio of services.
To do this, the Group is continuing its targeted investments around key catalysts, such as the deployment of a global client relationship management tool for On-site Services, creating regional centers of marketing-sales expertise in Europe, and building client loyalty with the overhaul of Sodexo’s “Clients for Life” program. New technologies, automation, robots and the Internet of Things will also improve the execution and operational efficiency of its services. Building on its investments, Sodexo is strengthening its go-to-market strategies and building unique relationships with its clients.
The transformation of Benefits & Rewards Services is now reflected in a business digitization rate of 86%, up 13 points in just two years. The platform implemented in partnership with Zeta in India, combining both a new consumer-centric approach and robust digital payment technology, is gradually being leveraged in other countries, including Brazil, to deliver a holistic and unique multi-benefits experience. Sodexo now off ers a robust digital ecosystem and more than 70 partnerships with e-commerce sites and delivery platforms and has accelerated time to market for its off ers. With more than 36 million consumers every day and nearly one billion digital transactions per year, the Benefits & Rewards Services business is now the technological arm of Sodexo.
To stimulate growth, improve its competitiveness and meet the expectations of its clients and consumers, Sodexo is stepping up its efforts to transform its supply chain, through operational efficiency gains, acceleration of digitization and consolidation of its responsible sourcing approach. To differentiate itself, the Group relies in particular on these commitments in the areas of health, nutrition and well-being, social equality and protection of biodiversity, for win-win partnerships, like its Partner Inclusion Program or its commitments to reduce carbon emissions. With 20 billion euro in annual purchasing capacity from approximately 150,000 suppliers around the world, Sodexo is able to transform its procurement model while having a positive impact on its supplier ecosystem and on the planet.
To respond to changing behaviors and expectations, particularly in terms of corporate foodservices, in response to trends greatly reinforced by the pandemic such as working from home or meals delivery, Sodexo is accelerating development of its multi-modal and multi-channel off ers and the adaptation of its production and operating models.
The Group’s approach is to place the consumer at the heart of its model and to respond to the diversity of situations with relevant services. In particular, the Group intends to develop its operating model through new off -site production sites and strengthening the digitization of services, such as pre-order, click & collect and digital payment solutions, which are gradually being rolled out in all segments and regions, as well as digital platforms such as SoHappy used daily by 250,000 French consumers and solutions implemented in China in partnership with Meican.
Sodexo is thereby reinforcing its value proposition to its clients and meeting the individual needs of consumers, regardless of their place of consumption, through the complementarity of meal delivery off ers such as Alchemista in the United States and FoodChéri in France as well as through its Benefits & Rewards Services.
Through the diversity of its off ers and the adaptation of its production methods, Sodexo is able to meet the expectations of consumers and thus increase their average purchase, while improving productivity.
CUMULATIVE RESTRUCTURING COSTS
350 million
EURO BY FISCAL 2021
