Faced with the rebound of the pandemic, new public measures have been implemented since September 2020 in many countries in which the Group operates. Given the disparity of the situations with which the Group is confronted, the changing nature of the situation and the difficulty in assessing the duration of this resulting health crisis, the impact it could have on the Group’s future results cannot be accurately measured.
However, the Group continues to make every effort to ensure the continuity of its activities and confirms its confidence in its ability to adapt to the consequences of this pandemic.
Significantly impacted by the Covid-19 pandemic, Sodexo in France announced on October 27, 2020 an Employment Protection Plan which would involve the reduction of 7% of its workforce, i.e. 2,083 positions mostly in the Corporate Services segment as part of an information process and consultation of its employee representatives.
Discussion with employee representatives are just starting and Sodexo intends to propose all measures to maintain employment for its employees and thus limit the impact of these reorganizations, in particular through a project to support the movement of its employees on a voluntary basis, in expanding the choices available to them in all of the Group’s other activities in France.
Commitments arising from surety arrangements (pledges, charges secured against plant and equipment, and real estate mortgages) contracted by Sodexo S.A. and its subsidiaries in connection with operating activities during Fiscal 2020 are not material.
| AUGUST 31, 2020 | AUGUST 31, 2019 | ||||
|---|---|---|---|---|---|
| (in millions of euro) | LESS THAN 1 YEAR | 1 TO 5 YEARS | MORE THAN 5 YEARS | TOTAL | TOTAL |
| Financial guarantees to third parties | Financial guarantees to third parties AUGUST 31, 20201 | Financial guarantees to third parties AUGUST 31, 2019- | - | 1 | 1 |
| Site management commitments | Site management commitments AUGUST 31, 2020- | Site management commitments AUGUST 31, 2019- | - | - | 1 |
| Performance bonds given to clients | Performance bonds given to clients AUGUST 31, 202045 | Performance bonds given to clients AUGUST 31, 201930 | 109 | 184 | 181 |
| Other commitments | Other commitments AUGUST 31, 20203 | Other commitments AUGUST 31, 2019128 | 1 | 131 | 136 |
| TOTAL OTHER COMMITMENTS GIVEN | TOTAL OTHER COMMITMENTS GIVEN AUGUST 31, 202049 | TOTAL OTHER COMMITMENTS GIVEN AUGUST 31, 2019158 | 111 | 316 | 319 |
The performance bonds given to clients relate to around fifteen sub-contracting contracts where the Group considers that it may be exposed to indemnity payments if it is unable to fulfill the service obligation. These bonds are subject to regular review by the management of the business unit and a provision is recorded as soon as payment under a bond becomes probable. For all other contracts with a performance bond, Sodexo considers that it can deploy the additional resources needed to avoid paying compensation under the bond.
The Group also has performance obligations to clients, but regards these as having the essential features of a performance guarantee rather than an insurance contract designed to compensate the client in the event of non-fulfillment of the service obligation (compensation is generally due only where Sodexo is unable to provide alternative or additional resources to fulfill the obligation to the client).
In practice, given its size and geographical reach, Sodexo considers itself capable of providing the additional resources required to avoid paying compensation to clients protected by such clauses.
At this time, no provision has been recorded in the consolidated statement of financial position with respect to these guarantees.
The “Other commitments” line mainly includes the 12-year guarantee given by Sodexo S.A. in October 2012 to the Trustee of the UK pension plan (i.e., until October 2024) for a maximum of 100 million pounds sterling in order to cover Sodexo UK’s obligations in connection with the plan.
As of August 31, 2020, Bellon SA held 42.75% of the capital of Sodexo and 57.14% of the exercisable voting rights.
The expense recognized in Fiscal 2020 under an assistance and advisory services contract between Bellon SA and Sodexo S.A. amounts to 1.5 million euro (3.3 million euro in Fiscal 2019).
Bellon SA received dividends of 181 million euro from Sodexo S.A. in February 2020 and the Group received dividends of 2.4 million euro from Bellon SA during Fiscal 2020.
