Exchange rate fluctuations do not generate operational risks, because each subsidiary bills its revenues and incurs its expenses in the same currency. However, given the weight of the Benefit & Rewards business in Brazil, and the high level of the margins relative to the Group, when the Brazilian real declines against the euro, it has a negative effect on the underlying operating margin due to a change in the mix of margins. Conversely, when the Brazilian real improves, Group margins increase.
| 1 €= | AVERAGE RATE FY 2020 | AVERAGE RATE FY 2019 | AVERAGE RATE FY 2020 VS. FY 2019 | CLOSING RATE FY 2020 AT 31/08/2020 | CLOSING RATE FY 2019 AT 31/08/19 | CLOSING RATE 31/08/2020 VS. 31/08/2019 |
|---|---|---|---|---|---|---|
| Dollar US | Dollar US AVERAGE RATE FY 20201.115 |
Dollar US AVERAGE RATE FY 20191.134 |
Dollar US AVERAGE RATE FY 2020 VS. FY 2019+ 1.7% |
Dollar US CLOSING RATE FY 2020 AT 31/08/20201.194 |
Dollar US CLOSING RATE FY 2019 AT 31/08/191.104 |
Dollar US CLOSING RATE 31/08/2020 VS. 31/08/2019- 7.6% |
| Livre sterling | Livre sterling AVERAGE RATE FY 20200.876 |
Livre sterling AVERAGE RATE FY 20190.885 |
Livre sterling AVERAGE RATE FY 2020 VS. FY 2019+ 1.0% |
Livre sterling CLOSING RATE FY 2020 AT 31/08/20200.896 |
Livre sterling CLOSING RATE FY 2019 AT 31/08/190.906 |
Livre sterling CLOSING RATE 31/08/2020 VS. 31/08/2019+ 1.1% |
| Real brésilien | Real brésilien AVERAGE RATE FY 20205.255 |
Real brésilien AVERAGE RATE FY 20194.384 |
Real brésilien AVERAGE RATE FY 2020 VS. FY 2019- 16.6% |
Real brésilien CLOSING RATE FY 2020 AT 31/08/20206.474 |
Real brésilien CLOSING RATE FY 2019 AT 31/08/194.588 |
Real brésilien CLOSING RATE 31/08/2020 VS. 31/08/2019- 29.1% |
The major impact of currencies this year is the decline in the Brazilian real of 16.6% over the year, but with a particularly sharp drop in the second half of the year. This has had a relatively small impact on Group revenues, compared to the impact on Underlying operating profit due to the higher profitability of the Benefits & Rewards activities, particularly in Brazil.
Sodexo operates in 64 countries. The percentage of total revenues and underlying operating profit denominated in the main currencies are as follows:
| FISCAL 2020
|
% OF REVENUES | % OF UNDERLYING OPERATING PROFIT |
|---|---|---|
| U.S. dollar | U.S. dollar % OF REVENUES40% |
U.S. dollar % OF UNDERLYING OPERATING PROFIT59% |
| Euro | Euro % OF REVENUES24% |
Euro % OF UNDERLYING OPERATING PROFIT- 38% |
| UK pound sterling | UK pound sterling % OF REVENUES9% |
UK pound sterling % OF UNDERLYING OPERATING PROFIT14% |
| Brazilian real | Brazilian real % OF REVENUES5% |
Brazilian real % OF UNDERLYING OPERATING PROFIT30% |
The currency effect is determined by applying the previous year’s average exchange rates to the current year figures except in hyper-inflationary economies where all figures are converted at the latest closing rate for both periods when the impact is significant.
As a result, for the calculation of organic growth of the On-site Services activities in Argentina, Peso figures for Fiscal 2020 and Fiscal 2019 have been converted at the exchange rate of 1€ = 87.865 vs 63.975 ARS for Fiscal 2019.
REVENUES BY ACTIVITY
| REVENUES BY SEGMENT
(in millions of euro) |
FY 2020 | FY 2019
|
RESTATED
ORGANIC GROWTH
|
ORGANIC
GROWTH
|
EXTERNAL
GROWTH
|
CURRENCY
EFFECT
|
TOTAL GROWTH
|
|---|---|---|---|---|---|---|---|
| Business & Administrations | Business & Administrations FY 202010,265 |
Business & Administrations FY 201911 577 |
Business & Administrations RESTATED ORGANIC GROWTH- 12.1% |
Business & Administrations ORGANIC GROWTH- 10.3% |
Business & Administrations EXTERNAL GROWTH+ 0.4% |
Business & Administrations CURRENCY EFFECT- 1.4% |
Business & Administrations TOTAL GROWTH- 11.3% |
| Healthcare & Seniors | Healthcare & Seniors FY 20204,815 |
Healthcare & Seniors FY 20195,210 |
Healthcare & Seniors RESTATED ORGANIC GROWTH- 6.6% |
Healthcare & Seniors ORGANIC GROWTH- 9.4% |
Healthcare & Seniors EXTERNAL GROWTH+ 1.7% |
Healthcare & Seniors CURRENCY EFFECT+ 0.1% |
Healthcare & Seniors TOTAL GROWTH- 7.6% |
| Education | Education FY 20203,475 |
Education FY 20194,280 |
Education RESTATED ORGANIC GROWTH- 18.9% |
Education ORGANIC GROWTH- 20.4% |
Education EXTERNAL GROWTH+ 0.5% |
Education CURRENCY EFFECT+ 1.0% |
Education TOTAL GROWTH- 18.8% |
| ON-SITE SERVICES | ON-SITE SERVICES
FY 2020
18,554 |
ON-SITE SERVICES
FY 2019
21,067 |
ON-SITE SERVICES
RESTATED
ORGANIC GROWTH
- 12.1% |
ON-SITE SERVICES
ORGANIC
GROWTH
- 12.1% |
ON-SITE SERVICES
EXTERNAL
GROWTH
+ 0.7% |
ON-SITE SERVICES
CURRENCY
EFFECT
- 0.5% |
ON-SITE SERVICES
TOTAL GROWTH
- 11.9% |
| BENEFITS & REWARDS SERVICES | BENEFITS & REWARDS SERVICES
FY 2020
773 |
BENEFITS & REWARDS SERVICES
FY 2019
892 |
BENEFITS & REWARDS SERVICES
RESTATED
ORGANIC GROWTH
- 7.8% |
BENEFITS & REWARDS SERVICES
ORGANIC
GROWTH
- 7.8% |
BENEFITS & REWARDS SERVICES
EXTERNAL
GROWTH
+ 0.2% |
BENEFITS & REWARDS SERVICES
CURRENCY
EFFECT
- 5,8 % |
BENEFITS & REWARDS SERVICES
TOTAL GROWTH
- 13.4% |
| Elimination | Elimination FY 2020(5) |
Elimination FY 2019(4) |
Elimination RESTATED ORGANIC GROWTH
|
Elimination ORGANIC GROWTH
|
Elimination EXTERNAL GROWTH
|
Elimination CURRENCY EFFECT
|
Elimination TOTAL GROWTH
|
| TOTAL GROUP | TOTAL GROUP
FY 2020
19,321 |
TOTAL GROUP
FY 2019
21,954 |
TOTAL GROUP
RESTATED
ORGANIC GROWTH
- 12.0% |
TOTAL GROUP
ORGANIC
GROWTH
- 12.0% |
TOTAL GROUP
EXTERNAL
GROWTH
+ 0.7% |
TOTAL GROUP
CURRENCY
EFFECT
- 0.8% |
TOTAL GROUP
TOTAL GROWTH
- 12.0% |
Fiscal 2020 consolidated revenues totaled 19.3 billion euro, down -12% year-on-year. This is the combination of solid first half revenue growth of +3.2%, followed by a -27.5% decline in the second half as the Covid-19 pandemic spread across the world, impacting most of the Group’s operating sites, in particular in Schools and Universities and the Corporate Services and Sports & Leisure sub-segments in Business & Administrations, particularly in North America and Europe.
