3.3.5 Outlook
For the Group, given that On-Site activity in the fourth quarter was in line with pre-pandemic levels, we expect revenues and margins for Fiscal 2023 to be back up to Fiscal 2019 levels. As a result:
- Fiscal 2023 organic revenue growth is expected to be between +8 and +10% driven by:
- further recovery in Corporate Services and Sports & Leisure,
- positive net new business momentum including expected further improvement in retention,
- inflationary pricing at 4-5%,
- somewhat offset by the impact of the end of the Testing Centers contract in the UK (-100 bps);
- Fiscal 2023 Underlying Operating Profit margin close to 5.5%,at constant rates, supported by:
• continued price increases and inflation mitigation action plans,
- operational excellence including supply chain efficiencies,
- further ramp-up in volume,
- increased investments to sustain growth.
For the first time, we are providing specific guidance for Benefits & Rewards Services:
- organic growth of +12 to +15% for Fiscal 2023, driven by:
- further progress in new business, cross-selling and retention,
- strong demand in all regions,
- benefits from inflation and higher interest rates;
- underlying operating profit margin around 30% at constantrates for Fiscal 2023, supported by:
- the benefits of the topline growth flow-through,
- increased investment in technology, digital offers, brand and sales & marketing.
3.3.6 Alternative Performance Measure definitions
Blended cost of debt
The blended cost of debt is calculated at period end and is the weighted blended financing rate on borrowings (including derivative financial instruments and commercial papers) and cash pooling balances at period end.
Financial ratios
Please refer to Chapter 4, 4.3.1.
Free cash flow
Please refer to the section entitled Consolidated financial position.
Growth excluding currency effect
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.
Issue volume
Issue volume corresponds to the total face value of service vouchers, cards and digitally delivered services issued by Benefits & Rewards Services for beneficiaries on behalf of clients.
Net debt
Net debt is defined as Group borrowing at the balance sheet date, less operating cash.
Organic growth
Organic growth corresponds to the increase in revenue for a given period (the “current period”) compared to the revenue reported for the same period of the prior fiscal year, calculated using the exchange rate for the prior fiscal year; and excluding the impact of business acquisitions (or gain of control) and divestments, as follows:
- for businesses acquired (or gain of control) during the current period, revenue generated since the acquisition date is excluded from the organic growth calculation;
- for businesses acquired (or gain of control) during the prior fiscal year, revenue generated during the current period up until the first anniversary date of the acquisition is excluded;
- for businesses divested (or loss of control) during the prior fiscal year, revenue generated in the comparative period of the prior fiscal year until the divestment date is excluded;
- for businesses divested (or loss of control) during the current fiscal year, revenue generated in the period commencing 12 months before the divestment date up to the end of the comparative period of the prior fiscal year is excluded.
