Pursuant to European regulation 1606/2002 of July 19, 2002, the consolidated financial statements of the Sodexo Group have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and approved by the European Union as of the fiscal year end. The texts adopted by the European Union are published in the Official Journal of the European Union and are available for consultation on EUR-Lex.
Information for the comparative year presented has been prepared using the same principles.
The Group does not apply IFRS standards that are not approved by the European Union at the closing date. Considering the Company closing date, the IFRS application dates as approved by the European Union have been the same as those for the IFRS standards published by the IASB.
The accounting policies used by the Group to prepare its consolidated financial statements for the fiscal year ended August 31, 2024 are the same as those used for the consolidated financial statements as of August 31, 2023.
The texts effective as of September 1, 2023 had no material impact on the consolidated financial statements of the Group, in particular IAS 12 amendment regarding the exemption from the recognition of deferred tax assets and liabilities linked to taxes on the result arising from the Pillar 2 rules based on estimates made to date by the Group. Based on the preliminary work performed, the Group does not expect any significant impact from the Pillar 2 reform on its consolidated financial statements.
Furthermore, the Group did not elect to early adopt the texts, which will be effective for the Group as of September 1, 2024. The Group does not expect the application of these texts to have a material impact on its consolidated financial statements.
In addition, amendments and standards not yet applicable whose date of application defined by the IASB is from 1 January 2025 or later, the analysis of the impact of their application on consolidated financial statements is in progress, notably regarding IFRS 18 “Presentation of financial statements and disclosures” (effective as of 1 January 2027, subject to adoption by the European Union).
The preparation of financial statements requires the Management of Sodexo and its subsidiaries to make estimates and assumptions which affect the amounts reported for assets, liabilities and contingent liabilities as of the date of preparation of the financial statements, and for revenues and expenses for the fiscal year.
These estimates and valuations are updated continuously based on past experience and on various other factors considered reasonable in view of current circumstances and are the basis for the assessments of the carrying amount of assets and liabilities.
Actual amounts may differ from these estimates if assumptions or circumstances change.
Significant items subject to such estimates and assumptions include the following:
As part of its Climate Strategy, the Group has set the objective of significantly reducing its environmental impact at every level of its value chain, in particular through the following actions:
The many initiatives undertaken by Sodexo aim, in particular, to achieve the objective of a 34% greenhouse gas emissions reduction by 2025 (as compared to the 2017 baseline), as part of its corporate responsibility roadmap Better Tomorrow 2025 defined in 2017.
The results of these initiatives are reflected in significant progress of the non-financial performance indicators for Fiscal 2024, including 73% renewable electricity (vs. 57.4% in 2023) on directly operated sites and a 40.7% food waste reduction (vs 37.6% in 2023).
The Group took into account the estimated costs of implementing these actions within the business plans drawn up for each operating segment when preparing its impairment tests.
The potential long-term impact of climate-related risks and opportunities on other components of business plans – primarily the effect on the cost of sales and the margin of possible disruptions to the Group’s supply chain due to physical risks after taking into account the anticipated impact of the mitigating measures – is considered via sensitivity analysis of the value in use estimated for the purposes of the impairment tests to the variation in operational assumptions, the results of which are presented in note 6.4.
The Group continues and strengthens its work on assessing the impact of climate change on its activities and will be able to provide more details on the topic as part of the 2025 publication, in compliance with the European Corporate Sustainability Reporting Directive (CSRD) requirements.
The commitments made by the Group in relation to climate change had no other impact on the judgments and estimates used by Management in the context of the preparation of its consolidated financial statements as of August 31, 2024, in particular regarding the assessment of the useful life of property, plant and equipment, the estimate of their recoverable value or the recognition of liabilities.
