Universal Registration Document Fiscal 2025

6.3 Risk factors

6.3 Risk factors

6.3.1 Principal risks and risk management measures

Summary of Sodexo’s principal risk factors

The summary table of Sodexo’s principal risks shows a classification of the risks by reference to four categories, as well as risks from the external environment. As outlined in 6.2.4, each risk is assessed using impact and likelihood to give an evaluation of the inherent risk, and then a third criteria, level of control, is used to evaluate the overall net risk. The table below shows the net risk assessment. The most significant risks are presented at the top of each category, and the materiality of each risk shown is using a two-level rating scale (medium and high), as follows:

MAIN RISKS AND RISK MANAGEMENT

This image presents a summary table of risk levels across different business areas.

  1. Clients / Consumers
    • Medium level:
      • Assessing consumer expectations and behavior.
      • Risks related to tenders.
    • High level:
      • Client retention.
  2. Operations
    • Medium level:
      • Technology and IT security.
    • High level:
      • Execution of client contracts, including inflation management.
  3. Employees
    • Medium level:
      • Staff shortages and recruitment.
    • High level:
      • Retention and talent development.
  4. Sustainability
    • Medium level:
      • Basic safety, service safety, and workplace safety.
      • Sodexo’s environmental impact.
  5. External Environment
    • Medium level:
      • Risks related to legal and regulatory compliance.
      • Exposure to climate change.
Description of principal risk factors

The tables below describe Sodexo’s principal risk factors, their possible impact and give examples of measures implemented to reduce these risks.

CLIENT RETENTION

 Risk level: high

CLIENT RETENTION

Risk of not keeping and renewing contracts with Sodexo’s existing clients.

CLIENT RETENTION

Category: Clients/consumers

CLIENT RETENTION

Impact

In order for Sodexo to continue to add value to its clients, and in turn consumers, there is a consistent need to understand – and then meet – their expectations.

In a dynamic workplace, the need for innovation and continuous improvement means that Sodexo must regularly evolve and enhance the ways it supports its clients.

An inability to adapt to each client’s specific circumstances or offer quality, innovative services could lead to Sodexo losing recognition as a strategic partner, resulting in:

  • a disconnection between our goals and those of our clients;
  • a decrease in satisfaction from clients and consumers;
  • a direct impact on both revenue and profit at account, region and Group level;
  • loss of credibility in the market place.

Risk level: high

Examples of mitigating activities

  • On-site teams actively listening to the client and the consumer; aggregated insights are then shared across operational, functional and strategic teams.
  • Regular training of operational teams on the Clients for Life process ensuring that all stages of the client relationship and contract management are properly implemented.
  • Deployment of strong branded offers such as Modern Recipe and Kitchen Works to offer clients and consumers new food experiences.
  • Review of key accounts every six months to identify potential risks of client loss, along with the develop of mitigation plans developed to address them.
Download the table