a better tomorrow starts today ahc

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1. Sodexos Plan: A Better Tomorrow Starts Today 2. Sodexo 1 2 3. GROUP KEY FIGURES (FY 2014) 3 18bn revenues 419,317 employees 18th largest employer worldwide 75 million consumers served daily 32,659 sites 80countries 4. SODEXO IS THE WORLDS LEADING QUALITY OF LIFE SERVICES COMPANY 4 On-site Services Benefits and Rewards Services Personal and Home Services 5. ON-SITE SERVICES 5 Corporate Defense Justice Services Remote Sites Sports and Leisure Health Care Seniors Education Across 8 client segments 6. BETTER TOMORROW PLAN OUR SOCIAL & ENVIRONMENTAL COMMITMENT 6 our Corporate Social Responsibility road map, setting our social and environmental commitments around 4 priorities Contributeto local communities Develop our employees and promote diversity Promote nutrition, health and well-being Protect the environment 7. Global DJSI Industry Leader for 10 years in a row RATINGS AND REPUTATION 0 50 100 Economic Environment Social Overall Sodexo Industry Avg Carbon Disclosure Project (Sodexo reports to CDPs climate change & forests programs) 7 GLOBAL COMPACT For the third time Sodexo has qualified for the Global Compact Advanced level, meeting all 24 criteria. 8. The Moral Firm 2 8 9. Most simple calculation: HOW DO WE KNOW WHAT A COMPANY IS WORTH? Cost for a share of stock Number of shares outstanding 9 10. Tangible Values Intangible Values Financial Capital Physical Assets (Generally Audited Financial Information) (Generally Non-audited, Non-financial Information) Intellectual property Unallocated goodwill Labor environment Customer loyalty Employee engagement Community support Brand Image Reputation 11. Value is based on your relationships with Customers Employees Owners/Investors Suppliers Competitors Communities Government agencies/regulators INTANGIBLE ASSETS 11 12. To improve company valuation, improve relationships with stakeholders. Good stakeholder relationships are necessary for and lead to a Sustainable Corporation THEREFORE 12 13. MCKINSEY GLOBAL SURVEY 2014 management of corporate reputation for sustainability increasingly important to executives highest value- creation potential for their industries over the next five years. 14. Needed for quality income Necessary to get low cost of capital Critical to hire/retain the best employees Gets you through rough times Avoids commodity pricing/builds value added REPUTATIONAL CAPITAL (BRAND EQUITY = GOODWILL) 14 15. 15 70% of market value (avg) 80% for S&P 500 Companies 90% for technology companies INTANGIBLE ASSETS MORE THAN MEETS THE EYE Brand Finance Monks/Lajoux, Corporate Valuation 16. Company Market value Balance sheet assets Goodwill Microsoft $279 billion 33.7% 66.3% Best Buy $26.3 billion 39% 61% Starbucks $27.8 billion 12% 88% Goldman Sachs $61.7 billion 1.1% 98.9% Burlington Northern and Santa Fe $29.2 billion $30.3 billion (103%) None Caterpillar $49 billion 95.9% 4.1% Apple $58 billion 19.8% 80.2% 2005: BEFORE THE CRASH 16 17. 17 18. THEORY OF THE MORAL FIRM (self interest considered upon the whole) Reputational Capital Social Capital Financial Capital Physical Capital Human Capital Conversion Process Output (Goods/ Services) Customers $$$ Sustainable profits; maximum value INPUTS RETURN ON CAPITAL (preserve adequacy of capital inputs) 18 19. The Social Responsibility of Business is to Increase its Profits There is one and only one social responsibility of business to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud. Milton Friedman, 1970, New York Times Magazine MILTON FRIEDMAN 19 20. MILTON FRIEDMAN The Social Responsibility of Business is to Increase its Profits There is one and only one social responsibility of business to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud. That responsibility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while conforming to the basic rules of the society, both those embodied in law and those embodied in ethical custom. Milton Friedman, 1970, New York Times Magazine 20 21. THEORY OF THE MORAL FIRM (self interest considered upon the whole) Reputational Capital Social Capital Financial Capital Physical Capital Human Capital Conversion Process Output (Goods/ Services) Customers $$$ Sustainable profits; maximum value INPUTS RETURN ON CAPITAL (preserve adequacy of capital inputs) 21 22. 22 23. Five Keys To Build Reputational Capital 3 23 24. FIVE KEYS TO BUILD REPUTATIONAL CAPITAL 1. Alignment with your core business model (why) 2. Integration with day-to-day operations (how) 3. Employee Engagement and Empowerment (who) 4. Tangible Local Benefits (where) 5. Maximize Stakeholder Engagement (what) 24 John Friedman 25. 1. ALIGNMENT WITH YOUR CORE BUSINESS MODEL Our Vision 2020 Financial Objectives Expand premium offer to capture higher profit sales Increase sales volume of existing customers Improve margins Reduce DSOs Ensure compliance Operational Objectives Identify best practices Integrate best practices throughout company Increase market share Reduce raw materials costs Reduce transportation costs Reduce lost time accidents Reduce fines/mediation Sales Objectives Expand share of business with existing clients 100 percent retention of existing clients Win new business Competitive analysis Cultural Objectives Attract / hire / retain the best talent Culture of continuous Improvement Align HR processes and incentives with desired outcomes Increase productivity Reduce turnover 25 26. 1. ALIGNMENT WITH YOUR CORE BUSINESS MODEL CR objectives Businesspriorities 27. 1. ALIGNMENT WITH YOUR CORE BUSINESS MODEL 28. 2. INTEGRATION WITH DAY TO DAY 28 29. 2. INTEGRATION WITH DAY TO DAY 29 30. 2. INTEGRATION WITH DAY TO DAY 30 31. 2. INTEGRATION WITH DAY TO DAY 31 32. Influence How our values are integrated into business Actions How we live our values Expertise How we encourage others to adopt Brand promise of standards/innovations Be the benchmark for Operational Excellence Our culture as differentiator Brand promise standards/innovations Be the benchmark for Operational Excellence Leverage the strength of our people Our culture as differentiator Promise Plan Program Performance Business practices (labor, d&I, etc.) Food Industry Supply chain 18 Commit- ments Goals Timelines Milestones Initiatives Programs Efforts Measurement Reporting Third party validations Drive client actions Drive customer decisions Drive public awareness/expectations Behavior change Health & Wellness Suppliers/partners creating alternative ingredients; ensuring a market for these new products Research based Health & Wellness Solutions Varied & Balanced Food Options Reduced Intake of Sugar, Salt and Fats Dietitian Expert Network 10 Golden Rules Recipe co- development Expertise Public engagemen t USDA food guidelines Percent of accounts w/ dietitians % offering MN Bucket list Results releases Outcome Results Partnership for a Healthier America Environment WasteLESS Week Sustainabl e supplies Energy & Emissions Water & Effluents Materials & Waste Site Wins (best practices) Value Chain Grow energy business WasteWatch Endocube EquiLulnch Take One! WasteLESS Week Case Studies Pilot Programs Universal Roll Out International Food Waste Coalition founding member Local communities Safety training Quality training Expertise sharing Access to markets Economic empowerment Standard of Living Quality of Life Stop Hunger Local community developme nt Fairly Traded Certified Engage suppliers Social, env & economic development Economic development Supply Chain Inclusion Program # and % of SMEs % of spend shared with SMEs Access to markets Increasing markets 33. 3. EMPOWER AND ENGAGE EMPLOYEES 33 1 Inspire long term behavior change 3 5,364 sites participated in WasteLESS Week in 2014 Raise awareness of the work Sodexo has been doing to reduce the waste of resources Encourage employees and consumers to take action 1 2 What is WasteLESS Week? WasteLESS Week is a five day campaign that runs during October at Sodexo sites around the world. It empowers consumers, clients and Sodexo employees to reduce waste by celebrating the benefits of wasting less food, water, energy, paper and raw materials. It supports our overall waste reduction efforts, using the site survey results to create customized messages for clients based on local actions and results. Why is Sodexo doing it? We know that the best way to encourage a new habit is to show people the benefits of the new behavior, making it easy, simple, rewarding and desirable. How does it work? On-site materials such as posters, videos and activities, we showcase the quality of life benefits they experience when they waste less.You have the Power to turn trash into treasure 2014, Sodexo 34. SUPPLY CHAIN INCLUSION PROGRAM Launched in 2013 All countries will develop strong and sustainable relationships with suppliers in at least one of the following categories: Small and Medium Enterprises (SMEs), including social and micro-enterprises; Suppliers from minority and other under-represented and/or protected groups, with an emphasis on women- owned businesses; Major Sodexo suppliers demonstrating a diverse workforce composition, actively embracing diversity and inclusion and promoting local supply chain inclusion. 34 35. SUPPLY CHAIN INCLUSION PROGRAM Sodexo set 2020 targets for supply chain inclusion based on progress to date, including: 26 countries have specif