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Growth in the Motivation Solutions activity depends
on Sodexo’s ability to achieve geographical expansion
and develop new services, and on a trusted brand and
established affiliate networks.
5.1.3 Competition risk
At the international level, Sodexo has relatively
few competitors. However, in every country where
it operates, Sodexo faces significant competition
from international, national, and sometimes local
operators.
Some existing or potential clients may opt to selfoperate
their On-site Service Solutions rather than
outsource them.
5.1.4 dependency risk
Although business depends on Sodexo’s ability
to renew existing contracts and win new ones on
favorable economic terms, no single client represents
more than 2% of total Group revenues.
In addition, no industrial supplier represents more
than 3% of the total volume of the Group’s purchases.
However, the Group’s ability to organize its supply
systems, including purchasing and logistics,
significantly affects its performance.
Sodexo’s activities are not dependent on any patent
or licensed brand name of which Sodexo is not the
legal owner.
5.1.5 Food safety risk
Every day, Sodexo serves a vast number of meals
worldwide, and it is committed to the safety of the
food and services provided. In order to protect against
eventual shortcomings in this area, Sodexo has
implemented control procedures designed to ensure
strict compliance with applicable regulations. Staff
training and awareness policies are rolled out in all
countries in which the Group operates.
However, if Sodexo were to incur significant liability
at one or more of its sites, this would impact its
activities, operating margins and reputation.
Consolidated information 06
Supplemental information
5.1.6 Risks related to food cost inflation
and access to food commodities
Sodexo could be exposed to fluctuations in food prices
and difficulties in the supply of certain products. The
price of food and its availability in the marketplace
may vary in different regions of the world.
Sodexo’s contracts include certain clauses allowing
for increases in prices or menu changes, but given the
delays in implementing such measures, a temporary
reduction in margins cannot be ruled out. Although
most contracts include a minimum increase in the
pricing of products and services provided by the
Group, Sodexo could be affected during inflationary
periods if the contracted increase rate is lower than
the actual inflation rate.
5.1.7 Facilities Management risk
Although Facilities Management services have long
been a part of the business, Sodexo’s strategy is to
accelerate the development of Facilities Management
services, resulting in a larger contribution to revenue.
These services require skilled personnel, particularly
in the areas of building maintenance, electrical
engineering, plumbing, heating and cooling systems.
Therefore, the Group faces certain operational risks
and has a need for qualified human resources. The
Group’s capacity to grow in this highly specialized
environment depends on its knowledge of these
markets and its ability to find, attract, recruit and
train suitable employees.
5.2 Employment risk
Service quality is largely dependent on the ability to
attract, develop, motivate and retain the best talent,
and to provide a sufficient level of training in order
to raise standards continuously. For these purposes,
Sodexo has developed training policies at every
level of the organization, with a particular focus on
prevention and safety.
Sodexo Registration Document Fiscal 2011
167
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