Sodexo Ventures

Investment principles and process

September 2017
Supporting innovative
start-ups and bringing
value to Sodexo

€50M
Strategic Venture Capital Fund

▪ Opening links with an external and open

ecosystem to accelerate Sodexo’s transformation.
We believe start-ups are good partners for us to
enhance our quality of life services for our
consumers, clients and employees

▪ Creating value for clients and consumers by

combining the agility and creativity of start-ups with
the Group’s investment capacity, expertise and
international footprint

▪ Investing in a minority share and accompanying

innovative start-ups, that are non core business
 Each investment is bound
with a Partnership agreement
Sodexo Ventures key principles

Bring value to

Sodexo Start-ups
New innovative revenues / Scalability
EBITDA ▪ Leverage Sodexo’s
▪ Develop new and innovative international footprint
products & services ▪ Leverage Sodexo’s 425K
▪ Create new business models employees
▪ Develop new capabilities ▪ Leverage Sodexo’s 75M
▪ Improve Sodexo’s efficiency daily clients

Market Knowledge Finance

▪ (Market / techno watch)
Time
▪ Gain Time-To-Market / agility
to test innovative offers
Spread innovation into
Sodexo’s teams
▪ Leverage Sodexo’s
investment capacity
Expertise
▪ Leverage Sodexo’s
expertise

Brand attractiveness (indirect

impact)
▪ Improve brand awareness &
image
 Supporting agility and
development of start-up
while attracting co-investors

Support agility and development of the start-up

▪ Support agility: we invest up to 20% and ask for a Board
Member without voting rights in order to let the start-up as agile
as possible. He / she is considered as a business partner, to
advise and share his / her expertise, and connect with Sodexo’s
operational teams

▪ No exclusivity: we want the start-up to remain free to work with

all relevant clients – example: Wynd is currently working with
Elior

▪ Minimize risk of execution: we prefer to test through a pilot

first our partnership: investment decision follows the results of
the pilots

Attract co-investors to combine complementary skills

▪ Attract co-investors: to align interests between co-investors,

Sodexo Ventures will ensure re-investment capacity, propose
liquidity clauses and always refuse exclusivity

▪ Combine complementary expertise: Sodexo will bring its

market expertise and skills while other financial co-investors
will support the start-up growth (go to market, HR,
organization, …)
 Focus on investments in non-
core businesses aligned with
segments’ needs
First areas of interest*

1. Enlarge our offer 2. Improve processes/

▪ Food tech operational efficiency

▪ FM and smart buildings

▪ Health & wellness
▪ Mobility
▪ Data
▪ Other innovative services
related to the Quality of
Life of the people we serve

*Other innovative areas of investment are being

defined following segments’ needs collection
 Delegation received to
Investment Committee under
four financial conditions

Financial conditions for delegation

1 Maximum ticket of €1.5m, mainly Series A

2 Maximum pre-money Equity Value of €6.0m

Maximum shareholding of 20% of Target’s

3 fully diluted share capital

4 No consolidation on Sodexo P&L (limited

control, influence, …)

Sodexo Ventures will not limit the scope of opportunities

with these delegation criteria to remain as flexible as
possible
Governance: Investment
Committee

Investment decisions are made by six

Committee members

▪ M&A: David Newman

▪ Digital: Belen Moscoso Del Prado
▪ Strategy: Maria Outters
▪ BRS & PHS: Sébastien de Tramasure
▪ Service Operations: Jean-Marc Haut
▪ Innovation: Eric Texier

Monthly meeting with the following agenda

▪ Pipe / dealflow review
▪ Decide on single investment
▪ Portfolio performance review
▪ Decide on exit (when needed)
▪ Other topics (VivaTech, Sparklife contests, …)

NB: 5 approvals out of 6 votes needed for investment

decisions (+GIC validation if needed)
How to work with
Sodexo Ventures
 5-step approach with strong
involvement of local teams
Criteria / Local business
key actions involvement
1 N/A Medium
(Selected)
SOURCE to High
Pilot (Opportunistic)
(if possible)

▪ Alignment with Medium

2 ▪
segments’ needs
Compatibility with
SELECT Sodexo
▪ Ease of execution
TARGETS ▪ Scalability of the
Sodexo
Ventures partnership
Investment
Committee High
▪ Local team involvement
GO / NO GO 3 (Segment ExCom
sponsorship)
ENGAGE ▪ Partnership &
FURTHER Investment agreements
Sodexo assessment
Ventures ▪ Founder appreciation
Investment
Committee
GO (LOI) /
NO GO
4 ▪ Financial and partnership High
reportings to Sodexo
LAUNCH M&A Ventures (KPIs, …)
▪ Presentation of results to
PROCESS the Investment Committee
Sodexo (1x / year)
Ventures
Investment
Committee
GO / NO GO
5 ▪ Valuation High
▪ Financial Due Diligence
▪ Partnership agreement
PORTFOLIO ▪ Investment agreement
MONITORING ▪ Shareholders agreement
▪ Finance & Legal Teams
▪ Communication
 Opportunistic and selected
approaches

1 SOURCE

A. Selected approach
Segments’ needs Market foresights

Opportunities identified by Sodexo Opportunities identified by

Ventures in line with segments’ needs Sodexo Ventures in line with
market long-term transformation

Local teams role

Communicate segments’ needs to Communicate market foresight

Sodexo Ventures (key sectors, study to better anticipating market
services, geographies, …) long-term transformation

Sodexo Ventures role

Screening of potential partners for investment

B. Opportunistic approach
Opportunities identified by local segments and communicated to Sodexo Ventures

Local teams role

Communicate description of the opportunity to Sodexo Ventures

Sodexo Ventures role

Prioritize opportunities through specific criteria (partnership / business potential,

financials, involvement of local Sodexo teams, quality of management, …)
 Getting inspiration

1 SOURCE

▪ Use our start-up incubators partners websites

▪ Access to CRM eNovhub ▪ Open Innovation days

database: 150+ start ups @ request done by
pre selected (upload from Innovation team
different partnerships + BRS)

▪ Leverage presence on
Vivatech (15-17 June,
2017) with 5,000 start- Co-Venture
ups present, and Platform
Sodexo Booth
An idea? Send your
suggestions to:

1 SOURCE

▪ Sodexo-Ventures.Group@sodexo.com
▪ jean-sebastien.beaucamps@sodexo.com
 Prioritizing first selection of
potential targets

2 SELECT TARGETS

Launch of pilot with the start-up will help Sodexo

prioritize first selection of potential targets

Local teams Sodexo Ventures

assessment
OPPORTUNISTIC

Strong relationship with ▪ Scalability

APPROACH

the start-up
▪ First pilot already ▪ Ease of execution
launched (based on the results of
▪ Deployment plan being the pilot when possible)
defined
▪ Compatibility with
Sodexo (based on
Local Team SV meeting with the
founder(s) and feedbacks
Medium relationship with from local teams)
the start-up
APPROACH
SELECTED

▪ First discussions with the ▪ Alignment with

start-up segments’ priorities
▪ Identification of a pilot (validated with local
▪ Deployment plan not teams)
defined

Local Team SV

The selection of the start-ups for further analysis will

be validated by the Investment Committee of Sodexo
Ventures
 Assessing four different
criteria

3 ENGAGE FURTHER

Local team involvement

▪ Segment ExCom
sponsorship
▪ Presentation of the
opportunity from the
operational team (details in
the following pages)
Partnership Agreement
▪ Implementation plan
▪ Objectives / KPIs to
monitor the partnerships
▪ Other (details in the
following slides)

Assessment from
the Investment
Committee

Quality of the management
▪ Presentation of the start-
up by the founder (+ Mgmt
team if needed)
Financial agreement
▪ Shareholder agreement
review
▪ Valuation / Price

▪ Q&A session ▪ LOI validation

 The rationale for investment
3 ENGAGE FURTHER
Zoom on the presentation from Sodexo’s operational team to
the investment committee
1. Sodexo Project team: list of all
people involved on the deal
(Including notably Sodexo
Business representatives who will
work on the opportunity for
Operations, Finance, Tax, Legal,
IT and HR streams)
2. Company short presentation: i)
Date of launch, key achievements,
…, ii) Business Model, iii) Strategy
and iv) Bios of the top-
management
3. Market Overview including i) a
sizing and growth forecasts of the 6.
market, ii) a list of direct or indirect
competitors, and iii) barriers to
entry
4. Strategic Rationale
a) Alignment with segment
strategy
b) Partnership / commercial
agreement presentation:
roadmap, KPIs, key
achievements, … - more
details in the following slide
5. Financial rationale
a) Business plan of the Target
on a standalone basis (i.e.
with no input received from
Sodexo), with i) financing
needs and ii) cash position
evolution towards the BP
period vs. Business plan with
Sodexo
b) Business plan for Sodexo,
based on the business case
presented in the Partnership
agreement
c) Past / Current / Future Cash-
burn split by category
Evolution of the Target’s
shareholding structure (“Cap
table”) from the set-up of the
Company to date, including the
quantum and conditions of all the
past fundraising performed
7. Target’s Organization chart with
all the relevant legal entities in the
transaction scope, with the
purpose of each entity
8. Last Target’s accounts,
consolidated and audited to the
extent possible
9. End-Game for the Target and for
Sodexo
 Partnership agreement
3 ENGAGE FURTHER

List of clauses to be agreed with the target prior to LOI approval

1. Obligations of both parties

2. Duration: 3-5 years (recommended)

3. Implementation plan definition: key milestone, definition of KPIs to

monitor the deployment, definition of KPIs to measure the impact
(volume of businesses, revenues, EBITDA, …)  these KPIs will be
leveraged for the monitoring of the partnership opportunity

4. Ensure that there is no conflict of interests between the financial

interests and the commercial interests. In particular when
exclusivity rights are discussed (only when developing a joint-
asset):

a) This should be subject to competition law and only if priority

over competitors is relevant

b) It can otherwise be dealt within IP clauses (commercial or

technical joint developments)

5. Define governance structure to ensure proper deployment of

initiatives: committees, representatives, frequency, objectives, …

6. Data:

a) Secure obligations of target on protection and privacy

b) Ensure ownership and use of data

7. Other: termination clauses, liability and insurance, intellectual

property, communication
 M&A process starts after the
LOI approval (1/3)

4 LAUNCH M&A PROCESS

Zoom on Due Diligences

▪ Due Diligence information requests

› A list of information requests for all the relevant Due Diligence

stream shall be prepared and shared with the Target’s
management and advisors, in order for them to prepare a
dataroom

▪ External advisors fees in relation with Sodexo Ventures

investment and Partnership agreement with the Target will be
incurred at relevant Business or Segment entity

› Business entity will be the primary beneficiary of the

Partnership agreement entered into with the Target from which
the value creation will be derived

› It is a means to ensure Business representatives involvement

on the investment process from Day 1 to Closing

› Note that if several segments or geographies are concerned by

the investment and Partnership agreement, fees will be borne
by the largest beneficiary (segment or country)

› Some flexibility around the above rules can be proposed from

time to time if relevant
 M&A process starts after the
LOI approval (2/3)

4 LAUNCH M&A PROCESS

Zoom on Group Finance & Legal Teams Approvals

▪ Each new investment should be discussed together between

M&A, Tax, Legal and Accounting Methods, Consolidation in
order to address the following issues

› Influence Sodexo wants to have over the investee, rights and

obligations to be negotiated

› Accounting under IFRS

› Accounting under French or UK GAAP

› Tax optimization

› Determination of the Fund entity (France or UK) which will bear

the investment

▪ The draft of Letter of Intent should be shared before being

signed and sent to the Target, and a preliminary analysis shall
be conducted

▪ The drafts of shareholder agreement, potential Partnership

agreement and Business Plans should be shared when
available, before Signing, to confirm the preliminary analysis
 M&A process starts after the
LOI approval (3/3)

4 LAUNCH M&A PROCESS

Zoom on Communication

▪ For each new investment which is about to close, the M&A project
manager together with the operational team shall reach out to
Group Communications and Group Investors Relations to brief
them so they can decide whether Sodexo will communicate or not
on the deal, and if yes, prepare relevant announcement at Closing,
or shortly after

▪ Group Communications: Laura Schalk

▪ Group Investors Relations: Virginia Jeansen

▪ Should there be a communication on the deal, it is up to Group

Communications to

▪ Prepare the first draft of Press release

▪ Manage the required translations of the press release
▪ Obtain the approval of Sodexo top-management on the press
release
▪ Choose the release date and publish it

▪ However, it is up to the M&A project manager and the operational

leaders to ensure that

▪ The Target does not publish anything prior to Sodexo press

release
▪ The approval from the Target on Sodexo press release is obtained
▪ Group Communication has validated the potential Target press
release
 Communicating KPIs and
presenting the performance
5 PORTFOLIO MONITORING

Sodexo
Ventures
After each Board

Sponsor (Board member)

Start-Up

Deployment Business Strategic Financial

KPIs KPIs KPIs KPIs

▪ ▪ ▪ Anticipation of ▪ Financial impact of

RATIONALE

Ensure speed of Commercial

implementation / impact of the market trends the investment
focus on the partnership (disruption, (value and P&L)
partnership innovation, …)
EXAMPLE OF KPIS

▪ Calendar listing all ▪ Financial impact ▪ Market watch ▪ Revenues &

the key actions on Sodexo ▪ Technological EBITDA evolution
and responsibles (revenues & watch (stand-alone)
on Sodexo & the EBITDA) ▪ … ▪ …
start-up side ▪ …
▪ …

Frequency of reporting:
▪ Deployment & Financial KPIs after each Board
▪ Overall Status Update to the Investment Committee to be presented 1x / year to the IC
(Founders + Sponsor)

The Board Member will enable access of information as the business sponsor and
should be
▪ A member of Sodexo Ventures or
▪ A business executive (Excom sponsor from the segment for instance)

Definition and collection of KPIs should be defined in the:

▪ Partnership agreement for Deployment, Business and Strategic KPIs
▪ Shareholder agreement for the financial KPIs