Sodexo: reports strong organic revenue growth in Q1-2024

Issy-les-Moulineaux / FR. (so) France’s Sodexo Group announced strong organic revenue growth at +8.2 percent in the first quarter of fiscal 2024. «First quarter growth has remained strong in all geographies, due to pricing, new contract ramp-ups and continued volume growth, particularly in Corporate services, Sports + Leisure and Education,» said Chairwoman and CEO Sophie Bellon. «We have had a good start to the year in terms of activity and we are solidly on track with our strategic plan to be the world leader in sustainable food and valued experiences. The Pluxee spin-off plan is progressing well.»

Highlights of the period

  • Sodexo (excluding Pluxee) first quarter Fiscal 2024 consolidated revenues reached 6.3 billion euros, up +3.1 percent year-on-year including a negative currency impact of -4.8 percent, a net contribution from acquisitions and disposals of -0.3 percent and organic revenue growth of +8.2 percent. The negative currency impact, resulting from the appreciation of the euro against most currencies from beginning of calendar year 2023, is expected to subside progressively over the fiscal year, assuming current rates going forward.
  • Organic growth has been positively impacted by the contribution from a successful Rugby World Cup and negatively impacted by the accounting changes on certain project works in Energy + Resources in the Rest of the World, offsetting each other. The effect of pricing is progressively reducing, to around +4.5 percent in the quarter. New business ramp-ups, cross-selling and ongoing volume growth continue to trend at close to +4 percent.
    • Organic growth in the quarter was driven by Food services, up +10.0 percent organically, while FM services were up +4.7 percent.
    • Net new development momentum remained solid year to date.
    • All geographies had high single digit underlying organic growth.
  • In line with its ambition to be the world leader in sustainable food and valued experiences:
    • Sodexo and Harris Interactive revealed the results of the first international sustainable food barometer. Outcomes are fully supporting Sodexo’s ambition as 75 percent of people surveyed have a positive perception of sustainable food, and 79 percent believe that adopting more sustainable behaviors is an urgent matter.
    • Sodexo has organized the second edition of its Sustainable Chef Challenge. Our Chefs showcased their skills and passion to create healthy, delicious and low carbon meals (less than 0.9 kg CO2e). The winners were Chef Sharon McConnell (from Northern Ireland) with her Pistachio crusted celeriac steak and Vegan chocolate mousse with dates and nuts and Chef Ricardo Machado (from Brazil) with his Sautéed banana peel medallion with sweet potatoes and Banana and coconut mash.
    • Sodexo has earned the leadership position in the 2023 Workplace Pride Global Benchmark for the 4th year in a row recognizing Sodexo’s performance and commitment to high standards of LGBTQ+ inclusion.

Outlook

First quarter 2024 activity was in line with expectations and the strategic plan. As a result, the Sodexo (excluding Pluxee) Fiscal 2024 and 2025 guidance is maintained:

  • Organic revenue growth should be between +6 and +8 percent per annum;
  • Underlying operating profit margin should continue to grow by +30 to 40bps per annum.
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