Sodexo reports Q1 fiscal 2024 – strong organic revenue growth at +8.2%

Sodexo reports Q1 fiscal 2024 financial highlights.

Sophie Bellon, Sodexo chairwoman and CEO, said in the announcement: “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. 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, with the next step being the Capital Markets Day on January 10, ahead of the first quotation expected February 1, 2024."

Q1 Fiscal 2024 revenues

Sodexo (excluding Pluxee) first-quarter fiscal 2024 consolidated revenues reached 6.3 billion euros, up +3.1% year-on-year including a negative currency impact of -4.8%, a net contribution from acquisitions and disposals of -0.3% and organic revenue growth of +8.2%. 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% in the quarter. New business ramp-ups, cross-selling and ongoing volume growth continue to trend at close to +4%.

Organic growth in the quarter was driven by food services, up +10.0% organically, while FM services were up +4.7%.

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% of people surveyed have a positive perception of sustainable food, and 79% believe that adopting more sustainable behaviors is an urgent matter.

Sodexo has organized the second edition of its Sustainable Chef Challenge. 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% per annum.

Underlying operating profit margin should continue to grow by +30-40 bps per annum, at constant rates.