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Sodexo reports encouraging growth in first-half Fiscal 2019

Sodexo has published its results for the first half of Fiscal 2019, reporting a slightly better than expected growth in organic revenue at just over three per cent, with growth accelerating in all segments, and in Benefits & Rewards Services.

Onsite Services organic revenue growth of +2.8% reflects growth in North America, which turned positive in the first quarter at +0.2%, and accelerated in the second quarter to +2.4%. Europe was solid at +3% and the region Africa, Asia, Australia, Latin America, Middle East continues to grow at +6.9%, despite the ever higher comparable base.

Benefits & Rewards Services organic revenue growth is +10.1%. Organic growth in Europe remains sustained at +8.2% and is strong in Latin America at +12.5%, as the economic environment improves steadily in Brazil.

Client retention, development and same site sales growth KPIs were also said to be improving, however the margin is down slightly in Onsite Services, as expected, and up slightly in Benefits & Rewards.

Looking ahead, Sodexo expects to see continued growth in developing economies, although the comparable base is high, some contracts are being exited and improvement in North America remains challenging. Therefore the Group has reported it maintains its objective of organic revenue growth of between 2 and 3%.

Sean Haley, Regional Chairman for Sodexo UK and Ireland, said: “Over the last six months, the focus on the outsourcing market and the value that private companies deliver has continued. Although the market remains very competitive and improving our operating performance is challenging, we have continued to win and retain new business across our sectors.  As a key strategic supplier to Government, we are working together to improve the procurement process and to ensure that social value is embedded into all contracts. This reflects the way we operate and supports our strong belief that companies that provide public services should contribute to society as part of the way they do business.

“Recent contract wins have included the Scottish Fire and Rescue Service, The King’s School in Chester and the Schoen Clinic in our private healthcare business. Existing contracts we have retained or extended include Wellington College, the Ardagh Group, Leonardo Helicopters and Birmingham Children’s Hospital.

“Sodexo has continued to invest in the UK which is a major market for the company. We have strengthened our education business with the acquisition of Alliance in Partnership, a specialist education caterer with a client base of over 400 schools and this week we announced the acquisition of The Good Care Group, a leading live-in care provider, to expand our presence in the UK home care market.

“Looking ahead, the market will remain challenging but we will continue to manage our business prudently and operate ethically. We are confident in our capacity to continue to grow.”

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