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Sodexo reports growth in revenue

Sodexo’s latest financial results, Fiscal 2019, report consolidated revenues totalled €22 billion up +7.6% year-on-year.

Organic revenue growth for fiscal 2019 grew +3.6%, which is above the company’s revised guidance of “around +3%” in July 2019.

Underlying operating profit margin was in line with Sodexo’s comments in July and at the lower end of the original guidance range (5.5% to 5.7%, excluding currency impact) at 5.5%.

On-site Services organic revenue growth was +3.3% in Fiscal 2019, the highest rate of growth achieved in the last seven years following a return to growth in revenue in North America, of +1.8% for the full year, and sustained growth of +4.6% in all other regions.

Acquisitions, net of disposals, amounted to €301 million for the year, which included On-site food services, Novae and Alliance in Partnership, strengthening the Group’s presence in high end Corporate Services in Switzerland and public-sector Education in the United Kingdom. Sodexo also expanded its UK home care business with the acquisition of The Good Care Group.

Sean Haley, Chairman, Sodexo UK and Ireland, said: “Sodexo UK& Ireland has had a strong year, with growth across all our markets, winning high profile new business and retaining our valued customers, despite the ongoing challenges and uncertainties facing all businesses, but particularly the outsourcing market.

“We have continued to invest in the UK, with the acquisitions of Alliance in Partnership, the specialist education caterer, and The Good Care Group, a leading player in the live-in care market in the UK. Earlier this year, Sodexo also opened a new restaurant, Café GEC, at the iconic Northern & Shell building on Lower Thames Street, London which will be run by our leading workplace dining specialist, The Good Eating Company.

Sodexo has won a number of significant contracts this year including the soft FM contract for two regions of HM Revenue and Customs (HMRC); a new catering contract at Victoria College in Belfast; the exclusive catering contract at the Liberty Stadium, Swansea; a new integrated FM contract with Leonardo Helicopters and two new contracts in energy & resources with Total E&P UK Ltd and Doosan Babcock Ltd.

Hayley continued:“Sodexo, as a green rated strategic supplier with around half of its business in the public sector, continues to work closely with government to ensure social value is further embedded into government procurement processes consistently and fairly for all suppliers.  We are committed to achieving tangible and better outcomes for service users that improves their quality of life”.

For Fiscal 2020 the Group is expecting organic revenue growth of around 4%, which includes major sports events in Japan, with the Rugby World Cup in the first quarter and the 2020 Summer Olympics in the fourth quarter, and a stable underlying operating profit margin for the year.

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