Consolidated revenues in the first quarter totalled €6.1 billion, up +7.1% year-on-year, with organic revenue growth at 3.8%, which Sodexo says is “in line” with the trend in the previous quarter.
On-site Services organic revenue growth of +3.8% was also in line with the previous quarter. The success of Sodexo’s Rugby World Cup contract in Japan contributed to growth, and “more than compensated” for the Healthcare contract exit and contract losses in North America which resulted in activities in this region being down -0.9%. Excluding the Rugby World Cup, organic growth would have been +2.3%.
Looking ahead Sodexo expects growth in North America to remain challenging. However, the contribution of the Rugby World Cup in the first quarter and the 2020 Summer Olympics in the fourth quarter, combined with strong growth in the developing economies and steady progress in Europe should according to the Group “more than compensate”.
As a result, for Fiscal 2020 Sodexo is expecting organic revenue of around 4%, including the major sporting events and a stable underlying profit margin for the year.
Sodexo CEO Denis Machuel said: “Revenue growth in the first quarter remains solid with a very successful Rugby World Cup which offsets the impact of contract losses and a decision to exit a Healthcare contract in North America.
“With renewed management teams in North America, strong outsourcing trends in developing economies, continuing growth in Europe and rigorous implementation of our action plans to enhance productivity and reinvest in sales, marketing, digital capabilities and innovation, we are confident that we are on the right track.”
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