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Sodexo reports strong business growth in Fiscal 2023

Sodexo’s Full Year Group Results for Fiscal 2023 report a “strong performance” which was above guidance and progressively updated during the year.

  • Organic revenue growth at +11.6%, compared to revised guidance of close to +11%;
  • Underlying operating profit margin at 5.6%, compared to revised guidance at 5.5%, at constant rates;
  • Underlying Group net profit reached 908 million euros; and
  • Net debt fell to 1.1 billion euros as a result of positive cashflow.

Sodexo Chairwoman and CEO Sophie Bellon said of the results: “In Fiscal 2023, we have made good progress in the execution of our strategy which confirms the momentum of the last two years. We are on track to recover agility and profitable growth. Everyday, the transfer of operational accountability in the regions enables faster decision-making and increased mutualization.

“The North American recovery is coming through, with solid growth in volumes, good commercial momentum and enhanced operational execution. 

“The transformation of our food offers is progressing in all geographies along with our approach to grow more selectively our FM business, which is now visible in contract signings.

“Our perseverance on client retention is consistently paying off with another record year at 95.2%, and I am confident that in time, we will further raise the bar to 96%.”

Sodexo UK & Ireland

Commenting on Sodexo’s performance closer to home, Sean Haley, CEO Sodexo UK and Ireland said:

“Despite the challenging economic and social backdrop, we saw strong business growth during FY23, with more valued clients in both the public and private sectors choosing to work with Sodexo. This growth has been achieved through new and existing clients recognising the quality of our services delivered onsite every day by our dedicated 34,000 colleagues, and recognising the difference we make through our authentic commitment to delivering positive social impact. 

“This year, we have retained our longest-standing clients, across all markets, as well as winning new business in a highly competitive environment.

“One of our largest retentions was our Project Allenby/Connaught contract, which we have held since 2006. This was retained for a further 17 years at a value of £730m over the initial 10-year period, meaning our 1,450-strong team will continue to be responsible for feeding more than a third of the British Army – a feat of which we are extremely proud.

“We also extended many other valued contracts across all our markets, including Ascot Racecourse, Manchester University NHS Foundation, and Sullom Voe energy terminal in Shetland. 

“We are proud to have expanded our public sector portfolio, taking over management of two more prisons on behalf of the Ministry of Justice and complex outsourcing contracts supporting HM Government. 

“In the private sector we have won significant contracts across food services and facilities management, including a London-based global banking firm; the Dublin HQ of a global tech giant; TriRx Pharmaceutical Services and Preston North End Football Club to name a few.   

“Every one of these contracts – both retained and new – has, in part, been won in recognition of the quantified and tangible social value we deliver as a company and with our clients. And while that social value – that sense of purpose – has been in our DNA since we were founded more than 50 years ago, this year we have increasingly evidenced throughout the business the positive impact we have on our people, planet, places and partners as shared in our Social Impact Report which we released this summer.

“This year, one of my proudest moments was celebrating the graduation of some of our 900 apprentices working across the UK and Ireland. Apprenticeships are crucial for driving social mobility – it has never been more important than now to create opportunities for people to belong, act and thrive in this dynamic industry.

“Our net zero 2040 mission continues at pace. In the UK and Ireland, we reported a 33% cut in scopes 1,2 and 3 greenhouse gas (GHG) emissions compared to 2017 – our baseline year – and prevented food waste equivalent to a million meals.

“This year, our Stop Hunger Foundation raised over £580,000 which will go towards projects fighting food insecurity and food waste. The Foundation also passed an incredible milestone with Fareshare, with financial support donations passing the £1.5m mark since 2005.

“These are just a few examples of where my colleagues have delivered life-changing and life-enhancing social impact. I see it across the Sodexo business, and we feel the momentum from our clients who want to see excellent services delivered with a positive social impact. 

“We have a strong platform for the year ahead and I thank wholeheartedly all my colleagues who work the length and breadth of the country in a wide variety of roles and environments who have delivered these results. Sodexo is, and has always been, a people-led business – without them, there is no business. With them, we close out a year to be proud of.”

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