Sodexo Q1 Fiscal 2024: strong organic revenue growth at +8.2%
Issy-les-Moulineaux, January 5, 2024Sodexo (NYSE
Euronext Paris FR 0000121220-OTC: SDXAY)
Sodexo Q1 Fiscal 2024: strong organic revenue growth at
+8.2%
- High single
digit Underlying growth in all zones
- Full year
Fiscal 2024 guidance maintained
Q1 FISCAL 2024 REVENUES
REVENUES(in million euros) |
Q1 FY24 |
Q1 FY23 |
|
ORGANICGROWTH |
EXTERNALGROWTH |
CURRENCYEFFECT |
TOTALGROWTH |
North America |
3,030 |
2,992 |
|
+8.7% |
+0.1% |
-7.6% |
+1.3% |
Europe |
2,196 |
2,047 |
|
+9.2% |
-0.8% |
-1.2% |
+7.3% |
Rest of the World |
1,061 |
1,057 |
|
+4.7% |
-0.2% |
-4.2% |
+0.3% |
SODEXO |
6,287 |
6,097 |
|
+8.2% |
-0.3% |
-4.8% |
+3.1% |
Note 1: These numbers exclude any contribution from Pluxee which
as a discontinued activity is consolidated only at the net profit
level.
Note 2: The impact from Q4 2023 of the accounting change related
to revenue recognition in a large Energy & Resources contract
in Rest of the World is offset by the contribution of the Rugby
World Cup in Europe. Underlying organic growth was +8.1% in Rest of
the World and +7.6% in Europe.
Commenting on the first quarter activity, Sophie Bellon,
Sodexo Chairwoman and CEO, said:
"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."
Highlights of the period
- 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. Our 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 +30-40bps per annum, at constant
rates.
*********************************
Conference call
Sodexo will hold a conference call (in English) today at
9:00 a.m. (Paris time), 8:00 a.m. (London time) to comment on its
Q1 Fiscal 2024 revenues.
Those who wish to connect:
- From the UK: +44 121 281 8004,
or
- From France: +33 1 70 91 87 04,
or
- From the US: +1 718 705 8796,
Followed by the access code 07 26 13.
The live audio webcast will be available on www.sodexo.com
The press release, presentation and webcast will be available on
the Group website www.sodexo.com in both the “Newsroom” section and
the “Investors – Financial Results” section.
Financial calendar
Fiscal 2024 First half Results |
April 19, 2024 |
Fiscal 2024 Third quarter Revenues |
July 2, 2024 |
Fiscal 2024 Full year Results |
October 24, 2024 |
Fiscal 2024 Annual Shareholders' Meeting |
December 17, 2024 |
These dates are indicative and may be subject to change without
notice.Regular updates are available in the calendar on our website
www.sodexo.com
About Sodexo
Founded in Marseille in 1966 by Pierre Bellon, Sodexo is the
global leader in sustainable food and valued experiences at every
moment in life: learn, work, heal and play. The Group stands out
for its independence, its founding family shareholding and its
responsible business model. Its portfolio of activities includes
Sodexo Food and Facilities Management Services and Pluxee Employee
Benefit Solutions, activity for which the Group announced a
spin-off with a listing expected on February 1, 2024.Sodexo meets
all the challenges of everyday life with a dual goal: to improve
the quality of life of our employees and those we serve, and
contribute to the economic, social and environmental progress in
the communities where we operate. For Sodexo, growth and social
commitment go hand in hand. Our purpose is to create a better
everyday for everyone to build a better life for all.Sodexo is
included in the CAC Next 20, CAC 40 ESG, CAC SBT 1.5, FTSE 4 Good
and DJSI indices.
Key figures
- 22.6 billion euros Fiscal 2023 consolidated revenues
|
|
- 430,000 employees as at August 31, 2023
|
- 80 million consumers served daily
|
- #1 France-based private employer worldwide
|
- 15.1 billion euros in market capitalization (as at January 4,
2024)
|
|
|
|
|
|
|
Contacts |
|
|
|
|
Analysts
and Investors |
|
Media |
|
|
Virginia Jeanson
+33 1 57 75 80 56 virginia.jeanson@sodexo.com |
|
Mathieu
Scaravetti +33 6 28 62 21 91 mathieu.scaravetti@sodexo.com |
|
|
|
|
|
|
Q1 Fiscal 2024 Activity Report
Revenues: Strong Organic Revenue growth
REVENUES(in million euros) |
Q1 FY24 |
Q1 FY23 |
|
ORGANICGROWTH |
EXTERNALGROWTH |
CURRENCYEFFECT |
TOTALGROWTH |
North America |
3,030 |
2,992 |
|
+8.7% |
+0.1% |
-7.6% |
+1.3% |
Europe |
2,196 |
2,047 |
|
+9.2% |
-0.8% |
-1.2% |
+7.3% |
Rest of the World |
1,061 |
1,057 |
|
+4.7% |
-0.2% |
-4.2% |
+0.3% |
SODEXO |
6,287 |
6,097 |
|
+8.2% |
-0.3% |
-4.8% |
+3.1% |
First quarter Fiscal 2024 Sodexo revenues reached 6.3
billion euros, up +3.1% year-on-year including a negative
currency impact of -4.8% resulting from the appreciation of the
euro against most currencies, and a net contribution from
acquisitions and disposals of -0.3%. Consequently, first quarter
Fiscal 2024 organic growth was +8.2%. Adjusted for the positive
effect of the Rugby World Cup in Europe and the negative impact of
an accounting change in Rest of the World for the corresponding
amount, all three zones demonstrated high single-digit Underlying
organic growth. This quarter benefited from both price adjustments
for around +4.5% and volume growth coming from new business,
continued increase in attendance and Rugby World Cup related
sales.
Organic growth in the quarter was driven by Food
services, up +10.0% organically, whereas
FM services were up +4.7%.
The commercial momentum remains solid in the first quarter.
North America
REVENUES BY SEGMENT(in million euros) |
Q1 FY24 |
Q1 FY23 |
RESTATED ORGANIC GROWTH 1 |
Business & Administrations |
1,081 |
1,009 |
+12.1% |
Healthcare & Seniors |
849 |
877 |
+6.3% |
Education |
1,100 |
1,106 |
+7.5% |
NORTH AMERICA TOTAL |
3,030 |
2,992 |
+8.7% |
1 As part of the streamlining of the organization during Fiscal
2023, some contracts or operations have been reallocated between
segments.
First quarter Fiscal 2024 North America
revenues totaled 3.0 billion euros, up +8.7%
organically. This strong growth was driven by the contribution of
new business and some volume growth as well as a pricing impact of
about +4%.
Restated organic growth in Business &
Administrations reached +12.1%, driven by new business,
volume growth from robust activity in convention centers, increased
passenger count in Airline Lounges, continued return to the office,
integrated FM cross-sales, and the impact of price adjustments
particularly in Sodexo Live! and Government segments.
Healthcare & Seniors restated organic
growth was +6.3%, with good performance in Healthcare through a
combination of price increases, volume, retail growth and favorable
net new contribution. This growth was somewhat offset by a negative
contribution in the Seniors segment due to the impact of sites lost
at the end of the prior fiscal year.
In Education, restated organic revenue growth
was +7.5%, benefiting from price increases as well as growth in
meal count, retail and catering events.
Europe
REVENUES BY SEGMENT(in million euros) |
Q1 FY24 |
Q1 FY23 |
RESTATED ORGANIC GROWTH1 |
Business & Administrations |
1,377 |
1,337 |
+10.1% |
Healthcare & Seniors |
490 |
504 |
+8.9% |
Education |
329 |
206 |
+6.2% |
EUROPE TOTAL |
2,196 |
2,047 |
+9.2% |
1 As part of the streamlining of the organization during Fiscal
2023, some contracts or operations have been reallocated between
segments.
In Europe, first quarter
Fiscal 2024 revenues amounted to 2.2 billion
euros, up +9.2% organically, or +7.6% excluding the Rugby
World Cup, from increased food volume in Business &
Administrations, along with a pricing impact of more than +5%.
In Business & Administrations, restated
organic growth was +10.1%, or +7.5% excluding the Rugby World Cup.
This was supported by Corporate services benefiting from both price
increases and higher attendance, coupled with new business in
Defense in the United Kingdom. Sodexo Live! demonstrated overall
good growth, with increased attendance and pricing, despite a drop
in tourism-related sales due to less international tourists in
Paris, compared to a record level in the previous year.
Healthcare & Seniors restated organic
growth stood at +8.9%, driven by new business in Spain and
inflation pass-through in the United Kingdom, as well as favorable
volumes and price revisions in Seniors in France.
Education restated organic
revenue growth was +6.2%, reflecting the positive impact of price
revisions, somewhat offset by a negative net new business
balance.
Rest of the World
REVENUES BY SEGMENT(in million euros) |
Q1 FY24 |
Q1 FY23 |
RESTATED ORGANIC GROWTH1 |
Business & Administrations |
927 |
941 |
+5.0% |
Healthcare & Seniors |
91 |
87 |
+2.6% |
Education |
43 |
29 |
+3.3% |
REST OF THE WORLD TOTAL |
1,061 |
1,057 |
+4.7% |
1 As part of the streamlining of the organization during Fiscal
2023, some contracts or operations have been reallocated between
segments.
Rest of the World first quarter Fiscal 2024
revenues amounted to 1.1 billion euros, up +4.7%
organically, impacted by the change in revenue recognition in
Energy & Resources. Excluding this impact, the organic growth
would have been +8.1%, with a pricing impact of close to +5%.
Business & Administrations restated organic
growth was +5.0%, or +8.9% excluding the accounting change. This
quarter was marked by a solid growth in India driven by both new
and existing business, and in Australia with a pricing catch-up and
new openings in mining. Latin America benefited from pricing. This
performance was slightly offset by weak activity in China due to
the economic slowdown, and in the Middle-East due to contracts lost
last year.
Healthcare & Seniors restated organic
growth was +2.6% organically, with strong growth in India and Latin
America, somewhat offset by slow growth in China and the impact of
the exit of low-performing contracts in Brazil during the second
quarter last year.
Education restated organic growth was +3.3%,
affected by weakness in China and the Middle East, more than
compensated by double-digit growth in Brazil and India, boosted by
both new business and ramp ups in existing sites.
CURRENCY EFFECTS
Exchange rate fluctuations do not generate operational risks
because each subsidiary bills its revenues and incurs its expenses
in the same currency.
1€= |
AVERAGE RATEQ1 FY 2024 |
AVERAGE RATE Q1 FY 2023 |
AVERAGE RATEQ1 FY 2024VS.
Q1 FY 2023 |
CLOSING RATEAT 11/30/2023 |
CLOSING RATE AT 08/31/2023 |
CLOSING RATE11/30/2023VS.
08/31/2023 |
U.S. dollar |
1.070 |
0.996 |
-6.9% |
1.093 |
1.087 |
-0.6% |
Pound sterling |
0.866 |
0.869 |
+0.3% |
0.864 |
0.857 |
-0.8% |
Brazilian real |
5.345 |
5.304 |
-0.8% |
5.398 |
5.308 |
-1.7% |
The negative currency impact for First quarter Fiscal 2024 of
-4.8% results from the appreciation of the Euro notably compared to
the US Dollar, the Australian Dollar, the Chinese Renminbi, the
Indian Rupee and the Swedish Krona.
The currency effect is determined by applying the previous
year’s average exchange rates to the current year figures.
FINANCIAL POSITION
Apart from the seasonal changes in working capital, there were
no material changes in the Group's financial position as of
November 30, 2023, relative to that presented in the Fiscal 2023
Universal Registration Document filed with the AMF on November 3,
2023.
PRINCIPAL RISKS AND UNCERTAINTIES
There were no significant changes to the principal risks and
uncertainties identified by the Group in the Risk Factors section
of the Fiscal 2023 Universal Registration Document filed with the
AMF on November 3, 2023.
ALTERNATIVE PERFORMANCE MEASURE DEFINITIONS
Growth excluding currency effect
The currency effect is determined by applying the previous
year’s average exchange rates to the current year figures except in
hyper-inflationary economies where all figures are converted at the
latest closing rate for both periods when the impact is
significant.
Organic growth
Organic growth corresponds to the increase in revenue for a
given period (the “current period”) compared to the revenue
reported for the same period of the prior fiscal year, calculated
using the exchange rate for the prior fiscal year; and excluding
the impact of business acquisitions (or gain of control) and
divestments, as follows:
- for businesses acquired (or gain of
control) during the current period, revenue generated since the
acquisition date is excluded from the organic growth
calculation;
- for businesses acquired (or gain of
control) during the prior fiscal year, revenue generated during the
current period up until the first anniversary date of the
acquisition is excluded;
- for businesses divested (or loss of
control) during the prior fiscal year, revenue generated in the
comparative period of the prior fiscal year until the divestment
date is excluded;
- for businesses divested (or loss of
control) during the current fiscal year, revenue generated in the
period commencing 12 months before the divestment date up to
the end of the comparative period of the prior fiscal year is
excluded.
Underlying operating profit margin
The Underlying operating profit margin corresponds to Underlying
operating profit divided by revenues.
Underlying operating profit margin at constant
rates
The Underlying operating profit margin at constant rates
corresponds to Underlying operating profit divided by revenues,
calculated by converting 2024 figures at Fiscal 2023 rates,
except for countries with hyperinflationary economies.
New segment reporting following evolution of the
organization
As part of the streamlining of the organization, from Fiscal
2024, some contracts or operations have been reallocated between
segments, with main impacts in Europe from Healthcare & Seniors
to Education.
Restated revenue breakdown for Fiscal 2023:
REVENUES(in million euros) |
Fiscal 2023 |
Q1 2023 |
Q2 2023 |
Q3 2023 |
Q4 2023 |
Published |
Restated |
Published |
Retraité |
Published |
Retraité |
Published |
Retraité |
Published |
Retraité |
North America |
10,479 |
10,479 |
2,992 |
2,992 |
2,506 |
2,506 |
2,658 |
2,658 |
2,322 |
2,322 |
Business & Administrations |
3,865 |
3,907 |
1,009 |
1,026 |
874 |
890 |
959 |
975 |
1,023 |
1,016 |
Healthcare & Seniors |
3,440 |
3,399 |
877 |
866 |
844 |
831 |
856 |
844 |
863 |
858 |
Education |
3,173 |
3,173 |
1,106 |
1,100 |
788 |
786 |
844 |
839 |
436 |
448 |
Europe |
8,071 |
8,071 |
2,047 |
2,047 |
1,980 |
1,980 |
2,042 |
2,042 |
2,002 |
2,002 |
Business & Administrations |
5,337 |
5,063 |
1,337 |
1,266 |
1,296 |
1,228 |
1,324 |
1,253 |
1,380 |
1,316 |
Healthcare & Seniors |
2,026 |
1,950 |
504 |
470 |
505 |
481 |
531 |
498 |
487 |
500 |
Education |
708 |
1,059 |
206 |
311 |
179 |
271 |
187 |
291 |
136 |
185 |
Rest of the World |
4,087 |
4,087 |
1,057 |
1,057 |
998 |
998 |
1,055 |
1,055 |
978 |
978 |
Business & Administrations |
3,659 |
3,569 |
941 |
917 |
898 |
876 |
946 |
922 |
874 |
854 |
Healthcare & Seniors |
337 |
376 |
87 |
95 |
81 |
92 |
83 |
93 |
87 |
96 |
Education |
91 |
142 |
29 |
45 |
19 |
30 |
26 |
39 |
17 |
28 |
Sodexo |
22,637 |
22,637 |
6,097 |
6,097 |
5,484 |
5,484 |
5,755 |
5,755 |
5,301 |
5,301 |
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