Sodexo: strong financial delivery in Fiscal 2024
- Organic revenue growth +7.9%
- Underlying operating profit +16% at constant currencies, margin up +40 bps at 4.7%
- Strong free cashflow resulting in a net debt/EBITDA ratio of 1.7x
- A proposed ordinary dividend of 2.65 euros, up 17.8%, in line with the Group dividend policy of 50% of Underlying net income
- Fiscal 2025 guidance:
- Organic growth expected between +5.5% and +6.5% (underlying trend1 between +6% and +7%)
- Underlying operating profit margin improvement expected between +30 to +40 bps, at constant currencies
At the Board of Directors meeting held on October 23, 2024, chaired by Sophie Bellon, the Board closed the Sodexo Consolidated accounts for Fiscal 2024 ended August 31, 2024.
Fiscal 2024 key figures and highlights
“2024 has been a year of structural transformation with two decisive steps to further focus the Group : the spin-off of Pluxee and the unwinding of the cross-shareholding with Bellon SA, returning the proceeds to shareholders. With our simplified structure, reorganized by geography, as a pure-player in Food and FM services, we are mobilized on enhancing our operational execution to drive profitable and sustainable growth.
We delivered a strong set of numbers, at the top-end of our guidance, achieving organic growth of +7.9% and a 40 bps improvement in margins. This was driven by effective inflation management, positive net new business, a standout year for Sodexo Live! and strong operating leverage from productivity gains, supply chain momentum and cost reduction. Finally, we reduced our Net debt to EBITDA ratio to 1.7 times, firmly back within the target range.
We achieved a record year for new signings, exceeding 1.9 billion euros including cross-selling, and at above-average margins. While retention was impacted by the loss of a large global contract, our disciplined approach and structural improvements have laid strong foundations. We are determined to recover our trajectory at over 95% already in Fiscal 2025.
Looking forward, I am confident that our progress on deploying our culinary food expertise through our food brands and our new production and distribution models, combined with strong digital features, will help us make a difference for clients and consumers. In the meantime, we are reaping the fruits of our efforts to optimize our supply management, and we are continuing to seek out efficiencies.
I want to thank our teams for their hard work and dedication in driving the Group's transformation."
Financial highlights
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Commercial momentum
- Net new business signed during the year was positive at 1.6%, lower than the previous year at 2.2%, but still well above pre-Covid levels and at better terms and margins than the previous year.
- New development was 7.4%, with a record year in signings, exceeding 1.9 billion euros including cross-selling, compared to 1.7 billion euros last year.
- Client retention was 94.2%, down from the previous year, affected by the loss of one large global FM contract for 60 bps, as well as two in Energy & Resources in Latin America, due to a very competitive environment, for 30 bps.
Leading the way in sustainability
In Fiscal 2024, Sodexo’s solid financial performance was accompanied by continued progress on its sustainability commitments:
- Further improvement in the performance on safety of our People. At the end of Fiscal 2024, Sodexo achieved 0.47 Lost Time Injury Rate (LTIR), representing a -14.5% reduction compared to Fiscal 2023. This is a second consecutive year with double-digit LTIR reduction.
- 81.5% workforce retention confirming a positive trend for the third consecutive year.
Retention rate for total workforce and for site managers increased significantly compared to previous years. These results are correlated with the improvement in training indicators as well as with the continued deployment of Vita by Sodexo. - Increased share in renewable electricity in our direct operations. Further progress has been achieved in the share of the Group’s direct electricity consumption that is renewable at 73%, well above the 60% target for the year and therefore facilitating the achievement of our target of 100% by 2025.
- Continued progress in GHG emissions reduction. The year-on-year Scope 1, 2 and 3 reduction in Greenhouse Gas (GHG) emissions was -2.5% in Fiscal 2024 while the absolute reduction compared to 2017 was at -16.4% and the reduction in intensity was at -29.6%. This achievement was possible thanks to Sodexo's ability to mobilize its entire ecosystem around four decarbonization levers: sustainable supply chain, low-carbon meals, responsible use of energy and the fight against food waste.