Sodexo Q1 Fiscal 2025 Revenues: a soft start to the year, as expected

Jan. 07, 2025
PR - Q1 Fiscal 2025 Revenues

Organic revenue growth of +4.6%, with Food services at +5.7%
Underlying Organic revenue growth of +4.9%¹
Fiscal 2025 guidance maintained

Q1 Fiscal 2025 Revenues

" As we reflect on the first quarter, we have delivered organic growth of +4.6%, marking a soft start to the year as expected. Solid performance in Food services offset softer activity in FM services, where we experienced lower volumes in project works.

Importantly, we are encouraged by the strong commercial momentum at the start of the year, marked by major contract wins and renewals.

Aligned with our expectations of modest growth in the first half of the year and an acceleration in the second half, driven by the timing of net new business contributions, we are committed to delivering on our guidance for the year.

Together with our talented teams, we are confident in our ability to continue to drive sustainable growth while delivering positive impact for all our stakeholders, in line with our ambition to be the world leader in sustainable food and valued experiences."

Sophie BellonSodexo Chairwoman and CEO

Highlights of the period

First quarter Fiscal 2025 consolidated revenues reached 6.4 billion euros, up +1.9% year-on-year including a negative currency impact of -2.0% and a net contribution from acquisitions and disposals of -0.8%. Organic revenue growth was +4.6%.
Organic growth was impacted by a higher base due to the Rugby World Cup last year, partially offset by the Paralympics this year. Excluding these events, underlying organic growth in the first quarter was +4.9%.
A portion of the organic growth was fueled by pricing which is currently trending around 3% for the quarter. The remaining part reflects net new business contribution and some volume growth.
Food services organic growth was solid at +5.7%, while FM services grew at +2.4%, or +3.5% when excluding last year's Rugby World Cup ticketing activity. FM organic growth was impacted, particularly in Europe, by reduced activity at certain existing sites and lower volumes in project works.
By geography:
- North America achieved organic growth of +5.9%, driven by a strong increase in Sodexo Live! fueled by new business, strong activity in airline lounges, convention centers and stadiums, and in Corporate services supported by higher attendance and new site openings. Education was, however, impacted by lower volumes in Universities and negative net new contribution in Schools.
- Europe was up +2.0% organically, or +2.7% excluding impacts from the two sporting events mentioned above, slowing from previous quarters notably due to lower activity in Continental Europe which was impacted by last year's contract losses and decline in project works. Healthcare & Seniors segments demonstrated positive momentum, benefiting from net new contribution and price adjustments.
- Rest of the World was up +6.4% organically. This sustained strong performance was driven by robust growth in India, Brazil and Australia. While China is gradually recovering, Chile and Peru are affected by contract losses incurred last year.
Sodexo continues to advance its ambition to lead in sustainable food and valued experiences:
- The second edition of the international Sustainable Food Barometer, in partnership with Toluna Harris Interactive, confirms growing consumer interest in sustainable eating habits and highlights the Food Service sector's increasing role in driving this transition.
- The third edition of the Sustainable Chef Challenge, Cook For Change, saw 330 chefs competing to create delicious, sustainable menus. During the ceremony held in Paris in November 2024, Adam Collison (UK & Ireland), Sandrine Leriche (France) and Michał Fabiszewski (Poland) were rewarded for their creativity and culinary excellence.
- Partnering with Eaternity, Sodexo is assessing the impact of its recipes on the planet by calculating carbon emissions based on the products used, with implementation already
  underway in the U.S. and UK & Ireland.
On January 1, 2025, Sodexo completed the acquisition of CRH Catering, a leading player in the convenience sector in the United States. This acquisition, announced in November 2024,
strengthens the InReach offering with multichannel services and footprint on the U.S. East Coast.
Evolutions in the Sodexo Leadership Team:
- After 26 years within the company, Anna Notarianni, Group Chief Impact Officer, has decided to leave the company. Her responsibilities have been integrated into the scope of Marc Rolland, Group General Secretary, whose role now includes sustainability, internal audit, legal, ethics & compliance, and global business services. Additionally, Jeanne Houssin, Group Chief Communications & Public Affairs Officer, has joined the Sodexo Leadership Team.
- Alexandra Serizay, Chief Strategy and Services Innovation Officer, has left the company. Dominique Guilhem has been appointed Group Chief Strategy Officer, overseeing the group's strategic planning process to ensure a strong alignment and consistency between strategic choices and global initiatives and programs. Dominique Guilhem has joined the Sodexo Leadership team.

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Outlook

Given our expectation of modest growth in the first half of the year and an acceleration in the second half, supported by the strong commercial momentum observed at the start of the year and the timing of net new business contributions, the full-year guidance is maintained:

Organic revenue growth expected between +5.5% and +6.5%;
The underlying trend should be +6% to +7%, excluding the base effect of the Olympics, the Rugby World Cup and the leap year in Fiscal 2024.
Underlying operating profit margin is anticipated to grow by +30 to 40 bps at constant exchange 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 2025 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

¹ Excluding Rugby World Cup last year, partially offset by the Paralympics this year

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