Sodexo, world leader in Quality of Life Services, today reported its revenues for the first quarter of Fiscal 2018, which ended on November 30, 2017.
Annual objectives maintained
Modest organic revenue growth of +1.9% for the first quarter of Fiscal 2018, in line with expectations
- On-site Services: +1.8%
- Benefits & Rewards Services: +3.8%
Commenting on these figures, Sodexo CEO Michel Landel said:
“First quarter performance was in line with our expectations, thanks to strong momentum in Business & Administrations, with in particular, robust growth in Energy & Resources and a recovery in France. However, the Education business has slowed due to fewer working days as well as low client retention last year.
The pipeline for new contracts is good. Our revenue growth should progressively improve in the coming quarters. In addition, the recent acquisitions of Centerplate in the US and Morris Corporation in Australia will contribute as of next quarter. We maintain our objectives for Fiscal 2018.”
Highlights of the period
> Fiscal 2018 first quarter revenues totaled 5.3 billion euro, down -2.6% compared to the same period in the previous fiscal year. Currency effects represented -4.1%, and net acquisitions/disposals -0.3%. Organic growth reached +1.9%.
> Organic growth for On-site Services was +1.8%, reflecting:
- Solid growth in Business & Administrations at +5.2%. The performance remains strong in North America. Recovery is continuing in the Energy & Resources segment due to new contract start-ups. Activity in France is improving with the start-up and ramp-up of several new contracts as well as an improvement in tourism. Momentum in Latin America, Brazil and Asia remains strong.
- Modest growth, as expected, in Health Care & Seniors at +1.0%. Weak performance in North America was offset by robust development in Brazil and Latin America. In Europe, bidding opportunities remained highly competitive, but the United Kingdom won some encouraging new business during the period.
- A -4.0% decline in Education. North American Universities suffered from poor prior year retention, and from weak comparable unit growth due to a negative calendar impact.
> Organic revenue growth in Benefits and Rewards Services was +3.8%. Growth in Europe, Asia and the United States remained strong at +8.6%, with solid growth in Europe as well as continued strong momentum in Incentive & Recognition. This performance compensated for the -1.5% decline in Latin America that was impacted by lower inflation and a reduction in interest rates in Brazil.
The Group maintains the following objectives for Fiscal 2018:
> Organic revenue growth of between +2% and +4%, excluding the 53rd week impact;
> Underlying operating profit margin maintained at 6.5%.
The Group confirms the medium-term objectives of:
> average annual revenue growth, excluding currency effect, of between 4% and 7%;
> average annual growth in underlying operating profit1, excluding currency effect, of between 8% and 10%.
To read the full version of the press release, please download the PDF.
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 Fiscal 2018 Q1 revenues. Those who wish to connect from the UK may dial +44 (0) 330 336 9105 or from France +01 76 77 22 74, followed by the passcode 270 79 17.
The press release, presentation and webcast will be available on the Group website www.sodexo.com in both the "Latest News" section and the "Finance - Financial Results" section.