Sodexo: Revenues for first Nine Months Fiscal 2018 in line with revised expectations
July 05, 2018
Sodexo, world leader in Quality of Life Services, today reported its revenues for the first nine months of Fiscal 2018, which ended on May, 31, 2018.
- Organic revenue growth of +1.6% for the first nine months of Fiscal 2018
• On-site Services: +1.5%
• Benefits & Rewards Services: +4.2%
- Action plans on track
- Fiscal 2018 revised objectives maintained
First nine months Fiscal year 2018 revenue:
Sodexo CEO Denis Machuel said:
“Revenues in the third quarter were in line with our revised expectations. On-site Services’ organic growth remained soft, as anticipated, and Benefits & Rewards Services improved slightly. Across our services, we have seen particularly strong growth across Asia and Latin America.
The key actions we identified to improve short-term performance and to drive growth in the longer term are being rolled out across the Group. While it is still early in this process, we remain confident in the benefits that they will deliver and the growth opportunities that are available to us. We are maintaining our revised guidance for the current fiscal year.”
Highlights of the period
- Fiscal 2018 first nine months revenues amounted to 15.5 billion euro, down -2.9%. During the period, the currency impact was -6.6% due to the weakness of the U.S. dollar and the Brazilian real in particular. Net acquisitions contributed +2.2% during the nine months, accelerating in the third quarter, with Centerplate contributing for the full quarter. Organic revenue growth was +1.6%. This growth was made up of +1.5% for On-site Services and +4.2% for Benefits & Rewards Services.
- Organic growth for On-site Services was +1.5%, reflecting:
• Business & Administrations organic growth of +4.2%, driven by solid growth in Asia and Latin America.
• In Health Care & Seniors organic growth of +0.7%, fueled by the very strong development in Asia and Brazil, and despite the ongoing weakness in activity in North America and Europe.
• Education organic growth of -3.5%, impacted by a low level of client retention in North America last year and 5 fewer board days in the third quarter in Universities in North America.
- First nine months Fiscal 2018 organic revenue growth in the Benefits & Rewards Services was +4.2% compared to an issue volume up 6%, with, as expected, continued strong growth in Europe, and a return to growth in Brazil in the third quarter.
- Contract wins and extensions in the first nine months reflected:
• Momentum in food services: Airport Lounge development and the Kansas Development for Aging and Disability Services in the US, Grupo Santa Hospital in Brazil,
• Some signatures in Education: Insead in Singapore, Tyne Coast College Group in the UK, and Marseilles Schools renewal in France,
• Contract extensions: Microsoft in 18 additional countries in Europe and Africa, Global Partnership with Tetra Pak covering 30 countries, Food services for the International school of Beijing.
- During the board meeting on June 20, the Board:
• Accepted the resignation of Patricia Bellinger, Board member since 2005 and Michel Landel, Board member since 2009 from July 1, 2018.
• Appointed Sophie Stabile, as a new director. She will bring strong financial and operational expertise and deep service sector experience, and will join the Audit Committee.
• With these changes, the Board is comprised of 13 Directors, including two employee representatives. Five are independent per the AFEP-MEDEF governance code. The Board continues to be diverse with seven women, six men and four different nationalities.
- Changes to the Executive Committee were made to ensure that all segments and activities are represented, to reinforce regional representation and strengthen Sodexo’s focus on clients and consumers, and their rapidly changing needs. The new members of the Executive Committee are:
• Nathalie Bellon-Szabo, CEO Sports & Leisure,
• Cathy Desquesses, Chief People Officer,
• Johnpaul Dimech, Region Chair Asia Pacific,
• Tony Leech, CEO Government & Agencies,
• Belen Moscosco Del Prado, Chief Digital & Innovation Officer,
• Anna Notarianni, Region Chair France,
• Didier Sandoz, CEO Personal & Home Services,
• Bruno Vanhaelst, Chief Marketing Officer.
The Group maintains the following revised objectives for Fiscal 2018:
- Organic revenue growth of between +1% and +1.5%, excluding the 53rd week impact;
- Underlying operating profit margin around 5.7% excluding currency impact.
- Read the full press release (PDF)
- Download the presentation (PDF)
- Watch the webcast live on July 5, 2018 - 8:00 am (London Time) / 9:00 am (Paris Time)
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 First nine months Fiscal 2018 revenues. Those who wish to connect from the UK may dial +44 (0) 330 336 9411 or from France 01 76 77 22 57, or from the USA +1 929 477 0448 followed by the passcode 563 00 82.
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.