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Issue Date: Vol. 54, No. 8, August 2014, Posted On: 7/15/2014

Sodexo Posts 9-Month Revenue Decline, Lowers Forecast

Emily Jed
TAGS: vending industry, food service, Sodexo, Sodexo first nine months, catering service provider, Compass Group, Unilever, Walt Disney World Resorts

ISSY-LES-MOULINEAUX, France -- Sodexo's revenues for the nine months totaled €13.8 billion ($18.8 billion), dipping 2.8% from €14.2 billion during the same period last year. Organic revenue grew 2.3%.

Sodexo is the world's second-largest catering service provider, exceeded only by Compass Group.

Nine-month revenue from onsite services, which make up the bulk of the French company's business, was €13.27 billion ($18.08 billion), down slightly from €13.64 billion ($18.58 billion) in the prior year. Organic growth was 1.7% year over year.

Onsite services revenue in North America fell 1.7%. Organic revenue climbed 3.7% driven by strong demand from corporate customers and new facilities management contracts with such clients as Unilever and Walt Disney World Resorts.

In Europe, onsite revenue ticked up 0.1% and only 0.3% on an organic basis, as clients continued to reduce catering services to cut costs. In the rest of the world, onsite revenue tumbled 12.2% and 0.7% on an organic basis.

Sodexo said it now expects a slightly slower fourth quarter than initially forecast due to the delayed startup of some major contracts. The company now estimates organic revenue growth between 2.2% and 2.5% for fiscal 2014, down from its April projection from 2.5% to 3%.

For fiscal 2014, the company confirmed its objective to achieve growth in operating profit of 11% at constant exchange rates and an operating margin of 5.6% for the year, up 0.4% compared with last year.

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