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Sodexo Posts 2010 Gains, Forecasts Growth For 2011

Posted On: 11/23/2010

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Sodexo, Sodexo fiscal 2010, Michel Landel, food service, foodservice, vending machine business

PARIS -- Sodexo posted a 4.1% profit lift for 2010, and forecast earnings and revenue growth for next year after winning contracts at a faster pace.

Net income for fiscal 2010, ended Aug. 31, rose to $563 million from $537 million the previous year. Sales reached $21.03 billion, a 2.5% increase over $20.07 billion in 2009.

The world's second-largest catering company said it won 8% more contracts in 2010 than in the previous year. It also reports investing in broadening its lineup of services such as building maintenance and cleaning to foster further growth.

Sodexo's food and facilities management business increased sales by 4.3%. Organic growth was 2.3%, including moderate 1.9% growth in North America, driven mainly by education, healthcare and senior living facilities. This offset a decrease in corporate business. Growth was strongest in Latin America, the Middle East, Asia and Australia, where sales increased by 7.5%.

Sodexo forecast a 10% increase in operating profit for 2011, following a 9.5% gain in fiscal 2010. The company projected that fiscal 2011 organic sales will rise 3% to 4%, after climbing 2.5% last year.

Sodexo chief executive Michel Landel said he expects the key drivers of Sodexo's business for 2011 to be demand from emerging countries and the defense, justice, healthcare and senior sectors.