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Sodexo Raises 2011 Target Behind 11% First-Half Lift

Posted On: 5/11/2011

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PARIS -- Sodexo raised its full-year sales targets following stronger-than-expected first half performance driven largely by gains in North America. Sodexo said it now expects fiscal 2011 sales growth of 4.5% instead of a previous range of 3% to 4%, after achieving 4.8% growth in the first half.

The French catering giant's first-half net profit rose 11% to 252 million euro ($370 million) from 227 million euro ($332 million) in the comparable 2010 period. Revenues rose 10.4% to $8.3 billion euro ($11.9 billion), from $7.5 billion ($10.8 billion) in last year's first half.

Revenues for the company's onsite services business for the period were 7.9 billion euro ($11.4 billion), up 10.4% year over year. Its corporate catering business grew 6.5%, propelled primarily by gains in Asia, Latin America and other emerging markets. Patronage at onsite dining facilities was steady with last year's comparable quarter in North America and Europe.

Sodexo's healthcare and seniors sector grew 3.4%, pushed in part by strong comparable unit growth in North America. Business was up 3.3% in the education sector, a result of increased enrollment in North American universities.

The world's No.2 catering services company after Britain's Compass Group maintained its operating profit growth target at around 10%; it remains unchanged due to accelerating food and energy costs. Sodexo reiterated its medium-term targets for annual average sales growth of 7% and an operating margin of 6% of sales.