Vending

Sodexo lifts Q1 2023 revenue 20%, boosted by post pandemic recovery

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February 10, 2023

Sodexo SA, the Paris-based global food and facilities management provider, boosted its revenue 20.2%, from 5.26 euros ($5.61 billion) in Q1 2022 to 6.3 billion euros ($6.73 billion), including a net effect from acquisitions and disposals of a negative 1.2%, and a strong positive currency impact of 9.2%, reflecting the strength of the U.S. dollar and the Brazilian real, according to an earnings report.

Highlights include:

• Organic growth remained strong at 12.3% for the quarter.
• On-site services revenue rose 20%, from 5.08 euros ($5.42 billion) in Q1 2022 to 6.1 billion euros ($6.51 billion) in Q1 2023, reflecting recovery in food services. Organic growth was 11.9%.
• Facilities management services organic growth impacted by the end of the Testing Centers contract in the U.K. stalled at 0.5%. Excluding this, facilities management services was up by nearly 6%, as higher prices contributed 5% to 6%.
• North America revenue rose 35.7%, from 2.2 billion euros ($2.35 billion) to 2.99 billion euros ($3.19 billion) in the comparative quarters, boosted by the post-COVID return to the workplace, a better-than-expected increase in the sporting and convention center activity and more retail and event catering activity on university campuses. Healthcare was also up in particular due to a strong increase in retail sales. Organic growth was 15.7%.
• Europe revenue rose 1.2%, from 2.02 billion euros ($2.16 billion) to 2.047 billion euros ($2.19 billion) due to the end of the Testing Centers. However, there was a strong return to the workplace across the zone as well as a recovery in the number of corporate events and tourists, particularly in Paris. Organic growth was 5.9%.
• The rest of the world revenue rose 23.9%, from 854 million euros ($911.9 million) to 1.06 billion euros ($1.13 billion), with solid performance in business and administrations in all regions despite the impact of the sporadic lockdowns in China and a particularly strong recovery in education in India. Organic growth was 15.3%.

Shares traded today at $95 against a 52-week range of $68.72-$98.05.

"On-site services continued to benefit from the post-COVID ramp-up, with a higher level of attendance, in all geographies, in the workplace, in stadiums, in convention centers and in universities," Sophie Bellon, chairwoman and CEO, said in the press release. "Price increases also boosted revenue growth. As a result, on-site services activity is back up over first quarter fiscal 2019 levels."

Fiscal 2023 organic revenue growth expected to be between 8% and 10%.