Vending

Sodexo sales, earnings rebound in fiscal 2022

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October 27, 2022

Sodexo, a France-based global food services firm, lifted sales and earnings in fiscal 2022 driven by COVID recovery and currency exchange, according to an earnings release. Highlights include:

• Consolidated revenues rose 21.2% from Є17.4 billion ($17.41 billion) in fiscal 2021 to Є21.1 billion ($21.12 billion) in fiscal 2022, driven by organic growth of 16.9% and a currency exchange impact of 5.5%.
• Net income jumped 400% from Є139 million ($139.11 million) to Є695 million ($695.56 million) in the comparative years.
• EPS jumped 399% from Є0.95 euros (95 cents) to Є4.75 ($4.75).
• On-site services organic revenue rose 17% as recovery continued sequentially throughout the year, leading to a return to 99% of fiscal 2019 level in the fourth quarter, with business and administration revenue back to over 100%.
• Business and administrations organic growth was 22.7% driven by growth in energy, resources, government and agencies.
• Healthcare and seniors organic sales rose 4% driven by pricing, cross-selling and the recovery of hospital retail sales and seniors' occupancy.
• Education organic sales rose 22% following the strong post-COVID recovery in activity in universities and schools in North America, China and India.
• North America, representing 44% of on-site services, saw organic sales rise 24%, resulting in revenues picking back up to 96% of fiscal 2019 level in the fourth quarter. Sports and leisure returned to 96% of fiscal 2019 level in the fourth quarter, while the return to the office, schools and universities was slower than in other regions.
• Europe, representing 38% of on-site services revenue, achieved 13% growth in 2022, up to 94% of pre-COVID level in the fourth quarter.
• Asia Pacific, Latin America, Middle East and Africa, 18% of on-site services revenue, saw sales grow 11.5%, with recovery in India and solid demand and new business in energy and resources, particularly in the mining sector in Latin America.

Shares traded today at $87.90 against a 52-week range of $68.80-$99.77.

The annual revenue of Є21.1 billion ($21.12 billion) beat analyst expectations by Є670 million ($670.54 million), according to Seeking Alpha.

"All our activities delivered a strong recovery in fiscal 2022," Sophie Bellon, chairwoman and CEO, said in the press release. "Growth in benefits and rewards services accelerated and on-site services margins improved, despite the inflationary backdrop. Net new business was strong, and retention was at an all-time high. Our balance sheet has also been strengthened significantly."

The company expects fiscal 2023 organic revenue growth between 8% and 10%.