Sodexo Reports 10.5 Percent Revenue Gain In Nine Months

Sodexo reported revenues rose 10.5 percent, including 5.2 percent organic growth, for first nine months of fiscal 2012.

Commenting on the figures, Sodexo CEO Michel Landel said in a prepared statement:

"In a volatile global economy, which has continued to deteriorate for the past several months, our quality of life integrated service offers and our emerging markets growth strategy have accounted for a large part of our growth. Our teams are fully mobilized to provide our clients with the services and savings they expect and to improve our competitiveness."

Organic growth in on-site service solutions was 5.0 percent.

Growth of 7.3 percent in corporate was propelled by double-digit growth (16.8 percent) resulting from the success of Sodexo’s operations in Latin America, Asia and remote sites, as well as the fall 2011 Rugby World Cup hospitality contract in New Zealand. During the third quarter however, the global economic downturn impacted Sodexo’s activity more noticeably.

Major multi-country contracts with large multinational companies won by Sodexo during the period included Unilever, Alcatel-Lucent, Astra Zeneca and Eli Lilly.

Organic growth reached 2.7 percent in health care and seniors and 2.9 percent in education against a backdrop of more modest business development, particularly in Europe.

Organic growth of 4.9 percent in corporate mainly reflects the success of “Quality of Life” integrated service offers as well as remote sites’ performance in Canada. Among the recent contract wins was Dominion, including three sites in Virginia.

In health care and seniors, organic growth was 2.8 percent. This modest increase reflects weak business development in previous months. Contract wins included senior living communities Wesley Willows in Illinois.

In education, organic revenue growth was 4.6 percent, reflecting comparable unit growth linked to an increase in the number of meals served in schools such as breakfasts and dinners.

During the third quarter of fiscal 2011, Sodexo commenced the major contract for the 136 public schools in the city of Detroit, Mich., providing technical maintenance services, cleaning and maintenance of buildings and landscaping.