For 2023 fiscal year ending August 31, 2023, Sodexo reported performance above guidance:
- Group organic revenue growth at +11.6%, compared to revised guidance of close to +11%.
- Group underlying operating profit margin at 5.6%, compared to revised guidance at 5.5%, at constant rates.
- Underlying Group net profit reached 908 million euros and underlying EPS of 6.21 euros.
- The proposed dividend is 3.10 euros, up +29%.
Sophie Bellon, Sodexo chairwoman and CEO, said in the announcement: “In Fiscal 2023, we have made good progress in the execution of our strategy which confirms the momentum of the last 2 years. We are on track to recover agility and profitable growth. Everyday, the transfer of operational accountability in the regions enables faster decision-making and increased mutualization.
The North American recovery is coming through, with solid growth in volumes, good commercial momentum and enhanced operational execution.
The transformation of our food offers is progressing in all geographies along with our approach to grow more selectively our FM business, which is now visible in contract signings.
Our perseverance on client retention is consistently paying off with another record year at 95.2%, and I am confident that in time, we will further raise the bar to 96%.
The Pluxee full spin-off is expected to be completed early 2024. And we have continued to actively manage our portfolio with for example the recently announced sale of the Homecare activities.
I would like to warmly thank our teams for this strong year. Thanks to their hard work and unprecedented engagement, we exceeded our guidance while executing at pace on our strategy. We are set up to continue to achieve solid and profitable growth and to deliver on our ambition to be the leader in sustainable food and valued experiences at every moment in life: learn, work, heal and play.”
Sodexo fiscal 2023 key highlights
Sodexo continued operations fiscal 2023 consolidated revenues reached 22.6 billion euros, up +11.7% year-on-year driven by organic growth of +11%, a positive currency impact of +1.5% and a net contribution from acquisitions and disposals of -0.8%.
The first half benefited from the ongoing post-Covid recovery and more than 5% pricing, to pass inflation. Growth remained very solid in the second half, at +9.9% in Q3 and +8.1% in Q4, due to ongoing volume growth in most segments and geographies and continued pricing contribution of more than 5%. Excluding an accounting change related to the revenue recognition in a large contract which impacted the fourth quarter by -2.3%, Underlying organic growth exit rate was in fact +10.4% in the fourth quarter, a positive trend for beginning of fiscal 2024.
By geography, for the full year:
In North America, organic growth was +13.9% with strong growth in all segments, and in particular in Business & Administrations due to the continued return to office and strong attendance and average spend in Sodexo Live!
In Europe, organic growth was +7.5%, or +10.6% excluding the end of the testing centers contract in the UK. All segments contributed even though Education was impacted by strikes in Q3 and delayed price increases, particularly in France.
In rest of the world, organic growth was +11.5%, or +14.6% excluding the accounting adjustment. Growth was very strong in all regions in Corporate Services and Energy & Resources, except in China where the post-Covid macro economic environment is impacting Business & Administrations. Education growth was very strong in India and China.
Fiscal 2024 and 2025 guidance
Organic revenue growth should be between +6 and +8% per annum.
Underlying operating profit margin should continue to grow by +30-40 bps per annum, at constant rates.