(BFM Bourse) – The collective catering group delivered growth below expectations over the first three months of its 2024-2025 financial year. Which may raise doubts about its annual objectives, which were nevertheless confirmed by the company.
Sodexo is traditionally the first large company on the Paris Stock Exchange to submit a copy in a new year.
Operating over a staggered financial year with annual accounts closed at the end of August, the collective catering group publishes its first quarter revenues at the beginning of January. This Tuesday, January 7, the company founded by Pierre Bellon communicated its growth and turnover for the first three months of its 2024-2025 financial year.
From September to the end of November, Sodexo's revenues stood at 6.4 billion euros, up 4.6% on a like-for-like basis (excluding currency and scope variations).
This progression turns out to be significantly lower than the expectations of analysts, who were counting on an increase of 5.3% according to a consensus cited by Jefferies. The bank describes this start to the financial year as “weak” while Royal Bank of Canada speaks of a “soft” quarter.
>> Access our exclusive graphic analyses, and gain insight into the Trading Portfolio
Facility management services are failing
“The strong performance in catering services offsets the more moderate activity in facility management services, for which we are seeing lower volumes in one-off projects,” said the company's CEO, Sophie Bellon, quoted in a press release.
Sodexo's collective catering services saw their revenues increase by 5.7% on a like-for-like basis over the quarter. “Facility management” services (elevator maintenance, laundry, cleanliness of premises, concierge, etc.) for their part recorded growth limited to 2.4% over one year. Excluding from the basis of comparison the contracts linked to the 2023 Rugby World Cup, which had been recorded during the first quarter of 2023-2024, the growth of “facility management” services would have stood at 3.5%, specified Sodexo.
The company's chief financial officer, Sébastien de Tramasure, told analysts that the company had seen difficulties with these services in Europe during the quarter with reduced activity on certain sites.
“The organic growth differential between foodservice and facility management, which has apparently been affected by a cyclical slowdown in projects, particularly in Europe, reminds us of the key structural difference between Sodexo and Compass (which has less than half of the proportional exposure of turnover to “facility management” compared to Sodexo)”, notes Royal Bank of Canada.
Due to its more limited exposure to “facility management”, the Canadian bank believes that Compass, Sodexo's great British rival, should benefit from higher valuation multiples on the stock market.
Weakened objectives?
By region, Sodexo saw its growth in North America rise to 5.9% over the period while that in Europe reached 2% while the “rest of the world” grew by 6%.
Despite these first three months of timid activity, Sodexo has confirmed its objectives for the 2024-2025 financial year. The company intends to achieve like-for-like growth of between 5.5% and 6.5% and increase its operating margin by 0.3 points to 0.4 percentage points, excluding currency effects.
The group is banking on an acceleration in the second half, which would be “supported by a solid commercial dynamic observed since the start of the financial year and the sequencing of the net contribution of new contracts”.
Sébastien de Tramasure highlighted the contract wins gleaned over the past quarter – notably in Australia with a company in the oil and gas industry – as well as the ramp-up of contracts previously won.
Several of them will contribute to growth in the third quarter of the 2024-2025 financial year, including a major healthcare contract in France. The manager also indicated that like-for-like growth in the second quarter would be “very similar” to that of the first.
“Although the outlook for the 2024-2025 financial year is reiterated, the weakness at the start of the year (fiscal, editor's note) raises doubts about the organic growth objective of 5.5%-6.5%” however points out Jefferies in a note published before the market opened.
As the bank expects a still “weak” second quarter, achieving this objective will require a “significant acceleration in the second half, which seems ambitious in the current context”, warns Jefferies.
On the Paris Stock Exchange, the market is grimacing. Sodexo shares plunged 8.4% around 10:40 a.m., showing the biggest drop in the SBF 120.
Julien Marion – ©2025 BFM Bourse
Are you following this action?
Receive all the information on SODEXO in real time:
