Sodexo Q3 Fiscal 2023: solid organic revenue growth at +10.5%

• On-site Services revenue growth as expected
• Ongoing acceleration in Pluxee (Benefits & Rewards Services)
• Full year guidance refined

Q3 FISCAL 2023 REVENUES

 

• Third quarter Fiscal 2023 consolidated revenues reached 6.0 billion euros, up +9.1% year-on-year including a negative currency impact of -1.2% and a net contribution from acquisitions and disposals of -0.2%. As a result, third quarter Fiscal 2023 organic growth was +10.5%. 
  Revenue for the first nine months of Fiscal 2023, to the end of May, reached 18.1 billion euros, up +14.7%, or +12.4% organically.
• Third quarter Fiscal 2023 On-site Services revenue organic growth was up +9.9%, benefiting from an accelerated net new in-year revenue of close to 2%, a pricing effect of above 5% and like-for-like volume growth (including cross-selling) of close to 4%, partially offset by a negative impact from the end of the Testing Centers contract in the UK of -0.9%.
  • Organic growth in the quarter was driven by Food services, up +13.8% organically, whereas FM services were up +3.6%, or +6.0% excluding the impact of the end of the Testing Centers.
  • Net new development momentum remained strong with improvements in both retention and development year to date.

• Pluxee (Benefits & Rewards Services) organic growth was +25.5%. Operating revenues organic growth at +16.7% continued to accelerate in the third quarter, fueled by positive net development and face value increases. The trajectory on financial revenues remained very strong, benefiting from the continuous increase in euro interest rates.

• Sodexo continues to progress on its sustainability commitments:
  • Rolling 12-month Lost Time Injury Rate (LTIR) at the end of the third quarter Fiscal 2023, decreased by -32% (from 0.69 to 0.47) and Severity of Lost time injuries by -70%. We have also experienced higher levels of employee engagement towards safety through a campaign focusing on near misses demonstrating a step change in our safety culture maturity.
  • As part of its commitment to preserve natural resources, and in particular its strong position on sustainable fishing, Sodexo participated in the creation of an innovative fund together with the World Wildlife Fund (WWF) and Finance Earth (FE). This fund aims to reverse the decline of fisheries and scale nature-positive improvements in fisheries around the world. At the end of Fiscal 2022, 85.3 % of fish and seafood purchased by Sodexo were sustainable, on track to reach the 100% target for 2025.

Update on the plan to spin-off and list Pluxee (Benefits & Rewards Services)

• The Benefits & Rewards Services activities now have a new name. Pluxee is the new commercial brand name as well as the name of the future listed company.
• The future appointment of Didier Michaud-Daniel as Chairman of the Pluxee Board of Directors has been endorsed by the Sodexo Board of Directors. Didier Michaud-Daniel will bring to the Board of Directors of Pluxee his significant background as CEO of large, listed companies in international BtoB environments and his experience of the financial markets. Didier Michaud-Daniel has a proven track record in driving significant business growth and transformations as well as extensive leadership experience. He will play an active role alongside Aurélien Sonet, who has been confirmed as CEO of Pluxee, and Stéphane Lhopiteau who is joining Pluxee as CFO. For now, Didier Michaud-Daniel is working on the constitution of the future Board of Pluxee and supporting the Leadership team as they prepare for the spin-off.
• Commenting his nomination, Didier Michaud-Daniel said: “I am very pleased to be part of the Pluxee journey and I feel honored by the trust placed in me by the Bellon family and the Sodexo Board of Directors. The times ahead are very exciting for this future pure player in a growth market with high potential. The teams I have started to meet with are profoundly engaged, extremely dynamic and deeply committed to Pluxee’s strong values. I am confident that the strategic course we are executing upon is the right one and that it will help us accelerate and deliver strong growth and profitability in the years to come.“

Outlook

Our Fiscal 2023 guidance has been refined to reflect the strong Pluxee performance and solid in-line performance of On-site Services in the third quarter:

• Pluxee organic revenue growth above +20% and Underlying Operating Profit margin above 32%, at constant rates.
• Group organic revenue growth close to +11% and Group Underlying Operating Profit margin at 5.5%, at constant rates.

Conference call

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• From France: +33 1 70 91 87 04, or 
• From the US: +1 718 705 8796,