Sodexo is in good health. The collective services and catering group announced this Friday that it had generated a net profit of 337 million euros in the first half of its 2021/2022 financial year, ten times higher than a year earlier, thanks to a clear resumption of its activities, even if Sodexo stock lost 7% in the stock market in the first few minutes of trading on Friday. During the same period a year earlier, profits had been 33 million euros, Sodexo said in a press release. For its part, turnover increased, even from September 2021 to February 2022, by 19.4% to 10.2 billion euros, which represents “95% of its pre-Covid-19 level”. As for the operating result, it more than doubled in these six months, standing at 538 million euros compared to 265 million the previous year.
“Revenue growth and margin growth were strong in the first half,” says group CEO Sophie Bellon, quoted by the press release, noting that “this performance reflects a strong recovery in education , business services and sports and leisure”. .
“Omicron had an impact on the recovery in the second quarter, but we have seen a better momentum since the end of February,” he adds. In the second half, “the environment remains uncertain with local outbreaks of Covid-19, as well as the war in Ukraine”, but the group believes “it can manage inflationary pressures at the margins of the year”, specifies Bellon. .
For the current financial year, Sodexo expects organic growth “around the bottom of the range” that it had indicated, which goes “from +15% to +18%” and reiterates that it expects an operating margin “close to 5%, at constant rates. . By business segments, internal growth in “companies and administrations is +19.5%” thanks to “a strong recovery in services to companies that return to 89% of pre-Covid levels in the second quarter”.
For its part, “sports and leisure” stands at 61% of these levels, “thanks to the significant recovery in the number of events”. In “health and seniors, organic growth was 5%” but it was mixed: +7.4% in the first quarter and +2.5% in the second “under the effect of a less favorable environment in Europe”.
In “education”, internal growth was +29.5% with a “recovery of activity in North American universities” that was “very strong”. The division posted 88% of its pre-COVID-19 activity levels in the second quarter, compared to 92% in the first, affected in particular by “the termination of the Chicago Public Schools contract.”
By geographic area, all regions showed solid growth in the first half, for “on-site services” which make up the majority of Sodexo’s activity, present in 55 countries: +27.1% for North America with 4,200 million euros, +10.6% for Europe to 3.9 billion and +11% to 1.7 billion for Asia-Pacific, Latin America, the Middle East and Africa.
The customer retention rate increased by 60 basis points to 98.1%. In the face of rising inflation, Sodexo has implemented measures that have “improved 210 basis points” in operating margin, to 5.2%, says Ms Bellon.
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