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Sodexo serves annual core profit on restaurant openings, vaccine rollout

10/27/2021 | 01:35am EST
FILE PHOTO: The logo of French food services and facilities management group Sodexo is seen at the company headquarters in Issy-les-Moulineaux near Paris

(Reuters) -French catering and food services group Sodexo posted on Wednesday a better-than-expected annual core profit and revenue, citing acceleration in vaccination programmes across its markets as the driving force of restaurant reopenings.

The Paris-based firm reported a 12.4% jump in core profit at constant rates to 578 million euros ($672.68 million) for the year ended Aug. 31, on revenue of 17.43 billion euros - both slightly beating the company's poll forecast.

By the fourth quarter, the group reached 87% of its annual activity in 2019, it said.

A massive global rollout of vaccines has led to reopening of sites in Sodexo's major markets, some segments and activities sooner than others. The company's Benefits & Rewards Services has also seen its merchant revenue picking up with the reopening of restaurants.

Sodexo said it remains confident in its capacity to continue the recovery momentum to pre-COVID levels, and expects organic growth between 15% and 18%, as well as an operating margin of close to 5% at constant rates for its 2022 fiscal year.

The French company said the boost in growth in the United States, the accelerated deployment of the new food model based on digital solutions and the active portfolio management will help Sodexo return to regular and sustained growth.

The group said it would resume dividend and pay 1.20 euros as part of its dividend policy, with an exceptional 0.80 euros linked to the disposal programme.

($1 = 0.8593 euros)

(Reporting by Diana Mandia and Federica Mileo; Editing by Rashmi Aich and Sherry Jacob-Phillips)

© Reuters 2021
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