- Revenue growth +20.2%
- Organic revenue growth +12.3%
Q1 Fiscal 2023 revenues
REVENUES (in millions of euros) | Q1 FY23 | Q1 FY22 | ORGANIC GROWTH | EXTERNAL GROWTH | CURRENCY EFFECT | TOTAL GROWTH |
2,992 | 2,205 | +15.7% | +1.1% | +18.8% | +35.7% | |
2,047 | 2,023 | +5.9% | -3.6% | -1.1% | +1.2% | |
Rest of the World | 1,057 | 854 | +15.3% | -1.9% | +10.4% | +23.9% |
6,097 | 5,082 | +11.9% | -1.2% | +9.3% | +20.0% | |
Benefits & Rewards Services | 234 | 183 | +23.4% | -1.6% | +6.4% | +28.2% |
Elimination | (1) | (1) | ||||
TOTAL GROUP | 6,330 | 5,264 | +12.3% | -1.2% | +9.2% | +20.2% |
Commenting the First quarter 2023 performance,
“As expected, we have had a strong start to the year.
Benefits & Rewards Services organic growth continued to accelerate, reflecting in particular this quarter, higher interest rates in the euro zone and a large one-off Klimabonus contract in
During the quarter, we also delivered positive net development and strong cross-selling.
We are on track.”
Highlights of the period
- First quarter Fiscal 2023 consolidated revenues reached 6.3 billion euros, up +20.2% year-on-year including a net effect from acquisitions and disposals of -1.2%, and a strong positive currency impact of +9.2%, reflecting the strength of the US dollar and the Brazilian real. Organic growth remained strong at +12.3%.
- On-site Services revenues reached
6.1 billion euros , up +11.9% organically. This growth reflected the recovery in Food services, up +19.2%. Facilities Management Services organic growth impacted by the end of the Testing Centers contract in theUK stalled at +0.5%. Excluding this, Facilities Management Services was up by nearly +6%. Higher prices contributed about 5-6% to growth. By zone, the key elements were:North America generated organic growth of +15.7% boosted by the post-Covid return to the workplace, a better-than-expected increase in the sporting and convention center activity and more retail and event catering activity on University campuses. Healthcare was also up in particular due to a strong increase in retail sales.- In
Europe , organic growth was more contained at +5.9% due to the end of the Testing Centers. However, there was a strong return to the workplace across the zone as well as a recovery in the number of corporate events and tourists, particularly inParis . - The Rest of the World organic growth was +15.3% with a very solid performance in Business & Administrations in all regions despite the impact of the sporadic lockdowns in
China and a particularly strong recovery in Education inIndia .
- The acceleration of the organic growth in revenues of Benefits & Rewards Services continued in the First quarter, at +23.4%. Higher demand, face values, net new business and interest rates all contributed. In particular, the quarter benefited from higher interest rates in the euro zone for the first time and a significant one-off contribution from the Austrian Klimabonus.
- During this first quarter,
Sodexo continued to reinforce its commitments to reduce its environmental footprint:Sodexo progressed towards its 2025 CSR objectives:- By promoting plant-based meal options:
Sodexo just concluded its first global Sustainable Chef Challenge. This international competition brought together Sodexo’s talent to showcase innovative dishes. - By raising awareness about the importance of reducing Food waste:
Sodexo has celebrated the 10th Anniversary of its WasteLESS Week Campaign.
- By promoting plant-based meal options:
- Our Corporate Responsibility achievements have also been recognized externally:
- For the 18th consecutive year,
Sodexo was ranked as one of the top-rated companies of its sector in the Dow Jones Sustainability Index (DJSI). Sodexo earned top LGBTIQ+ inclusion achievement from 2022 Workplace Pride Global Benchmark.Sodexo has been awarded the 2022 GEEIS-SDG trophy for its gender equality initiative “Fairy Godmother” inBrazil .Sodexo received the 2022 AGEFI Sustainable Business Award in the Environment category.
- For the 18th consecutive year,
Outlook
The strong start to Fiscal 2023 in the first quarter was expected. As we progress during the year, the post-Covid ramp-up will reduce gradually. From the second quarter, the strong momentum in Benefits & Rewards Services will continue but against a stronger comparative base. Growth is expected to be higher in the first half than in the second half of the year, even if the progressive increase in the contribution of last year’s net new development will support the organic growth in the second half.
Group Fiscal 2023 guidance is maintained:
- Fiscal 2023 organic revenue growth expected to be between +8 and +10% driven by:
- Further recovery in Corporate Services and Sports & Leisure;
- Positive net new business momentum including expected further improvement in retention;
- Inflationary pricing at 4-5%;
- Partially offset by the impact of the end of the Testing Centers contract in the
United Kingdom (-100 bps).
- Fiscal 2023 Underlying operating profit margin close to 5.5%, at constant rates, supported by:
- Continued price increases and inflation mitigation action plans;
- Operational excellence including supply chain efficiencies;
- Further ramp-up in volume;
- Increased investment to sustain growth.
Fiscal 2023 guidance for Benefits & Rewards Services is also maintained:
- Organic growth of +12 to +15% for Fiscal 2023, driven by:
- Further progress in new business, cross-selling and retention;
- Strong demand in all regions;
- Benefits from inflation and higher interest rates.
- Underlying operating profit margin around 30% at constant rates for Fiscal 2023,
supported by:- The benefits of the topline growth flow-through;
- Increased investment in technology, digital offers, brand and sales & marketing.
Conference call
- From the
UK : +44 121 281 8004, or - From
France : +33 1 70 91 87 04, or - From the US: +1 718-705-8796,
- Using the access code 07 26 38.
The press release, presentation and webcast will be available on the Group website www.sodexo.com in both the “Latest News” section and the « Finance – Financial Results » section.
Fiscal 2023 financial calendar
Fiscal 2023 First half Results | |
Fiscal 2023 Third quarter Revenues | |
Fiscal 2023 Annual Results | |
Fiscal 2023 Annual Shareholders Meeting |
These dates are indicative and may be subject to change without notice.
Regular updates are available in the calendar on our website www.sodexo.com
About
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Key figures
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Contacts
Analysts and Investors | Media |
+33 1 57 75 80 56 virginia.jeanson@sodexo.com | Mathieu Scaravetti +33 6 28 62 21 91 mathieu.scaravetti@sodexo.com |
Q1 Fiscal 2023 Activity Report
Q1 revenues: strong start to the year
REVENUES BY GEOGRAPHICAL ZONE AND ACTIVITY | |||||||
REVENUES (in million euros) | Q1 FY23 | Q1 FY22 | ORGANIC GROWTH | EXTERNAL GROWTH | CURRENCY EFFECT | TOTAL GROWTH | |
2,992 | 2,205 | +15.7% | +1.1% | +18.8% | +35.7% | ||
2,047 | 2,023 | +5.9% | -3.6% | -1.1% | +1.2% | ||
Rest of the World | 1,057 | 854 | +15.3% | -1.9% | +10.4% | +23.9% | |
6,097 | 5,082 | +11.9% | -1.2% | +9.3% | +20.0% | ||
BENEFITS & REWARDS SERVICES | 234 | 183 | +23.4% | -1.6% | +6.4% | +28.2% | |
Elimination | (1) | (1) | |||||
TOTAL GROUP | 6,330 | 5,264 | +12.3% | -1.2% | +9.2% | +20.2% |
First quarter Fiscal 2023 consolidated revenues reached 6.3 billion euros, up +20.2% year-on-year including a net contribution from acquisitions and disposals of -1.2%, and a strong positive currency impact of +9.2%, reflecting, in particular, the strength of the US dollar and the Brazilian real. Organic growth remained strong at +12.3%, with On-site Services at +11.9% and Benefits & Rewards Services at +23.4%.
On-site Services
On-site Services revenues reached
REVENUES BY SEGMENT (in million euros) | Q1 FY23 | Q1 FY22 | ORGANIC GROWTH |
Business & Administrations | 1,009 | 643 | +31.8% |
Healthcare & Seniors | 877 | 693 | +9.0% |
Education | 1,106 | 869 | +9.3% |
2,992 | 2,205 | +15.7% |
First quarter Fiscal 2023
Organic growth in Business & Administrations was +31.8%, with all segments strong. Corporate Services benefited from continued return to the workplace, Sports & Leisure was up by more than 50% as the volume and average spend of sporting and convention center events increased significantly. Entegra was also very strong, boosted by the improvement in Food services activities generally. Energy & Resources and Government & Agencies were both up, more modestly.
In Healthcare & Seniors, organic growth was +9.0%, continuing to accelerate quarter after quarter with a strong improvement in retail sales, price increases in hospitals and senior homes, and at the end of the quarter the start-up of the Ardent contract.
In Education, organic revenue growth was +9.3%, boosted in particular by the significant pick-up in retail and event catering activities in Universities due to fewer staff shortages. Schools was down slightly against a particularly strong first quarter in the previous year, linked to very high levels of Covid-related free meals supplied by local authorities and the last base effect of the loss of the
REVENUES BY SEGMENT (in million euros) | Q1 FY23 | Q1 FY22 | ORGANIC GROWTH |
Business & Administrations | 1,337 | 1,208 | +14.8% |
Healthcare & Seniors | 504 | 578 | -12.1% |
Education | 206 | 237 | +4.7% |
2,047 | 2,023 | +5.9% |
In Business & Administrations, organic growth was +14.8%. All segments were up except Government & Agencies, impacted by the loss of a large prisons contract in
In Healthcare & Seniors, revenues were down -12.1% organically, impacted by the closure of the Testing Centers. Excluding this, activity would have been up by nearly +7%, as a result of a combination of pricing and volume growth, particularly in
In Education, organic revenue growth was +4.7%, with higher pricing and a strong pick up in attendance in
Rest of the World
REVENUES BY SEGMENT (in million euros) | Q1 FY23 | Q1 FY22 | ORGANIC GROWTH |
Business & Administrations | 941 | 766 | +15.1% |
Healthcare & Seniors | 87 | 67 | +11.0% |
Education | 29 | 20 | +36.8% |
REST OF THE WORLD TOTAL | 1,057 | 854 | +15.3% |
First quarter Fiscal 2023 revenues in Rest of the World were 1.1 billion euros, up +15.3% organically.
Business & Administrations was up +15.1%. Corporate Services growth was boosted by net new business and strong demand in all regions, despite activity being flat in
Healthcare & Seniors was up +11.0%, with solid growth in all regions, boosted by volume growth and net new business as well as pricing in
In Education, organic growth was +36.8%, due to very strong post-Covid ramp-up in
Breakdown by segment
ON-SITE SERVICES REVENUES BY SEGMENT | |||
REVENUES BY SEGMENT (in million euros) | Q1 FY23 | Q1 FY22 | ORGANIC GROWTH |
Business & Administrations | 3,288 | 2,617 | +19.2% |
Healthcare & Seniors | 1,468 | 1,339 | +0.3% |
Education | 1,341 | 1,126 | +8.8% |
ON-SITE SERVICES TOTAL | 6,097 | 5,082 | +11.9% |
Business & Administrations was up +19.2%, resulting in particularly strong recovery in Sports & Leisure and a solid return to the office in all zones.
Healthcare & Seniors was flat with recovery in retail sales and new business compensating the closure of the Testing Centers.
Education was up +8.8% boosted by pricing, much better retail and event catering sales in Universities in
Benefits & Rewards Services
First quarter Fiscal 2023 Benefits & Rewards Services revenues amounted to 234 million euros, up +23.4% organically. Strong demand, face value increases, net new business and higher interest rates all contributed. In particular, the quarter benefited from higher eurozone interest rates for the first time and a significant one-off public sector contract in
REVENUES BY ACTIVITY (in million euros) | Q1 FY23 | Q1 FY22 | ORGANIC GROWTH |
Employee benefits | 191 | 148 | +22.5% |
Services Diversification* | 44 | 35 | +26.9% |
BENEFITS & REWARDS SERVICES | 234 | 183 | +23.4% |
* Including Incentive & Recognition, Mobility & Expenses and Public Benefits.
Employee benefits organic growth was +22.5% compared to an issue volume (
REVENUES BY REGION (in million euros) | Q1 FY23 | Q1 FY22 | ORGANIC GROWTH |
142 | 120 | +22.7% | |
92 | 63 | +24.5% | |
BENEFITS & REWARDS SERVICES | 234 | 183 | +23.4% |
In
In
REVENUES BY NATURE (in million euros) | Q1 FY23 | Q1 FY22 | ORGANIC GROWTH |
Operating Revenues | 207 | 172 | +15.8% |
Financial Revenues | 27 | 10 | +153.4% |
BENEFITS & REWARDS SERVICES | 234 | 183 | +23.4% |
Operating revenues increased +15.8% due to strong growth in all regions and in all activities. Financial revenues more than doubled as the effect of higher eurozone rates came on top of the significant increase in interest rates in
Financial position
There were no material changes in the Group's financial position as of
Principal risks and uncertainties
There were no significant changes to the principal risks and uncertainties identified by the Group in the Risk Factors section of the Fiscal 2022 Universal Registration Document filed with the AMF on
Currency effects
Exchange rate fluctuations do not generate operational risks, because each subsidiary bills its revenues and incurs its expenses in the same currency. However, given the weight of the Benefit & Rewards activity in
1€= | AVERAGE RATE Q1 FY 2023 | AVERAGE RATE Q1 FY 2022 | AVERAGE RATE Q1 FY 2023 VS. Q1 FY 2022 | CLOSING RATE FY 2023 AT | CLOSING RATE FY 2022 AT | CLOSING RATE VS. |
0.996 | 1.161 | +16.5% | 1.038 | 1.000 | -3.6% | |
Pound Sterling | 0.869 | 0.854 | -1.8% | 0.865 | 0.860 | -0.5% |
Brazilian real | 5.304 | 6.363 | +20.0% | 5.506 | 5.148 | -6.5% |
The positive currency impact in First quarter Fiscal 2023 of +9.2% results from the strong increase in the
The currency effect is determined by applying the previous year’s average exchange rates to the current year figures except in hyper-inflationary economies where all figures are converted at the latest closing rate for both periods when the impact is significant.
Alternative Performance Measure definitions
Growth excluding currency effect
The currency effect is determined by applying the previous year’s average exchange rates to the current year figures except in hyper-inflationary economies where all figures are converted at the latest closing rate for both periods when the impact is significant.
Issue volume
Issue volume corresponds to the total face value of service vouchers, cards and digitally delivered services issued by Benefits & Rewards Services for beneficiaries on behalf of clients.
Organic growth
Organic growth corresponds to the increase in revenue for a given period (the “current period”) compared to the revenue reported for the same period of the prior fiscal year, calculated using the exchange rate for the prior fiscal year; and excluding the impact of business acquisitions (or gain of control) and divestments, as follows:
- for businesses acquired (or gain of control) during the current period, revenue generated since the acquisition date is excluded from the organic growth calculation;
- for businesses acquired (or gain of control) during the prior fiscal year, revenue generated during the current period up until the first anniversary date of the acquisition is excluded;
- for businesses divested (or loss of control) during the prior fiscal year, revenue generated in the comparative period of the prior fiscal year until the divestment date is excluded;
- for businesses divested (or loss of control) during the current fiscal year, revenue generated in the period commencing 12 months before the divestment date up to the end of the comparative period of the prior fiscal year is excluded.
Underlying operating profit margin
The Underlying operating profit margin corresponds to Underlying operating profit divided by revenues.
Underlying operating profit margin at constant rates
The Underlying operating profit margin at constant rates corresponds to Underlying operating profit divided by revenues, calculated by converting Fiscal 2023 figures at Fiscal 2022 rates, except for countries with hyperinflationary economies.
Attachment
- PR
Sodexo Q1 Fiscal 2023 Revenues ENG
Source:
2023 GlobeNewswire, Inc., source