Posted By Global Banking and Finance Review
Posted on January 24, 2025
By Mathias de Rozario and Johan BODINIER
(Reuters) -French food caterer Sodexo reported a nearly 5% rise in its first-quarter organic revenue on Tuesday but missed market expectations, as robust growth in India, Brazil and Australia was offset by slower activity in Continental Europe.
Sodexo's shares were down 6% by 0810 GMT, at the bottom of France's SBF 120 index of Paris' most traded stocks.
Consolidated revenue was 6.4 billion euros ($6.7 billion) in the three months through November, compared with the 6.5 billion expected by analysts in a company-provided consensus poll and 6.3 billion a year earlier.
"The gap with the consensus is mainly due to the Europe zone," Chief Financial Officer Sebastien de Tramasure told journalists on a call.
European growth of 2% was weighed down by lower-than-expected volumes in Norway, Germany and the Netherlands due to contract losses in the facility management division and the closure of some facilities last year, he said.
During the past years, the catering sector has benefited from tailwinds such as inflation which led to record outsourcing and volumes, boosting growth.
The France-based group's growth came on the back of a 3% increase in pricing in the first quarter, it said. Price hikes however continued to slow down after reaching 4% in the fiscal year 2024 as Sodexo continues to pass through inflation.
It also benefited from 5.9% organic growth in its key North America market, which accounted for 48.4% of its total revenue in the quarter. Europe made up 34.7%.
Sodexo last week completed the acquisition of CRH Catering to strengthen its position in the fast-growing U.S. convenience segment.
The signing of key contracts also provides a boost for the coming years, de Tramasure said, highlighting the exclusive marketing of hospitality packages for the next three Ruby World Cups, namely the 2025 Women's World Cup in England and the 2027 Men's and 2029 Women's World Cups in Australia.
Sodexo confirmed the full-year guidance provided with its annual results in October.
($1 = 0.9614 euros)
(Reporting by Mathias de Rozario and Johan Bodinier in Gdansk; Editing by Jacqueline Wong and Milla Nissi)
