Sodexo announces nine months Fiscal 2016 revenue growth at +3.7% and confirms full-year objectives

Sodexo, world leader in Quality of Life Services, today reports its nine-month year to date Fiscal 2016 revenues, ending May 31, 2016. 

• Organic growth of +3.3%
• Steady growth in On-site Services despite a mixed environment
• Benefits & Rewards Services resilient

Commenting on these figures, Sodexo CEO Michel Landel said:

"The underlying growth trend has been maintained in the third quarter. This is due to strong growth in Corporate and Health Care in North America, stabilization in the Remote Sites activity quarter on quarter, and a resilient performance in Benefits and Rewards Services.

This quarter, we continued to develop exciting new partnerships with clients such as Publicis and United Airlines, who share our belief that improving Quality of Life for their employees and customers improves their own performance.

In light of this, we confirm our Fiscal 2016 objectives."

Highlights of the period

• Revenues for the first nine months of Fiscal 2016 amounted to 15.7 billion euro representing an increase of +3.7% compared to the year-earlier period. Organic growth was +3.3%, including the contribution from the Rugby World Cup contract in the first quarter, or +2.5% excluding this impact.
• Organic growth of On-site Services was +3.2%, reflecting:
  • Growth in North America continuing to improve, with revenues up +4% on an organic basis, driven by strong performance in Health Care and Corporate;
  • Small but regular improvement in organic growth in Continental Europe, up +1.8%, helped by a couple of extra working days in certain countries in May;
  • Revenue growth of 18.1% in the UK as a result of the positive impact of the Rugby World Cup contract and the ramp-up of the large new contracts signed last year, and which are now fully in the comparable base;
  • Impact, in the Rest of the World region, of the severe slowdown in the Remote Sites activity (mining and petroleum industries) which appears to be stabilizing quarter on quarter. Excluding Remote Sites, organic growth was +6.5%.
• Organic revenue growth in Benefits and Rewards Services was +5.7% reflecting:
  • A resilient performance in Latin America driven by strong growth in Chile and Mexico, offsetting ongoing weakness in demand in Brazil;
  • A particularly good performance in Europe, in the third quarter.
• Strong demand for integrated Quality of Life Services offers with clients including Publicis, EM Lyon Business School, United Airlines, Google and Baptist Health System.

Outlook

Given the underlying trends in growth achieved year to date in Fiscal 2016, the Group confirms its objectives for Fiscal 2016, as follows:

• Organic revenue growth of around 3%;
• Around 8% growth in operating profit excluding the currency effects and exceptional expenses related to the adaptation and simplification program.