Sodexo's Outlook for Fiscal 2025

(Reuters) – French food caterer Sodexo (EPA:EXHO) expects its organic growth to slow down to between 5.5% and 6.5% in fiscal 2025, as stated on Thursday after reporting slightly higher than expected growth for the financial year ending August 31.

The group, which spun off its voucher business Pluxee in February, is now focused solely on its catering services. Growth is expected to be driven by new contract wins, pricing, and positive volume growth.

Sodexo reported annual organic sales growth of 7.9% for fiscal 2024, surpassing analysts' estimate of 7.8% from a company-provided consensus.

During the year, the company benefited from contracts linked to the Paris Olympics and the Rugby World Cup, along with a 4% price increase to offset inflation's impact.

However, it moderated the pace of price hikes throughout the year, and volume growth also slowed as the post-COVID recovery ended.

Sodexo indicated that prices could rise by an additional 3% in the current financial year. It also anticipates an underlying operating profit margin improvement of 30-40 basis points at constant currency, compared to 4.7% in the previous year.

Consolidated revenue for 2024 was recorded at 23.8 billion euros ($25.7 billion), while analysts had anticipated an average of 23.9 billion due to the October 2023 sale of its Homecare activities and adverse currency exchange effects.

($1 = 0.9270 euros)