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Sodexo’s Full Year Group Results for Fiscal 2024 report a strong financial delivery in a year of structural transformation for the food services and facilities management company.
- Group revenues increased +5.1% year-on-year driven by organic growth of +7.9%. The year benefited from two major sporting events with the Rugby World Cup in the first quarter and the Olympics in the fourth quarter. Excluding these events, organic growth would have been +7.5%.
- Operating profit increased +24.1% along with underlying operating profit which saw an increase of +13.7%.
- Food services organic growth, increased by +9.3%, outperforming FM services, at +5.5%. Food services now represent 66% of Group revenues.
- In Europe, organic growth was +7.2%, or +6.0% excluding the Rugby World Cup and the Olympics, with increased volumes and the contribution of net new business, and despite the sequential slowdown in the price increases.
- Net new business signed during the year was positive at 1.6%, lower than the previous year at 2.2%, but still well above pre-Covid levels and at better terms and margins than the previous year.
- New development was 7.4%, with a record year in signings, exceeding 1.9 billion euros including cross-selling, compared to 1.7 billion euros last year.
- Client retention was 94.2%, down from the previous year, affected by the loss of one large global FM contract, as well as two in Energy & Resources in Latin America.
- Looking ahead Sodexo’s guidance for Fiscal 2025 expects organic growth to be between +5.5% and +6.5%.
Sodexo Chairwoman and CEO Sophie Bellon said of the results: “2024 has been a year of structural transformation with two decisive steps to further focus the Group : the spin-off of Pluxee and the unwinding of the cross-shareholding with Bellon SA, returning the proceeds to shareholders. With our simplified structure, reorganised by geography, as a pure-player in Food and FM services, we are mobilised on enhancing our operational execution to drive profitable and sustainable growth.
“We delivered a strong set of numbers, at the top-end of our guidance, achieving organic growth of +7.9% and a 40 bps improvement in margins. This was driven by effective inflation management, positive net new business, a standout year for Sodexo Live! and strong operating leverage from productivity gains, supply chain momentum and cost reduction. Finally, we reduced our Net debt to EBITDA ratio to 1.7 times, firmly back within the target range.
“We achieved a record year for new signings, exceeding 1.9 billion euros including cross-selling, and at above-average margins. While retention was impacted by the loss of a large global contract, our disciplined approach and structural improvements have laid strong foundations. We are determined to recover our trajectory at over 95% already in Fiscal 2025.”
Commenting on Sodexo’s performance closer to home, over the last 12 months, Sean Haley, CEO for the UK & Ireland said: “Our commitment to partnership working and delivering excellent food and FM services has led to the successful retention of many large complex contracts with longstanding clients this year, as well as an increasing portfolio of new business wins across our selected market sectors.
“We attribute this success to three core elements: firstly, the hard work and dedication of our colleagues, who everyday deliver service excellence across our 2,000 client sites. Secondly, our food and FM services are all delivered with a hospitality approach and is helping to increase client workplace productivity, engagement and wellbeing. And lastly, because we are purpose-led we can demonstrate very tangibly the positive impact we are able to deliver through our contracts and suppliers, supporting the communities in which we operate.
“We continue to transform our food and FM services to ensure we deliver valued experiences whatever the environment – whether at a large, acute NHS Trust, corporate workplace or a school – we are deploying technology enabling the delivery of these services ever more effectively and efficiently with our team’s dedication to great service at its core.
“We remain focused on evolving our food offers in line with consumer trends. Our portfolio of food brands – including Modern Recipe, Kitchen Works, Fooditude and the Good Eating Company – ensures that no matter which Sodexo restaurant you eat in, you can be assured that our highly-skilled culinary teams have created healthy, nutritious, tasty and sustainable food options for all to enjoy.
“We recognise that none of this can be delivered alone. We are mindful of, and grateful for, the partnerships we enjoy with our clients, our suppliers and our teams who are absolutely core to the progress we have made towards our social impact goals. I am incredibly proud that Sodexo is the only company in its industry this year to be ranked in the top 75 on the Social Mobility Employer Index, we are a Times Top 50 Employer for Gender Equality, and worldwide in the top four per cent of companies with an A grade CDA ranking for Climate Action.
“And as we look to the future, over the next 12 months we will celebrate some important anniversaries including the Good Eating Company’s 25th anniversary, and in 2025 we will be marking the tenth anniversary of the publication of our first social impact pledge, with the launch of a fifth iteration and new set of commitments. We will also be celebrating two decades of the Sodexo Stop Hunger Foundation providing valuable support to effect real, lasting positive change in communities across the UK and Ireland. Over the last 12 months alone the Foundation’s work has positively impacted 2.8 million people.
“All these milestones, provide an important moment to reflect on how much has been achieved. While we continue to grow and develop the business in line with our ambitions, our primary goals remain the same. We remain fully focused on the safety of our people, on delivering service excellence, working towards net zero and making a positive social impact in all we do, every day.”
