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Catering group Sodexo targets operating margin above 6% in 2025

by Staff GBAF Publications Ltd
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(Reuters) -French catering and food services group Sodexo onWednesday forecast organic sales growth of between 6% and 8% for fiscal 2024-2025 and an operating margin above 6% in 2025, as it aims to refocus on food services and boost voucher business growth.

Sodexo will later on Wednesday unveil its 2025 strategy based on enhancing and expanding its food services offering to address evolving consumer needs, and accelerating growth in the Benefits and Rewards division through digital services and broader range of employee benefits.

“Today, with our strategy to refocus and accelerate, and with a relentless focus on execution, we expect to continue to improve our performance in the coming years,” CEO Sophie Bellon said in a statement.

The mid-term objectives reflect caterers’ recovery after coronavirus restrictions eased, and good prospects in a context of inflation that the company expects will push clients to outsource more of their catering services and employee benefits.

One of the world’s biggest catering companies alongside Britain’s Compass, Sodexo said it expected its voucher business to deliver low-double-digit organic revenue growth for fiscal 2024 and 2025, and an underlying operating profit margin exceeding 30% in 2025.

The unit, which supplies employee meal passes and vouchers, targets capital expenditures close to 10% of revenue per year between 2022 and 2025, said Sodexo that earlier this year decided not to open the division to external capital.

The group last week forecast organic revenue growth of between 8% and 10% for 2023 and an underlying operating profit margin close to 5.5% after a fiscal 2022 that Bellon described as “a turning point” for the company.

Sodexo will host its Capital Markets Day in Paris from 11:00 a.m. (1000 GMT).

(Reporting by Diana Mandiá in Gdansk; editing by Milla Nissi)