French catering and food services group Sodexo reported better-than-expected revenue for the third quarter with strong growth in all business segments and geographies, helped by price hikes and post-Omicron volume recovery.
The Paris-based firm's revenue rose by 18.3% organically to €5.52 billion in the three months ended May 31, against a €5.33 billion average estimate from analysts polled by the company.
Sodexo, which provides catering for businesses, industrial sites, military troops, government agencies, hospitals, schools and sports events, also confirmed the full-year outlook it had lowered in April.
The group said its Corporate Services business continued to benefit from the return to offices, while activity also picked up in Sports & Leisure and Universities segments as events and retail sites restarted.
Catering Sector Challenges
After being hit by COVID-19 lockdowns, caterers are now renegotiating tariffs and supplier agreements as the sector faces soaring energy and food prices triggered by Russia's invasion of Ukraine, both major wheat exporters.
“Growth in the third quarter has been strong in all activities, segments and geographies, helped by post-Omicron On-site volume recovery and price revisions," commented Sophie Bellon, chairwoman and CEO.
"We are making progress on our strategic priorities. We are moving ahead on improving the effectiveness of our On-site Services organization. We plan to transfer full P&L accountability to the countries, regrouped into three geographic zones, North America, Europe and the Rest of the World."
On-site services is Sodexo's main division, with €5.30 billion of revenues in the quarter.
Sodexo, which in May dropped the option of opening up the capital of its voucher business to an external investor, said it would present its strategy for the division together with its mid-term objectives on November 2 during its Capital Markets Day.
News by Reuters, additional reporting by ESM – your source for the latest A-Brands news. Click subscribe to sign up to ESM: European Supermarket Magazine.
