Sodexo annual figures

Sales slump in almost all divisions

Sodexo Chief Executive Officer Denis Machuel
imago images / IP3press
Sodexo Chief Executive Officer Denis Machuel

Sodexo, the French catering and services group with activities in 67 countries and 420,000 employees, generated total revenues of €19.321 bn in fiscal 19/20, down 12% or €2.633 bn. Operating profit fell by 93.8%.

As announced this week, the Group is cutting nearly 2,100 jobs. This corresponds to less than seven percent of the workforce, the company announced. In Paris, Sodexo papers temporarily dropped by 4.66 percent to €54.48. The drop in sales was too great. CEO Dennis Machuel: "Until the end of February, our strategic agenda was 'Focus on growth'. The target was 4%. The extent to which Covid then influenced the entire business is shown by the concrete figures in the individual business units: While organic growth in the first half of the year was +3.2%, it declined by -27.5% in the second half due to the Covid 19 pandemic.

The reported net loss amounted to €315 m, compared to a net profit of €665 m euros. By segment, Healthcare & Seniors was relatively stable with a decrease of only -11.1%, while Education was down by -47.2% and Business & Administrations by -29.2%, and Business Services (-26%) were significantly lower. Catastrophic was the sports and leisure sector (-88%). Only ray of hope: Within business and administration, government and public administration as well as energy and resources together grew by +1.3%

All key indicators were affected.

The customer retention rate at the end of the year was solid at 93.5%, excluding voluntary exits, with a significant improvement in North America in particular. New sales decreased by -140 basis points to 4.9% as new projects were delayed. The underlying operating profit margin for the year was 2.9%.

By continent, while North America and Europe saw significant declines of -35.9% and -28.4% respectively, performance in Asia Pacific, Latin America, Middle East and Africa was much more robust at -5.2%.

Outlook and forecast

In the coming quarters, the effects of the Covid 19 pandemic will continue to be significant for the Group given the high level of uncertainty.

The segments Government and Authorities and Energy and Resources will continue to be resilient. Healthcare and seniors are gradually returning to pre-Covid levels. It is clear that some segments, such as sports and leisure, will not recover until the pandemic is over. In other segments, such as business services and education, activities will gradually improve.

The volume of employee Benefits & Rewards spending will gradually grow again as digitization progresses, reinforced by the trend towards home working. This progress could be somewhat hampered by rising unemployment. The assessment states: "At this time, we see an improvement in the first half of fiscal 2021 compared to the second half of fiscal 2020, with an organic decline of between -20% and -25%. There is no sign of a normalization.

Around the world, Sodexo provides its services daily to 100 million people in 67 countries. Its services include reception, security, maintenance and cleaning services, catering, facility management, restaurant and gift vouchers as well as fuel passes for employees, home support and concierge services. A total of 470,000 employees work for the multi service provider. Sodexo is included in the CAC 40 and DJSI indices.
In Germany, Sodexo employs around 10,800 people who serve almost 1.3 million consumers every day in around 700 companies, including commercial enterprises, public authorities, schools, kindergartens, clinics and senior citizen facilities. Founded by Pierre Bellon in 1966, Sodexo is currently one of the world's leading companies in services for a better quality of life.