(Boursier.com) — In the wake of the market, Sodexo drops 1% to 101.3 euros after a quarterly publication generally in line with analysts’ expectations. The collective catering group announced a turnover of 6.3 billion euros for its first quarter of 2024, up 3.1%, including a negative exchange rate effect of -4.8% and a contribution of acquisitions net of disposals of -0.3%. Internal growth stood at +8.2%.
The firm confirmed its outlook (excluding Pluxee) for the 2024 and 2025 financial years, namely internal growth between +6 and +8% per year and an improving margin of +30 to +40 basis points per year, at a rate constant.
Oddo BHF maintains its ‘outperform’ rating following these announcements. Sodexo presents a defensive profile in the current context since the group generates 55% of its turnover in sectors less dependent on the macroeconomic environment (health, education, sport & leisure). At the same time, Sodexo offers significant potential for improvement, already visible since 2022 and confirmed in 2023, in particular through the growth in the retention rate (now more than 95%, objective raised to 96% compared to around 93% for the historical average) and net new business (now 2-3% versus 0% historical average). This progress confirms the relevance of the group’s strategy under Sophie Bellon (CEO since 2021) who was able, with the board of directors, to make important decisions (return to an organization by regions, spin-off from Pluxee, reduction in the number countries, deployment of high-end and more flexible/digital food offers). The analyst expects organic growth to accelerate to levels above 6% per year in 2024 and 2025, and profitability, ultimately closer to Compass levels, thanks in particular to the increase in the retention rate and the Business Development. Sodexo’s valuation at 10.3x 2024 EV/EBIT implies a discount of 20% compared to its historical multiple and 40% compared to Compass.
First quarter 2024 revenue is in line with expectations with organic growth of 8.2%, with strong performances in North America and Europe, while the rest of the world disappointed somewhat, notes Stifel . The tariff contribution has decreased sequentially, although it still represents just over half of the growth at group level. The company reports “solid” net production, although there are some lost sites in Seniors in North America and negative net production in Education in Europe. Unsurprisingly, the outlook was confirmed. Overall, the broker (‘hold’) considers this publication to be in line with expectations.
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