Sodexo supported by its greater optimism about its internal growth


(AOF) – Sodexo (+1.03% to 78.10 euros) is among the strongest gains in the SBF 120 index following the increase in its growth prospects. Building on a better than expected first part of the year, the collective restaurant group now anticipates internal growth in turnover at the top of the range of 6% to 8%. Sodexo still anticipates an increase in operating margin of between 30 and 40 basis points at constant rates.

Reacting to these announcements, Jefferies anticipates an increase of 5% to 10% in earnings per share for 2024.

Sodexo’s outlook is based on solid commercial momentum, slight growth in volumes at existing sites, the contribution of the Paris Olympic and Paralympic Games in the fourth quarter and price increases expected at nearly 4% for the full year.

A good first half of exercise

In the first half, ended at the end of February, operating profit reached 612 million euros, an increase of 12.3%, or 16.9% at constant exchange rates. Operating margin increased 40 basis points to 5.1%, slightly beating consensus. Stifel explains this outperformance by North America where the margin increased by 30 basis points to 6.9%.

Sodexo’s consolidated turnover increased by 4.5% to 12.1 billion euros. Internal growth in turnover stood at 8.5%, “fueled half by the increase in prices, and the other half by the contribution of new contracts and larger volumes on the sites existing”.

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