Sodexo sees demand for catering and vouchers lifting margins By Reuters

By Diana Mandia

(Reuters) -Sodexo expects its working revenue margin to rise to over 6% in 2025 as extra firms outsource their catering and advantages wants and the French meals companies group boosts its voucher enterprise to satisfy extra demanding staff’ expectations.

The corporate delivered a 5% margin in its final fiscal 12 months and final week forecast a rise to five.5% for 2022-2023.

Sodexo (EPA:), presenting its 2025 technique, mentioned on Wednesday it might notably look to broaden its Advantages and Rewards (B&R) enterprise as firms search extra methods to retain workers in tight labour markets and better flexibility as a rising variety of staff work remotely.

French voucher group Edenred (EPA:) mentioned final month it anticipated revenue development to speed up over the subsequent three years as workers shortages and rising inflation pushed employers to spend extra on employee advantages.

B&R will goal capital spending near 10% of income per 12 months between 2022 and 2025 and an underlying working revenue margin exceeding 30% in 2025, Sodexo mentioned.

The caterer, whose companies additionally embody office design, reception and cleansing companies, additionally mentioned it might step up its deal with meals affords as rising inflation leads extra firms to outsource companies.

It’ll present extra choices with seasonal recent meals and regionally sourced merchandise, in addition to enhancing digital choices, CEO Sophie Bellon mentioned.

Sodexo, which serves 100 million shoppers every day throughout 64 international locations, additionally goals to spice up its development in the USA, the place first-time outsourcing contracts are growing and accounted for 44% of signings final 12 months.

Nevertheless, the corporate’s natural gross sales development goal of between 6% and eight% for fiscal 2024-2025 is decrease than its forecast final week of 8% to 10% for 2022-2023.

Its shares have been down 3.2% to 85.92 euros at 1406 GMT.

AlphaValue analyst Yi Zhong described B&R’s 2025 margin goal of greater than 30% as “prudent”.

“They’ve many plans and on the finish the margin targets stay the identical (over 30%) for 2023 and 2025, versus 31% in 2019, ie it would want no less than 3 extra years to return to its pre-pandemic margin stage”, she mentioned.