Sodexo cuts revenue guidance, shares tank
By Michele Maatouk
Date: Thursday 20 Mar 2025
(Sharecast News) - Sodexo shares tanked on Thursday as the French food services firm cut its full-year revenue guidance, mainly due to slower-than-expected organic growth in North America.
For the full year, Sodexo now expects organic revenue growth of between 3% and 4%, down from previous guidance of 5.5% to 6.5%. Meanwhile, the underlying operating profit margin is expected to improve by between 10 and 20 basis points at constant currencies, down from previous guidance for a 30 to 40 basis points improvement.
For the first half, Sodexo reported underlying operating profit of €651m, up 6.4% on the same period a year earlier and said the underlying operating margin improved 10 basis points to 5.2%. Consolidated revenues for the half reached €12.5up, up 3.1%. Organic revenue growth was 3.5%.
The company pointed to a good improvement in North America despite the revenue shortfall, and softer improvement in Europe, specifically in Corporate services, and in Rest of the World due to some operational challenges in a couple of contracts in Latin America.
Organic revenue growth in North America was 3.5%, lower than expected, with Education affected by the continuation of soft volumes, and Healthcare by delays in the opening of new contracts. The company said Business & Administrations and Sodexo Live! demonstrated good organic growth.
In Europe, organic revenues were up 2.1%, with a good performance in Healthcare & Seniors but continued soft growth in Facilities Management.
Rest of World organic growth was 6.6%, driven by strong performances in Australia, India and Brazil.
Chairwoman and chief executive Sophie Bellon said: "While our industry fundamentals remain strong, in North America the continued soft trend in volumes in Education and slower than expected net new ramp-up in Healthcare have impacted our ability to meet initial expectations.
"We are determined to strengthen execution on identified areas where improvement is required. We continue to see significant opportunities in a highly attractive market, and we are investing in the future to grow faster. We are confident in our ability to create sustainable value for our stakeholders."
At 1330 GMT, the shares were down 17% at €60.45.
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN