Sodexo posts strong half-year results despite Omicron disruption

Sodexo expects the return of workers to offices and the reopening of sports events to boost sales in the second half of 2022 | Photo credit: via Shutterstock

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Sodexo has shrugged off the worst of the Omicron wave to post strong revenue and profits growth across its business.
 
Reporting its half year results ended 28 February 2022, the French foodservice and facilities management firm posted revenues of €1.3bn, 19.4% higher than the €8.6bn during the same period a year ago. Group net profit was €337m, up from €33m earned during the same period in 2021.
 
“Revenue growth and margins improvement have been strong in this First half, reflecting the solid recovery in Education, Corporate Services and Sports & Leisure segments. Omicron did have an impact on the recovery in the second quarter, but we are seeing a pick-up since the end of February,” said Sodexo Chairwoman and CEO Sophie Bellon.
 
“In the second half of the year, we are confident that the return to the workplace and Sports & Leisure events will continue to recover. However, the environment remains uncertain with intermittent local outbreaks of Covid-19, and the war in Ukraine. We are confident that we can manage the year end inflationary pressure on margins,” Bellon added.
 
Commenting further on the war in Ukraine, Sodexo said it does not currently have operations in the country. The company also noted ‘small’ onsite presence in Russia accounting for less than 1% of group revenues and said it was closely monitoring the situation and ‘reviewing different options.’
 
Despite the positive results, Sodexo cautioned that the war in Ukraine, further outbreaks of Covid-19, and the earlier than expected winding down of Covid testing in the UK meant that the current trading environment was ‘full of uncertainties.’
 
Sodexo started 2022 in a strong position, posting an 18.8% rise in first quarter revenues to €5.3bn ($6bn) and reporting that business activity had returned to 95% of pre-Covid levels. In October 2021, the company reported annual revenues of ($20.2bn) – 87% of 2019 levels.
 
2021 saw the company sign deals with major coffee companies, including a 10-year workplace hospitality deal with For Five Coffee Roasters in the US and a three-year workplace partnership with the UK specialty roaster, Origin Coffee.
 
Looking to the year ahead, Sodexo said strengthening its US business was a key priority, citing its partnership with For Five Coffee Roasters as a significant milestone.