Sodexo reports ‘solid’ half-year results and plans to spin off vouchers business

Sodexo achieved revenues totalling €12.1bn ($13.2bn) for the six months ended 28 February 2023 | Photo credit: Sodexo

Sodexo has reported strong half-year revenue growth and announced plans to spin off its Benefits and Rewards Services workplace voucher business in 2024. 
 

The French foodservice group reported 18% year-on-year revenue growth to reach €12.1bn ($13.2bn) for the six months ended 28 February 2023. 

Group net profit increased 30% to €440m ($480m) compared to the same period of the previous year. 

Sodexo’s key On-Site Services division, which provides food and beverage catering services across offices, hospitals, leisure facilities and educational campuses, achieved 13% sales growth to reach €11.5bn ($12.6bn).  

Additionally, Sodexo’s food services segment achieved 20% revenue growth, contributing 65% of total on-site services revenues during the period. 

“The performance in the first half is solid. In on-site Services, despite inflation, the post-Covid ramp-up in volumes, mitigation actions and pricing have helped us to improve our margins. Food inflation has remained high and is likely to remain so in the second half,” said Sophie Bellon, CEO, Sodexo. 

Sodexo’s Board of Directors has also approved plans to separate the company’s two business units — On-site Services and Benefits & Rewards Services — into two entities.  

Its Benefits & Rewards Services division supplies vouchers to businesses for use by employees to be redeemed for a range of services, from ordering food to accessing health and well-being benefits. 

The segment achieved 24% revenue growth to reach €508m ($554m), representing just 4% of Sodexo’s total revenues during the period. 

However, the catering and food services group believes the division has an addressable market of €1tr ($1.1tr), growing at 10% per annum. 

Voucher services have gained traction as employers seek to support staff through the cost-of-living crisis. Research from London-based non-profit BusinessLDN in January 2023 found 65% of London businesses are supporting staff with benefits, including flexible working and vouchers, during the cost-of-living crisis. 

“More focused, supported by a dedicated and empowered governance as well as an adequate capital structure, each entity would be in an even stronger position to pursue its own strategy, achieve its goals and realise its full potential,” Bellon added. 

The proposed transaction, which would see Sodexo spin-off and list its Benefits & Rewards Services division through the distribution of shares to Sodexo shareholders, is expected to take place during 2024. 

Founded in Marseille in 1966, Sodexo operates across 53 countries. The business achieved sales of €21.1bn ($23bn) in its 2022 financial year.