Sodexo: another year of solid performance; positive outlook
17 november 2016
At the Board of Directors meeting held on November 15, 2016 and chaired by Sophie Bellon, the Board closed the Consolidated and Company accounts.
Sodexo’s Chief Executive Officer Michel Landel presented the Group’s performance for the fiscal year ended August 31, 2016.
• Revenues up +2.2%, and organic growth of +2.5%
On-site organic growth at +2.4% despite a tough economic environment in Remote Sites and a difficult situation in France.
Resilient Benefits & Rewards Services activity at +4.7%.
Excluding the impact of the Remote Sites activity, underlying growth was strong at +4%;
• +30 basis points improvement in operating margin excluding currency effect and before exceptional expenses.
• Segmentation is enhancing new business opportunities highlighted by a major integrated services contract signed with Rio Tinto in Australia.
• Net profit +5.2% before non-recurring items and currency effect.
• Proposed dividend of 2.4 euros representing an increase of +9.1% and a €300 million share repurchase program (around 1.9% of capital) for cancellation purposes.
• Fiscal 2017 guidance of around 3% revenue organic growth and an 8% to 9% operating profit growth (excluding currency effect and exceptional expenses linked to the Adaptation and Simplification program).
• Medium-term objectives confirmed.
Commenting on these figures, Sodexo CEO Michel Landel said:
"Sodexo continues to grow as a result of solid growth in North America, the UK (On-site Services) and Benefits and Rewards Services. We achieved this growth despite a tough environment in the commodities markets affecting the Remote Sites business and the impact of a difficult situation in France. Underlying organic growth excluding Remote Sites is 4%. The Group has also delivered another strong performance on operating profit before exceptional costs, up +8.2%, and +30 bps on the margin, excluding currencies, in line with our annual guidance.
The Adaptation and Simplification program is on track to deliver 200 million euro of annual savings in Fiscal 2018.
The first successes of the new organization by global segment were visible this year with the signature of the landmark Rio Tinto contract in March, followed by global agreements signed with Shell and Seadrill, as well as the further extension to global contracts with Pfizer or Unilever. We are proud of these major partnership agreements. This is both the result of the investments we have made over the past 10 years to build our integrated services offer, and the recognition of our technical expertise. It reflects our objective of improving the quality of life of the women and men we serve.
We are confident in the future, and for Fiscal 2017 aim for around 3% organic revenue growth and between 8% and 9% growth in operating profit, excluding the currency effect and exceptional expenses of the Adaptation and Simplification program."
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