UPDATE 1-Sodexo forecasts flat full-year profit

Thu Apr 18, 2013 1:49am EDT

* Sees 1-2 pct organic sales growth in 2012/13

* H1 op profit 528 mln eur vs poll avg 557 mln

* Expanded cost-cutting to lead to 180-200 mln eur charges (Adds detail, background)

PARIS, April 18 (Reuters) - French catering and vouchers group Sodexo forecast flat operating profit this year and said it would expand its cost-cutting plan as it battles a particularly difficult economic environment.

Sodexo also forecast organic sales growth of between 1 and 2 percent for the full year, following a 2.1 percent rise in the first half to 9.46 billion euros ($12.3 billion).

The group said an expanded cost-cutting programme would lead to charges of 180-200 million euros in the 18 months through February 2014 and a similar amount of savings as of fiscal 2015. This compares with 130-150 million euros previously.

"This programme will be reinforced, given the economic context," Sodexo said in a statement, adding that the group was keeping its medium-term growth targets.

Excluding restructuring costs and currency effects, operating income in the first half to Feb. 28 slipped 1.1 percent to 528 million euros - below an average of analyst forecasts in a Thomson Reuters I/B/E/S poll of 557 million.

Sodexo, which manages canteens and facilities for office workers, armed forces, schools, hospitals and prisons, also sells vouchers for meals and gifts. Its clients range from the Royal Ascot Racecourse to the U.S. Marine Corps.

As it faces more difficult times in Europe, Sodexo has been focusing more on services outside its core catering business and betting on emerging markets to drive growth.

Sodexo unveiled a plan in November to lower costs and cut jobs to help meet its goals of a 6.3 percent operating margin by the end of 2014/15, compared with 5.4 percent for 2011/12, and average annual revenue growth of 7 percent. ($1 = 0.7668 euros) (Reporting by James Regan; Editing by Dominique Vidalon and Edwina Gibbs)

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