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PARIS, April 17 French catering, facilities
management and vouchers group Sodexo kept its
full-year goals on Thursday after operating profit rose 11.4 in
the first half, helped by cost cuts and new contracts in the
The world's second-biggest catering services company after
Britain's Compass Group said operating income excluding
restructuring costs and currency effects in the six months to
Feb. 28 rose to 559 million euros ($772 million).
The group reiterated its forecast for a 2.5 to 3 percent
rise in like-for-like full-year 2013/14 sales after revenue grew
2.4 percent like-for-like in the first half to 9.283 billion
It also kept its forecast for 2013/14 operating profit
growth of 11 percent at constant exchange rates and for its
operating margin to rise because of cost savings to 5.6 percent
from 5.2 percent last year. For fiscal year 2014/15, Sodexo also
expects an operating profit margin of 6 percent.
Sodexo manages canteens and facilities for office workers,
the armed forces, schools, hospitals and prisons, and sells
vouchers for meals and gifts. Its clients range from the Royal
Ascot Racecourse to the U.S. Marine Corps.
Revenue from on-site services, which make the bulk of
business, rose 1.9 percent like-for-like in the first-half,
while the vouchers business grew 15.1 percent, driven by strong
demand in Latin America and accelerated growth in Europe.
On-site services revenue rose 3.8 percent in North America,
driven notably by strong demand from corporate clients and new
facilities management contract wins from Unilever and
Walt Disney World Resorts.
On-site revenue rose only 0.6 percent in Europe, where
clients continued to reduce demand for catering services to cut
costs. There was also weak demand for remote-site services in
the mining sector in Africa, the Middle East, Australia and
Latin America, Sodexo said.
As it faces tough times in Europe, Sodexo has been focusing
more on services outside its core catering business and betting
on emerging markets to drive growth.
Facilities management services now represent more than a
quarter of group revenue.
Sodexo trades at 19.65 times estimated earnings against
17.94 times for Compass, a premium some analysts tie to hopes
that a cost-cutting plan it unveiled a year ago will boost
($1 = 0.7243 Euros)
(Reporting by Dominique Vidalon; Editing by James Regan)