* Nine-month sales 14.219 bln eur, up 2.3 pct like-for-like
* Full-year sales growth probably at low end of 1-2 pct
* Strong Q3 in Latin America in rewards and benefits
(Adds details, CEO comments, shares)
By Dominique Vidalon
PARIS, July 10 Catering-to-vouchers group Sodexo
cautioned that full-year revenue growth would likely
be at the low end of its 1-2 percent target range as the
economic climate remained difficult in Europe and poor weather
hit its French leisure business.
The world's No.2 catering services company after Britain's
Compass Group said growth slightly accelerated in the
third quarter, however, driven by solid demand in Latin America,
and it kept its forecast for flat operating profit for the year.
"Organic sales growth will probably be at the low end of the
range, given the time it takes to ramp up some contracts in
Europe and a weak leisure business," Chief Executive Michel
Landel said on a conference call on Wednesday.
The company, which manages canteens and facilities for
office workers, the 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.
Sodexo, whose Bateaux Parisiens and Yachts de Paris units
offer cruises on the River Seine in the French capital, was hit
by poor weather in June. And the fourth quarter will suffer from
an unfavourable comparison with a year-ago period that included
the London Olympics.
Sodexo said sales reached 14.22 billion euros ($18.18
billion) in the nine months to May 31, a like-for-like rise of
2.3 percent and faster than the 2.1 percent in the first half.
Its shares were up 1.3 percent at 0918 GMT, outperforming a
0.3 percent drop on the French SBF 120 index. The
stock has gained 5 percent this year, giving the group a market
value of 10.6 billion euros.
Oddo analyst Guillaume Rascoussier pointed to an
acceleration in demand at the vouchers division in Latin
America, whose sales grew 20 percent in the third quarter.
He said the trend should benefit rival Edenred,
which posts quarterly sales on July 24 and makes some 40 percent
of operating profit in Brazil against 14 percent for Sodexo.
Nine-month sales at Sodexo's on-site services solutions unit
rose 1.4 percent in North America, and 7 percent in Asia and
Latin America, but only 0.8 percent in continental Europe.
As it faces tougher 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, up from 5.4 percent in 2011/12, and average
annual revenue growth of 7 percent.
Sodexo said on Tuesday the plan would notably entail 217
voluntary departures in France out of a domestic workforce of
38,000. It employs 420,000 people worldwide.
Sodexo trades at 18.47 times estimated earnings against
17.43 times for Compass, a premium some analysts tie to hopes
the cost-cutting plan will lead to higher operating leverage.
($1 = 0.7821 euros)
(Additional reporting by Noelle Mennella; Editing by Miral
Fahmy and James Regan)