* Nine-month sales rise 2.3 pct like-for-like
* Sodexo cuts 2013/14 sales growth goal to 2.2-2.5 pct
* Sodexo keeps full-year profit goals
* Shares drop almost 3 pct
(Adds CEO comments, shares, analyst)
By Dominique Vidalon
PARIS, July 9 Sodexo, the world's
second-biggest catering services company, cut it full-year sales
growth forecast on Wednesday, warning its fourth quarter would
be weaker than expected due to the delayed start-up of some
However the French firm said recently signed deals with
Johnson & Johnson in Germany and Procter & Gamble
in France should have a positive impact next year and stuck to
its profitability targets for this year and next.
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 Britain's
Royal Ascot Racecourse to the U.S. Marine Corps.
The company, which operates in 80 countries and has a market
value of 12.4 billion euros ($16.9 billion), said it now expects
2013/14 like-for-like sales to rise by between 2.2 percent and
2.5 percent - compared with a previous forecast of 2.5-3.0
It said this was notably due to delays in the launch of
major healthcare contracts won in 2013 with clients such as HCR
Manorcare. The delays could range from six to nine months.
By way of explanation Sodexo - whose fiscal year ends on
Aug. 31 - said large contracts were complex to implement as they
often involved employee transfers. It did not tie the delays to
weak economic conditions.
Sodexo, the world's No.2 catering services company by
revenue after Britain's Compass Group, cuts its
full-year forecast after reporting like-for-like sales growth of
2.3 percent to 13.822 billion euros in the nine months to May
This was a slight slowdown from 2.4 percent growth in the
first half as clients continued to postpone investments in new
mining projects in Latin America, Australia and Africa.
Societe Generale analysts, who had expected nine-month
like-for-like sales growth of 3 percent, said they may review
their estimates but were keeping a "buy" rating.
"Short-term guidance (was) reduced, but we maintain our
positive long-term view," they wrote in a note to clients.
Nine-month revenue from on-site services, which make up the
bulk of Sodexo's business, rose 1.7 percent like-for-like, while
the vouchers business grew 14 percent, driven by strong demand
in Latin America and a robust performance in Europe and Asia.
On-site services revenue rose 3.7 percent in North America
- a region which accounted for almost 40 percent of Sodexo's
overall sales - driven by strong demand from corporate customers
and the start of facilities management contracts with clients
such as Unilever and Walt Disney World Resorts.
On-site revenue rose only 0.3 percent in Europe, where
clients continued to reduce demand for catering services to cut
costs, and eased 0.7 percent in the rest of the world.
This was due to a sharp slowdown in demand for remote-site
services in the mining sector in Latin America, Australia and
Africa, Sodexo said. Recently agreed contracts in oil, gas and
construction should however allow its remote-site business in
the rest of the world to return to positive growth in the first
quarter of its fiscal year 2014/2015, it said.
At 0930 GMT Sodexo shares were down 2.74 percent,
underperforming the CAC-40 French blue-chip index which
was slightly down, as investors reacted to the guidance cut.
Sodexo kept its forecast for 2013/14 operating profit growth
of 11 percent at constant exchange rates, and for cost savings
to lift its operating margin to 5.6 percent from 5.2 percent
last year. It also reiterated its target to improve operating
margin to 6 percent in 2014/15.
"I remain extremely confident that we will deliver an
improvement in operating margin this year and next year and that
this will continue to improve in further years," Chief Executive
Michel Landel told a conference call with analysts.
Sodexo trades at 19.55 times estimated earnings against
19.64 times for Compass.
($1 = 0.7331 Euros)
(Reporting by Dominique Vidalon; Editing by Andrew Callus and