By Dimitri Rhodes
(Reuters) -French food caterer Sodexo expects its organic sales growth to slow down to between 5.5% and 6.5% in the fiscal 2025, it said on Thursday, after reporting higher than expected growth for the year through Aug. 31.
Sodexo, which spun off its voucher business Pluxee in February and is now fully focused on catering, said growth would be driven by new contract wins, pricing and positive volume growth even after post-COVID recovery waned.
It reported annual organic sales growth of 7.9% for the fiscal 2024, ahead of analysts’ average estimate of 7.8%.
Shares in the Paris-based company rose 4% by 0722 GMT.
Sodexo benefited from contracts related to the Paris Olympics and the Rugby World Cup during the year, along with a 4% increase in prices to mitigate the impact of inflation.
However, it slowed down the pace of price hikes through the year, while volume growth also eased. It expects to raise its prices by further 3% in 2025.
The Olympics had a positive impact of 66 million euros ($71 million) on the fourth-quarter results, above Sodexo’s estimate of 60 million announced in April.
Asked about the Bloomberg report that last month said Sodexo was weighing a possible acquisition of Aramark, CEO Sophie Bellon told reporters the company was not in talks with its U.S. rival.
Finance chief Sébastien de Tramasure said Sodexo was closely monitoring the French government’s 2025 budget proposal that could include a special contribution from companies with annual revenues exceeding 1 billion euros.
“France accounts for 12% of the group’s revenue, and the French market is far from being our most profitable, so this tax will apply to the results of our subsidiary in France,” de Tramasure added.
Sodexo’s revenue was 23.8 billion euros in the fiscal 2024, while analysts were expecting 23.9 billion on average.
It forecast an underlying operating profit margin improvement of 30-40 basis points in constant currencies for 2025, compared to 4.7% in the past year.
($1 = 0.9272 euros)
(Reporting by Dimitri Rhodes in Gdansk; editing by Milla Nissi)
