Sodexo (SW) Q3 2024 earnings summary

Executive summary

• Q3 fiscal 2024 revenues reached €6.1 billion, up 5.6% year-over-year, with organic growth at 6.8% and total revenue at €6,074m.

• Food services led growth at 8.6% organically, while FM services grew 3.5%; North America posted the strongest regional growth at 9.0%.

• Commercial momentum remains positive, with strong net new business and notable contract wins and renewals in North America, Europe, and Brazil.

• Deceleration in price increases and inflation, with food inflation now in low single digits and labor inflation below 5% except in the UK.

• Board established a Sustainability Committee to reinforce governance and CSR alignment, effective October 2024.

Financial highlights

• Organic revenue growth for Q3 was 6.8%, with pricing contributing less than 4% and the rest from new business and volume.

• Q3 revenue: €6,074m, up from €5,755m in Q3 2023; negative currency impact of -0.2% and net impact from acquisitions/disposals of -1.0%.

• North America revenue: €2,904m (+9.0% organic), Europe: €2,096m (+5.4%), Rest of World: €1,074m (+3.6%, 5.9% ex-accounting change).

• For the first nine months, group organic growth was 7.9%.

• Pricing impact decelerated from 4.5% in H1 to below 4% in Q3; full-year pricing expected near 4%.

Outlook and guidance

• Fiscal 2024 organic revenue growth expected at the top of the 6%-8% range, with 30-40 basis point UOP margin improvement at constant currencies.

• Fiscal 2025 guidance unchanged: organic growth at the bottom of the 6%-8% range, margin improvement of 30-40 basis points.

• Pricing impact expected to be around 3% for 2025.