French food caterer Sodexo has today reported a 3% rise in first-quarter sales helped by a rise in corporate events, although business in China remained weak.
Quarterly sales totalled €6.29 billion, up 3.1% from a year earlier and in line with a consensus provided by the company that had forecast €6.28 billion.
The figures exclude Sodexo's vouchers unit Pluxee, for which the group plans a separate listing in February. Chief executive Sophie Bellon said in a statement that those plans are on track.
Sodexo will now also focus on potential mergers and acquisitions over the coming quarters, finance chief Marc Rolland told analysts.
Sales grew in all geographies "due to pricing, new contract ramp-ups and continued volume growth, particularly in the Corporate services, Sports & Leisure and Education," Bellon said in a statement.
Stifel analysts said that while group sales met expectations, the 'Rest of the World' segment came below forecasts. The brokerage also flagged a lower contribution from price increases.
Sodexo is still raising prices for its services to cushion the effect of inflation, but at a slower pace than last year, Rolland told journalists.
The company also flagged a weak performance in China and some lost contracts in the Middle East last year. Barclays analysts said in a note that no update on Sodexo's full-year guidance for net new contracts may be seen as "slightly disappointing".
JPMorgan said the earnings report was a "sound start to the year," adding this "bodes positively for the sector overall," including for British peer Compass Group.
Sodexo confirmed its revenue and underlying operating profit margin outlook for 2024 and 2025.
