First-quarter numbers miss forecasts at Sodexo, shares slide

The catering and facilities management (FM) specialist said revenues in the three months to November end rose 1.9% to €6.4bn, or by 4.6% on an organic basis.

However, analysts had pencilled in revenues of €6.5bn, and by 1115 GMT the stock had lost 9%.

Sodexo said it had seen organic growth of 5.9% in North America, driven by strong activity in airline lounges, convention centres and stadiums.

The rest of the world also performed well. It posted growth of 6.4%, boosted by "robust" performances in India, Brazil and Australia.

However, in Europe, organic sales growth was slower, up just 2%. Sodexo said the region had been impacted by last year’s contract losses as well as a decline in project works. In the UK, Sodexo provides healthcare and justice services, including running a number of prisons.

The firm said that overall, it expected only "modest" growth in the first half.

But it was more confident for the full year, with new business contributions expected to underpin the second half, and left annual guidance unchanged.

Sodexo is currently targeting full-year organic revenue growth of between 5.5% and 6.5%.

Sophie Bellon, chief executive, said the first quarter marked a "soft start to the year, as expected.

"Solid performances in food services offset softer activity in FM services, where we experienced lower volumes in project works.

"Importantly, we are encouraged by the strong commercial momentum at the start of the year, marked by major contract wins and renewals.

"We are committed to delivering on our guidance for the year."

Bellon is the daughter of the late Pierre Bellon, who founded Sodexo in Marseille in 1966.