Paris-based multinational outsource services firm Sodexo reported an 11% organic increase in its continuing operations for its 2023 fiscal year, with North American operations leading the way with a 13.9% organic increase and representing 46% of the company’s total business.
North American operations were led by a 23.4% organic gain in the Business & Administrations segment, which encompasses corporate services as well as sports venues, convention centers and airport lounges. It was “boosted by the return to the office and new contracts in Corporate Services, increased activity in Sports events, convention centers and airport lounges, with increased passenger counts and higher spend per capita, as well as inflation pass-through,” the company noted in its earnings press release, adding that [a]lthough coming from a smaller base, Convenience solutions and Entegra [the company’s procurement unit] also contributed to the momentum with strong organic growth.”
Also posting strong organic growth rates for the fiscal year for the North American division were Healthcare & Seniors (8.8%) and Education (9.1%). The growth in Healthcare & Seniors revenues was “driven by price increases, cross-selling and retail volume improvement,” the company stated, and also noting the impact of the full implementation of Sodexo’s expanded partnership deal with Ardent Health to provide clinical patient nutrition and food services as well as environmental services to 50+ locations in six states.
Education business was led by the Universities segment, which saw organic growth of 13.4% due to “strong attendance levels, price increases and a higher level of board plans, retail sales and event catering,” the release stated. However, results in the Schools (i.e., K-12) segment was “slightly negative, the impact of price adjustments being offset by decreases in meal volumes related to the reduction of government waiver eligibility for students,” according to the release.
“In Fiscal 2023, we have made good progress in the execution of our strategy which confirms the momentum of the last two years,” stated Sodexo Chairwoman/CEO Sophie Bellon. “We are on track to recover agility and profitable growth. Everyday, the transfer of operational accountability in the regions enables faster decision-making and increased mutualization. The North American recovery is coming through, with solid growth in volumes, good commercial momentum and enhanced operational execution.”