By Gaelle Sheehan and Shivani Tanna
(Reuters) -French food caterer Sodexo sees 2024 organic revenue growth at the top of its 6% to 8% range, boosted by the Paris Olympics and higher pricing, it said on Friday.
Its shares rose 2.5% to 79.25 euros by 0827 GMT, after it also beat profit expectations for the first half of its fiscal year.
Sodexo will be in charge of making some 40,000 meals a day for 15,000 athletes in the Olympic Village, after its Live! division was chosen to provide catering for the Olympic Games and the Paralympics this summer.
The games are expected to have a positive impact of 60 million euros ($64 million) on the fourth quarter ending on Aug. 31, CFO Marc Rolland told reporters.
But “we shouldn’t get carried away”, Rolland warned, as there is also a negative impact from the Olympics which is hard to measure. He pointed to a likely increase in work-from-home trends around Paris and an unknown revenue effect from tourism.
While remote working has been a concern for caterers since the COVID-19 pandemic, Sodexo has managed to compensate somewhat for the loss caused by it through diversifying its services and products, CEO Sophie Bellon said.
She added that in the U.S., companies are pushing to get employees back to workplaces, which is good news for Sodexo.
In the first half of the year, North America recorded the highest revenue growth at 10% on strong food services growth, driven by new business and increased office attendance. The region contributes nearly half of the company’s revenue.
Sodexo, which spun off its voucher business Pluxee at the start of February, is still raising prices to cushion the impact of high inflation, though at a slower pace.
It said prices are likely to be increased by 4% during the fiscal year, compared with more than 5% last year.
Sodexo reported half-year organic sales growth of 8.5% to 12.1 billion euros, in line with a consensus provided by the company, fuelled by pricing and new contracts.
Underlying operating profit rose 16.9% on a constant currency basis to 612 million euros, beating expectations of 600 million euros.
($1 = 0.9406 euros)
(Reporting by Gaëlle Sheehan and Shivani Tanna, additional reporting by Stéphanie Hamel; Editing by Milla Nissi and Elaine Hardcastle)
