Caterer Sodexo sees rebound in 2023 to pre-pandemic levels

Oct 26 (Reuters) – Sodexo (EXHO.PA) on Wednesday said it expected 2023 revenue and profit margins to hit 2019 levels, as the French catering and food services group rebounds from the pandemic and increases prices to cope with rising food and energy bills .

The outlook reflects the relatively swift recovery by the catering industry this year as major sports events have restarted, shops have reopened and more people returned to offices after coronavirus restrictions eased.

The company also reported better-than-expected full-year revenue, driven by all-time-high client retention rate and strong new business growth, despite the inflationary backdrop.

The Paris-based firm posted annual revenue of 21.13 billion euros ($21.06 billion), compared with 20.73 billion euros forecast by analysts polled by the company.

Sodexo, which serves businesses, armed forces, hospitals, schools and events, said revenue of its main On-site Services unit reached 99% of its 2019 levels the fourth quarter.

Pointing to the unit’s return to pre-pandemic levels, the group now expects revenues and margins for 2023 to return to 2019 levels.

For 2023, Sodexo forecasts organic revenue growth of between 8% and 10%, driven by further progress in new business and inflation, and underlying operating profit margin around 30%.

Its benefits and rewards services unit is expected to report underlying operating profit margin of around 30% at constant rates next year, the company said, giving a forecast for the division for the first time.

The voucher business has benefited this year from companies improving employee benefits through vouchers for food and fuel in response to rising inflation.

($1 = 1.0035 euros)

Reporting by Federica Mileo in Gdansk; Editing by Josephine Mason

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