Sodexo has reported a -29.9 per cent slide in organic revenue growth as a result of falling demand from the education sector during Covid-19, with its FM division reporting a more modest decline of just 2 per cent.
Q3 Highlights
Currencies impacted revenues by -1.7 per cent and mergers and acquisitions (M&A) contributing +0.3 per cent, resulting in Group organic revenue growth of -29.9 per cent, which compares favorably to forecasts the group published in April of -33 per cent decline.
Whereas food services are down -44 per cent, FM services are only down -2 per cent.
Benefits & Rewards are down -22.8 per cent.
- Business & Administrations was down -28.5 per cent, compared to the -30 per cent forecasts.
While Corporate services was impacted by the lockdowns and home working for white-collar workers, production was maintained in many industries and in many countries, in particular in essential sectors.
Even if buildings were closed to workers, essential cleaning, maintenance and security continued, albeit at a slower pace, resulting in more resilience of the FM services than Food services.
Sports & Leisure sites closed down completely, whereas Energy & Resources and Government & Agencies were more protected from the lockdown by the nature of their business.
With most schools and universities closing from mid-March onwards, sales were limited to meals provided by local authorities to families in need.
In employee benefits, sales were impacted by the combination of a decline in issue volume of 12 per cent due to temporary unemployment in most countries and the interruption of paper voucher production in some countries, and the more significant slowdown in reimbursement volumes, due to restaurants being closed.
As a result, the float remained solid.
Diversification services were impacted by a sharp decline in the home services vouchers specifically during lockdown, and the decline in corporate travel for the Rydoo platform.
The reimbursement conditions include a “makewhole1” provision of around 149 million euro.
Going forward, the average cost of debt will fall to approximately 1.2 per cent, versus 2.3 per cent at the end of the 1st half Fiscal 2020.
As a result of this operation, Sodexo will have no covenants and will retain full agility to navigate in these uncertain times.
Drawing on lessons learned from our support for businesses based in Asia during the restart of their activities, Sodexo teams and experts have identified the new needs of clients and employees from all sectors of activity. “rise with Sodexo” is based on the seamless integration of our services across On-site services, Benefits & Rewards Services and Personal & Home Services, integrating over 20 essential service offerings, customized specifically to our clients’ and consumers’ needs, such as deep cleaning, air control, diversified restaurant services, meal cards for those who remain working at home, digital concierge services, office reorganization to ensure social distancing.
This Council will provide technical guidance and validation of health & safety protocols.
It gives quality assurance to our clients and consumers that all necessary health steps have been taken when organizations reopen post-lockdown.
It bolsters the “rise with Sodexo” program and the Medical Advisory Council measures.
- continuing the deployment of our Wastewatch food waste reduction program,
- maintaining efforts to reduce single-use items and plastic waste,
- providing access to sustainable eating and “low-carbon” meals,
- promoting sustainable and responsible sourcing,
- enhancing environmental training for our employees.
