Olympic catering drives strong year for Sodexo

Sodexo has reported organic growth of 7.9% for its 2024 fiscal year after catering for the Rugby World Cup and Paris Olympics.

The caterer said its results were driven by price rises of 4% to combat inflation, new business gains and a “standout year” for Sodexo Live!.

However, Sodexo said it expects organic growth to slow to between 5.5% and 6.5% during the fiscal 2025 year.

Price increases slowed during the year to 31 August 2024 and volume growth eased as post-Covid recovery came to an end.

Net new business signed during the year was positive at 1.6%, but lower than the previous year at 2.2%.

Client retention dropped to 94.2% due to the loss of a large global FM contract, as well as two in energy and resources in a competitive Latin American market.

Sodexo said it had an 81.5% rate of staff retention, a positive trend for the third consecutive year. It also increased its use of renewable electricity consumption to 73%, above its 60% target for the year, with a goal to reach 100% by 2025.

The caterer said prices were likely to rise around 3% over the next fiscal year due to the ongoing impacts of inflation.

It expects operating profit margin to improve by between 30 to 40 base points in 2025 on a constant currency basis, compared to an increase of 40 base points in 2024.

Sean Haley, chief executive of Sodexo UK & Ireland, said: “Our commitment to partnership working and delivering excellent food and FM services has led to the successful retention of many large complex contracts with longstanding clients this year, as well as an increasing portfolio of new business wins across our selected market sectors.”

Recent contract wins for Sodexo Live! include a five-year deal with Nottingham Forest Football Club, a five-year contract with Lancashire Cricket at Emirates Old Trafford in Manchester, while its contract with Henley Royal Regetta has been extended a further five years.

Last month it was rumoured that Sodexo was considering acquiring rival American caterer Aramark, but the caterer said it did not comment on market rumours.