New business wins drive strong first quarter for Sodexo

Foodservice giant Sodexo reported strong first quarter growth in Europe boosted by new business wins in the UK defence sector.

It comes after the French contract caterer announced it secured £34m in UK public sector contract renewals late last year.

These included a two-year extension with Transport for London for vending, hospitality and food services, which took its number of Kitchen Works Co restaurants to 25, as well as a one-year extension with His Majesty's Revenue & Customs (HMRC).

Sodexo also earned a two-year extension to its catering, hospitality and cleaning services contract with Avon and Somerset police.

Across Europe, first quarter fiscal 2024 revenues hit £1.9b (€2.2b), 9.2% up on the same period in 2023, partly driven by the Rugby World Cup.

Sodexo said organic growth in the business and administration sectors was particularly strong at 10.1% due to price increases and higher attendance in corporate services and new business wins in UK defence.

Inflation in the UK also contributed to its healthcare and seniors sector achieving organic growth of 8.9%.

Meanwhile, the wider Europe market performed in line with North America, which saw an 8.7% boost to organic growth.

Sophie Bellon, chairwoman and chief executive of Sodexo, said: "First quarter growth has remained strong in all geographies, due to pricing, new contract ramp-ups and continued volume growth, particularly in corporate services, sports and leisure and education.

"We have had a good start to the year in terms of activity and we are solidly on track with our strategic plan to be the world leader in sustainable food and valued experiences."