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Sodexo warns global revenues will be down £2.4b due to coronavirus

09 April 2020 by
Sodexo warns global revenues will be down £2.4b due to coronavirus

Sodexo has warned that global revenues will be down by up to £2.4b as a result of the coronavirus pandemic.

Having reported a strong start to its financial year, with H1 revenue up 5.1% to £9.7b and underlying operating profit up 5.9% at £600m, it warned that the figures to 29 February 2020 were only marginally hit by the impact of coronavirus.

However, Sodexo added that cost management measures and postponement of all capex would limit the impact to a 25% revenue shortfall.

In the UK regional chairman Sean Haley said that the first half of the year had been boosted by the Rugby World Cup and winning new contracts such as Quilter and the University of Greenwich. Sodexo UK also retained long-standing clients, including Transport for London.

Addressing the impact of coronavirus, Haley added: "As a company we have a clear commitment to supporting our people, clients, suppliers and consumers at this time.

"In the UK and Ireland, we are aiming to redeploy employees where possible to support the NHS and other critical sites as part of the national response to Covid-19. We are continuing to support all our colleagues and communities during this crisis, and we will be using Sodexo's global Employee Relief Programme to provide additional support to those who need it most."

Sodexo chief executive Denis Machuel confirmed that the first half of the year had been better than expected, with positive signs throughout the business, but that the landscape had shifted dramatically since.

He said: "We have seen a significant number of sites fully or partially closed in Education, Corporate Services and Sports & Leisure, and the Olympics Games have been pushed back a year.

"We immediately identified all means to reduce our costs, reduce our capex and ensure that we collect and protect our cash to reduce the impact of this revenue shortfall. We are using all proposed government measures to protect employment. We know that this situation will have a significant impact on our results for the year.

"I am extremely proud of our teams' exemplary efforts and engagement and am convinced that the improved momentum in this first half will help us emerge stronger than we were before."

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