Sodexo S.A. (SDXAY.PK) Tuesday said its third-quarter revenues increased 12 percent on higher on-site Service Solutions revenues in North America, UK and Ireland as well as Rest of the world regions, despite a weak Europe. The French catering and vouchers company also backed its full-year 2012 revenue growth forecast, despite a very challenging economic environment.
For the third quarter, revenue was 4.64 billion euros, higher than 4.14 billion euros a year ago. On-site Service Solutions grew 12.4 percent to 4.45 billion euros with strong growth in North America, UK and Ireland as well as Rest of the world regions. Continental Europe's revenues remained flat amid the sharp slowdown of economic conditions, resulting in reduced spending by consumers and pressure for additional savings by clients.
Motivation Solutions' revenues increased slightly.
For the nine-month period, revenue grew 10.5 percent to 13.71 billion euros. On a constant currency basis, revenues increased 9.4 percent. Organic growth, i.e., revenue increase at constant scope and exchange rates, was 5.2 percent.
On-site Service Solutions' revenues rose 10.6 percent mainly with revenue growth from emerging countries and a 36.3 percent increase in rest of the world region.
The company noted that 'Quality of Life integrated service' offers are growing three times faster than offers for foodservices alone.
Corporate segment revenues climbed 16.9 percent resulted from the success of Sodexo's operations in Latin America, Asia and Remote Sites, as well as the fall 2011 Rugby World Cup hospitality contract in New Zealand.
Healthcare and Seniors as well as Education segments generated revenue increase in single digit rates, against a backdrop of more modest business development, particularly in Europe, the company said.
Motivation Solutions' revenues grew 6 percent reflecting mainly the momentum of Sodexo teams in Latin America and improvement in Europe and Asia.
Sodexo chief executive officer Michel Landel commented, "n a volatile global economy, which has continued to deteriorate for the past several months, our Quality of Life integrated service offers and our emerging markets growth strategy have accounted for a large part of our growth. Our teams are fully mobilized to provide our clients with the services and savings they expect and to improve our competitiveness."
Going ahead, Sodexo continues to expect organic revenue growth to be between 6 percent and 7 percent and increase in adjusted operating profit excluding currency effects to be around 10 percent.
In Paris, Sodexo shares closed Monday's trading at 61.24 euros, down 0.11 euros or 0.18 percent.
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