Sodexo Posts Strong H1 Results but Economic Uncertainty Looms Over Full Year

Sodexo shares were little changed in Thursday trading after the world's second biggest catering services cautioned over the difficult year ahead, despite posting firm first half results with year-on-year profits and revenues up.

Strong demand in the French company's Latin American market boosted its European markets in the first half to see revenues increase, as well as holding its growth objectives in profit and revenue for the 2012 full year.

However it is still focused on cost cutting amid an uncertain world economy.

"In a tough economic environment, our teams are fully mobilised to provide clients the innovation and productivity they expect," Michael Landel, Sodexo chief executive, said.

Organic revenue growth increased 6.4 percent year-on-year in Sodexo's first half, taking the company's revenues to €9.07bn.

Operating profit was up to €559m, an increase of 14.5 percent, increasing its operating profit margin by 6.2 percent.

Recent acquisitions of Puras do Brasil, Lenôtre, and Roth Bros helped to lift the company in the first half.

Sodexo maintained its full year outlook of between 6 and 7 percent in organic growth for revenue, as well as a 10 percent growth in operating profit.

Landel pointed to rising food prices as one of the significant hurdles for the company in the year ahead.

Across the globe Sodexo operates in 80 countries, serves 50m consumers a day, and employs 413,000 staff - making it the world's 22<sup>nd largest employer.

It runs canteens for healthcare and education providers, as well as corporations.

North American revenues grew 4.8 percent, hitting €3.8bn.

In continental Europe revenues grew by 2 percent, reaching 2.9bn.

However the biggest growth came from the rest of the world, including Africa, Asia, and Latin America, which experienced, at 18.4 percent.

This took revenues for the area to €1.7bn.