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French catering, facilities management and vouchers group Sodexo kept its full-year goals on Thursday after operating profit rose 8.6 percent in the first half, helped by cost cuts and new contracts in North America and emerging economies.
The world's second-biggest catering services company after Britain's Compass Group said operating income excluding restructuring costs and currency effects in the six months to Feb. 28 reached 620 million euros ($663 million).
"First-half results are in line with our expectations. They continue to show the effects of different actions in terms of productivity for all our activities," Chief Executive Michel Landel told a conference call.
The group kept its forecast for a rise of around 3 percent in like-for-like full-year 2014/15 sales and of around 10 per cent in operating profit at constant exchange rates and excluding exceptionals.
Sodexo, which manages canteens and facilities for office workers, armed forces, schools, hospitals and prisons, also sells vouchers for meals and gifts. Its clients range from the Royal Ascot Racecourse to the U.S. Marine Corps.
Total revenue grew 2.2 per cent like-for-like in the first half to 9.93 billion euros, driven mostly by global demand for facilities management services, which currently make 27 per cent of group revenue and are now Sodexo's fastest-growing business.
Landel said facilities management services could in the long-term account for 50 per cent of the group revenue.
Revenue from "on-site" services, which make up the bulk of Sodexo's business and include both catering and facilities management, rose 1.9 per cent like-for-like, while the vouchers business grew 9.8 per cent, driven by growth in Brazil, Chile and Venezuela despite the economic slowdown affecting the region.
Revenue from on-site services rose 1.5 per cent in North America thanks to strong demand from corporate clients such as Citigroup and Walt Disney World Resorts for facilities management services.
On-site revenue eased 0.3 per cent in Europe, however, where clients continued to reduce demand for catering services to cut costs, notably in France, Italy and Finland.
In the rest of the world, on-site revenues rose 4.1 per cent thanks to new contracts in Latin America, Australia, India and China.
($1 = 0.9357 euros)
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