On Wednesday, French catering and food services company Sodexo (EXHO.PA) announced intentions to spin off and float its Benefits & Rewards Services (BRS) unit in 2024 to focus on faster-growing areas.
Sodexo abandoned a proposal to sell a minority investment in BRS, which provides employee vouchers and benefit cards to employers, in May. Instead, Sodexo shareholders will get shares to spin off and list it.
“The business is growing extremely well, pushed by interest rates, by inflation… therefore it’s the right time to put this jewel on the market and let it soar,” Chief Executive Sophie Bellon told reporters.
Sodexo wouldn’t comment on the spinoff’s worth. However, it stated the original Bellon family, which holds 57.5% of voting rights, will remain a fundamental stakeholder.
In the first half of 2023, BRS recorded a core profit of 162 million euros ($177 million), up 46.4% from a year earlier, excluding currency impacts.
According to a company-compiled consensus, the group’s core profit was 704 million euros, exceeding analysts’ average projection of 679 million euros.
Sodexo predicted second-half 2023 price hikes of over 5%.
“Inflation is greater than what we pass on to our consumers, but we manage it because we have action plans to limit the impact, that’s how we retain our margins,” said CFO Marc Rolland.
The business predicted organic sales growth of over 11% in fiscal 2023, up from 8% to 10%.
It upped its full-year BRS business projection to 20% organic revenue growth and 32% underlying operating profit margin.
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