Shares of Sodexo surged following the company’s announcement of its projected organic revenue growth and increased profitability for the next two fiscal years. The upward trend was driven by the planned spinoff of Sodexo’s Pluxee employee-benefits business.
Positive Market Response
At 0829 GMT on Thursday, Sodexo’s shares traded 5.8% higher at EUR102.95. The promising outlook for future growth and profitability resonated positively with investors.
Pluxee Spinoff Expected in Early 2024
Sodexo, a French catering and facility-management group, disclosed that it anticipates the spinoff of its Pluxee segment to occur in early 2024. The business will be listed on Euronext Paris, subject to regulatory approvals and market conditions.
According to analysts from Barclays, this indicates that Pluxee will be fully separated from Sodexo, with no remaining stake held by the company. This outcome is seen as favorable, as it will augment the spinoff’s free float and liquidity.
Excluding the Pluxee segment, Sodexo aims to achieve organic revenue growth between 6% and 8% annually for fiscal years 2024 and 2025. Furthermore, the company seeks to enhance its operating profit margin by 30 to 40 basis points.
In comparison to consensus expectations for fiscal year 2024, which currently anticipate organic growth at 6% and a margin expansion of 20 basis points, analysts Harry Martin and Alice Rose Buckley from Bernstein assert that Sodexo’s targets are even more favorable.
Sodexo’s positive performance and outlook, combined with the spinoff of its Pluxee employee-benefits division, have generated enthusiasm among investors and analysts alike. The company’s projections for organic revenue growth and improved profitability position it for continued success in the years ahead.