• Q3 Organic growth at -29.9%, better than early-April hypothesis 
  • More prudent hypotheses for Q4 revenues compensated by better Underlying operating profit flow-through in H2

Q3 Fiscal 2020 revenues

Fiscal 2020 Q3 revenues

Sodexo CEO Denis Machuel said:

“We have lost nearly one third of our Q3 revenues relative to last year due to COVID-19. Nevertheless, our On-site business broad geographic mix, strong Facilities Management (FM) and large integrated accounts combined with Benefits & Rewards have given us resilience. 

At the start of the crisis, our focus was on protecting the health and safety of our people, consumers and clients. With a significant number of sites fully or partially closed, we immediately identified all means to protect our cash and reduce our costs. 

As deconfinement became a reality, first in Asia, then in Europe, we launched "rise with Sodexo”,  a new program to help our clients reopen their sites safely and as quickly as possible. This multi-service approach brings together a wide range of our services with secure protocols, approved by  the Sodexo Medical Advisory Council and carrying a Bureau Veritas hygiene verification label. I am extremely proud of the speed of action and innovation that our teams have shown. 

I am convinced that the company is in a position to come out of this crisis stronger than ever.”

Q3 Highlights

  • Q3 Fiscal 2020 Group revenue was 3,910 million euro, down -31.2%. Currencies impacted revenues by -1.7% and M&A contribution was +0.3%, resulting in Group organic revenue growth of -29.9%, which compares favorably to the hypotheses provided in April of -33%. Whereas food services are down -44%, FM services are only down -2%. Benefits & Rewards are down -22.8%.
  • On-site Services organic revenue growth was -30.1% reflecting the significant impact of the COVID-19 pandemic as it spread across the world on the Group’s business with many sites closed or only partially open: 
    • Business & Administrations was down -28.5%, compared to the -30% hypothesis. While Corporate services was impacted by the lockdowns and home working for white-collar workers, production was maintained in many industries and in many countries, in particular in essential sectors. Even if buildings were closed to workers, essential cleaning, maintenance and security continued, albeit at a slower pace, resulting in more resilience of the FM services than Food services. Sports & Leisure sites closed down completely, whereas Energy & Resources and Government & Agencies were more protected from the lockdown by the nature of their business. 
    • Healthcare & Seniors was down -12.9%, a bit more than the -8% hypothesis due to the lack of retail activity and the decline in elective surgery, and not fully compensated by extra COVID-19-linked services. 
    • Education was down -53.9% slightly better than the -60% hypothesis. With most schools and universities closing from mid-March onwards, sales were limited to meals provided by local authorities to families in need.
  • Benefits & Rewards Services organic revenue growth was -22.8% vs the -20% hypothesis. In employee benefits, sales were impacted by the combination of a decline in issue volume of 12% due to temporary unemployment in most countries and the interruption of paper voucher production in some countries, and the more significant slowdown in reimbursement volumes, due to restaurants being closed. As a result, the float remained solid. Diversification services were impacted by a sharp decline in the home services vouchers specifically during lockdown, and the decline in corporate travel for the Rydoo platform.
  • Underlying operating profit flow-through from the decline in revenue has improved month by month and is now better than the hypothesis of 25% announced in April.
  • Free cash flow has stabilized in positive territory since April and is in line to achieve a 2nd semester in the range of -200 and +200 million euro, excluding the USPP “makewhole”1 of around 149 million euro. 
  • With nearly 5 billion euro of liquidity2 at end May, Sodexo has announced that it will reimburse its USPP notes for 1.6 billion dollars by the end of the fiscal year. The reimbursement conditions include a “makewhole1” provision of around 149 million euro. Going forward, the average cost of debt will fall to approximately 1.2%, versus 2.3% at the end of the 1st half Fiscal 2020. As a result of this operation, Sodexo will have no covenants and will retain full agility to navigate in these uncertain times. 
  • Sodexo launched "rise with Sodexo", a global program intended to meet the health, operational and confidence challenges that clients are facing when restarting their business as a result of the COVID-19 pandemic. 
    Drawing on lessons learned from our support for businesses based in Asia during the restart of their activities, Sodexo teams and experts have identified the new needs of clients and employees from all sectors of activity. “rise with Sodexo” is based on the seamless integration of our services across On-site services, Benefits & Rewards Services and Personal & Home Services, integrating over 20 essential service offerings, customized specifically to our clients’ and consumers’ needs, such as deep cleaning, air control, diversified restaurant services, meal cards for those who remain working at home, digital concierge services, office reorganization to ensure social distancing.
  • Sodexo has created a Medical Advisory Council, comprised of experts from around the world in epidemiology, family medicine, nutrition, occupational health and behavioral health, as well as pandemic planning and operations, to support the development of new protocols and standards, including COVID-19 related services delivered worldwide. This Council will provide technical guidance and validation of health & safety protocols. 
  • Sodexo and Bureau Veritas have joined forces to introduce a hygiene verification label for Sodexo procedures and services. It gives quality assurance to our clients and consumers that all necessary health steps have been taken when organizations reopen post-lockdown. It bolsters the “rise with Sodexo” program and the Medical Advisory Council measures.
  • To support “rise with Sodexo”, Sodexo has reaffirmed five key sustainability commitments for a more resilient and green economic recovery: 
    • continuing the deployment of our Wastewatch food waste reduction program, 
    • maintaining efforts to reduce single-use items and plastic waste, 
    • providing access to sustainable eating and “low-carbon” meals, 
    • promoting sustainable and responsible sourcing, 
    • enhancing environmental training for our employees. 


The COVID-19 pandemic started to be a concern in the second half of January for our business in China, leading to a rapid deterioration worldwide in February, moving from region to region and generating more and more government precautionary measures to limit the spread of the virus. The Q3 performance is slightly better than the April hypotheses predicting a decline in revenues of -33% and a 25% flow-through. 

Today, while Asia and Europe are coming out of lockdown, the pandemic is still strong in North America, Latin America and India. As a result, our Q4 hypotheses have been updated, showing more prudence on the topline, compensated by a better flow-through to Underlying operating profit in the second half. 

As of July 7, 2020, we expect Q4 revenues to be down circa -27%, vs our original hypotheses in April of -15%. As a result, the 2nd semester decline is now expected to be -28%, or around 3 billion euro and -13.7% for the Full year.

Fiscal 2020 Q4 Outlook

At this stage, after strong mitigating measures taken on-site and strict implementation of SG&A cost reductions, we estimate the Underlying operating profit flow-through in the second half to be better than originally assumed and should be between 20 and 23% of the revenue shortfall. 

Given the cash flow trend in the last three months, our 2nd half free cash flow should be within a range of -200 to +200 million euro, excluding the USPP “makewhole”. 

We are confident that our strong and unique market positioning with a diversified portfolio of services and our solid financial structure are key strengths to take better advantage of the emerging trends in the post-COVID-19 environment such as increased outsourcing trends, accelerated services integration and further market consolidation to the benefit of larger players.

To read the full version of the press release, please download the PDF:

Conference call

Sodexo will hold a conference call (in English) today at 9:00 a.m. (Paris time), 8:00 a.m. (London time) to comment on its 3rd quarter Fiscal 2020 revenues. Those who wish to connect:

  • from the UK may dial +44 (0) 207 192 8338
  • from France +33 (0)1 70 70 07 81,
  • from the USA +1 646 741 3167,
  • followed by the passcode 568 82 24.

The press release, presentation and webcast will be available on the Group website www.sodexo.com in both the "Latest News" section and the "Finance - Financial Results" section.


1 Net present value of flows – nominal value.
2 Liquidity as of May 31, 2020 includes Cash (including restricted cash) and unused credit facilities recently raised to 2 billion euro after the signing of additional bilateral on May 20, 2020.

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