Following an increase in profits for 2023, Sodexo has announced that it will create a new publicly traded company for its employee benefits and rewards business.
The food services group, most known for supplying meal cards and tickets for employees, reported a 30.6% increase in net profit in the first half of the fiscal year.
The separation of this activity is expected to take place sometime in 2024 and will involve a “distribution of shares in (the new) entity to Sodexo shareholders,” a press release stated.
Bellon SA family holding company, Sodexo’s main shareholder, states that it “supports (the) project and intends to retain a role as a long-term controlling shareholder in both entities.”
Sophie Bellon, the group’s CEO, said that the decision to separate on-site services; such as cleaning, maintenance, or catering for companies, schools, and hospitals from its employee benefit services; such as meal vouchers, meal tickets, and gift vouchers, is motivated by “a strong strategic rationale.”
Though much smaller in scale, Sodexo’s employee benefit services are very lucrative and even more profitable than its on-site services. Last year, more than 150.000 Belgian companies granted meal vouchers to their employees, according to the Belgian Voucher Issuers Association (VIA).
The terms of the proposed transaction will be submitted to Sodexo’s shareholders for approval at an extraordinary general meeting, while Sodexo’s bondholders and other lenders “will be consulted on the proposed transaction at the appropriate time,” the group said.
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Sodexo also announced on Wednesday that it had posted a net profit of €440 million, €30 million below Bloomberg’s initial forecasts, for the period September 2022 to February 2023.
Rebounding from these disappointing results, the company CEO said that the company was facing an “inflationary environment”, boosting revenues by 17.8% to €12 billion, higher than previous forecasts.
