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Outsourcing

Sodexo’s UK FM business resilient in pandemic

Open-access content Wednesday 27th October 2021
Authors
Marino Donati
web_Sean_Haley_Sodexo.jpg

Sodexo UK & Ireland's Sean Haley

Sodexo UK & Ireland has had a 'strong year and some significant successes' despite trading still below pre-pandemic levels, the company has stated.

Reporting its fiscal results for  2021, Sodexo said that overall, the group had performed better than expected over the period. It added that the UK FM sector remained resilient throughout the pandemic.

On-site Services revenues for the group dropped 6% overall for the year. Sodexo said that the group registered the deepest downturn ever due to the pandemic in the second half of fiscal 2020. However, activity picked up quarter by quarter, reaching 87% of pre-Covid Fiscal 2019 revenues at constant rates, by the fourth quarter.

Overall consolidated revenues were Euro 17.4 billion, down 9.8% year-on-year including a negative net contribution from acquisitions and disposals of 0.2% and a negative currency impact of 4%.

As a result, the organic decline was 5.6%, with the combination of a first half down 21.7%, followed by a second half up 18.1%.

Fiscal 2021 underlying operating profit was Euro 578 million, up 1.6%, or 12.4% excluding the currency effect.

Sodexo said it expected revenue growth of between 15% and 18% in 2022.

Sodexo Chairwoman and Interim CEO Sophie Bellon said: “Our actions to renegotiate our client contracts, strictly control costs and implement the GET1 efficiency program are clearly visible in our better-than-expected underlying operating profit margin. The step- up in the second half is significant given the traditional 100bps shortfall between the first and second halves.”

The group said that all regions performed well in the second half of Fiscal 2021 compared to the previous year. The comparative base was particularly weak in North America and Europe, which were severely impacted by the pandemic. The regions ended up at 77% and 85% respectively of Fiscal 2019 levels, at constant rates.

The group said that its business in the UK had not been materially impacted by Brexit.

The company it was “a local player, working with local suppliers and employees, and very often for government authorities and government services”.

The company’s statement said: “In the UK, a large part of the services are FM, which have demonstrated their resilience during the Covid‐19 pandemic. Our supply chain teams planned extensively for the EU exit and continue to manage supply carefully in partnership with our suppliers. As a result, we have not suffered any significant disruption to our supply chains. Growth in activity will remain dependent upon stand up of Covid impacted services, outsourcing trends, growth in GDP and employment in the country.”

Sodexo UK & Ireland regional chairman Sean Haley said the business had seen a steady flow of contract wins over the fiscal period, particularly in areas hit hardest by lockdown, such as schools and our sports and leisure business, Sodexo Live!

“We were also proud to continue supporting the Government’s ongoing response to Covid-19 and are now the largest provider of test centres in the UK and operate the only network of assisted testers in England and Scotland, providing tests for those who have mobility and disability issues, and at events such as the G7 and the forthcoming COP26,” Haley said.

He added that the business had made great progress on its social impact pledges, and that Sodexo UK & Ireland had set an ambitious and comprehensive roadmap to net zero by 2045.

“We’ve committed to being carbon neutral in our direct operations by 2025 and to reduce carbon emissions by 55% by 2030 across all three scopes, which has been validated by the Science Based Target initiative (SBTi),” said Haley.

“However, our approach is about using our scale and position to make business decisions that help not only our people, but the communities in which we operate. We’ve now gifted more than one million pounds of our apprenticeship levy and are one of the first companies to capture and analyse employee demographics as recommended by the Social Mobility Commission and Purpose Coalition. This year, we became the first hospitality and FM company to publish ethnicity pay gap data.”

Haley also acknowledged the commitment of the business’ employees during a challenging time.

“We start our new financial year focused on how we will continue to adapt and grow our business while ensuring we are leading the way to improve quality of life for society and our planet.  Everyone at Sodexo is committed to this journey,” he said.
 

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