(Reuters) – French catering and food services group Sodexo EXHO.PA said on Thursday it expects revenue in the first half of 2021 fiscal year to slump 20-25%, as the sector progressively recovers but remains strongly affected by the coronavirus crisis.
The group, one of the world’s biggest catering companies alongside Britain’s Compass CPG.L, forecast for the six months through February 2021 a core profit margin between 2% and 2.5% and a 250 million euro ($295.48 million) hit to its free cash flow – citing restructuring costs, payment delays and reimbursement of Olympic Games hospitality packages.
The firm’s restructuring costs during its 2020 fiscal year more than quadrupled at 191 million euros as government support schemes come to an end.
Sodexo – which provides catering for businesses, government agencies, hospitals, schools and events – said it was using all available furlough programmes.
The Paris-based company on Tuesday announced plans to cut 2,083 jobs, which it said would equate to less than 7% of its workforce and mainly affect its corporate services operation.
Sodexo served a core profit down 50% for the year ended Aug. 31 at 569 million euros, on revenue down 11% at 19.32 billion, beating expectations.
Analysts in a company-provided consensus had estimated a core profit of 527 million euros on revenue of 19.22 billion euros.
Beyond the pandemic, the French company said it aimed to return to sustained growth and rapidly increase its core profit margin back to pre-pandemic levels.
France is set to go back into a nationwide lockdown starting this week.
($1 = 0.8461 euros)
Reporting by Sarah Morland in Gdansk, Editing by Sherry Jacob-Phillips