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Sodexo SA (SDXAY)
OTHER OTC:SDXAY
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Sodexo SA
(OTC:SDXAY)
65Neutral
Sodexo SA (SDXAY) vs. S&P 500 (SPY)
Market Cap
$9.69B
Dividend Yield2.91%
Average Volume (3M)3.24K
Price to Earnings (P/E)13.1
Beta (1Y)0.15
Revenue Growth5.85%
EPS Growth142.16%
CountryUS
Employees317,177
SectorIndustrials
Sector Strength70
IndustrySpecialty Business Services
Share Statistics
EPS (TTM)1.01
Shares Outstanding737,274,960
10 Day Avg. Volume0
30 Day Avg. Volume3,238
Financial Highlights & Ratios
PEG Ratio0.09
Price to Book (P/B)N/A
Price to Sales (P/S)0.62
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
Sodexo SA Business Overview & Revenue Model
Company DescriptionSodexo SA (SDXAY) is a global leader in quality-of-life services, operating in over 50 countries. The company provides a wide range of services across various sectors, including corporate, healthcare, education, and government institutions. Its core offerings include on-site services such as facilities management, catering, and hospitality, as well as benefits and rewards services. Sodexo's mission is to improve the quality of life for its clients and their employees, enhancing performance and satisfaction through innovative and sustainable solutions.
How the Company Makes MoneySodexo makes money through its diverse portfolio of services, primarily in two main segments: On-site Services and Benefits & Rewards Services. On-site Services generate the majority of the company's revenue, coming from contracts with organizations to provide catering, cleaning, facilities management, and other support services. These contracts are often long-term, providing a stable revenue stream. The Benefits & Rewards Services segment involves providing employee benefits and incentive programs, such as meal vouchers, gift cards, and mobility services, which are sold to corporate clients. Additionally, Sodexo has formed strategic partnerships and alliances to expand its service offerings and reach new markets, further enhancing its revenue potential. The company also focuses on sustainability and digital transformation initiatives, which attract clients looking for modern and responsible service solutions.
Sodexo SA Financial Statement Overview
Summary
Sodexo SA demonstrates solid financial health with growing revenues and improving profitability metrics. The balance sheet shows moderate leverage, which is manageable, but declining equity might pose a risk if not addressed. Strong cash flow generation supports the company's operations and investments. Overall, the company is on a positive trajectory, but careful attention to equity and cost management is advisable for sustained growth.Income Statement
Sodexo SA's income statement shows solid revenue growth with a 5.14% increase from 2023 to 2024. Gross profit margin is healthy at 11.96%, and the net profit margin improved significantly from a loss in 2020 to 0.71% in 2024. The EBIT margin has increased to 4.64%, indicating improved operational efficiency. However, the net income is relatively low compared to revenue, suggesting room for improvement in cost management.78
Positive
Balance Sheet
The balance sheet indicates a stable position with a debt-to-equity ratio of 1.45, reflecting a moderate level of leverage. The return on equity stands at 4.44%, suggesting efficient use of equity capital. The equity ratio is 25.16%, showing a balanced asset financing structure. However, the company's equity has decreased over the years, which could limit future financial flexibility.72
Positive
Cash Flow
Sodexo SA's cash flow statement shows a strong free cash flow to net income ratio, highlighting effective cash conversion. Operating cash flow is robust at $1.32 billion, exceeding net income, which indicates strong cash generation from operations. However, there is a slight decline in free cash flow from 2023 to 2024, which needs monitoring.80
Positive
| Breakdown | ||||
| Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 23.80B | 22.64B | 21.13B | 17.43B | 19.32B | Gross Profit |
| 2.85B | 2.72B | 3.04B | 2.42B | 2.48B | EBIT |
| 1.10B | 847.00M | 1.05B | 529.00M | 141.00M | EBITDA |
| 1.65B | 1.40B | 1.29B | 950.00M | 1.04B | Net Income Common Stockholders |
| 168.00M | 794.00M | 695.00M | 139.00M | -319.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 2.20B | 2.02B | 3.23B | 3.59B | 2.07B | Total Assets |
| 15.02B | 20.79B | 20.92B | 18.99B | 17.35B | Total Debt |
| 5.47B | 6.38B | 6.66B | 7.03B | 6.36B | Net Debt |
| 3.33B | 4.36B | 3.44B | 3.49B | 4.33B | Total Liabilities |
| 11.23B | 16.24B | 16.50B | 15.82B | 14.58B | Stockholders Equity |
| 3.78B | 4.54B | 4.42B | 3.17B | 2.76B |
| Cash Flow | Free Cash Flow | |||
| 962.00M | 1.04B | 690.00M | 686.00M | 234.00M | Operating Cash Flow |
| 1.32B | 1.38B | 1.03B | 982.00M | 632.00M | Investing Cash Flow |
| -1.05B | -526.00M | -386.00M | -303.00M | -430.00M | Financing Cash Flow |
| -1.35B | -646.00M | -1.11B | 789.00M | 198.00M |
Sodexo SA Technical Analysis
Negative
13.39
Price Trends
15.07
Negative
15.74
Negative
16.22
Negative
Market Momentum
-0.53
Positive
27.05
Positive
6.35
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SDXAY, the sentiment is Negative. The current price of 13.39 is below the 20-day moving average (MA) of 15.34, below the 50-day MA of 15.07, and below the 200-day MA of 16.22, indicating a bearish trend. The MACD of -0.53 indicates Positive momentum. The RSI at 27.05 is Positive, neither overbought nor oversold. The STOCH value of 6.35 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SDXAY.
Sodexo SA Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $78.07B | 46.95 | 40.19% | 0.78% | 8.12% | 20.35% | |
76 Outperform | $218.39B | 26.83 | -216.57% | 2.21% | 1.67% | -1.61% | |
75 Outperform | $24.43B | 23.53 | 48.22% | 2.66% | 5.00% | 3.73% | |
73 Outperform | $43.48B | 29.88 | -19.43% | 1.75% | 6.68% | -7.09% | |
65 Neutral | $9.69B | 13.07 | 17.48% | 2.91% | 5.85% | 142.16% | |
62 Neutral | $8.36B | 14.28 | 2.39% | 3.06% | 3.99% | -14.45% | |
60 Neutral | $9.05B | 26.91 | 11.46% | 1.17% | -5.98% | -46.55% |
* Industrials Sector Average
Performance Comparison
SDXAY
Sodexo SA
13.13
-2.74
-17.27%
CTAS
Cintas
204.71
34.61
20.35%
DRI
Darden Restaurants
207.45
46.20
28.65%
MCD
McDonald's
313.58
38.26
13.90%
YUM
Yum! Brands
158.68
24.00
17.82%
ARMK
ARAMARK Holdings
34.28
2.57
8.10%
Sodexo SA Earnings Call Summary
Earnings Call Date: Oct 24, 2024 | % Change Since: -16.36% | Next Earnings Date: Apr 4, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong financial performance, successful debt reduction, and significant advancements in branded offers and technology. However, there were notable challenges in retention rates and specific segments, particularly in North America and Latin America, which balanced the overall sentiment.Highlights
Strong Financial Performance
Fiscal Year 2024 saw organic growth of 7.9%, driven by a 9.3% increase in Food Services, making up 66% of total revenues. The underlying operating margin improved by 40 basis points to 4.7%, and the underlying net income from continuing activities increased by 17.6%.
Debt Reduction Achievements
The net debt ratio was reduced to 1.7 times, which is well within the target range of one to two times, achieved a year earlier than anticipated due to strong cash generation.
Branded Offer Expansion
Branded offers such as Kitchen Works and Modern Recipe reported revenue increases of 45% and 30%, respectively. The branded offerings are on track to reach about 50% of food revenues next year.
Renewal of Major Contracts
The company renewed more than EUR500 million of revenues with large global clients like Microsoft and AstraZeneca.
Investment in Technology and Digitalization
Over EUR600 million was invested in tech, data, and digital, with a 25% increase in active app users. AI is being embedded into core operations to enhance decision-making and automate workflows.
Environmental and Social Responsibility Advancements
A 14.5% reduction in LTIR and a 2.5% decrease in Scope 1, 2, and 3 emissions were achieved. The food waste reduction program cut waste by 40.7% across sites.
Lowlights
Disappointing Retention Rates
Retention fell to 92%, down from 95.2% the previous year, impacted by the loss of a global FM contract and competitive challenges in Latin America.
Challenges in North American Education Segment
The Education segment in North America experienced a decline due to contract renewals in K-12 schools and universities, influenced by regulatory changes and aggressive pricing.
Operational Challenges in Latin America
Experienced contract losses in Latin America due to aggressive pricing and competitive challenges.
Company Guidance
During the Fiscal Year 2024 Results Call, Sodexo provided guidance reflecting strong financial performance and strategic advancements. Organic growth for the year was 7.9%, driven by a robust 9.3% increase in Food Services, which now constitutes 66% of total revenues. The underlying operating margin improved by 40 basis points to 4.7%, while the underlying net income from continuing activities rose by 17.6%. The company successfully reduced its net debt ratio to 1.7 times, ahead of schedule, due to solid cash generation. This positions Sodexo well for potential bolt-on acquisitions. Additionally, Sodexo highlighted strategic investments in technology and digital tools, spending over EUR600 million in tech, data, and digital capabilities, and achieving a 25% increase in active app users. The company also committed to sustainability, achieving a 2.5% reduction in Scope 1, 2, and 3 emissions, with 73% of electricity in its buildings sourced from renewables. Looking ahead, Sodexo projects organic revenue growth of 5.5% to 6.5% for Fiscal Year 2025, with a further margin improvement of 30 to 40 basis points, driven by efficiency gains and a disciplined commercial approach.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.