Moody’s assigns Sodexo Baa1

Moody’s Investors Service said it assigned a Baa1 long-term issuer rating to Sodexo SA. The outlook is stable.

“The Baa1 rating with a stable outlook assumes that Sodexo will be successful in largely offsetting the negative long-term effects of the coronavirus pandemic on its earnings, notably more frequent remote working, although the strategic recovery plan entails execution risks,” said Eric Kang, a Moody’s vice president, senior analyst and lead analyst for Sodexo, in a press release.

“We also assume the company’s Moody’s-adjusted EBITA margin will gradually recover to around 6%, which, combined with our expectation that Sodexo will maintain a conservative financial policy and very good liquidity will restore key credit metrics to levels more commensurate with a Baa1 rating by fiscal 2023,” added Kang.

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