Fitch rates Sodexo BBB+

Fitch Ratings said it assigned Sodexo SA a BBB+ long-term issuer default rating with a stable outlook.

“Sodexo's ratings are underpinned by its leading market position as the second-largest provider of on-site food and facility management services, significant scale and globally diversified operations, including into fast-growing benefits & rewards services (BRS). Its core on-site services (OSS) business ensures high revenue visibility and resilience in profit margins, albeit still exposed to slight volatility in times of cost inflation. This, together with Sodexo's disciplined financial policy, balances its moderate operating and free cash flow (FCF) margins,” the agency said in a statement.

Fitch said it projects Sodexo to generate revenue growth above 10% in the financial year ending August 2023, “driven by expansion, ongoing post-Covid-19 recovery and continued price increases as the company aims to pass on increased cost inflation to consumers.”

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