Sodexo's Q1 2022-23 (September to November 2022) sales beat expectations by 3%, at 6,330 ME (against a consensus of 6,169 ME, Oddo BHF 6,319 ME). It is up 20% on a reported basis, including organic growth of 12.3% versus the consensus forecast of 11.3% (Oddo BHF 11.7%).

Following this announcement, Oddo confirms its Outperform recommendation on the stock, with a price target of 98 E.

By division, on-site services came to 6,097 ME (against a consensus of 5,958 ME), with organic growth of 11.9% (consensus 10.6%, Oddo BHF 11%).

For fiscal 2022-23, Sodexo has confirmed its expectations of organic growth of between +8/10% (consensus 9.2%, Oddo BHF 8.3%e) and an operating margin of around 5.5% (at constant exchange rates, consensus 5.4%e and Oddo BHF 5.5%e).

We reiterate our preference for Sodexo in the foodservices segment because of its potential to improve its business, which is the most significant.

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