The Benefits & Rewards Services (BRS) division of French catering and food services company Sodexo (EXHO.PA) will be spun off and listed in 2024, the company announced on Wednesday, sending its shares up more than 11% in early trading.
Last May, Sodexo abandoned a proposal to sell a small portion of BRS, which provides vouchers and benefit cards to companies for their employees.
By giving Sodexo owners shares, it now plans to spin off and list it.
According to Chief Executive Sophie Bellon, “The business is doing very well, driven by interest rates, by inflation, so it’s the perfect time to put this jewel on the market and let it fly on its own.”
Concerning the value of the company after it is spun off, Sodexo declined to say. The founding family of Bellon, which holds 57.5% of the voting rights and runs the organization, was confirmed as a core shareholder.
In the first half of 2023, the BRS business recorded a core profit of 162 million euros ($177 million), up 46.4% from the same period the previous year when currency effects are taken into account.
According to a consensus compiled by the business, the group’s core profit came in at 704 million euros, exceeding analysts’ average forecast of 679 million euros.
According to Sodexo, price rises will continue to exceed 5% in the second half of 2023.
According to Chief Financial Officer Marc Rolland, “inflation is higher than what we pass on to our customers, but we manage it because we have action plans to mitigate the impact. That’s how we keep our margins.”
In fiscal 2023, the company predicted organic revenue growth of nearly 11%, up from its prior projection of 8% to 10%.
It also increased the BRS business’s full-year forecast, aiming for organic sales growth of nearly 20% and an underlying operating profit margin of nearly 32%.
($1 equals 0.9128 euros)