- Sodexo's leading market position, large scale, and global operations contribute to its rating, alongside improved revenue visibility and resilience in profit margins post-spin-off.
- The stable outlook anticipates continued operating margin recovery and deleveraging consistent with the rating.
- The spin-off results in slightly slower revenue growth and a minor reduction in operating margin, offset by increased revenue visibility and stability.
- Rating headroom is tighter post-spin-off, with EBITDA net leverage just below their 2x sensitivity and modest post-dividend free cash flow margins below 1%, though Fitch see leverage declining to 1.7x by FY25.
- A disciplined financial policy, targeting reported EBITDA net leverage of 1x-2x, supports Sodexo's credit profile (reported continuing EBITDA net leverage was 2.4x at FY23).
- The company is compared favourably with peers like Compass Group PLC and Aramark for its diversified operations and strong market positions.
CONSUMER CYCLICALS: Fitch Affirms Sodexo at BBB+[S] Following Today's Pluxee Listing
Last updated at:Feb-01 12:57By: Niall Madigan
- Sodexo's leading market position, large scale, and global operations contribute to its rating, alongside improved revenue visibility and resilience in profit margins post-spin-off.
- The stable outlook anticipates continued operating margin recovery and deleveraging consistent with the rating.
- The spin-off results in slightly slower revenue growth and a minor reduction in operating margin, offset by increased revenue visibility and stability.
- Rating headroom is tighter post-spin-off, with EBITDA net leverage just below their 2x sensitivity and modest post-dividend free cash flow margins below 1%, though Fitch see leverage declining to 1.7x by FY25.
- A disciplined financial policy, targeting reported EBITDA net leverage of 1x-2x, supports Sodexo's credit profile (reported continuing EBITDA net leverage was 2.4x at FY23).
- The company is compared favourably with peers like Compass Group PLC and Aramark for its diversified operations and strong market positions.
