Healthcare Segment Drives Sodexo USA's FY2008 Numbers

Sodexo posted an 8.4% increase in revenues in its 2008 fiscal year, ended August 31, though that shrinks to 1.7% when currency exchange factors are applied. In North America, revenues organically grew 4.2%, 5.4% when adjusted for a comparable 52-week basis for the previous year, the company said. The organic growth was led by the Healthcare/Seniors unit (up 6.9%), while Education increased 3.7% and Corporate Services edged up 0.8%.

The performance of the Corporate Services segment came from the full year impact of major contracts won during the previous year, including USAA, the Houston Zoo, American Family and Wellpoint, Inc.; increased patronage at U.S. Marine Corps military bases; continued growth in the Sports and Leisure segment, with contract wins at sites such as the Dallas Museum of Art, the Fort Worth Museum of Science and History and the Phipps Conservatory and Botanical Garden; and a reduction in discretionary spending by businesses and consumers in the current economic environment. Recent business wins for Corporate Services include new Facilities Management services contracts with Procter & Gamble at several industrial sites in the U.S., GlaxoSmithKline in Canada, EMC Corporation, Unilever-Slim Fast and Evergreen Solar, Inc. In addition, Sodexo acquired Circles, a leader in concierge services in the U.S. during fiscal 2008, and Circles had “an excellent year,” the company says.

Growth in Healthcare and Seniors was mainly driven by sustained high rates of client retention; strong revenue growth at existing sites; increased revenues from contracts won the previous year, such as York Central Hospital, Stanford University Medical Center and Moses Cone Health Center; and new contracts, including Mount Sinai Medical Center, Asbury Methodist Village, Palmetto Health, Georgetown University Hospital, Hospital of Central Connecticut, New Hanover Regional Medical Center, Bethany Village Retirement Center and US Army MedCom’s 10 hospitals.

The Education unit continues to benefit from increased student enrollment in universities, higher patronage in cafeterias and from the strong client retention achieved in fiiscal 2007, Sodexo says. Major new contracts won in Education in fiscal 2008 include the University of Puerto Rico, the University of Louisville, the University of California at Berkeley, the University of New Mexico and the Kansas City School District.