By Dimitri Rhodes and Mathias de Rozario
(Reuters) -Sodexo sees no direct impact from U.S. tariffs on its revenue, though there might be some inflationary pressure on imported food items, the French caterer said on Friday.
“In the U.S., we’re Americans, our collaborators are Americans, we recruit locally, we source 90% of our supplies locally and we deliver our services locally to American or international customers based in the U.S.,” CEO Sophie Bellon told journalists in a post-earnings call.
There could however be some inflationary pressure from seasonal foods coming from Mexico and Canada, like certain fruits and vegetables, she added.
“Managing inflation is really part of our business,” Bellon said.
Sodexo, which generates around a half of its revenue in North America, in March issued a profit warning due to a weak performance in its education and healthcare businesses in the key region.
“The challenges are concentrated in a few identified areas, and we are strengthening our action plan,” Bellon said in Friday’s statement.
Organic revenue growth in North America slowed down to 3.5% in the first half of its financial year, from 10% growth a year earlier, Sodexo said, confirming its preliminary estimates.
“Today’s release came with limited new news, but the shares will (still) not be helped by a disappointing cash flow in H1,” analysts at J.P.Morgan said in a note to clients.
Sodexo’s shares were down 3.1% at 0706 GMT, after its cash outflow more than doubled year-over-year to 234 million euros ($258.6 million) following a tax audit in France.
The group, however, recorded a record high value of new business wins at 1 billion euros in the first half of the year.
($1 = 0.9049 euros)
(Reporting by Dimitri Rhodes and Mathias de Rozario in Gdansk, editing by Milla Nissi)
