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Sodexho Marriott Services

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Business Summary
NYSE : SDH

Sodexho Marriott Services is a provider in North America of outsourced food and facilities management services to businesses, health care facilities, colleges and universities, primary and secondary schools and other clients. Food services include food and beverage procurement, preparation and menu planning, as well as the operation and maintenance of food service and catering facilities, generally on a client's premises. Facilities management services include plant operations and maintenance, energy management, grounds keeping, and housekeeping and custodial services

Extended  Business Summary

Financial Summary

 Sodexho Marriott Services provides outsourced food and facilities management services to businesses, health care facilities, colleges and universities, and primary and secondary schools. For the 26 weeks ended 3/2/01, sales rose 5% to $2.6 billion. Net income rose 26% to $53 million. Revenues reflect solid increases in sales at existing accounts and good retention. Earnings also benefited from improved operating margins due to efficiency initiatives.

 



 

 

 

 

 

 

 


Extended Business Summary

Sodexho Marriott Services is a provider in North America of outsourced food and facilities management services to businesses, health care facilities, colleges and universities, primary and secondary schools and other clients. Food services include food and beverage procurement, preparation and menu planning, as well as the operation and maintenance of food service and catering facilities, generally on a client's premises. Facilities management services include plant operations and maintenance, energy management, grounds keeping, and housekeeping and custodial services.

The Company was formerly named Marriott International, Inc. Upon consummation of a distribution, acquisition, and refinancing, which occurred in March 1998, Marriott International, Inc. was renamed Sodexho Marriott Services, Inc. As of March 27, 1998, the principal business of the Company changed from lodging and contract services to food and facilities management services.

Corporate Services

Although the market for food service in business and industry is relatively highly penetrated, customers are responding favorably to the growth in retail orientation by food service contractors. The market for multi-service national providers (food and facilities) is growing as large corporations are moving toward outsourcing all of their non-core services on a multi-site and multi-service basis. This represents an opportunity to leverage from food contracting to the less developed facilities management market. The government market is expected to increase as federal departments and agencies implement large-scale outsourcing of non-core functions. The Corporate Services segment represents approximately 31% of the Company's current revenues.

Health Care

The health care industry continues its transformation from a fee-for-service to a managed care and capitated rate environment. This market dynamic has shifted the risk and burden of cost control from insurance providers to the health care institutions themselves, forcing them to focus not only on the cost component of clinical care, but also on the cost of all services including food and facilities management. These cost pressures are driving the trend toward consolidation of health care institutions and guaranteed cost contracts for hospital services, and have contributed to several institutional bankruptcies. While management of the Company recognizes the challenges of these trends, it also believes that there are opportunities for growth, as the health care market remains significantly underpenetrated. The Health Care segment represents approximately 29% of the Company's current revenues.

Education

The campus dining marketplace, principally in colleges and universities, continues to shift from residential board plans to more retail-oriented operations driven by the growing proportion of non-resident day and evening students on campuses, the taste and service preferences of today's young consumers, and colleges' and universities' desire to provide their students with greater flexibility. Traditional straight-line cafeterias are being replaced by scatter systems and food courts. These trends, coupled with cost pressures, are causing public and private institutions to consider outsourcing as a viable choice. The Education segment represents approximately 27% of the Company's current revenues.

Schools

The current fiscal climate is forcing school districts (kindergarten through Grade 12) to minimize costs while improving the performance of non-instructional areas. Over the last several years, 150-200 school systems per year have decided to begin outsourcing their food services. Also, new federal regulations require that school meals meet more stringent food specifications and production techniques to comply with Nutrient Standards guidelines. Some school districts may turn to contractors to help comply with these guidelines. The Schools segment represents approximately 8% of the Company's current revenues.

The Company also operates two additional segments-- Canada and Laundry Services. These two segments collectively represent approximately 5% of the Company's current revenues.

 

 

Disclaimer:
The data included within the Financial section is solely for information  and does not construe a recommendation and/or endorsement by IGHRM or its members to invest funds with any of the companies listed. You are strongly advised to obtain professional advice with qualified individuals or corporations for any investments of funds.

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