Sodexho Alliance, the world's second-largest caterer, has posted year-end financial results much in line with analysts' expectations.
Despite achieving organic growth of 3.1% in the year to 31 August, the overriding message was a 7.3% fall in revenues to €11.4b (£8b), caused by poor performance in the UK market and fluctuations in currency.
The company's statement said the euro's sharp appreciation, particularly against the dollar, was the main reason for revenues falling from €12.6b (£8.9b) in 2002. It said at least 10% of this fall could be attributed to currency movements, particularly a weaker dollar.
These effects aside, the firm said it was showing signs of recovery. Growth was up by 1.2% on the year, helped by a solid 4.3% improvement in consolidated sales in North America, where it performed well in the healthcare and education markets.
Good performance in the USA and Continental Europe was offset by continuing downturn in the UK and Ireland, where output was €1.45b (£1.02b), down by 3.9%. The company said this was mainly because of an economic slowdown in the business and industry sector and its policy of axing unprofitable contracts.
In January this year, Sodexho terminated 20 of its worst-performing contracts in the UK, worth £13m in annual turnover. Despite this, the company revised profit forecasts down by 11% in September, because of more job losses at its corporate clients and slower-than-expected recovery from an accounting scandal.
The outlook looks brighter now - a statement issued by the company in its annual report forecasted sales growth at the same level next year and it was confident that its action plan would turn around profitability in the UK.
Another setback materialized last week when the US Supreme Court announced it was letting a racial discrimination case go ahead, causing the share price to fall by 5% on 7 October to €23.63 (£16.64). At the start of this week, the share price had stabilized around the €23 (£16.20) mark.
The firm strongly denies the allegations, but added in its annual report that the case could eventually have an impact on the group's net profit. Analysts said that the markets were jittery as the claim was unspecified.