A market leader thrown out with the bathwater

Pluxee business model post Sodexo Spin-off

"Don't throw the baby out with the bathwater" is an idiomatic expression for an avoidable error in which something good or of value is eliminated when trying to get rid of something unwanted.

Last month, French Food and facility services company Sodexo closed the spin-off of its employee benefits and engagement business, Pluxee. I invested a part of my portfolio into the business after the spin and shared a one-pager with my paid subscribers in early February. Now, let’s dive deeper into Pluxee's business model and, in a follow-up, into fundamentals and valuation.

Sodexo was founded in 1966 by Pierre Bellon as a food services company for enterprises. The company expanded its offering to school meals in 1971. In 1976, Pluxee was established as a business segment for meal & food benefits for corporations. The company grew over the coming decades with a range of acquisitions and organic growth. In 2007, they expanded the offering to Employee engagement and Reward & Recognition services. 2014 saw the launch of the first meal card. 2017, Aurélien Sonet was appointed CEO, and the company started its digital transformation. At this point, over 90% of business volume is digital.

Today, Pluxee is a standalone company with a new focus on its business. The Bellon family, who owns 42.8% of Sodexo, is committed to retaining its shares in the company, so Pluxee remains a family business with the majority of voting rights(60%).