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Oil price drop has had 'massive impact': Sodexo

The sharp decline in commodity prices has affected Sodexo's oil, gas and mining business "drastically," the chief executive of the French food services and facilities management group, told CNBC.

Known primarily for its catering services, Sodexo is the world's second largest catering company. It also manages canteens and facilities for schools and hospitals as well as private companies, including the oil and gas and mining industry.

The sharp decline in oil prices over the last 18 months has caused oil and gas companies around the world to cut staffing and running costs, however, having a knock-on effect on Sodexo's bottom line.

Chief Executive Michel Landel said his company had seen firms cutting back on the services they ordered from Sodexo amid the sharp decline in commodity prices.


Michel Landel, chief executive officer of Sodexo.
Chris Ratcliffe/Bloomberg via Getty Images
Michel Landel, chief executive officer of Sodexo.

"We've seen a massive impact because we've seen decline in volumes for our clients in oil and gas and mining by 20-40 percent, so we've had to adjust our level of services and of course that's affected drastically our business in oil and gas and mining," Landel said on Tuesday.

"It has been very much affected and we have seen a decline of 14 percent (this quarter) on that specific oil and gas and mining business," he added, noting that that represented 7 percent of the total revenue of the group.

Read MoreOil hammered but $10 a barrel unlikely: Yergin

On Wednesday, Sodexo reported 4.7 percent growth in organic revenue and kept its forecast for 3 percent organic revenue growth in 2016. It also continues to expect 8 percent growth in operating profit this year.

"We have included in our objectives the fact that oil and gas and mining are suffering these days. What we are trying to do in this business is really to work with our clients to make sure that we mitigate the decline of our margins in this business."

Despite oil prices falling further since the New Year, to around $30 a barrel, Landel remained optimistic that there would be a recovery. "At one point, we'll see growth coming back when the prices are going to go up," he said.

- Written by CNBC's Holly Ellyatt, follow her on Twitter @HollyEllyatt. Follow us on Twitter: @CNBCWorld