Sodexo (SW) Guidance summary

Opening remarks and agenda

• Call convened to update on H1 2025 estimates and full-year guidance, with Q&A to follow.

• Management limited comments to press release disclosures, with full audited results to be published April 4.

• Chairwoman and CEO Sophie Bellon highlighted strong industry fundamentals but noted underperformance in North America, especially in Education and Healthcare, impacting initial expectations.

Guidance on key objectives

• Full-year organic revenue growth guidance revised to 3%-4%, down from 5.5%-6.5%, with 10-20 basis points UOP margin improvement, reduced from 30-40 bps.

• H2 organic growth expected between 2.5% and 4.5%.

• Retention rate targeted at 94%-94.5%, including the impact of a lost global contract, with no revenue effect until H2 2026; client retention at 93.9% over the last 12 months.

• Adjustments driven by weaker volume trends in North America Education and delayed Healthcare contract ramp-ups.

• Robust cash flow reported for H1, with more details to come in April.

Market trends and strategic opportunities

• Growth strong in Europe, healthcare, seniors, Australia, India, and Brazil; North America faced challenges, especially in education and healthcare.

• North America organic growth at 3.5%, below expectations due to soft Education volumes and Healthcare delays; Business & Administrations and Sodexo Live! showed good growth.

• Europe saw 2.1% organic growth, with strong Healthcare & Seniors performance but soft Facilities Management.

• Rest of the World delivered 6.6% organic growth, led by Australia, India, and Brazil.

• Development rate strong, with over €1 billion in global sales in H1, a record volume.