Sodexo (SW) H1 2025 earnings summary

Executive summary

• H1 revenue reached €12.5 billion, up 3.1% year-over-year, with organic growth of 3.5%.

• Underlying operating profit rose 6.4% to €651m, and underlying net profit grew 5.4% to €450m.

• Commercial momentum remained strong, with over €1 billion in new contracts signed in H1, up 20% year-over-year.

• UOP margin improved by 10bps to 5.2%, reflecting operational efficiencies.

• Recognized for sustainability and responsible business conduct, including Ethisphere and S&P Global awards.

Financial highlights

• Organic revenue growth was 3.5% year-over-year; food services grew 4.5%, FM services 1.7%.

• Underlying operating margin improved by 10bps to 5.2%.

• Group net profit was €434 million, down 12.5% year-over-year, mainly due to higher restructuring costs and absence of prior year disposal gain.

• Free cash flow for H1 was -€234 million, impacted by seasonality and an exceptional tax outflow in France.

• Net debt increased to €3.4 billion, with a net debt/EBITDA ratio of 2.3x.

Outlook and guidance

• Full-year organic growth expected at 3%-4%, revised down from initial 5.5%-6.5%, mainly due to North America.

• H2 organic growth expected between 2.5%-4.5%, with Q4 stronger than Q3.

• Margin progression of 10-20bps targeted at constant currencies.

• Retention rate guidance at 94%-94.5%, with ambitions to return above 95% in the midterm.

• CapEx expected to reach 2.5% of revenue for the full year, up from 2.1% in H1, driven by new contract mobilizations.