Sodexo (SW) H2 2025 earnings summary

Executive summary

• Fiscal year 2025 delivered 3.3% organic revenue growth (3.7% underlying), with consolidated revenues at €24.1 billion, in line with revised guidance despite operational and commercial challenges, especially in North America and U.S. higher education.

• The company completed its pivot to a pure-play food and services provider, including the Pluxee spin-off, portfolio streamlining, and increased investments in digital, culinary, and sustainability initiatives.

• Leadership transition to Thierry Delaporte as CEO effective November 2025, with a focus on operational execution and commercial acceleration.

Financial highlights

• Revenues reached €24.1 billion, up 1.2% year-over-year, with organic growth of 3.3% (3.7% excluding major events).

• Underlying operating profit was €1,139 million (+2.7%), with a margin of 4.7% (up 10 bps at constant currencies); reported margin was flat due to FX headwinds.

• Free cash flow was €459 million, including a €160 million exceptional tax outflow; underlying cash conversion was 91%.

• Underlying EPS reached €5.37, up 3.7% at constant currencies; proposed dividend is €2.70 per share, up 1.9%.

• Net profit was €695 million; underlying net profit €785 million, up 3.7% at constant currencies.

Outlook and guidance

• Fiscal 2026 is a transition year, with organic revenue growth expected between 1.5% and 2.5%, and at least +2% from pricing; a one-off contract reclassification will reduce reported growth by 70 bps.

• Underlying operating margin is expected to be slightly lower than FY25, mainly due to investment phasing and growth mix, with margin pressure concentrated in North America.

• CapEx target is 2.5% of revenue, with continued focus on organic growth, selective bolt-on M&A, and targeted ROCE above 15%.

• Dividend payout ratio remains at 50% of underlying net income.