Sodexo (SW) Q1 2026 TU earnings summary

Executive summary

• Q1 FY26 revenue reached €6.3 billion, with organic growth of 1.8% year-over-year, broadly in line with expectations, and a negative 4% currency effect; negligible M&A impact.

• North America saw organic growth of -1.5% due to contract exits, tough prior-year comparables, and currency headwinds, partially offset by new healthcare contracts.

• Europe delivered 2.4% organic growth, driven by new contracts in business, industry, and healthcare, offsetting high prior-year comparables and softer education trends.

• Rest of the world posted strong organic growth above 10%, led by Australia, India, Brazil, and Chile.

• CEO Thierry Delaporte emphasized client centricity, operational efficiency, and investment in people, with direct oversight of North America and initial actions underway.

Financial highlights

• Organic revenue growth for Q1 was 1.8%; pricing contributed just under 2.5%, net new contracts had a -1% impact, and like-for-like volume was slightly positive at 0.5%.

• Total Q1 revenue was €6,260 million, down from €6,403 million in Q1 FY25, mainly due to a -4.0% negative currency impact.

• Excluding the Paralympics effect, organic growth would have been 2.1%.

• North America revenues declined by -6.5% year-over-year, with a significant -5.8% currency effect.

• Rest of the World delivered +10.2% organic growth, offset by -5.3% currency effect, resulting in +2.5% total growth.

Outlook and guidance

• FY26 organic revenue growth expected between 1.5% and 2.5%, with a minimum 2% contribution from pricing.

• Underlying operating margin anticipated to be slightly lower than FY25, with H1 and H2 margins more closely aligned.

• Q2 expected to be at the lower end of guidance, with gradual improvement in H2 due to favorable comparables and event phasing.

• Other income and expenses now expected at €200 million, up from €160 million, mainly due to restructuring and one-off costs.

• Net financial cost forecast at €140 million; effective tax rate around 27%.