Sodexo (SW) H1 2025 earnings summary

Executive summary

• H1 FY25 revenue reached €12.5 billion, up 3.1% year-over-year, with organic growth of 3.5%.

• Underlying operating profit rose 6.4% to €651 million, with margin up 10bps to 5.2%.

• Underlying net profit increased 5.4% to €450 million; underlying EPS up 5.8% to €3.08.

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

• Over €1 billion in new contracts signed in H1, with strong commercial momentum and recognition for sustainability and ethics.

Financial highlights

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

• H1 underlying operating margin improved by 10bps to 5.2%.

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

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

• Effective tax rate rose to 19.5% in H1, mainly due to a finalized French tax audit.

Outlook and guidance

• Full-year organic growth guidance revised to 3%-4%, down from 5.5%-6.5%, mainly due to North American headwinds.

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

• Underlying operating profit margin expected to improve by 10–20bps 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, driven by new contract mobilizations.