Sodexo (SW) H2 2026 earnings summary

Executive summary

• FY26 was a reset year; Shift & Grow began rebuilding commercial focus, simplifying structures and strengthening capabilities to restore competitiveness.

• Revenue was €23,963m, with 2.0% organic growth above latest guidance; underlying operating margin fell 130 bps to 3.4%.

• FY27 remains a transformation year, with guidance confirmed and growth expected to build through the year; acceleration is expected from FY28.

Financial highlights

• Revenue was €23,963m, down 0.5% reported; 2.0% organic growth and 0.5% from acquisitions/disposals were offset by a 3.0% currency impact.

• Underlying operating profit was €810m, down 28.9%; underlying operating margin fell 130 bps to 3.4%. Reported operating profit was €520m versus €985m.

• Group net profit was €304m versus €695m; underlying net profit was €508m versus €785m. Basic EPS was €2.09 and underlying EPS €3.48.

• Free cash flow was €379m versus €459m; working capital contributed €75m. Operating cash flow was €1.1bn and net capital expenditure €604m, or 2.5% of revenue.

• Net financial expense rose to €137m from €88m; the effective tax rate was 23.4%, below the ~26% expected.

Outlook and guidance

• FY27 guidance remains 2%–3% organic growth and underlying operating margin broadly in line with FY26 at ~3.4%; modelling assumptions include ~1% M&A revenue impact.

• Growth is expected to start below the full-year range and improve progressively; assumptions include at least 2% pricing, 0.5%–1% net new business, and neutral to slightly positive like-for-like volume.

• No repeat of FY26 review charges and early workforce and procurement benefits are expected to be offset by higher commercial, technology, supply-chain and new-contract start-up costs.

• FY30 ambitions remain organic growth above 5%, net new business above 3% and underlying operating margin above 5%; acceleration is planned from FY28.

• FY27 leverage is expected at 2.6x–2.8%; capital expenditure across the cycle is expected at 2.5%–3% of revenue.