Sodexo (SW) Q1 2025 TU earnings summary

Executive summary

• Q1 FY25 revenue reached €6.4 billion, up 1.9% year-over-year, with organic growth of 4.6% (4.9% adjusted for major sporting events), and food services organic growth at 5.7%.

• Strong commercial momentum with €500 million in new signings, major contract wins including Rio Tinto Iron Ore and World Rugby event partnerships, and expectations for accelerated growth in H2.

• Negative currency (-2%) and scope (-0.8%) impacts affected reported growth, mainly due to the Brazilian real and U.S. dollar depreciation and the disposal of the home care business.

• Pricing contributed about 3% to organic growth, with the remainder from net new business and volume increases.

Financial highlights

• Organic growth was 4.6% year-over-year; excluding major sporting events, organic growth was 4.9%.

• North America revenue: €3.1 billion, up 5.9% organically; Europe: €2.2 billion, up 2% organically (2.7% excluding sporting events); Rest of World: €1.1 billion, up 6.4% organically.

• Food service organic growth was 5.7%; facility management grew 2.4% (3.5% excluding last year's Rugby World Cup impact).

• Net financial expenses for FY2025 expected at ~€100m; tax rate around 27%.

Outlook and guidance

• Full-year guidance maintained: organic revenue growth of 5.5–6.5% and underlying operating profit margin improvement of 30–40 basis points at constant rates.

• Organic growth projected to accelerate in H2, driven by new business ramp-up and strong pipeline.

• Underlying trend projected at 6% to 7% excluding Olympics, Rugby World Cup, and leap year effects.