Sodexo Q1 Fiscal 2025 Revenues: a soft start to the year, as expected
— Organic revenue growth of +4.6%, with Food services at +5.7%
— Underlying Organic revenue growth of +4.9%1
— Fiscal 2025 guidance maintained
Sodexo First half Fiscal 2025 estimates and full year guidance update
- First half Organic revenue growth of +3.5%
- First half Underlying operating profit up +6.4% at constant currencies, margin up +10bps
- Update to full year guidance mainly triggered by slower than expected organic growth in North America :
- Organic revenue growth between +3% and +4% (from between +5.5% and +6.5%)
- Underlying operating profit margin improvement between +10 to + 20 bps, at constant currencies (from +30 to +40 bps)
First half Fiscal 2025 key figures - unaudited*
“While our industry fundamentals remain strong, in North America the continued soft trend in volumes in Education and slower than expected net new ramp-up in Healthcare have impacted our ability to meet initial expectations. We are determined to strengthen execution on identified areas where improvement is required. We continue to see significant opportunities in a highly attractive market, and we are investing in the future to grow faster. We are confident in our ability to create sustainable value for our stakeholders.”
H1 Fiscal 2025 highlights
- First half Fiscal 2025 consolidated revenues reached 12.5 billion euros, up +3.1% year-on year including a negative currency impact of -0.1% and a net contribution from acquisitions and disposals of -0.3%. Organic revenue growth was +3.5%.
- In North America, Organic growth was +3.5%, lower than expected, with Education affected by the continuation of soft volumes, and Healthcare by delays in the opening of new contracts, meanwhile Business & Administrations and Sodexo Live! demonstrated good organic growth.
- Europe was up +2.1% organically, with good performance in Healthcare & Seniors but continued soft growth in Facilities Management.
- In Rest of the World, Organic growth was +6.6%, fueled by strong performance in Australia, India and Brazil.
- During First half Fiscal 2025, last-12-months (LTM) client retention stood at 93.9% with a development of 7.3%.
- Underlying operating profit in the First half was 651 million euros, up +6.4%. The Underlying operating margin improved +10 basis points at 5.2%, with good improvement in North America despite the revenue shortfall, and softer improvement in Europe, specifically in Corporate services, and in Rest of the World due to some operational challenges in a couple of contracts in Latin America.
FY25 Guidance
- Organic revenue growth guidance revised to between +3% and +4% (from +5.5% to +6.5% in the initial guidance)
- Underlying operating margin YoY improvement guidance revised to +10 to +20 bps (from +30 to +40 bps in the initial guidance)
Our adjustment to the full-year organic revenue growth guidance is primarily driven by weaker-than-expected volume trends in Education in the First half, which are expected to persist. Additionally, in North America, delays in certain contracts start dates in Healthcare, and softer commercial performance in the First half have impacted expectations for net new contributions in the second half.
Similarly, the revision of the Underlying operating margin guidance mainly reflects the full-year impact of the revenue shortfall.
Sodexo is strengthening execution on identified areas where improvement is required, with a particular focus on North America towards commercial discipline and operational execution, as well as global organizational efficiency and strict overhead cost control.
Further details will be provided in the upcoming H1 results announcement, scheduled for April 4th, 2025.
Conference call
Sodexo will hold a conference call (in English) today at 8:30 a.m. (Paris time), 7:30 a.m. (London time) to comment on this release.
Those who wish to connect:
- From the UK: +44 121 281 8004, or
- From France: +33 1 70 91 87 04, or
- From the US: +1 718 705 8796,
Followed by the access code 07 26 13.
The live audio webcast will be available on www.sodexo.com, watch the webcast here.
*Sodexo's Board of Directors met on March 19, 2025, reviewed the financial data for the first half of Fiscal 2025 and reviewed this press release. These financial data are preliminary, the financial results for the first half of Fiscal 2025 will be approved by the Board of Directors on April 3, 2025. The limited review procedures by the Statutory Auditors are ongoing.
Associated Contents
Sodexo: strong financial delivery in Fiscal 2024
— Organic revenue growth +7.9%
— Underlying operating profit +16% at constant currencies, margin up +40 bps at 4.7%
— Strong free cashflow resulting in a net debt/EBITDA ratio of 1.7x
— A proposed ordinary
Sodexo announces the completion of the sale of Sofinsod for € 918 million and the payment of a special interim dividend
- Sale by Sodexo of Sofinsod to Bellon SA for €918 million, enabling the simplification of Sodexo's shareholder structure and the monetization of an illiquid asset
- All proceeds from the sale will be distributed in the form of a special interim dividend of €6.24 per share
- The ex-dividend date will be August 27, 2024. The record date will be August 28, 2024. The special interim dividend will be paid on August 29, 2024.