Sodexo First half Fiscal 2025 results

• Organic revenue growth of +3.5%
• Underlying operating profit up +6.4%, margin up +10 bps
• Full year Fiscal 2025 guidance:
  • Organic revenue growth between +3% and +4%
  • Underlying operating profit margin improvement between +10 and +20 bps, at constant currencies

At the Board of Directors meeting held on April 03, 2025, chaired by Sophie Bellon, the Board approved the consolidated financial statements for the First half Fiscal 2025 ended February 28, 2025.

• First half Fiscal 2025 consolidated revenues were at 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%.
• Food services continued to demonstrate solid organic growth of +4.5%, while FM services grew at +1.7%.
• By geography:
  • North America delivered organic growth of +3.5% in the First half. Strong performance in Sodexo Live! and Corporate Services was partially offset by the impact of contract demobilizations in the Education and Healthcare & Seniors segments. Second-quarter performance was softer than the first quarter, primarily due to a higher comparison base, as well as contract demobilizations in Corporate Services, including the impact from the loss of a global FM contract last year.
  • Europe grew +2.1% organically, driven by continued momentum in Healthcare & Seniors supported by net new wins, volume growth, and price adjustments. Growth was partly offset by softer activity in Facilities Management services, reflecting the current macroeconomic environment.
  • Rest of the World was up +6.6% organically. This sustained strong performance was driven by robust growth in India, Brazil and Australia. While China is gradually recovering, Chile and Peru were affected by previous year's site losses.
• Underlying operating profit was 651 million euros, up +6.4%. The Underlying operating margin was up +10 bps at 5.2%.
• Other operating income & expenses amounted to a negative 71 million euros, mainly from restructuring expenses and amortization of acquisition-related assets. The prior year positive number of 30 million euros included a gain from the disposal of the Homecare business. 
• Operating profit came in at 580 million euros, compared to 642 million euros in the prior year, reflecting year-on-year differences in Other operating income and expenses.
• Net financial expense was -40 million euros against -46 million euros in the prior year. 
• The Effective tax rate for the first half of Fiscal 2025 was 19.5%, mainly impacted by the update of the risk related to the Sodexo S.A. tax audit, following the finalization of related procedures during the period. In comparison, the effective tax rate for the first half of Fiscal 2024 was 16.6%, supported by the non-taxable capital gain from the Homecare disposal, as well as the utilization of previously unrecognized tax assets in France.
• Group net profit was down -12.5% to 434 million euros primarily due to an exceptional capital gain in the prior year.
• Underlying net profit adjusted for Other Operating income and expenses net of tax amounted to 450 million euros, up +5.4%.
• Free cash flow in the first half Fiscal 2025 was a seasonal negative -234 million euros, a decline relative to the -102 million euros in First half Fiscal 2024 due to an exceptional tax outflow related to a tax audit in France. Net capital expenditure was slightly up at 256 million euros, representing 2.1% of revenues.
• Net debt increased to 3.4 billion euros up from 2.6 billion euros at the end of Fiscal 2024, primarily due to the seasonality of cash movements. Given the 6% year-on-year increase in rolling 12-month EBITDA, the net debt to EBITDA ratio stands at 2.3x, up 0.6x since year end, and at the same level as at the the end of first half Fiscal 2024.

Net new development was 1.2% on a last-12-months (LTM) basis as of the end of February 2025:

• LTM client retention of 93.9%, reflecting the weaker performance of the second half last year;
• LTM development of 7.3%, within the 7-8% of expected range for the year;
• Over First half Fiscal 2025, 1 billion euros in new contracts signed, including cross-sell.

• Sodexo has been included in the S&P Global Sustainability Yearbook 2025, which recognizes 780 companies out of over 7,690 assessed across 62 industries for their progress in sustainability.
• Sodexo advanced in the EcoVadis scoring from the top 5% to the top 2% in sustainability rankings with an overall score of 79 out of 100, a 7-point improvement year-on-year.
• Sodexo has been recognized as one of the World’s Most Ethical Companies® by Ethisphere for the second consecutive year. In 2025, 136 companies from 19 countries and 44 industries were recognized, Sodexo being the sole honoree in the Food service industry.

The full-year Fiscal 2025 guidance was updated in a press release issued on March 20, 2025.

• Organic revenue growth between +3% and +4% (from +5.5% to +6.5% in the initial guidance)
  The underlying trend should be +3.5% to +4.5%, excluding the base effect of the Olympics, the Rugby World Cup and the leap year in Fiscal 2024.
• Underlying operating profit margin improvement between +10 and +20 bps, at constant currencies (from +30 to +40 bps in the initial guidance).

The adjustment to the full-year organic revenue growth guidance is primarily driven by weaker-than-expected volume trends in Education in North America in the First half, which are expected to persist. Additionally, in North America, delays in certain contracts start dates especially 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 will hold a conference call (in English) today at 9:00 a.m. (Paris time), 8:00 a.m. (London time) to comment on its First half Fiscal 2025 results.

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