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1. Company Snapshot

1.a. Company Description

Sodexo S.A. develops, manages, and delivers on-site, benefits and rewards, and personal and home services worldwide.It provides various on-site services, including business and administration, which covers corporate, energy and resources, government and agencies, sports and leisure, and other customers; healthcare and seniors; and education services comprising schools and universities.The company also provides food services; benefits and rewards services, such as employee benefits, incentive and recognition programs, employee mobility, expense management, and public benefits; and personal and home services, including childcare, concierge, and in-home care services.


In addition, it offers facility management services, including cleaning, front of house, security, ground maintenance, mailroom, document management, waste management, laundry, transportation, general repairs, technical maintenance, energy management, asset management, and project management services.The company was formerly known as Sodexho Alliance and changed its name to Sodexo S.A. in 2008.Sodexo S.A. was founded in 1966 and is headquartered in Issy-les-Moulineaux, France.

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1.b. Last Insights on SW

Sodexo's recent performance has been negatively impacted by margin contraction, with net profit margin compressing to 2.9% from 3.1%. The company's earnings growth forecast of 5.09% trails the broader French market's expected growth of 12.3%. Leadership changes and strategic updates have also contributed to investor caution. Additionally, the company's recent share buyback program, aimed at honoring obligations related to free shares award plans, may provide some support. Sodexo's fair value estimate has been revised downward, reflecting optimism about stable revenue growth and caution regarding the evolving risk environment.

1.c. Company Highlights

2. Sodexo's Fiscal Year 2025 Results: A Mixed Bag

Sodexo's fiscal year 2025 results were in line with revised guidance, with organic growth of 3.3%, underlying operating margin of 4.7%, and underlying EPS of EUR 5.37, up 3.7% at constant currencies. The company's free cash flow was EUR 459 million, and the Board will propose a dividend of EUR 2.7 per share, up 1.9% versus last year. The actual EPS of EUR 5.37 was not directly comparable to the analyst estimate of '2.37', as the latter was not found in the context, but it indicates a positive growth trajectory.

Publication Date: Oct -25

📋 Highlights
  • 2025 Performance:: Organic growth of 3.3%, operating margin 4.7%, EPS up 3.7% to EUR5.37, and free cash flow of EUR459M with a 1.9% dividend increase.
  • 2026 Guidance:: Organic growth 2.5-3.5%, margin around 5%, and EPS growth 5-10% at constant forex, offset by 70 bps reduction from a North America contract reclassification.
  • Leadership Transition:: Thierry Delaporte appointed CEO in November 2025, bringing digital/AI expertise; FY2026 IT/digital investment exceeds EUR600M.
  • Capital Allocation:: 50% payout ratio, net debt/EBITDA at 1.8x (target 1x-2x), M&A focused on food/services with ROCE >15% and 2.5% CapEx.
  • North America Challenges:: US Education enrollment down 0.7%, driving sales force expansion and digital platform investments, with a 70 bps organic growth drag from contract renegotiations.

Segmental Performance

The US Education segment is seeing softer trends, with early indications showing a 0.7% decline in comparable base enrollments. Sodexo is investing in sales force expansion and account management to address this challenge. The company is also reorganizing its structure, with a focus on improving efficiency and effectiveness, particularly in North America.

Guidance and Outlook

The guidance for fiscal year 2026 is organic growth between 2.5% and 3.5%, underlying operating margin around 5%, and underlying EPS growth around 5-10% at constant currencies. Sodexo has a solid balance sheet and flexibility to invest, with a net debt-to-EBITDA ratio of 1.8x, within its target range. The company expects to sign a renewal of a large North America contract in Q2 fiscal year '26, which will negatively impact organic growth by 70 basis points for fiscal year '26.

Valuation and Returns

With a P/E Ratio of 11.2, P/B Ratio of 1.89, and Dividend Yield of 17.15%, Sodexo's valuation appears reasonable. The company's ROIC of 7.75% and ROE of 17.38% indicate a decent return on capital and equity, respectively. The Net Debt / EBITDA ratio of 2.69 is slightly higher than the company's target range, but still manageable.

Strategic Initiatives

Sodexo is investing in digital platforms, sales force expansion, and its Global Business Services program to drive efficiency and standardization. The company is also focusing on branded offers, with local teams designing offers with group-level support. The M&A strategy focuses on food, existing markets, and bolt-on acquisitions, with a payback below 10 years and ROCE above 15%.

3. NewsRoom

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How Recent Moves Are Rewriting the Story for Sodexo

Nov -27

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Is There Now an Opportunity in Sodexo After Recent Leadership Changes?

Nov -27

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Sodexo - Conditions for obtaining or consulting the preparatory documents for the Combined Shareholders Meeting of December 16, 2025

Nov -26

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Sodexo - Disclosure of transactions in own shares carried out from November 17, 2025 to November 21, 2025

Nov -26

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Sodexo Appoints Joe Ganci as CEO, Corporate Services and Energy & Resources, U.S.

Nov -25

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Sodexo expands CEO Thierry Delaporte’s remit to North America

Nov -20

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Janitorial Services Market Analysis Report 2025-2030, Competitive Analysis of ABM, Sodexo, ISS, Compass, Cintas, OCS, ServiceMaster, Anago Cleaning Systems, Vanguard, and Jani-King

Nov -20

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Sodexo (ENXTPA:SW) Shares Slide—Is the Stock Now Undervalued?

Nov -19

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.81%)

6. Segments

Business & Administrations

Expected Growth: 3.5%

Sodexo's Business & Administrations segment growth of 3.5% is driven by increasing demand for facilities management services, expansion in emerging markets, and a growing need for energy and resource management solutions. Additionally, the segment benefits from the company's expertise in providing integrated services to clients, leading to long-term contracts and steady revenue growth.

Healthcare & Seniors

Expected Growth: 4.5%

Sodexo's Healthcare & Seniors segment growth of 4.5% is driven by increasing demand for elderly care, rising healthcare expenditures, and growing need for nutrition and wellness services. Additionally, the segment benefits from Sodexo's expertise in patient experience, clinical technology, and facility management, as well as its ability to provide integrated services to healthcare providers.

Education

Expected Growth: 3.8%

Sodexo's Education segment growth of 3.8% is driven by increasing demand for outsourced food and facilities management services in schools and universities, fueled by government initiatives to improve educational infrastructure and rising student enrollment rates. Additionally, the company's focus on digital innovation, sustainability, and customer experience has enhanced its competitive edge, contributing to the segment's growth.

7. Detailed Products

Corporate Services

Sodexo's Corporate Services provide a range of solutions to improve the quality of life of employees in the workplace, including food services, facilities management, and benefits and rewards services.

Healthcare Services

Sodexo's Healthcare Services provide a range of solutions to improve the quality of life of patients and residents in healthcare facilities, including food services, facilities management, and patient satisfaction services.

Education Services

Sodexo's Education Services provide a range of solutions to improve the quality of life of students and staff in educational institutions, including food services, facilities management, and student life services.

Government Services

Sodexo's Government Services provide a range of solutions to improve the quality of life of military personnel and government employees, including food services, facilities management, and base operations services.

Remote Sites Services

Sodexo's Remote Sites Services provide a range of solutions to improve the quality of life of workers in remote locations, including food services, facilities management, and camp management services.

Benefits and Rewards Services

Sodexo's Benefits and Rewards Services provide a range of solutions to improve employee engagement and motivation, including employee benefits, rewards, and recognition programs.

8. Sodexo S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Sodexo S.A. operates in a highly competitive market, but the threat of substitutes is medium due to the company's diversified portfolio of services and its ability to adapt to changing customer needs.

Bargaining Power Of Customers

Sodexo S.A. has a large and diverse customer base, but the bargaining power of customers is high due to the company's dependence on a few large clients and the competitive nature of the industry.

Bargaining Power Of Suppliers

Sodexo S.A. has a diversified supply chain and is not heavily dependent on a few suppliers, reducing the bargaining power of suppliers.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the industry, including the need for significant capital investment and the complexity of providing integrated facilities management services.

Intensity Of Rivalry

The intensity of rivalry is high due to the competitive nature of the industry, with many established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 58.43%
Debt Cost 3.95%
Equity Weight 41.57%
Equity Cost 7.69%
WACC 5.50%
Leverage 140.56%

11. Quality Control: Sodexo S.A. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
ISS

A-Score: 5.9/10

Value: 6.1

Growth: 5.3

Quality: 5.2

Yield: 1.9

Momentum: 8.5

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
Elis

A-Score: 5.8/10

Value: 6.5

Growth: 5.9

Quality: 4.6

Yield: 3.1

Momentum: 6.5

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
Intertek

A-Score: 5.3/10

Value: 3.4

Growth: 4.4

Quality: 5.9

Yield: 5.0

Momentum: 3.5

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
Sodexo

A-Score: 5.0/10

Value: 7.6

Growth: 3.9

Quality: 3.7

Yield: 8.1

Momentum: 0.5

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
ID Logistics

A-Score: 4.4/10

Value: 3.6

Growth: 7.9

Quality: 2.4

Yield: 0.0

Momentum: 5.0

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
InPost

A-Score: 3.5/10

Value: 3.6

Growth: 8.0

Quality: 5.3

Yield: 0.0

Momentum: 0.5

Volatility: 3.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

45.38$

Current Price

45.38$

Potential

-0.00%

Expected Cash-Flows