Sodexo: net profit down 56%, dividend reduced to €1.74 per share
Sodexo published its annual accounts on October 23, 2026, in which activity and profitability are moving in opposite directions. Organic revenue growth reached 2.0% for the fiscal year ended August 31, 2026, above the group's targets, while the group's net profit declined by 56.3% to €304 million. By confirming for fiscal year 2027 an operating margin broadly in line with that of 2026, management is targeting profitability improvement from fiscal year 2028 onwards, within the framework of its Shift & Grow 2030 plan.
Organic growth of 2.0%, operating profit down 28.9%
Consolidated revenue stood at €23,963 million, down 0.5% year-on-year. Organic growth of 2.0% (compared to 3.3% in fiscal 2025) and a net contribution from acquisitions and disposals of 0.5% were offset by a negative currency effect of 3.0%, mainly linked to the depreciation of the US dollar. Organic growth was driven by price increases of approximately 2.4% and volume growth on existing sites of approximately 0.6%, while the reclassification of a contract in North America, now accounted for on a net basis, reduced it by approximately 0.7 percentage points.
By region, North America showed organic growth of -1.0%, Europe of +2.1% and Rest of World of +9.7%. Operating profit fell 28.9% to €810 million, and the operating margin fell from 4.7% to 3.4%, a decline of 130 basis points year-on-year.
Adjusted net profit stood at €508 million, compared to €785 million, down 35.3%. Adjusted net profit per share was €3.48, compared to €5.37 a year earlier, above the consensus average of €3.23 expected by 16 analysts surveyed on October 19, 2026.
Provisions, investments and restructurings weigh on accounts
The group attributes the margin decline to charges and provisions from the review of certain contracts and assets, to accelerated investments intended to strengthen its capacities, and to operational factors, including underperformance in part of the portfolio. North America recorded the most significant decline, with a margin reduced to 4.0% (-180 basis points), compared to 3.4% in Europe and 4.0% in Rest of World (-90 basis points each).
Below operating profit, other operating income and expenses represent a net charge of €290 million, compared to €154 million, due to restructuring costs rising from €97 million to €216 million. Net financial charges reached €137 million, compared to €88 million.
Cash generated by operations amounted to €379 million, compared to €459 million, with net investments increased to €604 million (2.5% of revenue, compared to 2.0%). Net debt reached €2.9 billion and the net debt to EBITDA ratio rose from 1.8x to 2.4x. The group placed a €1.1 billion bond issuance at the end of August, intended in particular for the repayment of €800 million in bonds maturing in April 2027.
The proposed dividend of €1.74 per share corresponds to a payout ratio of 50% of adjusted net profit, compared to €2.70 for fiscal year 2025. Thierry Delaporte, Chief Executive Officer, stated: "However, our overall performance remains below the Group's full potential."
Stable margin targeted for 2027, objective above 5% in 2030
Sodexo confirmed the outlook presented at its investor day in July 2026: organic growth between 2% and 3% for fiscal year 2027 and an operating margin broadly in line with the 3.4% of 2026, reflecting continued investments. The group expects an acceleration phase from fiscal year 2028 onwards.
On the commercial front, commercial development reached 7.7% and customer retention rate 94.4%, indicators calculated on annualized revenue of signed contracts. They include the global contract with Meta, which is expected to ramp up during fiscal year 2027. Conversely, the reclassification of the North American contract is expected to represent an annualized impact of approximately 100 basis points on organic growth.
On governance, the board will propose to the general meeting on December 16, 2026, the appointment of Nathalie Bellon-Szabo to the presidency, replacing Sophie Bellon, as announced at the end of September. For fiscal year 2030, Sodexo is targeting organic growth above 5% and an operating margin above 5%, compared to 3.4% in fiscal year 2026.
