Half Year 2025 Sodexo SA Guidance Update Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Jaafar Mestari - BNP Paribas - Analyst : Hi, good morning. I have a couple and then a follow up. Firstly, you do not mention retention in today's press release. Do you have an early estimate of where it stands at the end of H1, or roughly are you above 94%? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 20, 2025 / 7:30AM, EXHO.PA - Half Year 2025 Sodexo SA Guidance Update Call And secondly, there's this large healthcare contract first time outsourcing if I correctly that you expect it to ramp up and seems to be off schedule. There's a number of those from your previous comments that you're expecting to open on time and on budget from the month of April. Could you update us briefly on these other large contracts and their status? I think it's the UK ESNEFT and NHS Trust. It's the French prisons. It's one large tech company in the US, and Santos in Australia. Is there anything else? And are they all except from US healthcare, 100% opening in April and 100% on budget?

Question: Jaafar Mestari - BNP Paribas - Analyst : Thank you. And then if I'm allowed to follow up, is there anything you can say on cash flow unaudited at this stage, please?

Question: Jaafar Mestari - BNP Paribas - Analyst : Okay, thank you.

Question: Leo Carrington - Citi - Analyst : Good morning. Please could I focus on the North America education segment. Firstly, I think I'm correct in saying that the issues you flagged there are mostly in higher education. Can you just talk about and perhaps update us on in enrollment trends, but also the meal packages and volumes. And then away from higher education, we think about K12 -- how's -- what's your view on this part of the education system? I think there's some potential concern around the free meals program, if that could be cut or reduced. General update on education would be very helpful. Thank you.

Question: Leo Carrington - Citi - Analyst : Thank you, Sophie. Thank you, Sebastien. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 20, 2025 / 7:30AM, EXHO.PA - Half Year 2025 Sodexo SA Guidance Update Call

Question: Neil Tyler - Redburn Atlantic - Analyst : Yeah, good morning. Thank you. Actually just picking up on the same topic of US education, please. I'm just interested that you've made the move to appoint a new leader there. Can you help us within some of the targets KPIs that you just described, Sophie, help us -- sort of help us understand the time frame within which you anticipate that the new leadership needing to or having to improve those KPIs because I think it's not -- you mentioned it's not in your concrete prepared remarks. It's not just a like for like volume issue, there's also a net new challenge to be addressed there. So that's the first question just in terms of the time frame of the turnaround that you anticipate. And then secondly, of those -- of that one global contract that you mentioned, would the impact of which wouldn't be seen until later in fiscal '26, can you just help us frame the impact on net new that contract will have on a sort of full year annualized basis, please. Thank you.

Question: Neil Tyler - Redburn Atlantic - Analyst : That's very helpful. Thank you very much.

Question: Vicki Stern - Barclays - Analyst : Hi, morning. I just firstly circling back on the question, the comment you just made there on the 70 to 80 bps impact. When you suggested for this year, you think retention is probably going to land in the 94% to 94.5% range, that includes obviously I know it doesn't come through in the revenue this year, but report retention that captures that 70 to 80 bps of headwinds within the 94% to 94.5%. Okay. Just wanted to step back a little bit and talk more broadly about volume. Are you seeing -- you've given good color on what you're seeing obviously there on the education side, from the enrollment piece. To what extent, if any, are you seeing any impact from sort of broader macro in the US government job cuts specifically coming through in any areas at all that you're seeing? And then last question was just around the development pace. I think back at Q1, Sebastien, you suggested that development was running

Question: Vicki Stern - Barclays - Analyst : Thanks so much.

Question: Simona Sarli - Bank of America - Analyst : Yes, good morning and thanks for taking my questions. So first of all, if you could please help me understand the moving parts if we start from the organic revenue growth in North America in Q1, which if I remember correctly, it was close to 5.9%, and now in a Q2 effectively implies a 1.1% organic revenue growth. So if you can please like quantify a little bit of the moving parts for this sequential deceleration and again what we should expect for the second half of the year. So probably starting from this please.

Question: Simona Sarli - Bank of America - Analyst : Thank you. And on the second part of the question, so what should we expect in terms of trends for the second half of the year? And then if you could please quantify also what are currently the pricing trends, please. Thank you.

Question: Simona Sarli - Bank of America - Analyst : Thank you. And can you elaborate a little bit more on the ramp up in net new that you are expecting in the second half? So how much visibility do you have, and in terms of trends by sector, so which ones will be contributing the most? Thank you.

Question: Simona Sarli - Bank of America - Analyst : Thank you.

Question: Jack Cummings - Berenberg - Analyst : Good morning. Thanks for taking the question. Just one, please. You flag in Europe continued soft growth in facilities management. Has the trends in Q2 in facilities management mirrored the trends in Q1, or has there been any decline or improvement? And how should we think about facilities management for the remainder of the year? Thanks.

Question: Jack Cummings - Berenberg - Analyst : Thank you.