Sodexo Aktie

Good morning. Thank you for standing by, and welcome to Sodexo's H1 Fiscal Year 2026 Results Conference Call. [Operator Instructions] I advise you that this conference is being recorded today on Friday, April 10, 2026. At this time, I would like to hand the conference over to the Sodexo team. Please go ahead.

Good morning, everyone, and thank you for joining us for our H1 fiscal 2026 Results Call.

I'm Juliette Klein, Head of Investor Relations. With me on the call today are Thierry Delaporte, our CEO; and Sebastien De Tramasure, our CFO. Thierry will start by sharing his assessment and key messages, followed by Sebastien, who will cover the financials. After that, we will open the line for questions. [Operator Instructions] If you have additional questions after the call, please don't hesitate to reach out to the IR team. With that, I'll now hand over to Thierry.

Thank you, Juliette. Good morning, everyone, and thank you for joining the call. This is my first earnings call as CEO of Sodexo. I'm very pleased to be speaking with you today.

What I'll do is I'll share my perspective on where the company stands today, what we are already doing but also the priorities we are setting. We are preparing a more comprehensive update for July 16. Based on our current assessment of the business and the actions we are implementing, there are also some near-term financial considerations. So I want to provide context on how this shape our outlook for 2026.

Over the last 5 months, I've spent most of my time in the field with clients, with teams in operations and with our partners. I've been traveling across the U.S. where I'm spending half of my time but also in Asia, in Europe. I joined Sodexo because I'm genuinely attracted to this business. I know B2B, people-intensive service as well. I know how much value can be created when execution, discipline and client focus come together.

Sodexo, let me tell you, is a special company. The quality of our people, the pride they take in serving clients every day and the expertise on the ground absolutely stands out. We often operate in an environment where reliability, quality, continuity are critical. So delivering this consistently every day and that our scale is no mean feat.

The group was built by Pierre Bellon on a clear entrepreneurial ambition and a strong client mindset. I fully adhere to these foundations. Our priority now is to bring them back to life everywhere. At the same time, this business is different from what I have known before. It's complex in a different way. It's operational, physical highly decentralized and diversified by nature. We have thousands of sites running every day in real time. Disciplined execution and attention to every single detail make the difference.

The real challenge, therefore, is driving rigor, discipline and consistent performance at scale. It's about how we lead, organize and execute. Too often, great people are held back by layers, processes and administration instead of being fully focused on clients. So my conviction is clear, growth is the solution. And growth comes from an obsession with clients on the ground every single day. It's earned contract by contract, side by side, by building trusted relationships and creating value at the client level.

In our model, growth is not just an outcome. It's a catalyst. It drives operating leverage to support profitability enhancement. It basically fuels the organization with energy, talent and confidence. So let me start with a balanced picture of Sodexo today, our strengths and the realities we need to address.

We operate in resilient and growing markets with strong long-term growth drivers. Demand for outsourced services in both food and facility management continues to expand. We also have a global and highly diversified client portfolio, as I said, across geographies, segments, services. In many cases, we are the best partner to self-deliver an integrated proposition with one governance across multiple geographies. This strengthens client relationships and gives us additional levers to grow alongside them.

Another key strength is our people-led service culture. Teams who care, who show up for clients every day, and we take pride in delivering. In a people-intensive business like ours, this is fundamental. It's a foundation we will build on as we restore execution and growth. But we also have to face the facts. And the facts are we have consistently underperformed our market and our peers. We underinvested in key capabilities that are critical to run well this business at scale and build a repeatable model. We have not been consistent enough in deploying a best-in-class offer in execution and in the predictability of our delivery and guidance.

So what has held us back? The root cause is go back a long time, and there is no [ synoptics ]. First, commercial intensity. We have not shown enough appetite to win, not enough hunger to fight for clients to stay close to them, to truly understand their expectations, to anticipate and even surprise them. We have not been consistent enough in the way we drive growth and retention, winning, defending, expanding key accounts always with discipline and cadence. In a service business, you just can't review sales momentum once in a while and expect intensity to magically appear. It requires systematic follow-up and accountability and sharper engagement with clients. That is changing.

Second, empowerment and decisiveness. Decision rights, accountability have become diluted across layers. The heavy structure will slow you down, creating [ interference ] and reduces the permission to act close to the clients and the operations. And third, the prioritization and focus, past organizational choices and too many parallel initiatives wasted attention and [ to resources ]. We were not consistently putting our people and capital towards the highest value priorities. Sometimes, short-term trade-offs prevailed over long-term value creation. As a consequence, we have not invested enough in the capabilities that make execution predictable, sales effectiveness, account management, processes, systems and tools.

Now let me move to what we are doing differently starting now, and with a clear focus. We are turning the entire organization towards growth, restoring execution discipline and creating a real sense of accountability and urgency across the board. The first decision I made was to take direct leadership of North America, I wanted to go deep into the business, understand what works and what doesn't and make the necessary changes at the right pace.

Over the past months, we have changed around 2/3 of the leadership team in North America. This is about bringing the right mix of experience, energy, accountability. We combine internal talent with external hires to better serve our clients and execute more consistently across America. In parallel, we simplified the global leadership structure, and we reshaped the executive committee to be more execution focused. We removed the zone layer with regional CEOs now reporting directly to me. This, inevitably, short-term decision paths strengthens accountability and brings leadership much closer to clients and operations.

The Executive Committee now brings together the business leaders and a very limited number of global functions. And it has a clear mandate, enable execution across the group with discipline and urgency. We also we anchored incentives on growth to reinforce focus and accountability across the organization. In parallel, we are reinforcing sales capabilities, not only in the U.S. but everywhere.

Beyond resources, we are strengthening our commercial engine by tightening discipline and governance. We are now consistently running a monthly review of commercial performance, which was not the case, clarifying account ownership and reinforcing the role of account managers. There are key leaders in the organization, fully accountable for client development and retention.

We are also accelerating investments in technology. This work has already started. You know that, but it's clear we need to move faster. The focus is on strengthening our core systems, notably finance and HR, and scaling client-facing digital solutions. To me, these are no option. They are required to improve the productivity, speed and overall performance for our teams and for our clients.

Finally, we have reinforced a disciplined and systematic reassessment of contract and assets taking into account changes in the environment, but also the strategic choices we make. Sebastien will explain how this has translated into the numbers. These measures, for sure, have a short-term impact on margin. This is deliberate. We are choosing to fix the engine properly rather than optimize around the ages that allow us to raise execution start-ups immediately, then over time to reaccelerate growth in a sustainable way.

Now looking forward, our next priority are also very clear. First, we are aligning the organization around a single execution agenda, one set of priorities and clear choices on where we play, how we operate and where we invest. Our choices grounded in one -- in our strengths, our clients' needs and market trends. We call this program shift and grow because that is what it is about shifting the business to grow faster.

Second, we are changing how we run the company. Decision-making is being pushed closer to the clients. Operational teams are being empowered. Headquarters are refocused on supporting execution rather than adding layers. At the same time, we are restoring competitiveness across the model, starting with labor. In my view, while a lot has already been done on supply, workforce management is where we see the biggest opportunity, actively managing the workforce pyramid, improving on-site utilization better matching staffing to client demand. That's what I've done for years. We're going to do it here. All of this supported by stronger processes and tools. And let's be clear, these actions are already in motion.

Finally, we are reinforcing a strong client focus every day. I'm talking to some of our clients. I make a priority. In all our leadership meetings, we start with client cases, we're keeping this focus front and center, and I want every leader to personally own the client relationship and performance. We are also strengthening our performance culture. We are developing internal talent, bringing in external capabilities where needed and raising the bar on delivery. This is about empowerment and accountability. All of this has clear implications for how we invest, allocate capital and approach the year ahead. That brings me to the recalibrated baseline. We are setting for the fiscal year '26.

Turning to H1. The numbers reflect both ongoing execution challenges and deliberate management actions to establish a more disciplined baseline. Organic growth was plus 1.7%, consistent with what we laid out in January, but frankly, below what this business should be delivering.

Looking at our commercial indicators, retention over the last 12 months was 93.4%, and development, 5.3%. That's leading to negative net new business levels that are not where they should be, reflecting both execution issues, and an insufficient quality of pipeline and win rates. The underlying operating profit margin was 3.7%, which is down 140 basis points year-on-year. This reflects operational challenges in specific areas, for sure, and the impact of the deep review of contracts and assets we have conducted in the last few weeks and days.

As we look to the full year, weaker than net new business in the first half will obviously weigh on organic growth in the second half as well as lower volumes in an uncertain external environment. Lower operating leverage, execution issues in H1 and the actions we are taking are reflected in our outlook. Taken together, this leads to a recalibrated starting point for FY '26 with now an organic growth expected between plus 0.5% and 1% and an underlying operating profit margin between 3.2% and 3.4%.

So before I hand over to Sebastien, I want to say, I'm confident in the direction we are taking. The work is well underway. We clearly see where the levers are for improvements. We are operating in markets that are fundamentally attractive, and we are convinced of the relevance of our model. We are already seeing tangible changes in how teams work together, how decisions are made and how we go to market.

With that, I now hand over to Sebastien to walk you through the H1 performance in more detail, and we'll talk later. Thank you.

Thank you, Thierry, and good morning, everyone. So I will now walk you through our first half financial performance in more detail, and let me start with revenue and organic growth at group level.

So reported revenue growth in the first half was significantly impacted by foreign exchange with a negative impact of 5.3%, mainly driven by the U.S. dollar depreciation. M&A had no material impact in the first half as the acquisition of Mediterránea was completed at the very end of February.

Organic growth for the group was plus 1.7%. Pricing contributed around 2.4%. Like-for-like volume growth was around 0.2%, supported by cross-selling, especially in Healthcare, offset by a strong comparable in Sodexo Live! in the first half of last year, which benefited from an exceptional level of events.

Net new business was negative at around minus 0.6%, reflecting prior year contract losses, mainly in Education and Business & Administration. And finally, we had an impact of around minus 0.3% from a contract reclassification in North America Business & Administration. And this followed the renewal of a contract where the economics and [ contractual ] terms evolved, leading to revenue being recognized on a net basis, rather than on a growth basis, fully in line with IFRS requirements. And as a reminder, the annualized impact of this reclarification is around 100 basis points at group level and will, therefore, weigh more in the second half of the year.

Turning now to underlying operating profit margin, which stood at 3.7%. Year-on-year, the group's underlying profit margin declined by approximately 150 basis points in the first half, including a negative foreign exchange impact of 6 basis points.

And this evolution can be explained by 3 main factors. First, operations, mix and leverage representing around minus 50 basis points. This reflects mobilization cost and new contract under performance on a limited number of contracts and unfavorable portfolio mix and softer organic growth in the first half. At the same time, we are actively addressing these execution challenges and continuing to drive efficiency and productivity across the group, especially through shared service and efficiency initiatives.

Second, the acceleration of investments for around minus 20 basis points. These are deliberate investment, notably in technology, system, supply and commercial capabilities fully aligned with the execution priorities Thierry outlined earlier.

And finally, the review of contract and asset that Thierry mentioned had an impact of around minus 70 basis points. And depending on their nature, the outcome of this review affect either underlying operating profit or other operating income and expenses. The impact at underlying operating profit level mainly reflects contract-specific provision following a detailed assessment of actual contract performance, credit risk exposure and litigation matters based on an updated assumption in the current market environment where appropriate. This review was also about improving visibility, reducing future volatility, reflecting clear management choices to address risk earlier and establish a more robust and predictable baseline going forward.

Now that we have covered the group picture on both growth and margin, let me turn to the regional view. Starting with North America. Organic growth was down 1.8%, mainly due to contract losses in Education and Business & Administration, changes in scope on certain Business & Administration contract and the one-off reclassification effect. Healthcare continued to deliver strong growth driven by new contracts while Sodexo Live! softer due to a tough prior year comparison. In Europe, organic growth was 2.8%, supported by Healthcare & Senior as well as strong activity in Sodexo Live! across airport lounges and events, while education remains softer.

Rest of the World delivered organic growth of 9.2%, driven by new contract ramp-ups and strong underlying dynamic across markets, especially in India, Australia and Brazil. From a margin perspective, the decline was more pronounced in North America where the underlying operating margin decreased by around 200 basis points year-on-year and this largely reflects the execution challenges, the accelerated investment and the action referenced earlier.

In Europe and Rest of the World, margins also declined year-on-year mainly reflecting the impact of management actions related to the review of contracts and assets while underlying operational performance remain broadly stable.

Now moving to the income statement. So having covered revenue and underlying profit and before coming back to the other operating income and expenses in the next slide, let me complete the picture with financial results, tax and net profit.

Net financial expense increased by EUR 24 million year-on-year, mainly reflecting a higher gross cost of debt following the issuance of the U.S. dollar bonds in May 2025 at higher coupons. As a reminder, these bonds were issued in anticipation of the April and June 2026 debt maturities, which we intend to repay from cash reserves.

The effective tax rate was 25.9% compared to 19.5% last year. Last year was impacted by one-off positive items, including the update of tax risk related to the Sodexo S.A. tax audit. And net profit for the first half was EUR 188 million. And on an underlying basis, net profit was EUR 285 million, down 37% year-on-year, reflecting lower underlying operating profit and adverse currency effect currencies.

Turning to other operating income and expenses. The increase versus last year mainly reflects higher restructuring and rationalization costs linked to organizational changes, leadership adjustment and transformation project. Amortization of purchased intangible assets was stable year-on-year, and other items mainly reflect some assets and footprint rationalization decision, including the write-off of certain production and operational assets, for example, following the rationalization of central production units where capacity has been consolidated into fewer, more efficient sites. They also include pension-related items driven by legislative change in labor law in India as well as the recognition of one-off costs related to multiemployer pension plan in the U.S.

Turning now to cash flow. Operating cash flow was EUR 616 million, up EUR 16 million year-on-year and this reflects the fact that last year included an exceptional tax outflow related to the Sodexo S.A. tax audit, partially offset this year by lower operating profit. The change in working capital was negative EUR 490 million and as a reminder, the first half is seasonal low point of our cash generation, and we expect working capital to normalize by the end of the year.

Net capital expenditure increased year-on-year mainly due to one-off client investment in the context of contracts renewals. Free cash flow was therefore broadly flat year-on-year at negative EUR 243 million. Net acquisition amounted to EUR 256 million, mainly reflecting the acquisition of Mediterránea alongside smaller bolt-on acquisition in Europe.

As a result, our net debt increased to EUR 3.6 billion, corresponding to a net debt-to-EBITDA ratio of 2.7x. This reflects the usual seasonality of cash flow in the first half, but also lower EBITDA days than last year. And as always, we expect a seasonal improvement in net debt in the second half. That said, based on the revised full year fiscal 2026 guidance and the recalibrated baseline, it implies we now expect to end the year with a net debt-to-EBITDA ratio above our target range of 1 to 2x.

Let me close by coming back to our guidance for the year and giving you a bit of additional color. So Thierry outlined, this is the guidance we are providing today, reflecting our current assumption and the action we are taking. We now expect fiscal year 2026 organic growth to be between 0.5% and 1%. So this reflects weaker-than-expected commercial performance and in particular, in retention impacting the second half as well as lower volume in an uncertain external environment.

Underlying operating profit margin is now expected to be between 3.2% and 3.4%. This reflects reduced operating leverage from a softer top line, ongoing operational execution challenges, the continued impact of our review of contract and asset over the full year and the accelerated investments we are making to strengthen execution.

Let me also share a few key modeling assumptions for clarity. So based on current spot rates, we assume a full year 2026 currency impact of around minus 3% on reported revenue. We also assume a positive M&A impact of around 0.5% on revenue, mainly from the acquisition of Mediterránea offset by a few small disposals. On other operating income and expenses, reflecting the level already recorded in the first half, we now expect the full year amount in fiscal 2026 to be around minus EUR 300 million, of which roughly half is restructuring. Net financial expenses are still expected to be around minus EUR 140 million and our effective tax rate to be around 26%.

So to conclude, the first half reflects a demanding environment, but also clear and decisive management action on contracts, asset, organization and investment now reflected in today's guidance. As Thierry outlined earlier, this action weighed on the near term but are necessary to reset a realistic deadline and strengthen execution, competitiveness and sustainable performance over the time.

With that, Thierry and I will be happy to take your questions.

[Operator Instructions] First question is from Jamie Rollo, Morgan Stanley.

So 2 questions. The first one is just on the margin guidance, 3.2% to 3.4%. That's obviously a very helpful clear range, but there's a lot of numbers in that. And you've given us a helpful bridge for the first half, it would be quite helpful to get that bridge for the full year margin, particularly to quantify the contract asset write-down because obviously, that's a one-off and that suggests that 2027 margin should increase naturally. But then again, Thierry, maybe your July review will lead to another step-up in investment next year. So any sort of flavor for what the real underlying base margin might be would be very helpful.

And then the second question was just on the leverage as you say, well above the target. I appreciate you've got no covenants, you're pretty well all fixed debt. But what sort of constraints might this have on CapEx spend or bolt-on M&A going forward?

Jamie, thank you. So what I'll do is I'll take the first part of your question and give a little bit of context, and then I'll take the second one on the leverage. And then I'll ask Sebastien to add a lot more details and probably on the bridge you're asking for H2.

What we've done, Jamie, is clear. We've done, as we said, clearly the objective and that's why it's my [ ask ] for Sebastien and the team is do a comprehensive review of contracts, asset, risk by the end of the quarter. So literally in the last -- and you know that we do, at Sodexo things are going to change. But until now, there is one single process of forecast per quarter. This is changing to a monthly process now.

So what we've done is a very deep reviews of the risks in the contracts and really assess the situation and provision where appropriate. This is not a [indiscernible]. This is really looking at the existence of risk that we have and the level of provision we have against that. For sure, given this -- there's a disciplined risk review embedded into our processes going forward at each closing, but this review we've done is a pretty extensive one for sure.

Objective. Simple, improve visibility, reduce the volatility and limit the surprise which has been the issue of Sodexo for the last quarters. So let's be honest, what we've done is create a more solid earnings floor and a stronger base for growth. So that's the philosophy. Now to your point on the guidance and the bridge for H2, you want to cover it, and then I'll come back on the leverage target, connection, okay?

So thank you, Jamie. So if you look at the bridge, we shared with you for H1, 3 drivers. So when we look at the full year bridge drivers are broadly the same as the one in the first half. I would say that the impact of the operation mix and leverage, we are not expecting any change between H1 in H2. Then we will accelerate investments. So we mean that the investment rate will be a little bit more on the full year and in H2. And the review of the contract and asset will be lower in the second half of the year.

You asked for '27 as well, Jamie. So for sure, we're not guiding for '27. All I can say is I think you can consider '26 guidance as a floor.

Now to your second point, leverage, right? You're absolutely right. The capital allocation framework is the result of a strategy. It's not -- and right now, the strategy is to regain performance, let's be clear, okay? So it's a special year. You can see that. And it wouldn't make much sense to, I would say, give detailed capital allocation messages without first setting a clear direction of travel. So that's what we will do in July. So if you can hold on this 1 for 2 months, 3 months, we'll tell more.

Until then, priority is execution and performance recovery. Everything else follows from that. The leverage fully aware, maybe temporarily above our historical range, you know that reflecting lower margins during the reset phase and the investments we are making to stabilize the execution, but also rebuild the business. But this -- and that's an important point as well. To me, this does not limit our flexibility or block any of our actions.

And if I may, just we remain a strong cash-generative business, and we will keep and retain a good access to funding. And again, this temporary effect on average are clearly not structural.

Okay. So just to clarify then, we'll hear more about the capital allocation in July? And also in July, you're going to be giving, I assume, some medium-term targets and framework? Anything else we should be expecting in July?

So the investor update in July will give for sure, greater visibility on FY '27. And in the, yes, medium-term financial ambition. What we'll do there, Jamie, is we will articulate where we want to position the group versus the best-in-class benchmarks. That's our ambition for sure, including a clear ambition to narrow the growth gap, okay, versus the strongest players in the market.

We will also, for sure, present a detailed action plan, underpinning that ambition with you will see clear strategic priorities and financial levers over the medium term, right? So that's what you should expect.

Next question is from Jaafar Mestari, BNP Paribas Exane.

I have 2 questions, please. The first one is just an open-ended question on the review of contracts and assets. Can you give us more concrete examples of what you're reviewing and changes you're making? It was interesting. You mentioned some central [ kitchens ] are being consolidated into a smaller number of sites, for example. Just keen to hear more on those, what sort of measures you're taking? It seems pretty broad ranging. And I'm really mostly interested in the ones that fall into adjusted profits, not on the stuff that is exceptionals, please?

And then secondly, on management compensation, there was an undisclosed margin target for full year '26 in your cash bonus for this year. You never said what it was because it was commercially sensitive. Can I ask you if you're basically accepting that you're not getting paid on this part of the targets because you've ended up lower? Or would you expect the Board to adjust these compensation targets because of the voluntary nature of some of the measures you're taking?

And related to that, can you remind us factually what's the policy on stock option awards. If I'm correct, Mr. Delaporte, you still have not been awarded your performance shares for this year and understand why the Board did this after disappointing full year results, but if you were awarded them immediately after today's announcement, you would also look perhaps like you're not exactly in the same boat as investors yet?

So Jaafar, I'll try to take the point, and I hope -- you tell me if I don't cover well all the points, okay?

On the first one about the contracts and assets. What's so sure is that when we look at contracts, the operational performance on contracts, fortunately, most of them are performing well and delivering results for the client and for ourselves. In cases, there are delivery issues, how do we provide for it? How do we make sure that we are investing into addressing those concerns and therefore, how does it change the financial profile of this deal.

When we are in financial distress on an account, how do we handle it? Are we renegotiating with clients? Are we improving the way we are delivering? Or are we exiting the contracts? All these questions have been addressed and covered in the way we were looking at the contracts.

And you're right regarding assets, I'll let Sebastien, but the point was, again, to look at assets we have. And are they long-term investments for us or not? Does it require decisions to be made? Over to you, Sebastien.

So on the impact of the review of the contract and assets, the impact on underlying operating profit, so one part is really the assessment and the reassessment of the credit risk around 25%. And when we look at also contract and contract litigation related claims, so we have also covered all of that. It's again around 25% of the impact in terms of [ UOP ].

And then also, we have looked in this -- in the performance of the contract, and that impacted also for additional provision. And then on the write-off of assets, this is really the part impacting the other income and expenses below the line. And here, yes, we look at the footprint of our off-site production. And we took in some geographies, a very deliberate decision to consolidate part of that and this implies some write-offs and impairment in our balance sheet.

Okay. Thanks. On the second point, management compensation, if you're talking about leadership compensation and [ I'll all ] mine. So let's cover both, if you want. So what I've done is for the leadership team is we have made sure that while they are committed to delivering the forecast of the budget of the year, we are refocusing in H2 more part of their incentive on the growth because this is what we need now to get ready for FY '27. And so I didn't want us to wait another 6 months and really push on the accelerator now.

As for my compensation, I think, honestly, this is not me to comment them on. It's a Board decision that will have to be approved by the general assembly. All I can tell you is that it includes certainly financial KPIs about growth and profitability. So I'm not immune for sure. As for LTI plan, the LTI plan will be launched in the next weeks. It is not related with the communication today. It's -- I think last year was the same timing in the year. So I think it's just followed the same logic. But also, we are changing the scheme for our people to make it more a performance-based LTI as opposed to presence-based LTI. So that's the philosophy.

And just on the contract we use and just to be very clear, should we expect that you formalize a revenue figure for contracts that you'll be exiting? Or is it less explicit than that?

Yes. Again, at that time, when we look at this review of contracts and assets, it's really linked to -- its case by case. And it is not linked to exiting a large portfolio of activities or even any specific contract. We have booked some provisions for onerous contracts in that case because the contract was not performing at the right level.

Let's be clear, we have done what we had to do. It's just normal practice. Probably I'm injecting my way of drive a certain level of prudence in the way we are looking at risk, for sure.

Next question is from Estelle Weingrod, JPMorgan.

You mentioned lower retention and volumes impacting the remainder of the year. Can you just provide -- I may have missed it, but can you provide details on the new contract process and who you lose them to? And what volumes you are budgeting for H2? Are they going to be in negative territory?

Thank you, Estelle. So yes, when you look at our annual guidance between 0.5% and 1%, if you take the midpoint, it implies a negative organic growth in the second half of the year. If we look at the different drivers, pricing was 2.4% in H1, we are expecting something very similar for the second half of the year.

And then you have the net new contributions, minus 0.6% in H1. And same here, we are expecting something very similar to the -- for the second half of the year. Then we need to -- you need to keep in mind, sorry, is that we also have the impact of the contract reclassification and then we will have a full semester impact on organic growth for around 100 basis points. And then the remaining part is linked to volume.

And it's true that we are taking a more cautious stance regarding volume. This is clearly linked to the overall environment, macro, geopolitics as well. And we know also that we have some volatility in our revenues to volume what we decided to include.

And your more cautious stance on volumes? Is it driven by a specific region? Like is it more North America? Or is it broad-based?

It's broad-based.

Next question is from Simon LeChipre with Jefferies.

Yes. Three questions, please. First of all, a follow-up on the margin bridge for H2. Could you be a bit more specific in terms of the investment, I mean should we expect this going to double in H2 relative to H1? And should we expect some incremental investment in 2027 as well?

Second thing is in terms of top line going forward and looking at the last 12 months net new, it was minus 1.3%. You expect net new minus 0.5% in H2. Should we expect net new still be negative in the first part of '27? And more broadly speaking, how do you think about the path in terms of top line acceleration? And when do you expect to see the benefit of the actions you have taken and you are currently implementing?

And lastly, in terms of the U.S. and the management team, I mean what's the road map? Are you actively looking for someone? Do you intend to still remain CEO for the region as of now?

Yes. So Simon, thank you. So taking your questions in no particular order, if you don't mind. The first one on the U.S. management team. So I joined on November 10, literally first days, it appear to me that I needed to make something change in America. It's -- America is our greatest market, the biggest, and it's a strategic market for us. I was coming from a different industry, it was critical for me to dive into the operations.

America was my priority. I dove into it. I took it over. It's basically what I decided, and I'm very pleased with that because it allows me to really spend time in America, as I said, 50% of it. I've spent 20 years in America. So I know well this market and shaping the team is absolutely key. We have great talent in America. We have great accounts, great team as well, and I have wonderful leaders.

We had significant weaknesses as well. And so we had to fix it. I've been working on it. I've made a lot of changes in the leadership team over the last weeks and months and reinjecting energy and ambition in America. The timing -- the team is great, is well mobilized. In the meantime, I'm looking for talent to take over the North American role for me. And it's -- I'm not supposed to -- do not consider that I stay in this role forever. But I'm not in a hurry because I feel that being very close to the operations is a [ greatly full ] for me and for the operations. But yes, for sure, there will be a leader of America at some point in time.

On the point #1, that is the margin -- also margin bridge for H2, we'll let you say it. But one thing I can tell you, because you were -- a question around the investment for FY '27. So for sure, we are doing investments now. We couldn't wait in the situation where we need to inject accelerate fuel, if you like, into our growth, it's the time to grow -- to invest. And so we have started to invest now. And we know them well that this is impacting our margin in H2. And for sure, we will not stop the investment on December 30 -- actually on August 31.

So for sure, it will continue in FY '27. The objective for sure is that as we progress steadily, the growth will come back and pick up to supported by the investments we are making now. That's the whole logic. You know more about the sequence in the next interactions. Over to you, Sebastien.

Yes. So on the margin, as I said, if you look at again at the bridge H1, H2 full year, the part related to operation and leverage remains the same, around minus 50 basis points, then you will have more impact on investment of the acceleration of the investment in the second half of the year. So with a higher weight of that on the bridge, and we will have lower impact coming from the review of contracts and assets for the second half of the year.

Next question is from Kate Xiao, Bank of America.

First, I want to follow up on -- I still want to ask a couple of questions on contract assessment and provisions. Has this process affected your retention rate and development numbers because both of these 2 numbers are down compared to FY '25 and as of last quarter? And would there be -- I understand that this is an ongoing process, would there be a scope for reversal for some of the provisions if contracts actually turned out to be better than expected?

My second question -- sorry. And my second question is around just look, simple one. When you mentioned, Thierry, that there's early positive signals. Can you talk to us a little bit more about these signals?

Yes, correct. Correct. Okay. So Kate, on the first one, contract assessment. It has been occasionally that indeed, but I don't think it's a huge impact on the retention, honestly. So those are 2 different things. For the scope for potential reversal of provision, for sure, that's the objective. I mean, we are covering the risk, but we are not giving up on it. We are fighting, but we are in a logic where when there is risk, we provide for it and then we try to mitigate the risk as opposed to we have a risk, and we hope it doesn't materialize and when it materializes, it blows up and we are surprised. So that's the change in philosophy.

Last early positive signals, sales performance intensity in the market. There are several deals. I know for a fact, several deals that we were about to lose that we haven't lost. And the energy in the system, the mobilization from the team is really great. So a lot of good signals, honestly, okay. It's still early. I'm not going to tell you other than that.

Can I just quickly follow up on retention rate, if there's not a big impact from the reassessment of contracts? What has led to the lower rate at 93.4% now versus 94%? Was there more contract losses that you can kind of tell us a bit more about? And would you see this as a trough?

Well, let me tell you one thing first, Kate, on the assessment of retention rate. For us where it stands is a signal for sure. Every -- I consider that every time we lose a contract, it's dramatic, okay? So we have to stop accepting the fact that we are losing contracts. So it's in us, and we are very active on that.

Now it's -- in a given quarter, you might have more or less contract to retain. And so just looking at this ratio just for 1 quarter or 2 is not necessarily enough to draw conclusion. Except that, our ambition is to be closer to 95%, 96%. I think today, 95%, but the objective is to continue to improve and we have some work to do. And that's what we are working on at the moment. Sebastien, you want to say more? No? All right.

Next question is from Pravin Gondhale, Barclays.

Firstly, on the incentives aligned to growth that you talked about. Sorry, if I'm being nuanced. But could you please clarify, are these incentives linked to gross growth or net growth, i.e. incentives for both gross development and retention or just the gross development here?

And then secondly, on the review of contracts. Is this all done and then fully captured in your H2 guide annualizing in H1 next year? Or is there any tail left to review further down the line?

So Pravin, thanks. I'll take the first one. On the incentive. First, KPIs have been reset for my direct report in H2 to really get the target -- the growth target for H2, and that's revised growth target. What does it entail? It's what we call commercial growth, net commercial growth, which basically takes net development, I mean, new development plus retention plus cross-sell, okay?

So that's the combination of all, all right? And then after when you look at the organization, it depends, those who are focused on retention, those who are working on closing new deals, for sure, they have different set of KPIs. The objective here is to set clear accountability, but also drive focus across the organization. Okay. Now just to be clear, even if you haven't asked, gross incentives do not mean volume at any cost. We continue to keep an eye for sure on the level of profitability expected from the deals, for sure.

Review of contract, is it all done? Well, first of all, we've done a very good job, I think, to review the contract in a very short time frame. And I think the team has done a great job. So I'm pleased about that. Will it be a continuation? I mean the fact that we will review contract and assess the risk is of discipline. We will do it every single quarter. So this will not change. Are we expecting further impact going forward? I mean our objective is precisely to have done the job.

Next question is from Neil Tyler, Rothschild & Co Redburn.

Two questions, please. Firstly, on the contract review, I wonder if you could share any sort of insights that you drew from those contracts that you've had to provide against, whether there's any commonalities emerging from the contracts either in terms of regions duration or sort of start point, those that needed to be reassessed.

And then secondly, on the -- back to the incentive program, has the altered incentives been or will they reach further into the organization than they have done in the past in order to alter the selling behavior sort of deeper into the organization rather than just at the management level.

You tell me if I do not address -- maybe I do not really understand your question, Neil, on incentives. But my point is we have implemented a new set of KPIs across the organization. It's not only for managers, it's across the organization for H2, okay?

On the contract reviews, insights, you want to take this one, Sebastien?

I can tell -- yes, I can take this one. So in terms of framework, I can tell you that we apply this framework across all regions, okay, all segments. Around 50% of the adjustment adding to the review related to Europe, 1/3 is North America and the remaining part is the Rest of the World. And when we look at the framework, again, was done really case by case, contract by contract, asset by asset. And on the commonalities, again, as I mentioned, it was linked to the credit risk, credit exposure, again, across a portfolio of contract.

It was also linked to legal risk litigation, again, across all regions, and then we look at the performance of some of the contracts, as I said, and we apply again a new calculation again on the potential adjustment needed in terms of onerous provision. So it's really the same framework across the globe on a contract basis and the case by case basis approach.

That's helpful. And can I just ask, within that, was there any difference between food service and facilities management contracts in terms of how those materialize?

Type of risk may differ, but again, the methodology and the framework was exactly the same.

Next question is from Andre Juillard, Deutsche Bank.

First one is about CapEx. Could you give us some more color about what you plan to do considering that historically, Sodexo had a lower level compared to its main peers? And I wanted to understand if you have a clear view on what we could expect on that side.

Second one, about dividend. We know that historically, the dividend has been important for Sodexo and for its main shareholder. So do you have a view on what you could do on that side?

Thank you for the 2 questions. My answer is going to be quite similar on both. We'll meet at the Capital Markets Day. CapEx consider that, as I said, I said -- I covered it for me, right now, our strategy is to regain performance, focus on the performance, we'll discuss the capital allocation messages when we are together in July, July 16.

On dividend, same thing. Too early to tell. We are very aware of this. We will certainly discuss at the Board as well. So we'll get back to you, not now.

Next question is from Julien Richer, Kepler Cheuvreux.

A quick follow-up on growth and strategy. We recently had some comments from the French government about the structural decline in the number of kids at school due to the demographic situation in the country, and this is not only the case of France, I suppose. How do you see your education division going forward? Any view on this point?

So for sure, this is a -- we are -- obviously, as you can imagine, as we are working on our strategy and refining it -- they are -- and we spend more time on it at the Capital Market Day. They are time focused on looking at for each of the segments we operate in where there is more growth to expect. Sometimes, you have different elements that have an implication. The market growth itself. There's the level of outsourced, right?

So in some cases, you may have markets where the growth is not necessarily significant, but there's a wave of outsourcing that we can trigger to drive new type of clients, and they are, for sure, a prioritization on those investments. So without being specific, we are very aware of those declined head count or population decline in schools in France or in the next few years.

It's elements that we are considering for our -- for the way we are investing into our segments and again, we do it by country. And within segments, we look at the services that are more relevant, the ones that are a little less. But to be clear, education is one of our big segments, and we'll continue to invest in education for sure.

Next question is from Sabrina Blanc, Bernstein.

I have 2 questions from my part. The first one is regarding the review of the contract. And just to understand if you have a schedule potentially to exit some contracts or potential to exit some assets. For example, we know already that the number of countries has been reduced. But do you intend to go further?

And my second question, I can perhaps answer directly that I should expect this Capital Market Day. But could we have visibility on free cash flow and potentially on conversion rate?

Okay. So thank you, Sabrina. First question, so the review of contracts. So again, we are taking decisions. We have taken decisions on some situations when there is -- if you do not -- if you are in a situation where you do not foresee opportunities to be profitable, this exit is one scenario. So I'll keep this freedom going forward. It may happen at times that -- and good decision sometimes is to recognize the fact that it's just not working.

So we feel we have done the job and -- but we'll keep an eye on it and make sure that when we are signing contracts, we are signing good contracts and that it doesn't end up being an issue for the client, for ourselves.

Exiting countries. No, we have no plans of exiting more countries. In fact, if I can tell you I believe it's a strength of Sodexo to offer to a lot of our global clients a global presence, and we want to build on this.

As for free cash flow, over to you, Sebastien.

Thank you, Thierry. So on the free cash flow, as I said, we remain a cash-generative business. So we'll keep a strong focus on that. And we are expecting again to have an underlying conversion rate, I mean, for this year that will be very in line with and consistent with prior years on the underlying part. And on the future, as you said, Sabrina, we will come back to that during the Capital Market Day.

Finally one -- do we have someone?

Next question is from [ Eva ] [indiscernible], UBS.

Welcome to the company, I suppose. I want to talk a little bit more about the market as a whole. I mean you mentioned commercial momentum being slightly weaker than expected. But is that an indication of any slowdown in the market itself? Or is it simply your execution? So in other words, I mean, are we still seeing the amount of new business in the market as a whole being strong or have recent developments had an impact on that?

And secondly, I mean this might be slightly minutia to a certain extent, but you mentioned your refinancing costs associated with debt this year isn't going to be an issue, but you still have an awful lot of debt to refinance over coming years, which was issued at very, very low coupons. So as and when that gets refinanced, how is that actually going to be able to impact your ability to compete with peers who might not have the same level of pressure on that front?

On the first question, the commercial momentum, it's a good question. And I spend time to review that with the team. The conviction we have is that the market is actually a rather good market, okay? So we do not -- we are not taking this on the back of any kind of slowdown. Yes, for sure, moments like what is happening in Middle East are elements of potential slowdown, although it has limited impact for us in terms of size, but the market continues to be good.

I'm convinced that the answer is with us. So addressing our own structural and operational challenges will just make us stronger and able to win more. One argument for that supporting this is the fact that the pipeline is not going down. Actually, if we look at the pipeline, it's actually going slightly up. Still not big enough, okay? But again, it's the same -- going back to the same point, our intensity in the market and to grab opportunities and go after it.

Sebastien?

Yes. And on the cost of the financing, it's true that if we look at where we are today, the average interest rate on the bond is around -- we are around 2.7%. I told you about the cost -- financial cost for fiscal year '26 to be circa EUR 140 million. And then it's true that for the coming years, we are expecting also an increase of the financial cost, linked to the renewal and the refinancing of the bond in 2027.

So yes, the cost of financing will increase again in the next 3, 4 years, around EUR 30 million. We would be around EUR 170 million, EUR 190 million in terms of annual cost in 3, 4 years. And this will be an average cost circa 4%, 4.5% depending on the cost. It will depend obviously on the market rates.

Sodexo team, we have no more questions registered at this time.

All right. Thank you for your questions. Thank you for the conversation today and for the time. We are very aware of where we need to improve, and we're fully focused on execution and getting the basics right again. So we'll have the opportunity, as we discussed, to go into our plan and ambitions in July, and I'm looking forward to continuing the dialogue with you.

Thank you very much for joining us today.

Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.

Good morning. Thank you for standing by, and welcome to Sodexo's First Quarter Fiscal 2026 Revenue Conference Call.

[Operator Instructions]

I advise you that this conference is being recorded today on Thursday, January 8, 2026. At this time, I would like to turn the conference over to the Sodexo team. Please go ahead.

Good morning, everyone. Welcome to our Q1 Fiscal 2026 Revenue call. On the call today is Sebastien de Tramasure, our CFO. After Sebastien's remarks, we will open the line to take your questions. We'll ask you to please limit yourself to 2 questions and one follow-up. Please get back to the IR team if you have any further questions after the call. With that, I'll now hand over to Sebastien.

Thank you, Juliette and good morning, everyone. I wish you all a very happy, healthy and successful 2026. And thank you for joining us today. So I will start this call with a brief look at our first quarter performance before I touch on our operational priorities and our outlook for the year, and then I will be happy to take your questions.

So in the first quarter of fiscal '26, Sodexo delivered revenue of EUR 6.3 billion. And this is broadly in line with our expectations. Organic revenue growth was 1.8%, while reported revenue were impacted by a negative 4% currency effect with a negligible contribution from acquisitions and disposal. So looking now at our performance by geography. In North America, our organic growth was minus 1.5%. This reflects several known factors, including contract exit in Education and Business & Administration last year, as well as a strong prior year comparison for Sodexo Live! as we had exceptional event activity in the first 2 quarters of last fiscal year. And these effects were partially offset by contributions from the new health care contracts we enter into the fourth quarter of last fiscal year. In Business & Administration, while we had anticipated a negative trend and due to the contract exit I just mentioned, I just mentioned, sorry, it was amplified by scope changes at a few larger accounts and to a lesser extent, by external elements linked to the U.S. government shutdown.

Meanwhile, Sodexo Live! performed slightly better than expected as the Mariner successful run in the playoffs provided a welcome boost with additional games at the T-Mobile Park having a positive contribution on revenue. In Europe, organic growth reached 2.4%. This was driven by new contracts in Business & Administration and Healthcare, which more than offset a high prior year comparable in Sodexo Live! linked to the Paralympics as well as softer trend in education, mainly reflecting contract exits. In the Rest of the World, organic growth was strong at just over 10%. This was driven by solid performances in Australia, supported by new contract and scope extensions along with good momentum in India and Corporate Services and in Brazil and Chile. Overall, across dynamic markets where we operate in this region, we are making significant progress with a robust growth coming from both new wins and from healthy underlying momentum on existing contracts.

Then from a strategic and operational perspective, as you know Thierry joined us as our new CEO in November. And as stated in the press release this morning is currently in an assessment phase across the business, spending a lot of time in the field with our clients, with our clients and with our team, sorry, and he will share his initial views at our half year results in April. And this will be followed by a more comprehensive assessment and planned before the summer break. In the meantime, we are not standing still on our near-term priorities are clear and execution is moving forward. And let me briefly update you on the initiatives we outlined at our full year. In the U.S., we are strengthening our sales organization. Our objective is to double the size of our North American sales team within 2 years. Since the beginning of this fiscal year, our sales force has increased by 20% with continued recruitment in priority segment. For example, we have increased the number of salespeople in our Education segment by 40%. And more broadly, over half our sales team have joined in the past 18 months, bringing in new talent and fresh energy.

We are also accelerating the time to productivity by strengthening onboarding and training, and by embedding AI across the sales cycle from prospecting to proposal development. On supply chain, we are redesigning our we buy food and moving to standardized ingredient level offers with common specs, so we can buy at scale and strengthen compliance through our digital tools. In the U.S., this new target operating model is already delivering tangible benefits in the first pilot sites. We are also rolling out our AI-based retail compliance tool. It's called Perfect Score. This is significantly improving planogram compliance. And these early results give us confidence as we scale the model across the U.S. portfolio through fiscal year '26. On ERP, India will go live in the second half of the year with our global finance and supply system. And in North America, deployment of the new food management system is now underway. Overall, this multiyear program remain key enablers of operational discipline and scalability.

On Global Business Services, progress continues. We have completed our large IT outsourcing program covering run activities for application and infrastructure. We are also expanding our shared service footprint and including the new Bogota Center, which now supports North America with close to 150 FTEs. And around 30% of North America sales support is now delivered through global business services, giving us access to more flexible and scalable support capacity. Overall, we have now over 1,000 people working across our 3 shared service centers, and we are accelerating the program with additional expansion to follow. So overall, we are progressing as planned on these key initiatives to strengthen the underlying foundation of our business. Turning now to our outlook and expected phasing effects for fiscal '26. We are reiterating our guidance framework with organic revenue growth expected between 1.5% and 2.5%. And our underlying operating margin is expected to be slightly lower than fiscal year 2025. In terms of revenue phasing, we expect the second quarter to be towards the lower end of the full year guidance range. And this will be followed by a gradual improvement in the second half, mainly driven by favorable comparatives and phasing of Sodexo Live!

On margin, so we usually see some seasonality with H1 being higher than H2. This year, the phasing will be different with H1 and H2 margin more closely aligned. This means that H1 will show a higher year-on-year reduction in margin. Three main factors explain this: First, the acceleration of the investment we started in the second half of last year; second, mobilization cost on our new large healthcare contracts; and third, the impact of negative organic growth in North America, with limiting operating leverage and a less favorable segment and contract mix. For fiscal 2026, we now expect other income and expenses to be around EUR 200 million compared to our initial indication of EUR 160 million. This increase mainly reflects additional restructuring costs related to organizational changes, acceleration in the Global Business Service program to push our competitiveness and some other one-off elements. Meanwhile, we continue to expect an M&A impact of revenue of 0.5%, net financial cost of around EUR 140 million and an effective tax rate of approximately 27%. And as usual, all the numbers are in the appendix of the slide deck.

So overall, our fiscal Q1 performance is consistent with our expectation. But let me be clear here, this does not reflect the potential we aim to realize for the company. We remain focused on execution, staying close to clients moving faster, focusing on growth and executing with more rigor and simplicity. And together with Thierry, we will provide more color on this in due course. With that, we'll open the call to questions.

[Operator Instructions]

First question is from Jamie Rollo, Morgan Stanley.

Two questions, please. First of all, it seems to be a little bit less disclosure than usual. I appreciate it's only the first quarter for sales only, but it would be great if you could please give us a general breakdown of organic sales growth between pricing, volumes and net contract gains for the quarter and also food versus facilities management?

And then secondly, Sebastien, I think you said that Q2 organic sales will be the low point. I think previously, Q1 was going to be the low point. Maybe I misunderstood that. But has anything changed at all there in the sort of cadence of sales during the year?

So thank you, Jamie, for your question. So first question on the bridge on organic growth. So 1.8% overall organic growth in Q1. Pricing is slightly below 2.5%. So again, in line with our expectations. The net new, it's a negative impact, again, around minus 1% and as expected and coming mainly from the net new from last year. And the like-for-like volume is slightly positive at circa 0.5%. And if you restate the impact of the Paralympics, overall, organic growth for Q1 is 2.1% instead of 1.8% and the impact of volume are at 0.8% instead of 0.5%. So on -- yes, on the phasing, so we are expecting Q2 again towards the low range of the guidance by the same expectation for Q1.

As you know, we'll have in Q2 initial impact of the contract reclassification, the large one we have in B&I in the U.S. This will impact around 60, 70 basis points in Q2. Then we will have the offset of the annualization of last year, major B&I U.S. losses which we have demobilized in during Q2. And this will create an easier comparison base for Q2. And again, as I said, we had in Q1 the impact of the Paralympics. And on your last topic on Food and FM, it's true that we did not disclose that in Q1. It's more or less at par, I would say, between Food and Facility Management, even if the full organic growth is affected obviously by the losses in University because in this segment in the U.S., it's mainly food.

Next question is from Leo Carrington, Citi.

Two for me. Firstly, large health care contracts that you referenced that are ramping up. We also saw the full outsourcing of the PEN health care contract. Are you seeing any acceleration in outsourcing in this sector than last year? Or is this activity increase phasing? And then secondly, just a follow up on those comments on organic growth acceleration. Is there anything that's happened since you last reported to give more comfort on this? Or as you say, is it mostly about the comp effects last year?

Okay. So there is a good momentum on the health care segment in North America, definitely with good development last year and good also pipeline and potential for this year. So it's true that the market remains very dynamic with a positive trend, underlying trend in terms of outsourcing in this segment. So for me, there is no major change here in the trend. But compared to prior years, but definitely, the trend is good. Then on the acceleration of the organic growth for H2, there is 2 -- again, 2 major impacts that we need to keep in mind for the second half of the year.

There is first, yes, the impact of, again, the reclassification of the large contract in Business and Administration that have a negative impact overall in the organic growth. And in the other hand, we have a strong different phasing and comparable for Sodexo Live! Last year, we had a very strong H1 for Sodexo Live!, a strong Q1 with Paralympics, with all the concert with [indiscernible]. Q2 was pretty good as well with the Super Bowl. So strong H1 last year. This year, we will have a much stronger H2 compared to H1. We'll have some big event schedule already during the second half of the year. One of them will be the World Baseball Classic Tournament. Here, it's mainly ticketing and travel and hospitality. As you know, this is an activity we have within Sodexo Live!. And on top of the additional event already scheduled for H2. We also had the ramp-up, a nice ramp-up within Sodexo Live!, especially in the U.S. from new contracts. We signed last year and recently, and one of them being also the [indiscernible] Lounges activity. We have also a new contract that I can mention with L.A. Music Center and all of that will bring also more organic growth, and will help for the acceleration of the organic growth in H2.

Next question is from Estelle Weingrod, JPMorgan.

First, I have a question on Europe and France in particular. Just wanted to check on the underlying momentum, any pressures on volumes or contract wins given the ongoing political uncertainty and macro headwinds, basically, how is it going on the ground? The second question I have is on North America Education. Just give us more color on how enrollment shaped up for you at the end in the full term? And how would you -- and when would you expect this division to regain momentum following new sales hires and so on?

And perhaps the last one on renewals for '26. I think last time you mentioned that there will be a few larger GSA renewals in the next couple of years with almost none this year. Just wanted to check if there was anything else to flag in terms of renewal for 2026.

So thank you, Estelle. On the first question on France, underlying momentum. Here in France, I mean, the trend, I would say, remain pretty stable. It's true that, again, overall, it's a tough context, I would say, but we see, again, same trend overall in all the different segments. We don't see any pressure, significant pressure in terms of volume. So as you know, France remains a very large and important market for us, and we don't see at this stage any big change in terms of underlying trends, it's a competitive market, but nothing new in terms of volume evolution.

On your second question regarding North America and the enrollment. So the environment in North America, higher education, it's in line with what I shared with you in October. Overall, there is a decrease. When we look at our portfolio of minus 0.7%, this was really, again, in line with our expectations. So -- and this has obviously an impact on our organic growth for the year, and part also the explanation of the negative organic growth in Education for Q1. And then on your last question about the pipeline of retention renewal. There is no -- as we mentioned, there is no very, very large contract, and it's a normal renewal cycle, even if, as you know, based on the average duration of the contract every year, it's a sizable amount of renewal at stake but nothing big, super big this year.

As we already said, there is no global account in fiscal year 2026 at a rebid phase.

Next question is from Simon LeChipre, Jeffries.

Two questions, please. First of all, coming back on the phasing for organic growth and the acceleration for H2. I mean I would assume pricing will further slow in H2. Also, you have this contract reclassification. So this is probably altogether more than 100 bps to offset compared with 2% underlying growth in Q1? And then when looking at the comps, it's not -- it doesn't look massively easier in H2. So what should drive the organic growth acceleration? Is it mainly a function of the annualization of the losses? Or is it the expectation of an acceleration in new business wins?

And secondly, relating to this, how is the pipeline of new contracts has evolved since October? Does it give you more confidence than that new business wins should accelerate through the year?

Okay. So coming back to the phasing. So what I said is that we have 2 major impacts in H2. The first one, as you mentioned, is really the impact of the reclassification of the large B&I contract. So this is a negative impact. And this impact is offset by the phasing and the much more favorable H2 for Sodexo Live!, as I mentioned before. Then you are right also to explain the slightly improvement of the organic growth over the year. There is other items. I mean first one is the annualization of the losses. As you said, the losses, some of them B&I, I have mentioned it that we demobilized in Q2 last year. So this will have, I would say, positive impact in H2.

There is also, I mentioned it, the good momentum in health care. So we continue to see a ramp up of new contract in health care during the second half of the year. And also in the second half of the year, we have a more favorable segment mix with a lower weight of education. So then on the pipeline, the pipeline remains solid and again, in line with what we are expecting. And what I can tell you on the pipeline and on the development, is that with the arrival of Thierry, we are really pushing the team on a much more commercial intensity. We are pushing the team on deal execution. There is a clear momentum here winning more and being more aggressive in the market to capture more sales and more development at this stage.

Next question is from Kate Xiao, Bank of America.

The first one is on retention rate. Can you kind of confirm whether the forward-looking retention rate is still stable at around 94% or is there kind of more recent contract losses that we should be aware of that could drive this a bit lower? My second question is on World Cup, which is a big event for Sodexo Live! in H2. I guess I understand that a number of players in the field are bidding for the contracts, including you guys. What is your understanding of the time line there? And what do you think is the total market opportunity there? And within that, what kind of level is the I guess, amount of contracts that Sodexo was bidding for?

So first on retention. So when we look at our forward-looking retention rate, it's broadly in line again with expectations at this stage of the year. So no big surprise in Q1. We had a few disappointments, nothing material in the context of the group. We also had very encouraging outcome. We managed to secure also a sizable contract during Q1. So overall, again, plus and minus, broadly in line with expectation. And then it's a bit too early then when we look at what we want to achieve during the year. Focus on retention is, again, key priority. We all know that this is really the first pillar for organic growth. But it's a little bit too early to draw a clear conclusion for the full fiscal year 2026.

But as I said, for this year, but not the case last year and 2 years ago, it's a more normal renewal cycle, and there is no major global account at stake for this year. Then on your second question on the pipeline, yes, so the pipeline for Sodexo Live! is good and there is some already secured events. The one I mentioned already, the World Baseball Classic Tournament is ticketing is for sure is there. There is more. It's still a tender and RFP process. But it's another opportunity here, we are quite confident. We also know that we'll have also the FIFA World Cup in the second half of the year. Again, all the tenders are underway. But we need to keep in mind that we are involved in 2 stadiums that we already operate. One is the [ Hard Rock ] Stadium in Miami. The other one is the BC Place in Vancouver. So we are in a good place there.

But again, we get the result of those RFP in the coming months, but it's definitely a very good opportunity for us, but it's a bit too early to comment on the financial impact.

Just a quick follow-up, if you don't mind. Are you also bidding for a new stadium kind of in the World Cup bidding stage?

Again, talking about ongoing commercial negotiation and bid, I cannot get into the detail. What I can tell you is that, yes, this is clearly a good opportunity for us, and we are clearly working on it.

Next question is from Jaafar Mestari, BNP Paribas.

I have 2 questions, if that's okay. Firstly, just on group margins in H1. I just wanted to clarify, you said H1 and H2 margins will be more or less aligned this year. Normally, it's at least 80 basis points difference between your H1 and H2. Is that the sort of order of magnitude of margin deterioration you're expecting in April? I mean unless you think margins improved year-on-year.

And then on North America B&I, you said you expected it to turn negative, but it was trending 4% organic in the last 6 months. Now it's minus 7.5%. It's a huge deterioration. I know there's government shutdown, which may be transitory. But on the rest, on the scope changes that you flagged, can you explain really behaviorally what's happening? What are clients saying? Are they giving services away to other providers? Are they just cutting services? I guess, in all cases, is that here to stay for the next 12 months before it starts to annualize? Or is there anything that's calendar that's one-off in Q1?

Thank you, Jaafar. So yes, on the margin, as I said, this year, we are expecting to have H1 and H2 margin more closely aligned. And we'll see a reduction in terms of margin on year-on-year compared to H1 this year to last year. And you are right overall on your number and here, it's really -- you understand the drivers here of the explanation of the reduction, again, as I said, it's really the acceleration of the investment, it's a mobilization cost for health care and also the fact that we don't have this leverage in terms of top line. And North America, especially North America, North America being our region with the highest profitability and the impact also in education in that education is also one of the segments with pretty good margin. Obviously, the change in the mix is impacting our margin for H1.

then on the B&I organic growth for Q1. So it's a mix. I mean the impact of the net neutral this what I have mentioned, it was clearly anticipated, super clear for us. Then there is also always a little bit of volatility on the facility management part. You could have some reduction of scope. This is clearly decision from the client. You also have some volatility in terms of project. In this case, it's impacting negatively North America in Q1. We're not expecting exactly the same trend for the coming quarter. It should improve there. And again, coming back on the volatility here, it's true that it's a negative impact in North America for B&I, but we had also a very positive impact in Rest of the World, for instance, with a very strong activity in Q1. And part of that is also due to more project work coming our IFM contract, especially in Energy & Resources.

So H1 margins, I mean, H2 margins were 4.2% last year. Is that the right order of magnitude for H1 margins this year?

But we are expecting margin. You have a guidance for the year. There is a market consensus. We are expecting margin to be aligned between H1 and H2, so that gives you your number.

Next question is from Karl Green, RBC.

Yes, just one residual question for me, please. Just wanted to clarify your comments about the ambition to double the size of the sales team. Can I just talk whether that was North America or globally? And I think you also mentioned around half of the sales team has joined in the last 18 months. Could you just give a little bit more detail about the kind of hiring criteria for those sales individuals, the sort of background levels of experience, et cetera?

Thank you. So yes, the number I shared with you in terms of the increase of the sales team is really for the U.S. at least objective, we have to double the size of our sales team for North America. We have clear priority here. One of them is really higher education. We spoke about that. We need to strengthen the team in this segment with strong potential. It's also on account management as well where we really need to strengthen the team as well. So this is really part of the play, part of the plan, sorry, to really strengthen activity there. And then in terms -- yes, in terms of background, in terms of salespeople. Well, here, again, it's true that 50% of our existing sales team is coming external.

I think it's important for us to bring also a new talent within the company. It needs to have also fresh eyes and new level of energy. It's exactly what we want to do. Then in doing that, we also need to work on the onboarding, on the training. So it's true that then it takes a little bit more time to see tangible results. So we will not improve development there in next quarter. But what is super important is that we are really preparing this acceleration of the development of the growth is bringing this new talent and the new sales team within the organization.

That's helpful. And if I can be cheeky, could you give an approximate indication of how many sales people -- sales and marketing people you now have in the U.S., please?

So what we said, again, for competitive reason, we are not sharing the absolute number in terms of sales team. But what I can tell you again is really that we need to increase the team and it's clear in terms of objective with doubling the size, and we have been progressing well in this objective.

Gentlemen, there are no more questions registered at this time.

So thank you for joining us today. Again, looking forward to speaking with all of you again for the half year results in April. And as I said, Thierry will be with us for the H1 results. So thank you again, and have a great day.

Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.

In the name of the whole team. I'd like to wish you welcome. As you know, Sodexo Live operates this wonderful place, which was opened in April 2017. Siene Musicale is an auditorium. It's a huge thing. 35 studios for practice. Our teams are in charge of the commercialization of the spaces, welcoming production, safety, security, and maintenance, as well as restaurant services. Please look at our programs.

Let me cite a few shows that are currently being run. original creation, the ran by [ Marco Casowitz ]. There's still a few dates available starting on the 4th of January. Nutcracker suite by Tchaikovsky from the 7th to the 8th of January or... [ STING ] Musical, the first in France starting on the 18th of February.

Ladies and gentlemen, before we start our general assembly. I'd like to remind you a few important bits of information for your event. In case of a fire alarm, we invite you to go back to -- from the emergency exits that are located on either side of the stage. If you need to, we will also inform you that the physician is present on site. And lastly, to conclude, I'd like to invite you to make sure that your telephones are off or on airplane mode.

In the name of the whole team at the Siene Musicale, I would like to wish you a wonderful general assembly. Thank you.

Ladies and gentlemen, dear shareholders, good afternoon to everybody. Welcome to La Seine Musicale. It's a great pleasure to meet you in this exceptional place again this year for our Annual Shareholders' Meeting. I'm speaking to you today alongside Thierry Delaporte, who is our Chief Executive Officer. He's been the CEO since the 10th of November; Sebastien De Tramasure, our Chief Financial Officer; and Florence Negrel, who is Secretary of the Board of Directors, who is handling the General Meetings Secretarial duties.

I would also like to inform you of the presence of the general meetings to scrutineers. François-Xavier Bellon, who represents the holding company, Bellon SA; and Jean-Michel Cayol, who represents FCPE Groupe, Sodexo Peps, one of the mutual funds for Sodexo employees. Who are the shareholders with the largest number of votes having accepted the role of scrutineer.

I will now officially open this annual meeting, of which I am the Chair as Chairwoman of the Board of Directors of the company. The members of the Board of Directors and Sodexo leadership team who could attend are also present, either physically in this room or remotely.

The audit firms Ernst and Young Audit, represented by Madam [ Sara Ganem ] and KPMG, represented by Mr. Nicholas Chy will share their reports with us during this meeting.

I would now like to hand the floor over to Florence Negrel. Now she's the meeting secretary, who will present the agenda.

Thank you, Sophie. Hello, everybody. I'm delighted to be with you as secretary for this meeting. First of all, I'd like to remind you that this shareholders' meeting will be held in French and that simultaneous translation in English is also available.

As usual, this meeting is also accessible to the deaf or hard of hearing, thanks to sign language interpreters. I also remind you that this meeting is being broadcast live from our website www.sodexo.com, and will also be available for replay in the coming days.

I inform you that the number of shares mentioned on the attendance sheet in the name of the shareholders present, represented or having voted by correspondents amounts to 126,690,573 shares. That's 87.24% of the shares bearing voting rights. The legal quorum is 36,306,708 shares. So the shareholders meeting, therefore, can deliberate validly. If fleet commerce come to attend the meeting before 4:15 p.m., this provisional quorum will be modified, and the final quorum will be taken into account when we vote upon the resolutions.

I have before me all the documents which attest to the regularity of the convening and the deliberations of this meeting. And also the documents that must be made available or communicate to shareholders have been made so under the legal conditions and deadlines. Please also be informed that [ belif ] is present here in the room.

The agenda of the shareholders' meeting, as well as the draft resolutions were presented in the preliminary notice of meeting published on October 31, 2025, in the French BALO publication. The notice of meeting was published in the BALO and in journal of legal announcements on November 20, 2020. Please note that following the publication of the preliminary notice of meeting, [ the ] request with the inclusion of points or draft resolutions on the agenda has been submitted by the shareholders.

As usual, in the interest of the debate, we propose that you exempt the Chairwoman from the exhaustive reading of the Board of Directors' report. The full report can be found in the fiscal 2025 universal registration document available on our company's website. And its main elements will be presented to you during the shareholders' meeting.

I now give the floor to Sophie Bellon, Chairwoman of the Board of Directors.

Dear shareholders, dear Board members, dear colleagues, dear friends of Sodexo. The year 2025 was marked by significant progress and many challenges. It also marks the end of a cycle of profound transformations that began in the aftermath of COVID with the ambition to reposition Sodexo as a pure player in food services and facilities management. This objective required numerous structural changes aimed at building a stronger Sodexo. We've streamlined our portfolio, divesting our child care and home care services followed by the successful spin-off of Pluxee in 2024.

Today, Sodexo operates in 43 countries where we have strengthened our presence through acquisitions in key markets notably in China in 2024 and in Spain this year with Grupo Mediterranea. This acquisition will allow us to double our size and strengthen our positions in key segments, particularly in Corporate Services in health care and in education.

Food services now represent 66% of our portfolio compared to 62% in 2022. We have modernized our offers, leveraging our consumer insights and enhancing the culinary digital and sustainable dimensions of the experience that we provide. Our food offers such as Modern Recipe now account for more than 50% of revenue compared to less than 20% 3 years ago. With nearly 6 million active consumers on our digital ecosystems up from EUR 1.2 million in 2022, we have a more direct and personalized relationship with those we serve. Improving their experience is at the heart of our strategy, and I'll come back to that.

To drive greater efficiency, we have reshaped our organization so that P&L accountability now sits at the regional and country levels. At the same time, we've transformed our operating model. This has resulted in significant progress in supply chain management with compliance with food catalogs rising from less than 70% in 2022 to 78% in 2025.

On the technology front, we have once again invested EUR 500 million this year in data and digital tools. Artificial intelligence is now embedded across all our operations from kitchen management to procurement and workforce planning, thanks to attendance forecasting at our sites. While enhancing our efficiency, we're enabling our teams to focus on what matters most. That is culinary excellence and the quality of the experience that we offer our guests.

Finally, our shared service centers in Porto, Mumbai and Bogota the efficiency of our support functions, while more than 40 standardized processes have improved service quality throughout the year. All the progress we've made this year has also enabled us to strengthen our positive impact and consolidate our leadership in sustainability within our sector. Our ongoing focus on employee safety is reflected in the historically low lost time injury rate of 0.45 in 2025 compared with 0.65 in 2022. Continuing our efforts to get even closer to zero accidents is an imperative for all of us.

Our commitment to an inclusive environment remains unwavering. For example, 42% of Sodexo's senior executives are women. Our global benefits program, Vita, is now effective in more than 70% of the countries where we operate. We're also committed to developing our talent, and we've increased the average number of training hours per employee by 5.1%, now reaching 12.4 hours per year. Nothing would be possible without the constant commitment of our teams around the world, which we measure every 2 years in our voice survey. I remind you that we were the only ones in our sector to do so. And this year, again, it reached a rate of 80%, demonstrating the relevance of the employer policy that we're developing.

Finally, on the environmental front, 2025 marks the successful completion of our sustainability road map. That's better tomorrow. Thanks to the mobilization of our team, significant progress has been made in reducing our carbon footprint promoting healthy and sustainable leading, developing local partnerships, responsible sourcing and fighting food waste.

As an illustration, I'm proud to announce that we've exceeded our greenhouse gas emissions reduction target that scopes 1 and 2 with minus 37.7% compared to 2017. With our new "Better Tomorrow 2028" road map, we are now entering a phase of acceleration. Our ambition is to further integrate sustainability at the heart of our operations at every site, in every action of our 426,000 employees. Because it is they who every day in the field work to improve the lives of millions of consumers and support our clients in their own sustainable transition.

Let's look at this in more detail now with the video.

[Presentation]

In 2025, we also continue to invest in our commercial strengths, notably through strengthening our teams, deploying training programs and new motivation and recognition schemes for our salespeople.

In both development and retention, we achieved encouraging successes this year. including GSK, MSD, AtlantiCare, [ U.S ]. Health, the schools of Marseille, [ Santos ] as well as the next ree Rugby World Cup, Men's and Women's and the [ Todos ] with Sodexo Life.

Finally, our net growth is positive again, which was not the case in the pre-COVID years. Thus, despite the demanding economic and geopolitical context, these transformations have paid off, and our trajectory of profitable growth is confirmed.

In 2025, our revenue reached EUR 24.1 billion, up 1.2% driven by organic growth of 3.3% or 3.7% on an underlying trend. Our underlying operating margin increased by 5% and by 10 basis points at constant exchange rates to 4.7%. Our business development amounted to EUR 1.7 billion, with a very strong first half followed by a more moderate second half. Underlying organic growth increased by 3.7% to EUR 785 million, our adjusted net earnings per share of EUR 5.37.

On this basis, as [ in ] line with Sodexo's 50% distribution policy, the Board of Directors proposes an ordinary dividend of EUR 2.70. You will be able to vote on this proposal during the resolutions. Our Chief Financial Officer, Sebastien De Tramasure, will present the details of our financial performance in just a moment.

2025 brought challenges also for our group. The results of this [ you ] reflect both the progress made and the operational challenges that we faced, particularly in the United States. These have affected Sodexo stock market performance and Sebastien will return to this in a moment. Nevertheless, we have many reasons to be confident about the future.

We operate in a global outsourced food services market that is vast, resilient and growing. It amounts to EUR 300 billion worth 10x our size with immense potential, since 50% of this market is still self-operated. Sodexo has strong assets to capture part of this market's growth. Its financial independence, diversified geographical presence, strong values, recognized ethical principles, leadership and sustainability, and a mission driven by the commitment of its 426,000 employees.

With these solid foundations, we're ready to open a new chapter focused on commercial acceleration and operational excellence. Our ambition is clear. We want to be the leader in food and services, shaping better everyday experiences at every moment in life. Concretely, this means continuing, as I mentioned earlier, our investments in improving the consumer experience. For example, by strengthening our value proposition for employees in the workplace, developing new culinary concepts in line with consumption trends and continuing to deploy technologies that improve the guest journey.

In health, education, the workplace or sports and leisure we continue this momentum, always mindful of our commitment to have a positive impact on people and to progress with purpose in line with the mission defined for our group nearly 60 years ago now. Shipping better everyday experiences is indeed our ambition.

I'd like to invite you to watch a video that demonstrates this.

[Presentation]

A new chapter is opening now for Sodexo. This new phase of our development will be led by Thierry Delaporte, who joined us as Group CEO on November 10. Thierry brings solid experience to support Sodexo in this new stage. He fully embodies the human values at the heart of our identity and to which we will always remain faithful. I'm convinced that our new governance structure will strengthen us and make us more efficient. And I have full confidence in Thierry's leadership to guide the next stages of our growth and write a new page in Sodexo's history.

As Chairwoman of the Board, I will now devote all my energy to leading the Board and its committees and to maintaining strong and sustainable governance. With my family, we remain deeply committed to Sodexo's financial independence and to preserving the long-term vision desired by our father, Pierre Bellon. Our shared ambition will be to sustainably support the group's growth, the margin improvement and the market share increase and to strengthen also our positive impact.

Before handing over to Sebastien, I'd like to express my sincere and warm thanks to all of our employees. Throughout this year, they've mobilized to support our clients, our consumers and our partners in an increasingly complex and demanding environment. I see it day after day. And on each of my visits, I see their commitment, their passion and their spirit of service that are the driving force behind our collective success. I'd also like to thank our clients, our partners around the world and, of course, our shareholders for their trust, their support and their loyalty.

As Sodexo approaches its 60th anniversary, it has strong fundamentals. More than ever, we're ready to continue our growth and innovate and keep shaping the future of food services and facilities management. Thank you for your attention.

Ladies and gentlemen, dear shareholders, I am pleased to present you the financial highlights for fiscal year 2025, which ended on the 31st of August. For the full year, the consolidated revenues reached EUR 24.1 billion, representing organic growth of 3.3%. This growth rises to 3.7% when excluding base effects from the previous year, which was marked by major sporting events and a leap year.

The underlying operating margin stands at 4.7%, up 10 basis points at constant currencies, driven by procurement efficiencies, benefits from the implementation of our shared services centers and operating leverage from higher revenues, which offset investments made to support growth. Underlying net profit reached EUR 785 million or an increase of 3.7% at constant currencies.

Free cash flow totaled EUR 459 million, helping to maintain the net debt to EBITDA ratio at a moderate level of 1.8x within our target range of 1 to 2x. The Board of Directors will propose a dividend of EUR 2.70 per share, a slight increase from last year, in line with our policy of distributing 50% of underlying net profit. All of our geographic regions contributed to the group's growth.

North America, representing 46% of group revenues, delivered organic growth of 2.8% supported by price increases, a strong momentum in Sodexo Live and the corporate segment, but impacted by contract losses in education. In Europe, accounting for 36% of group revenues, saw organic growth of 1.7% or 2.7% when excluding the impact of major sporting events in 2024. As to the rest of the world, which represents 18% of revenues, recorded organic growth of 7.5%, with excellent performance in India, Australia and Brazil, where we are gaining market share.

On margins in North America, the underlying operating margin was stable at constant currencies, standing at 5.8%. In Europe and the rest of the world, margins increased by 20 basis points at constant currencies, reaching, respectively, 4.3% and 4.9%.

After analyzing the operating performance, let's move on to our financial position and our balance sheet to continue investing in our strategic priorities. Free cash flow generated was EUR 459 million, including an exceptional outflow of around EUR 160 million related to the finalization of the Sodexo SA tax audit.

Excluding this one-off item, the cash conversion remains very high, standing at 91%. As of 31st of August 2025, the net debt stood at EUR 2.7 billion with a net debt-to-EBITDA ratio of 1.8x within our target range of 1 to 2x. We continued proactive debt management with the early repayment of a EUR 700 million bond in April and the issuance of a new USD 1.1 billion bond. In May, these operations extended our average maturity and preserve our financial flexibility. Our balance sheet remains solid, enabling us to keep investing in our strategic priorities while maintaining disciplined capital allocation.

In this slide, we are presenting you with our proposal for dividends from 2025, as well as changes in the share price for 2025. The proposed dividend for fiscal '25 is EUR 2.70 with a payout ratio remaining at 50%, as is our usual policy. In addition to the ordinary dividend, EUR 2.65, we paid an extraordinary dividend of EUR 6.24 per share, redistributing the entire proceeds from the sale of Sofinsod–Bellon SA.

In fiscal 2025, the share price declined by 36%, while the CAC 40 Index rose by 1%. This evolution mainly reflects the drop in March after our guidance revision followed by the adjustment period through to the end of the year. we naturally understand the questions raised by the current share price level. Our priority remains operational performance and sustainable value creation.

This last slide summarizes our fiscal outlook for the upcoming year and our approach to capital allocation. For revenues, we anticipate organic growth between 1.5% and 2.5% with an operating margin slightly below that of 2025. This reflects our decision to accelerate investments to strengthen the group's foundations, especially our sales forces and systems.

Our ambition remains to bring CapEx to around 2.5% of revenues mainly in order to support client investments, particularly in the most complex contracts and to continue investing in systems and technologies. We also aim to maintain our financial leverage with a range -- within a range of 1.2x EBITDA to ensure a solid balance sheet.

Regarding the dividend, we confirm our policy of distributing 50% of underlying net profit. Our M&A strategy remains focused on small- and medium-sized transactions with an average budget of around EUR 300 million per year to support our development while maintaining strict financial discipline.

In summary, we continue to follow a balanced approach investing for growth and competitiveness while preserving our financial strength and ensuring regular returns to shareholders. Sodexo enters fiscal 2026 with a solid financial base, enhanced execution discipline and a targeted investment plan to support strategic priorities. I would like to thank all teams for their commitment and professionalism and you, share shareholders for your trust. Thank you for your attention.

Ladies and gentlemen, a little over a month ago now, Thierry Delaporte joined our organization as Group Chief Executive Officer. Through numerous meetings, there are teams and clients, he's already begun to immerse himself in our culture, our challenges and our priorities. It is with great pleasure that I invite him to speak for the first time before our assembly. Thank you. Over to you.

This is Chairwoman, members of the Board of Directors. Dear shareholders, ladies and gentlemen, it is a true honor to address you today for the first time as Chief Executive Officer of Sodexo. And I do so with great humility.

Joining Sodexo, a group with a unique history, a French flagship and a world leader in food services and facilities management is both a privilege and a great responsibility. So Sodexo is a company whose values and commitments resonate deeply within me. From my very first interactions with the group, I felt their strength. The teams I have met, everywhere where I've gone embodies these values.

I've spoken with many clients who fill them in every interaction. This is also the legacy of Pierre Bellon, the founder of Sodexo. I would like to acknowledge his human and entrepreneurial vision which continues to inspire our employees' actions every day. His book to serve and to grow remains a true compass serving our clients, helping women and men to grow and contributed positively to society. This legacy guides us. It remains a foundation upon which we will build the future. I warmly thank Sophie Bellon, the Board of Directors and the Bellon family for their trust.

A few words now about my background. I've had the opportunity to live and work in Europe, Asia, Australia and North America for 14 years. I've worked with high-growth industries, where people are at the very heart of priorities. Services first, at Capgemini for more than 20 years than at Wipro, an Indian digital services group.

In these global companies undergoing major transformation, I learned that performance always relies on three key aspects. First of all, customer obsession. The customer has to be at the very heart of all of our decisions. We correspond to the expectations innovating at their side. It is by cultivating this proximity that we create value and that we build a relationship of trust over the long haul.

Secondly, constant investment in developing our teams giving them the means to make progress to commit and to exceed themselves. This is absolutely indispensable condition for excellence that our customers are expecting from us.

And lastly, rigor and discipline acting within a demanding way quickly in a determining fashion is to transform challenges into performance and to enroll our performance in the long haul. In each of my travels in the last weeks were in Hong Kong and the U.S., in Spain, in France, in Great Britain. I witnessed the same energy, commitment and pride across our teams and partners. Same pride.

Our customers see us as a trusted partner committed, attentive and able to create solutions tailored to their needs. I have also witnessed Sodexo's societal impact. We're working one of the most human professionals -- professionals there is, nourishing, supporting and improving the everyday experience. I'd like to salute as well the transformation and progress made in recent years in an environment marked by profound economic social and geopolitical changes. My priority is clear, to enable Sodexo to continue and to amplify its value creation for their shareholders and all stakeholders.

My actions, we'll focus on three areas. First, further strengthening our customer focus and accelerating the conquest strategy in any new market. Every decision should start with one question. What value does this bring to our clients? Next, improving our operational efficiency and talent. Our force depends on the quality of our commitment and the commitment of our teams. All customers that I met said the same thing, developing staff is at the heart -- our difference in our performance.

Lastly, accelerating with determination our operating model to make it ever and ever more adaptable and agile. Sustainable performance of the company [ been ] expected by our shareholders. To move forward in this direction, I believe in something very simple. Listening to teams, understanding their realities and acting alongside them. It is in that spirit our -- I wish to emerge myself fully and I'm going to take over the direct responsibility of North America for a certain amount of time.

I have a great ambition for Sodexo because I'm convinced of our potential. We must become the global reference in our field. The path will be demanding, but we have the ability to meet challenges, to anticipate changes in our environment, and to continue to progress time and again. Thank you for your trust. Thank you for your commitment. Let's write together this new chapter in Sodexo's history.

Thank you. Thank you, Thierry. Thank you for this first message. We now come to the presentation of our corporate governance.

First of all, I would like to express my sincere gratitude to the members of the Board of Directors for their work, their commitment, their invaluable support. And once again, to acknowledge the collective intelligence that drives the Board. The Sodexo Board of Directors, which I have the honor and pleasure to chair is at the end of fiscal 2025 composed of 12 members, including 6 independent directors and 2 directors representing employees, and 4 representing the family.

The proportion of independent directors stands at 60%, well above the 30% required by the [ FF MEDEF ] code for a controlled group. The Board's composition reflects the group's values with gender balance in line with best market practices and international profile with four nationalities represented and the complementary mix of experience and expertise that enables us to address all the challenges that the group phases. You'll find the full details of all the topics discussed in the [ addressed ] by your Board in Chapter 7 of the Universal Registration Document.

And I'd like to just give you a brief summary of this. The Board met 9 times with an attendance rate of 99%. Thank you to our Board members. It's work focused in particular on the renewal and selection of directors. My succession plan as Chief Executive Officer, the review and definition of executive compensation policies, the monitoring of the group strategy and reviewing its various activities across all geographical regions and strategic opportunities. Also overseeing the implementation of the CSRD reporting and, of course, reviewing and approving the financial statements, as well as all matters related to monitoring the group's financial performance.

Let me also remind you that in making its decisions the board relies on the work of its four specialized committees, which are responsible for making recommendations and each committee is chaired by an independent director. During fiscal 2025, the Audit Committee chaired by Jean-Baptiste de Chatillon, notably review the financial statements, monitor the group's financing, establish the risk mapping oversaw the group's nonfinancial reporting obligations and the implementation of CSRD reporting and ensured the review of the auditor's independence.

The Sustainability Committee chaired by Véronique Laury was created during fiscal 2024. It focused closely on the review of the "Better Tomorrow 2025" plan. the implementation of CSRD and the development of our new sustainability road map, which is "Better Tomorrow 2028". It also reviewed the Stop Hunger program and the responsible purchasing policy.

In addition to our joint meetings with the Audit Committee and the Compensation Committee on cross-functional topics. During the year, and in addition to matters relating to the renewal and appointment of new directors, the nominating committee chaired by Gilles Pélisson focused, in particular, on my succession plan and the recruitment of our new Chief Executive Officer.

Finally, the Compensation Committee chaired by Cécile Tandeau de Marsac focused, in particular, on defining the compensation policy, reviewing the free share and performance share plans and confirming the delivery of the 2022 allocation plans. It also played a key role in matters relating to the compensation of executive officers as part of the succession plan and the separation of the roles of Chairman of the Board and CEO.

I will now hand over to Luc Messier, who as Lead Independent Director during fiscal 2025 will present an overview of his work during the year. And the key decisions that have reshipped our governance.

Ladies and gentlemen, shareholders, Board members, employees of Sodexo. It is a great pleasure for me to speak today and share with you an overview of my work during fiscal 2025 and to take this opportunity to revisit some of the changes made to our governance, namely the reasons behind the separation of the rules of Chairwoman of the Board and CEO and the decision to maintain the role of Lead Director despite the separation.

As you know, the role of Lead Director is to ensure the independence of the Board and in this capacity to be consulted on the agendas of Board meetings to organize executive sessions to maintain dialogue with our main shareholders, investors and proxy advisory firms and ensure the prevention of conflicts of interest and safeguard the independence of the Board's decision-making. To ensure a full oversight of the Board's activities,

I'm a member of the Audit Committee, the Nominating Committee Sustainability Committee. And I also attend the meetings of the compensation committee, the only committee, of which I'm not a member. By contributing to the committee's discussions, on governance matters, I have been closely involved in the recent governance changes, which stem from the Board's reflections and the work of the nominating committee during fiscal 2025. Throughout the year, the Board's activity has been particularly rich and intense. And I would like to thank all directors for their full commitment.

As Lead Director, I have monitored the follow-up actions taken based on the Board and committee evaluations carried out in 2023 and 2024, which notably led to holding a strategic similar in the United States, organized around workshops, site visits and expert presentations in developing a training plan for directors, covering governance, sustainability and cybersecurity, including two sessions dedicated to sustainability issues and the new internal evaluation of the Board and its committees work.

I also organized three executive sessions following Board meetings, as well as a fourth at the end of the strategic seminar in the United States, part of which was held exclusively amongst independent directors. As your point of reference on governance matters and as a member of the Nominating Committee and the member of the Nominating Committee, I'd like to revisit the separation of the roles of Chairwoman of the Board and CEO and the recruitment of Thierry Delaporte. The Board considered that after the ball structural changes, courageously taken by Sophie Bellon in the last years, such as the spinoff of proxy and the sale of Sofinsod to Bellon SA, the time had come to strengthen Sodexo's leadership for a new phase of growth and development.

The recruitment process for the new Chief Executive Officer was led by the Nominating Committee chaired by Gilles Pélisson. This process began several months ago and involved all members of the committee, the Chairwoman and CEO the independent directors and the Bellon family members. I would like to thank them all for their availability and unwavering commitment during this period. this process.

This process, which began several months ago, resulted in a unanimous decision by the Board of Directors to dissociate the function of Chairman of the Board and General Director. And by dissociating the function of Chair of the Board, the Board of Directors by a decision which was unanimous, wish to on the best standards of governments to maintain the function of Lead Director of an independent lead director.

I therefore handed over this role to Gilles Pélisson, who succeeded me as Lead Director on November 10. Thank you for your attention. And then I give the floor back to Sophie Bellon.

Thank you, ladies and gentlemen. Dear shareholders on my own behalf and on behalf of the Board, I'd like to thank Luke for his valuable and essential contribution to Sodexo's governance as Independent Lead Director since March 2022. Luc, thank you very much.

Now as our custom, I invite you to welcome Cécile Tandeau de Marsac, so she may present you with a summary of the compensation committee's work.

Hello, everyone. I'm pleased to be with you today to present the work carried out by the Compensation Committee. During fiscal 2025, in addition to its usual topics, the Compensation Committee focused in particular on the impact of the succession plan for the Chairwoman and CEO, and on the decision to dissociate the rules of Chairman of the Board and Chief Executive Officer.

This year, six resolutions relating to the compensation of corporate officers are being submitted for your approval. For each one, I'll briefly review its components and focus also on highlighting the proposed changes, which, as you will see, largely stem from the dissociation of rules. The compensation elements received by the Chairwoman and CEO for fiscal 2025 are in line with the compensation policy approved by shareholders at the 2024 Shareholders' Meeting.

This compensation consists of fixed remuneration of EUR 900,000, a variable remuneration and a long-term remuneration, which I will detail shortly. It also includes benefits in kind amounting to EUR 1,431. Regarding variable compensation for fiscal 2025, the achievement rate stands at 41.5% of the target variable remuneration, representing an amount of EUR 448,200. This achievement rate reflects the demanding nature of the objectives set by the Board of Directors.

As a reminder, these objectives were defined by the Board in October 2025, and were not revised during the year in line with the policy. As you can see, the targets were ambitious, and the financial objectives relating to organic revenue growth, client retention, operating margin and group net profit or not met. The objective for cash flow generated by operations was largely achieved, demonstrating rigorous cash management.

As for the achievement of nonfinancial objectives, which account for 30% of the targets, health and safety objectives partly achieved. The go linked to the near misincident rate, the NMI or aimed at fostering a culture of accident prevention, and that was largely met. Although this excellent result contributed to a further 4% reduction in the lost time injury rate, the LTI or, as we call it, it was not sufficient to meet the very ambitious target of a 17% reduction that have been set. The sustainability objective achieved as measured by the deployment of the internal food waste monitoring program, WasteWatch. This, therefore, was achieved. This program now covers nearly 85.4% of the cost of food stuff, food raw materials.

Finally, the talent management objective, which consists of two indicators relating to the group's senior executives, the rate of departures considered regrettable and the gender balance in operational positions, this was achieved. I would also like to remind you that the acquisition of annual rights under the supplementary pension plan is subject to achieving a minimum annual bonus attainment rate of 80%. Therefore, Sophie Bellon does not require any entitlement to a lifetime retirement pension for fiscal 2025.

In addition, regarding long-term compensation, the Board of Directors granted 40,000 performance shares to Sophie Bellon in accordance with the compensation policy for fiscal 2025. The performance conditions of the plan aligned with the 2025 strategic plan are displayed here on the screen.

At the grant date, these shares were valued at EUR 1,589,360. This grant represents 80% of the target annual fixed and variable remuneration below the target level for free share award set out in the policy and down 20% compared to the grant for fiscal 2024. The Board of Directors consider the recent evolution of Sodexo's share price and reaffirmed the importance of maintaining a rigorous and balanced approach in determining the grant.

The compensation policy for corporate officers for fiscal 2026 is consistent with the 2025 policy. It's a continuum aiming to strike a balance between short-term and long-term performance. The compensation policy applicable to Sophie Bellon is divided into two periods from September 1 to November, the 9 inclusive. Sophie Bellon served as Chairwoman and CEO; then she became Non-Executive Chairwoman of the Board on November 10, 2025.

Similarly, the compensation policy applicable to Thierry Delaporte part is divided into two periods. From this appointment on November 1, and following this shareholders' period. That's this shareholders meeting. That's the second period. So regarding the compensation policy applicable to the Chairwoman and CEO from September 1 to November 9, 2025 inclusive, the policy remains unchanged from the previous compensation policy approved at the shareholders' meeting on December 17, 2024. It will apply on a pro rata basis.

Furthermore, Sophie Bellon will not receive any grant of free performance shares for fiscal 2026. Regarding the compensation policy applicable to the nonexecutive Chairwoman, it reverse to the policy that Sophie Bellon received 4 years ago. That is before she assumed the role of Chief Executive Officer, namely an annual fixed remuneration of EUR 675,000, which will be paid on a pro rata basis. This amount was in fact the same as what Sophie Bellon had received since 2018, no variable remuneration of granted free performance shares coverage under the welfare and health insurance plan and a company car.

Regarding the compensation policy for the Chief Executive Officer, I would like to point out that it has been defined in line with Sodexo's existing policy. The peer groups used to determine the CEO's compensation policy have remained unchanged. The annual variable component equals 120% of fixed remuneration when targets are met and can reach up to 170% in the event of outperformance or overperformance. That's been our policy since last year.

As for fixed remuneration for the period from November 1 to December 15, the fixed remuneration remains at EUR 900,000. No change. And subject to approval at today's shareholders' meeting will increase to EUR [ 1,150,000 ] with these amounts applied on the pro rata basis. Ultimately, the CEO's overall compensation, consisting of fixed remuneration and annual variable remuneration and the grant of performance shares is largely based on variable components subject to demanding performance conditions.

The fixed portion of the remuneration, thus represents only 23% of the target package and 17% in the case of outperformance. The amount of this remuneration falls between the median and the upper quartile of the peer groups in line with Sodexo's positioning within these panels. Regarding the objectives for annual variable remuneration, the client retention objective has been replaced by the criterion of net sales growth in order to better capture the dynamics and the overall commercial performance. They have a safety criteria has also evolved in favor of more mature indicators. The total recordable case rate, the TRCR replaced the lost time incident rate, LTIR, and the number of safety visits carried out and recorded replaces the new MIR incident ratio.

To take into account the change in governance on this transitional year, our qualitative criterion representing 20% of the nonfinancial objectives has been introduced. The Board of Directors will thus have the flexibility to assess Thierry Delaporte's strategic choices in all the dimensions. In particular, regarding the turnaround of the North America region, Investor Communication, managerial transition and the effectiveness of implementing Sodexo's operational strategy in line with the group's strategic pillars through 2028.

Regarding the other compensation elements, Thierry Delaporte will receive some that will remain unchanged. They will consist of the at least the elements will remain unchanged. The assume will consist of the grant of free performance shares with acquisition measured over 3 years and subject to the achievement of performance conditions a supplementary pension plan, collective welfare and health insurance plans and a benefit in kind, which is, in fact, a company car. It should be noted that no sign on our relocation allowance was paid upon Thierry Delaporte's appointment as Chief Executive Officer.

Now let us turn to the remuneration of directors. As a reminder, the total annual amount that may be allocated to Sodexo directors is EUR 1.3 million. It's been that some since 2024. The scale for fixed and variable remuneration of directors applicable in 2026 remains unchanged. The only change is the increase in the flat travel allowance paid to directors residing in North America from EUR 1,500 to EUR 4,500. This allowance is paid for each actual attendance at the meeting of the Board of Directors.

To conclude, I'd like to thank all the members of the Compensation Committee for their active participation and unwavering commitment throughout the past year. I also like to invite you to consult the Universal Registration Document for fiscal 2025 for more information on the compensation of corporate officers. Thank you for your attention.

Thank you, Cécile. Ladies and gentlemen, before we continue and because they will step down from their roles as directors at the end of this Annual Shareholders Meeting. I'd like to warmly thank on behalf of the Board and myself a couple of people.

Firstly, Cécile Tandeau de Marsac for her unwavering commitment and invaluable contributions over 9 years of service. Dear Cécile, you've successfully taken on the roles of Chairwoman of the Nominating Committee and Chair of the Compensation Committee at a decisive time for the group. A group and a team that you have guided through the COVID crisis and through its transformation also notably with the spin-off of Pluxee. Your sound advice and energy were critical at these key moments. And this year again, you remain fully engaged until the very end. Thank you.

I'd also like to thank Véronique Laury, who couldn't join us today, but who has served as a director for 6 years and as Chairwoman of the Sustainability Committee since its creation in 2024. Dear Véronique, your work and setting up this committee and reviewing all the CSRD related matters has been outstanding as has your broader contribution to the Board's work. I'd like to express my heartfelt thanks. Thank you.

At this Annual Shareholders Meeting, we're proposing the appointment of two new directors. [ Genevieve Bish ], they're with us here today, by the way. Genevieve Bish and Francois [indiscernible], whom I warmly thank for joining us. Let's watch a short introduction video of Genevieve Bish.

[Foreign Language]

Thank you, Janie. We've also asked Francois to introduce yourself and here is her video.

[Foreign Language]

Thank you to both of you for these fun videos. Ladies and gentlemen, as Patrice de Talhouët term is coming to an end, we're proposing to evolve our governance and to appoint Bellon SA, the holding company and controlling shareholder of Sodexo as a new director. In this context, Bellon SA would designate Mr. Patrice de Talhouët as Managing Director, as its representative allowing him to continue to bring his expertise and strategic vision to the Board.

Finally, we invite you today to renew Luc Messier's term as an independent director. Ladies and gentlemen, to give you a complete overview of the changes to your Board and subject to the approval of the resolutions you will be voting on shortly. Adjustments will be made to the composition of the specialized committees.

For example, Geneveieve Abish will succeed Cécile de Marsac as Chairwoman of the Compensation Committee. And Luc Messier will succeed Véronique Laury as Chairman of the Sustainability Committee, which will then have five members compared to seven previously. Patrice de Talhouët, representing Bellon SA, we joined the Audit Committee, along with Francois [indiscernible]

Dear shareholders, we will now give the floor to the statutory auditors so that they can present to you the -- their different reports. Madame [indiscernible] floor is U.S.

On behalf of the group of statutory auditors, Ernst & Young and KPMG, I'm pleased to report our engagement and the reports we issued for fiscal 2025. We have issued several reports and in keeping with the practice of this meeting, I propose not to read them in full but to provide you with a summary.

Our report on the consolidated financial statements and our report on the annual financial statements have been made available to you as part of the shareholders' meeting and appear on Pages 245 to 248 and 267 to 270 of the universal registration document, respectively. Our work aims to provide reasonable assurance that the financial statements are free of material of the statements, comply with the applicable accounting standards and that give a true and fair view of the consolidated financial statements of the assets and liabilities of the group's company's operations for the year [indiscernible] ended.

We carried out our work in accordance with the professional standards applicable in France. At the end of our engagement, we presented our conclusions to the finance department the Audit Committee and the Board of Directors of your company.

In summary, we issued an unqualified opinion on Sodexo's annual and consolidated financial statements for fiscal 2025. Our reports on the annual and consolidated financial statements highlight the key audit matters. For the consolidated financial statements, the key audit matters are measurement of the recoverable amount of goodwill and tax risks. For the annual financial statements, the key audit matter is the valuation of equity investments.

Our reports on the financial statements include for each of these key audit matters, a description of the risks identified and the response we provided. Our reports on the financial statements also include the description of certain risks and the responses that we provided. Our reports on the financial statements also included the conclusions of certain verifications provided by law -- required by law, which we performed on information contained in the management report, notably in its section on corporate governance. We have summarized the nature and scope of these specific verifications in the table currently displayed on screen.

In summary, we have no particular comments to make following these specific verifications. I now propose that we move on to our special report on related parties agreements, which appears on Page 271 of the universal registration document. No new agreement has been submitted for approval by this shareholders' meeting. report refers to the management support and services agreement between your company and Bellon SA, which was already approved by the shareholders' meeting in previous years. The amount recorded as an expense for fiscal 2025 amounts to EUR 4.6 million, excluding taxes.

Finally, as part of the extraordinary portion of the shareholders' meeting, we have issued four special reports concerning resolutions that may have an impact on your company's share capital.

Our conclusions are as follows: on the 15th resolution, we have no comments to make on the methods used to determine the issue price of the equity securities to be issued as provided in the Board of Directors' report. As the final conditions under which the issuance would be carried out have not yet been determined. We do not express an opinion on them.

On the 17th resolution, we have no matters to report as to the information provided in the Board of Directors' report relating to the proposed free allocation of shares.

On the 18th resolution, we have no comments to make on the methods used to determine the issue price of the equity securities to be issued as provided in the Board of Directors report as the final conditions under which issuance would be carried out have not yet been determined. We do not express an opinion on them and consequently on the proposed cancellation of preferential subscription rights.

On the 19th resolution, we have no matters to report as to terms and conditions of the proposed reduction in capital.

Ladies and gentlemen, I'm going to present a summary of our assurance report on sustainability information, which appears on pages 172 to 175 of the universal registration document. The objective our engagement was to express a limited assurance opinion on three distinct areas as required by the provisions of the French Commercial Code in the guidelines of a high audit authority.

The first area concerns the compliance of the process implemented by the success of Sodexo Group to determine the information to be published including the obligation to consult the Social and Economic Committee. The aspects that received particular attention from us relate to stakeholder identification of impacts, risks and opportunities as well as the assessment of impact materiality and financial materiality. The second area addresses compliance with the ASRS standards and the French commercial code for sustainability information presented in the group's management report.

In this context, the -- the aspects that received particular retention related to information published under climate change ESRSE1 standard and under social standards and workforce information under ESRSE1 standard without calling our conclusion into question. And in the context of the first year of application of the CSRD, we draw your attention to the basis of preparation of the sustainability statement which specifies in particular, quantitative information or presented or presented in a partial scope or subject to estimates and extra operations.

Finally, the third and last area of our engagement concerns compliance with the publication requirements on taxonomy as provided for in Article 8 of the EU regulation 2020/832 -- 852.

In summary, and based on the procedures and verifications we performed, we did not identify any material errors emissions or inconsistencies in of these three areas of our engagement. Ladies and gentlemen, the shareholders, I'd like to thank you for your attention. And I'll now hand the floor back to the Chairwoman.

Thank you to both of you for your presentation. Dear shareholders, before we move on to the Q&A session. I suggest that Florence Negrel should present the resolutions that will be submitting to you for the poll.

Florence Negrel will now present the resolutions.

Ladies and gentlemen, there are 20 resolutions submitted to the vote today. 15 is ordinary resolutions and 25 is extraordinary resolutions. Through the first 2 resolutions, there's ordinary resolutions, we propose that you approve Sodexo's [ statutween ] consolidated financial statements for fiscal 2025. showing, respectively, a net profit of EUR 777 million and a consolidated net profit attributable to the group of EUR 695 million.

Under the third resolution as an ordinary resolution, we propose that you approve the allocation of earnings and set the dividend at EUR 2.70 per share for fiscal 2025. This dividend will be paid on December 23, 2025. In accordance with the bylaws, a 10% increase on the ordinary dividend will be granted for shares registered in nominative form for at least 4 years as of the payment date.

On to resolutions 4 to 7 as ordinary resolutions, we proposed the appointment of three new directors for a term of 3 years. That is Bellon SA represented by Patrice de Talhouët, [ Genevieve Bish ], Francois [indiscernible], as well as the renewal of Luc Messier directorship also for 3 years.

Under the eighth and resolutions as ordinary resolutions, we propose that you approve the compensation components paid or awarded to the Chairwoman and CEO for Fiscal and approve the information relating to the compensation of corporate officers as provided for in article L22-10-9 of the French Commercial Code. These components were presented by Cécile Tandeau de Marsac, Chairwoman of the Compensation Committee and are included in the 2025 universal registration document. Under Resolutions 10 to 13 as ordinary resolutions, we propose that you approve for fiscal 2026. The compensation policy for directors, the compensation policy for the Chairwoman and CEO for the period from September the 2025 to November 9, 2025, inclusive for the Chairwoman of the Board as from November 2025 and for the Chief Executive Officer as from November 10, 2025. These components were presented by Cécile Tandeau de Marsac, Chairwoman of the Compensation Committee and are included in the 2025 universal registration document.

On to the 14th resolution as an ordinary resolution, we ask you to renew the authorization granted to the Board to allow the company to trade in its own shares. Outside the period of a public offer, and under the 15th and 16th resolution as extraordinary resolutions, we ask you to renew the authorization granted to the Board to allow the company to carry out capital increases with retention of shareholders' preferential subscription rights to set the overall ceiling for such capital increases and to carry out capital increases through the capitalization of premiums, reserves, earnings or other amounts eligible for capitalization.

Under the 17th and 18th resolution as extraordinary resolutions, we ask you to renew the authorization granted to the Board to allow the company to grant free shares of existing stock and/or issue shares to employees and/or corporate officers of the group and to carry out capital increases reserved for employees who are members of company savings plans.

Under the 19th resolution, as an extraordinary resolution, we ask you to renew the authorization granted to the Board to allow the company to reduce its share capital by canceling treasury shares.

Finally, under the 20th resolution as an ordinary resolution, we invite you to approve the powers necessary to carry out the legal formalities.

Ladies and gentlemen, I would like to remind you that you have the option to receive your notice and vote electronically via the vote access platform. We encourage shareholders who have not yet done so to contact their financial institution to subscribe to this service, which will allow them to exercise their rights more easily and quickly. Thank you.

Thank you very much, Florence. I suggest that at this point, we open the Q&A session. Before taking questions from the room, I'd like to inform you that the company has not received any written questions from any shareholder. So

ladies and gentlemen, there were host and hostesses at your disposal in the room. So please identify yourself if you have a question, and you'll be handed a microphone so you can speak into it to ask your question. Number four over there, please?

On two topics. The first will have to do with the location in North America of Sodexo. The second point about the 60th anniversary in 2026 of the creation of Sodexo. The U.S. was the #1 market in Sodexo because they represent 47% of our activity.

But since a few years, they become our weak point. In the last few months, significant contracts were lost in American universities due to the [indiscernible] the growth in hospitals, is not as good as we had expected. Outside to the American giant Europe and particularly France, look are somewhat dwarfed. France only represents 12% of consolidated sales.

Have you never thought? This is my question about having a more balanced geographical approach to raise -- raises foot off the gas in the U.S. and to reinforce our presence in Europe and in France. After all, Sodexo was not born in Connecticut. It was born in Marseille in France, I would like to bring up the second topic.

The 60th birthday or anniversary of the foundation of Sodexo. It was on the ninth of March, 1966 that Pierre Bellon created Sodexo was to become the worldwide giant in collective osteration. And this is my suggestion. Why not organize an assembly of all the shareholders at the San [indiscernible], why not with a stance in animations and to present the recipe recipes and meetings with corporate staff and to around the whole, a wonderful banquet and the cocktail by [ lent ].

And lastly, at the end of this party, everybody could say like your father would, Madam -- Chairman. I had a great time. Thank you.

Thank you for your question. Thank you very much for your question. I'll let Thierry answer the first question, and I'll answer the second one.

Thank you so much for your question. About the strategic choice of deployment of our activities in development throughout the world. Sodexo, our intention was to be present in all markets where our services, whether it be in restoration or wherever there is a need. And where we have an ability to grow and to develop.

Sodexo is a leader -- an undisputed leader in France that you spoke about. But it's also a huge leader in the United States. There are two big markets. And we have the ability to orient our growth to these two markets, in particular. The American market is the biggest world market these days, and we're one of the leaders. We are very strong in the United States, and there's no reason to be afraid of continuing our development in the U.S. as to the French market, it's obviously an essential and fundamental and historical market for us in which we are having good growth and more potential for development is still there and that we will continue to invest in.

I'll just add to what Thierry said that well, we're #1 in France. We're not #1 in the U.S., but we're not in France, we want to stay in that leading position. Some of our competitors are investing in France, too. And we want our main leaders in France. We've got to also continue investing here. Now regarding the 60th anniversary of Sodexo, well, thank you for your suggestion. Well, if we want to invite all the shareholders, it would be very pleasant, but the thing is we've got lots of shareholders to our friend, but we've managed shareholders from outside of France, too, would be kind of complicated to bring everybody together in one place.

And on geographical location, while we'll be celebrating the event, of course, we will be celebrating it locally as well in the different countries where we have a footprint and the [ Notre ] cuisine, well, you'll be able to appreciate some of it after the meeting outside here in the lobby, and we'll be keeping you posted about the celebration events that will be organized for the 60th -- organizing for the 60th anniversary.

There's a question over there towards my left, number one, I think.

Association for the heritage of individuals. I have an observation in five short questions.

First of all, congratulations of having made it possible for students who are present here today in the [indiscernible] University participate in the general assembly and to understand that humans are at the heart of companies. They've been doing this for several years.

It's not the first time they've been coming for several years at this point. Maybe not the same students, but, students have been coming for the last number of years. We do encourage students to come and understand the governance of companies.

Leasing numbers of companies are asking their staff to be physically present in the office and the impact of that trend. What effect does that have on your business? Second question. I congratulate for the separation of functions. It's a sign of good governance. The extension of responsibilities of Thierry Delaporte, the new Chief Executive Officer in the U.S. seems to be a good initiative since he knows the practices and culture of management in the U.S. Why do you keep the same President a strategic counselor because the performance wasn't apparently satisfactory? Could you give us some feedback on the application that was started in the U.S. in 2024?

Fourth question, the European Commission approved our acquisition of control the Mediterránea Group from Catarina in Spain. Do you continue -- do you intend to continue to invest in this country to reach a critical size. And lastly, apparently, you have many contracts with oil companies such as Shell or gas company [ Santos ] in Australia. Are there any specific things at Sodexo that would make it possible for you to have a plus in these sectors?

I'm not certain I fully understood your second and third questions. On the presidency are the chairmanship of the Strategy Committee was in the U.S.? Was that your -- question number two.

Well, the current President in the U.S. and the company seems to be stepping down from his post but staying on as an adviser. So maybe, Thierry can answer that question. Given the unsatisfactory results you achieved, why is he staying on is my question?

I'll take the first two questions. The first was concerning the need or not first half, what we thought was due to the fact that employees work from home or for the offers. I think that was the question. I think it's Sodexo for some years now, there have been changes in the way of working.

And our employees are quite attached to a certain form of a hybrid solution, which enables them to work one or two days a week from home. But that means the rest of the time they work in the office. We are particularly attached to the fact that they do come indeed regularly to the office. We believe we're a company of people, a human company. It's very difficult to develop a collective culture and the collective feeling if we don't know each other. And if there's no better way to know somebody than to work together to meet and to be in the same place.

So the physical presence in the office is very important for the development corporate culture, but also so that this talent can grow and develop their own careers, we believe that's important for that they be regularly present in our walls.

As to the second question, having to do we're the former Chair of Sodexo in North America. We made the decision. So just several days ago to change our governance structure, and I took the decision to hire directly the management of the region, which makes it possible to be much closer to the field and to better understand the reality. It's also for me a wonderful way to base in the culture and the reality of the field of the contextual company there.

And in this framework, we set up a transition period, which is over time, and what you are referring to is simply part of the transition. We should not envisage that this is a permanent role is slated to your last.

I'll let Sebastien answer it.

Thank you for your question. Now about acquisitions and Mediterranean in Spain, Acquisitions are part and parcel of our strategy for -- mergers and acquisitions in the existing market. So Mediterránea will help us double our size. EUR 300 million in revenue. So we double the size in the market in Spain in this way, which will enable us to be co-leaders in the market, and we will be able to generate a pretty different -- a pretty significant effect of scale.

For your fifth question on the oil company contracts, you mentioned mining contracts too. Indeed, we do have teams that are specialized in that kind of contract. We're very active on those contracts in the U.S., in Canada, in Latin America, in Brazil and also in Australia. Santos is a contract, which is -- in the mining sector, we renewed Rio Tinto, which is our largest contract at the end of the calendar year of 2024.

And yes, all of these geographies apart from the U.S. and Canada are indeed under the responsibility of John Paldimik, who is in charge of ATMEA, but also Latin America and Brazil. So clearly, there are synergies and a lot of exchanges that go on between them and our teams because they are specialized in these areas. For those contracts, we operate for mining contracts, for example, we're in the middle of a desert in the north of Australia.

For Rio Tinto, you're isolated from the rest of the country and customer proximity is really important then. And just to crystallize that concerning the uniforms, you haven't got the Sodexo people and the Rio Tinto people, we have uniform with Sodexo Rio Tinto together on the uniform. So we work in close conjunction with the Rio Tinto people. So there are specialists here working on those contracts. And when we signed Rio Tinto, that contract, we utilized know-how we gleaned in Chile with central cooking facilities called Colinas and the Rio Tinto client went to see in Chile, what we were doing down there to understand the know-how we had, they were -- they found their attractive, they're convinced buy it, and that's what we set up for them in the new contract we have with them now. that will be starting shortly.

And regarding our oil company clients, we have a very large client in the United States, Chevron. We've grown the business with them. And in the last year. We're big with Shell to we're present with Total in France, but Thierry thinks we should continue developing our business with Total in the rest of the world, too, a French company.

And in the world of our people, it would be great if we could be supportive of each other. That would be one of the objectives going forward for 2026. So thanks for your question on that. Also, did I forget a question, question number three. I didn't hear properly perhaps -- I'm not sure if I answered it or not. Could you repeat it? Would you mind? I had lots of questions. I let you ask five, but I'm sorry, I forgot one of them, but maybe you could repeat it. Well, they were short, but they needed appropriate answers to. We're learning.

The third one was, could you give us feedback about the application that was rolled out in the U.S. in 2024?

You rolled out an application -- additional application, you mean? Okay, yes. Well, it's working very well. we rolled out in the enterprise segment, the business segment where our teams are pushing forward the use of that application and also on the University segment where students are really -- they really go for that kind of mode of consumption.

Everything that's digital can facilitate consumer lives these days, and it increases the average spend. And there's are manager over their as, [ Alice ], you can talk to the cocktail reception afterwards, if you like the figure actually is not just the U.S. but it's driven by the U.S. In 2022, we had 1.2 million consumers directly interacting with our digital ecosystem. Now there are 6 million. Now on the -- out of the 80 million consumers, it's not it's not a big enough proportion, but we're continuing to go forward on this and speeding it up fast tracking it, investing more and more, and especially in the U.S., where our consumers really love those applications. So thank you for that question.

There's number two over there on the left, I think.

Charles [indiscernible] questions. First about Lenôtre, the icon of the brand of French gastronomy. What I read recently that it was too expensive, not as good. we're closing 3 out of the 11 sites. What's going on? That's my question. What's your communication policy about this superb brand and how can you fix it?

The second question has to do with the Sodexo policy with respect to additives and colorants of which we talk about so often. What's your position on food eyes, do you avoid using them? Are you the friend of [ UCA ]

Third point, having to do with the stock market values, there's a contrast between this beautiful company and the change over 1 year or over 10 years. we got minus 31% over 10 years, minus 43% since 2025, but there are results. How can you explain that? I'd like to ask you if there's -- why are you not trying to develop the shareholder ship on the part of staff. There's only 1.5% of our shareholders and the company very often in [ Bouygues ] associate. This is a very large portion of their shareholders are working there, and they're doing well in the stock market.

I'll let Sebastien answer your last question.

I'll start by the stock market values. I understand your frustration. The decrease in the listings occurred subsequent to the revival of our guidance for 2025. We reviewed our guidelines downwards in March and reduced our growth but it's between 3% and 4% with a margin between 10% and 20%, which we confirmed at the end of 2025, this revision of the guidance.

But nonetheless, this is -- it was a disappointment, it perceives as just either in a waiting position. We have expressed our guidance for 26 million transition year in organic change between -- and the pressure on margin. These have to invest. So the situation is that of expectation is a waiting period the cost has to reflect the feeling of the market at a given point in time. And it's up to us to rebuild that trust with the new [ shopper ] that's opening, so as to be able to give a positive inflection to the stock market prices. Thank you.

Concerning the neutral answer, if you don't mind. So regarding lent, we keep on reviewing the business network. We try to meet customers' expectations. The stores that were closed down weren't servicing their customers, as well anymore, but we opened in Galeries Lafayette, a corner, a [indiscernible] corner in Galeries Lafayette gourmet [indiscernible], that is the idea is to focus on locations that are most relevant and to have better conditions to continue developing Lenôtre in the future, and we do remain very committed to the Lenôtre company.

They really provide exceptional quality products in their stores. And we want to be in line with the standard of excellence that's always led to the fantastic reputation of Lenôtre and we're working on improving that experience year in year out. Regarding your question concerning transparency on the ingredients and our know-how on that. What we have know-how that respects nutritional standards. And I'd like to recall that we're cooks and chefs we try and work as much as possible using raw materials that have not been processed, additives and color and that you're talking about coloring agents, that's where products produced industrially by the food industry, usually, that's much less our case.

So we respect nutritional standards and health and safety when it comes to food products, we work mainly with fresh produce, not processed products. So obviously, in selecting our food stuffs, our procurement people are very attentive to all of these matters.

And as we explained, as has been shown through the videos through [indiscernible] was said, and as you know yourselves, were leaders on sustainable food services these days. We've given the strongest commitments. If you look at our French and non-French peers, we are the ones who want the furthest in all of our countries and with the commitments we've given for 2030, 2035 and 2040 as well to be borne in mind. We've gone further than our peers and our competitors, we're really attentive to this, and we want to be a step ahead of others, and we are a step ahead of others right now with "Better Tomorrow 2025" and the new commitment we're making with "Better Tomorrow 2028", our new plan, we want to continue maintaining our lead and manage all of the dimensions, you mentioned the additives and such like. So thank you for those questions.

There's a question over there -- there are lots of questions. I see a lot of hands going up towards the back of the room, microphone number six perhaps.

Hello, Mr. [ Jean Bars ], my name. I have a question. Well, firstly, well done on separating dissociating the post of Chairperson and CEO. You still have a contract between Bellon SA and Sodexo to provide services. I think last year was EUR 5.1 million. Now it's EUR 4.6 million. Why has that contract gone down? And could do the members of the Board look at that?

Does this service contract need to exist because the company Bellon SA, I think, received dividends, EUR 167 million in the previous fiscal year, I think. So whilst the advantage of having that agreement with our company? Secondly, on long-term incentives and long-term remuneration. The only place I see variable compensation index to potential development of the stock price is -- there's just one 1 place. So it should be more, I think, because for us as shareholders, it's a really important criteria. And what I see in the TSR is that you have a panel and you give a list of the companies and the panel. Well done on that Sophie.

Well, answer on this service agreement with our [indiscernible] Bellon SA are shoulder to the tune of 43.8% of Sodexo. So they have 58.8% of voting rights.

And this agreement bolsters the structure and the leadership role of Belllon SA. This leadership will consist of defining jointly the long-term strategic guidelines for Sodexo. And the variation in the amount, as you mentioned, I won't go into the mathematical details, but there or people who work for Bellon SA that are cross-charged built to Sodexo. And it depends on the salary of those persons. So it's normal for to vary from 1 year to the next.

Then the second question was both the LTI, yes. And the TSR portion and the importance of the stock price. Yes, the indexing is using a TSO with the benchmark of peers. In our industry or similar industries. And I think the percentage is already 30% if I'm not mistaken. So it's already quite a large percentage. And we chose that relative with because we did benchmarking with what's done in other companies. And it's a fairly conventional way of doing things actually. So thank you for those questions.

There is another question. I think it's microphone number one down there. We'll just take -- we'll do two more questions if you don't mind, because we're going to have to move on. And well, maybe number four over there. The gentleman towards the middle microphone number four, I think? It was one and four, I think. This gentleman is right in the middle of microphone number four first.

In the food -- any risk is big, whether it be bacteria or salmonella or [ steri ] or whatever or some kind of the new virus. And the portage is a matter of health.

On the other hand, you have -- the rupture of the cold chain. What are the processes that you use to make sure that you won't have a gastroenteritis vehicle and a lot of industrials have had problems with contamination. You also work in hospitals or schools. There could be a significant risk, and it could be really too bad for the group. That's an issue.

You're quite right. This is something we're quite aware of. It's something we've been working on since the very start of the group since the inception of the group. It's part of our job really, it's the prime risk you've got to try and fight against in this business line. So what do we do? We train our people first start. We train them, retrain them, reskill them and refresh skill them and so on.

And that's really in the center stage of our priorities. We've got protocols for what we produce because it might be a cold chain. It might be a site in a hospital, it might be in the company is not quite the same mode of production. So we've got protocols each time a very strict ones that must be adhered to depending on the sector, depending on the activities we have in each site, the type of site didn't -- I mean there's a whole set of protocols as a function of the typology of the site.

So as to make sure that we abide by all those protocols, we do regular audits in our restaurants, but also on the side of our suppliers because we've got quite a lot of purchasing power, and we work closely with our suppliers, and we try and work hand-in-hand with them and keep them over time. We're long-term partners for our suppliers, and we try to, therefore, make sure they make the commitments we want them to make. And that we make ourselves so that we can trust their protocols.

So that's really in the forefront of what we do. It requires training. It requires management overseeing their teams that their direct reports are doing the right thing, and we do conduct these orders as well. And the whole town, we keep on challenging ourselves. And if there is a problem, we immediately escalated to group level and I can tell you that the slightest problem is escalated in the space of the day on the same day.

And we have a whole protocol set up to understand what's happened and to use this as a learning experience, maybe just a small problem, but we still have to learn from it and make sure it doesn't happen again. The percentages, oh it's tiny. Gastroenteritis, that's -- it's a virus. And it's very difficult. I mean, we start identifying there's a problem if in the side, there are several cases are a very serious case, but gastroenteritis can come -- doesn't come from what we produce.

It can be in the year around us -- kind of just maybe at the cock [indiscernible] all over the price these days. So we can measure like that. We've got to measure the number of cases reported on the site. And then sometimes there may be cases but it may not be due to our activities at all. So then we do an investigation, but we doesn't happen every day. The EUR 18 million of meals served per day. It's pre-reassuring. We don't have this problem often. Is there a last question? Have we exhausted your questions.

There's a question over there. At microphone number one, perhaps no? Is that all then? No more questions? There is a gentleman there who wants to ask a question, I think, towards the middle, if he could be given the microphone, microphone number 5.

One last question then. And we've got to vote on the resolutions and then go to the cocktail in that order. Otherwise, it won't be on the cocktail, if we don't vote on the resolutions.

I have a question, Sodexo's a proximity or a local group. Providing local restoration. You spoke about an application deployed essentially in the U.S. apparently. I would like to know a bit more about your ambitions in digitalization or digital services. Why combined humans with a digital approach, which you haven't lots of movies. But I mean, why do you in your business that you have digital ambitions in new technologies?

Thank you. With that question kind of projecting us into the future. Firstly, smile will never replace a real smile. That is a conviction I have myself that I think is defended by many people by all of our employees anyway. And yes, of course, we have an application, but -- we also have people in a restaurant in the company, in a hospital doing the job. And if we use connected tools is to bolster the links we have between the consumers and our teams.

So it's an augmented experience for the consumer. But if you want to use the tool you can use if you don't want to use it, you don't have to use it in other words. You can continue interacting directly with our staff members. And a few weeks ago, there was a major form, adapt AI at the Grand Palais and people tended to say, look, AI is going to be used, how many people are going to make redundant.

No, that's not the issue. We've got 426,000 people right now. We're not going to make any but redundant. We are going to utilize AI to make sure that our teams we'll have fewer repetitive tasks to do. I mean I'll give you an example. The menus and AI, if you have to change your menu because you have a change in product or product cost, very expensive. You've got to change the menu got to put the new product down to the menu instead got to adapt things because sometimes clients don't want exactly this new product.

But this tool enables us to do what you say. In the past, it could take days and days to make the change, and it will take just a couple of hours, thanks to AI. So that's the kind of tool that will be useful for us.

And -- we have our foresight to, let's we call it. So we can identify with our clients the population that will come to dine at a certain point in time. And the people on the site using the tool. Instead of spending hours and trying to anticipate it's a Friday. So how many people will come and dine in Monday or Wednesday, how many will we plan for?

We use all the data that have been entered into the tool, and they will realize upfront how many people they should be prepared for. And they use this tool, they realize is very reliable and the time that they will save, they don't have to do forecasting much, they will spend that time then with their teams talking to the clients when the meals are being served to see if the consumers are satisfied and so on.

So to free up time for them to do more higher-value activities. So we want to enhance the customer experience also improve the interactions we have with clients, with diners as well so as to therefore as I say, make for a better experience, and we'll also be able to measure our carbon emissions better.

So with this tool, we can provide all this information to our clients and help them in their own transition to reduce their carbon emissions and improve the experience for our team members who will spend less time on repetitive tasks that prevent them from focusing on the consumer experience. I hope that's an answer to your question. It was a very good question, though. It's indeed a very exciting topic for the future.

You can go and talk to Alice. Lots of people who want to see here during the [indiscernible] she's the lady expert on this subject, Alice.

So I think that runs off our Q&A session. Thank you. for all of your questions. I suggest we should close this Q&A session at this point. And the team in charge of Shareholder Relations is available as they are throughout the year, of course, to answer your questions. And we've got many of our senior managers with us, lots of the French teams, the procurement manager, HR manager, communication manager, the demand for France. So we've got many of our senior managers here with you that you can chat to as well.

And I'll give the floor now to Florence Negrel to vote upon the resolutions.

We're at the final quorum. We'll be taking into account the number of shares currently in a number of shareholders present represented or having voted by correspondence [ 126,759,02,206 ], 87% of shares entitled to vote. In the legal quorum or the ordinary reading and the extraordinary meeting has been reached. And the voting of the resolutions can therefore be validly carried out. We will now proceed to the vote on the resolutions. As you look at a short video explaining how to use the tablets that were handed to you when signing the attendance sheet.

[Presentation]

The first resolution adoption of individual company financial statements for fiscal '25. I open the vote. Those has been adopted by 199.98% second resolution. Adoption of the consolidated financial statements for fiscal 2025. The vote is -- and I open the vote.

[Voting]

The vote is closed. The vote is adopted by 99.98% of votes. Third resolution, appropriation of net income for fiscal 2025, determination of the dividend amount and payment dates. I open the vote.

[Voting]

The vote is closed. This resolution has been adopted by 99.99% of the votes. Fourth resolution, appointment of Bellon SA as a Director for a 3-year term. I open the vote.

[Voting]

The vote is closed. This is adopted by 82.54% of fifth resolution, appointment of Genevieve Bish as Director for a 3-year term. The vote is open.

[Voting]

The vote is closed. The resolution has been adopted by 99.97% of the votes. Sixth resolution, appointment of [ Francois Copa ] as Director for a 3-year term. I open the vote.

[Voting]

The vote is closed. This resolution has been adopted by 99.99% of the votes. Seventh resolution, reappointment of Luc Messier as a Director for a 3-year term. The vote is open.

[Voting]

The vote is closed. This was a 98.22% of the votes. Eighth resolution, approval of the components of compensation paid during or awarded for fiscal 2025 to Sophie Bellon, Chairwoman and CEO. I open the vote.

[Voting]

The vote is closed. This vote has been adopted by 76.73% of the votes. Ninth resolution, approval of the information related to the compensation of corporate officers and directors paid during or awarded for fiscal 2025 as referred to an article L22-10-9 of the French Commercial Code. The vote is open.

[Voting]

The vote is closed. This resolution has been adopted at 99 of the votes. Tenth resolution, approval of the compensation policy applicable to the directors. The vote is open.

[Voting]

The vote is closed. This resolution has been adopted by 99.71% of the votes. 11th resolution, approval of the compensation policy applicable to the Chairwoman and CEO for the period from December 1, 2025 to November 9, 2025. The vote is open.

[Voting]

The vote is closed. This resolution has been adopted by 91.22% of the votes. 12th resolution, approval of the compensation policy applicable to the Chairwoman of the Board of Directors as from November 1, 2025. The vote is open.

[Voting]

The vote is closed. This resolution has been adopted by 88.65% of the votes. 13th resolution, approval of the compensation policy applicable to the Chief Executive Officer from 10 November 2025. The vote is open.

[Voting]

The vote is closed. This resolution has been adopted by 97.72% of the votes. 14th resolution, authorization for the Board of Directors to purchase shares of the company. The vote is open.

[Voting]

The vote is closed. This resolution has been adopted by 99.74% of the votes. 15th delegation of powers to the Board of Directors to increase the company's share capital with preferential subscription rights for existing shareholders, by issuing ordinary shares and/or other securities carrying immediate or deferred rights to the company's capital. The vote is open.

[Voting]

The vote is closed. This resolution has been adopted by 99.23% of votes. 16th resolution, delegation of powers to the Board of Directors to increase the company's share capital by capitalizing premiums, reserves, profits or other sums eligible for capitalization. The vote is open.

[Voting]

The vote is closed. This resolution has been adopted by 99.74% of the votes. 17th resolution, authorization for the Board of Directors to grant existing and/or newly issued to restricted shares to all or certain employees and/or corporate officers in the group with automatic waiver by shareholders of their preferential subscription rights. The vote is open.

[Voting]

The vote is closed. This resolution has been adopted by 98.46% of the votes. 18th resolution, dedication of powers to the Board of Directors to increase the company's share capital without preferential rights for existing shareholders, by issuing ordinary shares and/or other securities carrying immediate or deferred rights to the company's capital reserved for members of employee share purchase plans. The vote is open.

[Voting]

The vote is closed. This resolution has been adopted by 99.60% of votes. 19th resolution, authorization for the Board of Directors to reduce the company's share capital by canceling treasury shares. Vote is open.

[Voting]

The vote is closed. This resolution has been adopted by 98.79% of the votes. And the last resolution, powers to carry out formalities. The vote is open.

[Voting]

This resolution has been adopted by 98.99% of the votes. Thank you for your attention. I will now hand over the floor to Sophie Bellon.

Thank you. Thank you, Florence. Ladies and gentlemen, thank you for placing your trust in your Board of Directors through these resolutions. We shall now adjourn this session. And thank you for attending, and I would invite the shareholders with us here in the room in Paris to move towards the cocktail prepared by Lenôtre. So we'll meet at the cocktail reception in a very short while. Thank you.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

Good morning. Thank you for standing by, and welcome to the Sodexo Fiscal Year 2025 Results Call. If you -- I advise you that this conference is being recorded today, Thursday, October 23, 2025.

I would like to hand the conference over to the Sodexo team. Please go ahead.

Good morning, everyone. Welcome to our fiscal 2025 results call. I'm here with Sophie Bellon and Sebastien De Tramasure. They'll go through the presentation and then take your questions. [Operator Instructions] The slides and the press release are available on sodexo.com, and you'll be able to access this webcast on our website for the next 12 months. Please get back to the IR team if you have any further questions after the call. I remind you that our Q1 fiscal 2026 revenues announcement will be on Thursday, January 8.

With that, I now hand over to Sophie.

Good morning, everyone, and thank you for joining us today. We spoke to you a couple of weeks ago regarding our governance changes. And today, we are going to cover our fiscal year '25 results and our priorities and outlook for 2026. Just on the slide here, a brief summary of what we're going to cover today.

When I became CEO in 2022, our priorities were clear: reposition Sodexo as a pure-play food and services company and simplify the organization. Over the past 3 years, we've made solid progress, streamlining the portfolio, refocusing on food, accelerating key investments and strengthening client relationships. These were essential steps to build a strong foundation for sustainable growth.

In financial year '25, results came in line with revised guidance, reflecting both operational and commercial challenges. We are actively addressing these with targeted action plan in commercial and in U.S. universities. We're also continuing to strengthen our foundation. With this in mind, fiscal year '26 will be a year of transition and the start of a new phase for the group. Thierry Delaporte will soon take over as CEO, bringing the right experience and profile to drive operational execution, accelerate commercial momentum and lead the group forward.

But let's now first take a backward perspective on our key achievements from the last 3 years and 2026 priorities before Sebastien walk you through the fiscal year '25 results and the resulting fiscal year '26 guidance.

Turning to the next slide. While I won't go into every detail here, this timeline of recent years shows the major steps of our shift to a pure-play food and services company. We have simplified our structure through geography reorganization and the sale of Sofinsod. We have actively managed the portfolio by spinning off Pluxee and making other non-core disposals, while pursuing targeted acquisitions to accelerate in food.

So if we look now at the impact of this refocus on core activities, you can see that there has been real progress in the numbers. Let me pick out some highlights. Food now covers more than 2/3 of our portfolio, up from 62% in fiscal year '22. We have modernized the offer based on data-driven insights across culinary, digital and sustainability. Digital engagement has surged almost 6 million active consumers, up from just over 1 million, showing how we're expanding our reach and creating new growth avenues.

Our branded food offer now represents over 50% of revenues versus less than 20% 3 years ago, improving client experience, standardization and operational efficiency. Entegra has more than doubled in size, boosting procurement benefits, and we have also advanced catalog compliance, both strengthening our competitive edge.

On sustainability, we are hitting the targets we set on workplace safety, carbon and food waste, thanks to close collaboration with our clients and partners, and we are leading by far the industry on those aspects. And all of this is creating tangible value. Our underlying earnings per share has grown at 14% compound annual growth rate, and we have seen a marked improvement in our return on capital employed.

Moving on to commercial performance. We have made a solid improvement in retention and development compared to the pre-COVID period. Over the last 3 years, our average retention is 94.5% versus 93.5% between 2017 and 2019. Likewise, on development, we signed around EUR 1.7 billion of new contracts per year, including cross-selling compared with EUR 1.4 billion before the pandemic. This is a result of our ongoing focus on processes, team culture and competence, but also client relationship. However, this does not reflect our full potential with fiscal year '25 presenting some commercial challenges.

In fiscal year '25, retention came in at 94% due to the negative impact from the loss of a global account and softer performance in North America, in particular, in Education. Performance is uneven across the business. For example, U.S. Healthcare. In U.S. Healthcare, we delivered retention above 97%. And in France and Australia, we were above 96%.

On development, H1 was strong, especially in Europe and Rest of the World, but H2 softened and total new business landed at EUR 1.7 billion. North America, which remains our largest market, is where we need to improve. We have clear actions underway. We are addressing near-term priorities in U.S. Higher Education, and we are strengthening our U.S. sales team through expansion and training. We are also investing and reorganizing to make sure we capture the market's potential.

I will now walk you through in more detail how we are addressing the challenges in U.S. Higher Education. We clearly had some performance gap over the past couple of years in this segment, and it's translated into market share losses. Since February, together with Michael Svagdis and his team, we have carried out a comprehensive diagnostic process to fully understand the root causes behind this lack. A few key issues stood out. First, our footprint is still too concentrated in small and midsized institutions. Second, we have not focused enough on mid-plan renegotiation. And third, we've had some resource misalignment.

The remedial action plan is already well underway. Michael has put in place a new organization with culinary and digital now reporting directly to him, and he has reenergized the team to drive best practice and greater standardization. Our sales function was clearly subscale, so we have expanded the team by 50% with the newly hired sales executives already in place and operational. We are also targeting more large universities and athletics, working more closely with Sodexo Live!. To strengthen existing relationship, we are growing our account management team and refreshing our broader teams, bringing in new talent where needed to ensure the right capabilities are in place.

Execution is a big focus. We are currently renegotiating 75 meal plans for implementation in fall 2026, and we have rebuilt the meal plan team, which had been disbanded during the COVID period. Now we are harnessing data and tech to methodically track what's selling, where and to whom. We are deploying digital platforms like Everyday and Grubhub, and strengthening our own retail brands to streamline the offer.

This plan is clear, but it won't be executed overnight. Some levers will take time. And given the timing of the selling season, fiscal year '26 is largely set already. The goal is, therefore, to restore growth momentum and capture new market opportunities progressively from fiscal year '27 onward.

Michael and his teams are laser-focused. Michael has visited more than 20 campuses in the last 3 weeks. The feedback is very consistent. Universities are under financial pressure. They are becoming more business-driven, and they are open to change. That creates challenges, but also a lot of opportunities, and we are now in a much better position to seize it.

So as you can see, we have set focused priorities in the U.S. for this year, short term very execution-driven, to put us back on a stronger trajectory. With that in mind, fiscal year will very much mark itself as a year of transition. It will still reflect some of the commercial challenges we have just discussed, but also the investments we are making to strengthen our foundation to drive efficiency, accelerate digital and prepare for long-term growth. Sebastien will get back to that.

We have a strong foundation to build on, with a solid balance sheet and the flexibility to invest where it matters most. We are the #2 player globally with a balanced portfolio across regions and segments. We have the scale to leverage procurement, technology and operational excellence across the group. Our culture remains a key driver of sustainable performance, purpose-driven, people-focused and deeply engaged with our clients.

Retention in our industry drive resilience, and our teams are proud to deliver on our mission every day. And of course, we operate in a large and attractive market, still 50% in-sourced with significant outsourcing opportunities ahead of us.

Looking ahead, I'm also very confident in the next phase for Sodexo. On November 10, Thierry Delaporte will join us as Group CEO. He brings over a decade of leadership experience in the U.S., strong digital and AI expertise and proven track record in leading large people-intensive organization. He's operational and execution focused and deeply aligned with our values. He is the right fit to take Sodexo into its next stage of development.

And with that, I'll now hand over to Sebastien to take you through the fiscal year '25 financial and fiscal year '26 guidance in more detail.

Thank you, Sophie. Turning now to our fiscal '25 performance. Overall, our performance was in line with our revised guidance. Organic growth came in at 3.3%, slightly higher at 3.7%, excluding the base effect from the major sports events and the leap year in fiscal 2024.

Underlying operating margin was 4.7%, up 10 basis points at constant currencies, while on a reported basis, it was broadly flat due to the FX headwinds. Free cash flow was EUR 459 million, including the exceptional cash out of circa EUR 160 million related to the finalization of the tax reassessment in France. And excluding that, our cash generation remained robust with an underlying cash conversion of 91%. Underlying EPS reached EUR 5.37, representing a rise of plus 3.7% at constant currencies. And the Board will propose a dividend of EUR 2.7 per share, up 1.9% versus last year and in line with our 50% payout policy.

So now let's have a look at our performance by geography. Breaking down our results further, all regions contributed positively to our performance. Our largest region, North America, delivered 2.8% organic growth, reflecting strong results in Sodexo Live! and Business & Administrations, along with solid underlying momentum in Healthcare despite timing impact and partly offset by contract losses in Education.

In Europe, organic growth was plus 1.7%, or 2.7%, excluding the base effects from the Olympics and the Rugby World Cup with steady progress across segments, notably in Healthcare & Seniors and Sodexo Live!. Rest of the World delivered strong organic growth of 7.5%, which was mainly driven by strong performance in India, in Australia and Brazil, which remain key countries where we are strengthening our positioning and consolidating our market share. And overall, close to 86% of our revenue in this segment are generated by Business & Administrations services.

On margins, North America was stable at constant currencies, while Europe and Rest of the World improved 20 basis points, lifting the overall margin for the group of 10 basis points, to 4.7%. And the margin also reflects procurement efficiencies and benefit from our Global Business Services Program.

So now let me guide you through the full P&L picture. Fiscal '25 consolidated revenue reached EUR 24.1 billion, up 1.2% year-over-year. As already mentioned, we faced currency headwinds this year, mainly from the U.S. dollar and several Latin America currencies, which had a minus 1.8% negative impact on revenue. And we also saw a small net impact from acquisition and disposal of minus 0.3%.

Underlying operating margin, as we discussed, was stable on the reported basis and improved 10 basis points at constant currencies. Other operating income and expenses reached minus EUR 154 million with minus EUR 97 million of this related to restructuring and efficiency initiatives covering our global business service program, ERP implementation and other organizational optimization.

Operating profit came in at close to EUR 1 billion compared with EUR 1.1 billion last year. Net financial expenses were EUR 88 million, lower than expectation due to some one-off gains. The new USD bond issuance had little impact this year as higher coupons were largely offset by cash interest income and gains from tendering existing bonds. However, net financial expense will increase next year as a result.

The tax charge was EUR 198 million with an effective rate of 22.2%, reflecting updates on the tax credit and use of previously unrecognized tax losses in France. And looking ahead, our normative tax rate is expected to be around 27%. As a result, group net profit reached EUR 695 million, translating into EUR 785 million of underlying net profit, which was up 3.7% at constant currencies.

So let's now turn to cash generation, which remains a key strength for the group. Free cash flow in fiscal '25 was EUR 459 million, compared with EUR 661 million last year. The change in operating cash flow mainly reflects the exceptional tax outflow for around EUR 160 million related to the finalization of the tax audit in France. Working capital remained well contained and net capital expenditure increased by 3%, translating into a CapEx to sales ratio of 2%, broadly in line with last year.

Acquisition net of disposal amount to an outflow of EUR 93 million following the acquisition of CRH Catering in the United States and Agap'pro, a GPO in France. Both acquisitions fully aligned with our strategy to strengthen our convenience business in the U.S. and our procurement capabilities. Overall, our free cash flow remains solid, supporting both reinvestment in the business and shareholder returns.

Then at the end of the financial year, net debt stood at EUR 2.7 billion, which was slightly higher than last year, while EBITDA increased by 2% over the same period. So this translated into a net debt-to-EBITDA ratio at 1.8x, within our target range of 1 to 2x.

During the year, we repaid the EUR 700 million bond maturing in April 2025 and successfully issued a USD 1.1 billion bond. And part of the proceeds was used to repurchase some of our 2026 bonds. Overall, the balance sheet remains solid and give us the flexibility to invest in growth.

So now that we have looked at the performance and the financials for the year just ended, I'd like to take a step back and talk about how we are accelerating our investment in foundations that will drive our long-term efficiency and profitable growth. This is really a strategic phase for the group as we are making significant investment into our HR, finance and supply system and our food and FM platform. In short term, this will put some pressure on margin, but it is essential that we position ourselves for improved efficiency and stronger profitable organic growth.

We will continue to invest in sales and marketing, especially in North America to ensure more consistent net new business, as Sophie stated earlier. An important part of our investment program is supply chain management with a strong focus on the U.S., where we are optimizing processes, systems and ways of working to improve both cost and agility. The idea is really to bring more sites into a single unified purchasing system, giving us much better visibility on spend and allowing us to track compliance in real time.

We are also standardizing our menus and recipes, so that they automatically link to order guides and purchasing system. And that means simpler execution for our site manager, stronger compliance and more leverage from our volume, including greater pooling between our on-site operations and Entegra. All of this is about making compliance and efficiency happen at the site level, and we are now incentivizing our unit manager directly on compliance.

Another key area is our digital and IT foundations. Our global ERP rollout is a perfect example. It allows us to standardize end-to-end processes, secure our infrastructure, which is instrumental in all aspects of our operation, obviously, for data and performance management, but also to strengthen client account management by giving teams better visibility and faster insights.

We are also investing to enhance our analytics and AI capabilities to support better decision-making, sharper performance tracking and faster execution across the organization. Finally, Global Business Services is another major focus. We are transforming support function into a shared service model with center in Porto, Mumbai and Bogota, now employing over 900 people. And these teams are centralizing finance, HR, other functions like supply and legal. And by doing this, we are driving efficiency, standardization and innovation while also creating talent hubs for the future.

And we are already seeing some early benefits. For example, in the U.S., more than 90 positions were moved over to the Bogota center during the summer, improving competitiveness, process harmonization and supporting employee administration, recruitment and tender preparation.

So this is really the second leg of our near-term priorities. The first being the U.S. turnaround that Sophie discussed before. And this investment position us to capture growth more effectively in the future and over time, and the margin improvements will follow. It's also about building the right platform today to deliver stronger performance tomorrow.

Now moving to the outlook for fiscal year 2026. As we mentioned previously, fiscal 2026 will mark a year of transition as we proactively address the commercial challenges faced in 2025, especially in North America. And at the same time, we are accelerating the investment in our foundation, as just mentioned, to build a stronger platform for future efficiency and profitable growth.

With that in mind, our guidance for fiscal year '26 is as follows: We expect organic growth between 1.5% and 2.5%. This includes a minimum plus 2% contribution from pricing, neutral to moderate contribution from both like-for-like volume and net new business and a one-off reclassification triggered by the renewal of a large contract. And this last point relates to a large NorAm contract currently being renegotiated. And under the new terms, we will act as an agent rather than the principal, meaning that revenue will be recognized on a net basis. And this will mechanically reduce reported organic growth by around 70 basis in fiscal year '26 with the new terms of the contract taking effect during the second quarter of the year.

And our underlying operating margin should be slightly lower than fiscal year 2025, reflecting mix and timing of growth driver and the targeted investments we are making. In terms of quarterly phasing, we expect a relatively soft start with growth gradually improving over the year. This will be mainly driven by North America, where the impact of last year's Education losses will be most visible early on. And in addition, several contracts existed last year will annualize in the second half.

Now I would like to conclude with you on our capital allocation priorities. We remain focused on disciplined execution, and that also applies to how we allocate capital. On capital allocation, framework remains balanced and consistent, designed to support both near-term execution and long-term value creation.

First, we continue to focus on organic growth, with acceleration of our investment and CapEx objectives remaining unchanged at 2.5% of revenue. We remain selective on M&A, targeting midsized bolt-on acquisitions that are accretive and aligned with our strategy. On average, we expect to allocate about EUR 300 million per year to M&A, mainly focused on convenience, GPO and food services in our key existing markets. And recent acquisitions fit perfectly within the framework and the closing of the acquisition of Grupo Mediterránea expected to happen by the end of the calendar year. It's also part of the objective to strengthen our food services position in our key markets. And this acquisition will allow us to double our footprint in Spain.

Furthermore, we are committed to optimizing returns to shareholders. Our dividend payout ratio is unchanged at 50% of underlying net income, ensuring an attractive and balanced remuneration for shareholders. And finally, we keep a close eye on liquidity and balance sheet strength, with a leverage ratio maintained between 1x and 2x and a commitment to preserving our strong investment-grade ratings. Overall, this framework supports our near-term priorities while providing the flexibility to adapt.

With that, we are very happy to take your questions.

[Operator Instructions] First question is from Jamie Rollo, Morgan Stanley.

Two questions then. First, could you please quantify the margin guidance? What is slightly lower, please? And also, is that pressure in all the regions? Or is that going to be concentrated in North America?

And the second question is, you're describing '26 as a transition year, but you said the other day that the new CEO probably wouldn't announce their review until maybe early summer, which could that not mean that 2027 then is another transition year if there were further changes to be made? Or are you going to be doing all of the implementation in 2026?

Thank you, Jamie. So I will take this first question about the guidance. So as I said, the objective is to have an operating margin to be slightly lower than fiscal year '25, reflecting really the mix phasing of our growth driver and also the phasing of the targeted investment we have to do.

Then, the reason we did not give a range is that because there are a lot of moving parts. Again, at this stage, we do expect margin to be slightly below fiscal year '25. There are different drivers. Again, the low organic growth with small optimization in terms of volume increase. And then there is a timing of the investment. And also, we do expect also some headwinds from the -- from the exchange rate that will also impact our margin. So a lot of moving parts, the reason why we decided not to quantify this guidance.

So thank you, Jamie, for your question. I will take the second question on the transition. So 2026 will be a year of transition in several ways. First and foremost, it's a year marked by a change in leadership with the upcoming arrival of Thierry as the CEO next month, on November 10.

It's also a year of investment to continue to lay the foundation for sustainable future growth. We are investing heavily in our HR, in our finance, in our procurement system, in tech and data as well as in our food and FM platform. And in the short term, this weigh on our margin, but I think it is essential to prepare for the future to be more efficient, more agile and to support sustainable growth. So for example, in the supply chain, particularly in the U.S., where we are improving our processes and system to better manage our expenses. And also, we want to increase our compliance in real time. We're also investing in data and analytics and artificial intelligence to better track the performance and execute faster.

And -- does it mean another year of transition in '27? No, we are not standing still. We have our near-term priorities, U.S. Education, as an example, the investment in the commercial, and our underlying organic growth is between 2.2% and 3.2%. So we are moving forward, and we are in the actions.

If I can -- can I just come back on the margin answer? I appreciate you can't give guidance. There are lots of moving parts. But obviously, with a margin of under 5%, every 10 basis points is quite a big impact. I mean, is slightly lower nearer to 10 basis points or nearer to 30?

Again, as I said, Jamie, we are not quantifying the guidance at this stage. We are talking about a slight decrease in terms of margin. And to also answer your question, the pressure on margin will be mostly in the U.S. because, again, as I said, our focus on accelerating investment in sales and marketing and all the supply initiatives will be also focused on strengthening our position in North America.

Next question is from Estelle Weingrod, JPMorgan.

I've got three, please. I mean the first one on U.S. Education and Higher Education more specifically. Could you give us some initial colors on the full-term enrollments? Then on North America, again, you elaborated on the action plan underway in the U.S. When you talked about targeted investment to enhance foundations for profitable growth, is it mostly investment in U.S. Higher Education? And within this, is it mostly about expanding sales higher? You mentioned 50% expansion of sales teams.

And last question is just on your -- on modeling details. You've got that slide in the PowerPoint. On other income and expense, you guide for EUR 160 million, which is broadly flat year-on-year despite the step-up in investment this year, being an investment and transition year. So I was a bit surprised there's not more of an increase there.

So thank you, Estelle. I will take the first question on U.S. Education and Sebastien can answer on the other two questions. So first, you asked on the enrollment. The early indication from our boarding data show that we are about 0.7% below last year in our comparable base, and it really varies from countries to another. Some are growing, others are slightly down.

Geographically, we're seeing softer trends in the Midwest and Northeast, while the Southwest and Southeast are showing increases. And these figures are still preliminary, and we'll have a more definitive year-on-year view once final enrollment numbers are confirmed over the next few weeks. But obviously, we are not standing still looking at that. Let me remind you the measures we are taking, and I told you, to boost volumes, retail and of course, to win new clients in the next selling season. And I explained that earlier in the presentation.

Also, if we go specifically on international students, enrollment for the fall 2025 is expected to drop due to visa delay, denial, revocation, post-graduation restriction. So it will mostly be graduate program and will be most affected. We could reduce demand for housing, dining and other campus services. And undergrad services like mandatory meal plans are less affected.

And also, what we see is that universities are adapting with, for example, mid-semester starts, which may mitigate some of that decline. And of course, we will monitor those trends closely and be ready to adjust our offering, our financial planning and the support to respond to the potential changes in the campus demand.

And also, as I said on the slide, we are really investing in our sales force. We expanded our sales team by 50%. So I think it's -- and also investing in our account management team. So we are in the action.

So on the second question regarding the investment and the acceleration of the investment in North America. So we have specific investment as described by Sophie for the Education segment. But we are really targeting investment across the organization. We want to strengthen the sales and marketing organization, not only for Education, but for all the segments. And all the investment regarding supply is not only for Education, it's, again, for all our businesses.

And on your third question. So we are guiding other income and expenses at EUR 160 million, flat versus fiscal year '25. But the combination of the different restructuring program is slightly different. We had many regional restructuring program to optimize the structure at the regional level in fiscal year '25. We will have less than in fiscal year '26, and we will increase our investment again in our GBS program. The restructuring costs related to the GBS will increase in fiscal year '26. But if we combine both, yes, it's flat between fiscal year '25 and '26.

Next question is from Jaafar Mestari, BNP Paribas.

I have three questions, if that's okay. First one is in terms of your operating models and services. You mentioned some of the qualitative targets that you've achieved this year: branded offers, more than 50% of revenue; Entegra, more than doubled; carbon emissions, minus 34%; food waste, you didn't quite get to minus 50%, but not far. There was another one on digital and new services, 10% of revenue, you haven't said, but I assume you're not that far.

My question is, you've achieved most of your soft qualitative targets and yet the overall financial performance was disappointing. What is your assessment here? Did you take targets that were not the right ones, and they need a complete rework under new management? Or was the delivery not deep enough? I guess you can get to 50% branded by changing a logo on the site. So have the teams delivered on these targets the right way, a way that benefits the business? Or have they delivered sometimes in a cosmetic way that has not really helped cross-sell or cross-fertilize the business?

Second question, shorter, just on business development. You said yourself, your average signings pre-pandemic were EUR 1.4 billion each year. In H2 '25, this is where you are, EUR 700 million. What have you seen? Is it the industry? Is outsourcing less dynamic? Or would you say it's entirely market share issues on your side?

And lastly, on full year '26, net new business, if I look at the forward-looking retention and signings, it looks like you could be a plus 1%, but you never quite get there. And I think that was one of the issues last year where you had 1.6% forward-looking, but you don't quite get there because you lose more staff, because the contracts take time to ramp up. So in terms of net new, could you help us a little bit more in terms of your assumptions in the guidance?

Okay. Thank you, Jaafar, for your question. So first -- on the first question, yes, we have delivered. I think when you talk about the offer and the branded offers and the fact that we have reached our target, I think it's a first step. No, it's not just a logo on -- it's not just a logo in a restaurant saying that we are implementing a new offer.

It is much more than a logo. It's a menu. It's a number of SKUs that are linked to that menu, and it's more compliance. So I think it's a first phase. And I agree with you that it's not driving gross profit enough yet. And we are fully aware of that and especially in the U.S. where our compliance, at the site level, is not sufficient. And that's why starting in September, all our managers are incentives, from the site manager and upwards are incentives on the compliance. It's a new -- it is for every member in the organization. I think also when you have -- so it takes more time than just sending the offer. You need to also go -- we need to go deeper now.

Second, when we talk about the, for example, the digitalization and the fact that now we have 6 million of people that can have access through -- digital access, it will also drive the revenue because we have seen that. And it will also drive the margin because we will be able to answer better what people want on a daily basis.

So on your third question, I will let Sebastien answer, and then I will get back to you on the net development.

Yes. So on the net new, you're right. I mean, the net impact, if we take the looking forward KPI, 1.4%, and then the in-year impact expected for '26 will depend obviously of the net new from '26 as well and the in-year impact. It depends on the phasing of the development, phasing of the retention. And it's the reason why we took this year a more cautious approach, I would say, baked into the guidance, as we said that the net new impact in-year expected for fiscal year '26 should be between neutral to moderate contribution. And again, the phasing development retention is explaining this cautious guidance in terms of net new impact for fiscal year '26.

And in terms of the -- the last question was about the development, right, and the EUR 1.7 billion. Clearly, this year, as I said it in my introduction, financial year '25 has been a challenging year and on new development, especially in the second half, we had a first -- a good start in H1. And what we see -- and the second half was very disappointed.

What we see is that, for example, in the U.S. our hit rate with big contract is not sufficient. I think we are doing well in Healthcare, and we had a good net development. We had, as I said, a good retention in Healthcare in the U.S. this year, but we also had a good development. So a net development above 2% in Healthcare in the U.S.

We have invested for a while in those teams. We have teams that are capable of addressing and winning a large contract. And we are in the process also of building and strengthening those teams in the U.S. in the other segment. But that being said, there are countries or geography where -- like France or like Australia, where we are winning market share and where we have a good net development rate. So we need to make it happen everywhere.

And that last qualitative target that you didn't explicitly say, the 10% of revenue from digital and new services. Did you achieve that in '25?

I'm not sure I understand your question.

I think in your qualitative target, you had doubling Entegra, and you had reaching 50% branded offers, but you also had a target to reach 10% of group revenue from vending and digital and new services. So I just wanted to check if that one was on track as well.

On that one, we are slightly below this 10% objective we defined at the beginning of the...

8%.

Yes, we are around 8% in terms of covering of -- from advanced food model.

Next question is from Simon LeChipre, Jefferies.

I've got three, please. First of all, on organic growth for next year. Could you clarify the timing of the demobilization of the global accounts and also the timing of the -- impact of the reclassification of the contract? I don't quite get why organic growth should drop from 4% underlying in Q4 to kind of 1.5% in Q1, and then how you would then accelerate in subsequent quarters.

Secondly, on this contract reclassification, could you clarify if there is any impact on profit and on margin in percentage terms? And lastly, in terms of the organization, I mean, I noticed that Michael is managing Government Services on top of universities. What is the rationale for this? And does that mean you do not necessarily believe in a strategy focused on sectorization similar to what your closest competitor is doing?

I will take the first one. So regarding the timing of demobilization of the global account, if you look at the one we lost in fiscal year '24 and the one we lost in fiscal year '25, basically, the overall impact for fiscal year '26 is minus 50 basis points. And it's -- combining both, it's similar impact between H1 and H2.

Regarding the reclassification of a large contract in North America. So here, we are talking about a preemptive renegotiation and to extend, the duration of this contract. As I said, we -- given the new term of the contract, we moved from gross revenue to net revenue. And overall, we are renegotiating the economics of the contract, and we are not expecting any significant impact in terms of margin, in terms of [ UOP ] margin.

And on the third question on organization, it -- why is it together? Because it has been historical. The person that used to be in charge of Government then extended his role to University.

Yes, of course, we are doing market sectorization. It's the only exception. I want to remind you that for us, Government is not a priority. It only represents 4% of our revenue and with a huge contract that you know, U.S. Marine Corps. And so it has been part of that portfolio. And I don't think it's -- it doesn't affect the bandwidth of -- that Michael has to put on universities. And just for the U.S. Marine Corps, because it's the biggest part of that Government business, it still runs for another 18 months. And we are working proactively to -- we expect the client to launch an RFP , but we are fully engaged in the process and also -- yes, fully engaged in the process.

And I will go back to your question -- sorry, I'll go back to your question about Q4 underlying versus the guidance in terms of organic growth. We have to keep in mind that Q4, the mix and the weight of Education is lower. So it means that this had a positive impact in our Q4 organic growth. It will not be the same for the full year '26.

And also, we had a very strong Q4 fiscal year '25 in Sodexo Live!, with a more than double-digit organic growth in the U.S. with some specific events. And this will not obviously reproduce the full year '26. We will not have 10%, double-digit organic growth in Sodexo Live! during the full year '26.

Okay. Just on this impact of contract reclassification, I mean, can you quantify it? And is it going to impact you as soon as Q1? Or does the impact start later on in the year?

Okay. So we are currently, again, under renegotiation of this contract. Again, it's a preemptive extension of the contract. Today, we are expecting to sign the renewal of the contract in Q2. So the impact will start in Q2 fiscal year '26, and it will impact negatively the organic growth by 70 basis points for fiscal year '26.

So it means that you need to accelerate organic growth after Q1 to offset this impact on top of the rest, right?

Yes. And that is the plan, again, with some ramp-up of development. And again, this phasing of Sodexo Live! will be quite different between fiscal year '25 and fiscal year '26.

Next question is from Leo Carrington, Citi.

If I could ask just two questions. Firstly, I appreciate he doesn't officially start for 3 weeks, but did Thierry Delaporte have any input into setting this guidance?

And then secondly, just on the margin outlook again. In terms of the factors pushing margins down mix phasing investments, is it correct to say these are all headwinds? And in terms of the relative importance of all three of them, is one more important than the other? The investment sounded significant, but I wonder if you can quantify that.

So thank you, Leo, for your questions. I will take the first one. So regarding the involvement of Thierry, of course, we had a few preliminary discussions with him. But I remind you that he's only starting on November 10. And however, the financial year '26 guidance reflects the work of the current team. It's also the result of a bottom-up approach based on the visibility we have for the year.

Okay. And on the investments, so we are not providing any specific quantification at this stage of each investment. We'll do it in another time, I would say. And again, there are moving parts on this timing of the investment. It's the reason why we said that, again, it will have [ this ] negative impact in terms of margin for next year.

Next question is from Kate Xiao, Bank of America.

I have a couple. The first one is a follow-up on the previous question on branded offer. You mentioned, Sophie, that now the first step is done, and you need to go deeper now. I wonder if you could elaborate what that means? Do you mean a further, I guess, change of the organization, change of the team so that it's more brand focused, more sectorized? And would this be a big task for the new CEO? That's my first question.

And the second question also on just investment. I think, Sophie, you mentioned before for fiscal year 2024, you spent more than EUR 600 million on IT, data, digital. I wonder what that number is for '25? And do you see a step-up in '26? If you could just -- obviously, I appreciate you cannot give us exact numbers, but the level of step-up would be really helpful.

And then just number three, specifically on retention. I think you mentioned that you're doing preemptive renegotiations with big contracts. I guess, any progress there? Are you doing more in terms of preemptive retention -- preemptive efforts to help really with retention? If you could elaborate on the efforts there?

Okay. So I will take the first question on the branded offers. I think it's a work, as I said, that started a couple of years ago. And when I mean go deeper, it's that -- for example, we are implementing in Education a brand that -- are -- one and all brand, it's close to EUR 1 billion of revenue, thanks to the active conversion of the sites during summer break. Now it's our largest brand globally and regionally. So it means that now the team have adopted the brand, but then we need to make sure that the implementation is happening right, that the right recipes are implemented, that the right menu, the right products.

And it's by -- when I mean go deeper, it's making sure that operationally, it happened on each and every site the way it should happen. That's why I explained that, for example, in the U.S., where -- when you implement a brand, like I just said for University, it implies a lot of people. We have also added for every single manager the compliance because that's what will improve the margin and the profitability on those sites.

And then about Thierry, of course, he will make his assessment of the situation. But definitely implementing the brands and not just putting names but an offer with -- that matches the client and also especially the consumer needs with price points, more standardization, less SKUs, better leverage on our purchasing powers simplifying the bid process. All that takes time, but it will definitely help us make progress.

Maybe, Sebastien, you want to answer the second question?

On the investment in IT and digital, based on all the ongoing program, we have been increasing our investment if you take OpEx and CapEx in fiscal year '25 compared to fiscal year '24. And again, with this acceleration of our transformation with the ERP, with the finance supply platform, the food platform as well, AI and data, again, this amount will continue to increase for fiscal year '26.

And in terms of retention, as we said, we have made progress, and there are areas or countries where we are fully aligned with our targets, to be above 95% and at some point, in midterm, at 96%. And on the preemptive bid, yes, we are pushing. I don't have the exact number with me today, but we can get back to you. And we are definitely pushing, and it's something that we want to make happen, as I said, not just in some geography, but all geography and all segments, especially in the U.S.

Next question is from Sabrina Blanc, Bernstein.

I have three questions from my part. The first one is regarding the branded offer. I would like to have more idea of how it has been organized. I mean, who has designed the brand, who is in charge of the leadership of the brand?

My second question is regarding -- you have mentioned the hiring of commercials. I would like to understand in which areas specifically, if it's regarding the GPO for new commercial? Or is it commercial dedicated to the retention? And are they incentivized in these three key segments?

And lastly is regarding the M&A. You have mentioned bolt-on acquisition, but we would like to understand in which areas you are focusing and what are your KPIs?

Okay. Thank you, Sabrina. So for the branded offers, for example, I just discussed, all in one, in the Education market in the U.S. This brand has been designed one and all -- sorry, in the U.S. in the University business. It has been designed by the team in Universities and getting some support from the North American marketing team. There are some brands like Modern Recipe where we have -- that we have implemented in different countries, in the U.S., but also in Europe. And there, we have a center of expertise at the group level, so we can accelerate the share of best practice between countries.

And -- but it's the countries that are responsible for growing the brand at the local level by segment because, of course, those offers are different what we propose, an indication is different from what we propose with a Modern Recipe or Good Eating Company in corporate services, even though sometimes Good Eating Company, if there is a need, could also be proposed on a campus. But the brands belong where most of the revenue happen with that brand.

On the second -- your second question about commercial: in which area specifically? Well, in all areas. Now we hired a number of salespeople with -- in the GPO and in our Entegra business and especially in the U.S. But we also hired -- as I said, we want to increase our sales team. And we have increased our sales team, I think, in the U.S. by 30% this year.

And how are they incentivized? We have changed the incentive for our sales team. And we have revamped our sales incentive structure. Previously, it varied by region and wasn't always linked to the individual performance or profitability. Now we have a global commission that based system with a consistent rule across the region. It includes clear threshold and accelerators for over-performance and staggered payouts to ensure quality and overs.

And we also -- we have also added specific incentives for renewals, cross-selling and strategic priorities. So in terms of sales incentive, we have worked a lot. And now it's really rolling out, and it's really implemented for fiscal year '26, but we have really worked a lot on making sure that we have the right incentive and also the right teams. We have changed a number of people in our sales team.

And to the third question regarding M&A. So we have a very clear strategy regarding M&A. We want to invest in food. We want to invest in our existing markets. And then we have done investment in GPO, especially in Europe over the past year and especially in France in fiscal year '25.

We are also investing, and we have been investing since 2022 in convenience in the U.S. So here again, we are talking about small, midsized bolt-on acquisition, very important to get the scale and the efficiency with the supply. And then we want to invest in also a key market on food, again, market share in the U.S., in Europe, also in the Rest of the World, but again, focusing on our key existing markets. A good example is the acquisition, the signing of Grupo Mediterránea in Spain. It will allow us to double our footprint in the Spanish market.

And also, we can also do some small acquisitions to gain capabilities in advanced food models. It can be also linked to commissary and central kitchen capabilities. And in terms of indicators, [ LGO ] payback, we look at the [ LGO ] payback below 10 years. And we looked at the ROCE and the objective is to have a ROCE above 15%.

Next question is from Andre Juillard, Deutsche Bank.

Just a follow-up on investments in general. Could you give us some more color about what you plan to do in terms of IT and reporting software? Do you still have some significant investment to do on that side? And could you give us some quantification on that? And regarding CapEx, you remain relatively low with 2% compared to your main competitor. Do we need to anticipate a significant improvement on that side or not?

So I will start with the CapEx. So you are right. Today, our CapEx level is around 2%, fiscal year '24 and fiscal year '25. The objective is really to reach 2.5% with, I would say, two main components. The first one is supporting retention and development. So we need CapEx to sign large deals. And as we said before, this is one of our priority. And then we need also CapEx for the -- our investment in IS&T and digital, especially for our ERP program. So this is really the reason for the targeted increase in terms of CapEx.

And just to add to what Sebastien just said, in terms of CapEx, as I said -- and as I said also earlier, we want to sign more large deals, and we want to improve our hit rates on large deals. So the way that happens, the large deals are the one where we spend more money. And the fact that our hit rate has not been as good as expected explain also the fact that our CapEx today is closer to 2% than 2.5%. So hopefully, when our hit rate with those big targets improve, it will have an impact also, and it will automatically increase the percentage of our CapEx, and we will get closer to 2.5%.

But you still consider that 2.5% is the right number?

Yes. Well, we have been talking about 2.5% and still staying at -- so far now, we really want to reach 2.5%. And if you know, some specific deals that sometimes it happens in Sodexo Live! or in Universities in the U.S., if we need to go beyond, we will go beyond but not systematically.

Next question is from Johanna Jourdain, ODDO BHF.

Two questions from me. First one, could you please remind us the level of renewals in large contracts to come in '26? And can you update us on where you stand there on those renewals? And second question, can you update us on the ramp-up of the Healthcare contracts that were delayed in '25 or late to start and in particular, the captive contract in North America?

So thank you, Johanna, for your question. So the level of renewal for the large contract, I think you're talking about the GSA contract because last year, we had -- in fiscal year '24 and '25, we had a big number of those GSA contracts in renewal. And today, this fiscal year, we don't have any. So there will not be any renewal of those large contracts and a very small number also for fiscal year '27. The contract that we discussed earlier is not -- it's not a global account. And so that's for a clarification on those large contracts.

And then for captive, first, last year, we talked about the ramping up of Healthcare and especially that contract. We have had two big contracts in Healthcare, ProMedica and University of Cincinnati that started in June and July. So there, we are on track. And as I said, we had a very good net development for Healthcare during the fiscal year '25.

For captive, during the first year, as I remind you, it was a very innovative contract. And the first year, we spent more time and focus than anticipated in evaluating the existing client for the transition into the captive program. And this led, as you know, to a slower-than-anticipated ramp-up of new business. We signed the very first contract with captive members at the end of financial '25. Currently, we are negotiating with a significant number of clients. The pipeline is well advanced and robust. And our objective remains unchanged to sign over EUR 100 million in contracts within the first 2 years of the program. But since the launch was shifted to the end of fiscal year '25 instead of the beginning of '25, our target is now to reach EUR 100 million in signed contracts across '26 and '27.

We have no further questions registered at this time. Back to Sodexo for any closing remarks.

Well, thank you very much for your question. And as this is my last call as CEO, I would like to sincerely thank you for all your -- for your engagement and your constructive dialogue over the years. I remain deeply confident in Sodexo's strength, and I look forward to continuing to support the company as Chairwoman. Thank you very much, and take care.

Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.

Good morning, and thank you for standing by, and welcome to the Sodexo call this morning. [Operator Instructions]

I advise you that this conference is being recorded today, Thursday, the 9th of October 2025. I would now like to hand the conference over to the Sodexo team. Please go ahead.

Good morning, everyone, and thank you for joining us on such short notice. I'm Juliette Klein, Head of Investor Relations. Joining me on the call today is Sophie Bellon, our Chairwoman and CEO; and Gilles Pelisson, Independent Board Director, Chair of the Nominating Committee. After their opening remarks, we will open the line for a few questions. We kindly ask you to limit the number of your questions and keep them focused on today's topic. Finally, a reminder that fiscal 2025 results will be announced on Thursday, October 23. With that, I now hand it over to Sophie.

Thank you very much, Juliette. Good morning, everyone. And yes, thank you very much for joining us this morning. Yesterday, the Board approved the appointment of Thierry Delaporte as Chief Executive Officer of Sodexo, effective November 10. Following our announcement, we felt it was important to give you additional context today around this key milestone in our company's journey. This decision is the result of a governance process the Board has been working on for some time.

And 4 years ago, when I stepped into the CEO role, our priority was to complete a deep transformation and reposition the group as a pure-play food and services company. Having completed this transformation, we are now entering a new chapter for the group, one, that will focus on commercial acceleration and operational execution to unlock the full potential of our business. We operate in a dynamic expanding market. Our business model is resilient, and we provide essential services, benefit from recurring demand and generate strong cash flows. We also have the financial flexibility to reinvest in growth while continuing to deliver value to our shareholders.

We have made significant progress, yet our performance remains below our expectation and not up to the potential of the market. The bridge that gap -- the bridge to gap -- to bridge that gap, sorry, we need the right leader to take the company forward. I'm very confident that Thierry is that leader. Upon his arrival, I will serve as nonexecutive Chairwoman of the Board, working closely with him to ensure a smooth transition. Thierry will be fully empowered to make decisions, set his own strategy priorities and evaluate the organization. I will now hand over to Gilles Pelisson, Independent Board of Directors at Sodexo, Chair of the Nomination Committee and who also will become our new Lead Independent Director from November 10. Gilles will say a few words about the process that led to this important nomination.

Thank you, Sophie, and good morning, everyone, and I'm very pleased to join you today and share a few words about this important deployment. I would say as President of the Nomination Committee, I had the privilege to lead thorough and structured process, working closely with the Board to ensure we identify the best profile for this role. We hired a leading executive search firm, assessed both internal and external candidates.

We were looking for someone who had already led, of course, a publicly listed company in an international environment. Somebody who knows the U.S. market quite well, given the size of the business of Sodexo in the U.S. Who has driven major transformation while delivering results in fast-changing environment. And somebody who could bring a strong B2B services background with a strong client-centric mindset. Somebody also accustomed to leading large organization, we're talking about over 400,000 people at Sodexo, with sizable workforces. And finally, of course, somebody who had worked, if possible, in a family ownership structure because this is one of the characteristics of course of Sodexo.

So from a very large number of people we screened, Thierry Delaporte stood out as the clear choice. He has spent more than a decade in the U.S., holding senior CFO and CEO roles at Capgemini. And then over the 4 years, where he was the CEO of Wipro, about half of the business of Wipro was generated in the U.S. So he spent a lot of time there. He knows that market very well. He brings also proven experience in a large-scale company transformation, including the strong IT, digital dimension, highly relevant, we believe, to Sodexo's future necessity to improve data, mining and AI.

He has also extensive B2B experience, driving international and people-intensive businesses. His leadership style combined strategic vision, operational discipline and the ability to inspire and mobilize team. And of course, beyond these credentials, Thierry embodies the values we hold dear at Sodexo and we inherited from Pierre Bellon, humanity, openness and responsibility. His ethical standards and transparent approach are a strong fit with Sodexo's culture. So Sophie now, I will hand it back to you to wrap up.

Thank you very much, Gilles, and thank you for your involvement in this very important process. The timing is right for this transition, and I'm convinced of our ability to succeed with our talented teams and resilient business, Sodexo is well positioned to keep evolving with intent and to embrace the future with clarity and ambition. So I also -- yes, I really want to thank everyone who contributed to this process and especially who was very much involved. We are now happy to answer your questions.

[Operator Instructions]

The first question is from Jamie Rollo, Morgan Stanley.

First question is, could you just confirm that 2025 is in line with your guidance? And are you still expecting to provide some guidance with the 2026 results -- sorry, 2026 guidance with the results next month?

And then just on today's discussion, are you expecting the new CEO to do a review of the business? And if so, how long might that take? And then finally, you talked about new commercial acceleration and better operational execution. What sort of needs to be done, do you think, to get there? Do you think margins need to be taken down with further reinvestment?

So regarding business performance in fiscal year, we are referring to the guidance framework we gave in July. And and that's it. Today, is not a call. We are in a quiet period. We cannot give any information on guidance on results. It's about the CEO nomination. And same thing for the financial '26 guidance. We cannot discuss any of that today. And it will be part of our call on the 23rd.

So the review of the business of the new CEO, yes, of course, he will be -- he will start -- he starts to have a meeting today actually with a member of the team. So even before he starts his role on November 10, he will start getting to know the team and visiting the team in countries. He will start on November 10. And of course, as a new CEO especially one coming from outside with his expertise, and he will take a few months to make his own diagnosis. And I think we -- he will be able to come back to the market before in the spring or in June in '26.

And on the fourth question, on the new commercial acceleration, it's -- it is a continued intent. When I took over post COVID, the net development was negative and had been negative prior -- not because of COVID, but prior to COVID. Since then, I think we have made a lot of progress. We are doing a very good job in Sodexo Live!, in Australia, in India, in Brazil, in France.

We have done a good job also in hospital this year in the U.S., but there are still some countries where our net development is 2 weeks, some countries in Europe, in the U.K. also, it's a little weak and some segment in the U.S. that we have already discussed with you before, like education.

Yes. It's a call on the government. So I'm just repeating what was already said before, but let's meet in 2 weeks to discuss the results.

And apologies for asking that question. I was just wondering how you could guide on next year if the CEO subsequently went on to take action that could affect that guidance, but I understand.

The next question is from Jaafar Mestari, BNP Paribas Exane.

I just wanted to come back on the selection process, please. And in terms of it's how would the Board presents the track record of Mr. Delaporte today, he spent some time at Capgemini. He then led Wipro, which you mentioned. I don't think anyone on this call is in IT services experts, but it looks like Wipro was a story of catching up with peers and accelerating growth and reweighting to maybe large, larger clients, a lot of these themes will be familiar with -- for people at Sodexo. I guess, how do we assess the track record? And what were the main achievements in these mandates that made Mr. Delaporte the right fit, please?

Well, maybe I will take this answer. I think we -- the way we look at it was really that having been for 20 over years, at Capgemini in the leading team under Paul Hermelin, he was like a #2, but in charge of very large businesses. He accomplished the booster plan, which was really when Capgemini decided to stay in the U.S., which was a major and significant move for them at the time where they really were asking themselves whether they should pull out or not.

So building on this, we are talking about somebody who has tremendous experience coming from a more of a CFO background and moving into sales. We discussed with him and we saw how client oriented he is and over the recent years, he has really been involved both in Capgemini and in Wipro with clients and being very, very just focused on client development.

At Wipro, my understanding and the read we made was that -- it's one of the IPPs. He took it. The company was like at $8 billion in sales, took it to $11 billion. So significant improvement between '20 and '24, growing the sales, upgrading the management team, internationalizing the team. So making sure that Wipro could evolve part of the 5 or 6 IPPs and really make a significant jump ahead under his leadership.

Under his leadership, not only the sales grew up, of course, the workforce went from 150,000 people to 250,000 people and the market cap was doubled. These were significant achievements that as the Board, we assessed to be a tangible transformation performance that we like very much, which may be very relevant for Sodexo because we know that in general, assume the previous question, there is certainly to be a focus on margin in the future. So targeting excellent performance in margin delivery.

And of course, also the consolidation of certainly the IT is an issue. We know that we need to invest in those -- in this field. And with his technological and digital background, we think it will be a real help.

The next question is from Estelle Weingrod, JPMorgan.

I have 2 questions, please. The first one, I just wanted to understand when did the process start. And also, again, on his background, could you tell us more about his U.S. expertise and what it can bring to Sodexo's overall competitiveness, more specifically? Or is it more about him having worked in large organization in the same region before?

So thank you, Estelle, for your question. For -- the process really started quite a few months ago, I'm not going to give you -- but early in the year. So it has not -- it was very much -- something very much planned. And why that? Because when I took over as a CEO post-COVID, I really took over to make some structural milestone changes and I think it's what happened in the last 4 years with the spinoff of Pluxee in February '24, with the simplification of the shareholding structure the last summer, also an active management of the portfolio, selling the TieCare business, selling the home care business, rationalization of the country, we also -- as soon as I took over, I simplified the organization changing from business world, a business unit segment organization to a country-based P&L and we worked on the operating model.

We refocused on food and accelerated on food and also other services, but a strong acceleration of food. We did some investment in our brands, in our tech and data in the supply chain. So I really think that the big structural changes that needed to happen, happened during those 4 years. But now we realize that '25 is the end of the cycle. We have a 3-year plan, '22-'25. We are launching -- starting a new phase and with the Board, with the family, with the Nomination Committee, we anticipated that new phase and that's why we decided to launch that process.

And as Gilles said, we look for internal candidates, but very quickly, we didn't think that internally, we had anyone ready for this role. So that's why we quickly looked outside. And really, I'm very confident that Thierry is the best person to open this new chapter. And I can tell you that personally, I will really change my hat and become the non-executive Chairwoman and he will be fully empowered to continue the journey, make his own diagnosis and build the best team around him.

And maybe, Gilles, you can answer on the U.S. expertise.

Yes. For having discussed with him extensively and myself having lived in the U.S. for 8 years, he knows very well the U.S. in terms of geography. It's not the same thing doing business in Texas and in California or in New York City. He knows the U.S. business structure, the way corporations make decisions are organized, et cetera, even the administration also, although it's changing a lot recently, but he has this approach, so he is not going to have a long learning process to how to do business in the U.S. environment.

And as you know, Sodexo's business in the U.S. is very diversified, goes from universities to health, to corporate to Sodexo Live! with lounges, with managing Stadium. So we wanted somebody who was able to take over quickly, had a good grasp on the business, and then lead the team in a significant way because this is important for the company and important for our growth.

So this is why we felt very much at least with his knowledge, capitalizing on experience with Capgemini and also with Wipro.

The next question is from Leo Carrington, Citi.

Can I ask two questions. Firstly, what was Mr. Delaporte's rationale for leaving Wipro? And then secondly, the release does draw attention to his acquisition experience. Does that suggest more of a focus for Sodexo on M&A?

I'm sorry, we didn't hear your first question, Leo. Can you repeat, please?

Yes. Sorry, the first question was just around his rationale for leaving Wipro in 2024.

And the second?

On M&A.

The second question is, the release does draw attention to his M&A experience. Is it indicative of more of a focus for Sodexo or just highlighting what his experience is?

Yes. So first, on the rationale for leaving Wipro, I don't think it's something that we want to answer. But what we know is what he has done there. And what we know we have done there is that he has been transforming in 4 years. He has been transforming significantly the company. As Gilles said, he also increased the revenue by 40% in 4 years, which is significant, and he doubled the share value of the company, the capitalization of the company also in 4 years. So he has -- and that's what matters for us.

And also, as Gilles said, coming from a tech background, transforming organization and having done it with many clients, I think we will -- in the journey, we are going through at Sodexo. It will be very helpful to get that expertise. Then on M&A, when I first took over, clearly, I said M&A is not a priority. But since then, you heard us with Sebastien, we said that now it's time to go back to M&A to increase our market share, work on -- also be more present in convenience, especially in the U.S., also look for the right targets in our GPO business.

So we have a clear capital allocation that reflects our near-term needs at Sodexo. You've seen that we just announced quite significant acquisition in Spain, where we are going to double size and become #1. And we continue to have an active pipeline. As I said a year ago that now we were more ready for M&A, and he will, of course, make his own diagnosis and on that topic.

My understanding was that at Capgemini, there was a lot of M&A activities. So we wanted somebody with that kind of agility so that if we have opportunities to do so, it could be familiar with the process and the way we could handle those situations.

The next question is from Karl Green, RBC.

I've just got 1 question. If Thierry identifies a scenario where more radical action is the most logical strategy to close the performance gap versus the market. And I'm thinking, for example, accelerated contract shedding investments into sales, account management technology, et cetera, possibly large-scale M&A, would Bellon SA contemplate taking the group private moving to and voting or economic minority?

We did not hear you very well. Can you speak a little louder because we -- I'm not sure I heard very well the question.

Yes, apologies. Can you hear me a bit better now?

Yes, a little better, yes.

Okay. The question was, if Thierry identifies a scenario where more radical action is the most logical strategy to close the performance gap, would Bellon SA contemplate taking the group private and moving to a voting or economic minority.

Yes. I think the good news here is that we manage as independent directors to have an ongoing discussion with the Bellon family and a good understanding what was right for the company and for the group. As major shareholders, of course, they are the most interested in the success and the growth of the company. And of course, they are not satisfied at this stage with our recent performance, especially on the share side. So making sure that Thierry is in an environment where the decision and the -- whatever he wants to implement in the company can really happen is key to everybody.

And as Sophie mentioned, she will step down as a non-exec Chairwoman. And we are going to make sure that we have a new governance, which can function and operate in the best interest of all shareholders. So I think this is what you should keep in mind that have definitely the intent to put in place that kind of governance to make sure that we can deliver results and that if he needs to take whatever actions he recommends and that we agree, it will have the full support of the entire Board, including the family.

The next question is from Kate Xiao, Bank of America.

Two from me. First, just if you could elaborate on kind of the task that the Board has given to the new CEO in terms of time line and geographies. You kind of mentioned earlier that you expect him to kind of first come to the market after the initial diagnosis in about 6 to 8 months, around June. But I just wonder, what's the kind of multiyear time line like with the task? Is there a time limit to the term of the CEO? What is he looking to accomplish in the first couple of years, if you could lay out that time line?

And in terms of geographies, we've talked a lot about the U.S. It sounds like that's where he has a lot of expertise. Is it going to be based in Europe or the U.S. And so what are some of the other geographies that you also focus on? And kind of -- I guess, what are the priorities there?

And then my second question is, I think one of the things he was known for when he was CEO at Wipro was he was making big and bold moves, transforming the organization, which is exactly what Sodexo needs. He was also more focused on growth than margins. So just wondering if that's the thinking of the company now that you're willing to kind of be focused more on growth. You talked about investments, but maybe the thinking of investing growth and then margin will come later.

Yes. We are really looking at profitable growth, so to speak. So it's growth, but combined with profitability and margins. To go back to your first question, I think we -- what the board is looking at, and this is also going to be fine-tuned in the coming months. As Thierry goes around the world and discovers, meets the team and sees the challenges, et cetera, but it's really about setting up a very strong ambition to strengthen our market share because we have been losing some in the past month. So we have to be really on top of that. Mobilize the right leadership team, which has anybody who joined a new team, I'm sure he will make his own assessment and his own choices, accelerate the commercial momentum because this is critical, of course, as Sophie mentioned, and she has always been very focused on that, what is called in Sodexo language, the new development, reinforce disciplined operational execution to improve margins.

So that's really your question. And this is really something where we all believe there is margin for improvement. And it's based on the systems, it's based on the discipline, on the execution. And we do believe that Thierry can bring something here, which will be important. And then, of course, regarding geographies, I think definitely the U.S. needs to be addressed. Maybe there are some other geographies that you have in mind.

As I said, I think we are doing -- we are performing well in the U.K., for example, in terms of margin. But definitely, we need more development. We need more growth, more new contracts, certain countries in Europe, but I think that we can discuss in 2 weeks because it's not the topic of the -- it's not the topic of the day. Then I think you asked where will Thierry will be based. He will be based in Paris, but he also has a room in the U.S. So he will travel very easily to the U.S. And I think that's it.

Gentlemen, there are no more questions registered at this time. I turn the conference back to you for any closing remarks.

Okay. Well, thank you very much, everyone, for joining the call today. Don't hesitate to reach out to our investment -- Investor Relations team to Juliette and her team. If you have any follow-up questions, and we will speak again at the fiscal year '25 results on Thursday, October 23. Thank you again, and have a very good day.

Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.

Good morning. Thank you for standing by, and welcome to the Sodexo's Q3 Fiscal 2025 Revenues Presentation. [Operator Instructions] I advise you that the conference is being recorded today on July 1, 2025.

At this time, I would like to hand the conference over to the Sodexo team. Please go ahead.

Good morning, everyone, and thank you for joining us today. I'm Juliette Klein, Head of Investor Relations, and I'm pleased to welcome you to our Q3 fiscal 2025 revenues call. On the call today is CFO, Sébastien de Tramasure, to take us through the presentation. After Sébastien's remarks, we will open the line to take your questions. We ask you to please limit yourselves to 2 questions and 1 follow-up.

The slides and the press release are available on sodexo.com, and you'll be able to access this call on our website for the next 12 months. The call is being recorded, but may not be shared without our consent. Please get back to the IR team if you have any further questions after the call.

With that, I'll now hand over to Sébastien.

Thank you, Juliette, and good morning, everyone. Welcome to our Q3 fiscal '25 revenue presentation. And let me start by saying that our third quarter performance is in line with our expectation. Back in April, when we presented our first half results, we shared a detailed view of the underlying dynamics, notably the softer performance in some areas of North America, contrasting with better trends in others. And our third quarter performance reflects a continuation of these dynamics. We also began to see early contribution from key contracts won in H1, while experiencing a softer selling season in Education in North America.

Now let's begin with the headline figures on Slide 3. Group revenues for the third quarter reached EUR 6.1 billion, up 0.8% reported. Currency effects remained negative at minus 2.1%, largely due to the depreciation of the U.S. dollar and some Latin America currencies. Scope effects were limited at minus 0.2%. And organic growth came in at plus 3%, in line with expectations. And just for reference, organic growth for the first 9 months of the year stands at plus 3.4%.

Now let's look at some operational trends by geographies. In North America, third quarter organic growth was 1.2%, slightly above Q2, as expected. Pricing momentum remains healthy, and new business is contributing. However, prior period contract losses continued to weigh on growth, mainly the major global facility management contract lost last year and, to a lesser extent, some losses in Education.

Business & Administration is benefiting from the ramp-up of new business, even if this is partially offset by the impact from contract exit linked to prior period losses. Sodexo Live! continued to perform well, with growth supported by higher passenger volumes in airline lounges.

Education showed a slight improvement, helped by favorable calendar days and extra campus activity, but it's still affected by past contract exits. Healthcare & Senior is solid in Healthcare in the U.S., thanks to pricing and scope gains, but impacted by site losses in Canada and in Seniors. So overall, we are seeing some contribution for new business and healthy pricing while continuing to absorb the impact of prior period exits.

That said, our recent sales and retention season in universities was below our expectation. A few large client decision went against us, which will have an impact on Q4 and on our organic growth trajectory into fiscal year '26. We have taken a hard look at what happened. It comes down mainly to 2 things, market dynamics, including some competitive pressure on mix, and turnover within client organization, which has disrupted long-standing relationships.

In parallel, we are still working hard on internal initiatives, and we are pushing to accelerate the outcome on this area. And looking ahead, fiscal '26 will require disciplined execution and focused leadership as the university segment continue to face a more complex operating environment. We have a renewed leadership team in place, and we remain committed to investing and growing in this important market.

In Europe, organic growth of plus 3.3% improved compared to the previous quarter, with clear momentum in Healthcare & Senior across the board and solid activity in Sodexo Live!, which benefited from strong volume in the U.K. airport lounges and stadium as well as the robust tourism activities in France.

In Business & Administration, growth was driven by pricing and new site openings. However, this was partly offset by softer volumes, reflecting broader macro headwinds and the impact of contract exit.

Education remains slightly positive overall, thanks to pricing, but continue to reflect the impact of low-performing contract exit from prior year. So while the external environment remained mixed, we are seeing encouraging sign in several segments and remain focused on execution and commercial delivery. We have successfully renewed several contracts in France and in the U.K., and our mobilization of our midsized contract opened in April is progressing well.

Rest of the World continued to deliver a solid organic growth of plus 7.5% this quarter, driven by strong performances across key geographies. India, Brazil and Australia all contributed meaningfully. In Australia, the successful mobilization of the Santos contract during the spring was a clear highlight, with excellent client feedback regarding service quality, professionalism and execution under challenging conditions. So altogether, a solid quarter for Rest of the World, with balanced growth across segments and regions.

As a reminder, in April, we guided for full year organic growth between 3% and 4% and underlying operating margin improvement of 10 to 20 basis points. With 2 months to go and given the improved visibility on recent business trends, including retention dynamics in the U.S., as mentioned earlier, our current expectation is to land at the lower end of the range for both organic growth and margin.

And please keep in mind that fiscal '25 includes a base effect of around 50 basis points from the nonrecurring positive item in the prior year. And for Q4 alone, the year-on-year comparison would be affected by 120 basis points contribution from last year Paris Olympics.

And as usual, you will find our assumptions for items below underlying operating profit in the modeling slide in Appendix 4. And please note a slight change compared to last quarter. Other income and expenses are now expected at around minus EUR 160 million.

Overall, we continue to navigate a more complex environment, and we are working with our teams with discipline and agility to monitor closely our operation and to implement the right changes where needed, with a clear focus on execution and client development.

So thank you for your attention. I'm now ready to take your questions.

[Operator Instructions] The first question is from Julien Richer of Kepler.

Two questions for me, please. The first one, if you could give us a little bit more detail on your Q4 implicit growth because you -- so you initially expected Q4 to be above Q3. So now it seems that it's going to be below. And if I take the low end of the 3% to 4% range, it means that Q4 might be below 2%. And can you please give us the impact of retention and impact of development in Q4?

And then the second question on 2026. Any guidance you can give at this stage or any color you can give at this stage in terms of the evolution of retention rate and the evolution of the like-for-like, so the net new business and like-for-like for next year, please?

So thank you, Julien, for your questions. So first, regarding Q4 on organic growth. So again, keep in mind that we'll have a negative impact from the Olympics for around 120 basis points at the group level. So -- and excluding this Olympics impact, we are expecting to have Q4 underlying organic growth being slightly above Q3 as expected, with a higher impact coming from the net new contribution.

To your second question, so as you know, we will not guide on fiscal year '26 at this stage. And the full fiscal year '26 guidance will be given when we report full year results at the end of October. But I can share some color about expectations for '26.

So based on our current visibility, in-year net contribution from fiscal year '25 will be relatively modest. And as a reminder, this will be impacted by the loss of the large global facility management contract and recent losses in Education as I said earlier. But the good news is that the commercial momentum remains strong, and we have a very strong pipeline. But the conversion into revenue will be progressively, during the year, as usual.

And then the overall fiscal year '26 will depend obviously on inflation trends and on the broader macro environment, and both will play a key role in shaping the year. And again, as I said at the beginning, we'll be in a much better position to share the full year guidance for '26 at the end of October.

And regarding Q4, when you are looking at your ramp-up of recently signed contracts, is it the likes of Santos that was expected to mobilize? And Q3, the Captis contract, is it in line with what you had in mind? Or is it maybe softer than what you initially expected?

As the ramp-up of the major -- I would say, major contract we opened in Q3 is really in line with expectation. We are talking about the Justice contract in France, ESNEFT in the U.K. and, as you said, Santos in Australia, and this will have an impact in the Q4 organic growth. And Captis is not expected to already contribute in fiscal year '25. It will be really in fiscal year '26, even if we sign 2 contracts within the Captis number. But again, the ramp-up and the contribution in terms of organic growth will be progressive in fiscal year '26.

The next question is from Jamie Rollo of Morgan Stanley.

My first question is just, are you seeing in North America any weakness in underlying volumes in either Business & Administrations or Sports & Leisure from the sort of more uncertain economic and political environment in the U.S.?

And then the other one, just again, if I can get back to 2026, I know you're not guiding yet, but consensus has got margin growth of 20 basis points. And obviously, this year, we're going to be more like 10 basis points. And you just talked a bit about reinvestment on the call then. So just really wondering, early days, how you're sort of feeling about margin progression next year.

So thank you, Jamie. So to your first question, when we look at our number in -- for North America in Q3, we don't see any weakness in underlying volume at this stage, neither in B&I or in Sodexo Live!.

And then regarding your second question on margins. So our ambition is clearly to improve margins, but over time. We know our key levers to improve margin and with procurement, supply, better labor management. And in parallel, we continue to streamline both operation and our back-office functions. So this, we continue to deliver in the coming years.

And at the same time, we know that also we need to invest in the business. We will have to invest in sales, especially in North America. We continue to invest in our brand, in our tech, data and digital initiatives. And this will be needed to obviously accelerate our organic growth.

So it's really a balance of leveraging our key initiative, middle-of-the-page and back-office functions to improve profitability and invest at the same time in key capabilities. And again, we'll share a more detailed view of our margin trajectory in October with the full year results.

And just for clarity, that October results outlook, is that just going to be a 1-year guidance? Or will you be giving a multiyear target framework again?

We'll focus on fiscal year '26 guidance at the end of October, and we'll give some color as well on the midterm guidance.

The next question comes from Pravin Gondhale of Barclays.

Firstly, can you give a bit more color or details of net new and volume performance in Q3 and if there has been any change in signing momentum compared to what you mentioned during your H1 call?

And then secondly, I know you don't give retention figures with quarterly results, but can you share some more color on how this has trended since -- has trended in Q3? And is there any lumpiness over the next few months in terms of contract renewals?

So regarding the driver of the organic growth for Q3, so the main driver is pricing being close to 3%. And then the remaining is really small positive with volume and net contribution.

In terms of development, as we said, we have a pretty strong momentum in terms of development. If we look at new contract plus cross-sell, we should end the year around 8%, and we have a very strong pipeline. So overall, we are very happy with our level of development.

And you just -- yes, repeat your third question, if you -- your last question, sorry.

Yes, if there is any lumpiness over the next few months in terms of contract renewals.

Well, as I said, in terms of retention, we are slightly disappointing by the results in Education in North America. But we are not expecting any major rebid and renewal by the end of the year.

The next question is from Ivar Billfalk-Kelly of UBS.

Can you please give us a breakdown of the growth between food services and facilities management. At 2Q, you did highlight that FM was weak in part because of lower project work. Are you hearing from any clients that this could effectively be phasing with a backlog of work that needs to be done that can provide support for future quarters? Or should we actually see that as just a loss growth that won't be recovered in the future?

And secondly, on the pricing, you mentioned 3%. But if I look at the inflation indexes in the America, it seems that food-away-from-home inflation is trending closer to 4%. So what is it that means that your pricing isn't actually able to keep up? And equally, could we actually expect that you should try and recover this to an extent in next year?

Okay. So to your first question, in terms of dynamics between food and facility management, when we look at the year-to-date, we are around 4% for food, and we are around 2% for facility management. So the trend in food remain better than in facility management. And it's the same trend for Q3. We have a higher organic growth in food versus facility management as expected.

Then in terms of inflation, what we need to look at, it's the CPU, food-away-from-home for North America. And when we look overall at the trend in terms of pricing for North America, it's very similar to what we have at the group level. I mean it's a pricing impact close to 3%.

Just follow up on the first question, specifically around project work, I mean, because I understand that was one of the key drivers why FM is weak. Is that expected to recover at any point? And could you see tailwinds from recovery of a backlog that was missed?

Yes. So we are not expecting a major recovery in Q4 regarding project work. So there is no material change in the environment at this stage and remain quite cautious on the budget.

The next question is from Simon LeChipre of Jefferies.

So 2 questions. First of all, are you able to confirm the retention target of above 94% for the end of this year given the outcome of the selling season in U.S. Education?

And secondly, a follow-up on margins. Your updated guidance seems to imply flat margin year-over-year in H2. And I mean, given the kind of lower growth trajectory for next year and the reinvestments you were talking about, I mean, is it realistic to assume some year-on-year margin improvement next year? Or should we be a bit more cautious given the slower growth ramp-up and reinvestment and so on?

Okay. So first question on retention. So on retention, there is 2 elements to keep in mind. First, as I mentioned earlier, the recent Education losses exit that will weigh on the figure overall. And in addition to that, the scope of the large FM, facility management loss we flagged in March is still under discussion. And both effect will have obviously an impact on the retention rate for the year.

So with current visibility and, again, better visibility, especially on the -- in the North America, our expectation now is to be a little below 95%, including the FM loss or above 95% -- 94% -- yes, sorry, a little below the 94%, including the FM loss, or above 94%, if you exclude the large FM loss for the year.

And in terms of margin, so for -- I think that for fiscal year '26, I already answered as a question. And then for fiscal year 2025, as I said, we expect to be at the lower range of our guidance between 10 and 20 basis points.

The next question is from Estelle Weingrod of JPMorgan.

Three questions my side. And the first one, what changed between March when you downgraded the guidance and today?

Second one, North America, what is your organic growth run rate within Education, excluding the impact of favorable calendar and these additional campus event? When will you start lapping contract losses there?

And the last one, very quick one, what's driving the higher other income and expense increase today?

Okay. So to your first question, when we talked to you in April about the new guidance for the year, we believe that we took at what we have in terms of assumption. We believe that it was a reasonable assumption, again, based on the pipeline, based on the client feedback and the momentum we were seeing at that time.

And now our visibility is better. Our visibility is stronger. We are already embedding more discipline in planning, in -- when we look at our forecast. And we'll do that, obviously, also when we'll come to plan our fiscal year '26 outlook. So this is really the main differences between March and today. We just have better visibility on the sales activity and on our underlying assumption.

Then on your second question on the North America run rate, excluding calendar and event. So it's true that Q3 is helped by a favorable calendar impact and some specific event. But if you exclude that, organic growth is negative because we are still absorbing negative impact from the net new from prior losses. And I'm talking obviously about North America organic growth for Education.

And on the higher OIE, well, there is more program in terms of transformation and in terms of restructuring across countries and regions.

The next question is from Jaafar Mestari of BNP Paribas.

I have 2 questions, please. Firstly, on the U.S. Education selling season, you mentioned that you had a number of new losses in U.S. Education since March. It's very unusual for the U.S. Education selling season to come this early in the year while universities are effectively still open. Do you think it's now over? It was all much earlier than usual this year for some reason? Or did we just have a handful of early RFPs, and as we move into July and August, we still have, as every year, a large number of universities that are still to award their contracts for the next fall semester?

And then on the margins, if I calculate what the updated guidance means for H2, it means flat margins, up a couple of basis points in H2. You had some planned ramp-up from cost efficiencies, the shared services centers, et cetera. So is there a very rough bridge to explain that? Is the underlying trend slightly negative, but then you have efficiencies? Or is the underlying trend flattish and then the efficiencies are taking a bit more time or are reinvested?

So thank you, Jaafar, for your questions. So to your first question, I would not say that it's unusual. I mean, yes, we had some RFP. We got the answer very recently. And again, as I said, we are not expecting now any major decision in our case when we look at our portfolio for the remaining weeks until the end of the fiscal year.

And then regarding margin, so again, different driver to explain the evolution of our margin for the second half of the year. We are expecting a slight improvement in terms of margin for the second half versus last year. And there is a combination of different effects. So yes, we are working on efficiency. And I mentioned last time that our global business services program, so we'll get efficiency and margin improvement with this overall program. And then there is some reimbursement as well. And then there is a mobilization cost because when you look at the opening, end of Q3 and Q4, really at the beginning of the ramp-up of the contract, this trigger, obviously, some opening costs that have an impact in our margin.

Next question comes from Neil Tyler of Rothschild & Co.

Just 2 left from me, please. Similarly, on the Education business in North America, do the current selling season experiences reflect probably a negative net new...

Excuse me, Mr. Tyler. I'm sorry, sir. We can't hear you very well. Could you speak closer to the microphone?

Apologies, apologies. Is that better? It is better now?

Yes, it is better, yes.

Yes, sorry. So back to the selling season in Education in North America, does this limit your optimism that you can deliver positive net new for U.S. or North America Education in FY '26? Is that more likely to be sort of neutral to negative net new in that business?

And then second question on Healthcare in North America. The slower ramp-up, does this -- are you still confident that this is a sort of slower progression to the same point? Or do you think it might reflect a lower absolute level of revenue opportunity at those sites?

Okay. So to your first question regarding fiscal year '26, I would say, organic growth trends for Education in the U.S. Again, we'll have different drivers. So we'll have -- yes, we'll have the impact of the new contribution in fiscal year '26 coming from the selling season from -- coming from the selling season in 2025. And yes, based on what I said, will not be positive. Then we'll have also the impact of pricing, and we'll have the impact of volume helping overall the organic growth for Education in North America.

And then regarding your question on Healthcare, we are happy with our performance in Healthcare in the U.S. overall. And we have a very strong momentum in terms of retention and sales. There is a negative impact mainly coming from the losses, prior losses in Senior segment and in Canada. But overall, the underlying trend for Healthcare in the U.S. are really positive.

The next question is from Sabrina Blanc of Bernstein.

Yes. I have 2 questions from my part. The first one is regarding the potential impact of currency on a full year basis. It looks like that you have a negative impact in Q3, which looks like to deteriorate at the end of the year. So can we assume, let's say, minus 1.3% currency impact plus a negative 0.3% scope impact for the full year?

And my second question is regarding the development of GPOs in Europe. You have mentioned an acquisition in France, but can we have more color globally in Europe and specifically in France?

Okay. So thank you, Sabrina, for your question. So on the first one, yes, we are estimating, at this stage, a negative impact around minus 1.5% for the full year coming from the currencies.

And then to your second question on the GPO in Europe. So clearly, the development of the GPO Entegra in Europe is really part of our strategy. We really want to accelerate the growth of our GPO activity in Europe. So the acquisition of Agap'pro we mentioned recently is really fitting within this strategy. We are now in around 10 countries. We are growing and developing pretty well. And we have a pipeline of small and midsized acquisition in Entegra also for the coming period as well.

And just for coming back on the question on change and on the scope effect, shall we assume 0.3% or something like that? [ And are we seeing discrepancies ] in your business?

Yes, the scope impact would be around minus 0.5%, slightly below 0.5%.

The next question is from Andre Juillard of Deutsche Bank.

Two follow-up questions, if I may. First one about reinvestment that you mentioned. Could you give us some more color about the split between CapEx and OpEx?

Second one about the labor in North America. Do you see any tension regarding the actual environment and the politic of the actual government? And what is your forecast for the next few months in terms of wages and if you see some tension on volume?

Okay. So when I spoke earlier about investment, I was mainly talking about OpEx investment at this stage. I mean it's investment again in sales, in marketing to support our brands and in the transformation. Then in terms of CapEx, the objective is to be around 2.5%, and this will help also the transformation in terms of IS&T, and it will help also to strengthen development and retention.

And on labor, well, the labor situation in North America is, I would say, a challenge. There is some pressure on the labor market, not new. And since the change -- the recent change in the politics, again, there is some pressure, but we can manage at this stage, not creating really operational challenges, and we are closely monitoring the situation.

[Operator Instructions] Management, there are no more questions registered at this time. Excuse me, we do have a follow-up from Simon LeChipre of Jefferies.

Yes, a very quick follow-up on margin and the FX impact. Do you expect any negative FX impact on margin given the mix effect and the recent move of the U.S. dollar? Or it should be more or less neutral?

It's very minor, 1 basis points.

Okay. So thank you all for being with us this morning and looking forward to talking with all of you for the year-end results at the 23rd of October. Thank you, and have a good day.

Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.