Good morning, everyone, and thank you for joining us for our Q3 fiscal 2026 revenues call. I'm Juliette Klein, Head of Investor Relations.

With me on the call today is Sébastien de Tramasure, our CFO, to take us through the presentation. After Sébastien's remarks, we will open the line to take your questions.

If you have additional questions after the call, please don't hesitate to reach out to the IR team. Before we start, I would also like to remind you that we will be hosting our investor update on July 16.

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

Thank you, Juliette. Good morning, everyone, and thank you for joining us today.

I will start with a brief overview of our third quarter performance and our updated outlook for the year before opening the call for your questions. As usual, the appendix includes the detailed segment breakdown by geography, as well as the nine months performance for those of you who would like to see the year-to-date view.

In the third quarter of fiscal 2026, Sodexo delivered revenue of €6.2 billion with organic revenue growth of 2% above our expectations. Reported revenue growth included a negative currency effect of 2.5%, mainly due to the depreciation of the US dollar, while acquisitions contributed to 1.4%, mainly from Grupo Mediterránea.

Now looking at third quarter performance by geography. In North America, organic growth was -0.1% or +2.2%, excluding the effect of the contract reclassification we discussed at our fiscal H1.

Healthcare & Seniors continue to perform well. Sodexo Live!

exceeded expectations, driven by a busy events calendar, strong attendance across a number of major sports venues, healthy convention center activity, and continued growth in airport lounges volume. Beyond attendance, we also saw higher spend per guest, reflecting the success of our offerings, innovative concepts, brand partnerships across the portfolio.

These positives were partly offset by the impact of prior contract losses in Education. In Europe, organic growth was +0.6%, reflecting the impact of a large IFM contract exit in Business & Administrations from prior year and continued softer activity in Education.

Healthcare & Seniors remained robust, while there was a particular high comparable for Sodexo Live! following a strong prior-year activity.

In Rest of the World, organic growth was +10.6%, supported mainly by new contract ramp-ups and additional project work, especially in Energy & Resources, with a strong contribution across multiple geographies. Overall, our third quarter performance was stronger than anticipated, driven mainly by robust activity at Sodexo Live!

North America, more projects in Rest of the World, and overall more resilient volume trend than projected in our guidance. As a result, we are increasing our fiscal 2026 organic revenue growth guidance and now expect growth between 1.2% and 1.5% compared with 0.5% to 1% previously.

This updated guidance reflects both our year-to-date performance and our current expectation for the remainder of the year. At the same time, we are maintaining our underlying operating profit margin guidance of between 3.2% and 3.4%.

To reiterate what we said at half-year results, our focus remains on strengthening the business over the medium term. We continue to invest in commercial capabilities, competitiveness, supply, and technology, while maintaining a close watch over the external environment and a prudent view of the remainder of the fiscal year.

Finally, in two weeks' time on July 16, we will host our investor update in Paris, where Thierry, I, and the team will present our execution roadmap and medium-term ambitions. We look forward to seeing many of you there.

With that, I'm happy to take your questions.

Hi, good morning. I've got three questions, please.

The first one, you sounded more constructive on commercial momentum. Could you elaborate a bit more?

Net new was second-truly better in Q3, though still negative. Could it turn positive as early as in Q4?

That's on net new. Also more generally on your new upgraded guidance for organic growth, it does not really imply any growth in Q4 year-on-year.

May I ask why you're being so conservative here? Related to that, what drove this good performance within Sodexo Live!

in North America in Q3, and why would not the World Cup also underpin a solid Sodexo Live! in North America in Q4?

Maybe the last one on pricing, unchanged in Q3 versus the first half of the year, how should we think about Q4 and next year? Thank you.

Thank you, Estelle. First question on commercial momentum.

What I can tell you that at this stage we are seeing early encouraging signs on on commercial net commercial growth. We have a good pipeline.

We we are also in improved conversion rate. Overall, when we look at our last 12-month forward-looking net new KPI, it's improving.

It has improved when we compare Q3 end of Q3 compared to end of Q2, quite positive. This improvement is expected to come through progressively in the reported in-year net net new revenue.

The improvement is really coming from from development. We have we have seen this good traction on development.

Q2 was better than Q1. Q3 is better than Q2.

On your second question on the organic growth for for Q4, what we need to keep in mind that it's Q Q4 will will face tougher comparable. Last year we had a very strong Q4, especially in in Energy & Resources in in North America, and this creates a less favorable year-on-year comparison than in Q3.

Also, second topic for Q4, we have normal phasing of net new opening, closing. We mobilized a lot of contracts last year in Q3, with the fully annualization of those contracts, the incremental incremental contribution again year-on-year will will will naturally moderate.

Then overall, we see some uncertainty in the macroeconomics, in the geopolitical environment, and at this stage, we we believe that it's appropriate to remain prudent for the remaining part of the year. However, what I can tell you that we are not seeing any we are not seeing any specific deterioration overall in the business.

Even when based on what we see today, we would currently expect Q4 to be modestly po- modestly positive, but again as I said, we believe that it's appropriate to remain to keep a prudent approach at this stage. Then I believe that your third question was on Q3, the very strong performance on on Sodexo Live!.

As I said, overall, a strong performance across all the activities of of Sodexo Live!, I mean convention center, airline lounges, sports venues as well. We had very good sports events.

I can I can give you some example. We had the BNP Paribas Open at Indian Wells went super well.

Miami Open as well. We had a very strong beginning strong beginning of the season in baseball with with with a good game, good affluence, good attendance at T-Mobile Park as well with Seattle Mariners.

Overall, attendance was pretty good across all the events. On top of of attendance, also what I said during the the speech, also we we have been we have been able to to catch more revenue.

Spend per capita has been increasing quite importantly, and we are quite happy with that. It's really the way we capture more business.

I mentioned it's really coming from our offer, innovative concept, also brand partnerships, overall, again a very good success of of Sodexo Live!. It's more than 15% organic growth in in Q3, definitely above our expectations.

Your last— Yes. On pricing, the last one, sorry, yeah.

I believe that you have a last question on pricing and inflation. Overall, what I said, when we look at the inflation, we are not seeing any meaningful change at this stage in food inflation overall.

There is, yes, there is some pressure on energy prices, some pressure on transportation and logistic costs, but overall, this remain under control. As managing inflation is really part of what we do.

We have different levers also to manage and control our internal inflation. We have been talking about again product substitution, working on menu, working with clients, negotiation with supplier as well.

Overall, we are monitoring pretty well the input inflation.

Thank you.

Yes, good morning. I've got three as well, please.

Following up on the comment on pricing, and based on what you see on cost inflation at the moment, would it be fair to expect pricing for the first part of 2027 to be sort of similar to the 2026 exit rate? Secondly, on the commercial momentum, any sort of regions or sectors driving the early positive signs in terms of commercial momentum?

Lastly, anything to flag in terms of retention since you last reported in April, and any comments on the US selling season for Education, please? Thank you.

Okay. On pricing inflation, so as I said, on the food inflation, internal inflation, we are controlling overall the evolution of that.

Then we have seen also a declining trend in terms of labor inflation. You need to keep in mind that it's a bundle, between food inflation and labor inflation.

Yes, at this stage, it's quite fair to expect something quite similar for the beginning of the year, with maybe some small pressure on food inflation, but again declining trend in terms of labor inflation. Not a big change expected for the beginning of the year in the on the pricing inflation part.

On your second question on commercial momentum, yeah, we have, as I said, encouraging signs. If I mention some region, we see, again, very good momentum on development in Rest of the World, in APAC, APMEA, in LatAm as well.

Also now in the US as well, the dynamic on development start to be more encouraging, and especially in corporate services. Just to give you some color, good trends, Rest of the World, APAC, APMEA, NorAm, especially Corporate Services.

Last question on retention, based on what we see today, overall, we should land broadly in line with last year. I would say around the 94% level.

Specifically on retention in the US and on the selling season for Education, I would say that it should be slightly better than last year, but still disappointing. This is a key focus for the team in Education in North America now.

We have a new leadership for the Education segment, new leader for K-12 Schools segment as well. They both joined recently, working on their own organization, where we need to adjust, clear focus on retention, on development, building very clear action plan, account plan, and starting to prepare, at the end of the day, the next selling season for fiscal 2027.

Thank you very much.

Good morning, thank you. A couple more for me, please.

Firstly, in the Rest of the World and the Business & Administrations growth that you point to, I think the statement talks about the faster ramp-up of new wins, but I think in your prepared remarks, you also talked about some new projects. I wanted to understand the latter of those, is that long duration work, or is that something that might be relatively short-dated in terms of the volumes there?

Second question, in terms of the per capita spend that you mentioned in Sodexo Live!, can you sort of talk a little bit more about the other businesses more broadly, and geographies more broadly, and trends in per cap spend there, and what you're seeing? Then finally, small one, the Education segment in North America, last year had a bit of a calendar effect positive, and was that helping or hindering the year-on-year growth this year, if you could just remind us of that, please?

Thank you. Yeah.

First, on the very good performance in Rest of the World, so, yes, it's mainly coming from Business & Administrations, organic growth 11.9% in Q3, 8.6% in Q2. The driver is, as I said, two drivers.

The first one, the underlying one, explaining also the good performance of the prior quarters, is really new wins, net development, very strong development last year, ongoing very strong commercial performance. This is really helped the underlying organic growth.

On top of that, yeah, we had some additional projects, especially in Energy & Resources in remote sites. Depending on the nature of the project, it can be sometimes construction.

It can be some ad hoc work on a network, on electricity network, on HVAC. Really depending on can be preventive maintenance work as well.

Depending on the nature of the work, it could be one month, six weeks, two months, or longer. It varies.

Here, it was really specific projects during the quarter, and we delivered a bit more revenues than expected on that part as well. On the spend per capita, it's really this improvement is really within the I would say, the B2C business in Sodexo Live!.

When we look at this trend, it's across geographies, especially in North America because of the size of the events. We see this good dynamic across the globe for Sodexo Live!.

The last question on the calendar effect, so, yes, we had a small calendar effect impact, negative one compared to last year. There is nothing, again, nothing big here.

When we look at the quarter, the evolution quarter-by-quarter even in the Education, you have also some impact linked to the weather sometime. I know that we don't like to talk about weather, but it explained also sometimes the evolution from one quarter to another quarter.

For me, what is very important when we look at the evolution of the organic growth in North America is really the impact of the net new. This is a reflect of the last selling season from last year.

I see, that's helpful. Thank you very much.

Good morning, thank you for taking my question. Few ones, if I may, just to detail the operating trend in North America and in Europe.

We see that in North America B&I has been clearly under pressure compared to a light acceleration or strong acceleration in Live! and Healthcare, where in Europe all segments were down.

Could you give us some more color about this trend, and what we can expect for the rest of the year? Because as Estelle was mentioning it, it's a bit surprising to see such a conservative assumption for Q4.

That's my first question. Regarding the FX that you are planning, you are still maintaining a 3% negative effect on a yearly basis.

Do you still feel comfortable with that guidance considering the recent evolution of the euro-dollar especially? Thank you very much.

To give you a little bit more of color regarding the performance by activity, starting with NorAm, we already spoke about the 15% organic growth in Sodexo Live!. For B&I, you need to keep in mind that we have the impact in North America, the impact of the reclassification of the large contract.

This is impacting Q3. We started the new contract 1st of 1st of 1st of January, you have a full impact in Q3.

If we restate this impact, the underlying trend in B&I is very close to what we had in Q2. Then, yeah, we mentioned as well that Healthcare & Seniors is really trending pretty well.

It's 7.8% organic growth for Q3, in line with Q2. Overall, a good—

That should continue.

We have a good trend. We have a good momentum.

We will have the fading impact of new from last year. We will have some annualization in Q4, we are not expecting Healthcare & Seniors in the US to be at close to 8%, but again the trend is very good, and the dynamic is strong.

Then if we go to Europe to give you some color, on B&I, that means we have really the impact here in Q3 of the demobilization of a large IFM contract, it's not a surprise at all, and it was fully embedded in our guidance. This is really the impact of the loss of this contract last year, with the start of the impact this year beginning of Q3.

Then on the other segment, Education is quite soft, Q3 very similar to Q2. As I said, on Sodexo Live!

last year, we had a very strong Q3 in France and in the UK, and with much more events, especially in the UK, it's not the case for this year explaining a soft organic growth for Q3 in Sodexo Live!. Then on the FX, yes, we are comfortable.

We keep our overall -3% impact. We will have, as you can see with the evolution of the euro dollar, we will have a, I would say, a better, favorable impact in Q4 compared to Q3.

We should land around this -3% for the full year.

Thank you. Just a follow-up one, if I may, on Education in the US.

You were saying that you were disappointed by the recent operating trend. Considering that most of the negotiations must be done six months in advance for beginning of contracts most of the time in September, that means that we should not see a significant improvement in the next few quarters?

As I said, on the selling campaign for Education, you are right, and we have a pretty good visibility now at this stage. It's the reason why I said that it's a little bit disappointing overall, even if it will be again slightly better than last year, but still disappointing, exactly what I said before.

You are right. We have at this stage a pretty good view of what should be the final picture on net new for Education in the US.

Thank you.

Hi, good morning. This is Ajay on for Leo.

Two questions for me, please. First, on the operating margin guidance, why was that kept unchanged despite the upgrade to the organic growth guidance?

Secondly, if you can give us some color on the bolt-on acquisitions, the rationale behind the deals and the transaction value involved? Thank you.

Okay. Thank you thank you for your question.

On the on the first one, it's true that the stronger top-line performance is supportive in in in term of margin. Now we have still one quarter to go.

We have some moving pieces in in in the business. We we we have the speed of our investment.

There is also mobilization, demobilization as well. Still a few moving parts here, and it's the reason why, at this stage, we we are not changing our margin guidance.

We really remain comfortable with the existing range between 3.2% and and 3.4%. Then on on your second question on on M&A, again the large M&A this year, well large, mid-size M&A was Mediterránea in in in Spain.

Now we we have a very small, targeted bolt-on acquisitions in in food, in our existing market. The objective is to to get a little bit more scale, leverage, also the supply, get some synergies in term of back office.

Here it's really nothing new. It's fully in line with with what we have been doing on those very targeted bolt-on acquisition.

Great, thank you.

Thank you very much for taking my questions. First one on volume, obviously it's improved to half a percent in nine months compared to 0.2, which means pretty good performance in 3Q.

I guess, can you elaborate a little bit on the underlying trend? Was it mostly driven by Sodexo Live!

better spending, or is there anything else you could potentially share with us? The second question, can I please ask about the data center opportunity, which, obviously, is a new and large opportunity in the sector more recently.

I personally think that's probably around $70 billion TAM by 2030 in the construction phase and about $20 to $30 billion of the operational data centers by 2030. I guess, what's your view there?

What activities do you already have, and are you in active kind of conversations about future opportunities? Thank you.

Okay.

I will start with your first question on volume. You are right.

It's improved significantly when you look at the year-to-date compared to H1. As I said, and that means the two main reasons for that, it's first Sodexo Live!, and that means very strong performance of Sodexo Live!, and it comes from volume.

The second reason, as I said, it's the additional projects in Rest of the World, especially in E&R, and this also is impacting volume. Now on the data center opportunity, you are right.

That means it's clearly a strong opportunity for us, fast-growing business. Today, we have some business, obviously, in the data center.

On those who are already operational, here we deliver mostly food. It's 24/7 offer.

It could be convenience solution and pantry, etc. This is what we have today.

Now what it's super important, it's to target opportunities for data center in construction phase. This is really where we can capture most of the value.

We are working on the pipeline on that topic. What I can tell as well, it's we have few opportunities ahead of us, and also we are quite well positioned here because when you look at what we do in E&R, in Energy & Resources, we are talking about large camp, remote sites with thousand of workers, and it's exactly basically the same offer that we need to address this opportunities in data center in construction.

Overall, yes, fast-growing opportunity, very interesting market for us, working on the pipeline, and we have again very good position there because we can leverage our capabilities, expertise we have in Energy & Resources.

Thank you.

Hi, good morning. Thanks for taking my question.

Just one on the margin guidance for the full year. Despite the top-line beat and the guidance raise, you have kept the margin guidance unchanged.

Is there any change in moving parts of the margin bridge that you explained at H1 results, i.e., the operating leverage or the pace of investments there, which meant you have kept the guidance unchanged for now? Thank you.

Thank you. I think that already answered that question.

Basically what we said is that the stronger top line is supportive, definitely. Then we have different moving pieces in the business.

There is also with mobilization, demobilization. We also have the speed of the investments.

It's the reason why we are more comfortable in keeping our range of our guidance between 3.2% and 3.4% at this stage.

My question is that is there any change in the moving parts, let us say the pace of investments

there

was versus H1?

No. If you look at the bridge and the bridge we comment after H1 publication for the year, it's exactly the same buckets, I would say, the same pieces.

No significant change on the different levers of the margin.

Thank you. This is helpful.

Thank you.

Thank you all for joining us today and for all your questions, and we look forward to seeing many of you on the 16th of July. Thank you again and have a great day.