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 Sebastien De Tramasure, our CFO, to take us through the presentation. After Sebastien'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 Sebastien.

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

So 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. And as usual, the appendix includes the detailed segment breakdown by geography as well as the 9 months performance, for those of you who would like to see the year-to-date view.

In the first quarter of fiscal 2026, Sodexo delivered revenue of EUR 6.2 billion, with organic revenue growth up 2% above our expectations. Reported revenue growth included a negative currency effect of 2.5%, mainly due to the depreciation of the U.S.

dollar, while acquisitions contributed to 1.4%, mainly from Grupo Mediterráñea. So now looking at our third quarter performance by geography.

In North America, organic growth was minus 0.1% or plus 2.2%, excluding the effect of the contract reclassification we discussed at our fiscal H1. Health care and 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. And these positives were partly offset by the impact of prior contract losses in education.

In Europe, organic growth was plus 0.6%, reflecting the impact of a large IFM contract exit in business and administration from prior year and continued softer activity in education. Health care and senior 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 plus 10.6%, supported mainly by new contract ramp-ups and additional project work, especially in energy and 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 volumes 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 expectations 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%. And to reiterate what we said our 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 2 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 ambition.

We look forward to seeing many of you there. With that, I'm happy to take your questions.

I've got 3 questions, please. I mean the first one, you sounded more constructive on commercial momentum.

Could you elaborate a bit more -- net new was sequentially better in Q3, though still negative. Could it turn positive as early as in Q4?

So 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?

I mean, related to that, what drove this good performance within Sodexo Live! in North America in Q3?

And why will not the World Cup also underpin a solid Sodexo Live! in North America in Q4?

And 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, Estelle. So first question on commercial momentum.

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

We have also an improved conversion rate. So overall, when we look at our last 12 months forward-looking net new KPI, it's improving.

It has improved when we compare Q3 -- end of Q3 compared to end of Q2. So it's quite positive.

And this improvement is expected to come through progressively in the reported in year net new revenue. And the improvement is really coming from development.

I mean 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 Q4.

So what we need to keep in mind that it's -- Q4 will face tougher comparable. Last year, we had a very strong Q4, especially in energy and resources 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 contract last year in Q3. So with the fully annualization of those contracts, the incremental contribution, again, year-on-year, will naturally moderate.

And then overall, we see some uncertainty in the macroeconomics, in the geopolitical environment. And at this stage, we believe that it's appropriate to remain present for the remaining part of the year.

However, what I can tell you that we are not seeing any -- we're 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 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 is a very strong performance on Sodexo Live!

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

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

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

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

I mean spend per capita has been increasing quite importantly. And we are quite happy with that.

And I mean, it's really the way we capture more business. And I mentioned, it's really coming from our offer, innovative concept and also brand partnerships.

So overall, again, a very good success of Sodexo Live! It's more than 15% organic growth in Q3.

So definitely above our expectations.

And your...

Yes, on pricing, the last one. Sorry, yes.

Yes. And I believe that you have a last question on pricing and inflation.

So overall, when 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, as this remain under control. And as you know, we -- managing inflation is really part of what we do.

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

So overall, we are monitoring pretty well the input inflation.

I've got 3 as well, please. First of all, following up on the comment on pricing and based on what you see on cost inflation at the moment.

So 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?

And lastly, anything to flag in terms of retention since you last reported in April? And any comments on the U.S.

selling season for education, please?

Okay. So on pricing, 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. So 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, a declining trend in terms of labor inflation.

So yes, not a big change expected for the beginning of the year on the pricing inflation part. On your second question on commercial momentum, yes, we have, as I said, encouraging signs.

If I mention some region, we see, again, very good momentum on development in the Rest of the World, in APAC, AMEA, in LatAm as well. Also now in the U.S.

as well as the dynamic development are to be more encouraging and especially in corporate services. So just to give you some color, good trends Rest of the World, APAC, AMEA, NorAm, especially in Corporate Services.

And last question on retention. So 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 U.S. 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 school 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 year '27.

A couple more from me, please. Firstly, in the Rest of 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.

Sort of drill into this, but I wanted to understand the latter of those. Is that long duration work?

Or is that something that -- these projects, 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?

And then finally, a small one, the education segment in North America. There was -- last year, we had a bit of a calendar effect, negative.

Was that -- sorry, positive. And was that helping or hindering the year-on-year growth this year?

And if you could just remind us of that, please.

Yes. So first, on the very good performance in the Rest of the World.

So yes, it's mainly coming from Business and Administration. Organic growth, 11.9% in Q3, 8.6% in Q2.

And the driver, as I said, 2 drivers. The first one, the underlying one, explaining also the good performance of the prior culture is really new wins, net development, very strong development last year, ongoing very strong commercial performance.

So this has really helped the underlying organic growth. And on top of that, yes, we have some projects -- additional projects, especially in Energy and Resources in remote sites.

So depending on the nature of the project, it can be sometimes construction, it can be some add-up work on the network, on electricity network, on HVAC. So really depending on -- it can be a preventive maintenance work as well.

So depending on the nature of the work, it could be 1 month, 6 weeks, 2 months or longer. So it's really -- it varies.

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

And it's -- and when we look at this trend, it's across geographies, especially in North America because of the size of the events, but we see this good dynamic across the globe for Sodexo Live!. And the last question on the calendar effect.

So yes, we had a small calendar effect impact, negative one compared to last year. But there is nothing -- again, nothing this year.

When we look at the quarter and 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 explains also sometimes the evolution from one culture to another culture.

But 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. So this is a reflect of the last selling season from last year.

A 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 Life and Health Care, 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 -- so 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?

So to give you a little bit more color regarding the performance by activity, starting with NorAm. We already spoke about 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. So this is impacting Q3.

We started the new contract 1st of January. So you have a full impact in Q3.

So if we restate this impact, the underlying trend in B&I is very close to what we had in Q2. And then, yes, we mentioned as well that Health Care and Senior is really trending pretty well, and that means it's 7.8% organic growth for Q3, in line with Q2.

So overall, a good...

That should continue.

So we have a good trend. We have a good momentum, and we will have -- will have, again, the fading impact of new from last year.

We will have some annualization in Q4. So we are not expecting Health Care and Senior in the U.S.

to be at close to 8%. But again, the trend is very good, and the dynamic is strong.

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

And then on the other segment, I mean, education is quite soft in Q3, very similar to Q2. And as I said on Sodexo Live!

last year, I mean, we had a very strong Q3 in France and the U.K. and with much more events, especially in the U.K., 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 minus 3% impact.

We will have, as you can see, with the evolution of the euro-dollar, we'll have, I would say, a better, favorable impact in Q4 compared to Q3. So we should land around this minus 3% for the full year.

Just a follow-up one, if I may, on education in the U.S., you were saying that you were disappointed by the recent operating trend, considering that most of the negotiations must be done 6 months in advance for beginning of contract most of the time in September. That means that we should not see a significant improvement in the next few quarters?

Yes. On the -- 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. And 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 U.S.

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?

And secondly, if you can give us some color on the bolt-on acquisitions, that rationale behind the deal and the transaction value involved?

Okay. Thank you for your questions.

So on the first one, so it's true that the stronger top line performance is supportive in terms of margin. Now we are still one quarter to go.

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

There is also mobilization, demobilization as well. So yes, so still a few moving parts here.

And it's the reason why at this stage, we are not changing our margin guidance. We really remain comfortable with the existing range between 3.2% and 3.4%.

And then on your second question on M&A. So again, the large M&A this year were large, midsized M&A was Mediterranea in Spain.

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

So here, it's really -- nothing new, it's fully in line with what we have been doing on those very targeted bolt-on acquisitions.

First one on volume. Obviously, it's improved to 0.5% in 9 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 it's probably around $70 billion TAM by 2030 in the construction phase and now $20 billion 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?

Okay. So I will start with your first question on the volume.

So yes, you are right, improved significantly when you look at the year-to-date compared to H1. And as I said, I mean the 2 main reasons for that is first, Sodexo Live!, that means very strong performance of Sodexo Live!, and it comes from volume.

And the second reason, as I said, it's the additional project in Rest of the World, especially in Vienna, and this also is impacting volume. Now on the data center opportunity.

So you are right. I mean it's clearly a strong opportunity for us, a fast-growing business.

So today, we have some business, obviously, in the data center. And on those, we are already operational.

Here, we deliver mostly food. It's 24/7 offer, could be a convenience solution and pantry, et cetera.

So this is what we have today. Now what is super important is to target opportunities for data center in the construction phase.

So this is really where we can capture most of the value. We are working on the pipeline on that topic.

But I can say as well it's -- we have a 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 and Resources, we are talking about large camp, remote sites, with thousands of workers, and it's exactly -- basically the same offer that we need to address these opportunities in data center in construction.

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

Just one on the margin guidance for the full year. Despite the top line bit and the guidance raise there, 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.

I think I already answered that question. But 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 a speed of the investment.

So 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.

Yes, but my question is that is there any change in the moving parts, let us say, the pace of activities there was in H1?

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

So no significant change on the different levers of the margin.

So 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. So thank you again, and have a great day.