Prepared for Manish Chopra by Henry Obegi

Sodexo S.A. (SW.PA) — Deep Dive Analysis

Euronext Paris • Contract Catering & Facilities Management • February 2026

Market Overview

~$290B
Global TAM (2025)
~5%
CAGR (2024-32)
~45%
Outsourcing Penetration
~28-30%
Top 5 Share
Structurally attractive industry. Outsourcing penetration at ~45% (up from ~39% in 2021) provides a multi-decade secular tailwind. COVID accelerated the self-op to outsourced conversion. Regulatory complexity (CSRD, HACCP, food waste laws) raises barriers for smaller operators.

Global Market Share

Geographic Revenue Split

Industry Segments

SegmentGrowth OutlookSodexo PositionNotes
B&I (Corporate)Mixed~43% of revenue (largest)Hybrid work pressure but outsourcing tailwind
Healthcare & SeniorsStrongGrowing segmentAging demographics; 7% CAGR; regulatory moat
EducationMixedWeak (US contract losses)Enrollment headwinds in US; outsourcing tailwind in EU
Sports & LeisureStrongSodexo Live! (~500 venues)Premium economics; event-driven
Government & DefenseStableLong-term contracts (USMC, DoT)Political risk but multi-year visibility

Industry Financial Benchmarks

MetricIndustry RangeSodexoBest-in-Class (Compass)
Operating Margin3.3% - 7.2%4.7% Average7.2%
Capex Intensity2.0% - 3.7%2.0% Low3.5%
Client Retention93% - 97%94.0% Average96.3%
FCF Conversion85% - 95%~90% Good88%
Sodexo is an average operator in an attractive industry. The equity thesis hinges on whether Sodexo can close the operational gap with Compass. Industry attractiveness alone isn't enough.

Cyclicality Assessment

Revenue Beta to GDP~0.5-0.7x
Normal Recession Revenue Drop3-6%
COVID Revenue Drop-12% to -30%
ClassificationModerately Defensive
Henry Obegi • Sodexo Deep Dive • February 2026 • Prepared for Manish Chopra