Prepared for Manish Chopra by Henry Obegi

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

Euronext Paris • Contract Catering & Facilities Management • February 2026

Self-Review & Limitations

Confidence Assessment

High
Financials
High
Peer Comparison
Medium
Industry Data
Medium
Macro Analysis
Medium
Management
Medium
Moat
Medium
Catalysts
High
Analyst Review

What's Working Well

Financial data is comprehensive and sourced. 5-year financials from official filings with Pluxee distortion properly flagged. DuPont decomposition computed from actual data. Every ratio is calculated, not copied.
Peer comparison is robust. 5 peers compared across 10+ metrics with FX conversions shown. The Compass premium analysis (historical vs current) provides clear context for the valuation discount.
Adversarial analyst review is differentiated. Not just summarizing consensus — each thesis is tested with counter-evidence. The NA "secular decline" refutation (Compass/Aramark growing in same market) is the most important independent finding.

What's Incomplete or Approximate

No stock price chart. Real-time historical price data for SW.PA and peers was not available via web research. The performance comparison (1Y, 3Y, 5Y returns) is estimated from point-in-time prices, not continuous time series. A future iteration should pull price data from a financial API.
Industry data relies on third-party market reports. TAM estimates ($290B), growth rates (5% CAGR), and penetration rates (45%) come from Euromonitor/IBISWorld/Technavio — different sources give different numbers. Ranges are noted but exact precision is not achievable.
DCF beta is judgment-based. Yahoo Finance's 0.14 beta is unreliable post-Pluxee. The 0.85 used is industry-derived with adjustments — defensible but not empirically precise. The sensitivity table mitigates this by showing value across a wide WACC range.

What Couldn't Be Done

Universal Registration Document (URD) not accessed. The URD contains: exact revenue by client segment, contract type mix (P&L vs cost-plus), top client concentration data, detailed working capital breakdown, and segment-level profitability. Press releases and IR materials were used instead — adequate for most metrics but missing granular detail on a few items (flagged throughout the research docs).
Delaporte's Sodexo compensation not yet disclosed. His package will appear in the FY2026 URD. Assessment of CEO alignment with shareholders is incomplete without this data.
No proprietary channel checks. This analysis relies entirely on public information. Competitor win/loss dynamics, contract pipeline quality, and employee morale are assessed from reported metrics (retention rates, new signings), not from primary research.

Known Limitations of the Recommendation

LimitationImpact on ConclusionMitigation
Medium-low conviction (3/5)Position sizing should be conservative (2-3% max)Scale in on evidence; 3-tranche entry
Catalyst timeline is 4-6 months awayDead money risk in near term5.7% dividend yield compensates for waiting
CEO is unproven in food servicesTurnaround may take 3-5 years, not 1-2DCF assumes only 50bps improvement over 10 years — conservative
Family control blocks activism/takeoverNo "floor" from corporate actionDividend yield and FCF provide fundamental floor
FX headwinds acceleratingReported results may disappoint even if underlying improvesFocus on organic growth, not reported growth

Recommendations for Follow-Up

R1: Monitor H1 FY2026 Results (April 10, 2026)
Key data: Q2 NA organic growth, group margin trajectory, updated FY2026 guidance. This is the first real test.
R2: Attend CEO Strategic Plan (Summer 2026)
Watch for: FM review, medium-term margin targets, capital allocation changes (buyback?), technology investment plans.
R3: Pull URD When Available
Fill data gaps: client segment revenue, contract type mix, working capital detail, Delaporte compensation.
R4: Add Real-Time Price Charts
Integrate historical price data (SW.PA, CPG.L, ARMK) for visual stock performance comparison.