Investing.com — shares fell over 16% on Friday after the group cut its full-year revenue and profit outlook following a review by its new CEO, which flagged operational challenges, as first-half net profit halved and net debt rose above its target.
The French food services group now expects full-year organic revenue growth of 0.5%-1%, down from a prior forecast of 1.5%-2.5%, and underlying operating profit margin of 3.2%-3.4%, against a previous indication of slightly below fiscal 2025’s 4.7% level.
The guidance revision implies a roughly 30% cut to consensus earnings per share estimates, according to analysts.
“We have undeniably underperformed the market and our main competitors,” said Delaporte, who took office in November 2025. “The root causes have been building over time and relate primarily to under-investment and execution.”
First-half underlying operating profit fell 32% year-on-year to €442 million, missing consensus estimates of €547 million by 19% and Jefferies’ forecast by a similar margin.
The underlying margin compressed 140 basis points at constant currencies to 3.7% from 5.2% a year earlier, well below analyst expectations of around 4.4%-4.5%.
Net profit attributable to shareholders more than halved to €188 million from €434 million. Basic EPS fell to €1.29 from €2.98, while underlying EPS dropped 36.5% to €1.96, missing Morgan Stanley’s estimate of €2.34.
Revenues fell 3.7% to €12.02 billion, absorbing a 5.3% foreign exchange headwind driven primarily by a weaker U.S. dollar.
Organic growth slowed to 1.7% from 3.5% a year earlier, broadly in line with consensus of 1.7%, though momentum eased to 1.6% in the second quarter from 1.8% in the first.
North America, which generates 43% of revenues but 66% of underlying operating profit, posted organic decline of 1.8%, with margin falling approximately 200 basis points to 5%, the steepest regional deterioration and falling short of Morgan Stanley’s forecast of a 0.3% decline in organic growth.
Contract losses in Education and Corporate Services were cited as primary drivers, with the client retention rate slipping to 93.4% from 94% at full-year 2025.
Net debt rose to €3.58 billion from €2.69 billion at August year-end, lifting net debt-to-EBITDA to 2.7 times, breaching the group’s 1-2 times target range.
Full-year other operating expenses are now guided at around €300 million, against €130 million booked in the first half alone.
Analysts are divided on recovery prospects. Jefferies, which rates the stock “buy” with a €55 price target, sees the guidance reset as a clearing event.
Morgan Stanley, rated “underweight” with a €45 target, warns of a potentially prolonged turnaround, flagging that no fiscal 2027 guidance has been provided ahead of a capital markets day on July 16.
“While we know this will not be an overnight fix, we are moving with a strong sense of urgency,” Delaporte said.