Registered number: 00842846
FOR THE YEAR ENDED 31 AUGUST 2025
COMPANY INFORMATION
CONTENTS
STRATEGIC REPORT
FOR THE YEAR ENDED 31 AUGUST 2025
The directors present their strategic report for the year ended 31 August 2025.
Sodexo Limited (the "Company") is a wholly owned subsidiary of Sodexo Holdings Limited and forms an integral part of the Sodexo Group’s operations within the United Kingdom and Ireland. The Company’s ultimate parent undertaking is Sodexo S.A., a French corporation listed on the Paris Euronext. The Sodexo Group operates across 43 countries and employs over 425,000 individuals.
The principal activities of the Company comprise the delivery of a comprehensive suite of on-site services, encompassing food services, soft services, and technical services. These services are provided to a diverse range of private and public sector organisations throughout the United Kingdom.
Turnover decreased from £1,521m in 2024 to £1,437m in 2025, primarily due to the transfer of trade and assets of the Live! segment from Sodexo Limited to Sodexo Live! UK Limited, another entity within the Sodexo Group. Adjusting for the impact of these contracts in both years, to give a like-for-like comparative, turnover increased from £1,382m to £1,417m, representing growth of 2.6%. This uplift reflects inflationary trends and new contract wins across the Health & Care and Education segments.
At operating profit level, there was a marginal decrease from £65.8m in 2024 to £64.6m in 2025, with margins remaining broadly stable at 4.3% in 2024 and 4.5% in 2025.
Net assets totalled £237.2m at 31 August 2025 compared with £240.1m at 31 August 2024, a decrease of £3m During the year, the Company subscribed to additional shares in Sodexo Live! UK Limited at par to facilitate the transfer of trade and assets. In addition, the UK&I Group undertook a legal entity rationalisation project to simplify its structure. As part of this exercise, the Company initiated the liquidation of a number of dormant subsidiaries through voluntary applications for strike-off.
The Company's financial strategy continues to be measured growth, improved profitability and strong cash conversion. The directors monitor progress against this strategy by reference to a number of KPIs:
∙Growth in turnover;
∙Operating profit margin;
∙Days Sales Outstanding ("DSO").
The year-on-year movement in turnover and operating profit margin has been explained above.
The DSO measures the average number of days required for the Company to receive payments from its customers. The DSO has decreased from 34.6 days in 2024 to 32.7 days in 2025 due to continued improvement in client collections.
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The Company is exposed to several principal risks and uncertainties, which are monitored and managed through its established risk management framework. The most significant risks that may adversely affect the Company’s financial performance, operations, and reputation are summarised below:
∙Food Services and Workplace Safety – The health and safety of colleagues, clients, and customers is a core value of the Company. Strategic direction, performance measurement, and training are overseen by the Quality Safety Health & Environment (“QSHE”) Board. The Company has embedded a ‘Zero Harm Mindset’ culture, which is continuously monitored and enhanced through targeted actions across all operations.
∙Geopolitical and Macroeconomic Risks – Instability in macroeconomic, geopolitical, and UK political environments may expose the Company to fluctuations in the cost and supply of food, labour, and other goods. Many contracts include clauses that allow for price adjustments or menu changes. During periods of inflation, proactive planning for inflation recovery with clients, tariff management, cost optimisation inclusive of labour management and securing supply at competitive prices are critical to maintaining margins.
∙Technology and Information Security – The Company is subject to external cyber threats, such as phishing and malware attacks, which have the potential to disrupt key systems, infrastructure, or compromise confidential data. Such incidents could impact the Company’s ability to deliver services. The Information & Security Committee provides oversight and direction for policies and controls designed to mitigate these risks and ensures that recovery plans are in place to minimise disruption in the event of a breach.
∙Competition and Retention – The Company operates in a highly competitive marketplace where there is a risk that the Company could lose business to its competitors. The Company manages this risk by having a diversified portfolio of business, supported by innovation and service excellence. It focuses on building strong relationships with clients and customers to deliver high levels of retention and win new contracts.
∙Regulatory Compliance – The Company is subject to a broad range of laws and regulations, including those relating to labour, corporate governance, health, safety, and the environment. Robust internal governance ensures compliance and effective management of regulatory changes. Anticipated changes in labour laws are closely monitored following recent government changes. The ‘Speak Up’ programme provides employees and partners with a confidential mechanism to report activities or behaviours that contravene the Company’s Code of Conduct or are unlawful.
∙Climate-Related Risks – The Company is exposed to various climate-related risks, including both physical and transition risks. The most significant climate risks affecting the Company are detailed within the Climate-related Financial Disclosure section.
∙Service Delivery and Contractual Compliance – The Company engages with a diverse portfolio of clients across multiple sectors. Non-compliance with contractual terms, including deficiencies in service delivery, may result in loss of business, reputational damage, and potential claims against the Company. To mitigate these risks, the Company operates a clearly defined suite of services and maintains a robust control framework that monitors service performance against contractual requirements.
∙People – As a people-centric organisation, the Company recognises that the growth, engagement, and retention of its workforce are central to achieving strategic objectives and sustainable growth. Insufficient attention to employee engagement, retention, and development may result in reduced service quality, diminished client satisfaction and retention, and the loss of talented employees to competitors. The Company addresses these risks through comprehensive HR programmes, including training, performance management, strategic workforce planning, employee value proposition initiatives, and engagement surveys.
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Under The Companies (Miscellaneous Reporting) Regulations 2018, the Company is required to make disclosures in the following areas:
∙A description of how the Directors have addressed the requirements of the Companies Act 2006 section 172(1) (a)-(f) in carrying out their duties as directors during the year.
∙A description of how the directors have had regard to suppliers, customers and employees as well as the resulting effect on the principal decisions of the Company.
∙A description of the Company's corporate governance arrangements for the year.
The Wates Corporate Governance Principles for Large Private Companies have been followed during the year ended 31 August 2025. Further detail on the Company's application of these principles is shown in more detail within the Directors' Report.
Disclosure of the Company's application of Principle 6 - Stakeholder Relationships and Engagement, is also considered to explain how the directors have met the requirements of section 172 of the Companies Act 2006 and how they have had regard to suppliers, customers and employees. Further disclosure is therefore not provided on these topics within the Strategic Report.
Information related to non-financial matters detailed under section 414CB of the Companies Act 2006 can be found within Directors' Report.
This report was approved by the board and signed on its behalf.
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DIRECTORS' REPORT
FOR THE YEAR ENDED 31 AUGUST 2025
The directors present their report and the audited financial statements for the year ended 31 August 2025.
The financial statements have been prepared on a going concern basis, which the directors consider appropriate for the following reasons:
The Company is part of the Sodexo UK and Ireland group of companies (the “UK&I Group”), which in turn forms part of the wider Sodexo Group, headed by Sodexo S.A., a company incorporated in France. The UK&I Group’s principal activities include the provision of facilities management and catering services across various sectors such as government, healthcare, corporate services, sports and leisure and education. Accordingly, the Company’s cash flows are influenced by the continuity, volume, and pricing of these operations.
The Company meets its day-to-day working capital requirements through operational cash flows and intercompany loan arrangements within the UK&I Group. The UK&I Group has demonstrated resilience in the face of economic challenges. This has been achieved through disciplined cash and balance sheet management, strong contract retention, a diversified client base across both public and private sectors, and robust inflation management processes. Furthermore, the UK&I Group continues to pursue organic growth opportunities, with several new contracts in the pipeline. Nonetheless, it remains vigilant and prepared for potential macroeconomic changes through sound commercial management and prudent cost control.
In determining the appropriateness of the going concern basis, the directors have reviewed cash flow and profit forecasts for the UK&I Group covering a period of at least 12 months from the date of approval of these financial statements. These forecasts incorporate a severe but plausible downside scenario, which assumes a deterioration in gross margin due to operational challenges, a reduction in revenue from non-renewal of key contracts, and under-recovery of inflation. In addition, this scenario does not factor in any mitigating actions that management could implement. Even under these conditions, the forecasts indicate that the UK&I Group would remain resilient.
Based on this assessment, the directors are confident that the Company will have sufficient resources to meet its obligations as they fall due for at least 12 months from the date of approval of the financial statements. Accordingly, the financial statements have been prepared on a going concern basis.
A dividend of £54,000,000 (2024: £57,000,000) was paid during the year ended 31 August 2025. A dividend of £45,000,000 was subsequently declared and paid post year-end on 10 December 2025 in respect of the financial year ended 31 August 2025 to its 100% shareholder, Sodexo Holdings Limited.
The directors have not proposed any further final ordinary dividend in respect of the current financial year (2024: £Nil).
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The directors who served during the year were:
The Company made no political contributions during the year (2024: £Nil). Donations to charities amounted to £210,919 (2024: £451,638). The amount represents the donation paid by the Company to the Stop Hunger Foundation and other charities and the same had been restated for FY2024.
The stability of the current contract portfolio provides a strong foundation for Sodexo Limited to pursue further growth opportunities in the next financial year. The Company will continue to actively seek and secure new contracts while maintaining its commitment to delivering high-quality services to clients and customers. Alongside this, a focus will remain on optimising operational performance and maximising financial returns through disciplined cost management and continuous service improvement.
Please refer to principle 6 in the Statement of Corporate Governance for further detail on the Company's engagement with employees.
Sodexo also ensures reasonable adjustments are made where necessary and actively promotes disability confidence across its workforce through dedicated programmes and initiatives.
The Company maintains insurance for directors and officers in respect of their duties as directors and officers of the Company.
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Sodexo is committed to reaching net zero by 2040 globally.
Net zero means drastically reducing emissions by 90% and then physically removing from the atmosphere the remaining emissions. The Science Based Targets Initiative (“SBTi”) has defined what net zero means for companies according to science; this is the methodology followed by Sodexo.
In 2021, Sodexo Limited had both its near and long-term science-based targets validated by the SBTi, providing assurance that our net zero journey is thorough, impactful and transparent. We have been accelerating our journey that started in 2010 through our partnership with the World Wildlife Fund (“WWF”) who have provided support in measuring emission sources and providing confidence in the actions required to reduce them.
With 98% of our total Greenhouse Gas (“GHG”) emissions coming from indirect scope 3 sources, such as the supply chain, energy consumption at client sites, as well as food waste, achieving our climate targets will require a gradual and profound transformation of our operations across the entire value chain.
Governance & Risk Management
The Sodexo UK&I CEO oversees our regional climate strategy and is responsible for ensuring governance arrangements are in place to assess and manage climate related risks and opportunities. Specialist appointments were made in 2021 to develop the regional climate strategy, including a Sustainability Director and a Net Zero Lead. They also ensure close alignment with our Group company, Sodexo SA.
Climate-related risks and opportunities are identified through the regional ESG Working Group, which comprises experts across a range of functions, including Legal, HSEQ, Sustainability, HR, Finance, Waste and Energy Management. These are escalated to the ESG Committee that meets bi-monthly and is responsible for assessing and capturing climate related risks and opportunities on our regional risk management system at the subsidiary level and ensuring controls are implemented. New and emerging key risks are reported to the regional Risk Management Committee via a quarterly assurance statement.
The Risk Management Committee (“RMC”) evaluates the critical risks and opportunities relevant to the business strategy and objectives and reports twice yearly to the Sodexo Limited Board of Directors. ESG is one of the principal risks regularly reviewed by the RMC. The RMC meets quarterly and is chaired by the regional CFO. In exercising their legal duties, the Board of Directors are responsible for reviewing the risk reports and providing strategic direction.
Identified climate risks and opportunities are scored against a defined matrix and continue to be reviewed and re-rated throughout the risk management process. The likelihood, or the probability of the risk occurring is then assessed. Once prioritised, risks are managed in order of highest impact with details of existing controls and further work measures as appropriate.
Strategy
Climate change has been identified as a key factor for Sodexo delivering its business strategy and objectives. A cross-functional Sodexo team worked with external specialists in 2022 to better identify and analyse the risks and opportunities created by climate change. This risk assessment was carried out using the Task Force on Climate-Related Financial Disclosures (“TCFD”) framework. This framework divides risks into:
∙Physical risks: acute event-driven risks resulting from climate change such as an increase in severity in floods, cyclones or hurricanes, and chronic risks that result from shifts in longer term weather patterns such as higher temperatures causing more heatwaves.
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∙Transition risks: the policy, legal, technology and market change risks that may arise for a company transitioning to a lower carbon economy. Further reputational risk may also occur if a company fails to transition fast enough or meet stakeholder expectations in relation to climate change.
The climate risk outlook considered was on a near-term timeframe of 5-10 years. This timeframe was selected to align with business planning cycles, while being mindful of the impact of external factors including political change and amendments or updates to laws and regulations. It also prepares Sodexo for moments of rapid market shifts that occur due to climate events. Although we are working on a near-term timeframe, we are aware of longer-term risks and will build on this to encompass them as part of future disclosures.
Our climate risk assessment and evaluation process was completed in four steps:
1.Assessment by climate risk type: An exhaustive and industry agnostic list of both transition and physical risks, aligned with the TCFD categorisation, was used in the assessment. Relevant climate risks applicable to Sodexo business activities were selected.
2.External data overlay: leading industry sources were used to assess the likelihood of physical and transition risks and the potential impact.
3.Experts overlay: Further insights were gathered through interviews with Sodexo business leaders across different activities and regions to assess the impact of each climate risk on each business activity.
4.Convergence: Results of climate risk assessment were shared and adjusted with key internal stakeholders during a workshop.
A list of 26 physical and transition risks that could affect Sodexo’s business was identified, among which all were considered relevant for Sodexo activities.
Each risk was qualitatively assessed in relation to foodservices and Facilities Management (“FM”) using likelihood and impact as risk criteria. Likelihood was calculated using respected external data sources. Impact was assessed based on knowledge of Sodexo’s business and the insights from a series of risk interviews run with key senior leaders. The standard definitions for impact within Sodexo’s wider risk management framework were used for the assessment. This approach highlighted the impact of the risks more on foodservices than on FM services.
The following risks have been selected as being the most significant to Sodexo within the UK region for both food and FM services.
Brand reputation
∙Description: Consumer sentiment shifts to a point where the Company receives a negative reputation from its environmental practices and/or investing in non-environmentally friendly companies.
∙Services affected: Foodservices & FM.
∙Time Horizon: Short-term (1-5 years).
∙Impact: Failure to embed environmental initiatives into business activities could reduce client retention rate (e.g., not sufficiently complying with growing consumer demand for locally sourced foods could decrease visits to restaurants on clients’ sites). If sustainability storytelling is not robust enough, Sodexo could be accused of greenwashing; or there could be a reduction in the client retention/win rate. Difficulty to attract and retain talent, or employees leaving for “greener” companies.
∙Action: Sodexo have developed a net zero strategy in alignment with the SBTi to ensure all climate related targets are robust, transparent, and aligned with climate science. Sodexo Limited became one of the first foodservice organisations globally to have near and long-term science-based targets validated by the SBTi.
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Drought
∙Description: Prolonged/increased frequency of droughts driven by climate change, increasing water scarcity, impacting crop yields, and causing saltwater intrusion.
∙Services affected: Foodservices & FM.
∙Time Horizon: Near-term (5-10 years).
∙Impact: Directly impacts growth of plant life. This could cause the agriculture industry to become less productive, reducing its ability to meet demand and/or increasing costs.
∙Action: A third of all food produced globally ends up being wasted, making food waste a significant contributor to climate change. As part of the Better Tomorrow sustainability strategy 2025 Sodexo committed to halving food waste by 2025 (covering 85% raw material cost) through the WasteWatch programme, which supports our teams collecting and analysing data on food waste. At the end of August 2025, WasteWatch was deployed at 474 locations, with a 50.2% reduction in food waste (encompassing 85% raw material cost). The next iteration of the global sustainability strategy Better Tomorrow 2028 is to embed and maintain.
Temperature & humidity
∙Description: Increased frequency and severity of extreme high and low temperature and humidity days.
∙Services affected: Foodservices & FM.
∙Time Horizon: Short-term (1-5 years) & near-term (5-10 years).
∙Impact: Directly impacts growth of plant life as they have 'ideal temperatures' and are grown in certain areas; changing temperatures can impact yield as well as ability to continue growing in that location. This could cause the agriculture industry to become less productive, reducing its ability to meet demand and/or increasing costs. Extreme or fluctuating temperature would increase energy consumption (such as heating, ventilation and air conditioning) and energy costs for clients.
∙Action: As well as fighting food waste to mitigate the loss of agricultural productivity, Sodexo is committed to sourcing 100% renewable electricity worldwide as part of its RE100 pledge, while also reducing energy use across its own and client sites. In the UK & Ireland, this target was achieved in FY24 through prioritising renewable energy providers and, where necessary, supplementing supply with REGO certificates (accounted for 3.8% of total consumption in FY25).
Transportation emissions reductions regulations
∙Description: More stringent vehicle emissions standards and/or fuel consumption taxes put in place to limit greenhouse gas emissions.
∙Services affected: Foodservices & FM.
∙Time Horizon: Short-term (1-5 years) & near-term (5-10 years).
∙Impact: Transportation restrictions (e.g., ban on sale of petrol and diesel vehicles, zero and ultra-low emissions vehicle (ULEV) zones) could increase complexity in delivery of services.
∙Action: Sodexo have launched a 100% hybrid and EV company car policy and are transitioning all petrol and diesel internal combustion engines to electric vehicles. Sodexo have also initiated a salary sacrifice programme allowing employees to lease electric vehicles in a tax-efficient way.
Increased competition from low carbon and/or energy efficient technology
∙Description: Through policy changes, increased investment in the low carbon space, or advancements in technology, renewable energy sources and/or energy efficient technologies become more competitive.
∙Services affected: Foodservices & FM.
∙Time Horizon: Short-term (1-5 years).
∙Impact: Rise of new players with carbon efficient models capturing market shares. Additional costs to develop “must have” low-carbon services.
∙Action: Sodexo have developed a “low-carbon” meal definition (<0.9 kgCO2e) in partnership with the WWF
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and are designing new recipes to ensure that 70% of our main dishes are labelled “low-carbon” by 2030.
Climate-related scenario
Based on this risk and opportunity analysis, Sodexo carried out a climate-related scenario analysis across three NGFS (Network for Greening the Financial System) scenarios. NGFS have partnered with climate scientists and economists to design hypothetical scenarios. The scenarios provide reference points for understanding how climate change (physical risks), climate policy and technology (transitional risks) could evolve in different futures. The NGFS scenarios were selected as they use a wide range of land use variables (i.e. agriculture) and are recommended by banks and financial supervisors. Three scenarios were chosen to provide a wide variability and assess the widest climate risk scope from an orderly net zero scenario to a least ambitious scenario leading to a higher degree of physical risk.
The scenarios were underpinned by general assumptions:
∙In the current policies scenario, it assumes that only currently implemented policies are preserved, there is a limited increase in carbon pricing and other policy requirements, and an increased frequency, duration, intensity and spread of extreme weather events.
∙In the delayed transition scenario, it assumes that annual emissions do not decrease until 2030, with strong policies needed from 2030 to limit warming to below 2°C. There will be rapid and higher increases in global carbon pricing after 2030, limited negative emissions technologies available due to lack of investment and increased frequency of extreme weather events.
∙Finally, in a net zero orderly scenario, it assumes global warming is limited to 1.5°C through stringent climate policies and innovation. There is an early and gradual introduction of carbon taxes, Government support in development of negative emissions technologies and increased global average temperatures threatening climates.
The three categories of NGFS climate scenarios clearly differ in transitional risks, the more that is done to mitigate against climate change, the greater the transition risk impact through increased policies, taxes and legislation.
The impact of the scenarios identified several key variables that would impact Sodexo P&L: price of agriculture products, carbon price, GDP changes, labour productivity and prices of energy. The scenario models assumed a conservative pass-through rate of 75% on food cost increases. Overall, all three scenarios impact Sodexo UOP negatively, with a more significant decrease in profit within a current policy scenario (>3°C) than in a Net- Zero
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scenario (1.5°C):
∙In the current policies scenario, physical risks (drought, flooding etc) highly impact the overall economy and food production yields.
∙In the delayed transition (2°C) scenario, carbon regulations post 2030 increase the carbon price which impacts the cost of livestock products.
∙In the net zero (1.5°C) scenario, carbon regulations increase the carbon price and impact livestock product costs.
This analysis identified in the current policies scenario that the decrease in underlying operating profit (UOP) is more significant than in the transition scenarios, driven especially through food costs and the impact of physical climate risks such as flooding and droughts affecting the production yields. The net zero scenario had the lowest impact overall on Sodexo’s UOP. The scenarios also highlighted that foodservices are impacted by climate risk and impacts occur both on volume, price and unit cost, whereas FM is seen to be less affected by climate risk.
Sodexo have identified opportunities to increase the resilience of our business model and strategy to lower and mitigate the impacts of the scenarios, such as food costs and production yields. This has also been supported by the measurement and detailed understanding of our carbon footprint across our entire value chain. Opportunities include the development of sustainable offers for our foodservices, through the increase of low-carbon meals and plant-based recipes, and reduced resources depletion through energy and water consumption, and waste reduction.
Tackling food waste is a key lever in our commitment to reach net zero by 2040. Our commitment is to halve our own food waste by 2025. We have also committed to increasing the take-up of sustainable eating options by setting ourselves the target of having 33% of our menus as plant-based by 2025 (achieved August 2025). Supported by WWF, we have developed a definition of a low-carbon meal as one whose production generates 0.9 kgCO2e or less. Based on this definition we are designing new recipes to ensure that 70% of the main dishes can be labelled low-carbon by 2030.
To facilitate effective implementation of these initiatives, senior leaders’ long-term incentives have been aligned with key sustainability metrics and climate action priorities. These include promoting sustainable eating habits and accelerating the shift toward nutritious, low-carbon meals, fostering informed consumer choices, and improving on-site resource efficiency by minimising both food and non-food waste, and transitioning our fleet to low-emissions alternatives. Sodexo has also connected its financing to its action on food waste prevention. Sodexo SA renewed its €1.3 billion revolving credit facility which now incorporates a pricing adjustment based on Sodexo’s performance towards its goal to prevent 50% of the food waste and food losses from its operations by 2025.
Metrics & Targets
Sodexo Limited are committed to net-zero GHG emissions across the value chain by 2040.
Net zero encompasses all our business activities across our entire value chain, including – scope 1 and 2 GHG emissions and all aspects of scope 3 GHG emissions including supply chain, our activities at client sites and employee commuting; data for each of these activities are aligned to the GHG protocol.
We have set short, near, and long-term science-based targets that have all been externally validated by the SBTi.
The climate targets below include all the activities of Sodexo Limited, including all subsidiaries except for Sodexo (Cyprus) Limited given the low carbon impact and its location outside the UK.
∙Short-term Target: to reduce in absolute terms our Scope 1, 2 and 3 GHG emissions by 34% by 2025
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against a 2017 baseline.
∙Near-term Target: to reduce in absolute terms our Scope 1, 2 and Scope 3 (Non-Forest, Land and Agriculture (“FLAG”)) GHG emissions by 55% by 2030 against a 2017 baseline. We also commit to reduce Scope 3 FLAG GHG emissions by 40% by 2030 against a 2017 baseline.
∙Long-term Target: to reduce in absolute terms our Scope 1, 2 and Scope 3 (Non-FLAG) GHG emissions by 90% by 2040 against a 2017 baseline. We also commit to reduce Scope 3 FLAG GHG emissions by 72% by 2040 against a 2017 baseline.
At the end of fiscal year 2025, Sodexo UK&I achieved a 44.3% absolute reduction in total GHG emissions (scope 1, 2 and 3) compared to a 2017 baseline, representing a significant step forward in the decarbonisation of our operations and value chain. Importantly, Sodexo exceeded its short-term science-based target of 34% reduction by 2025.
Sodexo will achieve its long-term science-based targets once all residual remaining GHG emissions have been neutralised through carbon removals to reach net-zero emissions.
Sodexo does not currently engage in GHG removals or fund GHG mitigation projects through carbon credits. The company is focused on reducing GHG emissions throughout its operations and value chain. In July 2023, Sodexo removed its commitment to achieving carbon neutrality for its direct operations (scopes 1 and 2) by 2025. These emissions include fuel used by company vehicles, gas for heating buildings, and electricity purchased for offices and other facilities. This decision was approved by the Board and publicly communicated. Funds previously designated for carbon offsets will now be directed towards internal decarbonisation initiatives.
To accelerate our GHG emission reduction targets, Sodexo has identified additional short and near-term actions:
Sodexo UK&I are committed to reducing GHG emissions across its value chain to meet its climate ambition of
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net zero by 2040. To support the achievement of this net zero commitment we developed in conjunction with our partner Tennaxia, a carbon trajectory tool. This tool was designed to help monitor our GHG emissions and adapt our progress towards our commitments and a 1.5°C trajectory. The tool enables us to identify key priority areas and select decarbonisation actions to form part of our climate transition plan. The key targets and actions are highlighted in the table above; additional information and details are available in the Transition Plan available here: https://uk.sodexo.com /social-impact/planet /net-zero.
Sodexo has introduced a Carbon Module within its Site Engagement Assessment (SEA) tool, which utilises an automated system to calculate the carbon footprint associated with its service delivery. This module provides clients with a clear understanding of the environmental impact of Sodexo’s services at their locations and facilitates collaborative efforts to identify and implement effective carbon reduction strategies.
Scope 1, 2 & 3 GHG emissions
All scope 1, 2 and 3 GHG emission sources are included in our total footprint, with 2% representing our direct operations (scope 1&2) and 98% coming from indirect scope 3 sources. A breakdown of GHG reporting categories that are relevant to Sodexo and the associated business activities are included in the table below:
GHG emissions are calculated using The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard, which is internationally recognised as the benchmark for carbon accounting. Activity data is gathered at a suitable level of detail based on the specific GHG emission category. Physical measurements (such as litres, kilograms, units, or megawatt-hours) are preferred whenever available; monetary values are used only when physical data cannot be obtained.
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Emission factors are carefully chosen and updated annually from reputable databases, including: the UK Government GHG Conversion Factors for Company Reporting, ADEME Carbon Base (including Agribalyse), EcoInvent and the International Energy Agency. GHG emissions are then calculated by applying the appropriate emission factors to the corresponding activity data, at the relevant level of granularity. The emissions are expressed in carbon dioxide equivalent (CO2e).
Extrapolation, where necessary, is applied when the available data does not cover the entire scope; the activity data or the emissions are extrapolated using appropriate allocation keys (e.g. revenue). For food and non-food volumes and energy consumption, data is collected from 1 September 2024 to 31 May 2025 and then extrapolated to the entire fiscal year. All GHG emissions are reported at the UK level and allocated to legal entities based on revenue. For the reporting year ending 31 August 2025, our GHG emissions data was verified to “limited assurance" across Scopes 1, 2 and 3.
The table below highlights our latest FY25 GHG emissions for Sodexo Limited. Sodexo publishes every year its GHG emissions and progress towards its climate-related targets in a progress report (https://uk.sodexo.com /social-impact/planet /net-zero).
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Emissions Overview
Scope 1 & 2 GHG emissions represent just 1.9% of Sodexo’s total footprint, mainly from building energy (74.3%) and fleet energy (25.7%). Scope 3 accounts for 98.1%, driven by purchased goods and services (52.7%), client site energy (21.5%) and employee commuting (16.0%). Within purchased goods and services, food accounts for 79.7% of GHG emissions. Animal proteins have a disproportionate impact: meat represents only 10.3% of the food volume but 41.4% of food-related GHG emissions.
Scope 1, 2 and 3 Emissions Progress
At the end of FY25, Sodexo achieved a -46.6% absolute reduction in total GHG emissions (scopes 1, 2 and 3) compared to our 2017 baseline, representing a significant step forward in the decarbonisation of our operations and value chain. Importantly, we also exceeded our short-term science-based target of -34% reduction by 2025. At the same time, carbon intensity fell by -53.3% across Scopes 1, 2, and 3, demonstrating our ability to grow while cutting emissions.
Sodexo has achieved a -68.6% reduction in Scope 1 and 2 absolute greenhouse gas emissions compared to its 2017 baseline, largely due to switching its fleet to electric vehicles and increasing its use of renewable electricity. Scope 3 absolute GHG emissions reduced by -45.9% compared with the 2017 baseline, surpassing our short-term science-based target of -34% by 2025.
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Climate Action
Sodexo has structured its environmental approach around three strategic pillars: responsible sourcing, sustainable eating, and on-site resource efficiency, which serve as the main levers for decarbonisation.
Responsible Sourcing: Responsible sourcing serves as one of Sodexo’s most significant tools for climate action, with over 53% of our emissions resulting from the procurement of goods and services. Sodexo launched its net zero supply chain engagement strategy in 2023, setting clear deadlines to provide clarity and support suppliers. From January 2030, we will only partner with suppliers who can demonstrate tangible progress towards net zero through published reporting. By FY25, supply partners representing 92.9% of in-scope supply chain GHG emissions had provided GHG emission data and carbon reduction plans, with a further 2.1% signing up to our SME net zero mentoring programme. In total, 95% of supply partners are fully engaged with the engagement programme. Sodexo also continue to source products from sustainable sources, including 100% of palm oil, 98.9% hygiene paper and 97.7% office paper. 95.3% of all fish and seafood is now sustainably sourced.
Sustainable Eating: Sodexo advances sustainable eating by promoting nutritious, low-carbon meals and supporting informed choices for reduced environmental impact and healthier lifestyles. In partnership with WWF, a "low-carbon" meal is defined as producing 0.9 kgCO2e or less, guiding the development of new recipes to ensure 70% of main dishes meet this standard by 2030. Partnering with Eaternity, over 20,000 recipes have been assessed for environmental impact to help our chefs create more climate-friendly options.
Onsite-resource Efficiency: Sodexo is dedicated to optimising resource utilisation in alignment with its climate strategy. In 2024, all electricity was procured from renewable sources under our global RE100 commitment. This objective has been met through partnerships with energy providers prioritising renewable supply, and, where direct sourcing is not feasible, by purchasing REGO (Renewable Energy Guarantees of Origin) certificates. The company continues its transition to hybrid and electric vehicles, achieving 48.5% hybrid or electric representation within the fleet and 98% for company cars by FY25. The WasteWatch programme, deployed at 474 locations, resulted in a 50.2% reduction in food waste, encompassing 85% of raw material expenditure. Additionally, Green Skills training on sustainable practices has engaged over 3,000 employees, with 89% of onsite management and 99% of senior leaders completing the programme in FY25.
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During the year ended 31 August 2025 (“FY25”), under The Companies (Miscellaneous Reporting) Regulations 2018, Sodexo Limited (“the Company”) has applied the Wates Corporate Governance Principles for Large Private Companies (https://www.wates.co .uk/who-we-are/corporate -governance/).
The Company has a well-established corporate governance framework reflecting its activities as part of a multinational organisation. The directors have set out below an explanation of how the Wates Principles have been applied during FY25.
The Company is a subsidiary of Sodexo S.A. which has its headquarters in Paris. Sodexo S.A.'s Fiscal 2025 Universal Registration Document is available on Sodexo's website at https://www.sodexo.com /en/investors/financial -results-and-publications /financial -results. This Statement reflects the Sodexo structure and organisation in FY25.
Principle 1 – Purpose and leadership
“An effective board develops and promotes the purpose of the Company, and ensures that its values, strategy and culture align with that purpose.”
Purpose
The Company is the main operational corporate entity for the business operations in the UK and is a private company limited by shares. It forms part of the Sodexo Group of Companies (the "Group"), the global leader in sustainable food and valued experiences at every moment in life.
The Company carries out its mission which is to improve the quality of life for its employees and the people it serves, while contributing to the economic, social and environmental progress of the communities where it operates. The Company partners with clients in many sectors across business and industry; schools and universities; sports and leisure; energy and resources; health and care; and government including defence, justice and agencies. A range of services are provided, including food and catering, facilities management, and workplace and technical services.
The Company has developed a regional roadmap, aligned with the Sodexo Group 2028 strategic plan, reflecting its regional strategy and enablers.
Principle 2 – Composition
“Effective board composition requires an effective chair and a balance of skills, backgrounds, experience and knowledge, with individual directors having sufficient capacity to make a valuable contribution. The size of a board should be guided by the scale and complexity of the Company.”
Chair
In December 2024, the UK&I Chief Executive Officer resigned, and the Company appointed the UK&I Chief Operating Officer to lead the Board ("COO"). The COO is responsible for the Board’s overall effectiveness, promoting open debate and facilitating constructive discussion and leading the team to responsible and good commercial decisions. The COO reports to Sodexo Group through the Europe Zone President, Sodexo. In September 2025, the COO was appointed as the CEO of the Company.
The roles and responsibilities of the CEO are clearly defined to ensure that there is a balance of responsibilities, accountabilities and decision making across the Company. The CEO, supported by the Company Secretary, is responsible for the leadership and effective operation of the Board, including establishing the framework and procedures to govern the work of the Board and to support Directors in the discharge of their legal and regulatory obligations.
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Balance, Diversity, Size and Structure
The Board comprises the following members: UK&I CEO, UK&I Chief Finance Officer ("CFO"), UK&I Human Resources ("HR") Director, the Group Chief Finance Officer and the Group General Counsel.
Board members have a diverse range of skills, expertise, backgrounds, knowledge and experience reflecting the diverse nature of the Company’s business and enabling the Directors to discharge their duties and responsibilities effectively. Female representation within the Board is 20%.
The Directors have equal voting rights when making decisions and the Chair has a casting vote. All Directors have access to the advice and services of the Company Secretary and may, if they wish, take professional advice at the Company’s expense.
Effectiveness
The Company continues to review the membership, operation, and effectiveness of the Board.
Directors keep their skills and knowledge up to date by attending appropriate seminars and training courses. Induction materials and briefing sessions are available to new Directors which are tailored to their specific experience and knowledge.
The Company will continue to review the Board´s composition in order to ensure that the Board has the appropriate mix of skills, backgrounds, independence and diversity to meet the strategic needs of the Company in the future.
Principle 3 – Responsibilities
“The board and individual directors should have a clear understanding of their accountability and responsibilities. The board´s policies and procedures should support effective decision making and independent challenge.”
Accountability
The Group has in place a well-developed and embedded global operating framework which sets out Group operating rules, policies, procedures and delegations of authorities. In addition, the Company has established a UK governance framework, aligned to the global operating framework, designed to meet the Company´s requirements in the UK.
Board and Executive Team
The Board has delegated the day-to-day management of the Company to the UK&I Regional Leadership Team (“RLT”) which is representative of the Company’s diverse segment businesses and supporting functions.
The Board and the RLT are responsible collectively for the corporate governance of the Company. The day-to- day operational management of the Company’s business, including sales and financial performance, is implemented through each business segment. The segments are supported by the functions, including finance, legal, human resources, technology and services, and communications, with executive oversight from the Board and the RLT.
The RLT is responsible for the executive management of the Company’s business. The Board promotes the purpose of the Company in the region in alignment with the Sodexo Group; ensuring that its values, strategy and culture align with that purpose; provides constructive challenge to the RLT and oversees the stewardship and accountability of the Company in terms of financial governance and risk management.
The RLT meets at least monthly, and the Board currently operates a programme of two scheduled meetings a
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year, with ad hoc meetings held as and when required. Minutes of decisions and actions are recorded for each meeting. Board meetings are scheduled to align with RLT meetings, and the Directors have access to the same key management information.
The Board and the RLT consider and oversee significant matters which carry potential financial, operational, reputational or legal risk for the Company and which might influence the strategy and sustainable success of the Company. Agenda items include:
∙Health and safety
∙Sales and financial performance
∙Risk management and governance
∙Strategy, growth and business planning
∙Human resources
∙Ethics and compliance
∙Environmental social and governance
∙Technical and services support
∙Brand and communications
∙Potential acquisitions and divestments
Specific items will also be considered at meetings depending on the circumstances – for example: the macro-economic environment, current market and competitor activity and the progress of the annual Internal Audit Plan.
Governance and management committees
The Company has established a sound and proportionate governance model given the size and complexity of the business. This includes several empowered committees which identify, manage and report on the risks which might impact the Company and the progress of plans to address those risks. Each committee has its own terms of reference and reports ultimately to the Board. Each is reviewed periodically and evolved to ensure relevance and effectiveness.
Risk Management Committee (RMC)
The purpose and activities of this committee are explained further under Principle 4.
Ethics & Compliance Committee
The purpose and activities of this committee are explained further under Principle 6.
Quality, Safety, Health and Environment (QSHE) Board
This board is made up of representatives across the UK&I region including the health, safety, environment and quality (HSEQ) director. The purpose of this board is to provide strategic direction on QSHE matters, to monitor performance and effectiveness of the management systems, drive continual improvement, consider the social impact of processes underpinned by quality and a commitment to reduce injury and harm to safety and health.
Regional Investment Committee (RIC)
This committee comprises the CEO (chair), CFO and is attended by other representatives depending on the business under consideration. It reviews bid decisions, capital investments and M&A/disposal decisions in accordance with the delegations of authority.
The Company has various other forums, processes and controls to monitor and manage specific risk areas. These include:
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∙Business Continuity Committee – forum for all matters relating to incident management, crisis management, business continuity and disaster recovery. It ensures sites are using the Business Continuity Management system and it is aligned to ISO22301.
∙Labour Compliance Committee (LCC) – established to be the subject matter expert forum for compliance with UK&I labour laws and regulations.
∙Information and Cyber Security Governance Committee – established to monitor, review and steer the governance, strategy, roadmap and policy in place for managing information and cyber security risks within the region.
∙Environmental, Social and Governance (ESG) Committee – established to ensure that Sodexo integrates sustainability, social responsibility, and strong governance practices into all aspects of its business operations.
The Board receives reports on business and financial performance, key risks and opportunities, strategy, operational matters, market conditions, human resources, legal, compliance, and regulatory matters.
The Company’s finance function collates financial information from its various accounting systems, which helps facilitate and control the recording of all financial transactions and entries. Consistent accounting policies are applied that are aligned with IFRS (International Financial Reporting Standards) and with the Group Accounting Manual. The Company’s finance function has the appropriate independence, expertise and qualifications to ensure the integrity of this information and is provided with the necessary training to keep up to date with regulatory changes. Financial controls, processes and records are reviewed by the Company’s internal audit function. Financial statements are externally audited by KPMG on an annual basis.
Other key information is prepared by the relevant business and internal functions.
Principle 4 - Opportunity and Risk
“The Board should promote the long-term sustainable success of the Company by identifying opportunities to create and preserve value and establish oversight for identification and mitigation of risks.”
Opportunity
The Board and the RLT consider on an annual basis the Company´s strategic plan, which includes a consideration of long-term strategic opportunities (for example, the acquisition of strategic contracts and the development of new services). Short term opportunities to improve business performance and achieve operational efficiencies are also considered and actioned continuously by the RLT and Sodexo S.A., with clear delegations of authority for decision making and review at the Company’s RLT and board meetings.
Risk
Sodexo operates in a constantly changing environment and is exposed to risks that, should they occur, could have an adverse effect on its activities, financial situation and reputation. To make the best business decisions, protect its assets and support its strategic priorities, Sodexo has a proactive approach to anticipate and manage these risks; through a well-defined process for identifying, assessing and managing risks at the appropriate level within the organisation. Risks can be positive or negative and are considered across strategic, tactical and operational levels.
The Company ensures effective risk management through its Risk Management Committee (RMC). The Committee comprises the CEO, CFO (chair), General Counsel, HR Director, Business Support Director, Director of Risk & Asset Management, Head of Risk & Control, Head of Internal Audit, and a CEO from a business segment on a rotational basis.
The Committee keeps under review the effectiveness of the Company´s risk management framework ensuring that it is aligned to the Company’s governance structure and embedded throughout the organisation. This is
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monitored through quarterly assurance statements received from each segment and function, monitoring of KPIs as well as updates from specialist sub-committees. As part of the twice-yearly Statutory Board meeting, the Company’s key risks and the mitigations to these are discussed.
Sodexo’s internal control procedures are part of an ongoing process of managing the Company’s risk exposure. These procedures are designed to give reasonable assurance that laws and regulations are complied with; Group policies and guidelines are properly applied; internal processes are functioning correctly, and financial reporting is reliable. Annual testing of key controls is undertaken by the Risk & Internal Control team who identify actions and improvements. In addition, the Group Internal Audit team review a discrete list of business areas every year using a risk-based approach, with additional actions and improvements being recommended. The close-out of these actions is monitored through the RMC.
Principle 5 – Remuneration
"A Board should promote executive remuneration structures aligned to the long-term sustainable success of a company, taking into account pay and conditions elsewhere in the Company.”
The Company’s compensation policy is an essential lever for profitable growth. Through a balance between individual and collective recognition both long term and short term, it aims to strengthen its culture of performance.
The Company’s performance-based reward and recognition philosophy and policies will help build a performance culture by rewarding individual contributions to collective success. The reward philosophy is based on global key principles which include competitive salary, variable and discretionary long-term incentives for some roles, relevant locally and regionally maintained benefits.
Compensation Framework
All compensation and reward decisions made by the Company should reinforce the Company’s commitment to these global key principles and must therefore rely on several compensation fundamentals:
∙Job Documentation and Evaluation: Each job should be graded using the Group’s Korn Ferry based methodology. Evaluations will be based on written job descriptions including the most recent possible information on the scope and structure of the job, validated by the appropriate dimension HR or Group Talent team member.
∙Salary Structures: Each country should have a confirmed set of salary ranges by grade established collaboratively by Group Reward, Country HR, and Geographic Governance. These wage rates and salaries reflect market rates which are benchmarked against industry external data. Rates are set in a way which allows Sodexo to attract and retain required talent.
∙Additional company benefits can be offered to all or some roles, and are determined by local regulations and practices, and relevance to local employees.
∙Variable Pay Guidelines: Some roles have short term performance incentives (annual incentive payments) and long-term incentives (performance shares) that have target minimum and maximum levels established for each grade by Group Reward. These are set as a percentage of base pay based on combined data analysis of market practice in hub locations.
Principle 6 – Stakeholder Relationships and Engagement
“Directors should foster effective stakeholder relationships aligned to the Company´s purpose. The board is responsible for overseeing meaningful engagement with stakeholders, including the workforce, and having regard to their views when taking decisions.”
As well as outlining how the Company has applied Principle 6 of the Wates Corporate Governance Principles, the Company describes in this section how the directors have had regard to the matters set out in section
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172(1)(a) to (f) of the Companies Act 2006. In particular, the statement below outlines how the directors have acted in a way which is most likely to promote the success of the Company for the benefit of the members as a whole and in doing so having regard for stakeholders’ interests.
The Board and the RLT are responsible for fostering effective relationships with all stakeholders, including clients, employees, suppliers, the UK Government, and the wider community. These relationships are central to the Company’s ability to deliver sustainable value and uphold its purpose.
The Company considers the following to be its key stakeholders:
Employees
The Board recognises that, as an integrated facilities management service provider, its employees are key to the Company´s strength and success. The Board and the RLT are committed to ensuring:
Health & Safety
The Company is committed to ensuring a safe and healthy working environment for all its employees, contractors and visitors. Through suitable and sufficient risk assessment and the creation of resulting safe systems of work, Sodexo provides employees with information, training and instructions to enable them to work safely and to protect the safety and health of those who may be affected by its activities. Compliance with legislative requirements underpins its purpose. The Company tests and challenges itself to continually improve and to engage with its people to ensure everyone has a voice and is properly informed.
The Company believes that health and safety is everyone’s responsibility and through strong leadership, supervision and holding each other to account, health and safety can become a way of life that adds value and drives improved performance. Management and monitoring of performance is achieved through robust reporting, strong audit and monitoring regimes.
Since September 2023, over 4,200 people managers have completed a Zero Harm Mindset training course which is designed following the unshakeable belief that Zero Harm at work is possible. This represents 98% of the management population.
Ongoing support to all employees
The Company continues to provide ongoing support to all employees through:
∙promoting 'Speak Up', which is a confidential route for staff to raise concerns;
∙offering a free helpline ‘Talk’ where staff and their families can seek expert advice on personal and mental wellbeing topics;
∙offering a range of wellbeing products designed to provide employees with access to a virtual 24/7 GP, cycle to work scheme, free will writing services, daily wellbeing activities, fitness and nutrition consultation;
∙providing employees with the ability to access discounts to multiple high street retailers; and
∙providing all employees with access to life assurance.
The Company is proud of all its teams and their dedication and agility as its client and business needs continue to evolve.
High levels of employee engagement, wellbeing and communications
The Company strives to create an employee experience that enables its people to “belong, act and thrive” whilst working for Sodexo. It measures the effectiveness of its “belong, act, thrive” Employee Value Proposition (“EVP”) by conducting biennial global employee engagement surveys and ad hoc surveys to address specific areas of the organisation. The data is thematically and statistically analysed to distil an action plan to address feedback solicited through the survey. A communications strategy is then tuned to deepen employee engagement by
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focusing on informing, engaging and inspiring colleagues to create an effective and inclusive workplace.
Regular employee engagement surveys are conducted, and results are carefully scrutinised by the RLT to identify and implement actions for improvement. The RLT monitors attrition rates, feedback from exit interviews, agency spend and absenteeism levels in an effort to identify emerging people risks, trends, and to ensure appropriate action is taken to address these. Emerging people risks and trends are highlighted to the Board together with proposed action plans.
In 2025, Sodexo Limited conducted its biennial global employee engagement survey, Voice 2025, which assessed employee happiness and advocacy across nine core engagement drivers.
Following the survey, teams across the business have been reviewing and discussing the results within their respective groups. These discussions are now feeding into a structured action-planning process, aimed at delivering incremental improvements in the areas identified for development. The next survey cycle is scheduled to commence in April 2027, with results expected in the summer of that year.
A diverse and inclusive workforce and culture - Diversity, Equity & Inclusion (DE&I)
At Sodexo, Diversity, Equity & Inclusion is central to our Culture & Belonging ambition and our global strategy. We are committed to creating a workplace where every colleague feels valued, respected and able to bring their whole self to work. Belonging is the foundation of how we support people to act with purpose and thrive.
Our DE&I framework focuses on five global dimensions; gender, race and ethnicity, disability, generations, and sexual orientation and gender identity each championed by senior leaders who drive accountability and progress across the organisation.
Employee Resource Groups play a vital role in shaping our culture by amplifying diverse voices, strengthening allyship, and creating safe spaces for connection. These groups also link directly with our Stop Hunger charity partnerships, ensuring our social impact reflects our DE&I values and supports communities in meaningful ways.
We continue to maintain recognition as one of The Times Top 50 Employers for Gender Equality, validating our sustained focus on inclusive practices and equitable opportunity. Our global policies provide consistent, progressive support for colleagues across life stages and enable a fair, flexible and inclusive experience.
Clients
The Company operates a Client Lifecycle approach to monitor and manage all contracts.
Client retention is the essential first step in our Focus on Growth strategic agenda that helps create sustainable growth. This is underpinned by our “Clients for Life” programme. Clients for Life is a philosophy that underpins Sodexo’s client engagement and retention programme. It is designed to create and nurture open, transparent relationships with our clients and ensures we put client and consumer needs at the heart of everything we do.
Members of the RLT and our operational senior leadership team meet with our key clients at regular intervals to discuss and collaboratively agree the key strategic priorities that both organisations will invest effort and resources to drive continuous progression of both the strategic partnership and enhance service performance that impacts on our clients, employees and visitors.
Detailed client feedback touchpoints are executed by an independent and impartial team that captures client insight from a variety of client key stakeholders at various degrees of proximity to service delivery. This insight is shared across a range of key stakeholders within the Company to ensure that any decisions around service design and architecture places client objectives and needs at the heart of the decision making process. Progress is tracked by the board and the UK&I RLT.
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Suppliers
Sodexo manages its end-to-end supply chain to meet legislative requirements, mitigate risks and satisfy customer demands for supply chain transparency. All suppliers of goods and services to Sodexo are assessed to ensure they are capable and competent to deliver the goods or conduct the work they are being contracted to supply. Suppliers are assessed against Sodexo’s Supplier Code of Conduct. The level of initial assessment and ongoing monitoring relates directly to the goods/services provided or to be undertaken and the associated risk. Assessment of the supplier's suitability is fulfilled by professionals who are independent from the day-to-day operational management of the suppliers they evaluate.
Dependent on the associated risk, food suppliers are further audited against Sodexo’s Supplier Food Safety Code of Practice by either an external Independent Food Safety Consultancy or Sodexo's Health and Safety division.
It is essential suppliers strive to meet these standards on a continuous basis as a condition of the supply agreement. Failure to meet the expected standard results in the immediate suspension of trade. If positive action is not taken to remedy the situation, the supplier will be removed from the supply chain.
The Company promotes purchasing policies that increase the use of environmentally sound and ethically sourced products & partnering with a diverse supply chain, including small & medium enterprises, diverse suppliers and social enterprises. Sodexo encourages its suppliers to share its ethical principles and procurement commitments.
Sodexo is committed to ensuring that slavery and human trafficking is not taking place in any of its supply chains or any part of its business and has in place measures to manage this risk including a risk-based audit process.
Community
Sodexo’s approach to creating Social Impact and striving towards identifying and measuring its impact within local communities forms an integral part of the Company’s regional strategy. It encompasses many aspects of Sodexo’s business from its People Strategy to Net Zero to Responsible Sourcing and Stop Hunger.
The Company underwent a comprehensive strategy review to ensure that its ongoing endeavours are in line with community needs and the environment. This resulted in publication of its Social Impact Pledge:2030 in February 2025.
The commitments contained within the Pledge is led by the UK RLT and brought to life across the business. The UK has pioneered a distinctive approach to social impact and social value that stands out on the global stage. Unlike other countries, where legislative requirements like the EU’s Corporate Sustainability Reporting Directive (CSRD) or traditional Corporate Social Responsibility (CSR) frameworks dominate, the UK has developed a flexible, innovation-driven, and outcome-focused ecosystem. This approach not only enhances social and environmental outcomes but also drives business growth and competitiveness and ensures continuous focus on the intended outcome of actions.
Sodexo’s Social Impact Pledge:2030 is based around four Social Impact pathways:
∙Our People – we will nurture inclusive and equitable workplaces, measuring our progress through our position on the Social Mobility Employer Index
∙Our Planet – we will continue to decarbonise our business, staying on track for Net Zero 2040
∙Our Places – Sodexo Stop Hunger Foundation will by 2030 have supported 12.5 million people in our local communities
∙Our Partners – we will increase diversity in our supply chain and spend over £1 billion with SMEs and diverse suppliers by 2030
Sodexo continues to publish an annual progress report against each of our social impact commitments. This can
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be found at uk.sodexo.com/social-impact/social-impact-reporting
In doing so, the Company tracks its progress, articulates the social return on investment (SROI) of its activities, and accelerates subsequent actions based on achievements to date. The primary focus over the period to 2030 is on Social Mobility, progress towards Net Zero, elevating the depth and breadth of Stop Hunger, and diversification of suppliers through increased, targeted spend.
The following illustrates how Sodexo is delivering against its Social Impact Pathways:
∙Our People - Sodexo recognises that talent comes from all walks of life and actively seeks to go beyond the legislative requirements of the Equality Act. The Company works to understand and respond to the demographic needs of the communities it serves. As the UK’s largest prison services provider, Sodexo plays a leading role in supporting employment opportunities for prison leavers through its Starting Fresh Campaign. Since the campaign’s launch, over 800 prison leavers have been supported into employment, with more than 100 individuals securing roles directly within Sodexo. The Company also supports veterans through targeted employment initiatives and continues to promote inclusive hiring practices across all business areas.
∙Our Planet - Sodexo has been actively addressing its climate impact for over a decade, working in partnership with the World Wildlife Fund (“WWF”) to measure and reduce greenhouse gas (“GHG”) emissions. The Company is committed to achieving net zero by 2040, with both near-term and long-term science-based targets validated by the Science Based Targets initiative (“SBTi”). Progress against these targets is being delivered through the implementation of Sodexo’s net zero transition plan, which includes operational changes, supply chain engagement, and behavioural initiatives. Further details are available in the Climate-related Financial Disclosure section of the report and on the Company’s website: https://uk.sodexo.com /social-impact/planet /net-zero.
∙Our Places - Sodexo is the founding partner of the Stop Hunger Foundation; an independent registered charity in the UK since 2005. Stop Hunger has a global reach with activities supported in 58 countries around the world; it was created in 1996 by US Sodexo colleagues who witnessed children going to school hungry.
Stop Hunger relies on national, regional and local partnerships with registered charities and Community Interest Companies (CICs), as well as the unique ecosystem of Sodexo to tackle food insecurity and its root causes. Our key partners include Chapter One, Enactus, Fareshare and Trussell. We provide our partners with grant giving opportunities, hands on volunteering, expertise and knowledge sharing. In addition to alleviating food insecurity, the Foundation aims to support initiatives which go beyond food aid and empower women effectively and sustainably to eliminate food insecurity in the communities we live, work and play. In the UK a Community Fund has been introduced. This fund allows employees to identify causes close to their hearts, within their local community to receive funding to support their endeavours.
In FY25, the Stop Hunger Foundation generated an income of over £897,700 and supported through volunteering and grants given to charities, CICs and charitable organisations in the UK, Ireland and Cyprus to help over one million beneficiaries exit food insecurity.
All Sodexo employees have access to a volunteering policy offering three paid days per holiday year to participate in volunteering and fundraising. Our colleagues donated a total of 16,267 hours of their time, of which 6,315 hours focused on knowledge and expertise sharing and supported the Foundation and charitable organisations contributing to Stop Hunger’s mission. A team of Stop Hunger charity champions are in place across the business, engaging, encouraging and enabling ways in which Sodexo’s workforce can give back to communities to tackle food insecurity and its root causes.
Further information on the Company’s work in this area, and the impact in local communities, can be found at https://uk.sodexo.com /social-impact/places /stop-hunger.
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∙Our Partners – Sodexo’s responsible business strategy is complemented by its supplier engagement approach, known as Partners with Purpose. In the UK, the Company goes beyond traditional reporting metrics, such as spend and supply chain diversity, to emphasise the strategic importance of supplier impact on overall business success. Sodexo encourages suppliers to thrive by enhancing their competitiveness through pro bono coaching and mentoring. Each year, the Company deploys technical and professional employees to provide one-to-one support to suppliers, local charities, and community partners, helping them advance their organisational goals, strengthen engagement with Sodexo, and contribute to key policy objectives across the country.
Shareholder
The Board of Sodexo Limited duly considers the views of its ultimate shareholder, Sodexo S.A., and the interests of the wider Group when evaluating major decisions and transactions undertaken by the Company. Communication between the Company and its shareholder is facilitated through the Chair, the Board, and members of the RLT, who serve as key channels for dialogue and alignment.
Long-term decision making
The directors continue to review the Company’s organisational structure, cost base, service offerings, investment priorities, and broader business plans to ensure they remain optimal and responsive to the evolving external environment.
Standards of business conduct
Sodexo is built on strong ethical principles that guide its development and contribute to its reputation. These principles are the cornerstone of Sodexo’s culture, business model and policies on compliance, innovation, corporate responsibility, sponsorship, human rights and diversity, equity and inclusion. Sodexo’s leaders and employees must respect and apply all applicable rules and standards according to the principles of the Company’s Group Code of Conduct and UK&I Code of Ethics, whether it is fighting corruption, providing accurate financial reports or protecting confidentiality.
The UK&I Ethics & Compliance Committee includes the CEO (chair), CFO, HR Director, General Counsel, General Counsel – Ethics, UK&I Head of Internal Audit, Head of Risk & Control, and Head of Supply Management. A segment CEO from a business segment is also included on a rotational basis annually. The Committee receives, logs, considers and manages concerns raised under the UK&I Code of Ethics, Anti Bribery Policy, Gifts & Hospitality Policy and Whistleblowing Policy, including any allegations of bribery and corruption. The Committee conducts investigations, takes appropriate action, monitors and reviews incidents, training, measures trends, and reports appropriately to the Board. The Committee’s minutes are submitted to each Board meeting for consideration by the directors.
Sodexo’s Ethics and Compliance program to which the Company aligns, is structured around the following pillars: A committed management team (tone at the top), risk assessments, policies and procedures (including the Code of Conduct & UK&I Code of Ethics), training and awareness-raising, third party assessment (Supplier Code of Conduct), a whistleblowing system (Speak-up) and specific anti-corruption internal controls.
Sodexo shares the same ethical principles as those set out in the Modern Slavery Act, 2015. The Company believes in the elimination of all forms of compulsory labour and work to ensure slavery and human trafficking do not take place within any part of Sodexo’s business supply chain. Further details are set out in the Company’s Modern Slavery Act Statement which can be found at https://edge.sitecorecloud .io/sodexofrance1 -sodexocorpsites -prod-e74c/media/Project /Sodexo-Corp/Europe /UK/Media/pdf /legal/modern-slavery -report-28-02-2025.pdf
Stakeholder Management - Government
The Company is recognised as one of the UK Government’s strategic suppliers and maintains its relationship
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with central government through the Cabinet Office. This arrangement enables the Company to provide oversight across all public services delivered and facilitates effective partnership working to establish mutually agreed objectives that address governmental needs. The Company is appointed a Crown Representative, ensuring that business issues and initiatives are appropriately reviewed within the commercial function and serving as a key interface with relevant government departments.
Pension Trustee
The Trustee (appointed by Sodexo Limited) is responsible for managing the Sodexo Pension Fund (the “Fund”), which is a defined benefit pension fund, to ensure that it remains well governed, and that all member and beneficiary benefits remain secure. Whilst it is no longer open to accrual for new members, the fund still has a small number of active members and a significant number of deferred and pensioner members. Sodexo Limited executives meet regularly with the Trustee to discuss administration, governance and both company and fund asset performance. The ongoing assets and liabilities of the fund are monitored closely, and the Company makes payments to the fund based upon the agreed schedule of contributions.
The full actuarial valuation takes place every 3 years, the last valuation fell due in April 2024 and was completed in November 2024. As at April 2024, the Fund was fully funded on a technical provisions basis. It is important to note, however, that the funding position will fluctuate.
The Company remains fully committed to supporting the Fund and actively engaging with the Trustee.
Closing
The Company is committed to demonstrating transparency in its operations and strategic direction, reflecting the pride it takes in its workforce and the delivery of exceptional services. The Directors believe that maintaining transparency will further strengthen the trust placed in the Company by colleagues, clients, and the wider community throughout its corporate history.
An indication of likely future developments in the business has been included in the Director's Report on page 5.
The auditor, KPMG LLP, will be deemed to be reappointed in accordance with section 487(2) of the Companies Act 2006.
Page 26
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2025
This report was approved by the board and signed on its behalf.
Page 27
DIRECTORS’ RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 AUGUST 2025
The directors are responsible for preparing the Strategic report, the Directors' report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law they have elected to prepare the financial statements in accordance with UK accounting standards and applicable law (UK Generally Accepted Accounting Practice), including FRS 101 Reduced Disclosure Framework.
Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.
Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙assess the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and
∙use the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.
Page 28
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SODEXO LIMITED
Opinion
We have audited the financial statements of Sodexo Limited (“the Company”) for the year ended 31 August 2025 which comprise the Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity and related notes, including the accounting policies in note 2.
In our opinion the financial statements:
In our opinion the financial statements:
∙give a true and fair view of the state of the Company's affairs as at 31 August 2025 and of its profit for the year then ended;
∙have been properly prepared in accordance with UK accounting standards, including FRS 101 'Reduced Disclosure Framework'; and
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities are described below. We have fulfilled our ethical responsibilities under, and are independent of the Company in accordance with, UK ethical requirements including the FRC Ethical Standard as applied to other entities of public interest. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion.
Going concern
The directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the Company or to cease its operations, and as they have concluded that the Company’s financial position means that this is realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over its ability to continue as a going concern for at least a year from the date of approval of the financial statements (“the going concern period”).
We used our knowledge of the Company, its industry, and the general economic environment to identify the inherent risks to its business model and analysed how those risks might affect the Company’s financial resources or ability to continue operations over the going concern period. The risks that we considered most likely to adversely affect the Company’s available financial resources over this period were:
∙Deterioration in gross margin as a result of operational performance;
∙The downturn in revenues due to contracts of key clients not being renewed;
∙The under recovery of inflation.
We considered whether these risks could plausibly affect the liquidity in the going concern period by assessing the degree of downside assumptions that, individually and collectively, could result in a liquidity issue, taking into account the current and projected cash (a reverse stress test). We assessed the completeness of the going concern disclosure.
Our conclusions based on this work:
∙we consider that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate;
∙we have not identified, and concur with the directors’ assessment that there is not, a material uncertainty related to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for the going concern period; and
∙we found the going concern disclosure in note [2.2] to be acceptable.
Page 29
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SODEXO LIMITED
However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that the Company will continue in operation.
Fraud and breaches of laws and regulations – ability to detect
Identifying and responding to risks of material misstatement due to fraud
To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:
∙Enquiring of directors and internal audit, and inspection of policy documentation as to the Company’s high-level policies and procedures to prevent and detect fraud, including the internal audit function, and the Company’s channel for “whistleblowing”, as well as whether they have knowledge of any actual, suspected or alleged fraud.
∙Reading Board minutes.
∙Considering remuneration incentive schemes and performance targets for management, directors and sales staff.
∙Using analytical procedures to identify any unusual or unexpected relationships.
We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud throughout the audit.
As required by auditing standards, we perform procedures to address the risk of management override of controls, in particular the risk that Company management may be in a position to make inappropriate accounting entries and the risk of bias in accounting estimates. On this audit we do not believe there is a fraud risk related to revenue recognition because the opportunity for management to fraudulently recognise revenue using a revenue account at a transactional level is limited. The nature of the Company’s operations provides limited opportunities to engage in fraudulent revenue recognition as no significant estimation or judgement is required to apply the Company’s revenue accounting policies.
We did not identify any additional fraud risks.
We performed procedures including:
∙identifying journal entries and other adjustments to test based on risk criteria, including unusual account combinations, and comparing the identified entries to supporting documentation.
∙Assessing whether the judgements made in making accounting estimates are indicative of a potential bias.
Identifying and responding to risks of material misstatement related to compliance with laws and regulations
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience and through discussion with the directors and other management (as required by auditing standards) and discussed with the directors and other management the policies and procedures regarding compliance with laws and regulations.
We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit.
The potential effect of these laws and regulations on the financial statements varies considerably.
Page 30
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SODEXO LIMITED (CONTINUED)
Firstly, the Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including related companies legislation), distributable profits legislation, and taxation and pension legislation. We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
Secondly, the Company is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation. We identified the following areas as those most likely to have such an effect: health and safety, data protection laws, anti-bribery and employment law, recognising the nature of the Company’s activities. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and other management and inspection of regulatory and legal correspondence, if any. Therefore, if a breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach.
For the contingent liability discussed in Note 24 we assessed disclosures against our understanding from legal correspondence and inquiry with management and internal legal counsel.
Context of the ability of the audit to detect fraud or breaches of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it.
In addition, as with any audit, there remained a higher risk of non-detection of fraud, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations.
Strategic report and directors’ report
The directors are responsible for the strategic report and the directors’ report. Our opinion on the financial statements does not cover those reports and we do not express an audit opinion thereon.
Our responsibility is to read the strategic report and the directors’ report and, in doing so, consider whether, based on our financial statements audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Based solely on that work:
∙we have not identified material misstatements in the strategic report and the directors’ report;
∙in our opinion the information given in those reports for the financial year is consistent with the financial statements; and
∙in our opinion those reports have been prepared in accordance with the Companies Act 2006.
Matters on which we are required to report by exception
Under the Companies Act 2006 we are required to report to you if, in our opinion:
∙adequate accounting records have not been kept, or returns adequate for our audit have not been received from the branches not visited by us; or
∙the financial statements are not in agreement with the accounting records and returns; or
∙certain disclosures of directors’ remuneration specified by law are not made; or
∙we have not received all the information and explanations we require for our audit.
We have nothing to report in these respects.
Page 31
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SODEXO LIMITED (CONTINUED)
Directors’ responsibilities
As explained more fully in their statement set out on page 28, the directors are responsible for: the preparation of the financial statements and for being satisfied that they give a true and fair view; such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and using the going concern basis of accounting unless they either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue our opinion in an auditor’s report. Reasonable assurance is a high level of assurance, but does not guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.
A fuller description of our responsibilities is provided on the FRC’s website at
www.frc.org.uk/auditorsresponsibilities.
www.frc.org.uk/auditorsresponsibilities.
The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
KPMG LLP, Statutory Auditor
Chartered Accountants
1 St Peter's Square
Manchester
M2 3AE
29 May 2026
Page 32
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 AUGUST 2025
Page 33
STATEMENT OF FINANCIAL POSITION
AS AT 31 AUGUST 2025
Page 34
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 AUGUST 2025
The financial statements were approved and authorised for issue by the board and were signed on its behalf by
The notes on pages 37 to 75 form part of these financial statements.
Page 35
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 AUGUST 2025
Page 36
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
Sodexo Limited, a private company limited by shares, is incorporated, domiciled and registered in the United Kingdom. The company's registered number is 00842846 and its registered office is One Southampton Row, London, WC1B 5HA.
2.Accounting policies
These financial statements were prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework ("FRS 101").
The presentational currency of these financial statements is sterling (£). All amounts in the financial statements have been rounded to the nearest £1,000.
In preparing these financial statements, the Company applies the recognition, measurement and disclosure requirements of UK-adopted international accounting standards (“UK-adopted IFRS”), but makes amendments where necessary in order to comply with Companies Act 2006 and has set out below where advantage of the FRS 101 disclosure exemptions has been taken.
In these financial statements, the Company has applied the exemptions available under FRS 101 in respect of the following disclosures:
∙Cash Flow Statement and related notes;
∙Comparative period reconciliations for share capital, tangible fixed assets and intangible assets;
∙Disclosures in respect of transactions with wholly owned subsidiaries;
∙The effects of new but not yet effective IFRSs;
∙Disclosures in respect of the compensation of Key Management Personnel; and
∙Disclosures of transactions with a management entity that provides key management personnel services to the company.
As the consolidated financial statements of Sodexo S.A. include the equivalent disclosures, the Company has also taken the exemptions under FRS 101 available in respect of the following disclosures
∙IFRS 2 Share Based Payments in respect of group settled share based payments; and
∙Certain disclosures required by IFRS 13 Fair Value Measurement and the disclosures required by IFRS 7 Financial Instrument Disclosures.
The Company is exempt by virtue of s401 of the Companies Act 2006 from the requirement to prepare group accounts. These financial statements present information about the Company as an individual undertaking and not about its group. The results of the Company are included in the consolidated financial statements of Sodexo S.A., incorporated in France.
The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these financial statements.
The preparation of financial statements in compliance with FRS 101 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies.
The following principal accounting policies have been applied:
Page 37
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
2.Accounting policies (continued)
The financial statements have been prepared on a going concern basis which the directors consider to be appropriate for the following reasons.
The Company is part of the Sodexo UK and Ireland group of companies (the “UK&I Group”), which in turn forms part of the wider Sodexo Group, headed by Sodexo S.A., a company incorporated in France. The UK&I Group’s principal activities include the provision of facilities management and catering services across various sectors such as government, healthcare, corporate services, sports and leisure and education. Accordingly, the Company’s cash flows are influenced by the continuity, volume, and pricing of these operations.
The Company meets its day-to-day working capital requirements through operational cash flows and intercompany loan arrangements within the UK&I Group. The UK&I Group has demonstrated resilience in the face of economic challenges. This has been achieved through disciplined cash and balance sheet management, strong contract retention, a diversified client base across both public and private sectors, and robust inflation management processes. Furthermore, the UK&I Group continues to pursue organic growth opportunities, with several new contracts in the pipeline. Nonetheless, it remains vigilant and prepared for potential macroeconomic changes through sound commercial management and prudent cost control.
In determining the appropriateness of the going concern basis, the directors have reviewed cash flow and profit forecasts for the UK&I Group covering a period of at least 12 months from the date of approval of these financial statements. These forecasts incorporate a severe but plausible downside scenario, which assumes a deterioration in gross margin due to operational challenges, a reduction in revenue from non-renewal of key contracts, and under-recovery of inflation. In addition, this scenario does not factor in any mitigating actions that management could implement. Even under these conditions, the forecasts indicate that the UK&I Group would remain resilient.
Based on this assessment, the directors are confident that the Company will have sufficient resources to meet its obligations as they fall due for at least 12 months from the date of approval of the financial statements. Accordingly, the financial statements have been prepared on a going concern basis.
The financial statements are prepared on the historical cost basis and in line with applicable accounting standards.
Page 38
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
2.Accounting policies (continued)
The Company provides a range of on-site services to businesses and public-sector customers. Services contracts may include the provision of food and catering, facilities management, property and technical services.
Revenues are measured at the fair value of the consideration received or to be received, net of discounts and rebates as well as Value Added Tax (VAT) and other taxes.
Revenue is recognised in accordance with IFRS 15, following a five-step approach:
∙Identify the contract with a customer
∙Identify the performance obligations in the contract
∙Determine the transaction price
∙Allocate the transaction price to the performance obligations
∙Recognise revenue when the transfer of control of goods/services occurs
In the majority of cases, revenue from on-site contracts is recognised over time as the customer typically receives the benefits as the Company performs the contracted services. In certain cases of fixed billing contracts, if there is an unsatisfied performance obligation or excess of services provided, the Company makes an adequate credit note provision or raises an additional invoice to true up the revenue recognised. Revenues include all revenues stipulated in the contract, considering whether Sodexo acts as principal or agent.
Food services revenues are recognised when the customer pays at the check-out (the date on which control of the goods is transferred to the customer, since the sales do not represent any other unsatisfied performance obligation at that date). Facilities management, property and technical services mainly represent routine or recurring services, whose benefits are simultaneously received and consumed by customers as they are performed by the Company, and therefore correspond to performance obligations satisfied over time. Consequently, the Company applies the practical expedient provided for in IFRS 15 and recognises the revenue for its right to bill (invoicing based on contractual prices, which represent the transaction prices of the different promised services). As a result, revenue recognition matches with billing for most services.
The Company derives some of its revenues from property and technical services, often referred to as hard facilities management, where contracted work takes place typically over a number of months. Revenue from such contracts is recognised over time, by reference to the proportion of total costs incurred at the reporting date compared to the estimated total costs of the contract at completion. Until the outcome of such a contract can be estimated reliably, contract revenue is recognised to the extent of contract costs incurred, where such costs are considered recoverable. After this point, margin is recognised in the Statement of Comprehensive Income in line with the corresponding stage of completion. Contract costs include costs that are directly related to the specific contract and costs that are attributable to general contract activity and can be allocated to the contract.
When a third party is involved in providing goods or services to a client (for example, a subcontractor), the Company evaluates whether or not it obtains control of goods or services before transferring control to the client. When the Company controls the good or service before it is transferred to the client, the revenue is recognised on a gross basis. Otherwise, when the control is not obtained, the Company is not considered to be acting as principal in the transaction and the revenue is recognised on a net basis.
Page 39
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
2.Accounting policies (continued)
Tangible fixed assets are stated at historical cost less accumulated depreciation and accumulated impairment losses.
Depreciation is provided to write-off the cost or valuation less the estimated residual value of tangible fixed assets in a straight line method over their estimated useful economic lives as follows:
Plant and equipment 3-12 years
Motor vehicles 3-5 years
No depreciation is provided on freehold land. All short-term leasehold properties are amortised over the unexpired term of the lease.
Assets under construction are not depreciated.
Development costs represent the costs associated with developing software by the Company for its internal use. Development costs are amortised over their estimated useful lives. This is 3-7 years.
Other intangible assets include concessions, patents, licences, trademarks and similar rights & assets. Licences purchased by the Company are amortised to nil by equal annual instalments over their useful economic lives, being the period over which benefits arise.
Some client contracts provide for a financial contribution by Sodexo. For example, the Company may participate in financing the purchase of equipment or fixtures on the client site that are necessary to fulfil service obligations, or it may make a financial contribution that will be recovered over the life of the contract. They are recognised in accordance with the application of IFRS 15 “Revenue from contracts with customers” for consideration payable to the customer, as a reduction in the transaction price in the absence of a separate good or service provided by the customer. These contributions are recognised as an asset in “Client investments” and spread as a revenue deduction over the service duration. The amortisation is recognised as a reduction to revenues over the life of the contract. The amortisation period is in general less than 10 years, in line with the contract duration, but may be amortised over a longer period if the contract duration permits.
Client investments are subject to an impairment test in the same way as other non-current assets directly linked to contracts.
Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the Company operates (‘the functional currency’). The financial statements are presented in ‘Pounds Sterling’ (£), which is also the Company’s functional currency. Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the contracted rate or the rate of exchange ruling at the balance sheet date and the gains or losses on translation are included in the profit and loss account.
Page 40
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
2.Accounting policies (continued)
Stock is stated at the lower of cost and net realisable value. In determining the cost of raw materials, consumables and goods purchased for resale, the weighted average purchase price is used.
Any residual difference between the fair value of the consideration transferred, increased by the amount of the non-controlling interest in the acquired business and the fair value as at the date of acquisition of the assets acquired and liabilities assumed, is recognised as goodwill in the statement of financial position. Goodwill is considered to have an indefinite useful life and is tested for impairment annually or whenever there is an indication of impairment.
Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the profit and loss account except to the extent that it relates to items recognised directly in equity or other comprehensive income, in which case it is recognised directly in equity or other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.
Deferred tax is provided on timing differences which arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in the financial statements. The following timing differences are not provided for: differences between accumulated depreciation and tax allowances for the cost of a fixed asset if and when all conditions for retaining the tax allowances have been met; and differences relating to investments in subsidiaries, to the extent that it is not probable that they will reverse in the foreseeable future and the reporting entity is able to control the reversal of the timing difference. Deferred tax is not recognised on permanent differences arising because certain types of income or expense are non-taxable or are disallowable for tax or because certain tax charges or allowances are greater or smaller than the corresponding income or expense.
Deferred tax is provided in respect of the additional tax that will be paid or avoided on differences between the amount at which an asset (other than goodwill) or liability is recognised in a business combination and the corresponding amount that can be deducted or assessed for tax. Goodwill is adjusted by the amount of such deferred tax.
Deferred tax is measured at the tax rate that is expected to apply to the reversal of the related difference, using tax rates enacted or substantively enacted at the balance sheet date.
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.
Page 41
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
2.Accounting policies (continued)
Pre-contract costs
Pre-contract costs are expensed as incurred, except when costs are directly attributable to a contract where the award is virtually certain to occur within a reasonable timescale and positive net cash flows are anticipated. In such circumstances costs are recognised within other debtors and written off over the life of the contract, being the directors' best estimate of useful life.
Trademark fees
There are trademark fees relating to the use of intellectual property by the operational entities. These are recharged on an arm's length basis from Sodexo S.A and included within Admin Expenses as they are incurred.
Dividends unpaid at the balance sheet date are only recognised as a liability at that date to the extent that they are appropriately authorised and are no longer at the discretion of the Company. Unpaid dividends that do not meet these criteria are disclosed in the notes to the financial statements.
Financial instruments are classified and accounted for, according to the substance of the contractual arrangement, as financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Where shares are issued, any component that creates a financial liability of the Company is presented as a liability in the balance sheet. The corresponding dividends relating to the liability component are charged as interest expense in the profit and loss account.
Trade and other debtors/creditors
Trade and other debtors are recognised initially at transaction price less attributable transaction costs, trade and other creditors are recognised initially at transaction price plus attributable transaction costs. Subsequent to initial recognition they are measured at amortised cost using the effective interest method, less any impairment losses in the case of trade debtors.
Trade and other receivables are impaired to reflect the expected credit losses, assessed using an impairment matrix (application of the simplified impairment model as provided for in IFRS 9 “Financial instruments”). This method consists of applying for each ageing balance category a separate impairment rate based on historical credit losses adjusted, when necessary, to take into account prospective factors.
Bank and cash balances
Bank and cash balances comprise cash at banks and in hand as well as short term deposits.
Investments in subsidiaries
Investments in subsidiaries are carried at cost less impairment.
The cost of fixed asset investments is their purchase cost together with any incidental costs of acquisition. Provision is made for any impairment in value as appropriate. Fixed asset investments
Page 42
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
2.Accounting policies (continued)
are reviewed for impairment when changes in circumstances indicate that the carrying amount of the investment may not be recoverable. An impairment loss is recognised as an item of other expenditure in the Statement of Comprehensive Income for the amount by which the asset's carrying amount exceeds its recoverable amount.
Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which the Company pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an expense in the profit and loss account in the periods during which services are rendered by employees.
Defined benefit plans
A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Company is the sponsor and employer for a UK Defined benefit scheme. The net obligation in respect of the defined benefit pension plan is calculated by deducting the discounted value of estimated future benefit payments, that employees have earned in return for their service in the current and prior periods, from the fair value of any plan assets (at bid price).
The discount rate is derived by reference to the yield at the reporting date on corporate bonds with a credit rating of at least AA and maturity dates approximating the duration of the scheme’s obligations and that are denominated in the currency in which the benefits are expected to be paid.
The Company determines the cost which goes through the Statement of Comprehensive Income as the service cost, plus the net interest on the net defined benefit liability/(asset) for the period. The net interest cost is determined by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the net defined benefit liability/(asset), and allowing for Employer contributions and benefit payments made during the year. All administrative expenses related to defined benefit plans are also recognised in the Statement of Comprehensive Income.
Remeasurements arising from defined benefit plans comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest). The Company recognises these immediately in other comprehensive income.
When the benefits of a plan are changed, or when a plan is curtailed, the portion of the changed benefit related to past service by employees, or the gain or loss on curtailment, are recognised immediately in the Statement of Comprehensive Income when the plan amendment or curtailment occurs. The Company then calculates the current service cost for the remainder of the reporting period, post the amendment or curtailment, using the same actuarial assumptions as those used to remeasure the net defined benefit liability/(asset).
The calculation of the defined benefit obligations is performed by a qualified actuary using the projected unit credit method. When the calculation results in a benefit to the Company, the recognised asset is limited to the present value of benefits available in the form of any future refunds from the plan or reductions in future contributions and takes into account the adverse effect of any minimum funding requirements.
The Company recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs. The gain or loss on a settlement is the difference between the present value of the
Page 43
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
2.Accounting policies (continued)
defined benefit obligation being settled as determined on the date of settlement and the settlement price, including any plan assets transferred and any payments made directly by the Company in connection with the settlement, ignoring the effect of the asset ceiling that is reversed separately through OCI.
Page 44
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
2.Accounting policies (continued)
Assets that are subject to depreciation or amortisation are assessed at each reporting date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash-generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non-financial assets that have been previously impaired are reviewed at each reporting date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.
Page 45
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
13.Taxation (continued)
The company is a member of the Sodexo S.A. Group which is expected to be a Multinational Enterprise (MNE) within the scope of Pillar Two. The Group has carried out preliminary work and does not anticipate any significant impact from this measure in the UK. As at 31 August 2025, no deferred tax has been recognised in application of the amendment to IAS 12 concerning the mandatory exemption from recognition of deferred tax in the financial statements.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
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Page 54
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
16.Tangible fixed assets (continued)
Page 55
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
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Page 56
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
Page 58
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
Subsidiary undertakings (continued)
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
Subsidiary undertakings (continued)
Page 60
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
Subsidiary undertakings (continued)
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
Page 62
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
Page 63
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
Page 64
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
Deferred tax movement
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Page 65
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
Page 66
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
Lifecycle provision
Lifecycle provisions relate to obligations agreed as part of contract delivery which include the repairs, maintenance and replacement of agreed upon buildings, structures and other operational assets over the life of the contract in order to return them in the same condition at the end of its contract term.
Employee related provisions
This category includes two main types of provision:
∙Insurance-related provisions for compensation due to employees for accidents and injuries suffered but unresolved at year end.
∙Provisions made in relation to employment claims made against the company and their associated legal costs.
Property lease
Provision against empty properties, as well as amounts needed to restore properties to their original condition where the lease requires. Property lease provisions are expected to be utilised over the remaining period of the associated lease.
Onerous contract provisions
Other provisions include provision against contracts where costs of fulfilling the contract are higher than the economic benefit expected.
Others
Others include a matter arising in the ordinary course of business in which a third party has asserted potential claims. The Company disputes liability.
Based on the facts and circumstances existing at the balance sheet date, the directors consider that an outflow of economic benefits is probable. A provision of £4.0m has therefore been recognised in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets (as applied by FRS 101), representing the directors’ best estimate of the amount required to settle the matter at that date. The ultimate outcome may differ from the amount provided.
Contingent liabilities
The Company is subject to legal proceedings regarding a discreet health and safety matter, which relates to ongoing business. The matter is at an early stage, at this stage a material outflow is not considered probable and it is not practicable to estimate any possible outflow or the timing of resolution.
Page 67
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
Merger Reserve
This reserve represents the reduction in the investment value of Sodexo Property Solutions Limited. This amount has been recycled to Profit & loss account following the capital reduction of Sodexo Property Solutions Limited. The voluntary strike-off application for Sodexo Property Solutions Limited was submitted and approved post year end.
Profit and loss account
Page 68
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
Defined Contribution Pension Scheme
Under a defined contribution plan, periodic contributions are made to an external entity that is responsible for the administrative and financial management of the plan. Under such a plan, the employer is relieved of any future obligation (the external entity is responsible for paying benefits to employees as they become due and the employer is not required to make additional payments related to prior or current years if the entity does not have sufficient funds). The pension charge for the period represents contributions payable by the Company to the scheme and amounts to £28,943,000 (2024: £28,504,000).
No contributions (2024: £nil) were payable to the defined contribution scheme at year end.
Defined Benefit Pension Scheme
The characteristics of the Company’s principal defined benefit plans are described below: The Company’s obligation relates to a retirement plan funded by externally held assets, and calculated on the basis of:
∙for employees working in the private sector, a percentage of final base salary;
∙for employees working on public sector contracts, benefits comparable to those offered in the public sector;
This plan was closed to new employees effective 1 July 2003 and the level of contributions was increased in order to cover the shortfall in the fund. The plan is regularly evaluated by the plan’s actuary in compliance with UK law. A formal actuarial valuation by the plan’s actuary is required to be conducted every three years, and any shortfall identified at that time must be addressed through mutual agreement between the plan’s Trustee and the Company. Following a consultation process with the members of the pension plan carried out with a view to freezing benefit accruals for certain members, an agreement was signed in October 2012 between the plan’s Trustee and the Company whereby from 1 November 2012 the plan would remain open only to employees who transferred to the Company from the public sector, arising from a legal obligation on the Company to pay them certain benefits.
The defined benefit plan exposes the Company to actuarial risks such as longevity risks, interest rate risks and inflation risks, along with the risk of additional contributions to the scheme as a result of changes to asset and liability values. The Trustees actively manage these risks with specialist advice and consultation with the Company. The scheme has a diversified asset portfolio and a high degree of hedging of liabilities against interest rate and inflation risks.
The April 2024 actuarial valuation resulted in a small surplus and consequently no Recovery plan is required. The parent company guarantee from Sodexo S.A of £40m remains. The duration of the scheme at the year end is 13 years compared to 14 years at the prior year end.
In June 2023, the High Court handed down a decision in the case of Virgin Media Limited v NTL Pension Trustees II Limited and others relating to the validity of certain historical pension changes due to the lack of actuarial confirmation required by law. On 2 September 2025, the Government published draft amendments to the Pensions Scheme Bill which would give affected pension schemes the ability to retrospectively obtain written actuarial confirmation that historic benefit changes met the necessary standards. The draft legislation will need to be agreed by both Houses of Parliament before it passes into law. Following the publication of draft legislation, the Directors do not expect the Virgin Media ruling to give rise to any additional liabilities and so the DBO has not been adjusted and continues to reflect the benefits currently being administered. Based on the Directors’ previous assessment that no further investigation was required, they believe that the draft legislation confirms their belief that no additional liabilities will arise from the Virgin Media case and therefore the DBO has not been adjusted.
Page 69
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
27.Pension commitments (continued)
Page 70
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
27.Pension commitments (continued)
Page 71
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
27.Pension commitments (continued)
Page 72
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
27.Pension commitments (continued)
Page 73
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
27.Pension commitments (continued)
Page 74
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
A dividend of £45,000,000 was proposed post year-end on 8 December 2025 and paid on 10 December 2025 in respect of the financial year ended 31 August 2025 to its 100% shareholder, Sodexo Holdings Limited.
The Company’s immediate parent undertaking and controlling party is Sodexo Holdings Limited, a company incorporated in England and Wales.
The Company’s ultimate parent company and controlling party is Sodexo S.A., a company incorporated in France. This is the largest and smallest group of undertakings for which consolidated financial statements are prepared. Copies of the consolidated financial statements can be obtained from The Secretary, Sodexo S.A., 225 Quai de la Bataille de Stalingrad, 92130 Issy-Les-Moulineaux, France.
Page 75