REG - Compass Group PLC - AGM and Q1 Trading Update

CompassAnnouncement

09/02/2023 07:00

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RNS Number : 3621P  Compass Group PLC  09 February 2023

 

   Legal Entity Identifier (LEI) No. 2138008M6MH9OZ6U2T68

 

 

 

 

9 February 2023

AGM and Q1 Trading Update

 

This statement updates investors on Compass Group PLC's performance for the
three months ended 31 December 2022 and is being issued ahead of the Company's
Annual General Meeting. The AGM will be held at 12 noon today at Twickenham
RFU Stadium.

 

Good start to the year with strong growth in all regions

 

Group performance

 

In the first quarter of the year, the Group's organic revenue grew by 24%. We
continued to benefit from strong outsourcing trends with net new business
growth of 5.5%, significantly above our historical rate of around 3%, and in
line with FY 2022(1).

 

Like for like volumes were particularly strong in Business & Industry, as
employees continued to return to the office, and in Sports & Leisure,
where participation rates remained high.  Whilst inflation remained elevated,
we continued to work closely with our clients to help mitigate this pressure
both operationally and through appropriate pricing.

 

Regional performance

 

All regions performed strongly in the quarter, with organic growth of 23% in
North America, 26% in Europe and 27% in Rest of World.  Growth drivers across
all markets were similar, with net new business growth of 5 - 6%, and
double-digit like for like volume increases in all regions.

 

We are particularly pleased with the continued strong net new business
performance in Europe which is benefiting from the increased focus on growth
and retention, supported by investments in people, brands and processes.

 

Acquisitions

 

In the first quarter, the Group's net expenditure on bolt-on acquisitions was
£55 million, further strengthening our portfolio of brands, and our digital
and procurement capabilities. There is a strong pipeline of exciting
opportunities across all regions and sectors, and we remain focused and
disciplined in our approach to acquisitions.

 

Share buyback programme

 

As at 7 February 2023, we had completed £163m of the £250m share buyback
programme which was announced at our FY results in November 2022.

 

(1) Net new business in FY 2022 rebased to 2019 revenues was 5.7%.

 

Currency impact

 

Trading results from our overseas operations are translated at the average
exchange rates for the period. If these currency movements(2) continue for the
remainder of the year, foreign exchange translation would positively impact FY
2022 revenue by £1,314 million and operating profit by £94 million(3).

 

Summary and outlook

 

The outsourcing market remains strong, and we are excited about the
significant growth potential across our markets. The increasingly complex
operating environment and growing focus on sustainability and digitalisation,
combined with our market leading offering, mean we are best placed to capture
these opportunities.

 

While populations continued to return to the office and consumer demand has
been resilient, we are mindful of the uncertain macroenvironment and any
potential impact on discretionary spending.

 

We remain positive for FY 2023 and reiterate our guidance.  We expect
operating profit growth above 20% on a constant currency basis, organic
revenue growth of around 15%, weighted towards the first half of the year, and
an underlying operating margin above 6.5%.

 

Looking further ahead, we remain excited about the significant structural
growth opportunities globally, leading to the potential for revenue and profit
growth above historical rates, returning margin to pre-pandemic levels and
rewarding shareholders with further returns.

Conference call

There will be a live Q&A session for analysts and investors at 8.00am.
Please dial:

 Participant dial in numbers:
 UK Toll Number:                   +44 (0) 33 0551 0200
 UK Toll-Free Number:              0808 109 0700
 US Toll Number:                   +1 212 999 6659
 US Toll-Free Number:              +1 866 966 5335
 Please reference COMPASS

Please connect to the call at least 10 minutes prior to the start time.

Financial calendar

 Payment date for 2022 final dividend  2 March 2023
 Half year results                     10 May 2023
 Q3 trading update                     25 July 2023
 Full year results                     20 November 2023

Enquiries

 Investors  Agatha Donnelly, Helen Javanshiri & Simon Bielecki      +44 1932 573 000
 Press      Giles Robinson, Compass Group PLC                       +44 1932 963 486
            Tim Danaher, Brunswick                                  +44 207 404 5959

 Website    www.compass-group.com (http://www.compass-group.com)

(2) Based on closing rates as at 7 February 2023.

(3  )For H1 2022 FX translation is a positive impact of £1,074 million on
revenue and £75 million on operating profit.

 

About Compass Group

 

•    Compass Group PLC is a world leading food service company, which
generated annual revenues of £25.8 billion in the year to 30 September 2022.
It serves meals to millions of people in c. 40 countries and employs and
engages with over 500,000 people. The Company specialises in providing food
and a range of support services across the core sectors of Business &
Industry, Healthcare & Senior Living, Education, Sports & Leisure and
Defence, Offshore & Remote, with an established brand portfolio.

 

•  Organic revenue, a term used throughout the announcement, is calculated
by adjusting for acquisitions (excluding current period acquisitions and
including a full period in respect of prior period acquisitions), sale and
closure of businesses (excluded from both periods) and exchange rate movements
(translating the prior period at current period exchange rates).

 

Environmental, Social, and Governance (ESG)

•  To create long term sustainable growth for all our stakeholders,
Compass Group focuses on Environmental, Social, and Governance (ESG) efforts
where we can have the most positive impact. To learn more about our
sustainability initiatives and priorities, please visit our website
(https://www.compass-group.com/en/sustainability.html) .

 

Forward-looking statements

Certain information included in this Announcement is forward looking and
involves risks, assumptions and uncertainties that could cause actual results
to differ materially from those expressed or implied by forward-looking
statements. Forward-looking statements cover all matters which are not
historical facts and include, without limitation, the direct and indirect
future impacts and implications of public health crises such as the
coronavirus COVID-19 on the economy, nationally and internationally, and on
the Group, its operations and prospects; disruptions and inefficiencies in
supply chains (such as resulting from the war in Ukraine); future domestic and
global political, economic and business conditions (such as inflation or the
UK's exit from the EU); projections relating to results of operations and
financial conditions and the Company's plans and objectives for future
operations, including, without limitation, discussions of expected future
revenues, financing plans and expected expenditures and divestments; risks
associated with changes in economic conditions, levels of economic growth and
the strength of the food and support services markets in the jurisdictions in
which the Group operates; fluctuations in food and other product costs and
labour costs; and prices and changes in exchange and interest rates.
Forward-looking statements can be identified by the use of forward-looking
terminology, including terms such as 'believes', 'estimates', 'anticipates',
'expects', 'forecasts', 'intends', 'plans', 'projects', 'goal', 'target',
'aim', 'may', 'will', 'would', 'could' or 'should' or, in each case, their
negative or other variations or comparable terminology.

Forward-looking statements in this Announcement are not guarantees of future
performance. All forward-looking statements in this Announcement are based
upon information known to the Company on the date of this Announcement.
Accordingly, no assurance can be given that any particular expectation will be
met and readers are cautioned not to place undue reliance on forward-looking
statements when making their investment decisions. Additionally,
forward-looking statements regarding past trends or activities should not be
taken as a representation or warranty that such trends or activities will
continue in the future. Other than in accordance with its legal or regulatory
obligations (including under the UK Listing Rules and the Disclosure Guidance
and Transparency Rules of the Financial Conduct Authority), the Company
undertakes no obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events or otherwise.
Nothing in this Announcement shall exclude any liability under applicable laws
that cannot be excluded in accordance with such laws.

 

 

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