Compass Group Plc · LSE:CPG
Compass — Corporate Update (September 2012)
23 slides from Compass's corporate update, Sep 27, 2012
Slide 1: Full Year Pre-Close Trading Update & European Action Plans
Full Year Pre-Close Trading Update & European Action Plans Thursday 27 September 2012 1
Slide 2: Presentation Structure
Presentation Structure 1. Update on Trading – Richard Cousins 2. European Strategy – Richard Cousins 3. European Financials – Dominic Blakemore 4. Summary & Outlook – Richard Cousins 5. Q&A 2
Slide 3: Update on Trading
e PF * COMPASS GROUP Update on Trading
Slide 4: Group
Group • Good performance in the fourth quarter; organic revenue growth expected to be c.6% • Full year organic growth of around 5.5%; operating profit up c.8%; margin slightly ahead • £95m expected annual cost savings by 2014 to protect profitability and improve efficiency • European exceptional cas
Slide 5: North America
North America 2011/12 Looking forward • Another excellent year • Exciting pipeline of new business • Full year organic growth of over 8% • Healthy outsourcing culture • Steady 10 bps margin progression • Huge market opportunity • Excellent MAP 1 performance • Strong management team • Ascension Healt
Slide 6: Fast Growing & Emerging
Fast Growing & Emerging Fast Growing & Emerging revenue by sub-region Africa, Central Asia & Middle East, £0.6m Latin America, £1.1bn Pacific & South / East Asia, £1.1bn Note: revenue figures taken from FY 2011 results 6
Slide 7: Fast Growing & Emerging
Fast Growing & Emerging 2011/12 Looking forward • Double digit organic growth of c.12% • Excellent growth prospects • Good progress in building management • Outsourcing accelerating teams and processes ggggggggggggg • Steady margin in line with last year • Great revenue and margin opportunities 7
Slide 8: Europe & Japan
Europe & Japan 2011/12 Looking forward • Revenue decline of c.1% • Short-term economic pressures • Increasingly negative like for like volume • Actions to drive efficiency and trends, particularly in Southern Europe competitiveness • Pressure on margin from difficult • Healthy medium term opportunit
Slide 9: European Strategy
hd co? * COMPASS GROUP European Strategy
Slide 10: European Economic Backdrop
European Economic Backdrop • Declining GDP growth & downward revisions to forecasts Eurozone quarterly GDP growth 2005-12 • Modest recovery post 2008/9 but temporary • Good new business; pressure on like for like volume 10
Slide 11: Different Trends Across European Sub-Regions
Different Trends Across European Sub-Regions North East Europe Some modest growth Stable like for like volume France & UK Challenging economic conditions Moderately negative like for like volume Southern Europe Very difficult economic conditions Strongly negative like for like volume “Southern Europ
Slide 12: Breakdown of Organic Revenue Growth
Breakdown of Organic Revenue Growth Europe & Japan 2012 % H1 H2 (est.) FY (est.) Net new business (0.8)% (1.0)% (0.9)% Like for like revenue 0.4% 0.0% 0.2% Organic growth (0.4)% (1.0)% (0.7)% 12
Slide 13: Breakdown of Like for Like Revenue
Breakdown of Like for Like Revenue Europe & Japan 2012 % H1 H2 (est.) FY (est.) Like for like 0.4% 0.0% 0.2% - Price 1.5% 1.5% 1.5% - Volume (1.1)% (1.5)% (1.3)% - Volume ex. Japan (1.5)% (2.5)% (1.8)% Region Trend North East Europe 0% France & UK (2.5)% Southern Europe (5)% 13
Slide 14: Revenue and Profit Impact of Declining Volumes
Revenue and Profit Impact of Declining Volumes LfL volume decline (%) (2)% (3)% (4)% Europe only Est. FY revenue for Europe (£m) 5,500 5,500 5,500 Revenue impact (£m) (110) (165) (220) Profit drop through (%) 35% 35% 35% Profit impact (£m) (39) (58) (77) Fixed labour agreements in Europe result in h
Slide 15: European Strategy / Operations
European Strategy / Operations • New management structure bringing greater focus • Detailed bottom up review carried out • Fundamentals of the business are solid, good strategy in place • Good outsourcing potential; re-engineering cost base to drive growth Restructure Mediterranean Two key actions R
Slide 16: Driving Operational Efficiency
Driving Operational Efficiency Overheads • Good progress; still many opportunities Food • Improved performance but more to do In-unit costs • Much more to do Decisive action to reduce fixed cost element of labour 16
Slide 17: European Financials
hd co? * COMPASS GROUP European Financials 17
Slide 18: Accelerated Cost Efficiencies – MAP Labour
Accelerated Cost Efficiencies – MAP 4 Labour Exceptional cash charge (£m) 2012 2013 Total 100 50 150 Annual savings (£m) 2013 2014 Saving from 2012 investment 35 50 Savings from 2013 investment 15 25 Total savings 50 75 • £150m restructuring charge in 2012 and 2013 • £75m annual savings by 2014 • Ca
Slide 19: Non-Cash Restructuring Costs
Non-Cash Restructuring Costs Contract Ring fence all loss-making contracts provisions Focus on profitable core Receivables Full review of debtors Provision made where required 2012 charge: £195m £20m benefit in 2013 Disposals Sell / exit all non-core operations Simplify & re-focus the business Prope
Slide 20: Short Term Expectations Unchanged
Short Term Expectations Unchanged • Expectations for 2012 remain positive and unchanged • Laying foundations for improved performance • Actions underpin market expectations for 2013, despite economic headwinds 20
Slide 21: Group Summary & Outlook
hd co? * COMPASS GROUP Group Summary & Outlook 21
Slide 22: Group Summary & Outlook
Group Summary & Outlook • Compass is performing well • Solid fundamentals in Europe but economic conditions expected to remain challenging; decisive action being taken • Positive on global opportunities to drive further revenue, cash flow & margin progression • Expectations for 2012 and 2013 maintai
Slide 23: * COMPASS
ZA * COMPASS GROUP