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Cultivating
Growth
Annual Report 2024
Visit our website to find out more
about our sustainability strategy,
our approach to talent and
investor resources:
www.compass-group.com
We are cultivating growth
by increasing focus and
investment in our core
markets, and by further
nurturing our talent to
develop current and
futurebusiness leaders.
Strategic Report
1 Highlights
2 At a glance
3 Strategic framework
4 Business model
7 Key performance indicators
8 Chair’s letter
9 Market review
10 Chief Executive’s review
12 Health and safety
13 Ethics and integrity
15 Performance
15 Financial review
21 Regional reviews
23 Risk management
24 Principal risks
29 Viability statement
30 People
34 Purpose
41 Task Force on Climate-related Financial Disclosures
53 Non-financial and sustainability information statement
Corporate Governance and
Directors’ Report
54 Governance and leadership
55 Compliance with UK Corporate Governance Code2018
56 Board of Directors
61 Executive Committee
62 Governance framework
68 Section 172 and stakeholder engagement
73 Audit Committee Report
79 Corporate Responsibility Committee Report
82 Nomination Committee Report
86 Directors’ Remuneration Report
119 Other statutory disclosures
123 Directors’ responsibilities statement
Financial Statements
124 Independent Auditor’s Report
138 Consolidated financial statements
144 Notes to the consolidated financial statements
223 Parent Company financial statements
225 Notes to the Parent Company financial statements
Shareholder Information
230 Shareholder information
Forward-looking Statements
232 Forward-looking statements
Compass Group PLC, the parent company of the Group,
is a non-trading investment holding company which derives its
distributable reserves from dividends paid by subsidiary companies.
Highlights
of the year
Investing for future growth
We are investing in our portfolio, both
through capital investment and M&A,
to support our existing capabilities,
increase operational flexibility and
further strengthen our unique
sectorised approach to the market.
The Group’s net expenditure on M&A
was $1 billion in 2024, mainly on
HOFMANN
s
in Germany and CH&CO
in the UK and Ireland. Subsequent to
the year-end we also acquired Dupont
Restauration in France and agreed to
acquire 4Service AS in Norway.
An even more focused business
During the year, we exited, or agreed
to exit, nine countries, principally in
our Rest of World region.
By divesting of a number of our
non-core markets, we have further
improved the quality of our portfolio.
This enables us to better focus on our
core markets, where there remain
significant opportunities for growth,
particularly from first-time
outsourcing.
We now operate in around 30
countries in North America, Europe,
and Asia-Pacific, compared to around
50 countries in 2019.
Step change in Europe
The step change in the performance
of our European businesses is
continuing as they benefit from
additional investment, growth
initiatives and the transfer of
bestpractice.
We are continuing to expand our
brand portfolio in Europe and are
developing more flexible operating
models with compelling financial
returns. These initiatives are driving
higher organic growth compared to
our pre-pandemic levels.
Scale in procurement
During the year Compass highlighted
its competitive advantage in
procurement in a virtual deep dive for
investors. We leverage our significant
purchasing scale in food and
beverages to source the best-quality
products at the best prices.
Alternative Performance Measure (APM) (see pages 207 to 214).
1. Measured on a constant-currency basis.
APM which is also a Key Performance Indicator (see page 7).
Underlying operating profit growth
1
16%
Statutory operating profit growth 12%
Organic revenue growth
11%
Statutory revenue growth 11%
Underlying operating margin
.1%
Statutory operating margin 6.2%
Strong operational performance
2024 results were strong across all our
key performance metrics.
The Group delivered double-digit
organic growth and good margin
progression, resulting in strong
underlying operating profit growth.
Looking ahead, industry outsourcing
trends remain favourable, providing
Compass with an exciting pipeline of
new business growth opportunities.
The Group’s APMs are defined in note 34 (non-GAAP measures) and reconciled to GAAP measures in notes2 (segmental analysis) and 34 to the consolidated
financial statements.
1Compass Group PLC Annual Report 2024
At a glance
Our core focus is the provision
of outsourced food services and
targeted support services to five
key market sectors.
We create bespoke, innovative and cost effective solutions
through our unique sectorised approach to the market.
By understanding what is important to our clients we address
their unique needs and create long-lasting partnerships.
Business & Industry
We work with a diverse range of clients including the financial,
legal, technology and manufacturing sectors. Our scale, flexible
operating models and digital capabilities help us tailor our
dining solutions to each client.
Education
We provide healthy, balanced meals right through the learning
journey, from nurseries to universities. Our catering solutions
come in multiple formats, from traditional onsite dining to
vending and delivery or takeaway options.
Sports & Leisure
We provide outstanding customer experiences, providing food,
beverages and hospitality across large stadiums, conference
venues, museums and galleries.
Defence, Offshore & Remote
We provide food and support services to many major oil, gas,
mining and construction companies. Our clients rely on us to
provide uninterrupted support, however challenging the
operating conditions.
Healthcare & Senior Living
We work directly with healthcare providers to prepare food
that improves patient and senior living experiences – from
restaurant-style cafés to in-room patient dining and
specialistfeeding.
Compass is a global leader
in food services operating inaround 30 countries
Food services Support services
Underlying revenue
$42.2 billion
14%86%
North America
Europe Rest of World
Underlying revenue by region
3 regions
9%23%68%
Business & Industry
Sports & Leisure Defence, Offshore & Remote
EducationHealthcare & Senior Living
Underlying revenue by sector
5 sectors
7%14%18%23%38%
Underlying revenue is defined as revenue plus share of revenue of joint ventures.
Statutory revenue in 2024 is $42.0 billion.
The Group’s APMs are defined in note 34 (non-GAAP measures) and reconciled
to GAAP measures in notes 2 (segmental analysis) and 34 to the consolidated
financial statements.
Alternative Performance Measure (APM) (see pages 207 to 214).
2 Strategic Report
Strategic framework
Strategic
framework
Our vision
To be a world-class provider of contract food services and support services,
renowned for our great people, our great service, and our great results.
Underpinned by our robust health and safety programmes, and doing what is right
See pages 12 to 14
Our enablers
Diversity
Compass is committed to inclusion for
all and endeavours to harness the talents
of its diverse workforce across every level
of the business.
Digitisation
Digital is a right to entry in almost every
client proposal and a clear growth enabler.
It also unlocks cost savings and enhances
our sustainability proposition.
Decarbonisation
The Group was the first in its
industry to set a global climate netzero
target and aims to be carbonneutral in
its own operationsby 2030.
Our values
Can-do safely
Openness, trust
and integrity
Responsibility Passion for quality
Win through
teamwork
Our strategic focus
Create lifetime
opportunities
People are at the heart of who we are and
what we do. Compass is uniquely positioned
to create lifetime opportunities and to
positively impact and represent the
communities in which its businesses operate.
Deliver long-term
valued relationships
We use the Management and Performance
(MAP) framework to drive performance across
the Group. This discipline ensures businesses
are managed efficiently while continuing to
delight clients and consumers with innovative,
healthy and exciting food service solutions.
Maintain a positive social
and environmental impact
Compass continually seeks ways to be more
socially and environmentally responsible.
Our purpose continues to drive innovation
and collaboration across the Group as
partnerships with clients, business partners
and local communities are strengthened.
See page 30 See page 15 See page 34
People Performance Purpose
Representative of the
communities we serve
Industry-leading
services
A sustainable
future for all
Our goals
3Compass Group PLC Annual Report 2024
We use our Management and Performance (MAP) framework to drive performance
across the business. It is a simple framework embedded in our culture, which ensures
employees are focused on meeting our key performance drivers.
• Winning new business and retaining our existing clients. We invest in sales
and retention and are increasingly sectorising andsub-sectorising the business
around the worldto allow us to get closer to our clients.
• Like-for-like revenue consists of both volume andprice. We are focused
on attracting and satisfying our client base with strong consumerpropositions.
• Food makes up around one-third of our costs. In addition to the benefits
of our scale in food procurement, we are able to manage food costs through
careful menu planning and by rationalising the number of products we buy.
• In-unit costs are predominantly made up of labour. Byusing
labourscheduling techniques and improving productivity, we are able
to deliver the optimum level of serviceinthe most efficient way.
• We have a simple organisational model with few
layers of management and little bureaucracy, which
enables us to keep overheads low whilst
wecontinue to grow revenue.
Delivering
for our stakeholders
Business model
Driving
performance
through MAP
Cost of food
Client sales
andmarketing
In-unit
costs
Consumer sales
andmarketing
Above-unit
overheads
People and culture
Our people are at the heart of our
business. Energetic, ambitious and
entrepreneurial, they deliver amazing
food and hospitality to millions of
consumers worldwide.
Our sectors and
portfolio of brands
Our sectorised approach is a key
differentiator. Our businesses create
bespoke solutions using extensive
knowledge of their clients’
requirements.
Culinary and digital
innovation
We provide clients and consumers with
greater choice, award-winning
innovation and market-leading
contemporary food offers.
O
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t
Enabled by our
competitive advantages
4 Strategic Report
Compass is a strong cash-generating
business with a clear capital
allocationmodel.
We invest both organically and through
acquisitions to drive future growth.
Our policy is to pay around 50% of underlying
earnings through an ordinary dividend.
We maintain a resilient balance sheet,
targeting net debt to EBITDA in the range
of1x-1.5x, with any surplus capital
returnedto shareholders.
Shareholder returns in the year
$1.5 billion
Total dividend per ordinary share
Increased by
13.7% to 59.8c
Capital investment
3.7%
of underlying revenue
1
Leverage
Strong balance sheet with
1.3x
net debt to EBITDA
1
1. Alternative Performance Measure (APM) (see pages
207 to 214). The Group’s APMs are defined in note
34 (non-GAAP measures) and reconciled to GAAP
measures in notes 2 (segmental analysis) and34 to
the consolidated financial statements.
Net M&A expenditure
$1 billion
to drive future growth
Procurement
Our scale enables our
businesses to pass onpurchasing
benefits to clients and consumers by
offering better quality products at more
attractive prices. Spendingwith local
and diverse suppliers and social
enterprises enables greater
reinvestment into local
communities.
Decentralised structure
The Group operates on a
decentralised basis, enabling an
entrepreneurial approachby local
management teams. Thisis supported
by our MAP framework, which
standardises business processes
andincreases efficiency.
Financial
strength
A strong financial foundation
with a low level of leverage means
we can invest in growth, enabling our
businesses to innovate their offer, and
evolve their operating model.
Ourfinancial strength also attracts
new clients seeking stability and
long-term outsourcing
solutions.
5Compass Group PLC Annual Report 2024
Key performance indicators
Creating shareholder
value
Delivered through
Dividend per share
59.8c
Share buybacks
$2.2 billion
Since 2022 the Group has
returned $2.2 billion in surplus
capital to shareholders through a
number of share buybacks
Total shareholder return since 2014
198%
Compass FTSE100
0
10
20
30
40
50
60
59.8c
52.6c
40.3c
19.1c
2423222120
0.0c
2423222120191817161514
0
100
200
300
400
Generating attractive long-term compounding shareholder returns
Value created through operations (MAP)
Higher revenue growth
Capex to support organic growth
Cost efficiencies
Bolt-on M&A
Scale benefits
Progressive ordinary dividend
Margin opportunity
Surplus cash returned to shareholders
Value created through capital allocation
shareholder
returns
Long-term
compounding
P
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This generates cash
which enables us to
reinvest in our
businesses
Whilst also
focusing on people
and our purpose
Which creates
greater value for all
our stakeholders
Our businesses are
growing and creating
value through their
operations
6 Strategic Report
Measuring
progress
We track our progress against a mix of financial and non-financial measures, which we believe
best reflects the delivery of ourstrategy. Wemeasure growth, efficiency and shareholder returns,
which are all underpinned by our focus onsafety andourimpact onthe environment.
Financial KPI Non-financial KPI
Alignment with our strategic focus areas KPI type
People
Performance
Purpose
Organic revenue change
1
10.6%
Organic revenue growth was strong at
10.6%, reflecting net new business
growth of 4.2%, pricing of around 4%
and volume growth of around 2%.
Underlying operating margin
1
7.1%
Underlying operating margin improved
by 30bps to 7.1%, with strong margin
progression achieved across all the
Group’s regions.
Underlying free cashflow
1
$1,740m
Underlying free cash flow increased
to $1,740 million representing a
conversion rate of 85.0% of
underlying profit after tax.
Underlying basic earnings per share
1
119.5c
Earnings per share growth of 14.6% on
aconstant-currency basis reflects the
Group’s strong organic revenue growth
and the improvement inunderlying
operating margin.
Return on capital employed (ROCE)
1
19.0%
The reduction in ROCE in 2024 reflects a
higher underlying effective tax rate, as the
impact of recent business acquisitions on
capital employed was offsetby the
Group’s strong trading performance.
Global Food Safety Incident Rate
2
0.13
Our focus on global food safety has led to
a reduced rate of incidents on a five-year
basis (down 38%), despite our business
having grown significantly since 2020.
Greenhouse gas intensity ratio (GHG)
2
5.1 tCO
2
e/$m
Our greenhouse gas intensity ratio has
increased in the past year due to new
business wins and acquisitions. This ratio
is based on Scope 1 and 2 emissions
which represent 2% of Compass Group’s
total emissions. Including Scope 3
emissions our intensity ratio reduced by
4% compared to 2023.
1. Our financial KPIs represent underlying and other Alternative Performance Measures (APMs) which are not defined by generally accepted accounting
principles(GAAP). The Group’s APMs are defined in note 34 (non-GAAP measures) and reconciled to GAAP measures in notes 2 (segmental analysis)
and 34 to the consolidated financial statements.
2. Our non-financial KPIs are further explained on pages 12 and 36.
3. Restated (see footnote 3 on page 36).
$1,740m
$1,516m
$1,139m
$901m
$272m
2423222120
19.0%
19.3%
16.0%
8.7%
4.7%
2423222120
2423222120
10.6%
18.8%
37.5%
(6.3)%
(18.8)%
7.1%
6.8%
6.2%
4.5%
2.9%
2423222120
0.13
0.15
0.14
0.20
0.21
2423222120
5.0
3
5.5
3
6.4
3
7.1
3
2423222120
5.1
119.5c
105.2c
80.6c
40.3c
23.8c
2423222120
Measuring progress looking ahead
We are updating how we measure our safety progress to reflect a
broader approach to safety and food standards across Compass.
As reported in last year’s Annual Report, starting next year, the Total
Recorded Incident Frequency Rate (TRIFR) will be included to
provide a more comprehensive view of safety performance, with
2024 as its baseline year (see page 12).
Additionally, we will transition to featuring leading food safety
indicators that align with industry and regulatory standards allowing
us to emphasise qualitative insights. The Global Food Safety
Incident Rate remains important to us and will continue to be
tracked by management.
Key performance indicators 7Compass Group PLC Annual Report 2024
Chair’s letter
Delivering compounding
shareholder returns
Dear Shareholder
I am delighted to report another strong year for Compass with
double-digit organic revenue growth and good margin progress.
Thestrength of our balance sheet and continued strong cash
generation have enabled us to invest in future growth whilst returning
capital to shareholders through dividends and share buybacks.
Strategy
We have a clear strategy which is focused on providing outsourced
food services, together with targeted support services. The outsourcing
market remains very attractive, driven by increasingly complex
consumer demands, the desire for cost savings, and macroeconomic
pressures. Our addressable market is estimated to be worth
c.$320billion, with a significant opportunity available from
first-time outsourcing.
We have continued to refine our portfolio to become an even more
focused business, going deeper into our core markets, where there
remain significant growth opportunities.
People
With around 580,000 colleagues across the world, people are at the
heart of our business and integral to our continued success. We are
focused on attracting, developing and retaining the best talent. We
provide opportunities to diverse people from the communities we
serve, underpinned by our principles of respect, teamwork and growth.
I would like to thank all our people for their continued hard work and
commitment to the business. Without their dedication, Compass
would not be able to achieve its goals.
Financial results
The Group delivered strong organic revenue growth of 10.6%
1
and
underlying operating margin increased by 30bps to 7.1%
1
. This
resulted in underlying operating profit increasing by 16.4%
1
on a
constant-currency basis to $2,998 million
1
. On a statutory basis,
revenue increased by 10.8% to $42,002 million and operating
profitwas up 11.7% to $2,584 million.
Shareholder returns
The Board recognises the importance of returning capital to shareholders
through dividends and share buybacks. In line with ourpolicy of paying
out 50% of underlying earnings, the Board has declared a final dividend
of 39.1 cents per share, which, when added to the interim dividend,
provides a total dividend for the year of 59.8 cents per share. We also
provided additional returns in the form of a $500 million share buyback.
Sustainability
Our Planet Promise is the Group’s global commitment to a sustainable
future for all. It encompasses our values as an ethical, sustainable,
and inclusive business, together with our ambition to positively impact
the world. As well as being the right thing to do, this mission is also
keyto our growth aspirations as sustainability is also a priority for
many of our clients.
Governance and Board changes
Several changes were made to the Board during the year, including
the retirement of some familiar faces, the arrival of new colleagues,
and changes to roles and responsibilities.
In the first half of the year, Gary Green and Carol Arrowsmith retired
from the Board. Palmer Brown took over from Gary in the US, and
Petros Parras succeeded Palmer as the Group CFO. In the second-half
we appointed two new directors, Liat Ben-Zur and Juliana Chugg who,
together with their non-executive colleagues, bring balance and a
wealth of skills and experience to our organisation which complement
the talents of our strong executive team. I thank them all for their
valuable contributions and also wish good luck to Ireena Vittal and
Nelson Silva who, after nine years, will retire from the Board at the
conclusion of the 2025 AGM. Liat Ben-Zur succeeded Ireena as
Designated Non-Executive Director for Workforce Engagement in
October, and Arlene Isaacs-Lowe will succeed Nelson as Chair of the
Corporate Responsibility Committee when he retires from the Board in
February. More details of the above are in the Nomination Committee
report on page 82.
Summary
2024 was another strong year for Compass. We delivered good
top-line growth with margin progression, whilst further improving the
quality of our portfolio and increasing investment in core markets.
We are continuing to take advantage of opportunities for growth,
particularly in first-time outsourcing, by leveraging our significant
scale, culinary expertise and sectorised approach to the market
through the Group’s unique brand portfolio.
We look forward to continued success based on our focused strategy,
and to generating sustainable compounding shareholder returns over
the long-term.
Ian Meakins
Chair of the Board
26 November 2024
Statement on section 172 of the Companies Act 2006
Section 172 of the Companies Act 2006 requires the directors to promote
thesuccess of the Company for the benefit of the members as a whole,
havingregard to the interests of stakeholders in their decision making.
The Company’s section 172 statement is set out on page 68 and
isincorporatedinto this Strategic Report by reference.
Ian Meakins
Chair of the Board
1. Alternative Performance Measure (APM) (see pages 207 to 214).
The Group’s APMs are defined in note 34 (non-GAAP measures)
and reconciled to GAAP measures in notes 2 (segmental analysis)
and 34 to the consolidated financial statements.
8 Strategic Report
Market review
Significant market opportunity
with a runway for growth
We estimate the global food services
marketfor Compass to be worth
c.$320billion, of which we have
lessthan15% market share.
This provides us a significant runway
forgrowth, with nearly three-quarters of
themarket still self-operated or in the
handsof regional players.
For North America and Europe, our
foodservices market estimate now
includesvending.
In addition, there are further growth
opportunities for Compass in targeted
support services which are not included
in this estimate.
Tech and innovation
– culinary
– digital
– use of data
– flexible food models
Macro challenges
– labour shortages
– food and labour inflation
– supply chain disruption
– higher energy costs
Environment
– organic and locally sourced
– net zero targets
– plant-forward
– carbon labelling
People
– health and wellbeing
– talent attraction and retention
– encourage return to office
– improve productivity and morale
Risk and regulation
– health and safety
– business continuity
– allergen labelling
– calorie labelling
Cost reduction
– procurement savings
– back-office synergies
– labour utilisation
– menu management
Increased operational complexities are driving outsourcing...
c.$320bn
addressable global food
services market
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Large players
Regional players
Compass Group
Self-operated
9Compass Group PLC Annual Report 2024
Sustaining growth
in our core markets
Chief Executive’s review
2024 has been a year of strong operational and financial performance,
with net new business growth accelerating in the second half as
expected. The business continues to successfully capitalise on
thedynamic market trends, using its proven competitive advantages
to drive higher revenue and profit growth.
We have exited, or agreed to exit, nine non-core countries, further
improving the quality of our portfolio and enabling us to better
focuson our core markets with the greatest growth opportunities.
Tosupport this growth, we’re investing in capex to drive net new
business and are currently prioritising strategic acquisitions to
furtherenhance our unique sectorised approach to clients.
We have a proven track record of successful M&A in North America
and are using that blueprint to unlock growth in other regions. The
integration of recent high-quality acquisitions in Europe is progressing
well, and we’re excited by the capabilities they bring to the Group.
Performance
Compass has delivered another strong year, with organic revenue
growth of 10.6%
1
and underlying operating margin improving by
30bps to 7.1%
1
. As a result, underlying operating profit grew by
16.4%
1
on a constant-currency basis to $2,998 million
1
(2023:$2,576million).
Statutory revenue increased by 10.8% reflecting the strong trading
performance. Statutory operating profit increased by 11.7% to
$2,584million.
Cash flow generation remains robust, with underlying operating cash
flow of $2,642 million
1
(2023: $2,228 million) and underlying free
cash flow of $1,740 million
1
(2023: $1,516 million). Leverage
(netdebt to underlying EBITDA) remains well within the Group’s
guided range at 1.3x
1
as at 30 September 2024.
Our strong balance sheet provides us with flexibility to invest in future
growth, both through M&A and capital expenditure, which was 3.7%
of underlying revenue
1
. This was slightly higher than our guidance of
3.5% due to catch-up from the prior year.
Net M&A expenditure was $1,040 million, the main outflows being
HOFMANN
s
(Germany) and CH&CO (UK and Ireland), offset by an
inflow from the disposal of Brazil. Subsequent to the year-end, the
Group also completed the acquisition of Dupont Restauration, a food
services business in France, and agreed to acquire 4Service AS, a
catering and facility management services business in Norway.
The Group has refined its portfolio and has exited five countries during
the year, those being Argentina, Angola, Brazil, mainland China and
the United Arab Emirates. In addition, we have also agreed to exit
Chile, Colombia, Mexico and Kazakhstan, subject to regulatory
approval and completion procedures.
Strategy
Compass is focused on the provision of food services, with targeted
support services where appropriate. By divesting of non-core markets
we have further improved the quality of our portfolio. This also enables
us to better focus on our core markets, where there remain significant
opportunities for growth. We now operate in around 30 countries in
North America, Europe, and Asia-Pacific.
Our addressable market in food services is worth c.$320 billion, a
significant proportion of which remains self-operated. More
demanding consumer expectations and increased macroeconomic
pressures have contributed to the acceleration of first-time
outsourcing, and we have clear competitive advantages built over
thelast 30 years to capture these opportunities.
Our sector and sub-sector portfolio enables us to better differentiate
our offer compared to our competitors and create bespoke solutions
for our clients. We also leverage our scale, particularly in food
procurement, and are increasing the flexibility of our offer, ranging
from different food models to digital or sustainability initiatives.
Our thought leadership and solutions in these areas are also often
cited by clients as one of the reasons they outsource to Compass.
People
Our team of about 580,000 colleagues delivers exceptional
experiences to clients and consumers worldwide every day. These
dedicated professionals are the core of our business, and our people
strategy is designed to identify, attract, develop, support, and retain
the high-calibre talent essential for achieving our objectives.
Our goal is to provide lifelong opportunities for diverse individuals from
the communities we serve, ensuring they work in a positive and secure
environment. This approach is bolstered by empowered teams and
proactive leaders, grounded in respect, teamwork, and growth.
When sourcing new talent, we assess the specific requirements of
each sector and organisational level, adjusting our recruiting
strategies accordingly. For example, our North America business
employs targeted campaigns, process automation, AI, and other tools
to locate suitable candidates and facilitate their engagement with the
selection process in their preferred language and at convenient times.
We aspire to cultivate a diverse and inclusive workforce at all levels.
Our focus is on treating everyone with fairness and respect, providing
opportunities for growth and development, and fostering a positive,
supportive workplace throughout their careers.
Dominic Blakemore
Group Chief Executive Officer
1. Alternative Performance Measure (APM) (see pages 207 to 214).
The Group’s APMs are defined in note 34 (non-GAAP measures)
and reconciled to GAAP measures in notes 2 (segmental analysis)
and 34 to the consolidated financial statements.
10 Strategic Report
Recognising the challenges of daily life, we offer a variety of support
measures to ensure our employees’ wellbeing, encompassing
physical, financial, and mental health.
Purpose
We are dedicated to building a sustainable future for everyone.
Weharness our passion for food, advocate for responsible sourcing,
and reduce food waste on a large scale to drive global change and
improve lives.
Through culinary innovation, collaboration, and partnerships, we are
committed to achieving climate net zero across our global operations
by 2050 as part of our Planet Promise. This isn’t achievable through
asingle solution; instead, we continually review and enhance our
practices across the Group to amplify our impact and expedite our
progress towards sustainability goals.
One significant initiative demonstrating our commitment to reducing
food waste is linking a food waste-related KPI to the annual bonus
planof our executive directors and senior management.
Our culinary teams and front-line staff understand the importance
ofminimising food waste and are utilising various waste-reduction
technologies. For example, Waste Not 2.0 is our proprietary
tablet-based online tracking tool for chefs, and has been deployed
in12 countries, helping kitchen teams to identify opportunities to
reduce food waste and giving our unit managers tools to report on
their carbon footprint.
Whilst the Group’s absolute Scope 1, 2 and 3 emissions increased
year on year due to new business wins, our overall greenhouse gas
intensity ratio (normalised for revenue growth) reduced by 4%
compared to 2023.
Part of our core identity is being an ethical, sustainable, and inclusive
business. By integrating these principles into our culture, we aim to
make a meaningful difference and positively influence the world. Our
customers and partners increasingly align with these values, which
are crucial for our growth goals and long-term success.
Summary
Our 2024 results were strong across all our key performance metrics.
We delivered double-digit organic revenue growth and good margin
progress, driving strong underlying operating profit growth. The
Groupremains very cash generative, enabling us to invest in future
opportunities for growth and return capital to shareholders, whilst
maintaining a strong balance sheet.
We have further improved the quality of our portfolio, having exited, or
agreed to exit, nine countries. The Group is also increasing investment
in its core markets, particularly in Europe, where there are significant
first-time outsourcing opportunities. We are consistently delivering
netnew business growth in our target 4 to 5% range, with excellent
client retention.
The Group is continuing to develop its sub-sector portfolio, particularly
in Europe, where we have acquired, or agreed to acquire, four great
businesses. These also provide us with additional resources and talent
to help drive growth. We are also increasing investment in more
flexible operating models and innovating our offer to meet more
sophisticated consumer demands.
We remain excited about the significant global structural opportunities
and continue to anticipate profit growth ahead of revenue growth.
Weexpect our established value creation model to continue to deliver
strong earnings momentum, rewarding shareholders with
compounding returns over the long term.
Dominic Blakemore
Group Chief Executive Officer
26 November 2024
11Compass Group PLC Annual Report 2024
Our safety
journey
Health and safety
At Compass, a culture of care, respect and safety is paramount in
everything we do. Whether it’s inside or outside the kitchen, keeping
everyone safe is always our top priority. We strive to operate a safe,
injury-free and healthy workplace. Our safety journey, continuously
evolving with the growth of the business, reflects the shared
commitment across all levels of our businesses’ operations.
Food safety
Throughout every step of the food journey, from our supply chain to
final service, preventing potential health risks that can arise from the
handling, preparation and storage of food is a priority. The varying
complexities require every colleague, at every site and for every meal
to deliver the highest standards of food safety.
Adhering to industry frameworks like Hazard Analysis and Critical
Control Point (HACCP) and Good Catering Practices (GCPs), our
Global Safety Standards help us to achieve this. Recognising the
differing business climates and customs from country to country and
region to region, these standards allow our individual businesses to
adopt local regulatory requirements, as well as client-specific
protocols where appropriate.
In 2024, we achieved a Food Safety Incident Rate (FSIR) rate of 0.13,
below our limit of 0.17, representing a 13% year-on-year rate
improvement. Our focus on global food safety has led to significant
long-term reductions in incidents, despite continued business growth.
Safety audits
As well as ensuring we have industry-leading policies and procedures,
our standards provide the framework for leadership and oversight,
communication, awareness and training, risk assessments, issues
management and investigations, as well as reporting, monitoring
andreview.
Our Global Safety Standards are reinforced through regular safety
self-assessments, Group internal audits and third-party external audits
– ensuring multiple layers of assurance both internally and externally.
Personal safety
Training our people to manage safety in operations is crucial for
maintaining a safe and efficient work environment. Comprehensive
training equips our teams with the knowledge and skills needed to
identify and mitigate risks, ensuring they can effectively respond to
potential hazards.
This training fosters a sense of ownership and responsibility,
encouraging proactive behaviour and prompt intervention. It promotes
a strong focus on safety, where everyone is actively encouraged to
engage in protecting their own wellbeing and that of their colleagues.
As indicated in last year’s Annual Report, the businesses have looked
to capture a more holistic view of personal injuries by transitioning to a
Total Recordable Injury Frequency Rate (TRIFR) performance
measure which reflects all work-related injury types. In 2024, we
achieved a TRIFR rate of 10.7, representing a 12% improvement
compared to our limit of 12.10.
Safety governance and advancing food safety
Safety learnings are shared across our businesses with a safety
moment at the start of management meetings, whilst Board and
Executive Committee meetings regularly feature health and safety
updates. In 2024, we supported the globally recognised World Food
Safety Day, engaging our chefs, operators and colleagues globally and
further educating them on our approach to food safety.
We believe it is critical to partner with leading industry food safety
groups and actively collaborate on global food safety initiatives that
support learnings which continuously evolve our strategy and
approach. We are active board members of SSAFE, a global non-profit
that works to strengthen food safety across the supply chain, and we
participate in advisory committees across the following industry
groups: Food Industry Intelligence Network, International Association
of Food Protection, Conference forFood Protection and the National
Restaurant Association.
Evolving our processes
In 2024, we evolved our Global Safety Standards to reflect current risk
trends that are impacting our operational environment, and the
actions required of our businesses to achieve further excellence
through consistency of approach. We have built a globally connected
community for our safety professionals and senior leaders, uniting
people in a shared understanding of our safety journey through the
use of a market-leading employee engagement mobile application.
Priorities for the year ahead
The businesses will continue to prioritise initiatives that further the
maturity of our safety programmes. As we looked to capture a more
holistic view of personal injuries by transitioning to TRIFR in 2024, we
will prioritise the forthcoming EU Corporate Sustainability Reporting
Directive (CSRD), emphasising the qualitative aspects that add depth
and context to our strategies and opportunities for managing the
evolving risks throughout our business. As part of this, we will
transition to measuring our food safety progress through leading food
safety indicators that align with industry and regulatory standards. Our
Global Food Safety Incident Rate remains important to us and will
continue to be tracked by management.
12 Strategic Report
Doing what
is right
Ethics and integrity
Business ethics and integrity
At Compass we are committed to upholding high standards of ethics
and integrity (E&I), a commitment which has earned us our position
asa global leader and trusted partner. We believe in responsible
leadership and aim to set the standard and act as a role model for
ethical behaviour. Through an inclusive culture, we promote a
workplace where our people and partners can speak up and be
heard.Our values, commitments, Code of Business Conduct (CBC)
and Business Integrity Policy (BIP) guide the decisions, actions
andbehaviours of our people and serve as a foundation for the way
our businesses conduct themselves in an ethical, fair and
responsibleway.
Our E&I programme
Our risk-based programme and policy framework provide the minimum
standards, ethical principles, expectations and guidance for Compass’
employees and those we work with or who act on our behalf.
Global initiatives
We are committed to continuous improvement, and this year we
haveprioritised:
– the launch of country-specific BIPs in local languages, with locally
approved disclosure thresholds for gifts and hospitality, conflicts
ofinterest, donations, sponsorships and community investments
– our annual E&I awareness week, which focused on embedding
E&I principles within our countries
– the phased implementation of our Third-Party Integrity Due
Diligence (TPIDD) process
– further embedding key E&I controls through piloting our
Programme Implementation Playbook (PIP) which sets out
expected compliance standards and provides guidance to
countriesand regions
– continuing to collaborate across Group functions to strengthen
governance activities relating to supply chain risk management
andM&A due diligence
– undertaking a fraud risk assessment and an effectiveness review
ofour SpeakUp, We’re Listening programme, both carried out by
anindependent external adviser
Training and awareness
Through communication, awareness and training, we empower,
encourage and equip our people to spot red flags and make well-
informed integrity-driven decisions. Our training population includes
all Legal, Sales, Finance, People, Internal Audit, Procurement, Growth
and Retention teams in addition to our Board of Directors and
executive management, leadership and above-unit manager roles at
Group, region and country-level.
Our global E&I awareness week involved all our countries, targeting an
audience of over 100,000 employees across the Group’s businesses
and resulting in a total of 8,600 employees globally electing to become
E&I ambassadors. To set clear expectations of our ethical behaviours
and values, we have initiated new starter training covering E&I
principles for unit managers and above, in all of our countries.
Pledge and declaration
To confirm understanding of and compliance with the CBC and BIP,
our annual self-certification process requires all our target training
population of nearly 19,000 employees globally to provide a pledge
and declaration covering key business integrity risk areas and conflict
of interest disclosures.
Priorities for the year ahead
In partnership with the businesses and our community of E&I leaders,
we will prioritise initiatives in accordance with our strategic plan.
These priorities include: continuing to further embed key controls
through the PIP and TPIDD; strengthening monitoring, oversight and
assurance of key programme elements including external reviews;
Data Privacy Policy compliance; and optimising E&I’s suite of tools
and technologies, including a new learning management system.
13Compass Group PLC Annual Report 2024
Ethics and integrity continued
SpeakUp, We’re Listening (SpeakUp) is our confidential reporting
programme that is accessible to anyone through use of QR codes,
via the web or by phone, and is available 24/7, 365 days a year.
SpeakUp is managed by Group E&I, a team independent of any
other lines of business.
In 2024, SpeakUp received a total of 4,974 reports (2023: 4,130),
from employees in the Group, contractors and external parties.
Positive engagement with the programme is observed through
increased reporting and engagement, which was especially
notable following our annual E&I awareness week, including a
leader-led campaign to further promote the programme and
celebrate our ‘speak and listen up’ ethos.
Of the 4,974 reports made to SpeakUp, 1,460 were non-ethics-
related matters and were typically referred to country teams for
follow-up rather than requiring an ethics investigation. The
remaining 3,514 were ethics-related matters assessed as potential
breaches of our CBC.
Whilst 60% (2,105) of reporters elected to remain anonymous
(2023: 1,735), the overall substantiation rate for 2024 was 34%
(2023: 38%). Notwithstanding the rise in total reports received in
2024, we maintained a stable substantiation rate, which reflects
consistency in investigation processes including continued
engagement with reporters to develop a better understanding of
concerns raised. At Compass, we take all matters raised through
SpeakUp very seriously: we ensure our reporters receive a
response and that appropriate actions are taken with respect to
concerns raised.
Compass Group and all of its Group companies strongly encourage
raising concerns about improper behaviour or possible violations of
our CBC, BIP, other policies or laws. Compass prohibits and does
not tolerate retaliation or detrimental conduct in response to
anyone raising a concern, irrespective of the outcome.
SpeakUp, We’re Listening 2024 overview
1
3,514 ethics reports
Ethics report categories
34% substantiation rate
Ethics case outcomes
30% 23% 11%
Warning
11%
Feedback Termination
25%
Coaching
Other outcomes such as: referral to another process;
training; employee performance improvement.
N
o
n
-
e
t
h
i
c
s
r
e
p
o
r
t
s
=
1
,
4
6
0
E&I pulse survey responses
*
6
0%
of our employees stated that they speak up
when things do not feel right (2023: 89%)
6
8%
of our employees are aware of SpeakUp,
We’re Listening (2023: 96%)
88%
observed integrity-driven decisions being
made where they work (2023: 85%)
6
6%
agreed that training raised their awareness of
E&I principles (2023: 91%)
1. Data as at 30 September 2024.
5 most frequently
reported ethics issues:
1. Harassment/bullying.
2. Workplace conflict.
3. Issues with management.
4. Retaliation.
5. Discrimination.
Business
integrity
16.5%
Finance
0.5%
Health, safety &
sustainability
5.0%
Employee
behaviours
78%
* Based on responses as part of the 2024 training
(all regions ex. UK&I)
14 Strategic Report
Financial review
Performance
Another year of strong
performance
Change in reporting currency
With effect from 1 October 2023, the reporting currency of the Group
was changed from sterling to US dollars. The change in presentation
currency provides investors and other stakeholders with greater
transparency in relation to the Group’s performance and reduces
foreign exchange volatility on earnings given that approximately
three-quarters of the Group’s underlying operating profit originates in
US dollars. The amounts for prior periods have been translated into
US dollars at average exchange rates for the relevant periods for
income statements and cash flows, with spot rates used for significant
transactions, and at the exchange rates on the relevant balance sheet
dates for assets and liabilities.
Group performance
We manage and assess the performance of the Group using various
underlying and other Alternative Performance Measures (APMs).
These measures are not defined by International Financial Reporting
Standards (IFRS) or other generally accepted accounting principles
(GAAP) and may not be directly comparable with APMs used by other
companies. Underlying measures reflect ongoing trading and,
therefore, facilitate meaningful year-on-year comparison. The Group’s
APMs, together with the results prepared in accordance with IFRS,
provide comprehensive analysis of the Group’s results. Accordingly,
the relevant statutory measures are also presented where appropriate.
Certain of the Group’s APMs are financial Key Performance Indicators
(KPIs) which measure progress against our strategy. The Group’s
APMs are defined in note 34 (non-GAAP measures) and reconciled to
GAAP measures in notes 2 (segmental analysis) and 34 to the
consolidated financial statements.
2024
$m
Restated
1
2023
$m Change
Revenue
Underlying 42,176 38,216 10.4%
Underlying (constant currency) 42,176 38,147 10.6%
Organic 41,021 37,075 10.6%
Statutory 42,002 37,907 10.8%
Operating profit
Underlying 2,998 2,592 15.7%
Underlying (constant currency) 2,998 2,576 16.4%
Statutory 2,584 2,313 11.7%
Operating margin
Underlying 7.1% 6.8% 30bps
Statutory 6.2% 6.1% 10bps
Return on capital employed (ROCE)
ROCE 19.0% 19.3% (30)bps
Basic earnings per share
Underlying 119.5c 105.2c 13.6%
Underlying (constant currency) 119.5c 104.3c 14.6%
Statutory 82.3c 92.2c (10.7)%
Cash flow
Underlying – free cash flow 1,740 1,516 14.8%
Statutory – net cash flow from operating activities 3,135 2,536 23.6%
Dividend
Full-year dividend per ordinary share 59.8c 52.6c 13.7%
1. With effect from 1 October 2023, the reporting currency of the Group was changed from sterling to US dollars. The results for the year ended 30 September 2023
have been restated in US dollars.
Alternative Performance Measure (APM) (see pages 207 to 214) APM which is also a Key Performance Indicator (see page 7)
Petros Parras
Group Chief Financial Officer
15Compass Group PLC Annual Report 2024
Financial review continued
Statutory income statement
On a statutory basis, revenue increased by 10.8% to $42,002 million
(2023: $37,907 million).
Statutory operating profit was $2,584 million (2023: $2,313 million), an
increase of 11.7%, with statutory operating margin of 6.2% (2023: 6.1%).
Statutory operating profit includes non-underlying item charges of
$414million (2023: $279 million), including acquisition-related charges of
$235 million (2023: $153 million) and $170 million (2023: $118 million)
of charges related to the strategic portfolio review.
As part of our strategic portfolio review, and considering country
exits,ongoing advancement of technologies and the increased
decentralisation of our business, we have reviewed our European
regional business transformation ERP programme that commenced
anumber of years ago. We have decided to discontinue the
implementation and roll out of our cross-market ERP programme and,
accordingly, have recognised a charge of $160 million as a specific
adjusting item, which includes $146 million for the non-cash
impairment of work-in-progress head office (non-client-related)
computer software assets. An impairment charge of $10 million has
been recognised in respect of our business in Qatar. In 2023, the net
charge included the impact of site closures and contract
renegotiations and terminations in the UK.
A full list of non-underlying items is included in note 34 (non-GAAP
measures).
The Group has recognised a net loss of $203 million (2023: net gain
of$24 million) on the sale and closure of businesses, including exit
costs of $92 million (2023: $14 million) and a charge of $250 million
(2023: credit of $1 million) in respect of the reclassification of
cumulative currency translation differences. As part of our strategic
portfolio review, we exited five countries during the year and, in July,
the Group agreed the sale of its businesses in Chile, Colombia and
Mexico, subject to regulatory approval and completion procedures.
Subsequent to the year-end, we agreed the sale of our business in
Kazakhstan, subject to regulatory approval.
Finance costs increased to $325 million (2023: $200 million) mainly
reflecting both higher net debt and interest rates during the year,
together with a partial reversal of the fair value gains on derivatives
held to minimise volatility in short-term underlying finance costs in
previous years.
Profit before tax was $2,056 million (2023: $2,137 million) giving rise to an
income tax expense of $642 million (2023: $525 million), equivalent to an
effective tax rate of 31.2% (2023: 24.6%). The increase in rate primarily
reflects the increase in the UK corporate tax rate from 19% to 25% from
1 April 2023 and the impact of non-taxable non-underlying items.
Basic earnings per share was 82.3 cents (2023: 92.2 cents),
adecrease of 10.7%, as the higher operating profit is more than
offsetby the impact of the reclassification of cumulative currency
translation differences on sale of businesses, higher finance costs
andhigher effective tax rate.
Underlying income statement
Organic revenue growth was strong at 10.6%, including net new
business growth of 4.2%, which remains above our historical level
of approximately 3%, pricing of around 4% and like-for-like volume
growth of around 2%. As expected, volume growth moderated during
the year as we lapped strong prior year comparatives.
Growth in underlying revenue was broad-based reflecting double-digit
organic revenue growth, especially in North America and Europe, and
also the contributions from significant acquisitions during the year. This
was partly offset by the impact of exits from non-core countries as part of
the Group’s strategy to focus on our larger developed markets and
de-risk our portfolio. Client retention rates remained strong at 96.0%.
Underlying operating profit increased by 16.4% on a constant-
currency basis, to $2,998 million, with underlying operating margin
at7.1% (2023: 6.8%). Strong margin progression was achieved across
all regions, underpinned by our operational scale, efficiencies and
appropriate levels of pricing to mitigate inflation.
Underlying finance costs increased to $249 million (2023: $166 million)
mainly reflecting both higher net debt and interest rates during the year.
On an underlying basis, the tax charge was $702 million (2023: $588
million), equivalent to an effective tax rate of 25.5% (2023: 24.2%).
The increase in rate primarily reflects the increase in the UK corporate
tax rate from 19% to 25% from 1 April 2023. The tax environment
continues to be uncertain, with more challenging tax authority audits
and enquiries globally.
On a constant-currency basis, underlying basic earnings per share
increased by 14.6% to 119.5 cents (2023: 104.3 cents) reflecting
the higher profit for the year.
Income statement
2024
Restated
1
2023
For the year ended 30 September
Statutory
$m
Adjustments
$m
Underlying
$m
Statutory
$m
Adjustments
$m
Underlying
$m
Revenue 42,002 174 42,176 37,907 309 38,216
Operating profit 2,584 414 2,998 2,313 279 2,592
Net (loss)/gain on sale and closure of businesses (203) 203 – 24 (24) –
Finance costs (325) 76 (249) (200) 34 (166)
Profit before tax
2,056 693 2,749 2,137 289 2,426
Tax expense (642) (60) (702) (525) (63) (588)
Profit for the year
1,414 633 2,047 1,612 226 1,838
Non-controlling interests (10) – (10) (5) – (5)
Attributable profit 1,404 633 2,037 1,607 226 1,833
Average number of shares 1,705m – 1,705m 1,743m – 1,743m
Basic earnings per share 82.3c 37.2c 119.5c 92.2c 13.0c 105.2c
EBITDA $4,145m $3,620m
1. With effect from 1 October 2023, the reporting currency of the Group was changed from sterling to US dollars. The results for the year ended 30 September 2023
have been restated in US dollars.
Alternative Performance Measure (APM) (see pages 207 to 214) APM which is also a Key Performance Indicator (see page 7)
16 Strategic Report
Liquidity
The Group finances its operations through cash generated by the
business and borrowings from a number of sources, including banking
institutions, the public and the private placement markets. The Group
has developed long-term relationships with a number of financial
counterparties with the balance sheet strength and credit quality
to provide credit facilities as required.
The Group seeks to avoid a concentration of debt maturities in any
one period to spread its refinancing risk. A $352 million US Private
Placement (USPP) note matured and was repaid in October 2023.
In February 2024, the Group issued a €750 million ($806 million)
fixed-rate sustainable bond maturing in February 2031. The new bond
effectively pre-financed a €750 million ($809 million) bond which
matured and was repaid in July 2024. In September 2024, the Group
issued a €500 million ($557 million) fixed-rate sustainable bond
maturing in September 2033. The maturity profile of the Group’s
principal borrowings at 30 September 2024 shows that the average
period to maturity is 4.6 years (2023: 3.3 years).
The Group’s USPP notes contain leverage and interest cover
covenants which are tested semi-annually at 31 March and
30September. The leverage covenant test stipulates that
consolidated net debt must be less than or equal to 3.5 times
consolidated EBITDA. The interest cover covenant test stipulates
thatconsolidated EBITDA must be more than or equal to 3 times
consolidated net finance costs. Consolidated EBITDA and net finance
costs are based on the preceding 12 months. The leverage and
interest cover ratios were 1.1 times and 19.6 times, respectively,
at 30September 2024. Net debt, consolidated EBITDA and net
finance costs are subject to certain accounting adjustments for
the purposes of the covenant tests.
At 30 September 2024, the Group had access to $3,236 million
(2023: $3,271 million) of liquidity, including $2,683 million (2023:
$2,441 million) of undrawn bank facilities committed to August 2026
and $553 million (2023: $830 million) of cash, net of overdrafts. Our
credit ratings remain strong investment grade: Standard & Poor’s
A/A-1 long-term/short-term (outlook Stable); and Moody’s A2/P-1
long-term/short-term (outlook Stable).
Net debt
Net debt has increased by $932 million to $5,391 million
(2023:$4,459 million). The Group generated $1,675 million of free
cash flow and received $327 million in respect of the sale of its 19%
effective interest in ASM Global Parent, Inc., which was more than
offset by $999 million spent on the acquisition of subsidiaries, joint
ventures and associates, net of disposal proceeds, dividends of
$963million and share buybacks of $577 million. Adverse exchange
translation was $143 million. Cash net of lease liabilities of $34 million
in Chile, Colombia and Mexico has been reclassified to held
for sale in the Group’s balance sheet at 30 September 2024.
At 30 September 2024, the ratio of net debt to underlying EBITDA
was 1.3x (2023: 1.2x). Our leverage policy is to maintain strong
investment-grade credit ratings and to target net debt to underlying
EBITDA in the range of 1x-1.5x.
Post-employment benefits
The Group has continued to review and monitor its pension obligations
throughout the year, working closely with the trustees and actuaries of
all schemes across the Group to ensure appropriate assumptions are
used and adequate provision and contributions are made.
The accounting surplus in the Compass Group Pension Plan is $542
million at 30 September 2024 (2023: $525 million). The deficit in the
rest of the Group’s defined benefit pension schemes has increased to
$1,274 million (2023: $983 million). The net deficit in these schemes
is $154 million (2023: $130 million) including investments of $1,120
million (2023: $853 million) held in respect of unfunded pension
schemes and the US Rabbi Trust arrangements which do not meet the
definition of pension assets under IAS 19 Employee Benefits.
The total pensions operating charge for defined contribution schemes
in the year was $289 million (2023: $254 million) and $41 million
(2023: $37 million) for defined benefit schemes.
Return on capital employed
Return on capital employed was 19.0% (2023: 19.3%) based on net
underlying operating profit after tax. Excluding the effect of the
higherunderlying effective tax rate of 25.5% (2023: 24.2%), the
impact of recent business acquisitions on capital employed was offset
by the Group’s strong tradingperformance.
Balance sheet
At 30 September
2024
$m
Restated
1
2023
$m
Goodwill 6,899 6,105
Other non-current assets 8,757 7,301
Working capital (1,805) (1,514)
Provisions (714) (633)
Net post-employment benefit obligations (732) (458)
Current tax (94) (152)
Deferred tax (108) 105
Net debt (5,391) (4,459)
Net assets held for sale 94 5
Net assets 6,906 6,300
Borrowings (4,596) (4,114)
Lease liabilities (1,315) (1,153)
Derivatives (103) (221)
Cash and cash equivalents 623 1,029
Net debt (5,391) (4,459)
1. With effect from 1 October 2023, the reporting currency of the Group was changed from sterling to US dollars. The results for the year ended 30 September 2023
have been restated in US dollars.
Alternative Performance Measure (APM) (see pages 207 to 214)
17Compass Group PLC Annual Report 2024
Financial review continued
Free cash flow
Free cash flow totalled $1,675 million (2023: $1,425 million).
Duringthe year, we made cash payments totalling $24 million
(2023:$70million) in relation to restructuring and strategic
programmes and the one-off pension charge. Adjusting for this, and
for acquisition transaction costs of $41 million (2023: $21 million)
which are reported as part of operating cash flow, underlying free cash
flow was $1,740 million (2023: $1,516 million), with underlying free
cash flow conversion at 85.0% (2023: 82.5%). Underlying profit for
the year has replaced underlying operating profit as the denominator
in the calculation of underlying free cash flow conversion. Underlying
free cash flow conversion would be 58.0% (2023: 58.5%) using
underlying operating profit as the denominator.
Capital expenditure of $1,541 million (2023: $1,098 million) is
equivalent to 3.7% (2023: 2.9%) of underlying revenue. The working
capital inflow, excluding provisions and pensions, was $186 million
(2023: outflow of $120 million). The net interest outflow increased
to$228 million (2023: $147 million) consistent with the higher
underlying finance costs in the year. The net tax paid was $693 million
(2023: $539 million), which is equivalent to an underlying cash tax
rate of 25.2% (2023: 22.2%).
Acquisition and disposal of businesses
The Group spent $1,224 million (2023: $408 million) on business
acquisitions during the year, net of cash acquired, including $878
million on CH&CO in the UK and Ireland and HOFMANN
S
in Germany
(including the repayment of acquired borrowings), $285 million on
bolt-on acquisitions and interests in joint ventures and associates,
and$61 million of deferred and contingent consideration and other
payments relating to businesses acquired in previous years.
The Group received $225 million (2023: $58 million) in respect of
disposal proceeds net of exit costs, which primarily comprises the sale
of businesses in five countries during the year.
Including $41 million (2023: $21 million) of acquisition transaction
costs included in net cash flow from operating activities, the total
netcash spent on the acquisition and disposal of businesses is
$1,040million (2023: $371 million).
Sale of 19% effective interest in ASM Global Parent, Inc.
The Group received $327 million in respect of the sale of its 19%
effective interest in ASM Global Parent, Inc. in August 2024.
Dividends paid
Dividends paid in 2024 of $963 million represents the 2023 final
dividend ($606 million) and the 2024 interim dividend ($357 million).
Purchase of own shares
The cash outflow in respect of share buybacks totalled $577 million
during the year, which comprises $185 million in respect of the
completion of the share buyback announced in May 2023 and
$392million in respect of the $500 million share buyback announced
in November 2023. The share buyback is scheduled to complete in
December 2024.
Foreign exchange translation
The $143 million (2023: $91 million) loss on foreign exchange
translation of net debt primarily arises in respect of the Group’s
sterling and euro debt.
Other movements
Other movements primarily comprises fair value movements on
derivative financial instruments used to manage the Group’s
interestrate exposure and lease liabilities acquired through
businessacquisitions.
Cash flow
For the year ended 30 September
2024
$m
Restated
1
2023
$m
Free cash flow 1,675 1,425
Add back: Lease repayments 227 215
New lease liabilities and amendments (325) (323)
Acquisition and disposal of businesses (999) (350)
Sale of 19% effective interest in ASM Global Parent, Inc. 327 –
Dividends paid (963) (796)
Purchase of own shares (577) (1,167)
Foreign exchange translation (143) (91)
Other movements (120) (35)
Increase in net debt (898) (1,122)
Opening net debt (4,459) (3,337)
Net debt transferred to held for sale (34) –
Net debt (5,391) (4,459)
Free cash flow 1,675 1,425
Add back: Cash payments related to restructuring and strategic programmes and the one-off pension charge 24 70
Add back: Acquisition transaction costs 41 21
Underlying free cash flow 1,740 1,516
1. With effect from 1 October 2023, the reporting currency of the Group was changed from sterling to US dollars. The results for the year ended 30 September 2023
have been restated in US dollars.
Alternative Performance Measure (APM) (see pages 207 to 214) APM which is also a Key Performance Indicator (see page 7)
18 Strategic Report
Capital allocation
Our capital allocation framework is clear and unchanged. Our priority
is to invest in the business to fund growth opportunities, target a
strong investment-grade credit rating with a leverage target of around
1x-1.5x net debt to EBITDA and pay an ordinary dividend, with any
surplus capital being returned to shareholders.
Growth investment consists of: (i) capital expenditure to support
organic growth in both new business wins and retention of existing
contracts; and (ii) bolt-on M&A opportunities that strengthen our
capabilities and broaden our exposure. We have a proven track record
of strong returns from our investment strategy as evidenced by our
historical returns on capital employed.
Shareholder returns
Our dividend policy is to pay out around 50% of underlying earnings
through an interim and final dividend, with the interim dividend
reflecting around one-third of the total annual dividend.
In determining the level of dividend in any year, the Board considers a
number of factors, which include but are not limited to:
– the level of available distributable reserves in the Parent Company
– future cash commitments and investment requirements to sustain
the long-term growth prospects of the business
– potential strategic opportunities
– the level of dividend cover
Further surpluses, after considering the matters set out above, may be
distributed to shareholders over time by way of special dividend
payments, share repurchases or a combination of both.
Compass Group PLC, the Parent Company of the Group, is a
non-trading investment holding company which derives its
distributable reserves from dividends paid by subsidiary companies.
The level of distributable reserves in the Parent Company is reviewed
annually and the Group aims to maintain distributable reserves that
provide adequate cover for shareholder returns. The distributable
reserves of the Parent Company include the distributable portion
ofretained earnings and the own shares reserve, which total
£2,457million at 30 September 2024 (2023: £2,379 million).
An interim dividend of 20.7 cents per share (2023: 17.9 cents per
share), $357 million in aggregate, was paid in July 2024. It is proposed
that a final dividend of 39.1 cents per share (2023: 34.7 cents per
share), $664 million in aggregate, be paid on 27 February 2025 to
shareholders on the register on 17 January 2025. This will result in a
total dividend for the year of 59.8 cents per share (2023: 52.6 cents
per share), $1,021 million in aggregate (2023: $940 million). The
dividend is covered 2.0 times on an underlying earnings basis.
Shareholders appearing on the Register of Members or holding their
shares through CREST will automatically receive their dividends in
sterling, but have the option to elect to receive their dividends in US
dollars. The closing date for the receipt of dividend currency elections
is 3 February 2025. The sterling equivalent of the 2024 final dividend
will be announced on 11 February 2025.
For shares held in certificated form on the register, US dollar elections
can be made by contacting our share registrar, Link Group. Link’s
contact details can be found on page 230 or on our website under
Dividend Information.
A Dividend Reinvestment Plan (DRIP) will be available. The last date
for receipt of elections for the DRIP will be 6 February 2025.
The Group is in a strong position to fund its dividend, which is well
covered by cash generated by the business. Details of the Group’s
going concern assessment can be found on page 145. The ability of
the Board to maintain its future dividend policy will be influenced by a
number of the principal risks identified on pages 24 to 28 that could
adversely impact the performance of the Group, although we believe
we have the ability to mitigate those risks as outlined on pages 24 to 28.
At the date of this Report, $476 million of the $500 million share
buyback announced in November 2023 had been completed, with the
remainder scheduled to complete in December 2024. We prioritise
investment in the business through capex and M&A to support future
growth, with any surplus capital being returned to shareholders as we
maintain our strong track record of delivering long-term, compounding
shareholder returns.
Treasury
The Group manages its liquidity, foreign currency exposure and
interest rate risk in accordance with the policies set out below.
The Group’s financial instruments comprise cash, borrowings,
receivables and payables that are used to finance the Group’s
operations. The Group also uses derivatives, principally interest rate
swaps, forward currency contracts and cross currency swaps, to
manage interest rate and currency risks arising from the Group’s
operations. The Group does not trade in financial instruments.
TheGroup’s treasury policies are designed to mitigate the impact of
fluctuations in interest rates and exchange rates and to manage the
Group’s financial risks. The Board approves any changes to the policies.
Foreign currency risk
The Group’s policy is to balance its principal projected cash flows by
currency with actual or effective borrowings in the same currency. As
currency cash flows are generated, they are used to service and repay
debt in the same currency. Where necessary, to implement this policy,
forward currency contracts and cross currency swaps are taken out
which, when applied to the actual currency borrowings, convert these
to the required currency.
The borrowings in each currency can give rise to foreign exchange
differences on translation. Where the borrowings are less than, or
equal to, the net investment in overseas operations, these exchange
rate variances may be treated as movements on reserves and
recorded in the consolidated statement of comprehensive income
rather than in the consolidated income statement.
Non-dollar earnings streams are translated at the average rate of
exchange for the year. Fluctuations in exchange rates have given, and
will continue to give, rise to translation differences. The Group is only
partially protected against the impact of such differences through the
matching of cash flows to currency borrowings.
Interest rate risk
As set out above, the Group has effective borrowings in a number of
currencies and its policy is to ensure that, in the short term, it is not
materially exposed to fluctuations in interest rates in its principal
currencies. The Group implements this policy either by borrowing
fixed rate debt or by using interest rate swaps or options so that the
interest rates on at least 80% of the Group’s projected debt are fixed
or capped for one year. For the second and third years, interest rates
are fixed within ranges of 30% to 70% and 0% to 40% of projected
debt, respectively.
19Compass Group PLC Annual Report 2024
Financial review continued
Tax
As a Group, we are committed to creating long-term shareholder value
through the responsible, sustainable and efficient delivery of our key
business objectives. This will enable us to grow the business and make
significant investments in the Group and its operations.
We adopt an approach to tax that supports this strategy and also
balances the various interests of our stakeholders, including
shareholders, governments, employees and the communities in which
we operate. Our aim is to pursue a principled and sustainable tax
strategy that has strong commercial merit and is aligned with our
business strategy. We believe this will enhance shareholder value
whilst protecting our reputation.
In doing so, we act in compliance with the relevant local and
international laws and disclosure requirements, and we conduct an
open and transparent relationship with the relevant tax authorities
that fully complies with the Group’s Code of Business Conduct and
Business Integrity Policy.
After many years of operation, the Group has numerous legacy
subsidiaries across the world. Whilst some of these entities are
incorporated in low-tax territories, Compass does not seek to
avoidtaxthrough the use of tax havens. Details of the Group’s
relatedundertakings are listed in note 36 to the consolidated
financial statements.
In an increasingly complex international corporate tax environment,
adegree of tax risk and uncertainty is, however, inevitable. Tax risk
can arise from unclear regulations and differences in interpretation
but, most significantly, where tax authorities apply diverging standards
in assessing intra-group cross-border transactions. This is the
situation for many multinational organisations. We manage and
control these risks in a proactive manner and, in doing so, exercise
ourjudgement and seek appropriate advice from relevant professional
firms. Tax risks are assessed as part of the Group’s formal governance
process and are reviewed by the Board and the Audit Committee on a
regular basis.
Risks and uncertainties
The Board takes a proactive approach to risk management aimed at
protecting the Group’s employees, clients and consumers and
safeguarding the interests of the Company and its shareholders in a
constantly changing environment.
The principal risks and uncertainties facing the business, and the
activities the Group undertakes to mitigate these, are set out on pages
24 to 28.
Related party transactions
Details of transactions with related parties are set out in note 32 to the
consolidated financial statements. These transactions have not had,
and are not expected to have, a material effect on the financial
performance or position of the Group.
Going concern
The factors considered by the directors in assessing the ability of the
Group and Parent Company to continue as a going concern are
discussed on page 145.
The Group has access to considerable financial resources, together
with longer-term contracts with a number of clients and suppliers
across different geographic areas and industries. As a consequence,
the directors believe that the Group is well placed to manage its
business risks successfully.
Based on the assessment discussed on page 145, the directors have a
reasonable expectation that the Group and Parent Company have
adequate resources to continue in operational existence for at least
the period to 31 March 2026. For this reason, they continue to adopt
the going concern basis in preparing the financial statements.
Petros Parras
Group Chief Financial Officer
26 November 2024
20 Strategic Report
Regional
performance
Underlying Change Statutory Change
Revenue 2024
Restated
1
2023 Reported rates Constant currency Organic 2024
Restated
1
2023
North America $28,581m $25,768m 10.9% 10.9% 10.5% $28,557m $25,745m 10.9%
Europe $9,887m $8,598m 15.0% 14.3% 11.9% $9,737m $8,312m 17.1%
Rest of World $3,708m $3,850m (3.7)% (0.8)% 8.5% $3,708m $3,850m (3.7)%
Total $42,176m $38,216m 10.4% 10.6% 10.6% $42,002m $37,907m 10.8%
Operating profit
North America $2,335m $2,019m 15.7% 15.7% 15.7% $2,251m $1,931m 16.6%
Europe $583m $479m 21.7% 22.0% 15.0% $380m $297m 27.9%
Rest of World $224m $214m 4.7% 10.3% 27.3% $224m $205m 9.3%
Unallocated costs $(144)m $(120)m $(271)m $(120)m
Total $2,998m $2,592m 15.7% 16.4% 16.2% $2,584m $2,313m 11.7%
Underlying Change Statutory Change
Operating margin 2024 2023 2024 2023
North America 8.2% 7.8% 40bps 7.9% 7.5% 40bps
Europe 5.9% 5.6% 30bps 3.9% 3.5% 40bps
Rest of World 6.0% 5.6% 40bps 6.0% 5.3% 70bps
Total 7.1% 6.8% 30bps 6.2% 6.1% 10bps
Alternative Performance Measure (APM) (see pages 207 to 214) APM which is also a Key Performance Indicator (see page 7)
1. With effect from 1 October 2023, the reporting currency of the Group was changed from sterling to US dollars. The results for the year ended 30 September 2023
have been restated in US dollars.
2. Measured on a constant-currency basis.
North America Europe Rest of World
Underlying operating profit
$2,335m
2023: $2,019m
1
Underlying operating
profit growth
2
15.7%
Underlying operating profit
$583m
2023: $479m
1
Underlying operating
profit growth
2
22.0%
Underlying operating profit
$224m
2023: $214m
1
Underlying operating
profit growth
2
10.3%
Underlying revenue
$28.6bn
Underlying revenue
$9.9bn
Underlying revenue
$3.7bn
Business & Industry Sports & LeisureEducation Defence, Offshore & RemoteHealthcare & Senior Living
15%28%
1%
21%35% 13% 10%15%14%48% 35% 40%14%
7% 4%
Regional reviews
Sector
By sector By sector By sector
21Compass Group PLC Annual Report 2024
Regional reviews continued
North America
Underlying
Operating profit growth was 15.7% on a
constant-currency basis, increasing to
$2,335 million, driven by strong revenue
growth and operating margin progression.
Organic revenue growth was 10.5%, driven
by net new business growth, appropriate
levels of pricing and like-for-like volume
growth. Client retention rates remained
strong at 96.4%.
Growth rates were high single-digit or greater
across all sectors, and notably strong in
Business & Industry driven by net new
business growth and like-for-like volumes,
which benefited from the continued ‘return
to office’ trend and value proposition versus
the high street. Across our other sectors,
Sports & Leisure and Education continued
tobenefit from high attendance levels and
per capita spend levels, while Healthcare &
Senior Living business performance
includedstrong retail sales and new
businessopenings.
Operating margin increased by 40bps to
8.2% driven by management productivity
initiatives, cost control and appropriate levels
of pricing.
The region continues to acquire high-quality
businesses and talent within our existing
sectors, with a particular focus on vending.
Statutory
Statutory revenue increased by 10.9% to
$28,557 million reflecting the strong organic
revenue growth.
Statutory operating profit was $2,251 million
(2023: $1,931 million), with the difference
from underlying operating profit being
acquisition-related charges of $84 million
(2023: $88 million).
Europe
Underlying
The region continues to benefit from ongoing
investments in its people, brands and
processes. Operating profit was $583 million,
representing growth of 22.0% on a
constant-currency basis, driven by double-
digit revenue growth, strong margin
progression and the impact of acquisitions
during the year.
Organic revenue growth of 11.9% comprised
net new business growth, volume growth and
pricing. Client retention rates at 95.5%
remain significantly above historical levels.
All sectors delivered high single-digit growth
rates or above, with double-digit growth rates
achieved in Business & Industry, Education
and Defence, Offshore & Remote.
Operating margin increased by 30bps to
5.9%, reflecting management focus across
the portfolio, ongoing operational efficiencies
and appropriate levels of pricing.
We have increased our focus on M&A with
significant acquisitions to deepen our
sectorisation and sub-sectorisation
strategy,unlock new capabilities and
increase the flexibility of our operating
model. During the year, we acquired
HOFMANN
S
in Germany and CH&CO in the
UK and Ireland. Subsequent to the year-end,
we also completed the acquisition of
DupontRestauration in France and agreed
toacquire 4Service AS in Norway.
Additionally, as part of our focus on core
markets, we exited our joint venture in the
United Arab Emirates.
Statutory
Statutory revenue increased by 17.1% to
$9,737 million, with the difference from
underlying revenue being the presentation of
the share of results of our joint ventures
operating in the Middle East.
Statutory operating profit was $380 million
(2023: $297 million), with the difference
from underlying operating profit mainly
reflecting acquisition-related charges of
$151 million (2023: $56 million) and charges
related to the Group’s strategic portfolio
review of $43 million (2023: $118 million).
Rest of World
Underlying
Operating profit grew by 10.3% on a
constant-currency basis, to $224 million,
driven by strong organic revenue growth and
margin progression. This growth was despite
the impact of exits from our operations in
four non-core countries during the year.
Organic revenue growth was 8.5% and
strongest in our Business & Industry sector,
particularly in India, driven by high levels of
net new business growth and the ‘return to
office’ trend. All other sectors delivered
mid-to-high single-digit organic revenue
growth underpinned by net new business
growth, like-for-like volume growth and
pricing. Client retention rates remained
above historical levels at 94.3%.
Operating margin increased by a further
40bps to 6.0% reflecting the benefits from
strong focus on our core markets, including
Australia, Japan and India.
As part of the Group’s strategy to increase
focus on its core markets, we exited
Argentina, Angola, mainland China and
Brazil during the year and agreed to exit our
businesses in Chile, Colombia and Mexico,
subject to regulatory approval and
completion procedures. Subsequent to the
year-end, we agreed to exit our business in
Kazakhstan, subject to regulatory approval.
Statutory
Statutory revenue decreased by 3.7% to
$3,708 million reflecting the non-core
business disposals. There is no difference
between statutory and underlying revenue.
Statutory operating profit was $224 million
(2023: $205 million), with the difference
from underlying operating profit in 2023
being acquisition-related charges of $9
million.
22 Strategic Report
Identifying and
managing risk
Risk management
The Board takes a proactive approach to risk management aimed
at protecting the Group’s employees, clients and consumers and
safeguarding the interests of the Company and its shareholders in a
constantly changing environment.
Risk management is an essential element of business governance.
The Group has risk management policies, processes and procedures
in place to ensure that risks are properly identified, evaluated and
managed at the appropriate level.
The identification of risks and opportunities, the development of
action plans to manage those risks and maximise the opportunities,
and the continual monitoring of progress against agreed key
performance indicators (KPIs) are integral parts of the business
process and core activities throughout the Group.
In compliance with provision 28 of the UK Corporate Governance
Code 2018 (the Code), the Board has conducted a robust assessment
of the Company’s emerging and principal risks. The following pages
set out the Board’s approach to assessing and mitigating risk, the
principal risks of the Company, and the procedures in place to identify
emerging risks.
Risk management framework
The Board has overall responsibility for risk management. This
includes establishing policies and procedures to manage risk,
overseeing the internal control framework, reviewing the nature and
extent of the principal risks, setting risk appetite and embedding a
mindset of risk management throughout the business.
The Board has approved a Risk Management Policy. The Group
operates a formal risk management process in accordance with this
policy, under which the Group’s principal risks (set out on pages 24 to
28) are assessed and prioritised biannually. In accordance with the
Financial Reporting Council’s Guidance on Risk Management, Internal
Control and Related Financial Business Reporting 2014 and in the
Code, this process has been in place for the financial year under
review. These systems are designed to manage rather than eliminate
the risk of failure to achieve the Group’s strategic objectives,
safeguard the Group’s assets against material loss, fairly report the
Group’s performance and position, and ensure compliance with
relevant legislation, regulation and best practice including that related
to social, environmental and ethical matters. These systems provide
reasonable, but not absolute, assurance against material
misstatement or loss.
The Board delegates aspects of risk management, with the Executive
Committee responsible for the day-to-day management of significant
risk, and the Audit Committee responsible for the oversight of
Compass’ risk management systems and internal financial controls.
The Group Director of Risk and Internal Audit maintains the risk
management framework including the Risk Management Policy.
The Audit Committee annually reviews the effectiveness of the
Group’s approach to risk management and any changes to the
RiskManagement Policy and recommends the principal risks and
uncertainties disclosures made in the Annual Report and Accounts
tothe Board for approval. The Audit Committee’s report is on
pages73 to 78.
Risks and the corresponding controls and mitigations are reviewed
by country and regional leadership teams on an ongoing basis.
Risk updates are integral to periodic management reviews and are
regularly reviewed by the Regional Governance Committees (RGCs)
and the Executive Committee. A critical component of the risk review
process is the dynamic identification of emerging and developing risks
at a country, regional and Group-level. This bottom-up and top-down
approach provides a comprehensive assessment of the key risks
facing the Group. The findings of the risk reviews, including the
principal risks and any developing trends, are reported to and
considered by the Board twice a year.
Risks are considered at gross and net levels. This allows the impact of
each risk and likelihood of its occurrence both before and after
controls and mitigations to be assessed. Risk management plans are
developed for all significant risks. They include a clear description of
the nature of the risk, quantification of the potential impact and
likelihood of occurrence, the owners for each risk, and details of the
controls and mitigations in place, proportionate to the risk, and in line
with the Company’s business. The identification and assessment of
climate-related risks and opportunities are incorporated within the risk
management process. All country operating units are mandated to
consider climate-related risks and opportunities. These are assessed
in terms of percentage profit before interest and tax (PBIT) impact in
accordance with the criteria set out in the Board-approved Risk
Management Policy. All country and Group-level risks are assigned
risk owners and, together with the mitigations, are recorded in the
central risk reporting system.
Group companies also submit biannual risk and internal control
assurance letters to the Group CFO on internal control and risk
management issues, with comments on the control environment
within their operations. The Chair of the Audit Committee reports to
the Board on any matters arising from the Committee’s review of how
the risk management and internal control processes have been
applied.
The Audit Committee keeps under review the adequacy and
effectiveness of the Company’s and Group’s internal financial controls
and risk management systems. These are discussed in further detail
in the Audit Committee report on pages 73 to 78.
Risk appetite
The Board interprets risk appetite as the level of risk that the Company
is willing to take to meet its strategic objectives. The Board’s attitude
to and appetite for risk are communicated to the Group’s businesses
through the strategy planning process and the internal risk
governance and control frameworks. In determining its risk appetite,
the Board recognises that a prudent and robust approach to risk
mitigation must be carefully balanced with a degree of flexibility so
that the entrepreneurial spirit that has greatly contributed to the
Group’s success is not inhibited.
In assessing risk appetite, the Board reviews the three-year business
plan and associated strategic risks. Risk appetite for specific financial
risks such as funding and liquidity, counterparty, foreign exchange
and interest rate risk are set out in the Board approved treasury
policies. Compliance with legal and regulatory requirements, such as
those contained in the Companies Act, health and safety and other
risk-specific legislation, is mandatory.
23Compass Group PLC Annual Report 2024
Principal risks
New and emerging risks
The Board has established processes for identifying emerging risks,
and horizon scanning for risks that may arise over the medium to
long-term. Emerging and potential changes to the Group’s risk profile
are identified through the Group’s risk management framework and
through direct feedback from management, including in regard to
changing operating conditions, and market and consumer trends.
The democratisation of generative artificial intelligence (AI) has
givenwidespread access to powerful online AI services for content
creation. This opportunity presents several risks including breach
ofdata confidentiality and data privacy, and other intellectual
property- related risks. In response, to mitigate these risks,
Compasshas implemented principles-based rules that apply
globally,and we have developed a framework for responsible
useofAIto support all our markets.
The ongoing tensions in the Middle East and the Russia-Ukraine
conflict have elevated geopolitical risks and while we do not operate
directly in those countries currently affected, we do have interests
elsewhere in Europe and the Middle East. We continue to monitor
these situations closely with the safety and security of the Group’s
employees front of mind.
Our principal risks
Over recent years, we have reviewed our global portfolio of operations
and as part of this we have exited a number of countries deemed both
higher-risk and non-core to our long-term business objectives.
This has significantly reduced our risk exposure in certain areas
including political instability, economic volatility, employee welfare
(particularly foreign migrant labour risks) and international tax.
Risksarising in the immediate aftermath of the COVID-19 pandemic
have also reduced.
As a result, certain risks (Political instability and International tax as
set out in Annual Report 2023) are no longer considered to be
principal risks while others have been combined and streamlined.
All risks disclosed in previous years can be found in the annual reports
available on our website, www.compass-group.com. These risks
remain important to the business and are kept under regular review.
The principal risks and uncertainties facing the business at the date of
this Report are set out on pages 24 to 28. These risks are not listed in
any order of priority.
Other risks
The principal risks do not comprise all the risks that the Group may
face. The Group faces a number of operational risks on an ongoing
basis, such as litigation and financial risks. Additional risks and
uncertainties not presently known to management, or which are
considered to be remote or are deemed to be less material at the date
of this Report, may also have an adverse effect on the Group.
Risk and description Mitigation
Climate change
2024: 2023:
Strategic pillar link:
The Group continues to focus on evaluating its exposure to climate
change and seeks to identify potential future issues early so that
sourcing and operations can be adjusted, and menus adapted
appropriately. The Task Force on Climate-related Financial
Disclosures scenario analysis helps inform the materiality of these
risks. Work continues with clients and suppliers to propose, execute
and measure solutions to support their efforts and those of Compass
in reducing greenhouse gas (GHG) emissions. Compass has targeted
climate net zero GHG emissions by 2050 alongside validated
science-based targets to reduce emissions by 2030 (from a 2019
base year) in line with the 2015 Paris Agreement.
The impact of climate change on the environment may lead to
issues around food sourcing and security, and supply chain
continuity in some of the Group’s markets. Issues in these areas
could affect the availability of some food products, and potentially
may lead to food cost inflation.
MAP 1: Client sales and marketing
Increased risk
Static risk Decreasing risk New risk
MAP 2: Consumer sales and marketing MAP 3: Cost of food MAP 4: In-unit costs MAP 5: Above-unit overheads
Link to
See page 4
Risk management continued
Alignment with our strategic focus areas
People Performance
Purpose
24 Strategic Report
Risk and description Mitigation
Food safety
1
2024: 2023:
Strategic pillar link:
Management meetings throughout the Group feature a health and
safety update (food safety and/or occupational safety) as one of their
first substantive agenda items.
Food safety improvement KPIs are included in the annual bonus
plans for each of the businesses’ management teams. The Group
has policies, procedures and standards in place to ensure
compliance with legal obligations and industry standards.
The safety and quality of the Group’s global supply chain are assured
through compliance with a robust set of standards which are
regularly reviewed, audited and upgraded as necessary to improve
supply chain visibility and product integrity.
Further mitigations in place include our Global Safety Standards,
Global Supply Chain Integrity Standards and a Global Allergen
Management Plan.
Compass Group companies feed millions of consumers every day.
For that reason, setting the highest standards for food hygiene and
safety is paramount. Safety breaches could cause serious business
interruption and could result in criminal and/or civil prosecution,
increased costs and potential damage to the Company’s reputation.
Occupational safety
1
2024: 2023:
Strategic pillar link:
In addition to the priority focus in management meetings,
occupational safety improvement KPIs are included in the annual
bonus plans for each of the businesses’ management teams.
Our safety framework outlines the methods for executing and
reporting safety measures, ensuring a secure environment for
colleagues, contractors, and consumers. We regularly update and
refine the health and safety framework to address any challenges
that may emerge from operational changes.
Group standards are supplemented in country with occupational
safety standards that meet local regulatory conditions.
Compass Group companies employ hundreds of thousands of
people globally. Ensuring the safety of our employees, consumers,
and suppliers is our top priority. Failure to comply with workplace
safety standards can result in injuries to employees, clients and
consumers, or other third parties, potentially causing operational
disruptions and adverse financial, legal, and reputational
consequences.
Pandemic
2024: 2023:
Strategic pillar link:
Operations and working practices have been adjusted to retain the
skills and experience of colleagues and provide flexibility in the
eventof another pandemic which leads to a resumption of
containment measures.
To protect the Group’s employees, clients and consumers, in the
event of another pandemic, enhanced health and safety protocols
and personal protective equipment requirements and guidelines,
hygiene requirements and site layout solutions developed in
consultation with expert advisers and with our clients, would
beadopted.
Careful management of the Group’s cost base and robust measures
to protect the Group’s liquidity position have ensured that we remain
resilient and well placed to take advantage of appropriate
opportunities as they arise.
Robust incident management and business continuity plans are in
place and are monitored for effectiveness and regularly reviewed to
ensure they reflect evolving best practice.
The Group’s operations were significantly disrupted due to the
global COVID-19 pandemic and associated containment
measures. Compass recovered well and learned from the
pandemic, and this risk has now diminished. However, outbreaks
of another pandemic, could cause further business risk.
1. Combined under Health and safety risk in Annual Report 2023.
25Compass Group PLC Annual Report 2024
Risk and description Mitigation
Talent
1
2024: 2023:
Strategic pillar link:
Leadership succession planning is performed at Board, regional and
country-levels. The Group has established tools, training,
development, performance management and reward programmes
to help retain, develop, motivate and support its skilled workforce,
including an increasing focus on global mobility and opportunities.
The Group has a number of well-established initiatives which help to
monitor levels of engagement and to respond to the needs of
employees. Specifically, Compass has increased its local focus and
employee support on mental health awareness, stress management
and resilience and the provision of financial advice and assistance to
better equip its people in times of uncertainty and change.
Attracting, retaining and motivating the best people with the right
skills, at all levels of the organisation, is key to the long-term
success of the Group.
Changes to economic conditions may increase the risk of attrition
at all levels of the organisation.
Sales and retention
2
2024: 2023:
Strategic pillar link:
Compass has strategies based on quality, value, innovation and
investment in new technologies that strengthen its long-term
relationships with its clients and consumers.
The Group’s business model is structured so that it is not reliant on
one particular sector or group of clients.
Technology is used to support the delivery of efficiencies and to
contribute to growth through, for example, cashierless and cashless
payment systems and the use of AI. This is beneficial to clients and
consumers and positively impacts retention and new business wins.
Compass continues to focus on financial security and safety. In
today’s environment, these are key strengths for clients.
Processes are in place to ensure that the services delivered to clients
are of an appropriate standard and comply with the required
contract terms and conditions.
Compass continues to evolve its offer to increase participation rates
and service sites of different sizes.
The Group’s growth ambitions rely on sustainably driving positive
net new business through securing and retaining a diverse range
ofclients.
The Group’s operating companies contract with a large number of
clients. Failure to comply with the terms of these contracts,
including proper delivery of services, could lead to the loss of
business and/or claims.
The potential loss of material client contracts and the inability to
secure additional new contracts in a competitive market is a risk to
Compass’ businesses.
The emergence of new industry participants and traditional
competition using disruptive technology could adversely affect the
Group’s businesses.
Geopolitical
2024: 2023:
Strategic pillar link:
As a Group, Compass is monitoring the situation closely with the
safety and security of the Group’s employees front of mind.
Whilst we do not operate in Israel or the Palestinian territories,
we do have interests elsewhere in the Middle East. Compass has
permanently exited the Russian market and moved away from all
known Russian suppliers.
The Group has in place strategies to manage economic volatility
including cost inflation and cybersecurity threats.
The conflict in the Middle East and the ongoing Russia-Ukraine war
have increased geopolitical risks, heightened national security
threats in those regions, and disrupted the global energy market.
These factors contribute to risks such as economic volatility
including cost inflation and cybersecurity threats.
1. Combines and streamlines risks relating to Recruitment and Retention and motivation as set out in Annual Report 2023.
2. Incorporates and streamlines risks relating to Service delivery, contractual compliance and retention, and Competition and disruption as set out in Annual
Report 2023.
Risk management continued
MAP 1: Client sales and marketing
Increased risk
Static risk Decreasing risk New risk
MAP 2: Consumer sales and marketing MAP 3: Cost of food MAP 4: In-unit costs MAP 5: Above-unit overheads
Link to
See page 4
Alignment with our strategic focus areas
People Performance
Purpose
26 Strategic Report
Risk and description Mitigation
Economic volatility
1
2024: 2023:
Strategic pillar link:
As part of Compass’ strategy, the Group is focused on productivity
and purchasing initiatives which help to manage the cost base.
During adverse conditions, if necessary, actions can be taken to
reduce labour costs and action plans have been implemented to
protect profitability and liquidity.
As part of the MAP framework, and by sharing best practice across
the Group, Compass seeks to manage inflation by continuing to drive
greater efficiencies through menu management, supplier
rationalisation, labour scheduling and productivity, and through the
increased use of technology. Cost indexation in our contracts also
gives Compass the contractual right to review pricing with clients.
Our success in managing cost inflation also provides an opportunity,
as the scale and maturity of our procurement operations allows us to
manage supply chain price increases more effectively than some of
our competitors and in-house operations. We believe this is a factor
in increasing levels of first-time outsourcing.
Certain sectors of Compass’ business could be susceptible to
negative shifts in the economy and employment rates. Compass
has strategically exited a number of countries with high economic
volatility. This move, coupled with improved economic conditions
in our primary markets, has reduced the risks affecting the Group.
Business ethics and integrity
2
2024: 2023:
Strategic pillar link:
The Group’s zero-tolerance-based Code of Business Conduct (CBC),
Business Integrity Policy (BIP) and Human Rights Policy (HRP),
govern all aspects of its relationships with its stakeholders. Compass
operates a continuous improvement process as part of the Group’s
Ethics and Integrity programme (EIP).
The Group’s risk management process helps identify major risks and
informs the regular monitoring, effectiveness testing and review of
key areas of our internal control framework.
A strong culture of integrity is promoted through Compass’ EIP
(including training and awareness activities) and its independently
operated SpeakUp, We’re Listening helpline and web platform. All
alleged breaches of the CBC, BIP and the HRP, and other serious
misconduct, are followed up and investigated (as appropriate).
To enhance its ability to counter risks to its businesses and supply
chains from modern slavery, Compass has focused on the areas
where its human rights strategy can have the greatest impact.
This has been done through the continued implementation of the
HRP, the work of the Human Rights Working Group, the engagement
of external specialist advisers, e-learning and continued efforts to
improve the Group’s human rights due diligence through supplier
evaluation and labour agency reviews.
The strategic exit of several countries has helped to lower the risk
around employee welfare.
Ineffective compliance management systems, lack of an
embedded business integrity culture or serious violation of our
policies, relevant laws, or regulations (including but not limited to
anti-bribery and corruption, anti-competitive behaviour, fraud,
money laundering, tax evasion, trade and economic sanctions,
human rights and modern slavery, and data protection), could
result in civil and/or criminal proceedings leading to significant
fines, sanctions, financial loss and reputational harm.
Regulatory expectations and new laws in these areas are being
introduced in certain countries and regions, with a heightened
focus on corporate enforcement, accountability and supply
chainresilience.
1. Incorporates risk relating to Cost inflation as set out in Annual Report 2023.
2. Combines and streamlines risks relating to Social and ethical standards, and Compliance and fraud as set out in Annual Report 2023.
27Compass Group PLC Annual Report 2024
Risk and description Mitigation
Cybersecurity and data privacy
2024: 2023:
Strategic pillar link:
Compass continually assesses its cyber risk, and monitors and
manages the maturity of its enterprise infrastructure, platforms and
security controls to ensure that it can effectively prevent, detect and
respond to current or future cyber attacks.
Appropriate crisis management procedures are in place to manage
issues in the event of a cyber incident occurring. Our response
protocols are supported by using industry-standard tooling,
experienced IT and security professionals, and external partners to
mitigate potential impacts. Assurance is provided by regular
compliance monitoring of our key information technology control
framework, which is designed to prevent and defend against cyber
threats and other risks.
The Group relies on a variety of digital and technology platforms to
manage and deliver services and communicate with its people,
clients, consumers and suppliers. Compass’ decentralised model
and infrastructure help to mitigate propagation of attacks across the
Group’s technology estate.
Compass continues to be focused on the need to maximise the
effectiveness of its information systems and technology as a
business enabler. As such, the Group continues to invest in
technology and specialist resources in order to further strengthen its
platforms, cyber-security defences and controls to prevent and
detect cyber threats and respond to attacks in order to mitigate the
risk of operational disruption, technology failure, unauthorised
access to and/or loss of data.
The Group has implemented configuration changes designed to
block phishing emails, increased awareness campaigns, and
provided cyber training to help employees identify these kinds
ofattacks.
In response to the potential risks posed by AI, Compass has
implemented principles-based rules that apply globally, and we are
currently developing a framework for the responsible use of AI in all
our markets.
Information systems, technology and cyber-security controls and
risks are assessed as part of the Group’s formal governance
processes and are reviewed by the Audit Committee on a
regular basis.
The digital world creates increasing risk for global businesses
including, but not limited to, technology failures, loss of
confidential data, data privacy breaches and damage to brand
reputation through, for example, the increased threat of cyber-
attacks, and use and instantaneous nature of social media.
Disruption caused by the failure of key software applications,
security controls, or underlying infrastructure, or disruption caused
by cyber-attacks could impact day-to-day operations and
management decision-making or result in a regulatory fine or other
sanction and/or third-party claims.
The incidence of sophisticated phishing and malware attacks
(including ransomware) on businesses is rising with an increase in
the number of companies suffering operational disruption,
unauthorised access to and/or loss of data, including confidential,
commercial, and personal identifiable data.
A combination of geopolitical instability and accessibility of
sophisticated AI enabled tools and techniques have contributed to
an increase in the risk of phishing and malware attacks including
ransomware across all industries.
The democratisation of generative AI has given widespread access
to powerful online AI services for content creation. This opportunity
presents several risks including to data privacy and confidentiality.
Risk management continued
MAP 1: Client sales and marketing
Increased risk
Static risk Decreasing risk New risk
MAP 2: Consumer sales and marketing MAP 3: Cost of food MAP 4: In-unit costs MAP 5: Above-unit overheads
Link to
See page 4
Alignment with our strategic focus areas
People Performance
Purpose
28 Strategic Report
Viability statement
Viability statement
In accordance with provision 31 of the UK Corporate Governance
Code 2018, the directors have assessed the Group’s viability,
considering its current trading performance, financial position,
financing, strategic plan and principal risks.
Business prospects
The Board has considered the long-term prospects of the Group
based on its business model, strategy and markets as set out on pages
2 to 11. Compass is a global leader in food services and the
geographical and sector diversification of the Group’s operations
helps to minimise the risk of serious business interruption or
catastrophic damage to its reputation. The Group’s business model
is structured so that it is not reliant on one group of clients or sector.
The Group’s largest client constitutes 2% of underlying revenue,
with the top 10 clients accounting for 9%.
Assessment
The directors have determined that a three-year period to
30September 2027 is an appropriate period over which to provide the
Group‘s viability statement on the basis that it is the period reviewed
by the Board in its strategic planning process and is aligned to the
typical length of the Group’s contracts (three to five years). The
directors believe that this presents the Board and readers of the
Annual Report with a reasonable degree of confidence over this
longer-term outlook.
The Board’s assessment of the Group’s viability comprises the
following business processes:
– Risk management process: The Group operates a formal risk
management process under which the Group’s principal risks
are assessed and prioritised biannually. Risks and corresponding
controls and mitigations are reviewed by country and regional
leadership teams on an ongoing basis. The findings of the risk
reviews, including the principal risks and any developing trends,
are reported to the Board twice a year. In making its viability
assessment, the Board carried out a robust evaluation of the
emerging and principal risks facing the Group (see pages 24 to 28),
including those that would threaten its business model, future
performance, solvency or liquidity.
– Strategic planning process: The Board considers annually a
three-year, bottom-up strategic plan and a more detailed budget
which is prepared for the following year. Current-year business
performance is reforecast during the year. The plan is reviewed
and approved by the Board, with involvement throughout from
the Group CEO, Group CFO and the executive team. The Board’s
role is to consider the appropriateness of key assumptions,
taking into account the external environment and business strategy.
The most recent three-year plan was approved by the Board
in November 2024.
– Headroom and covenant analysis: At 30 September 2024, the
Group had $2.7 billion of undrawn committed bank facilities and
$0.6 billion of cash net of overdrafts. Term debt maturities in the
three-year period total $1.4 billion. Based on the forecast cash
flows in the strategic plan, the maturing debt is expected to be
refinanced during the three-year period to 30 September 2027
to maintain the desired level of headroom. The $2.7 billion of
committed bank facilities mature in 2026, but are expected to
be refinanced during 2025. The Group’s long-term (A/A2) and
short-term (A-1/P-1) credit ratings and well-established presence
in the debt capital markets provide the directors with confidence
that the Group could refinance the maturing debt and facilities
as required.
A reverse stress test has been undertaken to identify the
circumstances that would cause the Group to breach the headroom
against its committed facilities or the financial covenants on its US
Private Placement (USPP) debt. At 30 September 2024, the
nominal value of USPP debt outstanding totalled $700 million
(2023: $1,052 million). The reverse stress test, which removes
discretionary M&A expenditure as a mitigating action, shows that
underlying operating profit
1
would have to reduce by more than
55% of the strategic plan level throughout the three-year
assessment period before the Group’s committed facilities are
reached. The refinancing requirement is not accelerated in the
reverse stress test as a mitigating action given the strong liquidity
position of the Group.
The principal risks that would have the most significant impact
on the Group’s business model, future performance, solvency
or liquidity are another pandemic and associated containment
measures and geopolitical tensions, and these, together with the
other principal risks identified on pages 24 to 28, have been
considered as part of the viability assessment. Specific scenarios
based on the principal risks have not been modelled on the basis
that the level of headroom to absorb the occurrence of such risks is
substantial and there is a range of other actions available that could
be implemented to mitigate the potential impact.
Substantial mitigating actions were identified and implemented
as part of the Group’s COVID-19 pandemic response in 2020,
including reducing capital expenditure, resizing the cost base,
renegotiating client contracts, pausing M&A activity and
shareholder returns, raising equity, negotiating covenant waivers
and securing additional committed funding. These actions
illustratethe flexibility the Group has to mitigate the impact of
adverse events.
In the event that the financial covenants were to come under
pressure, mitigating actions include repaying the loan notes from
available liquidity, refinancing in advance of their maturity or
negotiating covenant waivers.
Conclusion
Based on the results of this analysis, the Board has a reasonable
expectation that the Group will be able to continue in operation
and meet its liabilities as they fall due over the three-year period
to 30September 2027.
Petros Parras
Group Chief Financial Officer
26 November 2024
1. Alternative Performance Measure (APM) (see pages 207 to 214). The Group’s APMs are defined in note 34 (non-GAAP measures) and reconciled to GAAP
measures in notes 2 (segmental analysis) and 34 to the consolidated financial statements.
29Compass Group PLC Annual Report 2024
We have around 580,000 people in the Group, who provide positive
experiences to our businesses’ clients and consumers around the
world, every day. These great people are the heartbeat of our
business, and our people agenda is designed to identify, attract,
develop, support and retain the strong talent that helps us deliver
our goals. Our ambition is to give a lifetime of opportunities to
diverse people from the communities we serve, working in a positive
and safe environment, within a culture which is supported by
empowered teams and connected leaders, and underpinned by
respect, teamwork and growth.
Delivering on our people agenda means providing development and
learning that enables employees to achieve their full potential.
Training is available for our colleagues, and programmes are in place
to maintain appropriate levels of recruitment for success and growth
at all levels and sectors of the business. In seeking new talent, we
consider the recruiting needs for each sector and level of the
organisation and tailor our requirements accordingly. For example,
our North America business uses a range of targeted campaigns,
process automation, artificial intelligence and other tools to help them
identify the right candidates and make it easier for them to engage
with the selection process in their preferred language, and at a time
that suits them.
By prioritising talent development and training, we support business
growth and help our people thrive so that, whoever they are and
whatever their background, they have the opportunity to achieve their
full potential at Compass.
People
A caring, winning culture
People
Culture, vision and values
Our vision is to be a world-class provider of contract food and support
services, renowned for great people, great service and great results.
To realise this, our people embrace the five Compass values that
support our caring, winning culture:
Openness, Trust and Integrity
Passion for Quality
Win Through Teamwork
Responsibility
Can-do Safely
Our aim is to build a diverse and inclusive workforce at all levels drawn
from the communities we serve. We want to treat people fairly and
with respect, and give them opportunities to grow, develop and work
in a positive, supportive environment throughout their careers. We
recognise that everyday life can be challenging, and that is why we
offer a range of help and support to protect our people’s wellbeing,
including their physical, financial and mental health.
Engagement, inclusion and wellbeing
Compass is committed to actively engaging with the communities
where it operates and creating an inclusive culture of diverse talent by
empowering its people to ‘be the difference’. At the 2024 Be the
Difference conference in the USA, now in its fourth year, members of
the US business discussed the importance of fostering a culture of
belonging, making a difference through Diverse Talent and Inclusive
Culture initiatives, and an evolved talent strategy, which enables the
business to assess people’s potential and remove barriers to progress.
Among other achievements, the Women in Food network in the UK&I
business created a specially designed maternity uniform that provides
proper support and comfort to help pregnant and post-partum women
so they can thrive in the workplace. The Women in Food network also
supported a review of the Menopause Policy in the UK&I business.
This global community of female leaders and professionals, including
both culinary and non-culinary members from within Compass, was
formed to ensure we nurture our female talent.
We care about the physical and mental wellbeing
of our colleagues. Our people perform at their best
when they are feeling well, so we have a variety of
programmes and initiatives which support their
physical and mental health throughout their careers.
The UK&I’s You Matter network has built greater awareness of mental
health issues alongside wider training for mental health first aiders.
The launch of our Global Health and Wellbeing Forum is an example of
our commitment to bringing our unique expertise in health and
nutrition to our employees.
Deborah Lee
Group Chief People Officer
30 Strategic Report
Respect
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Delivering on our people agenda means
providing development and learning
opportunities that enable every
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31Compass Group PLC Annual Report 2024
People continued
Engagement survey
Listening to colleagues through employee engagement surveys,
townhalls, community meetings, social platforms, and
maintaining close relationships with formal employee
representative groups and unions are just some of the ways
employees can have their say on the topics that matter most to
them, and contribute to our strategy and success.
This year’s global engagement survey heard the voices of
colleagues across 31 countries. Overall engagement scores
held steady despite significantly higher participation levels from
countries where we have traditionally seen lower average
engagement. We were also pleased to see positive progress in
our employee net promoter score.
Our results pointed to the many positive aspects of our culture:
a strong commitment to safety; customer-focused and
teamwork-oriented; enjoyment of the work; and feeling
respected. However, it also highlighted where we can further
enrich the lives of our teams by improving their experience of
working at Compass and by enabling them to access career
opportunities.
32 Strategic Report
Compass offers a suite of training programmes across all aspects of its
front-line, support teams and administration functions. Our core
global programmes are Mapping for Action, which embeds processes
for unit managers, and Mapping for Value for management, which is
about delivering value for the business. Over the years, a network of
certified trainers have trained significant numbers of our people on
these programmes to reinforce and keep focus on our distinct
Management and Performance (MAP) framework.
By fostering a culture of continuous learning and growth, we can build
the skills and capabilities we need to succeed while also equipping our
people to adapt, innovate and excel in an ever-evolving landscape.
Pay equity
Equal work deserves equal pay and our aim is to make sure that
employees with the same job functions receive the same
compensation regardless of their gender, ethnicity or background. As
reported in the 2024 Compass Group UK Gender and Ethnic Minority
Pay Gap Report, the UK business has reduced its median gender pay
gap to under 10% for the first time. The 2024 report also confirmed
the business had a median ethnicity pay gap of zero. We are proud of
this progress, but we know there is more to do. In line with the Social
Promise launched in 2022, the business continues to look at where it
can remove barriers to further reduce the gender pay gap and
enhance the development of those from ethnic minority backgrounds.
Read Compass UK&I’s Gender and Ethnicity Minority Pay Gap Report:
https://www.compass-group.com/gender-ethnicity-pay-gap-report.pdf
2024 female representation
2024
1
2023
Board 43% 38%
Executive Committee
2
44% 40%
Senior leaders 35% 34%
All management 46% 46%
Total workforce 56% 56%
1. Figures stated as at 30 September 2024.
2. Due to a change in Executive Committee membership between
30September 2024 and the date of this Report, female representation on
theExecutive Committee has increased from 40% to 44%.
3. The gender breakdown disclosures required in the Strategic Report pursuant
to section 414C(8)(c) of the Companies Act 2006 are made on page 121
andare incorporated by reference into the Strategic Report.
Learning and development
From entry-level employees to leadership, Compass invests in its people to help them succeed. Around the world, Compass businesses run a wide
range of programmes that identify and nurture a diverse cohort of leaders from within their existing teams, helping our people to find valuable
training that meets their needs and that they can apply to their job.
Human rights
Everyone has the right to be treated fairly, and with dignity and
respect. Compass is committed to its businesses upholding human
rights in their operations, their supply chains, and the communities in
which they operate. Compass’ businesses conduct their business
activities ethically and with integrity, and our Code of Business
Conduct and Global Supplier Code of Conduct reflect our commitment
to respecting human rights and the values that guide our actions and
behaviours. We are also guided by our Human Rights Policy, which
was reviewed in September 2024, reinforcing our belief that everyone
is entitled to basic rights and freedoms, whoever they are and
wherever they live. For more information, see pages 39 and 40.
We remain firmly committed to playing our part in eradicating modern
slavery in all its forms, which remains a serious global issue that
affects vulnerable individuals and communities worldwide. As a
Group, we continue to work hard to identify and address modern
slavery risks across our businesses and their supply chains.
For more information, you can read our Modern Slavery Statement
and Human Rights Policy here: www.compass-group.com/en/
sustainability/people/human-rights-and-ethical-trade.html
The Compass Group Foundation
Our people contribute their time and expertise to support the
Compass Group Foundation, an independent charity registered with
the Charity Commission in England and Wales. The Foundation funds
initiatives that expand job opportunities for disadvantaged groups
through training and career development in the food service industry,
while also supporting small suppliers within the food sector.
Since 2022, the Foundation has provided approximately $2 million in
grant funding to support initiatives aligned to its priorities across
various countries where Compass’ businesses operate.
In 2024, the Foundation funded 21 initiatives across seven countries,
supporting efforts to help individuals, including people with
disabilities, women affected by domestic abuse, and survivors of
human trafficking, overcome employment barriers. These initiatives
also empower farmers and small businesses by improving access to
information and training, enabling them to become more sustainable
and enhance their economic opportunities in the food supply chain.
www.compass-group.com/en/compass-group-foundation.html
First-time/
Front-line leaders
Multi-unit leaders
Emerging leaders
Executive leaders
– RISE
– Global Gender Leadership Programme
– Mapping for Value
– 30% Club Mentoring Programmes
– Global Gender Leadership
Programme
– Impact Leadership
– Consumer-led Growth
– Europe and Middle
East Academy
– Go Fluent
– Mapping for Value
– 30% Club Mentoring Programmes
– Consumer-led Growth
– Mapping for Action
– Leadership Labs
– Go Fluent
– Leadership in Action
– Mapping for Action
– Leadership Labs
Leadership and
career development
33Compass Group PLC Annual Report 2024
Our Planet Promise
At Compass, we are building a sustainable future for all. We channel
our passion for food, champion responsible sourcing and reduce food
waste at scale to drive global change and enrich lives. Through
culinary innovation, collaboration and partnership, we are committed
to reaching climate net zero across our global business by 2050.
This is our Planet Promise.
There is no single solution – we work towards this objective by
constantly reviewing and improving our practices across the Group
to increase our impact and accelerate our journey towards our
sustainability goals.
Being an ethical, sustainable and inclusive business is
an essential part of our identity. By embedding these
values, we can make a real difference and have a
positive impact on the world. Our customers and
partners increasingly share these values, which are key
to our growth aspirations and long-term success.
Purpose
Striving to be an
ethical, sustainable
and inclusive business
One of the most important ways in which we have put these values
into action is by demonstrating our expertise in reducing our carbon
impact and food waste. These capabilities are helping to attract
and retain a growing number of clients who rely on Compass to offer
delicious, healthy, less wasteful plant-forward menus that help them
achieve their sustainability goals.
Our actions are guided by the United Nations Sustainable
Development Goals (UN SDGs), a shared blueprint for peace and
prosperity for people and the planet. To take the most effective action,
we have aligned our sustainability strategy with the nine UN SDGs
where we can have the greatest impact, such as a reduction in food
waste – an essential target for a food business of our reach and scale
and which is covered in detail on page 38. Our sustainability strategy
also prioritises care for the health and wellbeing of our people and
consumers, animal welfare and carbon reduction, as we work towards
climate net zero by 2050.
Compass UK&I has committed to achieving climate net zero by 2030.
It has set out how it plans to achieve this by reporting its progress and
results in its transition plan, which is aligned to the UK Government-
backed Final Disclosure Framework final guidance. This makes
Compass UK&I one of the first companies in its sector to share
a detailed transition plan aligned to this framework.
We also demonstrated our commitment to putting our Planet Promise
values into practice by carrying out a new materiality assessment in
2023. This helped us further understand how our actions impact the
planet and society as well as understanding potential financial risks
and opportunities related to a wide range of environmental, social and
governance (ESG) topics. The process enabled us to recognise the
impact we can have as an organisation, and the knowledge will be
used to further refine our strategies and ensure we focus our efforts
on the initiatives where we can have the greatest impact.
Data transparency is an integral part of our philosophy and our Task
Force on Climate-related Financial Disclosures (TCFD) report (see
pages 41 to 52) includes disclosure of our climate-related risks and
opportunities for 2024.
Embedding sustainability through training
We help build sustainability into our processes by providing training
for our people that makes sustainable behaviour part of everyday
practice.
Compass UK&I has incorporated a bespoke climate net zero training
module into its mandatory e-learning for front-line kitchen staff.
The module shows how their teams can reduce energy consumption,
waste and water usage, and prevent pollution. The training module
has been completed over 29,000 times in 2024 as part of Compass
UK&I’s comprehensive Climate Net Zero Toolkit. The module is
helping to integrate sustainability into day-to-day operational tasks
at a site level.
Celebrating our Planet Promise Change-Makers
Because sustainability is an essential part of our identity, our teams
are always working to drive improvements in sustainability across our
operations. We want to celebrate the Compass employees making
a real change for the better across the Group.
We call them our Planet Promise Change-Makers and we highlight
their achievements, both to give them the recognition they deserve
and to further develop sustainability across our organisation by
engaging and inspiring others to drive change.
Their work is also brought to the attention of the executive leadership
team in their region. Our Planet Promise Change-Makers are at the
forefront of delivery in support of our sustainability priorities, leading
on food waste reduction, creating delicious and innovative better-for-
the-planet menus, collaborating with suppliers and influencing the
behaviour of consumers.
Purpose
Shelley Roberts
Group Chief Commercial Officer
34 Strategic Report
Materiality assessment topics and actions
Environment
Climate change adaptation and mitigation Nature and biodiversity Waste
Taking action to reduce the Group’s
direct and indirect greenhouse gas
emissions (Scope 1, 2 & 3) and adapting
the supply chain to be resilient to the
effects of climate change.
Establishing policies, standards and
programmes to minimise the impact of
sourcing on natural ecosystems including
preventing deforestation, overfishing and
biodiversity loss.
Reducing food waste throughout our
value chain, from source to kitchen, and
reducing the amount of plastic packaging
used in operations and, where possible,
investing in sustainable alternatives.
Governance
Business ethics and integrity Bribery and corruption Cyber security, privacy and data security
Implementing the Code of Business
Conduct and other Group policies
(including the Business Integrity Policy
(BIP)), reinforced by Compass’ global
Ethics and Integrity (E&I) programme.
Upholding a strong culture of integrity,
promoted through the E&I programme
and its independently operated SpeakUp,
We’re Listening helpline and web
platform. Focusing on preventing,
detecting and responding to emerging
risks and incidents, and mandatory
training and awareness programmes.
Assessing cyber risk and monitoring and
managing the maturity of Compass’
enterprise infrastructure, platforms and
security controls. Ensuring appropriate
crisis management procedures are in
place and implementing principles-based
rules for the use of AI.
Social
Inclusive talent attraction and retention Health, safety and wellbeing Workers’ rights
Creating an environment in which our
people thrive and feel valued, building a
diverse, equitable and inclusive workforce
to reflect the communities in which our
businesses operate. This includes ensuring
fair working conditions and wages.
Fostering a culture of health, safety
andwellbeing throughout the
Group’soperations.
Committing to upholding human rights,
and always treating people fairly, with
dignity and respect, within the
businesses’ operations.
Food safety
Promoting a culture of food
safety throughout Compass’
businesses to guide the
decisions, actions and
behaviours of our people.
Workers in our value chain
Promoting ethical principles,
human rights and labour
standards in our businesses’
supply chains.
Sustainable and healthy diets
Offering sustainable and
quality ingredients, and
healthy recipes that appeal
to consumers across our
businesses.
Food transparency
Presenting consumers with
accurate product
information and ensuring
that any product claims can
be substantiated.
In 2023, we refreshed our view on materiality. In addition to helping us understand potential financial risks and opportunities related to a wide
range of ESG topics, this assessment also helped us further understand how our actions impact the planet and society.
The process involved a wide range of internal and external stakeholders from across all of our operating regions. External stakeholders
included consumers, suppliers, distributors, NGOs, investors, and topic-specific subject matter experts. The knowledge gained will be used
to further refine our strategies and ensure we focus our efforts on the initiatives that matter the most.
35Compass Group PLC Annual Report 2024
Supporting sustainability through technology
We continue to invest in technology solutions that enable us to achieve
our sustainability goals by ensuring data-driven insights support our
decision-making.
One such investment that shows how we are progressing towards
climate net zero by 2050 is our partnership with a leading carbon
management consultancy specialising in the food and agriculture
industry. The partnership has enabled us to improve our methodology
for measuring emissions and enhance the quality of our supply chain
(Scope 3) data. Most of the Group’s greenhouse gas (GHG) emissions
are Scope 3 (originating in the supply chain), for which we are
indirectly responsible, and so gathering and acting on this data is vital
as our businesses work with suppliers to reduce the emissions of their
products and services. We also provide clients with dashboards to
visualise progress across ESG metrics with data provided by real-time
tools such as our proprietary food waste tracking technology Waste
Not 2.0 and via climate-management platforms.
Sustainable bonds
In September 2022, the Group issued fixed-rate sustainable bonds of
€500 million ($500 million) and £250 million ($288 million) maturing
in 2030 and 2032, respectively.
As of the date of publication of the 2023 Sustainability Report, the
proceeds of these bonds had been fully allocated to expenditure on
eligible sustainable projects in line with the Compass Group
Sustainable Financing Framework.
In February 2024 and September 2024, the Group issued a fixed-rate
sustainable bond of €750 million ($806 million) maturing in 2031
anda fixed-rate sustainable bond of €500m ($557 million) maturing
in2033. We intend to report on the allocation of the proceeds of
thesebonds in line with the Compass Group Sustainable
FinancingFramework.
Environmental leadership
Methodology
Compass Group PLC is required to report its global and UK energy use
and carbon emissions in accordance with the Companies (Directors’
Report) and Limited Liability Partnerships (Energy and Carbon Report)
Regulations 2018. The data reported in the table below represent
emissions and energy use for which Compass Group PLC is
responsible and is incorporated by reference in the Directors’ Report
on pages 54 to 123. To calculate our Group emissions, we have used
the main requirements of the GHG Protocol Corporate Standard. We
monitor the energy usage and GHG emissions of our owned and
operated sites across 26 countries (2023: 28), which represent 98%
of the Group’s underlying revenue (2023: 98%). tCO
2
e per $ million
turnover is calculated by dividing our total gross emissions (location-
based) by underlying revenue
5
for the countries monitored.
Scope 1,2 and 3
The Group has targeted a 46% reduction in absolute Scope 1 and 2
GHG emissions and a 28% reduction in its absolute Scope 3 GHG
emissions from all purchased food and drink by 2030, from a base
year of 2019 – a goal approved by the Science Based Targets
Initiative(SBTi).
Approximately 98% of Compass Group’s GHG emissions are Scope 3.
Since these are created in the supply chain, the only way for us to
lower them is to gather detailed information that enables us to work
with suppliers to reduce supply chain emissions. This is why we
arepartnering with a leading carbon management consultancy
specialising in the food and agriculture industry, to measure our
Scope3 emissions more accurately. We are now using their
technology to manage our data when reporting emissions across our
largest markets, to enable greater collaboration with clients in support
of carbon reduction initiatives. Our total 2024 reported Scope 3
emissions are 11,965,107
†
tCO
2
e.
Our absolute Scope 1, 2 and 3 emissions have increased 6%
year-on-year as we have continued to win new business across all
regions with our full year revenues growing by 10%. Our overall
greenhouse gas intensity ratio (normalised for revenue growth) across
all Scope 1, 2 and 3 emissions has reduced by 4% compared to 2023.
Only 2% of Compass Groups GHG emissions are Scope 1 and 2. These
have increased year-on-year due to our acquisitions. A significant
portion of our global Scope 1 and 2 emissions are derived from the
fleet of refrigerated trucks in the US required to operate the Canteen
vending business. Automotive innovation to support our refrigerated
electric truck transition is not yet available at the scale required,
whichis preventing us delivering the progress we strive to achieve in
reducing our emissions. We will continue to implement renewable
electricity and energy efficiency solutions across our markets to help
reduce our carbon emissions across our direct operations.
Purpose continued
Global energy consumption and greenhouse gas (GHG) emissions for the period 1 October 2023 to 30 September 2024
For the year ended 30 Sept 2024
†
For the year ended 30 Sept 2023
UK and offshore
1
Global
3
UK and offshore
1
Global (restated)
3
Scope 1 – Emissions from the combustion of fuel or the operation of any
facility, including fugitive emissions from refrigerants use tCO
2
e
4
1,555 156,924 1,934 139,687
Scope 2 – Emissions resulting from the purchase of electricity, heat, steam
or cooling (location-based) tCO
2
e 2,208 55,364 2,497 46,002
Scope 2 – Emissions resulting from the purchase of electricity, heat, steam
or cooling (market-based) tCO
2
e 424 51,271 268 46,392
Total gross emissions (location-based) tCO
2
e 3,763 212,288 4,431 185,690
tCO
2
e (location based) per million $ turnover
2
1.1 5.1 1.5 5.0
Energy consumption used to calculate above emissions/kWh 21,063,846 867,971,724 21,194,715 746,561,481
† KPMG LLP has issued independent limited assurance over the selected data indicated, using assurance standard ISAE(UK)3000 and ISAE 3410. KPMG’s
assurance statement and Compass’ Reporting Methodology are available at https://www.compass-group.com/en/sustainability/performance-and-reports.html.
1. UK and offshore emissions are a subset of the global emissions disclosed.
2. Calculated based on turnover in US dollars, reflecting the change to the Group’s reporting currency effective 1 October 2023. Prior year comparatives have been restated.
3. The UAE contributed 5.7% of the Group’s reported total gross emissions (location-based) of 196,996 tCO2e in 2023. During the year data quality issues were
identified in respect of the UAE’s emissions data for both 2023 and 2024 up until its disposal. The Group considers it not practical to obtain more reliable emissions
data given the Group no longer has control of these operations and cannot reasonably estimate it due to the incomparable nature of the market. Therefore 2024
does not include UAE, and all 2023 data in the table above and for prior years (GHG intensity ratio on page 7) has been restated to remove the UAE, including
removing the UAE’s turnover in calculating the intensity metric for consistency, as set out in our Reporting Methodology https://www.compass-group.com/en/
sustainability/performance-and-reports.html.
4. 2024 biogenic emissions (tCO
2
) is 886.
5. Alternative Performance Measure (APM). The Group’s APMs are defined in note 34 (non-GAAP measures) and reconciled to GAAP measures in notes 2 (segmental
analysis) and 34 to the consolidated financial statements.
36 Strategic Report
Over the past couple of years, we have evolved our methodology for
the emissions calculation from a spend-based approach to a hybrid
spend and volume-based approach to more accurately reflect our
emissions and to reduce the distortion from inflation. Our collection
and reporting of data are now enhanced by the fact that our reports
are aligned with the financial year.
To deliver our climate net zero target, we are focusing our
decarbonisation efforts on three strategic levers: 1) our supply chain;
2) operations including our work on food waste; 3) clients and
consumers. Our approach is illustrated in the graph below with more
information detailed in our transition roadmap on page 50.
Supply chain
Supplier initiatives
As a global food services business, we cannot achieve climate net zero
alone, so our work towards a more sustainable future involves our
businesses closely collaborating with their suppliers.
Most of the Group’s Scope 3 emissions are generated by the food and
drinks purchased from suppliers, and over the last two years Compass
USA’s procurement business, Foodbuy, has held Future Forward
meetings to understand how these emissions could be reduced. They
have engaged 25 of their largest supply partners, representing more
than $3 billion of spend and discussed strategies to reduce emissions
including farm-level interventions, packaging innovations and
distribution efficiencies.
Next steps are to align with the new Forest, Land and Agriculture
(FLAG) guidance under the SBTi in 2024, and to continue to work on
monitoring and updating our science-based targets, including new
SBTi FLAG and non-FLAG targets. You can read the latest
developments regarding our transition plan in the TCFD disclosures on
pages 41 to 52.
A demonstration of how close collaboration with suppliers will help
Compass Group reach climate net zero is Compass USA’s initiative to
connect its suppliers directly with their carbon consultancy partners to
assess the key drivers of carbon in its supply chain and recalculate its
item-level emission factors. The initiative enabled their carbon
consultants to compare industry-level assumptions with what was
actually happening in Compass USA’s supply chain. These supplier
initiatives have delivered a weighted average reduction of 11% in GHG
emissions across the products assessed.
Another initiative that will directly reduce Scope 3 emissions is
Compass Group France’s investment in its own French beef supply
chain, in partnership with farmers’ cooperative Terrena. It will enable
greater utilisation of each animal, minimising the environmental
impact of beef production, while supporting fairer remuneration for
farmers. The project is intended to be fully operational across the
French business by the end of June 2025.
Indirectly controlled interventions
Total emissions without interventions Directly controlled interventions
Total 2030 emissions targetTotal 2024 emissions
Total emissions with interventions
12,500,000
Tonnes CO
2
e
10,000,000
7,500,000
5,000,000
2,500,000
0
Supply Chain
Operations
(Food waste)
Clients & Consumers
Compass Group Scope 3 emissions strategic levers to deliver 2030 target
37Compass Group PLC Annual Report 2024
Purpose continued
Compass Group Australia (CGA) has also harnessed the power of data
to track emissions across Scope 3, provide metrics to clients and use
the data to adapt menus to make lower-emission products. CGA can
now measure the change in carbon emissions per unit of output over
successive years, helping assess improvements in sustainability
efforts relative to business growth. CGA can also track the total carbon
emissions year-on-year as well as monitor carbon emissions of specific
food categories, enabling it to reduce emissions from high-impact
products and enhance overall sustainability. As a result, CGA menu
reformulations will increase the businesses’ use of ‘Future 50’
ingredients – plant-based ingredients which, among other benefits,
have a lower impact on our planet than animal-based foods.
Reusable solutions
Packaging is a major contributor to the worldwide single-use plastics
culture and we are encouraging our businesses to maximise the reuse
or recirculation of materials used to package products to minimise
waste and build a more circular economy. In partnership with
suppliers, we are encouraging our businesses to strive to fast-track
sustainable alternatives that replace single-use products and fossil
fuel-based plastics.
In Europe, our businesses are reducing unnecessary single-use plastic
to a level below that required by the EU Single-Use Plastics Directive,
while Compass USA has co-founded the Single-Use Materials
Decelerator (SUM’D), a non-profit, cross-sector group of NGOs and
technical experts working to reduce reliance on single-use materials in
the food industry.
Compass USA’s Levy restaurants have been piloting and testing
programmes to introduce reusable cups on a scale that could drive
major industry and behavioural change, by bringing them to some of
the country’s largest sports venues. Every year, millions of people
attend large venue events, using and disposing of billions of single-use
items. Compass USA’s project has the potential to prevent waste on a
significant scale and have a positive ‘ripple effect’ on the reuse
movement at large.
Clients and consumers
Behavioural change
A key lever to engineer a greater sustainability impact is to use our
expertise to steer behavioural changes. We are investing in technology
to influence consumer behaviour at the point of purchase, through
carbon labelling with market-leading providers. Carbon labelling
scores food on whether it has a high or low environmental impact,
based on the total GHG emissions generated from the extraction of
raw materials to end of life. From carefully selecting where we position
menu options, to providing clear and comprehensive product
information, plus incentives and benefits for making sustainably
sourced choices, our businesses work to make plant-forward options
more appealing to consumers.
We are proud to be a member of the World Business Council for
Sustainable Development (WBCSD), and by co-chairing the Positive
Consumption action area we are donating our time to develop a
behaviour-change toolkit for the participating food-service members.
The initiative is encouraging collaboration and advocacy for the
consumption of nutritious foods to support a healthy diet within a
sustainable food system. The project is driving food-system
transformation by developing solutions that support healthy people
and a healthy planet.
Operations
Food waste
To deliver on our Planet Promise and foster a sustainable future we
have made reducing food waste a priority. Food waste has a negative
impact on the planet, wasting the energy used to grow, process and
cook food and generating greenhouse gases in landfill. As a major
provider of food services, we have the power to make significant
change, and we are doing what we can as a Group to control and
minimise waste. Sustainability is important to Compass and we have
already taken steps to reduce food waste, but there is more to do.
In 2024, the annual bonus plan for executive directors and senior
management contained a food waste measure, focused on the
rolloutand usage of industry-leading technology to record food
waste.This measure has further evolved in 2025 into a food waste
reduction target.
Our culinary teams and front-line staff know that reducing food waste
is essential and are employing a range of diverse waste-reduction
technologies across their businesses. Waste Not 2.0, our proprietary,
tablet-based, online tracking tool for chefs has been rolled out across
12 countries in nine languages, enabling kitchen teams to identify
opportunities to minimise food waste beyond the usual trim, bones,
core and peel waste. Managers can then use the tool’s data to report
on the carbon footprint of kitchen waste and avoid future wastage.
Key to embedding sustainability is the work of the Global Culinary
Forum comprising senior chefs who meet regularly to share
experiences and knowledge that support training across the
businesses. These chef leaders maintain a constant focus on
sustainability to deliver locally sourced and balanced menus for
clientsand consumers without compromising on taste. The forum
plays an important role in guiding Compass towards climate net zero
by establishing culinary practices across the Group that minimise or
prevent waste, such as better utilisation of ingredients and upcycling
food waste.
Menu reformulation
To deliver on our Planet Promise we need to create climate-friendly
dishes that are also tasty, nutritious and appealing, and our talented
chefs are meeting the challenge. By combining their exceptional
culinary expertise with accurate sustainability data on ingredients to
reformulate menus, our chefs are creating delicious food that is good
for the planet without sacrificing flavour.
Menu reformulation provides opportunities to reduce the emissions of
our products, and key to harnessing that potential is data. Gathering
accurate data enables us to gain the greatest benefit from menu
reformulation by identifying where the most potential lies so that our
businesses can make the shift to using more sustainable ingredients
and processes.
One way Compass UK&I has achieved this is by using data provided by
carbon-labelling service, Foodsteps, to drive menu changes.
Foodsteps records an intensity value (measured in kilograms of
CO₂e/kg), which enables A to E ratings to be assigned to items in
colour-coded marks from green to red. The traffic light system mirrors
nutritional labelling and helps to signpost how the carbon price tag of
one menu choice compares with another. As a result, a quarter of all
recipes have now been analysed as having A or B rated footprints
(<2.90 kg CO₂e/kg). The remaining recipes are targeted for
reformulation in ongoing partnership with our clients.
38 Strategic Report
Diversity, equity and inclusion (DE&I)
We continue to work collaboratively with clients, suppliers and
otherthird parties to build a more diverse, equitable and inclusive
supplier base and better serve the communities in which our
businesses operate.
In 2024, we took our commitment to DE&I a step further by
establishing a Group-wide procurement framework, aimed at helping
our teams better support diverse, equitable and inclusive suppliers
across their supply chains. The framework provides guidance on
identifying suppliers, creating opportunities for them and helping
them grow. Frequent training sessions and workshops are conducted
for our procurement teams to train them on the principles of this
framework, while regularly sharing best practices across the Group.
We also partner with expert organisations to help us deliver and
enhance our approach, including WEConnect International, a global
network that connects women-owned businesses to buyers, and
Minority Supplier Development UK, which connects ethnic minority-
owned businesses with global corporations such as Compass that care
about making their supply chain more diverse and inclusive.
Compass UK&I has supported DE&I by launching Pitch Social, a
programme which aims to identify and develop partnerships with new
social enterprises, B-Corps and minority-owned suppliers that are
engaged in social or environmental work. This enables Compass UK&I
to work with smaller businesses that often do not have the resource to
succeed through a traditional tender process. As a result, Compass
UK&I has already met with 36 businesses in the past two years.
Our Foodbuy USA business has also taken steps to enhance supplier
diversity, building upon its longstanding efforts through its Diverse
Supplier Accelerator Program. This initiative aims to support diverse
suppliers in growing their businesses by focusing on 10 women and
minority-owned businesses each year, connecting them with
resources and education. Suppliers that are selected to participate in
the 12-month programme are assigned a dedicated Foodbuy mentor,
who serves as their primary point of contact. Such mentorship helps
deliver a more diverse, equitable and inclusive supplier base. Building
on the success of their supplier mentorship programme in the US, we
are expanding it to our largest markets. This collaborative approach
will ensure consistency and enable us to support each other in driving
this important agenda forward.
Animal welfare
We have updated our animal welfare strategy, comprising five key
areas that our businesses are focusing on throughout their value
chains: in-house training; supply chain engagement; partnerships and
advocacy; transparency and communication; and plant-centric
menus. We work with many NGOs to drive standards and educate our
teams and suppliers, such as the Global Coalition for Animal Welfare.
Since our last Annual Report, our specific programmes have included
animal welfare training in Europe and the Middle East and cage-free
egg training in Asia Pacific. Compass Group’s Cage-Free Egg Working
Group explores co-buying opportunities, maps clients and suppliers,
and identifies new ways to advance our cage-free commitment. The
NGO, Mercy for Animals positively highlighted our transparency and
regional cage-free egg progress reporting in its latest annual
Cage-Free Equity Index.
Supply chain transparency and risk management
Our Global Supplier Code of Conduct outlines the principles,
expectations, and behaviours required of our supply chain partners,
covering areas such as business integrity, human rights, labour
standards, health and safety, and sustainability. This Code is shared
with suppliers annually and is a contractual requirement in all
suppliercontracts.
In creating the WBCSD toolkit, we looked to find the solutions that
would simultaneously make it easy for consumers to choose healthy,
plant-forward options and have the greatest wellness and
sustainability impact in our industry. In consultation with our
exceptionally skilled chefs and culinary forums, we reordered the six
Ps of behavioural change to align with our recipe and menu design
process, making it easy for our businesses to positively influence
consumer behaviour:
1. Product: modifying the offering or its ingredients
A good example of this is the creation of the 50/50 burger,
made with half beef and half mushroom.
2. Presentation: redesigning menus and layouts in
physical and digital environments
Sustainable choices can be made more prominent – and other
choices less so – on signage, digital apps and kiosks.
3. Placement: changing the physical food environment
Sustainable choices can be placed in eye-catching positions at
food stations, while other choices can be made less prominent.
4. Price: incentivising behaviour change
Reward cards and discounts can make sustainable choices
more appealing, and can encourage consumers to choose
alternative options.
5. Promotion: marketing, communications and storytelling
These tools can engage consumers with more healthy and
sustainable selections.
6. People: engaging and educating our teams
Teaching our teams ‘why’ and ‘how’ our great chefs make their
menus more sustainable without impacting flavour enables
them to educate consumers.
We have developed a powerful way to engage people on a large scale
and help drive behaviour change with Stop Food Waste Day (SFWD),
the largest annual global day of action in the fight against food waste.
SFWD engages and educates our colleagues in the sector by sharing
practical, creative and impactful ways to change behaviour and stop
food waste. In 2024, our ingenious chefs and front-line teams shared
menus reformulated to reduce waste and brought other influential
companies, with their own food waste targets, into the conversation.
The event was far-reaching, with a Compass Canada chef talking live
on breakfast television, the release of Unwaste Yourself – an AI tool
from Compass Sweden designed to help consumers reduce waste –
and the first annual Stop Food Waste Day Awards at The One Club in
New York, attended by 125 clients and thought leaders on food waste.
The activities of SFWD 2024 reached 112 million people in print and
9.2 million on social media during April 2024.
Positive procurement
Engaging with our suppliers to ensure that they are aware of our goals
is vital to delivering on our Planet Promise and building a sustainable
future. We work hard to drive collaboration across the Group, sharing
best practice from individual markets, scaling it where applicable, and
providing training that equips colleagues to prioritise ethical practices
that align with our culture and values. Furthermore, we organise
events and training programmes that engage suppliers directly,
fostering partnerships that help drive positive change and align their
practices with our sustainability and ethical commitments.
39Compass Group PLC Annual Report 2024
Purpose continued
We have enhanced our procurement processes by integrating a
Supply Chain Risk Management framework and by ensuring teams
receive training in supplier risk management. This framework enables
them to conduct structured evaluations during supplier selection,
onboarding, and ongoing management, supported by tools like Sedex
Self-Assessment Questionnaires and Sedex Members Ethical Trade
Audits. A key component of this framework is the Third-Party Integrity
Due Diligence screening process, applied to all suppliers, with a focus
on higher-risk categories, to ensure compliance with ethical standards.
Training and capacity-building initiatives are essential to enhancing
our procurement strategy. In 2024, Compass UK&I held two key
events with suppliers: the Seafood Responsible Sourcing Workshop,
and a session focused on sourcing responsibly for fruit and vegetables.
These sessions covered a wide range of critical topics, including
environmental impacts, responsible sourcing practices, and
addressing worker welfare and human rights. Specific focus was
placed on managing risks related to social welfare, labour conditions,
and compliance with international ethical standards within these
higher-risk supply chains. The workshops also highlighted the
importance of traceability, sustainability certifications, and supplier
alignment with Compass’ ethical commitments.
To further build internal capability, procurement teams across
Compass’ markets participated in risk identification and mitigation
training focused on higher-risk categories such as seafood. This
training series equipped procurement managers with the tools to
manage environmental and social risks. The training provided insights
into sustainability certifications, alignment with International Labour
Organization (ILO) conventions, and social welfare monitoring.
Promoting human rights, worker welfare, and traceability are central
to our procurement processes.
By aligning supplier engagement with internal training, we support
procurement teams and supply chain partners in being equipped to
uphold Compass’ ethical and sustainability standards. This cohesive
approach helps integrate insights from workshops and training
sessions into everyday procurement practices, fostering continuous
improvement across the supply chain.
Additionally, our partnerships with the Earthworm Foundation and the
Slave-Free Alliance (SFA) bolster our efforts to manage social and
environmental risks across the supply chain. The SFA provides
essential support in areas like training, policy reviews, and identifying
potential vulnerabilities.
Nature and biodiversity
We are preparing to comply with the EU’s new Deforestation
Regulation (EUDR), which requires companies trading in commodities
such as cattle, cocoa, coffee, palm oil, rubber, soya, and wood, to
ensure that goods in their supply chain do not contribute to
deforestation, forest degradation, or breaches of local environmental
and social laws. Training, guidance, and supplier engagement have
already begun to meet these new obligations.
In 2024, Compass Group also launched a Deforestation Policy to support
responsible sourcing of key commodities, including cattle, soy, and
palm oil. Combined with the EUDR, this initiative aims to achieve
deforestation-free supply chains for our most material commodities in
our EU, North America, and UK businesses by the end of 2025.
Together, these markets cover over 90% of procurement spend.
To further protect biodiversity and promote sustainable land
management, we are embracing regenerative agriculture, which helps
restore soil health, capture carbon, and combat climate change. Our
chefs are innovating with regenerative ingredients to create
sustainable, delicious meals. A notable example is Compass Group
France, which has shifted from importing to locally sourcing pulses
like lentils, working with cooperatives to regenerate the soil and
reduce carbon emissions, supporting sustainable food systems
throughout its network.
While in the early stages of this journey, we are collaborating with
suppliers and other external partners to promote sustainable farming
practices and enhance biodiversity at a local level.
Communities
We care about the communities where our businesses are based and
look to use our skills and resources to support them: donating food
where it is most needed, raising money for charities, buying locally
where possible and supporting groups that are driving positive
change. By working with local people and projects, understanding
their needs and helping to meet them, our businesses become a part
of the communities they serve and build sustainability in communities
as well as for the planet.
Donations
Compass’ businesses work with food-recovery partners to make sure
good food reaches people in food poverty. Various tools have been
developed to encourage and support our businesses’ food rescue
efforts. During the past year 2.6 million
†
meals were donated by
Compass businesses to local communities across our markets.
In the US, Compass works closely with its clients to support
customised food-recovery programmes. For example, after every
home game at one large arena client, Levy Restaurants donate
excessfood via a local non-profit organisation. And in the UK,
Compass donates to local charities in partnership with organisations
such as FareShare.
Social initiatives
We seek to advocate for social enterprises that can transform
communities and change lives, from spending with local suppliers to
supporting projects that champion good causes.
In India, Compass has a new partnership with the social initiatives
foundation Mitti, which runs cafes in institutional and public spaces.
Mitti creates opportunities for people with disabilities by hiring them to
work in its cafes, supporting diversity and enriching local communities
by helping people into work.
At Canteen in North America, there is immense pride in honouring the
remarkable contributions of their veteran team members. For the past
10 years, their annual townhall has been dedicated to recognising
these individuals and their service to the USA, timed to coincide with
Veterans Day. This year, Canteen highlighted the results of Bands for
the Brave, a festival in Stillwater, Minnesota, created by Compass One
employees in partnership with Helping Out Our American Heroes.
Bands for the Brave is a fundraiser that rallies the local community
through food, drink and live music to raise awareness for veterans with
mental health issues. To date, Canteen and Bands for the Brave
efforts have helped raise over $130,000 for the cause.
Compass Spain brings approximately 3,000 lunchtime school
monitors into over 300 primary schools served by Scolarest to create a
space for support and learning during lunchtime. The sessions are
based on four learning areas: body, soul, heart and mind. Thanks to
the engagement of their teams, which has made the scheme a great
success, the philosophy of the project has been extended to all
Scolarest restaurants in Spain, even in those schools where no
monitor role previously existed.
Our Canadian business recognises the importance of Indigenous
reconciliation for ensuring an inclusive workplace. The business
opened an Indigenous Teaching Kitchen with over 300 colleagues,
shared in-unit toolkits for celebrating National Indigenous Peoples’
Day, and worked with a local indigenous facilitator to enhance its
Indigenous Awareness Training.
† KPMG LLP has issued independent limited assurance over the selected data
indicated, using assurance standard ISAE(UK)3000. KPMG’s assurance
statement and Compass’ Reporting Methodology are available at https://
www.compass-group.com/en/sustainability/performance-and-reports.
40 Strategic Report
Task Force on Climate-related Financial Disclosures
(TCFD)
We set out below our climate-related financial disclosures, which are
consistent with the four pillars and all 11 disclosure requirements of
the Task Force on Climate-related Financial Disclosures, including
the TCFD all-sector guidance, and in compliance with the
requirements of LR 6.6.6(8) (UK Listing Rules).
This disclosure also complies with the requirements of the
Companies Act 2006 as amended by the Companies (Strategic
Report) (Climate-related Financial Disclosure) Regulations 2022.
Executive summary
Climate change poses a significant risk to our planet, people and
economies. Rising global temperatures, water stress and extreme
weather events impact supply chains, crop yields and community
livelihoods. We are proud of the work of our businesses in partnership
with their clients to support our shared goals to tackle this risk.
Sustainability is important to our business and our long-term success,
and is part of our identity, from our chefs to our executive leadership.
We have many operational levers at our disposal to mitigate supply
chain disruptions, through our procurement scale, sourcing flexibility,
menu management and culinary and digital innovation. There is no
single solution to this global challenge, and we are making changes
across our business units and their supply chains. Measuring, tracking
and understanding how climate change impacts our operations,
our clients and our strategy is a key priority for the Group.
The purpose of this TCFD statement is to provide investors and wider
stakeholders with a better understanding of our exposure and
strategic resilience to climate-related risks, and to enable us to
identify climate-related opportunities that are material to the Group.
We consider all risks and opportunities evaluated in this statement
to be industry-wide, applying to each of our sectors, our competitors
and other key stakeholders.
The outputs from the qualitative and quantitative analysis were rolled
over from our 2023 disclosure. This decision was made in conjunction
with our external advisers, as no internal or external factors
changed that could materially impact the outputs of the analysis.
The qualitative and quantitative scenario analysis will be repeated
at a minimum every three years in line with the relevant regulations.
This disclosure has, however, evolved with the inclusion of a Transition
Roadmap. The Transition Roadmap sets out how we will deliver our
climate commitments. Our transition is built on three key strategic
levers: our supply chain; our operations; and our clients and
consumers. These levers will guide our sustainability priorities,
transition activities, and strategic ambition and will form the basis
of our inaugural Group-level climate transition plan.
41Compass Group PLC Annual Report 2024
Task Force on Climate-related Financial Disclosures continued
Governance
Compass has well-established governance structures designed to
effectively oversee the management of its principal risks, including
climate change risks and opportunities. Principal risks are reviewed
biannually by the Board. Climate change is a principal risk
and it was embedded into our risk management processes
in 2021 (see page 24).
Climate-related risks and opportunities are identified, overseen and
managed at the highest levels of the Company through the following
governance structures and processes:
– the Board has overall responsibility for oversight of the management
of climate-related risks and opportunities, which it exercises
through the Corporate Responsibility (CR) Committee and the Audit
Committee
– the CR Committee meets at least three times a year and comprises
all of the directors. It receives reports at every meeting from the
Group Chief Commercial Officer (CCO), the Global Director of
Sustainability and other senior managers to ensure that progress is
being made towards meeting the Group’s specific CR KPIs and
ongoing CR commitments, including greenhouse gas (GHG)
emissions and food waste reduction targets
– the Audit Committee meets at least three times a year and
comprises all the independent Non-Executive Directors of the
Board. In line with the governance process used for financial
management, it considers the potential impact of climate change
on the financial statements, including the output of the Group’s
scenario analysis, the costs to achieve the Group’s climate net zero
commitments, and their impact on the financial statements and
related disclosures
– executive sponsorship is shared jointly between the Group CEO and
Group CCO, who have the highest management-level responsibility
to form, review and communicate the Company’s climate-related
global strategy, policies and standards. This includes setting and
reviewing progress towards targeted KPIs, identifying and assessing
climate-related risks, and managing and monitoring associated
opportunities
– they are supported at an operational level by the Global Director
of Sustainability, who leads the Group Sustainability function.
This function provides support to the Group’s regions and countries
to ensure sustainability strategies are implemented and
climate-related risks and corresponding controls and mitigations
are reviewed on an ongoing basis
– at Executive Committee level, the regional Chief Executive Officers
(CEOs) are responsible for managing climate-related risks and
opportunities for their respective regions. At a country level,
the country managing directors are responsible for managing
climate-related risks and opportunities in their respective markets
Board
Overall oversight of risks and opportunities presentedbyclimate change
Corporate Responsibility Committee
Reviews development and implementation of policies and
strategies, including those on climate change
Reviews performance against CR KPIs
Executive management
Communicates the climate-related strategy, policies and
standards to the Corporate Responsibility Committee
Group Sustainability function and country teams
Assess and manage environmental and
climate-related risks and opportunities
Audit Committee
Reviews the effectiveness of risk management
and internal control processes
Reviews TCFD analyses
Reviews the impact of climate-related risks and
opportunities on financial statements and
reviews disclosures
42 Strategic Report
Strategy
Climate-related risks and opportunities and their impact
on the operations of the Group
In partnership with external climate resilience experts, our specialist
internal teams conducted qualitative and quantitative risk
assessments and scenario analysis to identify climate-related
risks and opportunities.
We want to ensure that our strategy is resilient and set up to
deliver on our Planet Promise of a sustainable future for all.
This encompasses our values as an ethical, sustainable
and inclusive business, and is key to our growth aspirations.
We are committed to reaching climate net zero by 2050, supported
by our Sustainable Financing Framework, and have plans in place
to mitigate and adapt to climate-related risks and a future climate
transition. Our strategic investments enable the Group and its
businesses to capitalise on climate-related opportunities and help
clients realise their sustainability goals effectively and efficiently.
We continue to acquire and implement cutting-edge technologies
to enhance our sustainability services for clients and maximise the
opportunities likely to arise from the climate transition. Strategic
investment in our monitoring and measurement capabilities enables
our businesses to offer detailed and tailored roadmaps for clients and
positions the Group as a trusted partner in helping clients achieve
their own sustainability goals.
Scenario analysis
Our scenario analysis comprises three climate scenarios (1.5°C, 2.5°C
and 4°C) for which we have considered physical risks, transition risks
and related opportunities. These three climate scenarios, which are
explained in more detail in the table below, were chosen by our
specialist internal team, which includes representatives from the
Sustainability, Finance, Commercial and Procurement functions,
in consultation with our expert external partners. The outputs from
the qualitative and quantitative analysis were rolled over from our
2023 disclosure.
Scenario Key attributes Rationale for inclusion
Pathway to cost
increase
Scenario A –
1.5°C by 2100
(SSP 1/RCP 2.6
combination)
The world takes rapid and drastic action to limit global
warming and meet the ambition of the 2015 Paris
Agreement:
– coordinated action across public and private sectors
– low-carbon technologies take over from fossil fuels
– shift in consumer demand and preferences towards
low-carbon products and services
A < 2°C scenario is
required by TCFD. This
scenario allows Compass
to explore transition risks
in key markets, consider
changes in consumer and
client preferences and
understand competitor
and stakeholder
pressures.
Increase in sourcing
costs due to carbon
pricing on
agricultural (farm to
farm gate) and freight
emissions.
Scenario B –
2.5°C by 2100
(SSP 2/RCP 4.5
combination)
The world follows a path in which social, economic and
technological trends do not shift markedly from historical
patterns:
– development and income growth proceeds unevenly
– middle-of-the-road emissions with inconsistent
technological process
– global and national institutions work towards, but make
slow progress in, achieving the UN Sustainable
Development Goals
This scenario allows
Compass to prepare for a
disorderly transition away
from fossil fuels. Under
the 2.5°C scenario,
Compass examines both
physical and transition
risks and opportunities.
Increase in sourcing
costs due to carbon
pricing on
agricultural (farm to
farm gate) and freight
emissions, and
production losses
leading to higher
procurement costs.
Scenario C –
4°C by 2100
(SSP 5/RCP 8.5
combination)
The world continues to use fossil fuels as the engine of
economic growth, resulting in worst-case levels of global
warming:
– severe and frequent extreme weather, with chronic
changes to seasonal weather patterns
– extensive business disruption, severely damaging
economic growth
– protectionist government policies to build resilience to
climate change
This scenario allows
Compass to assess the
impact of acute and
chronic physical
climate-related risks and
opportunities on the
business, supply chain,
supplier network, and
stakeholders.
Loss in production
leads to higher
procurement costs
due to the costs
involved in switching
sourcing. No carbon,
plastic or food tax is
assumed.
43Compass Group PLC Annual Report 2024
Task Force on Climate-related Financial Disclosures continued
Scope and assumptions
Time horizon
We consider three time horizons – three years (short-term), four to 10
years (medium-term) and greater than 10 years (long-term) – to be
relevant for our scenario analysis, with the assumption that
climate-related issues often manifest over the medium to long-term:
– short-term – three years is the period reviewed by the Board in its
annual strategic planning process and is aligned to the typical
length of the contracts in the Group’s businesses (three to five
years). It is also consistent with the time period of the Group’s
Viability statement (see page 29)
– medium-term – four to 10 years allows for the outcomes of scenario
analysis to influence the development of our strategic objectives
– long-term – analysis over a period of 10 years or longer is more
uncertain due to the limited availability of data on the long-term
impacts of climate change, the severity of which will be contingent
on the actions taken over the short and medium-term
Geographic and product scopes
The scope of our scenario analysis includes consideration of four
countries and seven product categories to provide granular insight
into how the impacts of climate-related risks and opportunities vary
across geographies and products in each time horizon. We do not
believe there would be any material differences in the outcomes if we
considered different sectors in this exercise as our business model is
similar across sectors.
The geographic scope of the scenario analysis was determined on the
basis of both materiality (with the US, UK, Australia and France
representing 79% of the Group’s underlying revenue in 2024) and
reach (with each of our reporting regions – North America, Europe
and Rest of World – represented in the analysis). The balance of our
underlying revenue comprises multiple countries, with no individual
country representing more than 4% of the Group’s total underlying
revenue in the year.
The product focus for the scenario analysis was protein (beef, pork,
poultry and dairy), produce (fruit and vegetables) and beverages.
Together, these products represented more than 60% of the total
MAP 3 analysed spend in the four in-scope countries.
Qualitative scenario analysis
The impacts on the business of the climate-related risks and
opportunities identified in the scenario analysis were discussed
withleaders and management across the in-scope markets.
Workshops with our specialist internal teams, market representatives,
Group senior management and external climate resilience experts
were held to qualitatively assess each risk and opportunity to
determine the possible operational and financial impacts.
Participantsincluded representatives from the Sustainability,
Finance,Commercial and Procurement functions. The likelihood
andimpact of the risks were ranked.
The table on pages 45 and 46 summarises the risks and opportunities
identified and, for each one, shows the potential impact, geographical
exposure and time horizon during which the impact is expected to
materialise. The table also highlights for each risk the strategic
business model levers and operational measures available to the
Group to mitigate the impact and seize the opportunities identified.
Many levers and operational measures are ones we regularly
deployand will allow us to mitigate the impacts to levels deemed
minor or negligible.
Climate-related risks and opportunities are continuously reviewed
together with other business risks as part of our biannual Major Risk
Assessment (MRA) process. They are assessed based on their
potential impact on profit before interest and tax (PBIT) in accordance
with the criteria set out in the Board-approved Risk Management
Policy (see page 23).
44 Strategic Report
Multiple material levers we can use to mitigate these risks
The table below shows the relevant physical and transition risks and opportunities identified for Compass, including an assessment of potential
impact, likely time horizon and geographic exposure.
Risk/opportunity
and time horizon Description and impact Exposure Mitigation
Acute physical risks
Drought and
extreme heat
(S)
Increased drought
and extreme heat
events
Transportation disruptions, crop stress
leading to reduced yields and/or
catastrophic crop failure, raw material
shortages and increased operating costs.
Transportation routes in the Australian
market are vulnerable to disruption
fromwildfires.
US, UK,
Australia
and
France
– flexible menu planning arrangements that allow our
businesses to select local, seasonal and readily
available ingredients
– minimising food waste to maximise value of
limitedresources
– strategic diversification of suppliers and sourcing
regions to reduce reliance on single-source
ingredients
– increased use of alternative farming methods
(e.g. indoor vertical farming)
Extreme weather
events (L)
Increased flooding,
hurricanes and
cyclones
Increased crop stress, reducing yields
and/or catastrophic crop failure from
flooding, and distribution-network failures
from weather damage (due to flooding,
hurricanes and cyclones) to public
infrastructure, disrupting operations and
sourcing while increasing operating costs.
US, UK,
Australia
and
France
– flexible menu planning
– minimising food waste
– strategic diversification of suppliers and
sourcingregions
– flexible contractual terms with suppliers to manage
and mitigate short-term disruption
– contingency planning and rapid response to
emergency situations (e.g. the Emergency
Preparedness team in the US)
Chronic physical risks
Extreme heat (L)
Increased global
temperatures leading
to climate-related
health impacts,
diseases and pests
Increased range, spread and distribution of
weeds, disease, pests and fungi, reducing
crop yields. Extreme heat and disease
leading to cow weight loss and lower milk
production. Increased exposure of
agricultural workers to extreme heat in
Australia and US, limiting operational hours
and increasing operating and key input
costs for farmers.
Global – market-based initiatives to support farmers
(e.g. Compass US supporting the Carolina Farm
Stewardship Association to provide advice and
support to small farmers), focusing on sustainable
farming practices and climate resilience
– strategic diversification of suppliers and
sourcingregions
– increased use of alternative farming methods
(e.g. indoor vertical farming)
– reducing food waste
Water stress (L)
Increased water stress
and scarcity
Increased water stress in Australia and the
US leading to reduced water availability for
cattle feed, reducing dairy and beef herd
sizes and production, and increasing costs
of key inputs. Reduced water availability for
beverage suppliers, disrupting production
and increasing costs of key inputs.
US
and
Australia
– using analytical tools (e.g. carbon footprinting) to
allow operators to improve energy, water and
wasteperformance through menu and
equipmentmanagement
– strategically building competitive sourcing
programmes in alternative categories (e.g. meatless
proteins and dairy alternatives)
– reducing food waste
Transition risks
Taxation (S/M)
Taxation on animal
protein (beef and
dairy) and
transportation
Higher compliance costs or increased
insurance premiums on carbon use.
Increasing costs and/or decreasing revenue
due to taxation on the production and sale
of beef and dairy. Increased carbon
taxation on GHG emissions associated with
the transport and distribution of products
and services, increasing operating costs.
Global – continued menu reformulation and accelerated
plant-forward strategy
– reducing food waste
– continued close collaboration with key suppliers on
GHG emissions reduction
– building local sourcing options to reduce food miles
mature pricing practices and processes
S Short-term M Medium-term L Long-term
The four specific risks identified by the Group as the most relevant physical climate-related risks, which were the focus of the
quantitative scenario analysis (see table on page 43).
45Compass Group PLC Annual Report 2024
Task Force on Climate-related Financial Disclosures continued
Risk/opportunity
and time horizon Description and impact Exposure Mitigation
Transition risks continued
Market (M)
Changing consumer
preferences and
behaviours away from
animal proteins (meat
and dairy)
Reduced demand for certain products,
services and menus, and impact on
competitive market position due to shifts in
consumer preferences.
US
and
UK
– continued menu reformulation to reduce animal
proteinon the plate
– reducing food waste
– plant-forward training for our chefs
– expanding use of technology and consumer apps to
display carbon labelling
– working with suppliers on new plant-forward options
and reduced-carbon ingredients
– strategically building competitive sourcing programmes
in alternative protein categories
Policy and legal (S/M)
Regulation on plastic
and food waste
Increased cost of use (through increased
taxation or ban on use) and disposal of
plastics leading to loss of revenue and
increased regulatory disciplinary action.
Fines due to inefficient food waste
management, increasing operating costs.
Global – application of technology to measure our food waste
footprint (supporting our food waste reduction objectives)
– exploring and implementing solutions to move away
from single-use and fossil-fuel-based plastics (e.g. in
Australia, Compass has already made the transition
ahead of federal and state legislation)
Opportunities
Resource efficiency (M)
Reduction in food
waste across all
operations
Cost reductions and reputational benefits
resulting in increased demand for goods/
services and increasing revenue.
Global – continued rollout of and investment in proprietary
technology to measure our food waste footprint
(e.g. Waste Not 2.0)
– food waste KPI added to executive and senior
management annual bonus plan
– food reclamation partnerships to repurpose food waste
into meals for community support
Market (S)
Shift in consumer
preferences towards
plant-based menus
and products
Opportunity to become a market leader in
plant-based meals, resulting in increased
demand and increasing revenues.
Global – continue to expand our offer of healthy, lower-carbon,
plant-based menu items, reformulating menus in line
with our plant-forward strategy
– increase share of seasonal and locally-sourced products
– use of eco-labels to accelerate the transition and
position Compass as a market leader in this field
Resilience (M)
Use of operational and
strategic levers such
as procurement scale,
menu management,
and culinary and
digital innovation to
mitigate climate-
related supply chain
disruptions
Higher availability of products compared
tocompetitors, and increasing
consequentrevenues.
Global – expand use of existing operational and strategic
leversglobally
– leverage global procurement strategy to reduce
exposure to fluctuations in raw material costs
– flexible menu planning and pricing
Energy sourcing (M)
Use of lower emission
sources of energy,
switch to renewable
electricity across all
operations and
transitioning of all
fleet vehicles to 100%
fully electric
Reduced exposure to fossil fuel prices, and
lower operating costs.
Global – continue seeking to improve operational efficiency and
use new technologies that emerge as the sector
transitions to a low-carbon economy
– increasing adoption of 100% fully electric vehicles by
our businesses
– continue the transition to renewable energy across our
owned and operated sites
Physical opportunity (L)
Crop diversification
and increasing local
sourcing (especially in
higher latitudes)
Increased growth viability resulting in
reduced logistical emissions and costs.
Global – allocation of funding towards new production
techniques such as regenerative agriculture, vertical
farming and hydroponics; transitioning farmers from
traditional farming
– Compass Netherlands has partnered with Local2Local,
a platform that enables farmers and producers to sell
their products locally
S Short-term M Medium-term L Long-term
46 Strategic Report
Quantitative scenario analysis
The outputs from the quantitative scenario analysis were rolled over
from our prior year disclosures. This decision was made in conjunction
with our external advisers, as no internal and external factors changed
that could materially impact the outputs of the analysis. The
quantitative scenario analysis will be repeated a minimum of every
three years in line with the relevant regulations.
As part of our quantitative scenario analysis, each of the risks and
opportunities identified during the qualitative scenario analysis was
considered for quantification based on the level of risk identified,
itslikelihood and the additional insight that would be gained
fromquantification.
Consistent with the qualitative scenario analysis our modelling
includes short-, medium- and long-term timeframes (2025, 2030 and
2050) and four countries (US, UK, Australia and France). Our analysis
focused on the four most relevant physical climate risks identified
during the qualitative scenario analysis: acute drought and heat
events, and chronic water stress and temperature increases.
Thesewere modelled under the three climate scenarios, A, B and C,
explained on page 43, across the relevant markets and each of the
short-, medium- and long-term timeframes.
The chronic risks were only modelled for the US and Australia on the
basis that of the four, only these countries are expected to experience
temperature increases at levels that will impact livestock and milk
production. The food products selected for the quantitative scenario
focused on protein (beef, dairy, poultry and pork) and produce (fruit
and vegetables).
In 2022, we modelled transition risks relating to carbon taxation.
We consider that the conclusions of that analysis remain relevant
andtherefore they have not been re-modelled.
The table below shows the results of the 2023 quantitative scenario
analysis in respect of physical risks, together with the 2022 low-
carbon transition scenario. We are confident that our strategic
business model levers and operational measures will allow us to
mitigate the impacts to levels deemed minor or negligible.
Quantification of potential cost impacts by climate scenario
Cost impact
1
– 2025/2030 Cost impact
1
– 2050
Risk Type Description Impact Country Focus area
A
(1.5° C)
B
(2.5° C)
C
(4° C)
A
(1.5° C)
B
(2.5° C)
C
(4° C)
Drought Acute Prolonged period of
abnormally low
rainfall leading to a
shortage of water
Crop stress leading
to reduced yields
US, UK,
Australia
and
France
Poultry,
pork,
produce
Extreme
heat
Acute Prolonged period of
abnormally high
surface temperatures
Crop stress leading
to crop failure
US, UK,
Australia
and
France
Poultry,
pork,
produce
Extreme
heat
Chronic Sustained abnormally
high surface
temperatures
Heat leading to cow
weight loss and
lower milk
production
US
and
Australia
Beef, dairy
Water
stress
Chronic Sustained higher
temperatures and
reduced precipitation
Reduced water
availability for cattle
feed, thus reducing
herd size
US
and
Australia
Beef, dairy
Taxation
2
Transition Carbon tax on
agricultural and
freight (Scope 3)
emissions
Higher compliance
costs or increased
insurance premiums
US Beef,
dairy,
poultry,
pork,
produce
N/A N/A N/A N/A
Potential unmitigated annual food cost increase
1
< 2.5% 2.5-5.0% 5.0-7.5%
1. The cost impact columns indicate the potential unmitigated gross annual percentage increase in the cost of food products in scope for each risk scenario.
2. Scenario analysis on taxation in 2022 considered the low-carbon (1.5°C and 2°C) transition scenarios and calculated the cost impact for a 2030 time horizon only.
The four specific risks identified by the Group as the most relevant physical climate-related risks.
Key assumptions
– it is assumed that the price elasticity of food products is 100%,
i.e. when the yield decreases by 1, the price increases by 1
– it is assumed that the price elasticity of poultry and pork feed is
50%, i.e. when the price of feed increases by 1, the price of
poultry and pork increases by 0.5
– the output of the analysis is an estimated cost increase
assuming no volume changes from 2022 levels and no changes
in business activities. The results refer to this scope only and,
as such, cannot be extrapolated
– the analysis does not include the mitigation or adaptation
measures that would be undertaken by the Group’s businesses
and their suppliers to offset the estimated cost increases
47Compass Group PLC Annual Report 2024
Task Force on Climate-related Financial Disclosures continued
No potential financial impacts related to physical climate risks in 2030
of 2.5% or more of total spend on in-scope food categories before
business levers were identified. The most significant potential impact
is from chronic water stress in the US and Australia in 2050 under all
three climate scenarios, with an estimated annual cost increase in the
range of 2.5% to 5.0% of the total spend on in-scope food categories
across the US, UK, Australia and France. Beef and dairy production is
likely to be most impacted by climate change, with costs increasing in
the long-term. This is consistent with our strategy to build competitive
sourcing programmes in alternative food categories such as meatless
proteins and dairy alternatives, and to nudge consumers towards diets
that are more planet-friendly. Consequently, we are confident in our
ability to mitigate the impact of this risk.
In 2022, the analysis identified the most significant potential impact to
be from the transition risk of carbon taxes on animal protein in the US
in 2030 under low-carbon climate Scenario A, with an estimated
annual cost increase in a range of 5.0% to 7.5%. Whilst we concluded
that the application of the business levers in our operational model
would substantially reduce the financial impact, the analysis showed
that carbon tax on our Scope 3 GHG emissions is a key risk to mitigate.
It is, therefore, the focus of our current efforts, which are highlighted
in the Metrics and targets section below.
Future roadmap on scenario analysis
Despite our extensive scenario analysis, we recognise it is limited
bythe availability of data on the long-term impacts of climate
change,and our disclosures will evolve as this improves. We will
continue to work with experts to review the scope of our analysis
andevolve our process.
The resilience of the Group strategy
Compass Group’s sustainability leadership, climate net zero roadmap
and plant-forward strategy make us resilient and adaptable to the
impacts of climate change, most notably evolving client and consumer
demands and the projected climate impacts on animal protein
production costs and availability.
The Group uses a wide range of processes that can be flexed to
address changing market dynamics, supply disruption and other
impacts of climate change. These include a combination of
operational mitigation measures and strategic business model levers,
outlined in the table on page 45 and 46. The main levers are flexible
menu arrangements with clients, food waste management to optimise
resource efficiency, and continued strategic diversification of
suppliers and sourcing regions. Compass already widely deploys these
levers as part of its normal business practices, and we are confident
they will continue to provide a competitive advantage during any
climate transition.
We are also evolving our approach to carbon. Most of the Group’s GHG
emissions are Scope 3 and therefore collaboration with our suppliers
is essential if we are to meaningfully impact those levels. We are
working with partners and moving to a volume-based data approach,
to build a more granular understanding of food-related emissions.
Aswell as helping suppliers reduce their carbon emissions, menu
engineering and reducing food waste form the three key levers to our
carbon reduction strategy.
We believe our business model will be resilient in all three climate
change scenarios considered during the process.
Risk management
Processes for identifying and assessing climate-related risks
Climate change has been assessed as a principal risk by the Board
since 2021 in recognition of the potential impacts it can have on our
businesses in the medium and long-term. Climate change risks and
opportunities are considered as part of our major risk assessment
(MRA) process: a structured biannual bottom-up and top-down risk
review completed by all countries, which is the cornerstone of our risk
management framework.
The process for identifying climate-related risks and opportunities is
consistent with last year and continues to involve both country
leadership teams and central functions, including Finance, Risk
Management, Legal and Sustainability. Risks are identified and
assessed within each country and region, and the Group risks are
assessed biannually by the Board.
In accordance with our risk management framework, we assess the
materiality of key risks and opportunities, including climate-related
risks and opportunities, and deem them to have a substantive
financial or strategic impact if there is a one-off or recurring annual
profit impact of more than 4% of our PBIT. On climate-related topics
we involve internal and external experts to ensure we maintain an
up-to-date view on specific risks and opportunities to consider as part
of the annual process. More information about our risk management
framework can be found on pages 23 and 24.
Processes for managing climate-related risks
As noted on pages 24 to 28, the Group’s principal risks (which include
climate-related risks) are all considered as part of the Group’s strategic
planning process and viability statement assessment. In addition, we
note on page 145 how climate risk has been considered in the basis of
preparation of the Group’s consolidated financial statements.
Climate risks and mitigations are monitored throughout the year by
the Executive Committee, as part of the biannual MRA process, and
separately by a cross-functional steering group. Regional CEOs are
responsible for managing climate change risks and opportunities for
their respective regions while responsibility at the country level sits
with the country managing directors.
The development of action plans to manage the climate-related risks and
maximise the opportunities, and the continual monitoring of progress
against agreed KPIs, are integral parts of both business process and core
activities throughout the Group. These KPIs consist mainly of the metrics
described in the Metrics and targets section below, and are in line with
our strategy and the conclusions of our scenario analysis.
Metrics and targets
Focus on food waste and GHG emissions in line with
strategy and results of quantitative scenario analysis
In line with our commitment to the Paris Agreement and our sustainability
strategy, which includes climate action, we have established climate-
related metrics and targets for the short, medium and long-term, at both
a Group and operating country-level. We have committed to:
– reaching climate net zero GHG emissions across our global
operations and value chain by 2050. The climate net zero goal
includes interim 2030 targets validated by the SBTi
– reducing absolute Scope 1 and Scope 2 GHG emissions by 46% by
2030 from a 2019 base year, in line with an ambition to limit future
warming to 1.5°C above pre-industrial levels
– reducing our absolute Scope 3 GHG emissions from all purchased
food and drink by 28% by 2030 from a 2019 base year, aligned with
a trajectory to limit global warming to well below 2°C compared to
pre-industrial levels
Progress on these metrics is shared on page 36.
48 Strategic Report
We have also committed to achieving carbon neutrality worldwide in
our operations globally by 2030 (Scopes 1 and 2). To achieve this,
wewill compensate and later neutralise remaining Scope 1 and 2
direct GHG emissions through high-quality carbon removal projects.
As a critical step towards lower GHG emissions, we have also
committed to reducing food waste, and in 2025 the annual bonus
KPIfor executive directors and senior management will measure
year-on-year food waste reduction.
To support the business to meet these targets the Group launched a
Sustainable Financing Framework in July 2022 to issue sustainable
debt, a summary of which can be found on page 36.
Further details can be found in the latest Sustainable Bond
Allocation Report on the Group’s website www.compass-group.
com/en/investors/debt-investors/sustainable-financing
Food waste
With a third of all food produced globally wasted every year,
reducingfood waste is a core strategic priority for the Group and our
businesses. By sending less food waste to landfill, we are helping to
mitigate climate change, relieving pressure on natural resources.
Thisstrategy continues to enhance purchasing and product
management efficiencies throughout our businesses globally,
supporting the mitigation of the physical and transition risks
identifiedin our scenario analysis.
Improving tracking and accountability of kitchen waste worldwide
remains our focus with the continued rollout of technology that
increases our food waste measurement capability. We have deployed
our food waste management systems in 9,947 sites across the
regions, with data assurance provided by an independent third party.
By ensuring our sites capture accurate, high-quality data we can
continue to reduce food waste. This will also deliver reductions in the
Group’s Scope 3 GHG emissions and clients’ carbon footprints. See
page 38 for further details on our progress on food waste this year.
Scope 1 and Scope 2 GHG emissions
We report our energy usage and Scope 1 and 2 GHG emissions
annually (see page 36). In 2024, we monitored the energy usage and
GHG emissions of our owned and operated sites across 26 countries
(2023: 28) which represent 98% of the Group’s underlying revenues
(2023: 98%). This year, we have again calculated our Scope 2 GHG
emissions using market-based methodology to recognise the
purchasing of low-carbon energy. Our Scope 1 and 2 GHG emissions
normalised by revenue are disclosed on page 36.
Scope 3 GHG emissions
Of our emissions, 98% sit under Scope 3 and are related to the
products we purchase. Although these emissions are not entirely
within our control, we can influence change through menu
choices,reducing food waste or by working with suppliers to
contribute to reductions.
We have improved our methodology and we now measure emissions
on a hybrid volume and spend basis, which is a more accurate
reflection of our Scope 3 GHG emissions. A summary of our Scope 3
year-on-year performance can be found on page 36.
We can create a low-carbon supply chain that is fit for the future by
our businesses collaborating and engaging directly with their supply
chain partners. This has become a key focus area for all our supplier
engagements globally. Procurement teams have continued to expand
and formalise supplier engagements. In some countries, like the US,
they have formal supplier collaboration sessions. In others, like India
and France, our businesses share their plans and expectations at
supplier days. Expectations are also reflected in the Supplier Code of
Conduct, and increasingly in contractual agreements. For example,
inthe UK&I all suppliers are contractually mandated to establish
science-based targets in all newly awarded contracts.
Calculations of Scope 3 emissions going forward
In order to monitor our progress in reaching our 2030 science-based
targets, we will continue to measure and disclose our relevant Scope 3
emissions annually. This year, we have aligned our emissions reporting
to our financial year for ease of reference.
Internal carbon pricing
We recognise the importance of having an effective internal carbon
pricing system in place, to inform us of the effects of a possible
increase in the price of carbon offsets going forward. We therefore
continue to assess how to introduce an internal carbon pricing method
as a priority whilst evolving our data reporting systems to capture data
at a product level, which would be a critical enabler.
Remuneration
To further strengthen our targets and commitments, the food waste
measure within the 2024 annual bonus plan for executive directors
and senior management focused on reducing food waste across our
operations by targeting our sites to drive usage of industry-leading
technology. This has been effective in focusing our leadership to
encourage frequent usage of the technology at site level, allowing
usto further reduce food waste, more accurately refine our menu
andproduction planning, and enhance procurement efficiency.
Theannual bonus KPI for 2025 will measure year-on-year food
wastereduction.
Evolution of metrics and targets
We recognise the importance of measurement and follow-up to drive
change. We continuously assess and evolve our metrics and targets,
and have considered the seven metric categories in the TCFD
recommendations. In addition to the metrics mentioned above,
wecontinue to explore how to measure transition risks, physical
risks,climate-related opportunities and capital deployment to
theextent relevant.
Conclusion
The findings of the scenario analysis support our sustainability
strategy and reaffirm the mitigating actions we are already taking
across the Group. We are confident in our ability to manage these
riskswhilst maximising the available opportunities. Consequently,
weexpect the net impact to be immaterial to the Group.
We remain committed to collaboration with partners in our ecosystem
to decarbonise while continuing to work with external experts to
broaden the scope of our efforts and further improve our TCFD
disclosures year-on-year.
49Compass Group PLC Annual Report 2024
Task Force on Climate-related Financial Disclosures continued
Transition Roadmap
Introduction
As a global leader in food services, we acknowledge the importance of
transitioning our business model to promote social and environmental
responsibility, aiming to empower individuals to make healthier
choices for themselves and the planet. At Compass, we are committed
to fulfilling our Planet Promise of a sustainable future for all, reflecting
the Group’s values as an ethical, sustainable, and inclusive business.
As we work towards our target of net zero emissions across our global
operations and value chain by 2050, we have begun the development
of our inaugural Group-level climate transition plan targeted for
publication in 2025, aligned to our low-emissions scenario analysis,
and informed by the Transition Plan Taskforce Disclosure Framework,
the accompanying Food & Beverage Sector Guidance, and
the pivotal activities and initiatives presented below.
Our progress so far
Since we published our near-term decarbonisation targets in 2021,
wehave made consistent progress in reducing our emissions across
Scopes 1, 2, and 3. Our Group-level transition plan is aimed at
accelerating our decarbonisation journey, by providing structure to
our actions, accountability through our governance structures, and
proactive strategising through our financial planning. Please see page
36 for more detail on our emissions reductions.
Improving our data quality and transparency, particularly regarding
our Scope 3 emissions, continues to be one of our top sustainability
priorities. We recognise that enhanced data accuracy and
transparency are pivotal in our journey towards sustainable
operations. Therefore, we continue to invest in cutting-edge
technology and foster strategic partnerships to ensure that our data
isnot only more accurate and representative, but also serves as a
catalyst for informed decision-making and impactful sustainability
initiatives. This commitment will empower us to effectively track,
manage, and reduce our environmental footprint, while fostering trust
and credibility with our stakeholders. We have also continued work on
monitoring and updating our science-based targets, including new
SBTi FLAG and non-FLAG targets, which will be published in our
fulltransition plan.
Strategy
Following our qualitative and quantitative climate scenario analyses,
we have developed our strategy to directly address our identified risks
and opportunities, mapping our activities to a 1.5°C scenario. Our
transition is built on three key strategic levers which in turn guide our
sustainability priorities, transition activities, and strategic ambition.
Our levers are aligned to historical data from work completed in
collaboration with Planet FWD in 2022, which identified our material
decarbonisation areas. This has allowed us to clearly link our current
and future transition activities to the areas with the most potential for
emissions reductions. We are planning on assessing the time-horizons
of these actions in the future, ensuring they are all still aligned to a
1.5°C scenario.
The transition plan will shape our Group-level approach to
decarbonisation, supporting our geographies in setting their
own tailored strategies in line with their specific markets. It has
been developed to achieve four core objectives:
To respond to climate change
risks and opportunities
Building on our climate scenario analysis conducted in 2023,
we are actively embedding adaptation and mitigation strategies
in our own operations and across our value chain as part of our
implementation strategy and to better respond to the effects of
climate change, through sourcing from sustainable suppliers
and fostering sustainable practices, like reducing food waste
and flexible menu planning.
To empower stakeholders
to decarbonise
We are committing to decarbonisation across our value
chainby supporting clients and suppliers to achieve their
sustainability goals with strategies such as reducing food
wasteand expanding the availability of low-carbon choices
forconsumers.
To place individuals at the
heart of our transition
We want to ensure our climate transition initiatives are fair and
inclusive for impacted stakeholders, by collaborating with
supply chains to tackle key ESG issues, training chefs to
innovate and prepare plant-forward meals, and advocating
forfair access to nutritious food.
To drive change
by responding to regulation
By leveraging the knowledge we have gained from responding
to sustainability regulations, we can shape a consolidated
strategy that enables us to actively meet external obligations.
50 Strategic Report
Strategic lever Activities
Metrics we are using
totrackprogress* Progress to date
Supply Chain
Our strategic ambition:
To build business resilience
and drive emission reductions
by working with suppliers on
their journey to decarbonise;
diversifying the supplier base,
respecting human rights, and
promoting ethical trade.
1.1 Segment the supply chain to
prioritise engagement efforts to
improve traceability of product
level data and to identify the
highest climate risk categories.
1.2 Establish minimum sourcing
standards and set supplier
expectations through policies
aligned with Compass Group’s
carbon reduction plan.
1.3 Embed expectations into the
procurement process by providing
training to internal procurement
teams to better equip them to
manage supply chain risks, as
well as including contractual
language regarding Compass
Group’s requirement in RFPs.
1.4 Enable change through
training and engagement with
suppliers to help them meet
Compass Group’s minimum
standards, and collaborating with
them on carbon reduction
roadmaps with the aim of
standardising data collection
methods and improving data
quality.
1.5 Collaborate with organisations
externally and form partnerships
to leverage Compass Group’s
influence to advocate for
transparency and raise industry
standards including by
encouraging more regenerative
agricultural processes.
– % of sourced volume of
high-climate-risk commodity
covered by third-party
certification (including % of
sourced volume of net zero
deforestation commodities)
Global: launched a deforestation
policy which includes a
commitment to be deforestation-
free in our North America and UK
operations by the end of 2025. In
combination with EUDR this
covers 90% of the Group’s
procurement spend.
USA: held two Future Forward
meetings to look at how Scope 3
emissions can be reduced. 25 of
their largest supply partners,
representing $3 billion of spend,
attended and presented updates
on strategies to reduce the GHG
emissions of food as it moves
from the farm to packaging and
distribution.
UK&I: mandated that all new
contracts require suppliers to set
Science-Based Targets (SBTs)
within 12 months of a contractual
start date.
Operations
Our strategic ambition:
To collaborate with clients to
drive carbon reductions by
reformulating menus, and
reducing and repurposing
waste.
2.1 Deploy green technologies,
e.g., food waste technology or
using renewable electricity to
improve resource efficiency.
2.2 Add food waste KPI to
executive and senior
management annual bonus plan
to drive action on food waste via
enhanced executive
responsibility.
2.3 Donate via food reclamation
partnerships to minimise waste
and reduce food poverty.
2.4 Implement solutions to
transition from single-use/
fossil-fuel plastics in an effort to
further decarbonise products and
services.
2.5 Reformulate menus to lower
the carbon footprint associated
with products and services
through substituting ingredients
for low-carbon alternatives and
using locally sourced products to
reduce food miles.
– number of sites using food
waste technology
– number of community meals
donated
– emissions reduction in
menus that have had
ingredients swapped
Austria: cooking waste is
collected by a biodiesel
manufacturer to transform it into
biodiesel.
UK&I: re-engineers suitable
recipes in its menus, for
example, the associated
emissions of lamb keema can be
reduced by combining minced
lamb with green lentils.
51Compass Group PLC Annual Report 2024
Task Force on Climate-related Financial Disclosures continued
Strategic lever Activities
Metrics we are using
totrackprogress* Progress to date
Clients and consumers
Our strategic ambition:
To help clients to work towards
the economy-wide transition by
providing consumers with
healthy and sustainable food
choices and maximising the
efficient use of green energy.
3.1 Encourage clients to maximise
energy efficiency and use
renewable electricity to help them
achieve decarbonisation of their
on-site kitchens.
3.2 Implement dedicated chef
training and client and consumer
education programmes to
supportthe development and
consumption of sustainable
andhealthy menus and raise
awareness on how to reduce
foodwaste.
3.3 Engage with industry forums
and communities to develop
nutritional standards and
behavioural change toolkits
todrive sustainable and
healthydiets.
3.4 Enable consumers to make
sustainable and healthy choices
through deploying behavioural
change strategies such as choice
architecture and providing
consumers with more
sustainability-related information.
– number of colleagues who
have completed net zero
training across Compass
Group’s operations
Group: engage with clients and
consumers through Compass
Group’s Stop Food Waste Day,
with participation across all of
Compass Group’s operating
markets.
Group: our work with the World
Business Council for Sustainable
Development (WBCSD) has
resulted in a toolkit containing
key solutions that make it easy
for consumers to choose healthy,
plant-forward options.
US: supported a major
technology client in transitioning
to fully electric kitchens,
including working with
equipment manufacturers to
reach capacity requirements.
* Here we have presented our initial metrics and targets for our strategic levers, but we continue to consider appropriate metrics to phase in over time. The metrics
presented above are not associated with every activity in the strategic levers; however we are aiming to develop metrics to track progress on all of our actions.
Governance
Embedding mature and robust governance across our wider corporate
strategy is key to providing accountability, reviewing, and refining
strategy, and reporting on our climate transition. We detail our
Governance structures in our TCFD Report on page 42 and are
continuing work on embedding our transition plan within our
organisational arrangements.
Oversight of our transition plan sits with the Corporate Responsibility
Committee, supported by the Global Director of Sustainability and the
wider sustainability teams.
A new ESG KPI was included in the 2023 annual bonus plan for
executive directors and senior management, based on an annual
increase in the number of sites using industry leading food waste
measurement technology. In 2024, we adapted this KPI to evolve
from a technology deployment target to measuring frequency
of usage rates. For 2025, the bonus plan will include a food waste
reduction target.
Financial planning
Financial planning serves as a tool to provide us with fully-costed
actions, allowing Compass to better plan future changes to the
business, and show stakeholders how our transition plan will be
achieved. The Sustainable Financing Framework discussed earlier is a
key tool in driving our transition. We are currently working on mapping
these eligible projects to our strategic levers to align financial planning
with our transition plan, and research will be developed to quantify
different elements of our plan.
Assumptions
Our strategic levers and activities were informed through
consultations with key stakeholders (Finance, Sustainability,
Procurement, and Data and Technology), our climate scenario
analysis and its related assumptions, and the latest guidance
fromtheTransition Plan Taskforce.
Nevertheless, the success of our transition relies on several factors
outside our direct control. 98% of the Group’s GHG emissions are
Scope 3 (originating in the supply chain), and although our strategy
outlines how we plan to engage with suppliers, there are elements
beyond our immediate stakeholders’ control that will impact our ability
to drive change: e.g., a national agriculture or nature policy such as
the EU Deforestation Regulation. Therefore, transitioning our supply
chain requires effort across the industry, which we continue to support
– for example through our work with the WBCSD and the World
Resources Institute.
With regard to healthy and sustainable diets, we leverage behavioural
change strategies and continue to engage with industry forums and
government to explore nutritional standards, but we rely on our
consumers to choose sustainably sourced, plant-forward dishes
from our range of diverse and unique menu offerings.
Next steps and reporting
This report provides a comprehensive overview of our strategic
roadmap for transitioning to a low-carbon economy, laying the
groundwork for our inaugural Group-level transition plan. This will
include a decarbonisation roadmap to illustrate how we plan to reach
the near-term and 2050 targets in greater detail. We track and
measure our progress as we navigate our sustainability journey,
withthe intention for our transition plan to be iterative, dynamic,
andcontinuously evolving.
52 Strategic Report
Non-financial and sustainability
information statement
The table below sets out where stakeholders can find information in our Strategic Report that relates to non-financial matters detailed
undersection 414CB of the Companies Act 2006, as amended by the Companies (Strategic Report) (Climate-related Financial Disclosure)
Regulations2022.
Reporting requirement Some of our relevant policies
1
Where to read more in this Report about our impact,
including the principal risks relating to these matters Page
Environmental
matters
– Sustainability Strategy
– Environment Policy
– Responsible Sourcing Policy
– Food Waste Policy
– Deforestation Policy
Purpose 34-40
GHG emissions 36
TCFD reporting 41-52
Principal risks – Climate change 24
Employees
– Code of Business Conduct
– Business Integrity Policy
– Workplace Health and
Safety Policy
– Diversity, Equity and Inclusion
Policy
Chief Executive’s review – People 10
People 30-33
Principal risks – Occupational safety, Talent 25-26
Safety 12
Ethics and integrity 13-14
Human rights
– Code of Business Conduct
– Business Integrity Policy
– Modern Slavery Act Statement
– Human Rights
Policy Statement
Whistleblowing, anti-bribery and fraud 76
Human rights 33
Employee diversity 30-33
Social matters
– Social Purpose Chief Executive’s review – Purpose 11
Stakeholder engagement 68-71
Purpose 34-40
Anti-bribery
andcorruption
– Code of Business Conduct
– Business Integrity Policy
– Speak and Listen Up Policy
– Responsible Sourcing Policy
Ethics and integrity 13-14
Principal risks – Business ethics and integrity 27
Whistleblowing, anti-bribery and fraud 76
Business model
Strategy and business model 3-6
Non-financial KPIs
– Workplace Health and
Safety Policy
– Food Safety Policy
– Environment Policy
Global Total Recordable Injury Frequency Rate 7, 12, 63, 79, 108, 112
Global Food Safety Incident Rate 7
Greenhouse gas intensity ratio 7
Principal risks
Risk management 23-28
1. The Company’s policies, statements and codes are available on our website: www.compass-group.com.
The Strategic Report, as set out on pages 1 to 53, has been
approved by the Board and signed on its behalf by
Alison Yapp
Group General Counsel and Company Secretary
26 November 2024
53Compass Group PLC Annual Report 2024
Chair’s letter
Governance and leadership
Financial Officer (CFO) by Petros Parras on the same date. Both
Palmer and Petros made a smooth transition and quickly settled into
their new roles.
In February 2024, Carol Arrowsmith retired from the Board after
completing her nine-year term.
I am also pleased to report that, following search processes
undertaken by two external firms of search consultants, Liat Ben-Zur
and Juliana Chugg were appointed as non-executive directors on
1 July and 26 September 2024 respectively. Liat is a transformative
technology executive with over 27 years of experience in driving digital
transformation and product innovation. Juliana is a seasoned
non-executive director who previously had a successful executive
career in the FMCG and food sectors. Both appointments bring
qualities and skills that complement those of our existing directors and
further enhance the diversity of the Board. I am confident that their
fresh perspectives will help to further strengthen debate and
challenge in the boardroom.
Also during the year, Ireena Vittal and Nelson Silva completed their
nine-year terms. In line with our established practice, Ireena and
Nelson will retire from the Board at the conclusion of the 2025 AGM.
Liat Ben-Zur succeeded Ireena as the Designated Non-Executive
Director for Workforce Engagement on 1 October 2024 and
Arlene Isaacs-Lowe will succeed Nelson as the Chair of the Corporate
Responsibility Committee with effect from the conclusion of the
AGM on 6 February 2025.
I would like to convey my deep appreciation and thanks to Carol,
Ireena and Nelson for their many contributions and unwavering
support, and on behalf of the Board I wish them well for the future.
More details of these changes are in the Nomination Committee
Report on pages 82 to 85. The Nomination Committee will continue to
focus on succession planning for the Board and Executive Committee,
ensuring there is a strong and diverse pipeline of future senior leaders.
Diversity, equity and inclusion
At Board level, the changes we have made in the last few years reflect
our aim and ambition for better gender balance and diversity in its
broadest sense, and we continue to advance this agenda. At the date
of this Report, three members of the Board are from a minority ethnic
background; 43% (2023: 38%) of Board membership comprises
women; and the Senior Independent Director (SID) is a woman.
A table showing the gender balance and ethnicity of the Board
and Executive Committee is on page 84.
Across the Group, work continues to make the Compass workforce
more diverse and representative of the communities it serves, and we
are making good progress. Information on our diversity initiatives is on
pages 30 to 33 and on our website: www.compass-group.com.
Environmental, social and governance (ESG) matters
The Board has kept abreast of the progress and effectiveness of the
Group’s ESG strategy through the work of the Corporate Responsibility
Committee, including the developing sustainability disclosure
landscape and reporting frameworks and corporate governance
reforms. The Corporate Responsibility Committee also considered the
Group’s efforts to create lifetime career opportunities, and to further
improve the experience of employees, including initiatives designed
to give back to and create value for the communities in which
Compass operates. More detail on these matters can be found on
pages 1 to 53 and on our website: www.compass-group.com.
Matters reserved for the Board
The Board has a formal schedule of matters reserved for its
decision as follows:
– purpose, strategy and management
– values, culture and stakeholders
– Board membership and other appointments
– financial and other reporting and controls
– audit, risk and internal controls
– contracts and capital structure
– communication
– remuneration
– delegation of authority
– corporate governance and other matters
The matters reserved for the Board are reviewed annually to
ensure that they remain relevant and fit for purpose.
Full details can be found on our website:
www.compass-group.com.
Ian Meakins
Chair of the Board
Dear Shareholder
On behalf of the Board, I am pleased to present Compass Group PLC’s
annual Corporate Governance and Directors’ Report for the financial
year ended 30 September 2024. Throughout this and other parts of
the Annual Report, we have sought to provide shareholders and other
stakeholders with an insight into how our governance framework has
supported our performance during the year.
Board changes, succession planning and talent pipeline
Following a comprehensive review of the composition of the Board,
and on the recommendation of the Nomination Committee, during
the year several changes were made to the Board which are
summarised below.
At Compass, where possible, our preference is to make appointments
to key roles from our internal talent pool, and on 1 December 2023,
Palmer Brown succeeded Gary Green (who retired from the Board at
the end of November 2023) as Group Chief Operating Officer (COO),
North America. In turn, Palmer was succeeded as Group Chief
54 Corporate Governance and Directors’ Report
Governance reforms
In January of this year, the Financial Reporting Council (FRC)
published the UK Corporate Governance Code 2024 (2024 Code).
Themain changes in the 2024 Code focus on internal controls and
require boards to monitor and review all material controls and to
makea declaration on their effectiveness in the annual report.
The2024 Code will apply to Compass for the financial year
commencing 1October 2025 (except for provision 29 in relation
torisk management and internal controls, which is effective from
1October 2026). The Board and its committees are regularly
updatedon the forthcoming requirements and plans to ensure the
Company is compliant with the provisions and principles of the
2024Code at the appropriate times.
Stakeholders
The Board values engagement with stakeholders. For practical
reasons, most stakeholder engagement takes place between the
Company’s subsidiaries and their stakeholders at an operational level.
Direct engagement between members of the Board and stakeholders
is principally with employees and investors. However, the Board
ensures that there are effective mechanisms in place to support
thecontinuous flow of information between the Board, senior
management and the wider organisation, to enable the Board
tounderstand the views of all our stakeholders.
Details of how the Board has oversight of stakeholders’ interests,
together with examples of how decisions taken by the Board have
impacted stakeholders during the year, are on pages 68 to 72.
Board effectiveness
This year, we conducted an internal evaluation of the performance
ofthe Board and its committees. The results of this year’s evaluation
concluded that the Board and its committees continue to operate
effectively. As Chair, I remain confident that we have a diverse Board
with the right balance of capabilities, skills and experience to
continueto do so.
The year ahead
We are committed to doing things in the right way, and will continue
tostrengthen our governance processes over the coming year to
ensure that we are prepared for the introduction of the 2024 Code
andaligned with best practice, and that our approach to disclosure
remains understandable and transparent.
We look forward to meeting with you at our 2025 AGM, which
will be held at the Allianz Stadium (formerly Twickenham Stadium)
in Twickenham, south-west London at 12 noon on Thursday,
6 February 2025.
Ian Meakins
Chair of the Board
26 November 2024
Compliance statement
It is the Board’s view that for the financial year ended
30 September 2024, the Company was compliant with all the
principles and provisions set out in the UK Corporate Governance
Code 2018 (the Code).
The Company’s auditor, KPMG LLP, is required to review whether
the above statement reflects the Company’s compliance with the
provisions of the Code specified for its review by the Financial
Conduct Authority’s (FCA) UK Listing Rules and to report if it does
not reflect such compliance. No such report has been made.
Our commitment to corporate governance
The Board is committed to the high standards of corporate
governance set out in the Code. This Corporate Governance
Report, together with the Directors’ Remuneration Report set
outon pages 86 to 118, describes how the Board has applied the
principles and complied with the provisions set out in the Code
forthe year under review. The Directors’ Report also contains
information required to be disclosed under the FCA’s Listing
Rulesand Disclosure Guidance and Transparency Rules. To the
extent necessary, certain information is incorporated into this
Report by reference.
This Corporate Governance Report on pages 54 to 118 and the
Other Statutory Disclosures section on pages 119 to 122, together
with the Directors’ Responsibilities Statement on page 123 and the
Strategic Report on pages 1 to 53, which make up the Directors’
Report, have been incorporated by reference.
Board leadership and company purpose
Compass is led by an effective and balanced Board dedicated to
promoting the long-term sustainable success of the Company,
generating value for shareholders, and contributing to wider
society. The Board has established the Company’s purpose, values
and strategy, which are aligned with its culture.
Further information is available on pages 54 to 72.
Division of responsibilities
The roles of the Chair of the Board and the Group Chief
ExecutiveOfficer (CEO) are separate, and there is an appropriate
combination of executive and independent non-executive
directors. The responsibilities of the Chair, Group CEO and SID
areset out in writing.
See pages 62 to 64 for further information.
Composition, succession and evaluation
Appointments are subject to a formal, rigorous and transparent
procedure. Succession plans, designed to promote diversity of
gender, social and ethnic backgrounds, and cognitive and personal
strengths, are in place for the Board and senior management.
TheBoard and its committees are evaluated annually, in
accordance with the Code.
Read more on pages 82 to 85.
Audit, risk management and internal control
Formal, transparent policies and procedures are in place to ensure
the independence and effectiveness of the internal and external
audit functions, the integrity of financial and narrative statements,
and to manage and mitigate risks.
Read more on pages 73 to 78.
Remuneration
Compass will be putting forward its Remuneration Policy for
shareholders to vote on at its AGM on 6 February 2025. This Policy
has been designed to support the Company’s strategy and to
promote long-term sustainable success. Executive remuneration
is aligned to the Company’s purpose and values and is clearly
linked to the delivery of long-term strategy.
Further information is available on pages 86 to 118 in the Directors’
Remuneration Report.
The Code can be found on the FRC’s website: www.frc.org.uk.
Compliance with the UK Corporate Governance Code 2018
55Compass Group PLC Annual Report 2024
Board of Directors
Appointed: September 2020.
Appointed Chair of the Board in
December 2020.
Key skills and competencies:
An experienced chair and
former CEO with a strong
background in B2B and B2C
businesses across a variety of
sectors in global organisations.
Other appointments: Chair and
a non-executive director of
Unilever PLC*.
Past appointments: Served as
non-executive chair of Rexel SA
and as chief executive of
Wolseleyplc (now Ferguson plc),
Travelex Holdings Ltd
and Alliance Unichem plc (until
its merger with Boots). Before
that held positions at Diageo plc,
Bain & Company and
Procter & Gamble, and was a
founding partner at
Kalchas Group management
consultants. Also served as a
non-executive director of O2 plc,
as SID at Centrica plc, and as
non-executive chair of The
Learning Network B.V.
Appointed: February 2012.
Previously Group CFO, Group
Chief Operating Officer (COO),
Europe, and Deputy Group CEO.
Appointed Group CEO in
January 2018.
Key skills and competencies:
Extensive financial management
experience in a number
of international businesses,
together with general
operational management
experience. Qualified
charteredaccountant.
Other appointments:
Non-executive director of
London Stock Exchange Group
plc*. Vice-chair of the Council of
University College London, and
deputy chair of the board of
trustees of FareShare.
Past appointments: Served as
anon-executive director of
Shireplc, CFO of Iglo Foods
Group Limited, and European
finance & strategy director at
Cadbury Plc, having previously
held senior finance roles at that
company. Before that, was a
director at PwC.
Appointed: December 2023.
Joined the Group in January
2020.
Key skills and competencies:
Extensive financial, operational
and portfolio transformation
experience in large multinational
businesses. Holds a BSc in
Physics from Ioannina University
and a PhD in Chemistry from
Reading University.
Other appointments: None.
Past appointments: Served as
regional finance director for
Europe and the Middle East
from January 2020 to November
2023. Prior to that worked in
fast-moving consumer goods
businesses (FMCG) including
Procter & Gamble, Reckitt
Benckiser and Coty in Europe
and North America in senior
finance, operational and
strategic roles.
Appointed: October 2021.
Joined the Group in 2001.
Appointed Group COO, North
America in December 2023.
Key skills and competencies:
Held a variety of senior finance,
strategy and legal positions and
played a central role as a
member of the executive team
in North America. Has also
coordinated many of the
acquisitions and disposals for
the Group. Holds degrees in
business and law and is a
certified public accountant.
Other appointments: None.
Past appointments: Served as
Group CFO from November
2021 to November 2023. Prior
to that was the former group
commercial director, and chief
strategy officer for Compass
Group North America. Also held
the roles of general counsel and
executive vice president of
corporate & legal affairs for the
Group’s US business.
Ian Meakins
Chair of the Board
Dominic Blakemore
Group Chief Executive Officer
(CEO)
Petros Parras
Group Chief Financial Officer
(CFO)
Palmer Brown
Group Chief Operating Officer
(COO), North America
Committee membership key
Audit Committee
Corporate Responsibility Committee
Chair
Senior Independent Director Secretary
Designated Non-Executive Director for
Workforce Engagement
Nomination Committee
Remuneration Committee
Disclosure Committee
D
Treasury Management Committee
T
Executive Committee
E
General Business Committee
G
C
C
E
G
E
G
D
C
E
C
G
T
* Listed Company
56 Corporate Governance and Directors’ Report
Appointed: July 2018.
Appointed Chair of the Audit
Committee in February 2021.
Appointed SID in July 2023.
Key skills and competencies:
Has a wealth of experience in
finance and accounting in
international organisations with
a strong focus on strategy, M&A
and governance. Qualified
chartered management
accountant.
Other appointments:
Non-executive director of
Sanofi*.
Past appointments: Served as
CFO of Smith+Nephew plc,
Merlin Entertainments PLC and
Dechra Pharmaceuticals PLC.
Prior to that held a number of
senior finance roles during her
16-year tenure at
GlaxoSmithKline.
Appointed: July 2024.
Appointed Designated
Non-Executive Director for
Workforce Engagement in
October 2024.
Key skills and competencies:
Transformative technology
executive who brings over
27years of experience in driving
digital transformation and
product innovation. Known
forher strategic insights in
disruptive technologies and
product-led growth.
Other appointments:
Independent director of
Talkspace, Inc.* and
Splashtop Inc. Also advises
start-ups through her own
consultancy firm, LBZ Advisory.
Past appointments: Served as
an independent member of the
supervisory board of Umicore, a
listed Belgian company. During
her career she has also held
senior roles in Microsoft, Philips
and Qualcomm.
Appointed: May 2016.
Key skills and competencies:
Extensive experience of working
in international environments,
particularly in the operation,
sales and marketing of
well-known consumer food and
drink brands.
Other appointments: CEO of
Imperial Brands PLC*.
Past appointments: Served as
CEO of Inchcape plc. Prior to
that, was president of
BacardiLimited’s European
region. During his career, he has
also held a number of worldwide
senior positions at Cadbury Plc,
Unilever PLC, Diageo plc,
Burger King and Procter &
Gamble.
Anne-Françoise Nesmes
Senior Independent Director
(SID)
Liat Ben-Zur
Designated Non-Executive Director
for Workforce Engagement (DNED)
Stefan Bomhard
Non-Executive Director
Appointed: September 2018.
Appointed Chair of the
Remuneration Committee in
February 2023.
Key skills and competencies:
Aseasoned executive of over
30 years, with a particular focus
on finance, operations, M&A,
strategy and portfolio
transformation.
Other appointments:
Non-executive director and
chair of Flutter Entertainment
plc*, andnon-executive director
of Coca-Cola Europacific
Partners plc* and Ball
Corporation*.
Past appointments: Served as
executive chair and CEO of
global consumer goods
company Kellogg. Prior to
joining Kellogg in 1998, held
strategic and operational roles
in several companies,
worldwide. Also a former
non-executive director of
Macy’sInc.
John Bryant
Non-Executive Director
57Compass Group PLC Annual Report 2024
Board of Directors continued
Appointed: November 2021.
Will succeed Nelson Silva as
Chair of the Corporate
Responsibility Committee at the
conclusion of the 2025 AGM.
Key skills and competencies:
Over 20 years’ executive
experience in corporate social
responsibility (CSR), finance,
strategy and sales across the
US, Europe, the Middle East
andAfrica.
Other appointments: Non-
executive director of Equitable
Holdings, Inc.* and Xenia Hotels
& Resorts, Inc.*. Financial
secretary of The Links
Foundation, Incorporated, and
amember of the advisory board
of Howard University School of
Business.
Past appointments: Served as
global head of CSR at Moody’s
Corporation, where she
developed and implemented
their global CSR strategy. Joined
Moody’s Corporation in 1998,
where she held various senior
leadership, analytical,
commercial and relationship
management roles. Prior to
joining Moody’s, served as CFO
of Equinox Realty Advisors LLC,
and before that was a portfolio
manager with MetLife Realty
Group, Inc. A former member of
the advisory board of Agbanga
Karite LLC.
Appointed: January 2022.
Key skills and competencies:
Over 20 years’ experience as an
executive in the US, operating in
highly competitive markets and
successfully growing global
consumer brands.
Other appointments: Global
CEO of Procter & Gamble’s
Fabric and Home Care business.
Past appointments: President,
Home Care and P&G
Professional with Procter &
Gamble (P&G). Since starting
his career with P&G in 1998 as a
market analyst, he has held a
number of senior leadership
roles in business intelligence,
marketing and innovation across
a variety of product lines and
market segments. Also served
as chair of the American
Cleaning Institute, and as a
member of the board of the
National Underground Railroad
Freedom Center.
Appointed: July 2015.
Appointed Chair of the
Corporate Responsibility
Committee in February 2017.
Will retire from the Board at the
conclusion of the 2025 AGM.
Key skills and competencies:
Possesses considerable
executive management
experience in a variety of senior
leadership roles within major
international companies, with
aparticular focus on Brazil.
Other appointments:
Non-executive director of Nutrien
Ltd*, and Altera Infrastructure
L.P., and an adviser to Appian
Capital Advisory LLP and HSB
Solomon Associates LLC.
Past appointments: Served as
an executive director of Petróleo
Brasileiro S.A., CEO of BG Group
in South America, non-executive
director of Cosan Limited,
managing director of Embraer
for Europe and Africa, CEO of All
Logistica in Argentina and
president of BHP Billiton’s
Aluminium business unit. Prior
to joining BHP Billiton, he held a
number of senior positions at
Vale S.A., including sales and
marketing director.
Arlene Isaacs-Lowe
Non-Executive Director
Sundar Raman
Non-Executive Director
Nelson Silva
Non-Executive Director
Committee membership key
* Listed Company
Appointed: September 2024.
Key skills and competencies: A
seasoned non-executive director
with a successful international
executive career as a
transformative leader in the
FMCG and food sectors, Juliana
brings a strong international
perspective with a passion for
the food and food services
industries, together with general
management and marketing
insights, and extensive US and
board governance experience.
Other appointments:
Non-executive director of V.F.
Corporation*, Darden
Restaurants, Inc.*, and
Masterbrand, Inc.*.
Past appointments: Served as
anon-executive director of
Caesars Entertainment, Inc.
until July 2020. Juliana is also
the former executive vice
president and chief brand
officer of Mattel and held several
senior roles in Australia and the
USA at General Mills, the global
food manufacturer.
Juliana Chugg
Non-Executive Director
Audit Committee
Corporate Responsibility Committee
Chair
Senior Independent Director Secretary
Designated Non-Executive Director for
Workforce Engagement
Nomination Committee
Remuneration Committee
Disclosure Committee
D
Treasury Management Committee
T
Executive Committee
E
General Business Committee
G
58 Corporate Governance and Directors’ Report
Appointed: May 2023.
Key skills and competencies:
Has a wealth of experience in
people and organisational
strategy and also has wider
strategic and operational
experience in global
organisations, including in the
food and beverage, retail and
technology sectors.
Other appointments:
Chief Human Resources Officer
of Vodafone Group Plc*, and
lead Vodafone non-executive
director for Vodacom Group
Limited*.
Past appointments: Served as
non-executive director and chair
of the Remuneration Committee
of The Go-Ahead Group Plc.
Prior to joining Vodafone, served
as the chief people, strategy and
corporate affairs officer for
Burberry Plc, and worked for
Diageo plc for 15 years in a
variety of roles, latterly as its
group HR director. During her
career she has also worked in
strategy and finance roles for
Allied Domecq Plc, LEK
Consulting and United Distillers.
Appointed: October 2018.
Key skills and competencies:
Asolicitor with more than
30years’ international
experience in FTSE and NYSE
listed companies across the
services, industrial and
engineering sectors, with
significant experience in
strategic M&A, crisis and
change management.
Other appointments: None.
Past appointments: Served as
chief general counsel and
company secretary of Amec
Foster Wheeler plc, company
secretary and general legal
counsel of Hays plc and
company secretary and group
legal adviser of Charter plc. Prior
to joining Charter, she held a
number of senior legal roles at
Johnson Matthey plc and was a
corporate and commercial
lawyer at Turner Kenneth
Brown.
Appointed: July 2015.
Appointed Designated
Non-Executive Director (DNED)
for Workforce Engagement in
October 2019. Stepped down
from this role in October 2024.
Will retire from the Board at the
conclusion of the 2025 AGM.
Key skills and competencies:
Has strong advisory, business
and operational experience
across a variety of retail
businesses, with a particular
focus on India.
Other appointments:
Independent director of
AsianPaints Limited*,
Maruti Suzuki India Limited*,
and UrbanClap Technologies
India Private Limited.
Non-executive director of
Diageo plc*, and a member of
the advisory board of
Russell Reynolds Associates.
Past appointments: Served as a
non-executive director of
Godrej Consumer Products
Limited, WIPRO Limited,
Housing Development Finance
Corporation Limited, Titan
Company Ltd, The Indian Hotels
Company Limited, Cipla Limited,
Tata Global Beverages Limited,
Tata Industries, Zomato Media
Private Limited, GlaxoSmithKline
Consumer Healthcare, and Axis
Bank Limited; and also as head
of marketing and sales at
Hutchinson Max Telecom, and a
partner at McKinsey & Company.
Ireena Vittal
Non-Executive Director
Leanne Wood
Non-Executive Director
Alison Yapp
Group General Counsel
andCompany Secretary
A
C
N
R
D
G
E
59Compass Group PLC Annual Report 2024
Board of Directors continued
Directors’ diversity of skills and experience
CEO
experience
Finance
Strategy and
M&A
Remuneration
Health and
safety
HR/people
Operations
Sales and
marketing
Consumer
goods
andretail
Food and
beverage
Art, culture
and charity
Sustainability
Technology/
cyber-security
Ian Meakins
Dominic Blakemore
Petros Parras
Palmer Brown
Anne-Françoise Nesmes
Liat Ben-Zur
Stefan Bomhard
John Bryant
Juliana Chugg
Arlene Isaacs-Lowe
Sundar Raman
Nelson Silva
Ireena Vittal
Leanne Wood
0-5 years 5-10 years >10
Board tenure
Chair Executive Directors Non-Executive Directors
Board balance
Scheduled Board and committee meeting attendance table*
Board
Audit
Committee
Corporate
Responsibility
Committee
Nomination
Committee
Remuneration
Committee
Ian Meakins 6/6 – 3/3 4/4 –
Dominic Blakemore 6/6 – 3/3 – –
Petros Parras
1
5/5 – 2/2 – –
Palmer Brown 6/6 – 3/3 – –
Gary Green
2
1/1 – – – –
Carol Arrowsmith
3
2/2 1/1 1/1 1/1 1/1
Anne-Françoise Nesmes 6/6 3/3 3/3 4/4 5/5
Liat Ben-Zur
4
2/2 1/1 1/1 2/2 2/2
Stefan Bomhard 6/6 3/3 3/3 4/4 5/5
John Bryant 6/6 3/3 3/3 4/4 5/5
Juliana Chugg
5
– – – – –
Arlene Isaacs-Lowe 6/6 3/3 3/3 4/4 5/5
Sundar Raman 6/6 3/3 3/3 4/4 5/5
Nelson Silva 6/6 3/3 3/3 4/4 5/5
Ireena Vittal 6/6 3/3 3/3 4/4 5/5
Leanne Wood 6/6 3/3 3/3 4/4 5/5
* In addition to the above, a number of unscheduled Board and committee meetings were held to deal with important out-of-schedule business.
1. Appointed to the Board on 1 December 2023.
2. Retired from the Board on 30 November 2023.
3. Retired from the Board on 8 February 2024.
4. Appointed to the Board on 1 July 2024.
5. Appointed to the Board on 26 September 2024.
158 1031
60 Corporate Governance and Directors’ Report
Full biographies of the members of the Executive Committee are on our website: www.compass-group.com.
Biographies of Dominic Blakemore, Petros Parras, Palmer Brown and Alison Yapp, who are also members of the Executive Committee, are on
pages 56 and 59.
Board of Directors continued
Executive Committee
Kathinka Friis-Møller
Chief Executive Officer,
Europe and the Middle East
Deborah Lee
Group Chief People Officer (CPO)
Appointed: September 2021. Joined the
Group in 2019.
Key skills and competencies:
Highly experienced in strategic leadership,
stakeholder engagement and people
management in multinational environments.
Appointed: February 2022. Joined the Group
in 2012.
Key skills and competencies:
Extensive commercial and operational
experience and significant experience in
change management.
Shelley Roberts
Group Chief Commercial Officer (CCO)
Gaétan de L’Hermite
Chief Executive Officer,
Asia Pacific
Appointed: January 2022. Joined the Group
in 2017.
Key skills and competencies:
Extensive strategic, operational and
commercial management experience,
including M&A, gained in leadership
positions within Australian and FTSE-listed
organisations in highly complex operating
environments.
Robin Mills
Chief Executive Officer,
UK & Ireland
Appointed: November 2015. Joined the
Group in 2008.
Key skills and competencies:
A respected innovator with significant
experience in people management and
business operations.
Appointed: October 2022. Joined the Group
in 2002.
Key skills and competencies:
Strong business development and
operational leadership acumen with
significant experience in market innovation
and change management.
61Compass Group PLC Annual Report 2024
Governance framework
A number of executive management committees have also been
established: Executive, General Business, Treasury Management and
Disclosure. These consider various matters for recommendation to the
Board and its principal committees, or deal with day-to-day matters
within the authority delegated by the Board.
The Executive Committee, led by the Group CEO, is responsible for
day-to-day operational management and implementation of strategy.
The General Business Committee deals with general administrative
matters on behalf of the Company within clearly defined limits
delegated by the Board.
The Treasury Management Committee oversees the implementation
of the treasury policies approved by the Board, while the Disclosure
Committee oversees the disclosure of market-sensitive information
and other public announcements (as necessary).
Board
The Board comprises the Chair, executive directors and independent non-executive directors, and their biographies can be found on
pages 56 to 59. The Board is responsible for establishing the Group’s purpose, values, strategies and objectives to generate and
preserve value over the long term for shareholders and to contribute to wider society. The Board is supported by four principal
committees (Audit, Corporate Responsibility, Nomination and Remuneration), each of which is responsible for the matters delegated by
the Board and set out in its own terms of reference which are on our website: www.compass-group.com.
See pages 73 to 78 See pages 79 to 81 See pages 82 to 85 See pages 86 to 118
Audit
Committee
Responsible for the
oversight of the Group’s
financial reporting and
the effectiveness of the
internal and external
audit functions.
Corporate
Responsibility
Committee
Responsible for the
oversight of the Group’s
corporate responsibility,
health, safety and
sustainability, ethics and
integrity and people and
other stakeholder
engagement strategies.
Nomination
Committee
Ensures the Board and
the Executive Committee
have the necessary
balance of skills,
experience and diversity
to oversee and deliver the
Group’s strategy.
Remuneration
Committee
Determines the reward
strategy for executive
directors and senior
management in the
context of the wider
workforce and ensures
reward is aligned with
shareholders’ interests.
62 Corporate Governance and Directors’ Report
Responsibilities of the Board
Leadership
The Board leads the Group’s governance structure. It provides
stewardship of the Company to safeguard its long-term sustainable
success, creating value for shareholders and enabling the Company
and its subsidiaries to contribute to the communities and wider
societies in which they operate. The Board is responsible for setting
the tone from the top by demonstrating leadership.
Purpose, values and culture
The Group’s caring, winning culture is integral to its success. It defines
Compass, what the Company stands for, and how it does business.
Compass’ reputation has been built on a firm foundation of ethical
values, underpinned by a clear and effective governance system.
This culture has helped protect and deliver the long-term value of
theCompany and supports its strategy to deliver sustainable growth.
The Board defines the purpose of the Company and the values
thatguide it. A common set of expected behaviours based on
Compass’ corporate values, and an effective system of governance,
are described in the Code of Business Conduct (CBC). These have
shaped and embedded a strong ethical and governance mindset
across the Group.
The Group CEO and other members of the executive management
team actively promote ethical standards to ensure they are
maintained, and good governance is put into practice.
Key functions such as Legal, Finance, People, Ethics and Integrity
andInternal Audit also promote and embed high standards of ethical
behaviour and corporate governance across the Group.
The Board, supported by its committees, monitors the alignment of
the Group’s caring, winning culture with its purpose, values and
strategy through a variety of mechanisms, cultural indicators and
reporting lines, including those summarised below.
Cultural indicators
Health and safety
– Total Recordable Injury Frequency Rate (TRIFR)
– Food Safety Incident Rate (FSIR)
– safety walks and outcomes
People
– results of the global employee engagement survey and
pulse surveys
– gender pay gap disclosures
– diversity, equity and inclusion (DE&I) statistics
– retention rates
Ethics and integrity
– adherence to the Code of Business Conduct and the Business
Integrity Policy
– annual confirmation of compliance and pledge in respect of
compliance with the CBC by senior managers
– SpeakUp, We’re Listening statistics and trends
Clients and suppliers
– client retention rates
– adherence to the Global Supply Chain Integrity Standards
– adherence to Supplier Code of Business Conduct
– supplier audits
Sustainability
– greenhouse gas emissions
– food waste reduction
– number of sites deploying food waste technology/frequency of use
– sustainable sourcing
Workforce engagement
The Designated Non-Executive Director for Workforce Engagement
(DNED) provides a communication channel between the Group’s
workforce and the Board to ensure that the employee voice is
represented in the boardroom. As part of a structured programme
ofengagement, the DNED holds roundtable meetings with a diverse
set of employees representing different sectors, countries and
cultures. For more details see page 66.
Governance and risk
It is the Board’s responsibility to have oversight of risk management
and to set risk appetite. A robust governance and risk management
framework ensures that each business is being operated and
managed appropriately, and that prudent and effective controls are
inplace to identify emerging risks and to mitigate and manage the
principal risks. For further information on risk management refer to
pages 23 to 28.
Group strategy
The Board’s approval, effective oversight and monitoring of the
implementation of strategy are imperative to the long-term sustainable
success of the Group. The Board considers and approves the
Group’sstrategic aims over the short, medium and long term.
Theimplementation of strategy is monitored and assessed on an
ongoing basis. Food service remains at the core of Compass’ strategy
and the global food service market continues to provide significant
growth opportunities. To ensure Compass continues to be in a position
to capture future market opportunities, the business creates
innovative, bespoke offerings tailored to the needs of clients and
consumers. More details of Compass’ business model and strategy
are on pages 1 to 53.
Engagement with stakeholders
The Board ensures that the Company continues to operate in the best
interests of its shareholders as a whole. In exercising its duty to
promote the success of the Company, the Board also has regard to
other stakeholders, the environment, the reputation of the Company
and the need to act fairly between its members. How the Company
engages with its stakeholders and how the Board has oversight of
stakeholder engagement is on pages 68 to 71. The Company’s section
172 statement is on page 68.
Management delegation and oversight
The Board delegates the delivery of strategy and day-to-day
operational management of the Group to the Executive Committee,
which is led by the Group CEO.
63Compass Group PLC Annual Report 2024
Roles in the boardroom
The Board comprises executive and non-executive directors, which ensures that no individual or small group of individuals dominates the Board’s
decision-making. All non-executive directors, except the Chair of the Board, are considered independent. The Chair wasconsidered to be
independent on appointment. The roles andresponsibilities of Board members are detailed below and demonstrate a clear division between the
roles and responsibilities ofthe Board and executive management. The role descriptions of theChair of the Board, Group CEO and SID are reviewed
annually bythe Board and are updated as necessary to reflect changes in legislation or best practice. These role descriptions were last reviewed
in September2024. It was concluded that the role descriptions in their current form continue to be fit for purpose and no changes were made.
Copies of the documents can be found on our website: www.compass-group.com.
Responsibilities of the Board continued
Senior Independent Director
Providing a sounding board for the Chair of the Board and serving as an intermediary for other directors and shareholders:
– providing the Chair of the Board with support in the delivery of objectives, where necessary
– working closely with the Nomination Committee, leading the process for the evaluation of the Chair of the Board and ensuring orderly
succession to the Chair role
– acting as an alternative contact for shareholders, providing a means of raising concerns other than with the Chair of the Board or senior
management
Group CEO and other executive directors
Leading the implementation of the Group’s strategy set by the Board:
– Group CEO: leading the Executive Committee and ensuring its effectiveness in managing the overall operations and resources of the
Group; also leading the implementation of the Group’s strategy
– Executive Directors: providing information and presentations to the Board and participating in Board discussions regarding Group
management, financial performance and operational matters
Group General Counsel and Company Secretary
Supporting the Chair of the Board and ensuring directors have access to the information they need to carry out their roles:
– providing a channel for Board and committee communications and a link between the Board and management
– advising the Board on legal and corporate governance matters and supporting the Board in applying the Code and complying with UK
listing obligations, and other statutory and regulatory requirements
Chair of the Board
Leading the Board and ensuring its overall effectiveness in discharging its duties:
– shaping the culture in the boardroom and promoting openness, challenge and debate
– setting the agenda for Board meetings, focusing on strategy, performance, value creation, risk management, culture, stakeholders and
accountability
– chairing meetings and ensuring there is timely information flow before meetings and adequate time for discussion and debate
– fostering relationships based on trust, mutual respect and open communication inside and outside the boardroom
– leading relations with major shareholders to understand their views on governance and performance against strategy
Independent Non-Executive Directors
Independent non-executive directors meeting the independence criteria as set out in the UK Corporate Governance Code comprise more
than half of Board membership:
– providing constructive challenge, giving strategic guidance, offering specialist advice and holding executive management to account
– ensuring that no individual or small group of individuals can dominate the Board’s decision-making
Designated Non-Executive Director for Workforce Engagement
Providing an effective engagement mechanism for the Board to understand the views of the workforce:
– bringing the views and experiences of the workforce into the boardroom
– enabling the Board to consider the views of the workforce in its discussions and decision-making
64 Corporate Governance and Directors’ Report
Board activities
Board agenda for 2023-2024
November February March May July September
Purpose, strategy and implementation
Group CEO’s review, including a business update covering
financial performance, health and safety performance, ESG,
people and cultural indicators, initiatives and performance
Group CFO’s report, including Group financial performance,
results and outlook, finance, treasury, tax, cyber-security
arrangements and technology developments
Group COO, North America’s report, including an update on
the North America business covering financial performance,
health and safety performance, ESG, people and cultural
indicators, initiatives and performance
M&A and disposals, contract approvals and other capital
expenditure
Strategy review including Group, regional and sector/forum
updates, post-investment reviews, and budget and
three-year plan
Stakeholder engagement and shareholder analysis
Risks
Formal biannual Major Risk Assessment process
Governance
Review of full-year results including going concern, viability
statement,final dividend and share buyback
Review of half-year results and interim dividend
Trading update
Review of 2024 AGM Notice of Meeting
Approval of corporate governance documentation
Approval of Board appointments/changes to directors‘ roles
and responsibilities
Review and approval of Board and Committee minutes
Effectiveness
Annual Board evaluation process and outturn
Annual and ad-hoc review of directors’ conflicts of interest
65Compass Group PLC Annual Report 2024
At every meeting, the Board is briefed on aspects of the Group’s strategic pillars:
People, Performance and Purpose.
People are Compass’ greatest asset. During the year, the Board and
the Nomination Committee continued their focus on developing the
Board’s blend of skills and experience. The Board also continued its
employee engagement efforts through a variety of means including
roundtable meetings and site visits.
Site visits
In March, the Board visited the Group’s business in Spain. During its
programme of activities, the Board visited two client sites in Madrid
where it met with the clients to hear about their experience of working
with Compass.
The Board also met with members of the regional leadership team
from Europe and the Middle East (EME) and the Iberia leadership
team. The EME team provided an update on the region, the second
largest in the Group, part of which included a safety moment
described by management and the year-to-date health and safety
performance metrics against the KPIs established at the start of the
financial year. The agenda also covered the strategic priorities and
growth ambitions for the region together with a deep dive on the
Group’s businesses in Spain, Germany and France led by the country
managing directors. The visit to Madrid also provided an opportunity
for the Board to meet with local management and country teams on a
more informal basis.
The May Board meeting was held in New York. The first day of the
Board’s visit was dedicated to a strategy review of the North America
business which included: growth at scale, talent recruitment,
retention and development, and an overview of its HSE and financial
performance, future ambitions, and strategic priorities and plans. This
was followed by individual strategy sessions on each of the Healthcare
& Senior Living, Business & Industry, Education and Sports & Leisure
sectors, as well as the business’ procurement company, Foodbuy, and
the use of technology and innovation to drive growth.
As part of the Board’s activities, directors visited client sites and met
with members of the North America leadership team from across all
sectors. Additionally, the Board joined a Compass Community Council
meeting which was attended by almost 2,000 Compass colleagues to
hear from the North America leadership on current performance and
recent developments and to celebrate employee long-service
achievements. This event provided the Board with an opportunity to
meet a wide range of Compass employees.
Townhalls
During the year, the Group CEO, Group CPO, and other senior
executives held townhalls and made presentations to update
employees on the Group’s strategy and performance, and on key
initiatives such as the Group’s climate net zero commitment.
Theformat of the townhalls included Q&A sessions for employees
toask questions and a proportion of the time was also allocated to
celebrating the achievements of front-line and other colleagues,
whoshared their experiences of working at Compass.
Designated Non-Executive Director for Workforce
Engagement (DNED)
The role of the DNED is to provide an effective communication
channel between the Group’s workforce and the Board to ensure
thatthe employee voice is represented in the boardroom.
People
14 March 2024 Group 1:
UK
Australia
India
UK
14 March 2024 Group 2:
Northern
Europe
USA
UK
21 August 2024 Group 1:
USA
AustraliaHong Kong Germany
21 August 2024 Group 2:
DNED roundtables in 2024
During the year under review, DNED Ireena Vittal held four roundtable
meetings with employees from a variety of sectors, businesses and
geographies across the Group as part of a structured programme of
engagement designed and supported by the Group CPO. These
roundtables provided the DNED with opportunities to hear directly
from employees in an open environment, which in turn enabled the
Board to better understand the differing views of our people.
Participating colleagues valued the opportunity to share experiences
and learn from each other. They particularly appreciated the open,
intimate structure of the sessions and the freedom to explore a variety
of topics that are important to them. The feedback from these
roundtables was combined with the output from the Group’s wider
engagement activities and reported to the Corporate Responsibility
Committee. The main themes discussed in the roundtables included:
colleagues’ support for and interest in the development programmes
and other initiatives to grow and develop internal talent; the positive
caring, winning culture within Compass; the benefits of moving talent
around the Group; and the deployment of technology to support
unitmanagers.
Two further employee roundtables were held in the year hosted by
Non-Executive Director and incoming DNED Liat Ben-Zur. These
sessions were held with employees from seven countries across the
Group (Australia, Denmark, Germany, India, Sweden, UK and the US)
and focused on people matters including: diversity, inclusion and
development; training and reward; digital technologies and artificial
intelligence; and culture.
Feedback from employee roundtables, and output from the wider
engagement activities, enable the Board to understand what matters
to employees, and the ongoing engagement activities have provided
invaluable employee insight and helped inform the Board’s
discussions and decision-making during the year. More information on
our people initiatives can be found on pages 30 to 33.
Board activities continued
The flags above indicate the countries represented by employee attendees.
66 Corporate Governance and Directors’ Report
At every meeting, the Board is briefed by the Group CEO on Purpose
matters including up-to-date performance data on the Group’s
workplace health and safety and food safety metrics against the
established limits set at the beginning of the year. It is also briefed on
the progress being made on the Group’s sustainability agenda,
including climate change and social initiatives.
During the year, the Corporate Responsibility Committee continued to
monitor the food waste tracking technology which has been rolled out
to operations across the Group. Reduction of food waste is one of the
key environmental challenges in our sector and one where we have
the greatest potential to make a significant impact. Further
information about our food waste reduction initiatives can be found on
page 38.
In February, the Chair of the Board, together with the Group CEO,
Group CFO, SID and Committee Chairs attended the 2024 AGM with
the other non-executive directors participating online. The AGM is an
important annual event in the Board’s calendar where the directors
hear directly from shareholders, answer their questions and meet with
them on a more informal basis after the meeting. At the 2024 AGM,
shareholders asked questions about a wide range of topics, including
Compass’ plans to achieve climate net zero by 2050, how we intend to
continue to attract, retain and grow talent, our M&A and disposal
strategy, and the potential impact of the UK and US elections on the
Group. In addition to the AGM, the Group CEO, Group CFO, other
directors and senior managers also met regularly with investors as part
of the Group’s investor engagement programme. The Remuneration
Committee Chair also engaged extensively with investors, with a focus
on the new Remuneration Policy that will be put to shareholders for
approval at the 2025 AGM. Details of that engagement process can be
found in the Directors’ Remuneration Report on pages 86 to 118.
During the year, the Board considered and approved the Company’s
Modern Slavery Act (MSA) statement which provides an update on the
progress made in the last year to further develop Compass’ approach
to mitigating the risks of modern slavery in the Group’s businesses and
their supply chains.
The 2023 MSA statement can be found on our website:
www.compass-group.com. The 2024 MSA statement will be published
on our website in December 2024.
For further information on the above, see the Purpose section on
pages 34 to 40.
Purpose
Throughout the year, the Board monitored the Group’s performance
against the strategic framework and priorities, including M&A, global
trends, and risks and opportunities. To assist it, the Board received
regular reports from the Group CEO, Group CFO, Group COO,
NorthAmerica, and presentations from each of the Group’s regional
CEOs on regional performance. It also received updates from key
functional heads, e.g. Legal, Tax, Treasury, Information Systems and
Technology, and People on matters that could have an impact on the
Group’s financial or operational performance.
At every meeting, the Board receives a report from the Group CEO
onprogress against the Group’s strategy, and from the Group CFO,
setting out the financial performance of the regions and the Group
inthe latest period and for the year to date.
The Board considers the key financial performance metrics, including
revenue, organic revenue growth, operating profit and margin,
operating cash flow and cash flow conversion. It also regularly reviews
the financial outlook of the Group.
The Group CFO’s report also provides the Board with updates on tax
and treasury matters, cyber-security arrangements and technology
developments.
In addition, the Group COO, North America regularly updates the
Board on performance and recent developments in North America,
Compass’ largest market.
The Board also receives annual business updates from the regional
management teams as part of the regional strategy reviews.
Twice a year, the Board reviews the major financial and non-financial
risks facing the Group’s businesses, including any new and emerging
risks, and agrees the Group’s principal risks at the half and full year.
Italso considers the identification of risks and opportunities, the
development of action plans to manage risks and maximise
opportunities, and the continual monitoring of progress against
agreedKey Performance Indicators. The Board has also established
processes for identifying emerging risks and horizon scanning for risks
that may arise over the medium to long term. The Group’s emerging
and principal risks, and how these are managed, are set out on pages
23 to 28.
In September, the Board reviewed the Group’s preliminary budget for
the financial year ending 2025 and the three-year plan for 2025-2027.
The budget and the three-year plan were both approved in
September2024.
During the year, the Board evaluated the strategic rationale for the
acquisitions of CH&CO and HOFMANN
s
by the Group’s UK and
German businesses respectively.
The Board approved both transactions, concluding that they were in
line with the Group’s strategy and capital allocation model and would
further strengthen the Group’s capabilities.
More details can be found on page 72.
Performance
Board activities continued 67Compass Group PLC Annual Report 2024
Section 172 and stakeholder engagement
Section 172 of the Companies Act 2006 requires the directors to
promote the success of the Company for the benefit of the members
as a whole, having regard to the interests of stakeholders in their
decision-making. In making decisions, the directors consider what is
most likely to promote the success of the Company for its
shareholders in the long term, while having regard to the interests of
the Group’s other stakeholders. The directors understand the
importance of taking into account the views of stakeholders and the
impact of the Company’s activities on local communities, the
environment, including climate change, and the Group’s reputation.
The table below sets out the areas of this Report which demonstrate
how the directors have had regard to their section 172 responsibilities.
Section 172 disclosure Page
(a) the likely consequences of any decision in the long term
Strategic Report 1 to 53
Consideration of stakeholder interests 72
(b) the interests of the company’s employees
Chief Executive’s review 10
Strategic framework and our business model 3 to 6
Stakeholder engagement 68 to 71
People 30 to 33
Consideration of stakeholder interests 72
Remuneration Committee Report 86 to 118
Ethics and integrity 13 and 14
(c) the need to foster the company’s business
relationships withsuppliers, customers and others
Strategic Report 1 to 53
Stakeholder engagement 68 to 71
Consideration of stakeholder interests 72
(d) the impact of the company’s operations
on the community and the environment
Strategic Report 1 to 53
Stakeholder engagement 68 to 71
TCFD disclosures 41 to 52
Consideration of stakeholder interests 72
Purpose 34 to 40
(e) the desirability of the company maintaining
a reputation for high standards of business conduct
Risk management 23 to 28
Consideration of stakeholder interests 72
Audit Committee Report 73 to 78
Ethics and integrity 13 and 14
Safety 12
(f) the need to act fairly as between members of the company
Strategic Report 1 to 53
Stakeholder engagement 68 to 71, 89, 95 and 99
Consideration of stakeholder interests 72
Remuneration Committee Report 86 to 118
The above statement on section 172 of the Companies Act 2006
isincorporated by reference into the Strategic Report on pages
1to53.
Compass is a geographically and culturally diverse business with
operations in around 30 countries. As a result, it has a global and
diverse community of stakeholders, each with their own interests in,
and expectations of, the Company.
As set out in the Strategic Report, we have a decentralised structure
enabling the development of strategies on a country-by-country and
sector-by-sector basis for which country management are responsible
and accountable. The Board’s role is therefore to provide a framework
that gives the Group’s businesses the freedom and flexibility to make
decisions, pursue opportunities, and manage risks.
Responsibility for the day-to-day operational management and
implementation of Group strategy has been delegated to the Group
Executive Committee, led by the Group CEO.
To enable the effective day-to-day running of the Group’s businesses,
the country managing directors and local leadership teams are
responsible for local strategy, execution and compliance, in alignment
with Group values, governance and standards. Depending on the
region, an additional layer of regional and functional leadership may
be present. As a result, stakeholder engagement primarily takes place
at a local operational level, and the Board relies on local
managementto keep it informed of the impact of the Group’s
operations on its stakeholders.
During the year, the Board and the Corporate Responsibility
Committee considered information from across the Group’s
businesses and received presentations from management. This
enabled the Board to consider the likely consequences of decisions
over the long term and, where relevant, the impact on stakeholders
and the environment. Examples of decisions made during the year,
and the stakeholders impacted, are on page 72.
A summary and examples of how Compass engages with its
stakeholders, and how the Board is involved and kept
informed of stakeholder engagement,follow.
68 Corporate Governance and Directors’ Report
Why we engage Areas of focus Engagement in the year How the Board has oversight Outcomes and actions
Our people are at the
heart of our growth
strategy.
Understanding their
needs and motivations
helps drive
performance and
enables us to make
Compass a fair and
inclusive place to work
for all, regardless of
background.
– attraction and
retention of talent
– career opportunities
and development
– health and wellbeing
– supporting diverse
talent
– building a caring,
winning culture
– executive
remuneration
– engagement surveys
– roundtables
– sector/functional
forums
– Group executive,
regional and local
management
townhall meetings/
presentations
– engagement
between investors
and the Chair of the
Remuneration
Committee
– SpeakUp, We’re
Listening reports
– internal social media
channels
– consultative bodies
– Be the Difference
conference in the US
The Board receives
regular updates through
the Corporate
Responsibility
Committee on people
matters and initiatives.
The Designated
Non-Executive Director
for Workforce
Engagement (DNED)
engages directly with
colleagues from across
the Group to understand
their views and to hear
directly from employees
about the issues most
relevant to them. The
DNED reports feedback
from these sessions to
the Board.
Engagement with
colleagues highlighted
the need for continued
focus on talent
recruitment and
retention, including
more efficient
onboarding and
improved visibility of
development
opportunities.
The UK&I business
launched Xcelerate, a
state-of-the-art regional
skills and learning
centre for hospitality
and community
engagement.
Colleague wellbeing is
important, and functional
and sector forums help
identify focus areas and
share best practices,
such as the launch of a
maternity uniform
through the Women in
Food network.
People
Clients
Why we engage Areas of focus Engagement in the year How the Board has oversight Outcomes and actions
We engage with our
clients so we can better
understand what is
important to them, and
where appropriate
create tailored solutions
to meet their needs. We
do this through
quarterly business
reviews, analysing their
external messaging and
engagement with
surveys.
– clean and safe
environments
– technology solutions
– DE&I
– sustainability
– cost-effective, quality
food solutions
– client employee
engagement
– conducted external
research to influence
engagement
– created bespoke
strategies
– hosted global events
(e.g. Chef
Appreciation Week
and Stop Food Waste
Day)
The Board is informed of
performance through our
regional CEOs who
provide an overview of
their operations. From
these reports and those
of the Group CEO and
Group CCO, the Board is
able to form a view of
clients’ experience of
Compass and to adjust
strategy accordingly.
Our ability to
understand and
anticipate what clients
want and to tailor our
solutions for both
existing and new clients
means that we are
better able to win bids
and maintain high
client retention rates.
Suppliers
Why we engage Areas of focus Engagement in the year How the Board has oversight Outcomes and actions
We work with our
suppliers to ensure a
cooperative, resilient
and sustainable supply
chain.
– supply chain integrity
– health and safety
– environmental impact
– inflation
– allergens/nutrition
– ethics and human
rights
– consistent dialogue
– surveys
– annual meetings/
conferences
– collaboration to
achieve
sustainability
commitments
– roundtable
participation with
ethical suppliers
– supply chain
integrity
– third-party audits
The Board is kept
informed of supply chain
initiatives through the
Corporate Responsibility
Committee, which
receives reports from the
Group CCO, the
Sustainability team, the
Group CPO and the
Group Head of E&I,
including work to identify
and mitigate modern
slavery in the Group’s
businesses and their
supply chains.
By collaborating
consistently and closely
with suppliers, our
businesses build
longstanding and
trusting partnerships
which can improve
product quality,
reducecosts,
enhancereliability,
drive innovation and
mitigate risks.
69Compass Group PLC Annual Report 2024
Section 172 and stakeholder engagement continued
Shareholders
Why we engage Areas of focus Engagement in the year How the Board has oversight Outcomes and actions
Our philosophy is to
engage in regular,
open and transparent
dialogue with existing
and prospective
shareholders. Their
views and opinions are
shared with and valued
by the Board, which
reviews the feedback
and, where
appropriate, takes
action to address any
concerns.
– financial performance
– competitive
positioning
– strategy and outlook
– ethical business
practices and sound
governance
– leadership and
succession planning
– debt and liquidity
– sustainability and ESG
– executive
remuneration and the
2025 Remuneration
Policy
– the Group CEO,
Group CFO and IR
team meet regularly
with institutional
investors
– one-to-one and
group meetings,
webcasts,
presentations and
conference calls
– half- and full-year
meetings with
representatives from
institutional investors
– meetings/
communications
with major
institutional investors
on the 2025
Remuneration Policy
– virtual investor
procurement deep
dive
– 2023 Annual Report
– 2024 AGM
– regulatory
announcements
The Chair of the Board
ensures dialogue is
maintained and
Committee Chairs are
available to engage on
their areas of
responsibility.
Non-executive directors
also develop a view of
investor sentiment
through updates from IR,
the Group Director of
Reward, and the Group
General Counsel and
Company Secretary, who
acts as a focal point for
shareholders throughout
the year.
Our AGM also provides a
valuable opportunity for
directors to engage
directly with
shareholders.
The Board considered
investor views on
shareholder returns
when approving the
dividends and share
buybacks during the
year.
In addition, the
Remuneration
Committee Chair led an
extensive consultation
exercise with
shareholders, which
has informed the
development of the
2025 Remuneration
Policy to be put to
shareholders for
approval at the 2025
AGM.
Governments and regulators
Why we engage Areas of focus Engagement in the year How the Board has oversight Outcomes and actions
Ongoing engagement
with governments and
regulators is carried out
with those who have
responsibility for
implementing policy,
and laws and
regulations relevant to
our business.
– consumer health and
public health policies
– food safety
– workplace health
andsafety
– human rights
– climate change
– legal and regulatory
compliance
– public sector
procurement
– government buying
standards for food and
catering services
– school meals
– social value
– net zero
– the UK&I business
engaged with
multiple UK
government
departments,
including the
Cabinet Office and
DEFRA. Topics
included food-waste
reporting and
nutritional standards
in the public sector
– UK&I CEO’s
membership of the
UK Government’s
Food and Drink
Sector Council
The Group General
Counsel and Company
Secretary, Head of Group
Tax, and other subject
matter experts regularly
update the Board and its
committees on
regulatory developments
affecting the Group and
its businesses.
The Board receives
updates from the
regional CEOs and
country managing
directors on relevant
developments in their
businesses.
Ongoing engagement
with governments and
participation in relevant
consultations.
70 Corporate Governance and Directors’ Report
Communities
Why we engage Areas of focus Engagement in the year How the Board has oversight Outcomes and actions
We engage with the
communities in which
we operate to build
trust locally and to
provide training
opportunities, careers
and support to local
people.
We do this through
partnering with local
organisations such as
charities, food recovery
networks and
employment
programmes.
– fair employment and
equal opportunities
– support for local
causes and issues
– The Compass Group
Foundation
– local farms
– women and
minorities
– veterans
The Board receives
updates on community
engagement through the
Corporate Responsibility
Committee, which is
updated by the Group
CCO and Group
Sustainability team, and
through presentations
given to the Board by
country and regional
teams.
The Compass Group
Foundation supports
multiple charities
around the world.
During the year, the
Foundation provided
grants to several
organisations that
support the Charity’s
aims. For example, in
the US this included
Cakeable, Hot Bread
Kitchen and Emma’s
Torch, all of which help
disadvantaged
individuals build
careers in the food
industry.
Non-governmental organisations
Why we engage Areas of focus Engagement in the year How the Board has oversight Outcomes and actions
We engage with
non-governmental
organisations (NGOs)
to help us to develop
action plans that have
positive impacts on
social, environmental
and economic issues.
– environmental issues
(e.g. food waste,
climate, deforestation)
– human rights
– animal rights
– social justice
– regular engagement
including meetings,
conferences and
communications
– partnerships with
NGOs to tackle food
and set plastic waste
reduction goals
– engagement in
thought leadership
workstreams and
roundtables
– ongoing dialogue
with NGOs on animal
welfare goals
The Board receives
updates on engagement
with NGOs through the
Corporate Responsibility
Committee. The CRC
receives reports from the
Group CCO, the Group
Sustainability team and
the Group Director for
Employment, Equity and
Social Impact on key
areas of focus.
Working closely with
NGOs provides insights
that help us to develop
action plans that have
positive impacts on
social, environmental
and economic issues.
Consumers
Why we engage Areas of focus Engagement in the year How the Board has oversight Outcomes and actions
We engage with our
consumers to better
understand changes in
consumer demand and
trends so that we can
adjust our offers
accordingly. This
ensures that our
offering continues to
excite and engage
consumers.
– technology solutions
to ensure ease of
payment and efficient
service
– offerings that highlight
wellness and
sustainability
– hosted global events
(Chef Appreciation
Week and Stop Food
Waste Day)
– sustainable menus
(climate-friendly,
locally-sourced,
diverse suppliers)
– wellness offerings
– external research to
influence
engagement
– interactive cooking
demonstrations
– front-line
engagement
The Board receives
updates from sector
leaders on developments
in consumer food trends.
Our innovative offerings
receive high customer
satisfaction scores and
increase levels of
participation.
External research helps
us to pivot our offer to
satisfy consumer
trends.
Our global events, such
as Stop Food Waste
Day and Chef
Appreciation Week,
create excitement
throughout the year,
which increases footfall
at our venues.
71Compass Group PLC Annual Report 2024
Consideration of stakeholder interests during the year
The examples below give an insight into how the Board had regard
forthe interests of stakeholders in its decision-making processes
during the year.
Key decisions
Shareholder returns
The Board recognises the importance of shareholder returns and,
during the year, rewarded shareholders by recommending an
increased final dividend of 28.1 pence per share for the financial year
ended 30 September 2023, and approving an increased interim
dividend of 20.7 cents (16.2 pence) per share for the financial year
ended 30 September 2024. The Board also approved a share buyback
of up to $500 million in the year under review.
In its deliberations, the Board considered the Group’s growth
prospects and its strong financial performance in the 2023 financial
year and in the first six months of the 2024 financial year, including its
cash position and distributable reserves, together with its stated
dividend policy and capital allocation model, as set out on pages 5 and
19. The Board also considered shareholders’ views and the impact of
the dividend payments and share buybacks on the Group’s UK
defined benefit pension scheme. The Board concluded that approval
of the dividends and the share buybacks were in the best interests of
the Company and its shareholders as a whole and that there was no
material impact on the UK defined benefit pension scheme
considering its current surplus.
The Board also considered and approved the proposed resolutions to
be put to shareholders at the 2024 AGM, which included the payment
of the final dividend for the year ended 30 September 2023 together
with the approval of the Company’s authority to purchase its own
shares. Each of the proposed resolutions was approved by
shareholders at the 2024 AGM.
Stakeholders impacted:
Shareholders People
Bond issuance
During the year, approval was sought from the Board to issue term
debt to finance M&A activity and maintain the Group’s liquidity
headroom.
In its deliberations, the Board considered the maturity profiles of
existing term debt issues together with the status of M&A activity,
including timing considerations and pricing options.
The Board approved in principle the recommendation to issue term
debt and delegated authority to a committee of the Board to finalise all
aspects of the proposed debt issuance.
Ultimately, this resulted in the issuance of a fixed-rate sustainable
bond of €750 million ($806 million) maturing in 2031 and a fixed-rate
sustainable bond of €500 million ($557 million) maturing in 2033,
pursuant to the Company’s Sustainable Financing Framework.
The proceeds of the bond issue will be used in line with the Group’s
Sustainable Financing Framework on projects that will enhance
responsible sourcing, products purchased from local and diverse
suppliers, and other sustainable expenditure which supports
decarbonisation within the Group’s value chain.
Stakeholders impacted:
Clients Suppliers Shareholders
Acquisitions
CH&CO
The Board considered a proposal to acquire CH&CO, a leading
catering group offering premium contract and hospitality services
across the UK and Ireland.
The Board evaluated the strategic rationale for the acquisition,
including potential synergies and expected financial returns, and
determined that the acquisition would add further capabilities and
scale to the UK&I’s existing business. This would enhance Compass
Group’s footprint in the UK and Ireland and provide a platform for
potential accelerated growth and margin progression.
HOFMANN
s
The Board also considered a proposal to acquire HOFMANN
s
, a
German producer of high-quality cook-and-freeze meals.
The Board evaluated the strategic rationale for the acquisition, and
noted the potential synergies and financial returns, key risks and
mitigations, together with integration considerations.
The acquisition would add new capabilities and distribution channels
to the Group’s German business, and the Board noted the potential
foraccelerated growth and margin progression. The acquisition
wouldalso differentiate Compass from its competitors by bringing
further capabilities and scale to the German business. The Board
alsoreviewed the key transaction and integration risks together
withthe mitigations designed to ensure a successful execution of
theacquisition.
The Board approved both transactions, concluding that they were in
line with the Group’s strategy and capital allocation model and would
further accelerate growth and enhance shareholder returns.
Stakeholders impacted:
Shareholders Suppliers Clients
Consumers People
72 Corporate Governance and Directors’ Report
Audit Committee Report
Committee responsibilities
The Audit Committee is responsible for monitoring the integrity
of the Group and Company’s published financial statements
and related disclosures; and for assessing formal
announcements concerning the Group’s financial reporting
matters, as well as key accounting and audit judgements
related to the preparation of the Group and Company’s financial
statements. Other responsibilities include:
– reviewing the adequacy and effectiveness of the risk
management and internal control systems, including the
Group’s key internal controls over financial reporting and the
IT controls framework, and providing assurance to the Board
– reviewing the going concern and viability statements
– monitoring and reviewing the role, mandate and
effectiveness of the Group’s Internal Audit function
– managing the selection, appointment, independence,
effectiveness and remuneration of the Group’s external
auditor, including compliance with the Non-Audit
ServicesPolicy
– reviewing arrangements for the Group’s workforce and other
stakeholders to raise concerns in confidence about possible
improprieties in financial reporting or other matters (via
SpeakUp, We’re Listening), and ensuring that they are
investigated
– advising the Board on how it has discharged its
responsibilities and considering whether the Annual Report
and Accounts, taken as a whole, is fair, balanced and
understandable, and providing assurance to the Board
The Committee’s full terms of reference are on our website:
www.compass-group.com.
Governance
Anne-Françoise Nesmes was appointed Chair of the Audit Committee
in February 2021. She is a chartered management accountant and is
considered by the Board to have recent and relevant financial
experience and to be competent in auditing and accounting.
Committee membership comprises the Chair of the Committee and all
the non-executive directors (other than the Chair of the Board).
Committee members have appropriate financial and commercial
experience in multinational and/or complex organisations, combined
with a sound understanding of the Company’s business, and are
therefore considered by the Board to be competent in the Company’s
sector. The expertise and experience of the Committee members’ can
be found in the biographies on pages 57 to 59. The Board considers
each Committee member to be independent in accordance with the
UK Corporate Governance Code 2018 (the Code) and capable of
assessing the work of management, the assurances provided by the
Internal Audit function and the external auditor, and the effectiveness
of the risk management and internal control systems.
The Committee held three meetings during the year. The attendance
table is on page 60. The Committee Chair engages regularly with key
individuals involved with the Company’s governance. The Chair also
has regular contact with the external Senior Statutory Audit Partner
and attends the AGM virtually or in person to respond to questions on
the Committee’s activities.
Only members of the Committee have the right to attend its meetings.
However, typically the Chair of the Board, Group CEO, Group CFO,
Group Financial Controller, Head of Group Tax and Director of Risk
and Internal Audit together with the external auditors attend
Committee meetings. The Group General Counsel and Company
Secretary, who acts as Secretary to the Committee, attends all
meetings. Other members of senior management are invited to
present reports that are needed for the Committee to discharge its
duties. The Committee holds regular private discussions with
Committee members and also meets separately with the external
auditor and the Group Director of Risk and Internal Audit without
executive management and other invitees present. The Committee
Chair also meets separately with the Head of Group Tax and the Head
of Group Treasury.
The Committee is authorised to seek external legal and independent
professional advice as it sees fit.
The Committee has an annual agenda aligned to its terms of reference
and key events in the Company’s financial calendar. Itprovides
flexibility to include additional topics of particular importance so as to
allow the Committee to respond to emerging issues.
Anne-Françoise
Nesmes
Chair of the
Audit Committee
73Compass Group PLC Annual Report 2024
During the year, the Committee reviewed the interim and annual financial statements and considered the following:
Financial reporting and accounting matters
Fair, balanced and understandable
Whether the description of the performance of the Group in the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable
and provides the information necessary for shareholders to assess the Company’s position and performance, business model and strategy.
Risk management and internal controls
The adequacy and effectiveness of risk management and internal control systems (including financial controls, cyber-security risk and the
implementation of ERP systems).
Clarity of disclosures and compliance
The clarity of disclosures and compliance with financial reporting standards and relevant financial and governance reporting requirements and
guidelines, including in relation to Alternative Performance Measures.
Accounting policies
The accounting policies adopted in the Group’s financial statements, any proposed changes to them and the adequacy of their disclosure.
Significant transactions, accounting matters, and key judgements and estimates
The significant transactions, accounting matters, and key judgements and estimates used in preparing the 2024 Annual Report and Accounts
and the interim financial statements, and in particular management’s assumptions underpinning the going concern and viability statements.
TCFD disclosures
The Company’s disclosure in the Strategic Report on the Task Force on Climate-related Financial Disclosures (TCFD) reporting requirements,
and related disclosures in the financial statements.
Non-financial Key Performance Indicators
Non-financial data points which help investors to develop a deeper understanding of Compass’ business and to assess the Group’s progress and
performance against its strategy.
Governance reforms
Consideration of the Financial Reporting Council’s (FRC) revised UK Corporate Governance Code published in January 2024.
In discharging its responsibilities relating to the financial statements for the financial year ended 30 September 2024, the Committee reviewed the
following and concluded that such judgements and estimations were appropriate:
Areas of significant accounting judgement and estimation Page
Carrying value of goodwill
The Group undertakes a formal goodwill impairment exercise for its cash-generating units (CGUs) at least once a year in
accordance with IAS 36 Impairment of Assets, based on the most recent approved budget and financial plan. The Committee
received and discussed reports from the Group Financial Controller on the methodology and the basis of the assumptions used.
In 2024, the headroom in the UK CGUs was an area of particular focus. The Committee noted that the UK CGU is sensitive to
reasonably possible changes in key assumptions. The Committee reviewed the goodwill impairment assessment disclosures
and concluded that these were acceptable. 158 to 160
Tax
The Group operates in multiple tax jurisdictions and is subject to the rules of their various taxation authorities. Due to the
complexity and changing nature of tax rules and transfer pricing across multiple tax jurisdictions, a degree of judgement is
required in determining levels of tax recognised in the financial statements. The Committee received briefings and
discussedreports from the Head of Group Tax on the potential liabilities identified, levels of provisioning and the basis of
theassumptions used. 153 to 156
Acquisition accounting
The valuation of assets on acquisition requires judgement. Estimation is required in determining the future cash flows and
discount rates used to value these assets. The Committee received and discussed reports from the Group Financial Controller
on the methodology and the basis of the assumptions used. 198 to 201
Strategic portfolio review
The Group has continued its strategic portfolio review to allow the focus of its resources on its core operations, which in the year
resulted in the exit from several countries and the decision to discontinue the implementation and roll out of the Europe
cross-market ERP programme. The Committee received reports from management on overall disposal accounting and the
timing and de-recognition and impairment of assets (including head office computer software assets). 150 and 201
Post-employment benefits
The Group’s defined benefit pension schemes are assessed half-yearly in accordance with IAS 19 Employee Benefits. The present
value of the defined benefit liabilities is based on assumptions determined following independent actuarial advice. The Committee
received reports from the Group Financial Controller on the methodology and the basis of the assumptions used. 185 to 192
Presentation currency
From 1 October 2023, the Group’s presentation currency changed from sterling to US dollars to provide greater transparency of
the Group’s performance and to reduce foreign exchange volatility. The Committee noted that at the 2023 financial year end
and 2024 half year, all amounts for prior periods had been restated in US dollars. 144
Going concern and viability
The Committee received reports from the Group Financial Controller on the methodology and the basis of the assumptions used
in assessing going concern and viability. Having reviewed liquidity and compliance with debt covenants through the year, for
half-year and full-year reporting, the Committee reviewed the going concern and viability assumptions, including consideration
of a range of severe but plausible events that could have an impact on the Group’s viability and going concern outlook. 29 and 145
Audit Committee Report continued74 Corporate Governance and Directors’ Report
Fair, balanced and understandable Annual Report
and Accounts
The Code provides that the Board should provide a fair, balanced and
understandable assessment of the Company’s position and prospects
in its Annual Report and Accounts. At the Board’s request, the
Committee has reviewed the 2024 Annual Report and Accounts to
determine whether it considers the Annual Report and Accounts,
taken as a whole, meets this standard and provides the information
necessary for shareholders to assess the Company’s position and
performance, business model and strategy. The Committee has
concluded that this requirement has been met.
Throughout the Annual Report and Accounts, performance during the
year is presented against a mix of financial and non-financial KPIs,
which the Board and executive management consider best reflect
theCompany’s strategic priorities. The Committee has considered
these KPIs and is satisfied that the information that has been selected
by theBoard and executive management will help to convey an
understanding of the performance and the culture of the business,
and the drivers which contribute to its success, and will be of
interestto stakeholders.
Risk management and internal controls
The Committee is responsible for reviewing the Company’s internal
financial controls and internal control and risk management systems.
During the year, the Committee:
– received and discussed regular reports summarising: the Group’s
risk management activities; the identification of any changes to
theprincipal risks including the reduced risk exposure in certain
areas including political instability, economic volatility, employee
welfare (particularly foreign migrant labour risks) and international
tax following the Group’s exit from a number of countries deemed
both higher-risk and non-core to long-term business objectives;
emerging risks such as the continued development of generative
artificial intelligence (AI), and the actions taken to mitigate
theserisks
– reviewed the findings from internal audits and status of resultant
actions agreed with management
– monitored delivery of the internal audit plan, and reviewed and
approved the internal audit plan for 2025-2027
– reviewed the resources, terms of reference and effectiveness of the
Internal Audit and Risk Management function
– reviewed and approved the Group Risk Management Policy
– reviewed arrangements for the Group’s workforce/stakeholders to
raise concerns in confidence about possible improprieties in
financial reporting or other matters (via SpeakUp, We’re Listening)
– received an update from the Group Head of Ethics and Integrity
(E&I) on the business integrity risk profile and the effectiveness of
the SpeakUp, We’re Listening programme
– received a report from the Group Director of Risk and Internal Audit
in relation to theft and fraud
– received regular reports from the Head of Group Tax on tax policies,
uncertain tax positions, and tax audits and enquiries
– received reports from the Group Financial Controller on Certificates
of Assurance and on compliance with the key internal controls over
financial reporting
– received updates on the activities of the Regional Governance
Committees
– received updates in relation to cyber-security arrangements
– received updates in relation to the implementation of ERP systems
in Europe and North America
The Audit Committee reviews the integrity of any material
financial statements made by the Company. It monitors and conducts
a robust review of the effectiveness of the Group’s internal control
systems, accounting policies and practices and certain compliance
controls (including key controls over financial reporting), as well as the
Company’s statements on internal control, before they are agreed by
the Board for inclusion in the Annual Report and Accounts.
In accordance with the guidance set out in the FRC’s Guidance
on Risk Management, Internal Control and Related Financial and
Business Reporting 2014, and in the Corporate Governance Code,
theGroup has established a risk management framework. This has
been in place for the full financial year and up to the date on which
thefinancial statements were approved. The framework is designed
tomanage rather than eliminate the risk of failure to achieve the
Group’s strategic objectives, to safeguard the Group’s assets against
material loss, to fairly report the Group’s performance and position,
and to ensure compliance with relevant legislation and regulation
including that related to social, environmental and ethical matters.
The framework provides reasonable, but not absolute, assurance
against material misstatement or loss. Further details of the Group’s
risk management framework and principal risks are set out on pages
23 to 28.
The Audit Committee is responsible for reviewing the risk
management framework. As part of this process, Group companies
submit biannual Certificates of Assurance to the Group CFO on
internal control and risk management matters. The Group Financial
Controller summarises these submissions for the Audit Committee,
and the Chairof the Audit Committee reports to the Board on any
matters thathave arisen from the Committee’s review of the way in
which riskmanagement and internal control processes have been
applied. The Committee annually reviews and considers the
effectiveness of Compass’ approach to risk management and
any changes to the riskpolicy.
Management have defined a set of key internal controls over financial
reporting which must be complied with by all countries. These key
internal controls over financial reporting (KFCs) are regularly reviewed
by the Group Financial Control team to ensure compliance with best
practice, regulations and standards, and the Committee was briefed
on the work undertaken to further enhance the Group’s KFCs.
Compliance with the KFCs is tested by Group Internal Audit
annuallyfor the Group’s largest countries and on a rotational basis
forother countries, and the results are reported to the Committee.
TheCommittee received details of the testing and assessments that
had been undertaken and these did not identify any areas of
non-compliance that could have a reasonable possibility of resulting
ina material error or misstatement of the Group’s consolidated
financial statements.
The Committee and the Board remain satisfied that the Company’s
risk management framework continues to operate effectively and
provides the necessary flexibility without compromising the integrity
ofthe risk management and internal control systems.
75Compass Group PLC Annual Report 2024
Audit Committee Report continued
Whistleblowing, anti-bribery and fraud
The Audit Committee receives updates on any allegations of theft or
fraud in the businesses, with individual updates being given to the
Committee, as needed, in more serious cases. The Group’s Business
Integrity Policy (BIP) and Code of Business Conduct (CBC) strictly
prohibit any involvement in theft or fraudulent activities whatsoever.
The BIP sets out the expectations for risk-assessing, and reporting and
documenting any fraud in accordance with local requirements and the
Speak and Listen Up Policy. It also sets out how allegations and
incidents are to be followed up, such as through investigations
conducted by the Internal Audit, E&I or Legal teams. Fraud and theft
reports are consolidated at Group level, and feed into the regular
updates presented to the Committee.
The Corporate Responsibility Committee oversees the continued
development of the Group’s overall E&I programme, the training of
employees on key business integrity risk areas and the way in which
management obtains assurance in this area, including the annual
self-certification process via the annual E&I pledge and declaration.
More information on the CBC, and the SpeakUp, We’re Listening
programme, is set out on pages 13 and 14.
The CBC is available on the Company’s website:
www.compass-group.com/en/who-we-are/ethics-and-
integrity.html.
Data privacy
In May 2024, the Committee received an update from the Group Head
of E&I on the Group’s Data Privacy Policy and Data Privacy
Programme Framework, which had been revised to adopt a more
principles-based approach to reflect the differing privacy regimes and
local laws around the world. The policy, which includes minimum
reporting standards, provides a consistent way to track and validate
implementation through the use of technology, and to measure and
evaluate policy compliance; and as a consequence, it further improves
risk management, monitoring, oversight and assurance.
Information systems and cyber-security risk
Information systems and cyber-security risk continues to pose a threat
to the Group and remains a principal risk. Throughout the year, the
Committee received reports from the Group Chief Information Officer
(CIO) on progress made on the implementation of the IT controls
framework designed to protect the Group’s information assets,
including the key IT controls (KITCs), enhanced security operations,
threat intelligence, the Group’s response to the threat of ransomware,
and the continued emphasis on cyber-risk awareness and training
across the Group.
In November 2023, the Group CIO provided the Committee with an
update on the progress made during 2023 in regard to the maturity
levels of the KITCs across the Group, together with the plans for
2024to further develop the KITCs following the annual external
threatassessment.
The Committee was also briefed on Compass’ view of developing AI
technologies and of the benefits and risks they present to cyber
security. Potential benefits included the ability to respond to threats
quickly and accurately, to identify patterns and anomalies in systems
logs, and to provide insights into potential cyber attacks. The potential
risks were also outlined, including sophisticated and automated cyber
attacks, and manipulation by threat actors to avoid detection.
In addition, the Committee considered the use of AI by employees and
the need for guardrails to ensure it was used appropriately. Measures
designed to control the use of AI in Compass were reviewed by the
Committee, including: education for colleagues; the development and
implementation of appropriate governance arrangements and
responsible use guidelines; and updates to the KITC framework to
include AI controls. The Committee also received an update from
independent cyber-security advisers in relation to cyber-risk reporting
and disclosure trends in the US and other jurisdictions.
In September 2024, the Group CIO provided an update on cyber
security and the KITCs, including a deeper-dive review of the Group’s
cyber-security approach and maturity. In addition, he outlined the key
focus areas for the KITCs in the 2025 financial year which included a
greater emphasis on the use of automation and simplification of the
compliance processes.
Throughout the year, the Committee received updates on initiatives to
educate colleagues about cyber-security threats, and actions to
counter those threats. Initiatives included: the annual cyber
awareness week, ongoing weekly advocacy messages from ‘cyber
champions’ across the Group’s businesses, and the implementation
ofregular phishing simulations to reinforce appropriate behaviours.
ERP systems
In November 2023, the Committee was updated on the roll out of the
North America ERP system and considered with management the
timelines and key milestones that would support delivery of the
project. The Committee also reviewed with management the
implementation methodology for the programme, the development
ofthe programme plan and the deployment roadmap and challenged
the proposed governance and assurance arrangements around
theprogramme, particularly the replacement of legacy systems.
InMay2024, the Committee received a further update from the
localprogramme lead on progress made, including the internal
andexternal assurance activities which had been evaluated by
anexternal adviser.
The Committee was also updated on the business transformation
programme that commenced a number of years ago in Europe.
Duringthe year, as part of the strategic portfolio review to focus on the
Group’s core markets and considering the country exits, the ongoing
advancement of technologies and the increased decentralisation of
the Group’s businesses, management reviewed the regional business
transformation ERP programme. Following this review, management
decided to discontinue the implementation and roll out of the Europe
cross-market ERP programme. The Committee carefully considered
management’s proposals including, its roadmap for the ongoing
development and support of market ERP systems.The Committee
also reviewed management’s assessment to record a non-cash
impairment of $146 million to write down the related work-in-progress
head office (non client-related) computer software assets.
Internal audit
The Internal Audit team is led by the Group Director of Risk and
Internal Audit who reports functionally to the Chair of the Audit
Committee and operationally to the Group CFO. The purpose, scope
and authority of the Internal Audit function are set out in its terms of
reference which are approved by the Committee. The Audit
Committee is responsible for monitoring and reviewing the
effectiveness of the Group’s Internal Audit function, including
resources, plans and performance as well as the degree to which the
function is free from management or other restrictions. To help the
Committee gain assurance that the Internal Audit function is
independent, the Committee meets with the Group Director of Risk
and Internal Audit at least once a year without the presence of
management and it met with him twice during the year under review
without the presence of management.
76 Corporate Governance and Directors’ Report
During the year, the Committee monitored the performance of Internal
Audit and reviewed and approved the Group’s annual internal audit
plan. The plan is designed with reference to the Group’s principal
risks, which are described on pages 24 to 28. The Committee receives
regular updates on progress against the plan and Internal Audit’s
findings, together with management actions taken to address
recommendations.
The Committee remains satisfied that the Internal Audit function has the
necessary resources, objectivity and competency to fulfil its mandate. It
has also satisfied itself that the Internal Audit function has adequate
standing and is free from management influence or other restrictions.
Corporate governance
In November 2023, the Committee was updated on developments
regarding UK corporate governance reforms, including the withdrawal
of certain proposed legislative changes and the scaling back of
planned changes to the UK Corporate Governance Code. At its
meeting in May 2024, the Committee noted that the FRC had
published the 2024 UK Corporate Governance Code, which would
apply to financial years commencing on or after 1 January 2025,
noting that the Code had taken forward only a small number of the
original proposals set out in its 2023 consultation. The majority of
changes will apply to Compass from 1 October 2025. The significant
changes which will take effect from 1 October 2026 relate to the new
requirement for the Board to make a declaration on the effectiveness
of material internal controls. The Committee considered the
development of management’s plans to respond to these
requirements, including the updates to the Certificates of Assurance
and key internal controls over financial reporting. The Committee will
continue to monitor progress to ensure that Compass is compliant
with the new requirements at the appropriate time. To support it in
this, the Committee has appointed a sub-committee comprising
twomembers of the Audit Committee, including the Committee Chair,
to oversee and monitor management’s proposals for implementing
thenew requirements in relation to risk management and
internalcontrols.
The Committee also received an update on management’s work to
prepare the Group for the EU Corporate Sustainability Reporting
Directive (CSRD) which will apply to Compass from the financial year
commencing 1 October 2025. The CSRD establishes sustainability
reporting obligations for a large number of companies both within and
outside the EU and forms part of the EU’s sustainable finance agenda.
The Committee reviewed the work undertaken to date on the
implementation of the CSRD requirements, including the Company’s
assessment of materiality.
External audit
External auditor
The Audit Committee is responsible for the development,
implementation and monitoring of the Company’s policy on external
audit and has oversight responsibility for monitoring the external
auditor’s independence, objectivity and compliance with ethical,
professional and regulatory requirements. The Audit Committee is
responsible for the re-tendering selection process and recommends
the appointment, reappointment and removal of the Company’s
external auditor, and considers the risks associated with its withdrawal
from the market in its risk evaluation and planning.
The Audit Committee also reviews and sets the terms, areas of
responsibility and scope of the audit as set out in the external auditor’s
engagement letter, including the overall work plan for the forthcoming
year, together with the associated fee proposal, and cost-effectiveness
of the audit.
Effectiveness of the external audit process
During the year, the Committee considered the effectiveness of the
external audit process, whether the agreed audit plan for the financial
year ended 30 September 2023 had been fulfilled, and the reasons for
any variation from the plan.
The Committee is committed to ensuring that Compass receives a
high-quality and effective external audit. The Committee assessed the
effectiveness of the external audit process using several methods,
commencing with the identification of appropriate risks by the
external auditor. These were reviewed by the Committee in the
detailed external audit plan for the financial year ended 30 September
2024 at the start of the audit cycle. The work performed on these risks
by the auditor was used to test management’s assumptions and
estimates. The effectiveness of the audit process in addressing these
matters was assessed through the reports presented to the Committee
at the half- and full-year.
The Committee also considered how and to what extent the auditor
had exercised professional scepticism. During the audit of the Annual
Report and Accounts, the auditor challenged management as to
whether the disclosures in the financial statements were consistent
with the narrative disclosures in the Strategic Report in relation to the
impact of certain risks and, specifically, how the potential impact of
climate change on the financial statements had been assessed.
Theauditor also challenged management’s approach to goodwill
impairment testing, acquisition accounting (including the initial
accounting for CH&CO and HOFMANN
s
), and the appropriateness of
actuarial assumptions used to estimate post-retirement benefit
obligations, as well as other sources of estimation uncertainty, such
asuncertain tax positions and accounting consequences of the
ongoing strategic portfolio review. Management and the auditors
engaged constructively in relation to the challenges raised, and an
unmodified opinion was issued by the auditor, which is set out on
pages 124 to 137.
The review also included a formal evaluation process covering several
aspects of the external audit. A wide range of internal stakeholders
including Audit Committee members, regional finance directors and
Group functions (including Internal Audit, Legal, Finance and Tax) and
local finance directors (excluding countries not in scope for the KPMG
audit) completed questionnaires.
In May 2024, a detailed report on KPMG’s audit quality and
effectiveness was presented to the Committee. The findings were
considered and opportunities for improvement were discussed with
KPMG. In summary, the Committee concluded that the external audit
process continued to be of a high quality and remained effective.
Independence of external auditor
Jonathan Downer was the Senior Statutory Audit Partner for the year
under review. To ensure the independence and objectivity of the
Company’s external auditor and the integrity of the audit process, key
members of the external audit team periodically rotate off the
Company’s audit. Additionally, the recruitment of senior employees
from the Company’s auditor is not permitted for a period of at least
two years after they cease to be involved in the provision of services to
the Company.
77Compass Group PLC Annual Report 2024
In assessing the independence and objectivity of the external auditor,
the Committee takes into account the assurances and information
provided by the external auditor at the planning stage of the audit,
including a written disclosure of the relationships (including the
provision of non-audit services) that could have an impact on the
external auditor’s independence and objectivity, and the safeguards put
in place to address such concerns. As part of this process, the
Committee receives a statement from the external auditor advising that:
all partners and staff annually confirm their compliance with KPMG’s
ethics and independence policies and procedures and that they have
no prohibited shareholdings and their ethics and independence policies
are fully consistent with the requirements of the FRC Ethical Standard.
The Committee has concluded that KPMG was independent of the
Group for the year under review.
Non-audit fees
The Company operates a policy on non-audit-related fees which it
reviews annually and under which it discloses the ratio of audit
to non-audit fees paid in each financial year. The Committee monitors
the level of non-audit work which the external auditor can perform, to
ensure that any provision of non-audit services falls within the scope of
the agreed Non-Audit Work Policy and does not impair the external
auditor’s objectivity or independence. The Group’s policy on non-audit
services is aligned with the FRC’s 2019 Ethical Standard for auditing
practices for what is permissible for public interest entities, and no
services outside this are approved by the Committee. Engagements
for non-audit services that are not prohibited are subject to formal
approval by the Audit Committee, based on the level of fees involved.
Non-audit services that are pre-approved are either routine in nature
(e.g. the half-year limited review) with a fee which is not significant in
the context of the audit, or are other audit-related services. Within the
constraints of applicable UK rules, the external auditor can undertake
certain non-audit work. The provision of non-audit services within
such constraints and the agreed policy is assessed on a case-by-case
basis to ensure that the adviser best placed to undertake the work is
retained. In accordance with the Group’s policies, the Group CFO
approves individual non-audit services with fees up to $75,000 and
non-audit services with combined fees up to $150,000. Audit Committee
approval is sought for non-audit services exceeding these limits.
Fees paid in the year
The total fees paid to KPMG in the year ended 30 September 2024
were $10.6 million, of which $0.9 million related to non-audit work
(2023
1
: $9.8 million of which $0.4 million related to non-audit work).
Having considered the non-audit work undertaken by KPMG LLP
during the year, it was agreed by the Committee that the tasks
undertaken represent permitted non-audit services (as set out in
Section 5 of the FRC’s Revised Ethical Standard 2019). The principal
non-audit services provided by KPMG related to the half-year review of
the Group’s interim financial report; limited assurance over certain
climate-related disclosures (including Scope 1, 2 and 3 emissions),
responsible sourcing (including in respect of commitments under the
Sustainable Financing Framework and other social metrics; and
comfort letters in respect of the issue of two bonds. The increase in
2024 primarily relates to the limited assurance testing, which is
expected to increase in future years as requirements in this area
continue to expand. The Committee believes that KPMG, as external
auditor, is best placed to undertake these non-audit services and
thatthe level of fees for these services does not adversely impact
itsintegrity, objectivity or independence. Further disclosure on
thenon-audit fees paid during the year can be found in note 3 on
page151.
Statutory audit tender process
In accordance with its terms of reference and regulatory
requirements, the Audit Committee ensures that at least once every
10 years the external audit services contract is put out to tender. The
Committee is responsible for the selection and appointment of the
external auditor. It initiates and conducts any competitive tender
process undertaken by the Company for the provision of external audit
services and considers and makes recommendations to the Board, to
be put to shareholders for approval at the Company’s AGM.
The Committee confirms that for the year under review, the Company
complied with the provisions of the Statutory Audit Services for Large
Companies Market Investigation (Mandatory Use of Competitive
Tender Processes and Audit Committee Responsibilities) Order 2014.
Following a competitive tender process in 2023, KPMG LLP was
reappointed as the Company’s external auditor in February 2024.
KPMG has expressed its willingness to continue as auditor of the
Company. Separate resolutions proposing KPMG LLP’s reappointment
and the determination of its remuneration by the Audit Committee on
the behalf of the Board, will be proposed at the 2025 AGM.
Committee evaluation
The priorities set by the Committee following the 2023 external
evaluation process were:
– consideration of audit and governance reforms including assurance
over non-financial reporting
– ESG and climate net zero disclosures
These themes, together with the Committee’s regular programme
of work, shaped the Committee’s agenda and were included in the
principal activities during the year under review.
2024 evaluation
During the year, an internal evaluation of the effectiveness
of the Committee was conducted as part of the wider evaluation
of the Board and its committees. Details can be found on page 85.
The evaluation concluded that the Committee continued
to operate effectively.
The Committee will continue to focus on the following areas:
– ESG and sustainability reporting, including assessing the level
of assurance required
– regulation, especially preparation for the UK Corporate Governance
Code reforms
– oversight of controls for systems implementation and migration
– cyber-security risk management
– ongoing risk oversight
These matters, together with the regular work of the Committee,
will inform the Committee’s agenda for the coming year.
Anne-Françoise Nesmes
Chair of the Audit Committee
26 November 2024
Audit Committee Report continued
1. The fees paid to KPMG for the year ended 30 September 2023 of £8.0 million
and £0.3 million related to non-audit work, have been restated in US dollars.
78 Corporate Governance and Directors’ Report
Corporate Responsibility Committee Report
Committee responsibilities
The Committee is responsible for overseeing, monitoring, and
making recommendations to the Board on the development,
implementation and effectiveness of the Group’s strategies in
relation to:
– corporate responsibility
– health and safety
– sustainability (including climate change)
– ethics and integrity
– people and other stakeholder engagement
The Committee’s full terms of reference are on our website:
www.compass-group.com.
Governance
Nelson Silva was appointed Chair of the Corporate Responsibility
Committee in February 2017. As announced on 27 September 2024,
Arlene Isaacs-Lowe will succeed Nelson Silva as Committee Chair
following his retirement from the Board at the conclusion of the 2025
AGM. Membership of the Committee comprises the Chair of the
Committee and all of the other directors, whose biographies are on
pages 56 to 59.
The Chair of the Committee attends the AGM virtually or in person
to respond to questions on the Committee’s activities.
Only members of the Committee have the right to attend Committee
meetings. Other individuals, such as the Group Chief Commercial
Officer (CCO), the Group Chief People Officer (CPO), Group Head of
Ethics and Integrity (E&I) and external advisers, may be invited to
attend all or part of any meeting, as and when appropriate. The Group
General Counsel and Company Secretary, who acts as Secretary to the
Committee, attends all meetings. Other members of senior
management are invited to present such reports as are required for
the Committee to discharge its duties.
The Committee is authorised to seek external legal and independent
professional advice as it sees fit.
The Committee held three meetings during the year. The attendance
table is on page 60.
Health and safety
The health and safety (H&S) of the Group’s employees and consumers
is a top priority for Compass and the Committee receives regular H&S
reports from the Group CCO to enable it to monitor performance.
The Group has two Key Performance Indicators (KPIs) linked to the
health and safety of colleagues and consumers: Total Recordable
Injury Frequency Rate (TRIFR) and Food Safety Incident Rate (FSIR).
The Committee sets limits for these KPIs at the beginning of the year
and monitors performance over the course of the year to enable
it to assess the effectiveness of the controls in place to mitigate
the occurrence of workplace and food safety incidents across
the businesses.
Performance outcomes for these two measures are linked to a total of
10% of the outcome of the executive director and senior management
annual bonus plan.
Further details on the ESG measures in the annual bonus plan and the
results for the financial year ended 2024, which the Committee is
pleased to report are within the limits set at the start of the year,
can be found on page 108.
At each meeting, the Committee considers a safety moment on topical
aspects of H&S, or lessons learned from a recent incident. Each
briefing aims to provide the Committee with a fuller understanding of
the H&S matters faced by the businesses and how the lessons learned
from such incidents are applied to mitigate the risk of a recurrence.
More details of H&S performance, initiatives, and areas of focus
during the year are on pages 7 and 12.
Nelson Silva
Chair of the
Corporate
Responsibility
Committee
79Compass Group PLC Annual Report 2024
Corporate Responsibility Committee Report continued
Ethics and integrity
The Committee oversees the Group’s E&I strategy, programme,
policies and activities. To help the Committee in fulfilling its oversight
responsibilities, it receives regular presentations and reports from the
Group Head of E&I.
At its meeting in November 2023, the Committee received an update
from the Group Head of E&I on the matters raised via the Group’s
SpeakUp, We’re Listening platform in the 2023 financial year.
The Committee noted there had been an increase in overall case
volumes and business integrity reports in the year as a result of E&I
awareness activities and country-led initiatives.
There was also a favourable reduction in the risk profile, evidenced by
the year-on-year decrease in the most serious reports, an increase in
overall substantiation rates versus the prior year, and improvements in
follow-up and case management processes. The Committee noted
that the case substantiation rate and overall reporting profile were
consistent with external benchmarks.
At its meeting in September 2024, the Committee received an update
on the progress made during the year to further embed the E&I
programme. Further progress had also been made in the roll out of the
Group‘s Business Integrity Policy (BIP) through online training in all
countries in local languages.
The Committee also noted that the E&I policy framework was
completed during the year with the launch of the Third-Party Integrity
Due Diligence Policy which is linked to other key governance
processes such as supply chain risk management, the Major Risk
Assessment process, and M&A due diligence; and that work will
continue to further embed the policy and related processes into the
local control environments in the coming year.
Learn more about our E&I programme and SpeakUp, We’re
Listening on our website: www.compass-group.com/en/
who-we-are/ethics-and-integrity.html
Sustainability
In line with its oversight responsibilities in relation to the Group’s
sustainability strategy, the Committee continued its focus on
sustainability and climate-related matters.
In May 2024, it was updated by the Group CCO on the work being
undertaken to implement the evolving ESG regulatory reporting
requirements including those of the International Sustainability
Standards Board (ISSB) and the Corporate Sustainability Reporting
Directive (CSRD), together with the timelines for adoption.
As part of the briefing, several activities were highlighted, including
the CSRD scoping exercise that was being conducted by a
cross-function working group in conjunction with external advisers to
help identify the scope for Compass’ first CSRD report for the financial
year ending 2026, and the requirements of the ISSB standards
expected to apply from the financial year ending2025.
The Committee also received an update on the wider global ESG
regulatory landscape, including developments in North America.
During the year, the Committee received a progress update on the
deployment of digital tools to measure food waste. To support the
Group’s commitment to reduce food waste, at the beginning of the
year under review a performance measure relating to reducing food
waste was set linked to 5% of the annual bonus of executive directors
and senior management. This year’s measure relates to a year-on-
year increase in the number of sites across the Group’s businesses
adopting food waste technology and also to the frequency of use of the
technology.
The Committee is pleased to report that excellent progress has been
made during the year with an increase in the number of sites globally
deploying food waste tracking technology to record food waste. The
outcome versus the target set at the beginning of the year is on page
108 and 109.
At its meeting in September 2024, the Committee received an update
on the review of food safety controls, including the implementation of
the Global Safety Standards which set a minimum standard for all
operational sites in the Group.
The Committee also received updates on other activities designed to
further strengthen the food safety controls environment, including:
targeted audits of critical control points; independent audits of central
production units; food safety audits undertaken by the Internal Audit
function; and the implementation of digital tools to collect insights and
impact outcomes.
More details on the Group’s sustainability initiatives, including
information on the Group’s Scope 1, 2 and 3 emissions, are set out on
pages 34 to 52.
People
Employee engagement is a powerful enabler for Compass’ growth,
and in November 2023 the Committee reviewed a presentation
by the Group CPO summarising the results of the 2023 global
employee engagement survey (comprising Your Voice in the US
and pulse surveys in 18 other countries), which focused on wellbeing,
opportunities for career progression, and inclusion. A deeper dive
was also provided on the pulse surveys and actions taken to manage
Compass’ employee engagement.
In May 2024, the North America CPO briefed the Committee on the
results of the latest US pulse survey, noting that the drivers for
engagement included the advancement of positive relationships
between managers and their reports, a sense of belonging and an
understanding of company goals. The survey sought the views of
employees in the Group’s US business on motivation, teamwork,
safety, and diversity, equity and inclusion.
The Committee reviewed participation and response rates, insights
provided, and the areas of opportunity for further improvement that
had been identified, together with corresponding action plans to help
build better employee experiences.
80 Corporate Governance and Directors’ Report
During the year, the Committee also received summaries of the
roundtable meetings which the Designated Non-Executive Director
for Workforce Engagement, Ireena Vittal, held with employees from
across the Group’s businesses. Mrs Vittal shared observations from
her meetings, noting that the sessions continued to offer valuable
insights and remained popular with participants, who appreciate
the Board taking a direct interest in their views.
The data and views of employees gathered from the employee
engagement surveys and other engagement mechanisms, together
with feedback from the roundtable meetings held by Mrs Vittal help to
ensure the Board is aware of the views and concerns of the workforce
so that these are considered in the Board’s discussions and decision-
making processes. More details of the meetings held by Mrs Vittal are
on page 66.
The Compass Group Foundation
During the year, the Committee considered the work being done by
The Compass Group Foundation (the Foundation), an independent
registered charity that provides grants to charitable organisations in
countries where Compass operates, to create inclusive job
opportunities and support small and medium-sized local suppliers. A
copy of the Foundation’s first Impact Report, for the financial year
ended 30 September 2023 (which can be found on our website), was
shared with the Committee. The Committee noted that in its first year,
the Foundation had awarded grants to 14 charitable organisations in
eight countries, ranging from charities supporting people with
disabilities to those helping to improve the livelihoods of small farmers.
In the UK, the Foundation also partnered with FoodCycle, a national
charity that fights food poverty and loneliness by serving community
meals across the country. The Committee noted that, where possible,
Compass employees volunteer their skills and expertise to amplify the
Foundation’s impact. More details of the Foundation’s activities are on
page 33.
Human rights and modern slavery
The Committee reviews the Group’s Human Rights Policy every year to
ensure that it remains fit for purpose and is aligned to the Group’s
people, performance and purpose strategy.
In September 2024, the Committee considered proposed minor
changes to the policy to improve its alignment with stakeholder
feedback and expectations and with Compass’ broader ESG
objectives. The Committee considered and subsequently
recommended the revised Human Rights Policy to the Board for
whichthe Board gave its approval.
Earlier in the year, the Committee also reviewed the Company’s 2023
Modern Slavery Act statement (2023 MSA statement) and concluded
that the statement reflected the progress made in the year, and met
the requirements of section 54 of the Modern Slavery Act 2015. The
Committee recommended the 2023 MSA statement to the Board,
which the Board approved.
The 2024 MSA statement which was reviewed by the
Committee at its meeting in November 2024, will be
published on our website inDecember 2024:
www.compass-group.com
Stakeholder engagement
During the year, the Committee considered the Group’s stakeholder
engagement activities with people, clients, consumers, suppliers,
communities and NGOs, including key areas of focus, noting that
sustainability was a common theme among stakeholder groups.
In addition to the areas of focus, the Committee reviewed
the purpose and methods of engagement with stakeholders.
Information on the approach to stakeholder engagement, including
how the Board is apprised of the views of the Company’s stakeholders,
and how the matters set out in section 172 of the Companies Act
2006 have been considered in Board discussions and decision-
making, is set out on pages 68 to 72.
Engagement with the Group’s employees is described on page 66
and in more detail in the People section on pages 30 and 33.
Committee evaluation
No specific areas were identified in last year’s evaluation process
that required significant improvement. However, recognising the
increasing importance of ESG to stakeholders, it was agreed that
in 2024 the Committee would continue to focus on ESG matters
including, in particular:
– sustainability and climate reporting
– health and safety
– diversity, equity and inclusion
– supply chain risk
These themes, together with the Committee’s regular programme of
work, shaped the Committee’s agenda and were included in the
principal activities during the year.
2024 evaluation
The outcome of this year’s internal evaluation of the Corporate
Responsibility Committee confirmed that the Committee continued
to function effectively.
It was agreed that in the coming year the Committee would continue
to focus on the following priorities:
– preparing for changes in ESG and reporting requirements
– overseeing health and safety performance, particularly in relation
to food safety
– monitoring progress on safety performance
– tracking the Group’s performance against its ESG commitments
– ensuring the Committee’s agenda remains appropriately focused
These matters, together with the regular work of the Committee, will
inform the Committee’s agenda for the coming year.
Nelson Silva
Chair of the Corporate Responsibility Committee
26 November 2024
81Compass Group PLC Annual Report 2024
Nomination Committee Report
Governance
Ian Meakins was appointed Chair of the Committee in December
2020. Committee membership comprises the Chair of the Committee
and all the non-executive directors, and their biographies are on pages
56 to 59. The Board considers each member of the Committee
(except the Chair of the Board, who was independent on appointment)
to be independent in accordance with the criteria set out in the UK
Corporate Governance Code 2018 (the Code).
The Chair of the Board acts as Chair of the Committee, except when
dealing with their own succession when the meeting is usually
chairedby the Senior Independent Director (SID). The Chair of the
Committee attends the AGM to respond to questions on the
Committee’s activities.
Only members of the Committee have the right to attend meetings.
Other individuals, such as the Group Chief Executive Officer (CEO),
theGroup Chief People Officer (CPO), other senior management and
external advisers may be invited to attend all or part of any meeting,
asand when appropriate. The Group General Counsel and
CompanySecretary, who acts as secretary to the Committee,
attendsall meetings.
The Committee held four meetings during the year. The Committee
attendance table is on page 60.
Board succession planning
Succession planning is a core element of the Committee’s work. When
assessing succession plans for the Board, the Committee considers
and evaluates the skills, knowledge, experience and diversity of its
directors to ensure that the Board and its committees are well placed
to discharge their duties.
The terms of the independent non-executive directors are also
reviewed regularly to facilitate future refreshing of the Board and
to maintain an appropriate balance. From these reviews, the
Committee determines the skills, experience and attributes for any
new appointees to ensure the Board and its committees continue to
operate effectively.
During the year, the Committee reviewed Board succession plans over
the medium to long term. During this assessment, it considered the
structure, size and composition of the Board, taking into account the
requirements of the Code and the UK Financial Conduct Authority’s
Listing Rules. Two new non-executive directors, Liat Ben-Zur and
Juliana Chugg, were appointed in July and September 2024
respectively. More detail is on the opposite page.
Board appointment process
Procedures for appointing new directors are set out in the
Committee’s terms of reference. The appointment process is led by
the Chair of the Board, except where the appointment is for their
successor, when it is usually led by the SID. When appointing a new
Chair of the Board, the process includes an assessment of the time
commitment expected, recognising the need for the Chair of the
Board to be available in the event of a crisis.
Ian Meakins
Chair of the
Nomination
Committee
Committee responsibilities
The Nomination Committee is responsible for ensuring that the
composition and structure of the Board remain effective,
balanced and aligned to the Company’s strategic priorities.
The Committee also ensures the Group’s governance facilitates
the appointment and development of a diverse pipeline of
effective talent that can deliver shareholder value over the
long term.
In practice, this involves overseeing the:
– nomination
– induction
– evaluation, and
– orderly succession of directors
The Committee’s full terms of reference are on our website:
www.compass-group.com.
82 Corporate Governance and Directors’ Report
Before appointing a director, the Nomination Committee agrees a
candidate specification setting out the role, personal qualities and
capabilities required. The Board promotes an environment which is
supportive of individuals from diverse backgrounds, and in identifying
suitable candidates the Committee:
– uses open advertising or the services of external advisers to
facilitate the search
– considers candidates from different genders and a wide range of
backgrounds
– considers candidates on merit and against objective criteria,
bearing in mind the benefits of diversity on the Board
– ensures that candidates have enough time to devote to the position,
considering any other significant commitments
Depending on the strategic and succession plans of the Company,
where appropriate the Company will consider individuals who may not
have direct PLC experience, but who have experience of leading
complex, global-scale organisations. The Committee believes that this
approach broadens the talent pool.
The Committee considers the selection and reappointment of
directors carefully, before making a recommendation to the Board.
Non-executive directors and the Chair of the Board are generally
appointed for an initial three-year term, which may be extended for a
further two three-year terms. Reappointment is not automatic at the
end of each term.
Appointment of new directors
Non-executive directors
During the year, the Committee launched a recruitment process to
facilitate the appointment of two additional non-executive directors
insupport of the Board’s succession plans and the Group’s
strategicaims.
The selection process was led by the Chair of the Board who was
assisted by the Group CPO and Group General Counsel and Company
Secretary. The Committee used the services of two executive search
firms to identify suitable candidates: Egon Zehnder (EZ) and Essenta.
EZ is used from time-to-time by the Company for the recruitment of
senior executives. Both firms are independent of and have no other
links with the Company or its directors.
Position specifications were prepared for both appointments in
conjunction with the Committee, setting out the desired attributes,
experience and personal style for the successful candidates. To
identify a diverse pool of candidates, the searches considered
individuals who did not have direct PLC experience, but who
possessed experience of leading complex, global-scale organisations.
Potential candidates were also required to demonstrate that they had
sufficient time available to devote to the role.
In executing the search strategy for two non-executive directors, and
to ensure a diverse range of candidates, a wide pool of potential
candidates was identified. From this, a long-list was compiled and
following further review, a number of individuals were profiled and
considered by the Company. A short-list was drawn up and candidates
were interviewed by the Chair and Group CPO before progressing to
the second stage of interviews with the Group General Counsel and
Company Secretary and Group CEO. Candidates who were considered
to best match the role requirements were then put forward to meet
with the SID and other members of the Board. After detailed
discussions and careful consideration, the Nomination Committee
concluded and recommended to the Board that Liat Ben-Zur be
appointed to the Board with effect from 1 July 2024, which the Board
approved. Liat’s experience and credentials as a transformative
technology executive with over 27 years’ experience in driving digital
transformation and product innovation, together with her strategic
insights in disruptive technologies and product-led growth, were
considered to meet the Board’s brief favourably.
More recently, the Committee recommended the appointment of
Juliana Chugg as a non-executive director with effect from
26September 2024. Juliana is a seasoned non-executive director,
following a successful executive career as a transformative leader in
the FMCG and food sectors. She brings a strong international
perspective with a passion for the food and food services industries,
together with experience of general management, marketing and
governance. The Committee concluded that Juliana would be an
excellent addition to the Board, as Compass continues to focus on its
growth ambitions.
Liat and Juliana will stand for election at the 2025 AGM.
Executive directors
As previously reported, Gary Green retired as Group Chief Operating
Officer (COO), North America and as a director of Compass Group PLC
on 30 November 2023. Through the Board and Executive Committee
succession planning processes, Palmer Brown succeeded Gary as the
Group COO, North America on 1 December 2023 and Petros Parras
succeeded Palmer as Group Chief Financial Officer (CFO) on the same
date.
Induction process
On joining the Company, new non-executive directors receive a
formal, comprehensive and tailored induction programme designed to
address the individual’s needs and role. It includes meetings with
senior management, the external auditor and external advisers,
together with technical briefings and site visits, which facilitate an
effective introduction to the Group’s businesses and culture. Since
their appointments, both Liat Ben-Zur and Juliana Chugg have
commenced personalised induction programmes designed to provide
a good understanding of the Group’s businesses, the competitive
environment and the UK regulatory and governance landscape, to
ensure they are effective in their roles.
Petros Parras was appointed Group CFO on 1 December 2023. As he
already had a number of years’ experience at Compass and was
familiar with the Group and its operations, his induction programme
was tailored to meet his specific needs, including, amongst other
matters, training on directors’ duties and UK corporate governance.
Non-executive directors’ terms and responsibilities
Nelson Silva and Ireena Vittal were first appointed to the Board in July
2015 and completed their nine-year terms in July 2024. The
Committee recommended to the Board that their terms in office be
renewed until the conclusion of the Company’s 2025 AGM when they
will retire from the Board. In making their recommendation, the
Committee concluded that Ireena Vittal and Nelson Silva retained the
necessary independence of character and judgement and there are
no relationships or circumstances that are likely to affect or could
appear to affect their judgement. Ireena Vittal and Nelson Silva will not
stand for re-election at the 2025 AGM.
The Committee further proposed that Liat Ben-Zur succeed Ireena
Vittal as Designated Non-Executive Director for Workforce
Engagement on 1 October 2024, and that Arlene Isaacs-Lowe
succeed Nelson Silva as Chair of the Corporate Responsibility
Committee at the conclusion of the 2025 AGM. The Board approved
the Committee’s recommendations.
The Board also approved the Committee’s recommendations to
reappoint Anne-Françoise Nesmes, John Bryant, Arlene Isaacs-Lowe
and Sundar Raman who joined the Board in July and September
2018, and November 2021 and January 2022 respectively, for further
three-year terms. In making their recommendations, the Committee
considered the experience and skills of each director, their exemplary
attendance records, and their continued ability to commit sufficient
time to their roles at Compass.
83Compass Group PLC Annual Report 2024
Group diversity, equity and inclusion
The Committee reviews the Group’s policy on workforce diversity,
equity and inclusion, and its objectives and links to strategy.
During the year, the Committee received a presentation from the
Group CPO on diversity which provided data insights on diversity at
director, executive, senior leader, management and other employee
levels within the Group. The Committee was also briefed on the
progress being made to improve diversity, equity and inclusion,
including work to further strengthen the pipeline of women through
managed career paths, improved access to opportunities and the
removal of barriers to progression.
The Committee also considered the Parker Review requirements for `
FTSE 100 companies to set and report against voluntary targets to
increase ethnic diversity at senior management level, and to disclose
their progress against the 2027 deadline for meeting the targets in
their annual report. The Committee was advised that the Company
had, as required, shared ethnicity data in December 2023 with the
Department for Business & Trade.
The Committee considered the proposal to set targets and whether
these were in alignment with and supportive of the Group’s diversity,
equity and inclusion strategies. The Committee agreed that the goal to
be representative of the communities served by Compass remained
the correct ambition, but felt that a global target would not be
appropriate or meaningful due to the legislative environment and
other sensitivities in certain regions. It was, however, acknowledged
that the target of 14% ethnic minority representation for employees for
the Group’s UK & Ireland business, set as part of its Social Promise,
was appropriate for that population. A progress update will be
provided in the 2025 Annual Report.
More details on the Group’s diversity, equity and inclusion initiatives
can be found on pages 30 to 33. Information on Board and Executive
Committee gender and ethnicity is shown above. Gender diversity of
Executive Committee direct reports can be found on page 33.
The Board’s Diversity and Inclusion Policy together with the
Group’s Diversity, Equity and Inclusion Policy are on our website:
www.compass-group.com.
Senior management succession planning
The Committee oversees the development of a strong and diverse
pipeline of high-calibre individuals capable of discharging executive-
level responsibilities. The succession planning process includes a
review of talent at senior level. This enables the Committee to monitor
and evaluate the strength of the talent pipeline, its composition, its
diversity and the training and development needs within the Group’s
senior leadership.
During the year, the Committee focused on succession planning for
the Group’s North America business and the Group Executive
Committee.
In May 2024, the Committee reviewed the succession plans for the
North America business with the Group CPO and the Group COO and
CPO, North America. The Committee focused on the talent pipelines
and plans in place relating to executive, functional and operational
roles, and senior leadership roles in each business sector, designed to
ensure business continuity and to support sustainable growth. An
update was also provided by the North America CPO on the approach
to recruiting, developing and retaining talent, together with an update
on diversity, equity and inclusion initiatives designed to ensure that
there are diverse talent pipelines in place reflecting the diversity of the
consumers and communities served by the North America business.
The Committee noted the actions that had already been completed to
help the business achieve its aims, including a review of talent
identification, retention and development, and of the readiness of
individuals to undertake key roles.
In September, the Committee reviewed the succession plans for the
Executive Committee with the Group CEO and Group CPO. The
pipeline for talent for each role was reviewed, including candidates’
readiness for promotion and progress against development plans.
Diversity, equity and inclusion
Board diversity and inclusion
At Board level, the approach to appointing new directors reflects the
Committee’s objective to ensure there is always an appropriate
balance of experience and backgrounds on the Board, while
recognising the benefits of diversity in its broadest sense. For this
reason, members of the Board are drawn from a wide range of
disciplines, industries and cultures.
Financial Conduct Authority diversity disclosure table
Gender identity or sex
Number of
Board members
Percentage
of the Board
Number of
senior positions
on the Board
(CEO, CFO,
Chair and SID)
Number in
executive
management
Percentage of
executive
management
Men 8 57% 3 5 56%
Women 6 43% 1 4 44%
Ethnic background
Number of
Board members
Percentage
of the Board
Number of
senior positions
on the Board
(CEO, CFO,
Chair and SID)
Number in
executive
management
Percentage of
executive
management
White British or other white (including minority-white groups) 11 79% 4 8 89%
Mixed/multiple ethnic groups – – – 1 11%
Asian/Asian British 2 14% – – –
Black/African/Caribbean/Black British 1 7% – – –
1. The information above is shown as at 26 November 2024 so as to provide the most up-to-date disclosure. The UK Listing Rules set board diversity targets for listed
companies that (i) at least 40% of the board are women, (ii) at least one of the roles of CEO, CFO, Chair and SID is held by a woman, and (iii) at least one director is
from a minority ethnic background. Compass has met these targets. Data is collected in the UK for Board members and is compiled for the purposes of the Parker
Review and reconfirmed annually and consent is obtained from the relevant directors in accordance with the requirements of the Parker Review. Data for executive
management is also collected in the UK for the purposes of this disclosure and to help us progress our DE&I agenda and is disclosed with consent from the
individual executive manager.
2. Ireena Vittal and Nelson Silva, who have completed their nine-year tenures, will retire from the Board at the conclusion of the 2025 AGM. Notwithstanding these
future changes, the Company will continue to meet the FCA’s diversity targets.
Nomination Committee Report continued84 Corporate Governance and Directors’ Report
Time commitment, and training and development
The Committee performed its annual evaluation of the time required
from the Chair of the Board, SID and non-executive directors to
perform their duties. As part of this process, the Committee reviewed
each director’s external commitments and reflected on their
attendance at meetings and their availability at other times during
theyear.
During the year, the Board members continued to receive training to
enhance their understanding of the business, including an online
refresher training module on the Group’s Management and
Performance (MAP) framework, the common methodology and
language used across the Group to understand the five drivers of
performance at Compass. More details on MAP are on page 4.
Thedirectors also participated in a discussion session hosted by an
external expert on the capabilities and uses of artificial intelligence
(AI) and its potential impacts for Compass’ businesses and for wider
society. This was particularly relevant to the Board as Compass
continues to focus on its digital strategies.
In addition, the directors continue to receive regular regulatory and
governance updates from the Group General Counsel and Company
Secretary and other in-house and external subject-matter experts
andadvisers.
Additional and future training needs are considered and addressed
asrequired.
Board and committee evaluation
Lintstock was retained in 2022 for a period of three years to carry out
the 2022 external evaluation and to support the internal evaluations in
2023 and 2024, providing the technology to distribute questionnaires
and collate responses. This year was the final year of the three-year
cycle. Lintstock, is independent of and has no other ties with the
Company or its directors.
2024 evaluation
In May, based on a clear and comprehensive brief by the Chair of
theBoard and the Group General Counsel and Company Secretary,
questionnaires were prepared and distributed by Lintstock which
focused on the effectiveness of the Board and its committees. The
questionnaires, which considered a wide range of topics including
strategic oversight, risk oversight, stakeholder oversight, Board
composition and dynamics, management and focus of meetings, and
the identification of priorities for the coming year, were completed by
Board members and the Group General Counsel and Company
Secretary. Members of the Executive Committee completed a
separate questionnaire which sought their views on Board dynamics
across five themes: exposure to the Board, relationships and
communications, support and challenge, supporting growth, and
suggestions for improving Board and Executive Committee dynamics.
The outcome of the evaluation process (except the performance
evaluation of the Chair of the Board, which was reviewed by the SID)
was initially shared with the Chair of the Board and the Group General
Counsel and Company Secretary, followed by the other directors.
All reports were subsequently presented to the Committee at its
meeting in July.
The evaluation concluded that the Board and its committees continue
to be effective and that each of the directors continues to contribute
effectively to Board and committee meetings.
A number of priorities were agreed for the Board for the year ahead:
– continuing to focus on succession planning and talent management
as a strategic priority
– continuing to assess growth opportunities across all regions and
exploring adjacencies
– leveraging technological capabilities, including digital, data and AI,
to achieve a competitive advantage
Together with the regular work of the Board, these topics will inform
the Board’s agenda for the coming year.
Priorities identified from this year’s evaluation of the Audit, Corporate
Responsibility and Remuneration Committees can be found on pages
78, 81 and 118 respectively.
Nomination Committee evaluation
The priorities identified by the Committee following last year’s external
evaluation process were:
– as part of Executive Committee succession planning, review
individuals’ progress against their development plans
– review the talent strategy and how this supports the Group’s growth
ambitions
Together with the Committee’s regular programme of work, these
themes shaped the Committee’s agenda and were included in the
principal activities during the year under review.
This year’s internal evaluation of the Nomination Committee
confirmed that the Committee continued to be effective and identified
the following priorities for the year ahead:
– continuing to focus on executive succession, including for leaders
below Executive Committee level
– non-executive succession, including committee leadership
– making further progress on diversity
These themes, together with the regular work of the Committee, will
inform the Committee’s agenda for the coming year.
Ian Meakins
Chair of the Nomination Committee
26 November 2024
85Compass Group PLC Annual Report 2024
Remuneration CommitteeReport
Dear Shareholder
I am delighted to present to you our Directors’ Remuneration Report
(DRR) for the financial year ended 30 September 2024. It has been a
very busy time for the Committee. Alongside our usual activities, we
undertook a thorough review of our Remuneration Policy. This Report
sets out the Committee’s deliberations and rationale, and the
data-driven decisions that we have made during the year in
connection with the new Remuneration Policy (the 2025 Policy) and
other remuneration-related matters.
Introduction
Ahead of drafting the proposed 2025 Policy, we were committed to
gaining a clear understanding of shareholders’ views, and with this in
mind we commenced engagement a year in advance of our 2025
AGM. Over the following six months, we engaged with over 100
shareholders representing over three-quarters of our issued share
capital (ISC), and received strong endorsement for our proposals on
the quantum of opportunity. The overall view on the appropriateness
of our pay for performance approach was unanimous. It was therefore
in this context that we focused our review on ensuring that the Policy
contains an appropriate pay mix, with a market-aligned level of
opportunity consisting largely of performance-related ‘at-risk’ pay,
with the right metrics in place to support the growth of our business.
All of this is underpinned by the need to attract, motivate, and retain
the best talent to ensure that Compass remains a world leader in food
service and a world-class investment proposition. As part of the
consultation, we heard a range of divergent views on our incentive
plan performance measures which we considered and have reflected
in our final proposals.
We believe that our proposed 2025 Policy reflects the feedback we
received from shareholders and will stand the test of time, supporting
the Group’s future growth ambitions.
We have also aligned our Long-term Incentive Plan (LTIP) rules to the
proposed 2025 Policy. The amended LTIP rules will be presented to
shareholders for approval at the AGM. Our Restricted Share Award
(RSA) Plan, which is limited to employees below Board level, will also
be submitted to shareholders for approval at the AGM. Executive
directors will not be eligible for awards under the RSA Plan.
Details of the proposed 2025 Policy are summarised later in this letter,
and the proposed 2025 Policy is set out on pages 97 to 106.
During the year, the Committee continued its rigorous approach to
assessing performance, receiving and reviewing regular updates on
performance against the incentive plan targets, and ensuring stringent
controls on how activity such as mergers and acquisitions (M&A) is
treated, so as to ensure that management continues to be rewarded
for making the right decisions which are in the long-term interests of
the Company.
Executive director changes
As previously announced, Palmer Brown succeeded Gary Green as
Group COO, North America, on 1 December 2023, following the
announcement of Gary’s retirement. Petros Parras was appointed
Group CFO on the same date. The departure terms for Gary Green,
and the remuneration terms for Palmer Brown and Petros Parras,
were disclosed in the 2023 DRR, and further details are set out later in
this Report.
The Committee’s full terms of reference are on our website:
www.compass-group.com.
Committee responsibilities
– the Committee determines the Directors’ Remuneration
Policy (the Policy) and is responsible for setting the
remuneration of the Chair of the Board, executive directors
and the other members of the Executive Committee
– the Committee ensures that members of the Executive
Committee are appropriately incentivised to drive the
Group’s performance and are rewarded for their contribution
to the long-term sustainable success of the business by
designing, monitoring and assessing incentive arrangements,
including setting stretching targets and assessing
performance and outcomes
– the Committee reviews remuneration arrangements for other
senior executives within the Group and has regard to the
remuneration philosophy of the organisation when
developing policy and considering executives’ packages,
monitoring the relationship between executive remuneration
arrangements and those of the wider workforce
– the Committee maintains an active dialogue with major
shareholders and ensures their views and those of the proxy
advisers are sought and considered when determining the
Remuneration Policy
John Bryant
Chair of the
Remuneration
Committee
86 Corporate Governance and Directors’ Report
Business context
Compass is a global business, with around 580,000 employees
operating in around 30 countries. Over two-thirds of our revenues
aregenerated in North America, where approximately half of the
Group’s employees are based. We continue to grow, both in size
andcomplexity, with acquisitions helping us expand deeper into
ourcore markets.
Our strategic acquisitions of CH&CO in the UK and Ireland and
HOFMANN
s
in Germany, Austria and Switzerland provide further
accelerated growth and strengthen our capabilities. Subsequent to
the year-end, the Group also completed the acquisition of Dupont
Restauration, a food services business in France, and agreed to
acquire 4Service AS, a catering and facility management services
business in Norway. We have exited, or agreed to exit, nine non-core
countries, further improving the quality of our portfolio.
Our strong performance is evident in our year-end results, where we
have delivered organic revenue growth of 10.6%, including net new
business growth of 4.2%.
Looking ahead, industry outsourcing trends remain favourable,
providing Compass with an exciting pipeline of new business
growthopportunities.
2024 performance outcomes
Bonus outcome
The exceptional financial results and operational performance are
reflected in bonus outcomes for the year. We have delivered profit
growth of 16.4%, with continued strong cash generation providing
flexibility to invest in growth and reward our shareholders, and made
strong progress against our ESG targets, achieving the rollout and
regular usage of food waste recording technology in almost 10,000
units. This has resulted in an outcome of 100% of maximum under the
annual bonus plan for the Group CEO, Group CFO and Group COO,
North America.
When determining the outcome for the annual bonus plan, the
Committee considered the business performance and operating
environment and the wider stakeholder experience on a holistic basis,
in addition to the formulaic outcomes.
One-third of the bonus earned by each executive director will be
deferred into shares for a period of three years. The remainder of the
bonus will be paid in cash. The cash payment and deferred bonus
shares will be subject to malus and clawback provisions for a period of
three years following payment/award. No discretion has been
exercised in respect of bonus payments for 2023-2024. Full details of
the targets and outcomes are set out on pages 108 to 109.
LTIP outcome
The 2021-2022 LTIP award was based on a three-year performance
period which ended on 30 September 2024. Performance measures
and their associated weightings under this award were: 40% on
Return on Capital Employed (ROCE), 40% on Adjusted Free Cash Flow
(AFCF) and 20% on relative Total Shareholder Return (TSR).
The business delivered ROCE of 19% and AFCF of $4,756 million over
the three-year performance period ended 30 September 2024.
Compass’ TSR performance was in the upper quartile of the
comparator group (FTSE 100 excluding financial services), with
Compass outperforming the index by 9.9%, ranking 9th out of the 73
constituents remaining in the comparator group at the end of the
performance period.
All three of the performance conditions under the 2021-2022 award
were met, resulting in the award vesting in full. The Committee
considered it important to undertake a comprehensive and holistic
review of performance, on both an absolute and relative basis, to
determine whether the payout level was consistent with the
performance achieved and, in so doing, to make a judgement as to
whether any adjustment should be made to the vesting decision
beyond the formulaic outcome. Given the strength of delivery, degree
of outperformance versus peers, top-quartile TSR performance, and
the progress made on multiple strategic priorities, the Committee is
satisfied that the vesting outcome is a fair reflection of performance
over the period.
2025 Remuneration Policy review
Context
Since the appointment of Dominic Blakemore as Group CEO on
1 January 2018, Compass has generated total shareholder returns of
41.1% (as measured to 30 September 2024), compared to a FTSE
100 index return of 25.4% and returns of no more than 4% at our
closest peers (3.2% at Aramark, 0.3% at Sodexo and -88.3% at Elior).
This has resulted in the creation of £14.7 billion in shareholder value
over this period for Compass shareholders.
This performance demonstrates the ability of our management team
to deliver sustained, long-term growth for the business and our
shareholders relative to our peers. This performance has also been
reflected in our results: for example, the delivery of significant
operating profit growth, building momentum across all regions,
delivering double-digit organic revenue growth, and an underlying
operating margin of 7.1%.
Our strategy for growth has been supported by our shareholders and
it has been successful in delivering significant returns compared to a
number of our peers.
As we strive for transformative growth and progress in our core
markets, it is imperative that we have a Policy that retains, attracts
and motivates the high-calibre talent that we need to execute our
ambitious strategy. As it stands, we continue to face challenges in
respect of the incentivisation and retention of our senior management
in a highly competitive talent market. This is pertinent across the
wider executive population, including roles immediately below the
Executive Committee, where we are experiencing pay compression.
Over the past few years, there has been a growing debate around how
truly global companies such as Compass, with significant exposure to
international markets, and in particular the US, can compete on pay
for talent at a senior level, whilst operating within the UK corporate
governance framework. We have experienced this first hand, with the
attrition of some senior individuals. These individuals were offered
remuneration packages significantly above what we would be able to
offer them without compromising the internal relativity of
remuneration at Compass.
Nonetheless, as a UK-listed company, we are subject to and are
mindful of UK governance expectations. We have not sought to
replicate US pay practices for our executive directors, but we remain
acutely aware of the need to remunerate fairly in local markets and of
the wider impacts across the senior team of being a global player. We
are committed to taking a measured approach, maintaining our
internal pay differentials whilst still enabling Compass to compete for
talent in relevant markets.
87Compass Group PLC Annual Report 2024
Chief Executive Officer: current maximum Policy remuneration vs FTSE 30 ex. FS
LTIPAnnual bonusPensionBase salary
LTIPAnnual bonusPensionBase salary
$5m $7.5m $10m $12.5m $15m
$m
Compass
Upper
quartile
Lower
Quartile
Median
£m
13.2
12.3
12.0
11.7
11.6
10.9
10.8
10.5
10.1
9.9
9.9
9.3
9.0
8.8
8.7
8.2
Compass
7.6
7.0
6.0
5.4
13.2
13.4
14.1
18.7
Chief Financial Officer: current maximum Policy remuneration vs FTSE 30 ex. FS
£m
6.4
6.2
6.1
6.0
5.9
5.8
5.7
5.6
5.3
5.3
5.1
5.0
4.8
4.5
4.4
4.2
Compass
3.7
3.0
6.6
8.0
8.2
8.7
Remuneration Committee Report continued
Current remuneration competitiveness and peer group selection
As part of this review, we have considered the competitive positioning of our senior management remuneration. We have chosen the FTSE 30
(excluding financial services (FS) companies) as our peer group for remuneration purposes for the Group CEO and Group CFO as Compass has
consistently been in this group. In addition, this group is amongst the most international of UK companies and therefore represents a selection of
peers that are closest to the size and scale of Compass. A peer group consisting of other food services companies was considered, however our
main competitors are significantly smaller than Compass, some with remuneration arrangements materially above the current and proposed
levels at Compass.
Even amongst UK peers, we remunerate relatively conservatively. Over the current Policy cycle, we have consistently been positioned around the
middle of the FTSE 30 by market capitalisation, yet maximum total remuneration is the 5th lowest for the Group CEO and 5th lowest for the Group
CFO (FTSE 30 ex. FS) as shown in the following charts.
Chief Operating Officer, North America: current maximum Policy remuneration vs North America peer group
Given Palmer Brown’s role as Group COO, North America, a FTSE 30 ex. FS peer group as a single lens is not appropriate as the scope and
location of this role requires consideration of the US market. The Committee therefore primarily considered US market data in determining the
appropriate remuneration for this role. This data is based on a range of companies of a similar size and complexity to Compass. The Group COO,
North America benchmark uses independently collated proprietary data, some of which is not in the public domain. As such, the data presented
in this Report shows the total remuneration benchmarking quartiles for these roles, and the current remuneration level relative to these
benchmarking quartiles.
The Committee is satisfied that this peer group is the most appropriate as it directly reflects the positioning of the role within Compass, the
geographic location of the role, and the size of the North America business. On a maximum total direct compensation basis (including salary,
bonus and long-term incentives), the Group COO, North America sits between the lower quartile and median of the bespoke peer group (i.e.
broadly consistent positioning with the Group CEO and Group CFO roles versus the FTSE 30 ex. FS group). This positioning is driven principally by
the significantly higher long-term incentive opportunities typically offered in the US market.
88 Corporate Governance and Directors’ Report
Compass is one of the more complex businesses within the FTSE 30 ex. FS comparator group relative to our size and whilst we are currently
ranked 14th by market capitalisation, we rank 9th by revenue, and are by far the largest employer.
Engagement with shareholders on the 2025 Policy review
As described in depth in our 2023 DRR, the Committee has a
well-established relationship with its major shareholders, conducting
robust engagement processes during periods of change, and
continuing engagement outside these times. During 2023, the
Committee sought the views of many shareholders in respect of our
2022 Policy and its implementation, and consequently had a good
understanding of where to focus in respect of the 2025 Policy.
Formal consultation with shareholders commenced early in 2024.
During the process, we engaged with over 100 of our largest
shareholders. We also engaged with the three main proxy agencies.
Our major shareholders have been overwhelmingly supportive of the
proposals on remuneration quantum and recognise the rationale
behind the changes we are proposing. The key themes emerging from
the consultation process were:
– understanding of the size, scale and complexity of Compass and the
need for this to be reflected in how we remunerate our executive
directors
– recognition of the US dimension and its necessary impact on the
2025 Policy
– acceptance of the retention challenge and need for
competitiveness in a global talent market
– welcoming of the Company’s reassurance and commitment to
ensure suitably robust and stretching targets to reflect the new
increased opportunities
– divergent views on the proposal to change the LTIP performance
metrics and weightings, with more support for the preservation of
the current focus on cash and return metrics
– overall support for the philosophy underpinning our proposed
2025Policy
Median ranked by market capitalisation…
Market
capitalisation
scale rank Company
Market
capitalisation
(£m)
1 AstraZeneca 179,648
2 Shell 150,896
3 Unilever 120,352
4 Rio Tinto 91,173
5 RELX 65,409
6 BP 63,701
7 GSK 62,860
8 BAT 60,330
9 Diageo 57,919
10 London Stock Exchange 56,404
11 Glencore 52,182
12 National Grid 50,326
13 Rolls Royce 44,838
14 Compass 40,636
15 BAE 37,418
16 Experian 36,138
17 Haleon 35,808
18 Anglo American 32,490
19 Reckitt 31,704
20 Ashtead 25,302
21 Tesco 24,584
22 SSE 20,816
23 Antofagasta 19,845
24 Vodafone 19,622
…but top 10 by revenues…
Revenue
scale rank Company
Annual
revenue
(£m)
1 Shell 253,958
2 Glencore 174,718
3 BP 168,543
4 Tesco 68,187
5 Unilever 51,719
6 Rio Tinto 43,346
7 AstraZeneca 36,745
8 Vodafone 31,623
9 Compass 31,028
10 GSK 30,328
11 BAT 27,283
12 Anglo American 24,589
13 BAE 23,078
14 National Grid 19,850
15 Rolls Royce 16,486
16 Diageo 16,105
17 Reckitt 14,607
18 Haleon 11,302
19 SSE 10,457
20 RELX 9,161
21 Ashtead 8,641
22 London Stock Exchange 8,359
23 Experian 5,644
24 Antofagasta 5,073
…and with the most employees
Employee
scale rank Company
Number of
employees
1 Compass 579,126
2 Tesco 225,659
3 Unilever 128,000
4 Shell 103,000
5 BAE 99,800
6 AstraZeneca 89,900
7 BP 87,800
8 Vodafone 85,887
9 Glencore 83,426
10 GSK 70,212
11 Anglo American 58,000
12 Rio Tinto 57,000
13 BAT 46,725
14 Rolls Royce 41,400
15 Reckitt 40,000
16 RELX 36,500
17 National Grid 31,425
18 Diageo 30,092
19 Antofagasta 29,000
20 Ashtead 25,935
21 London Stock Exchange 25,608
22 Haleon 24,000
23 Experian 22,813
24 SSE 14,980
Data as at 30 September 2024.
89Compass Group PLC Annual Report 2024
Proposed changes for 2025
Given the performance of the Company and the macro environment in
which it operates, and taking into consideration the feedback received
as part of the shareholder consultation, we are proposing to make the
following changes to the 2025 Policy.
Maximum incentive opportunity under the 2025 Policy
In reviewing our remuneration arrangements, our underlying
motivation is to provide the capacity and flexibility to both attract and
retain executive directors over the full life of our Remuneration Policy
whilst ensuring that we are managing the relativities between all
executives fairly in the process. In addition, we have sought to ensure
that a significant proportion of total remuneration continues to be
focused on the delivery of long-term performance.
As highlighted above, the Committee is not seeking to increase
quantum to be aligned to our US peers, nor are we seeking to be
aligned with US pay models, despite our significant exposure to the
US from a talent and commercial perspective.
Nonetheless, we have considered the US pay context whilst using the
comparison with our UK peers in the FTSE 30 ex. FS as our main
reference point, in order to support our determination of an
appropriate total remuneration package for our executive directors
going forward. We have chosen the FTSE 30 ex. FS as our principal
peer group. Over the past two financial years, Compass has
consistently been positioned around the middle of this group, having
progressed from around 20th position during the first year of operation
of the 2022 Remuneration Policy, as the Company continued its
recovery from the impact of restrictions imposed during the
COVID-19 pandemic.
To that end, we are proposing to increase the incentive opportunity
available under the Remuneration Policy for our executives as set out
in the table below. It is our intention to move our executives to these
levels at an appropriate point in time, reflective of various factors,
including incumbent performance and experience, Company
performance and shareholder value created, and the general
talentlandscape.
Shareholding requirement changes
We are conscious of the importance of long-term shareholding for our
executives in order that their interests are linked with those of
shareholders. As such, for any increase in LTIP opportunity that we
implement, we propose to increase the shareholding requirements for
executives by a commensurate amount, as shown in the table below.
Implementation of the 2025 Policy
The Committee is confident that the changes proposed will continue
to enable Compass to motivate and retain our executive directors, and
to align with the delivery of our growth strategy, rewarding the creation
of sustainable long-term shareholder value.
A significant part of the Policy review was to assess the remuneration
package of the executive directors on a holistic basis, assessing the
Executive Director
Maximum opportunity (% of salary)
Shareholding
requirement
(% of salary)
Annual bonus Long-term Incentive Plan (LTIP)
Current Policy Proposed Policy 2024-2025 award Current Policy Proposed Policy 2024-2025 award
Dominic Blakemore
Aligned to
2024-2025
LTIP award
Group CEO 200% 250% 250% 400% 500% 500%
Petros Parras
Group CFO 150% 200% 200% 350% 400% 375%
Palmer Brown
Group COO, North America 150% 200% 200% 350% 450% 400%
Remuneration Committee Report continued
market positioning of the overall remuneration package, and
considering each remuneration element individually. Dominic’s
basesalary is currently positioned just below the lower quartile of
theFTSE30 ex. FS, despite him having served as Group CEO for
almost seven years, almost twice the median tenure of those within
the peer group.
Within the context of Dominic’s sustained strong performance in role,
the success of the business over the period and his proven track
record of delivery, and the critical need to retain Dominic, the
Committee took the view that his base salary should be recalibrated.
The proposed salary of £1,400,000 (an increase of 20.7%) will be
effective 1 January 2025, bringing this broadly in line with the median
of the FTSE 30 ex. FS. The Committee considered whether to phase
the implementation of the 2025 Policy increase for the Group CEO.
Dominic will be entering his eighth year as Group CEO at the time of
the proposed increase. Given this tenure and sustained exceptional
performance since his appointment, the Committee took the view that
an immediate recalibration was appropriate in these specific
circumstances. The Committee is very mindful that this increase is
significantly larger than the expected average increase of the wider
UK population, and how this may be perceived. However, this
approach is in line with that taken throughout the wider organisation,
that where an individual’s base salary is deemed to be significantly
below the market, the appropriate recalibration will take place.
The Committee determined base salary increases of 2.03% for the
Group CFO and 2.07% for the Group COO, North America, effective
1 January 2025. These are below the average increase for employees
across the wider UK population, which is expected to be around 5%
during 2025, inclusive of the impact of national minimum wage and
The Living Wage increases in the UK.
The Committee proposes to phase the increase in LTIP opportunity for
the Group CFO and Group COO, North America, such that the LTIP
award for the Group CFO will increase from 350% to 375% of salary for
the 2024-2025 award, with a second-stage increase from 375% to
400% of salary from 2025-2026 and beyond. Similarly, the LTIP award
for the Group COO, North America will increase from 350% to 400% of
salary for the 2024-2025 award, with a second-stage increase from
400% to 450% of salary from 2025-2026 and beyond. To recognise
tenure and performance in the role, the LTIP award for the Group CEO
will increase from 400% to 500% of salary for the 2024-2025 award.
The Committee intends to grant LTIP awards to executive directors at
the maximum levels permitted under the current Policy, shortly after
the 2024 full year results announcement.
Subject to shareholder approval of the 2025 Policy, the Committee
intends to make top-up LTIP awards to executive directors as soon as
practicable following the 2025 AGM, to bring the in-year awards for
2024-2025 to the percentage highlighted in the table below, based on
their prevailing salary at the date of the top-up award.
A summary of the proposed changes to the Policy and how the
Committee intends to implement the 2025 Policy for the financial year
2024-2025 is set out in the table below, and on the pages that follow.
90 Corporate Governance and Directors’ Report
Pay positioning following implementation
The resulting positioning highlights that we are not making proposals
to simply chase a certain benchmarking position. Instead we have
been considerate of each individual’s experience in their role and for
2024-2025 chose to exhibit restraint in not utilising the full headroom
within the proposed 2025 Policy for both the Group CFO and Group
COO, North America. We will continue to keep the opportunities under
review over the life of the 2025 Policy to ensure that they continue to
appropriately reflect the experience and responsibilities of each of our
Executive Directors.
Incentive performance measures
The Committee recognises the importance of the alignment between
remuneration, the business, and our key strategic aims, and ensuring
that executives are rewarded only for delivering against our strategy.
As a result, the Committee has sought the views of major
shareholders, and having carefully considered the incentive
performance measures that will apply on an ongoing basis. Changes to
the bonus measures for the Group CEO and Group CFO were made for
2023-2024 to reflect our ongoing strategy and these bonus measures
will now also apply to Palmer Brown in his capacity as Group COO,
North America, for 2024-2025.
The feedback from shareholders highlighted divergent views on the
most appropriate LTIP performance measures. Whilst there was some
support for the adoption of earnings per share as a key measure in the
LTIP, the most significant shareholder feedback supported the
retention of cash flow and ROCE measures. Having reflected on this
feedback, the Committee resolved to retain the existing cash flow,
ROCE and relative TSR measures in the LTIP. The Committee
reviewed the appropriateness of the peer group within the TSR
measure and whether to adopt a bespoke peer group. There are
relatively few companies of significant scale in our sector; Compass
has three to four times the market capitalisation of our main
competitors, and having a very small comparator group can mean that
relatively small differences in performance outcomes can lead to
materially large and undesirable movements in payout levels. As such,
the Committee resolved to retain a broader index-based comparator
group to mitigate these effects.
We will keep the performance measures under review to ensure that
the LTIP remains appropriately aligned to the prevailing business
strategy and objectives.
The 2024-2025 targets within the annual bonus plan and for the
LTIPaward have been reviewed to ensure that these are
appropriatelyrobust and stretching in the context of the increased
incentive opportunity. The ranges and proposed targets were debated
by the Committee during the target-setting process to ensure that
theincreased incentive opportunity is earned only in the case of
additive performance. If maximum performance is achieved under
thetargets that have been set, this will result in the creation of
significant shareholder value for the benefit of our shareholders,
clients and colleagues.
Concluding remarks
I would like to take this opportunity to thank our major shareholders,
key institutional investor bodies, proxy agencies and other
stakeholders for the time taken to engage with us on the
Remuneration Policy during the year.
We welcome your feedback on all aspects of our approach to
executive pay and I look forward to continuing our open dialogue.
I hope that you will join the Board in supporting the resolution to
approve the 2024 Directors’ Remuneration Report and the 2025
Policy at the upcoming AGM. I remain available for any shareholders
who wish to discuss any of the content set out in this Report ahead of
the AGM.
John Bryant
Chair of the Remuneration Committee
26 November 2024
91Compass Group PLC Annual Report 2024
Committee summary
Activities during the year
The key activities of the Committee during 2024 are set out
below. The Committee also monitors performance and regularly
reviews discretionary matters relating to individuals below
executive director level in connection with the Company’s share
plans. It also agrees the terms of appointment and exit
arrangements for executive directors and other members of the
Executive Committee. The Committee held five scheduled
meetings during the year, details of which are set out below:
November 2023
– reviewed salaries for the Executive Committee and executive
directors effective 1 January 2024, taking into consideration
the budgets for salary reviews across the Group
– determined performance outcomes for the 2020-2021 LTIP
awards and 2022-2023 annual bonus plan
– set targets for the 2023-2024 annual bonus plan
– approved the structure and proposed quantum of the
2023-2024 LTIP awards
– considered the vesting of the Senior Manager Incentive Plan
Plus (SMIPP) for US participants
– approved the 2023 draft DRR
– assessed the share ownership compliance of directors
against the share ownership guidelines
March 2024
– held an initial discussion on the proposed 2025 Policy
May 2024
– approved the appointment of the Committee’s new adviser
– received a performance update on the 2023-2024 annual
bonus plan
– received a performance update on the extant LTIP awards
– considered the wider employee perspective including an
employee landscape dashboard and remuneration of the
highest earning individuals in the Group
– received an update on external remuneration trends from
external advisers
– considered proposals in respect of the 2025 Policy and
approved shareholder engagement materials
July 2024
– considered shareholder feedback in respect of the proposed
2025 Policy and discussed and approved the approach going
forward
September 2024
– considered additional feedback from engagement with
shareholders in respect of the proposed 2025 Policy
– received an update on progress against 2023-2024 annual
bonus targets and in-flight LTIP awards
– reviewed the broader Company remuneration philosophy
– determined the structure and measures for the 2024-2025
LTIP awards and 2024-2025 annual bonus plan
– reviewed the draft DRR for 2024
– reviewed the fee for the Chair of the Board
– undertook the annual review of the Committee’s terms of
reference
Governance
John Bryant was appointed Chair of the Remuneration Committee in
February 2023. Membership of the Committee comprises the Chair of
the Committee and all the other independent non-executive directors.
Members are appointed by the Board following recommendation by
the Nomination Committee. Biographies of Committee members are
on pages 57 to 59.
The Committee meets at least twice a year. The quorum necessary for
a meeting is two. The Committee held five scheduled meetings during
the year, two of which were held specifically to discuss the proposed
2025 Policy. The Committee attendance table is on page 60. The
Chair of the Committee attends the AGM, either virtually or in person,
to respond to shareholder questions on the Committee’s activities.
Only members of the Committee have the right to attend its meetings.
The Group General Counsel and Company Secretary acts as Secretary
to the Committee and attends all meetings. The Group Chief People
Officer and the Group Reward Director are invited to attend meetings
to advise on remuneration matters. The Chair of the Board, Group CEO
and Group CFO may also attend by invitation. No individual attends
meetings where their own remuneration is discussed or in
circumstances where their attendance would not be appropriate. The
Committee is authorised to seek external legal and independent
professional advice as it sees fit. Details of the advisers to the
Committee can be found on page 118.
Structure and content of the Report
This DRR has been prepared on behalf of the Board by the Committee
in accordance with the requirements of the Companies Act, The Large
and Medium-sized Companies and Groups (Accounts and Reports)
(Amendment) Regulations 2013, The Companies (Miscellaneous
Reporting) Regulations 2018 and The Companies (Directors’
Remuneration Policy and Directors’ Remuneration Report)
Regulations 2019. The sections include:
– the Committee’s key activities in the year, followed by an ‘at a
glance’ summary of the 2023-2024 performance and remuneration
outcomes, a summary of the proposed 2025 Policy and
remuneration in the wider employee context
– the proposed 2025 Policy effective 6 February 2025, subject to
shareholder approval, and details of the consultation undertaken
with shareholders on the proposed changes
– how the 2022 Policy was implemented during 2024 and how the
proposed 2025 Policy will be implemented in 2025
Auditable disclosures are the:
– executive directors’ single total figure of remuneration (page 107)
– non-executive directors’ remuneration (page 111)
– long-term incentive awards (page 109 to 111, and 113)
– extant equity incentive awards held by executive directors
(page114)
– directors’ interests (pages 114 to 115)
– payments to past directors (page 115)
– payments for loss of office (page 115)
92 Corporate Governance and Directors’ Report
100%
ROCE
100%
AFCF
100%
Relative TSR
Measure Outcome
Remuneration at a glance
Linking pay to performance
Remuneration outcomes in 2024
Bonus LTIP
Organic revenue growth Operating efficiencies Competitive advantage Shareholder returns
Organic revenue growth PBIT growth Workplace safety Relative TSR
Operating margin Food safety
Return on capital employed
Food waste
Adjusted free cash flow
Cash conversion
100% for the Group CEO
and Group CFO
100% for the Group CEO
and Group COO, North
America
2021-2022 LTIP award
Dominic Blakemore
Palmer Brown
2023-2024 single total
figure of remuneration
2023-2024 annual bonus plan
Dominic Blakemore
Petros Parras
Palmer Brown
2024 performance highlights
The 2021-2022 LTIP award
granted to Petros Parras
pre-dates his appointment
as an executive director.
Dominic Blakemore
24
23
£9,499k
£7,498k
Petros Parras
24
£1,645k
N/A
23
Palmer Brown
24
23
£6,441k
£2,271k
Total shareholder return
The performance graph shows the Company’s TSR performance
against the performance of the FTSE 100 over the 10-year period to
30 September 2024. The FTSE 100 Index has been chosen as a broad
equity market index of which the Company has been a constituent
member throughout the period.
KPIs
Compass FTSE 100
0
100
200
300
400
20242023202220212020201920182017201620152014
11%
Organic revenue
growth
16.4%
PBIT growth
7.1%
Underlying
operating margin
Total shareholder return (TSR) – Compass vs FTSE 100 (£)
The remuneration levels in 2024 reflect the
Group’s exceptional performance, where
record levels of performance have been
achieved in many areas, and strong
shareholder returns delivered.
The Group COO, North America’s 2023
remuneration excludes LTIP awards which predate
his appointment as an executive director.
Operating margin
Cash conversion
Organic revenue growth
ESG
Measure
Outcome
100%
100%
100%
100%
20%
15%
45%
20%
20%
40%
40%
PBIT growth
Cash conversion
ESG
Measure Outcome
100%
100%
100%
60%
25%
15%
100% for the Group COO,
North America
93Compass Group PLC Annual Report 2024
The below table sets out a summary of our current and proposed Remuneration Policy for executive and non-executive directors, as well as its
proposed implementation for 2025.
Element and summary of 2022 Policy
Summary ofproposed
2025 Policy changes Implementation of 2025 Policy for 2024-2025
Base salary
Base salaries are reviewed annually with any
increases normally taking effect on 1January of each
year.
No change. 2025 base salary levels effective 1 January 2025:
Director Salary
Dominic Blakemore £1,400,000 (20.7% increase)
Petros Parras £755,000 (2.03% increase)
Palmer Brown $1,429,000 (2.07% increase)
The average increase for employees across the wider UK
workforce is expected to be around 5% during 2025.
Benefits and pension
Benefits include, but are not limited to, healthcare
for executive directors and their dependants, limited
financial advice, life assurance and car benefit.
Pension cash allowances are aligned to the
maximum rate available to the majority of the wider
UK workforce (currently 6% of base salary).
No change. No change in benefits or pension arrangements
for 2025.
Annual bonus plan
The maximum award for the Group CEO is 200% of
base salary and for the other executive directors is
150% of base salary.
One-third of the bonus for executive directors is
subject to mandatory deferral into shares, for a
period of three years.
Awards are subject to malus and clawback.
The maximum award
for the Group CEO
is250% of base salary
and for the other
executive directors is
200% of base salary.
No change to structure
of the plan including
deferral and malus and
claw-back provisions.
The measures and weightings for the 2025 bonus will be
as follows:
Measure Weighting
PBIT growth 60%
Cash conversion 25%
ESG 15%
Measures are based on Group performance for the
Group CEO and Group CFO, and North America
performance for the Group COO, North America
Long-term Incentive Plan
Maximum opportunity of 400% of salary for the
Group CEO and 350% of salary for other executive
directors.
A two-year holding period applies following the
three-year performance period. Awards are subject
to malus and clawback.
Maximum opportunity
of 500% of salary for
the Group CEO, 450%
for Group COO, North
America and 400% for
the Group CFO.
No change to structure
of the plan including
holding period and
malus and clawback
provisions.
The LTIP award levels for 2025 will be as follows:
Director
LTIP
award
Group CEO 500%
Group CFO 375%
Group COO, North America 400%
Performance measures for the 2024-2025 award are
ROCE, AFCF and relative TSR, weighted 40%, 40% and
20% respectively
Shareholding requirements
4x base salary minimum shareholding requirement
for the Group CEO and 3.5x base salary for other
executive directors, normally expected to be
achieved within five years.
Executive directors are required to hold the lower of:
(i) their shareholding at the date of termination of
employment; or (ii) shares equivalent to their share
ownership guideline at that date, for a period of two
years post-employment.
An increase in the
shareholding
requirement, aligned to
the LTIP award granted
in the relevant financial
year.
Shareholding requirement to align with the 2024-2025
LTIP award:
Director
Shareholding
requirement
Group CEO 5x
Group CFO 3.75x
Group COO, North America 4x
Chair of the Board andnon-executive director fees
The fees for the non-executive directors are reviewed
and determined by the Board each year to reflect
appropriate market conditions, and may be
increased if considered appropriate.
No change. Fees for non-executive directors for 2024-2025:
Chair of the Board fee
£620,000
(4.0% increase)
Non-executive director base fee
£103,500
(3.9% increase)
Senior Independent Director fee £30,000 (no increase)
Committee Chair fee £30,000 (no increase)
Remuneration Policy summary
94 Corporate Governance and Directors’ Report
Remuneration in the wider context
Engaging with our employees
Our people are at the heart of our business, and we want our employees to thrive in a fair and inclusive work environment. Understanding their
needs and motivations helps us to provide a great place to work and to drive business performance.
Engagement with our employees takes many forms, including surveys, roundtables, townhall meetings, SpeakUp, We’re Listening reports, and
initiatives taken in conjunction with trade unions and other employee consultative bodies. Our Designated Non-Executive Director for Workforce
Engagement (DNED) also held roundtable discussions with employees from around the Group during the year, gathering colleagues’ views and
sharing feedback with the Board.
Pages 68 to 71 provide an overview of how we engaged with employees and other stakeholders in 2024.
Details of the roundtable sessions are set out on page 66.
Our employee dashboard
When considering executive remuneration and setting the Remuneration Policy, the Committee takes into consideration the wider workforce.
Adetailed employee landscape dashboard was presented to the Committee at its May 2024 meeting. The dashboard covered the following areas:
Employee landscape dashboard
Inflationary
pressures
Throughout the year, we continued to monitor the inflationary pressures faced by many employees in the Group, and where
appropriate made tactical changes to help mitigate the impact of inflation and improve employee retention. Below are
some examples of our actions.
Our UK&I business:
– is a Living Wage Recognised Service Provider
– continued to provide colleagues with free meals, a practice which was first introduced during the pandemic
– provided enhanced access to loans from external providers for individuals who would not ordinarily meet the eligibility
criteria of high-street lenders, and access to early pay-days
– provided access to a Helping Hands fund to support with emergency and unexpected payments
– provided financial education seminars covering money management, Compass’ benefits, share plans, savings and
investments and retirement planning
– extended access to medical plans
Other businesses:
– in markets with high inflation such as Türkiye, India and Poland, in keeping with local market practice our local
businesses operated additional salary reviews during the year to mitigate the impact of inflation
– for colleagues in North America, 50% of earned wages can be accessed in advance of pay-day, helping them to manage
their finances more effectively
– continued to provide colleagues with free meals across a number of markets
Minimum and
Living Wage
The UK business has made significant progress tackling low pay across the UK, with 67% of employees receiving the Real
Living Wage or above, at 30 September 2024, compared to 37% of employees in 2020, when the UK business first became
a Real Living Wage Recognised Service Provider.
Gender and
ethnicity pay
gap
The Compass UK gender pay gap, reported in 2024, reduced further from 12.6% to 8.2%, which is below the national
average of 14.3%. Female representation at senior management level, including chef roles, is a focus for the business. 37%
of chefs in our businesses are female, above the industry average of 20%.
The Compass UK ethnicity pay gap was published for the first time in 2022. Our UK&I business reported in 2024 that there
was no ethnic minority pay gap, i.e. a median of 0%. To continue progress in this area, our UK business is now breaking
down the data of its ethnic minority colleagues further, to provide greater insights to establish if specific groups need extra
support or a different approach to progression.
CEO
pay ratio
The Committee reviews the CEO pay ratio and the reasons for any movement in the ratio each year. Further detail can be
found on page 116.
Pay
across the
organisation
The Committee continues to review the structure of the Group’s long-term share plans and to ensure eligibility and
participation remain appropriate. In 2023-2024 a total of 450 colleagues below the Executive Committee were granted
long-term share awards.
We have a broadly consistent annual bonus plan across our leadership team, with outcomes in the 2023-2024 financial
year based on local, regional and Group performance.
Further detail on our approach to remuneration below Board level is set out on the following page.
95Compass Group PLC Annual Report 2024
Alignment of executive and workforce remuneration
Component Executive directors Below Board level
Base pay
Salary increases as a percentage of salary are normally
aligned with, or lower than, the average percentage
increase for the wider UK population.
The average salary increase for employees across the wider
UK population is expected to be around 5% during 2025,
inclusive of the impact of national minimum wage and
TheLiving Wage increases in the UK.
Benefits
Benefits are aligned to market practice. Core employee benefits are competitive and reflect local
market practice.
Pension
Pension allowance of 6% of base salary, which is aligned
with the maximum rate available to the majority of the
wider UK workforce.
Pension arrangements reflect local market practices and
requirements.
The maximum rate available to the majority of the wider UK
workforce is currently 6% of salary.
Annual bonus
Maximum annual bonus opportunity of 250% of base salary
for the Group CEO and 200% of base salary for other
executive directors.
Annual bonus is subject to performance against financial
and ESG measures.
One-third of any bonus earned by executive directors is
deferred into shares for three years.
Annual bonus opportunities vary by role. For the global
leadership team, the principles of the annual bonus plans
are consistent with those for executive directors.
They include financial performance targets based on the
agreed budget, where target bonus is normally calibrated
for the delivery of budget. ESG measures also apply.
Alternative annual bonus structures may be used below the
global leadership team to meet local requirements and
regulations, such as profit-sharing or role-focused
arrangements (e.g. sales or procurement targets).
Long-term
incentives
Maximum Long-term Incentive Plan opportunity of 500% of
base salary for the Group CEO, and 450% and 400% of
base salary for the Group COO, North America and Group
CFO respectively (on a phased basis) as detailed on
page90).
Long-term Incentive Plan awards are subject to
performance against financial targets measured over a
three-year period, followed by a two-year holding period.
The Long-Term Incentive Plan (LTIP) is in place across the
Executive Committee and the global leadership team.
Eligibility is determined by role and individual contribution.
We also operate a Restricted Share Award (RSA) Plan
below executive director level, which supports recruitment,
retention and M&A activity. Awards are typically made four
times a year.
During 2023-2024, a total of 450 colleagues below the
Executive Committee received an award under the LTIP
and/or RSA Plan.
96 Corporate Governance and Directors’ Report
This section of the Report sets out our new Directors’ Remuneration
Policy (the 2025 Policy).
Our current Policy was approved at the AGM held on 3 February 2022.
The full version of the current 2022 Policy approved by shareholders
can be found in the 2023 Annual Report on the Company’s website.
The proposed 2025 Policy, which will be presented to shareholders for
approval at the AGM on 6 February 2025, is detailed in full in the
following section. If approved, the 2025 Policy will take effect from the
date of the AGM. Until then, the Policy approved on 3 February 2022
will continue to apply.
A full description of, and rationale for, the proposed changes to the
Remuneration Policy are set out in the Remuneration Committee
Chair’s statement; and as set out in the statement, we were pleased
that across our shareholder base there was a broad understanding of
the rationale for the updates we are proposing, and support for the
proposals themselves.
The 2025 Policy has been designed to incentivise executives to deliver
the Company’s strategic objectives. A significant proportion of
remuneration is performance-related, based on a selection of targets
linked to key business drivers which can be measured and understood
by both executives and shareholders.
The Committee may make minor amendments to the Policy (for
example for tax, exchange control, regulatory or administrative
purposes) without obtaining shareholder approval.
The Committee reserves the right to make any remuneration
payments, and payments for loss of office (including using any
discretion available to it in connection with such payments),
notwithstanding that they are not in line with the Policy set out below
where the terms of the payment were agreed: (i) before 3 February
2022 when the 2022 Policy came into effect, or before 6 February
2025 when the 2025 Policy is intended to come into effect, provided
that the terms of the payment were consistent with the Directors’
Remuneration Policy in force at the time they were agreed; or (ii) at a
time when the relevant individual was not a director of the Company
and, in the opinion of the Committee, the payment was not in
consideration of the individual becoming a director of the Company.
For these purposes ‘payments’ includes the Committee satisfying
awards of variable remuneration and, in relation to share awards, the
terms of the payment are ‘agreed’ at the time the award is granted.
The Committee considers the general pay and employment conditions
of employees across the Group and is sensitive to these, to prevailing
market and economic conditions and to governance trends when
assessing the level of salaries and remuneration packages of executive
directors and other members of the Executive Committee. Executive
directors have a greater proportion of their total remuneration
package at risk than other employees; however, the structure and
principles of incentives are broadly consistent. The wider employee
population of the Group will receive remuneration that is considered to
be appropriate in relation to their geographic location, level of
responsibility and performance.
Remuneration Policy
Remuneration Policy and practices in the context of
the UK Corporate Governance Code 2018 (the Code)
The Committee has considered the Remuneration Policy and its
practices in the context of the principles of the Code, as follows:
Clarity – the Committee endorses a transparent approach to
pay, by engaging regularly with executives, shareholders and
their representative bodies to explain the approach to executive
pay and how it links to Compass’ strategy. We are also
committed to clear and transparent disclosure on all aspects of
executive remuneration.
Simplicity – the purpose, structure and strategic alignment of
each element of pay have been clearly laid out in the
Remuneration Policy. The incentive arrangements are well
understood by both participants and shareholders. The
Committee monitors the structure of both the annual bonus
and long-term incentive plans to ensure they are easy to
understand and avoid unnecessary complexity. Additionally,
the Committee ensures there is sufficient flexibility to exercise
discretion and override formulaic outcomes where necessary.
Risk – the Committee ensures a careful balance between
competitive pay and performance-driven incentives, to mitigate
any risk of excessive rewards or encouraging the wrong type of
behaviours. There is an appropriate blend of fixed and variable
pay elements which, alongside the Committee’s ability to
exercise overarching discretion on Compass’ performance
within the year, allows for a holistic assessment of performance
in the year. There are robust measures in place to ensure
alignment with long-term shareholder interests, including the
post-vesting holding period, shareholding requirement, malus
and clawback provisions and mandatory deferral of a proportion
of bonus into shares.
Predictability – our Directors’ Remuneration Policy contains both
target and maximum opportunity details for our incentives, with
actual performance outcomes dependent upon performance
achieved against the targets for the period. Additionally, potential
remuneration opportunities under different performance scenarios
are set out on page 104 of this Report.
Proportionality – executives are incentivised to achieve
stretching, business-linked targets over annual and three-year
performance periods, ensuring strong alignment with the
business’ objectives and the creation of long-term sustainable
value for shareholders. The Committee assesses performance
holistically at the end of each period, taking into account
underlying business performance as well as the internal and
external market context. The Committee may exercise
discretion to ensure that payouts appropriately reflect the
experience of the Group during the year.
Alignment with culture – to ensure alignment across the
organisation, executive director pension cash allowances are
aligned to the maximum rate available to the majority of the
wider UK workforce. Additionally, the health and safety of our
employees, clients and consumers is a priority for Compass,
with 15% of the annual bonus plan measures focused on ESG
metrics. Our measures are meaningful to our business and
aligned to our ESG strategy, reflecting the importance of health
and safety and the impact of reducing food waste on the
environment.
97Compass Group PLC Annual Report 2024
Our review of executive remuneration arrangements at Compass has been underpinned by the key reward principles which drive our approach to
pay, all of which we believe support shareholders’ best interests:
The principles of our 2025 Policy centre on our ability to retain and recruit top talent over the long term:
Global competitiveness
Long-term sustainable
talent development Pay for performance Market positioning Balanced approach
Considering practice when
compared to companies of
a similar financial and
operational size, global
footprint and business
complexity, as well as the
competitive market for
talent in our sector.
It is important for us to
retain our executives’
skills, capabilities and
deep sector experience at
a key time in our growth
trajectory.
Commitment to ensuring
incentive outcomes are
supported by the
underlying performance of
the business and aligned
with shareholder
experience.
Ensuring remuneration
packages are aligned
appropriately to attract,
retain and incentivise key
talent.
Balancing any increase in
remuneration opportunity
with appropriate
safeguards, stretching
performance targets, and
best practice in corporate
governance.
Remuneration Policy structure
As set out in the Committee Chair’s statement, the structure of the Remuneration Policy remains effective; however, following detailed market
analysis undertaken of a relevant peer group, it became apparent that the quantum needed to be reviewed. The current structure is set out below.
Developing our new Policy for 2025
Annual
bonus
LTIP
Malus and clawback provisions apply
2-year
post-
employment
shareholding
requirement
applies
1/3 of bonus
deferred into
shares for
3 years
2/3 of bonus
paid in cash
0 +1 +2 +3 +4 +5
Year
Shares
released
Deferred
shares
released
Holding period
applies on vested
shares (2 years)
Changes from 2022 Policy
Full details of the rationale for our changes to the Remuneration Policy are set out in the Remuneration Committee Chair’s statement. A summary
of the changes proposed is included below.
Updates to variable remuneration opportunities
Our underlying motivation is to provide the capacity and flexibility to both attract and retain executive directors over the life of our 2025 Policy,
whilst ensuring that we are managing the relativities between all executives fairly in the process. To that end, we are proposing to increase the
incentive opportunity available under the Remuneration Policy for our executives as set out below, although it should be noted that we are not
intending to utilise this full headroom in 2024-2025:
– Group CEO increase in annual bonus opportunity from 200% of salary to 250% of salary, and increase in LTIP opportunity from 400% of salary
to 500% of salary
– Group CFO increase in annual bonus opportunity from 150% of salary to 200% of salary, and increase in LTIP opportunity from 350% of salary
to 400% of salary
– Group COO, North America increase in annual bonus opportunity from 150% of salary to 200% of salary, and increase in LTIP opportunity from
350% of salary to 450% of salary
Increased shareholding requirements
We are conscious of the importance of long-term shareholding for our executives, in order that their interests are linked with those of
shareholders. The shareholding requirements will therefore be increased for each executive director to align with the LTIP opportunity in the year.
LTIP
awards
vest
98 Corporate Governance and Directors’ Report
Shareholder consultation
2024
AGM
March 2024
Initial engagement with
shareholders introducing the
2025 Policy review: Engaged
with 10 largest shareholders
representing one-third ofour
issued share capital (ISC).
March
May 2024
Engagement with shareholders
as we developed our 2025 Policy:
Engaged with c.30 major
shareholders representing over
half of our ISC, outlining our
proposed approach.
July
May
May and June 2024
Engagement with
shareholders as we
developed our 2025
Policy: Further
discussions
with 15 shareholders
representing around
40% of our ISC.
July 2024
Follow-up letter to top30
shareholders, with further
engagement with an additional 80
other shareholders, providing
feedback from first round of
consultation and setting out revised
proposals which incorporated
shareholder feedback.
July to
September 2024
Calls with shareholders
who requested further
discussion following the
update letter, along with
calls with the three main
proxy agencies.
Sept
2025
AGM
February 2025
2025 Policy
formallyproposed
toshareholders
at 2025 AGM.
We will continue to
engage with our
shareholders in the
lead-up to the 2025 AGM.
Remuneration Committee Meeting
The Company is committed to ongoing engagement and seeks major shareholder views in advance of proposing significant changes to its
remuneration policies. In formulating the revised 2025 Policy, we consulted extensively with over 100 shareholders, representing over
three-quarters of Compass’ issued share capital, and the three main proxy agencies. We are grateful for the valuable input received from
everyone we engaged with. The majority of shareholders were supportive of our proposals and understood the rationale we put forward in
light of our global reach, historical performance, and the need to continue to attract and retain talent to sustain our future growth.
The overall timeline for the consultation is shown below.
The Committee intends to continue with engagement following the 2025 AGM and throughout the year as and when appropriate.
99Compass Group PLC Annual Report 2024
Component parts of the remuneration package
The key components of the 2025 Policy to be put forward to a binding shareholder vote at our 2025 AGM are set out below:
Component and link to strategy Operation of component Maximum opportunity Performance measures
Base salary
Reflects the individual’s role,
experience and contribution.
Set at levels to attract and
retain individuals of the
calibre required to lead the
business.
Base salaries are reviewed annually
with any increases normally taking
effect on 1 January of each year.
Salaries are appropriately
benchmarked and reflect the role,
job size and responsibility as well as
the performance and effectiveness
of the individual.
Whilst there is no prescribed
formulaic maximum, any increases
will take into account prevailing
market and economic conditions as
well as increases for the wider
workforce. Increases may be above
this for example, when an executive
director: progresses in the role;
gains substantially in experience;
experiences a significant increase
in the scale of the role; or was
appointed on a salary below the
market median. Reasons will be
appropriately explained in the
relevant year’s Annual Report.
None.
Benefits and pension
To provide a competitive level
of benefits.
Benefits include but are not limited
to: healthcare for executive
directors and their dependants,
limited financial advice, life
assurance and car benefit.
These are offered to executive
directors as part of a competitive
remuneration package.
The Committee has the discretion
to offer additional allowances or
benefits to executive directors, if
considered appropriate and
reasonable in the circumstances.
These may include but are not
limited to relocation expenses,
housing allowance and school fees
where appropriate.
Executive directors are invited to
participate in the Company’s
defined contribution pension
scheme (or local plan) or to take a
cash allowance in lieu of pension
entitlement.
The cost of providing these benefits
can vary in accordance with market
conditions, which will, therefore,
determine the maximum value.
The Company’s pension
contribution (or pension cash
allowance as appropriate) is aligned
to the maximum rate available to
the majority of the wider UK
workforce (currently 6% of base
salary).
None.
Remuneration Policy continued100 Corporate Governance and Directors’ Report
Component and link to strategy Operation of component Maximum opportunity Performance measures
Annual bonus
Incentivises and rewards the
achievement of stretching
one-year key performance
targets set by the Committee
at the start of each financial
year.
The annual bonus is earned by the
achievement of performance over
the financial year against targets set
by the Committee at the start of
each financial year. It is delivered in
cash or a combination of cash and
deferred bonus shares.
The Committee retains discretion to
adjust the bonus outcomes to
ensure that they reflect underlying
business performance.
The annual bonus is subject to
malus and/or clawback for a period
of three years following the date of
payment or grant of an award in the
event of: discovery of a material
misstatement in the accounts or in
the assessment of a relevant
performance condition; where the
action or conduct of a participant
amounts to fraud or serious
misconduct or has a detrimental
impact on the reputation of the
Group; a material corporate failure;
or the occurrence of any other
exceptional event as determined at
the discretion of the Committee.
One-third of the bonus for executive
directors will be subject to
mandatory deferral into shares, for
a period of three years.
Dividend equivalents may be
accrued on deferred bonus shares.
Maximum bonus opportunity
expressed as a percentage of
basesalary:
– Group CEO: 250%
– other executive directors: 200%
No bonus is payable for
performance below threshold level.
Performance is measured over
the financial year. Performance
measures and weightings are
determined by the Committee
each year and may vary to
ensure that they promote the
Company’s business strategy
and shareholder value.
The performance measures and
their percentage weightings may
vary, depending upon a
director’s area of responsibility.
Performance measures may
include, but are not limited to,
profit, revenue, margin and cash
flow. Strategic KPIs including
ESG measures may also be
chosen. However, the overall
metrics will normally be
weighted to financial measures.
Annual bonus targets are set
with reference to internal
budgets and analyst consensus
forecasts, with maximum payout
requiring performance well
ahead of budget.
A bonus underpin may be
operated so that the bonus
outcome is reduced if the
underpin performance is not
met.
Details of the specific measures
applying to the bonus for
2024-2025 are shown in the
Annual Remuneration Report on
page 112.
101Compass Group PLC Annual Report 2024
Component and link to strategy Operation of component Maximum opportunity Performance measures
Long-Term Incentive Plan
(LTIP)
Incentivises and rewards
executive directors for the
delivery of longer-term
financial performance and
shareholder value.
Share-based to provide
alignment with shareholder
interests.
An annual conditional award of
ordinary shares which may be
earned after a three-year
performance period, based on the
achievement of stretching
performance conditions. Executive
directors normally hold vested LTIP
shares (net of any shares sold to
meet tax and social security
liabilities) for a period of two years
post vesting.
Calculations of the achievement of
the targets are independently
assessed and are approved by the
Committee. The Committee will
consider the Group’s underlying
performance over the performance
period and has discretion to adjust
the final vesting level to take this
into account.
Dividend equivalents may be
accrued on the shares earned from
LTIP awards.
Malus and clawback rules operate
in respect of the LTIP. The
Committee may decide at any time
before an award vests, or for a
period of three years after an award
vests, that any participant will be
subject to malus and/or clawback in
the event of: discovery of a material
misstatement in the accounts or in
the assessment of a relevant
performance condition; the action
or conduct of a participant
amounting to fraud or serious
misconduct or having a detrimental
impact on the reputation of the
Group; a material corporate failure;
or any other exceptional event as
determined at the discretion of the
Committee.
Awards are delivered in shares.
However, the rules contain
provisions to deliver value in cash if
necessary (for example, due to
securities laws), subject to the
discretion of the Committee,
determined at any time up to the
awards’ release.
In the event of a change of control,
any unvested awards will normally
vest immediately, subject to
satisfaction of performance
conditions and reduction on a
time-apportioned basis.
Awards may be made at the
following levels of salary:
– Group CEO: 500%
– Group CFO: 400%
1
– Group COO, North America:
450%
1
For performance measures other
than TSR, 0% of the award vests for
performance below threshold,
increasing to 50% vesting for
achievement of on-target
performance, increasing further to
maximum vesting for achievement
of maximum performance. Vesting
between points is on a straight-line
basis.
Any element of an award based on
relative TSR will vest in full for
top-quartile performance and 25%
of that element of the award will
vest if performance is at the median
relative to the chosen peer group.
Awards will vest on a straight-line
basis between median and
top-quartile performance
achievement. No shares will be
released for this element of an
award if the Company’s TSR
performance is below the median.
Performance is measured over
three financial years.
Performance measures and
weightings are determined by
the Committee each year. They
are typically weighted
significantly towards financial
metrics, and aligned to the
prevailing business strategy and
objectives. The Committee will
consult with major shareholders
prior to making material
changes to performance
measures.
Performance measures for the
2024-2025 award are ROCE,
AFCF and relative TSR, applying
40%, 40% and 20%
respectively.
LTIP targets are set with
reference to a range of relevant
reference points which may
include internal budgets and
analysts’ consensus forecasts,
with maximum payment
requiring stretching
performance.
Details of the targets for the LTIP
award to be made in 2024-2025
are set out, as required, in the
Annual Remuneration Report on
page 113.
1. Increases in LTIP opportunities will be implemented on a two-phase basis for the Group CFO and Group COO, North America, with an award of 375% and 400% for
the Group CFO and Group COO, North America respectively for the 2024-2025 award, granted in the first year of the 2025 Policy.
Remuneration Policy continued102 Corporate Governance and Directors’ Report
Notes to the policy table
Incentive plans
The LTIP described in the table on page 102 (known as The Compass
Group PLC Long Term Incentive Plan 2018) is the primary form of
equity incentive for executive directors.
Compass Group PLC Long Term Incentive Plan 2018 (LTIP)
Shareholders will be invited to vote on proposed changes to the LTIP
rules at the 2025 AGM. It is proposed to amend the LTIP rules (which
were last approved by shareholders at the 2018 AGM) to remove the
individual limits upon which awards are currently calculated by
reference to fixed salary multiples and to specify that awards granted
to executive directors will be subject to the individual limits specified
in the Policy from time-to-time. In addition, some further amendments
are being proposed to ensure the LTIP rules reflect the latest
institutional shareholder guidelines on dilution limits, including the
Investment Association’s Principles of Remuneration published in
October 2024, and to introduce some flexibility to accommodate any
future changes in institutional shareholder guidelines.
Restricted Share Award Plan (RSA Plan)
Shareholders will also be invited to approve the RSA Plan at the 2025
AGM. The RSA Plan was previously adopted by the Board in March
2019 and amended by resolution of the Committee in November
2020. Participation in the RSA Plan is at the discretion of the
Committee and awards may be granted to any employee (other than
executive directors) of the Company or any subsidiary. It is now
proposed to further amend the RSA Plan and to allow treasury shares
and newly-issued shares to be used to satisfy awards, subject to the
restrictions contained in the Investment Association’s Principles of
Remuneration as amended from time-to-time.
Shareholder approval will be sought at the 2025 AGM for the approval
of the RSA Plan and the amendments to the LTIP rules. Further details
are set out in the 2025 Notice of Annual General Meeting.
Available headroom as at 30 September 2024
10% in 10 years
Headroom available
LTIP utilised
8.98%
1.02%
8.98%
The Committee monitors the position regularly and prior to making an
award ensures that the Company remains within these limits. Any
awards which are required to be satisfied by market-purchased shares
are excluded from such calculations. On 30 September 2024, the
Company held 87,992,005 treasury shares. During the 2024 financial
year, no shares were purchased in the market by the trustees of The
Compass Group PLC All Share Schemes Trust. 2,585,610 treasury
shares and 274,511 market-purchased shares were used in the year
to satisfy the Company’s obligations under the Group’s employee
equity incentive schemes.
Dilution limits
All of the Company’s equity-based incentive plans incorporate
the current Investment Association Principles of Remuneration (the
Principles) on headroom, which provide that overall dilution under all
plans should not exceed 10% over a 10-year period in relation to the
Company’s issued share capital (or reissue of treasury shares).
As at 30 September 2024, the Company’s headroom position, which
remains within the current Principles, was as shown in the chart
below:
103Compass Group PLC Annual Report 2024
Minimum
T
arget
Maximum
100% 62%
27% 24% 49%
16%
28%
56%
13% 22% 65%
£4,778
£1,289
£8,042
£10,282
Maximum +50%
share price
growth
Minimum
T
arget
Maximum
100%
28%
29% 54%17%
13% 23% 64%
24% 48%
£3,104
£863
£5,204
£6,620
Maximum +50%
share price
growth
Minimum
T
arget
Maximum
100%
£6,868
£1,443
£11,943
£15,293
21% 25% 54%
10% 23% 67%
12%
29% 59%
Maximum +50%
share price
growth
Share ownership guidelines
In order that their interests are linked with those of shareholders,
directors are expected to build up and maintain a personal
shareholding in the Company. Under the 2025 Policy, executive
directors will be required to build up, and maintain, a personal
shareholding aligned to their respective long-term incentive awards
granted in the year as a percentage of base salary.
The shareholding guideline may be achieved by executive directors
retaining shares received as a result of participating in the Company’s
share plans. The guidelines specifically exclude the need to make a
personal investment should awards not vest. The required level of
executive shareholding is expected to be achieved within a five-year
period commencing from the date of appointment or date of increase
in shareholding requirement, whichever is the later.
Directors’ shareholdings are reviewed annually by the Committee to
ensure that directors are on course to achieve their guideline
shareholding within the period required. However, if it becomes
apparent to the Committee that the guidelines are unlikely to be met
within the timeframe, then the Committee will discuss with the
director a plan to ensure that they are met over an acceptable
timeframe. The Committee reserves the right to make the granting of
future LTIP awards to an executive director conditional upon reaching
the appropriate threshold in the required timeframe. For annual bonus
awards for executive directors, a minimum of one-third of the annual
bonus earned is deferred into shares for three years.
A post-employment shareholding requirement was implemented
under the Share Ownership Guideline Policy for executive directors
and applies to awards acquired after the effective date of the 2021
Policy (4 February 2021). The Policy requires executive directors to
hold the lower of (i) their shareholding at the date of termination of
employment; or (ii) shares equivalent to their share ownership
guideline at that date, for a period of two years post employment.
Non-executive directors are required to build up and retain a personal
shareholding equal to the value of their base fee over five years.
Non-executive directors are generally expected to purchase shares
equating to a minimum value of one-fifth of their fee each year until
the guideline is met.
Details of the interests of directors in shares and equity incentives are
set out on page 115, together with the extent to which each of the
directors has complied with the share ownership guidelines as at
30September 2024.
Illustrations of application of the 2025 Remuneration Policy
The graphs opposite show an estimate of the remuneration that could
be received by executive directors in office at the date of this DRR
under the proposed 2025 Policy. The charts in this section illustrate
for each executive director remuneration payable at minimum, target
and maximum outcomes, along with maximum outcome incorporating
an illustrative share price appreciation of 50% on shares granted
under the LTIP. Each of the bars is broken down to show how the total
under each scenario is made up of fixed elements of remuneration,
the annual bonus, the LTIP, and LTIP including share price
appreciation.
Dominic Blakemore, Group CEO
£’000
Palmer Brown, Group COO, North America
1
£’000
Petros Parras, Group CFO
£’000
Total remuneration
Fixed pay Annual bonus LTIP
1. Palmer Brown is paid in US dollars. For reporting purposes, this pay is
converted into sterling at an exchange rate of $1.2697/£1.
Remuneration Policy continued
The scenarios in the graphs are as follows:
– fixed pay includes:
– annual base salary incorporates the current base salaries and
base salaries effective 1 January 2025 on a pro-rata basis
– value of benefits as noted in the single figure table on page 107
for the Group CEO and Group CFO. Costs relating to prior year
expatriate benefits for the Group COO, North America, which are
included within the single figure table, are not included in the
scenario charts
– pension cash allowance at 6% of base salary
– 2024-2025 annual bonus shown as a maximum percentage of base
salary, with minimum, target and maximum performance shown as
0%, 50% and 100% respectively
– 2024-2025 LTIP shown as a maximum of base salary, with
minimum, target and maximum performance shown as 0%, 52.5%
and 100% respectively. Target payout of 52.5% is based on AFCF
and ROCE performance measures vesting at 50% of maximum and
the TSR measure vesting at 62.5% of maximum (midway between
threshold and maximum payout)
– share price appreciation has been calculated as a 50% increase in
the value of the LTIP between the date of grant and vesting
– no dividend accrual has been incorporated in the values relating to
the LTIP
104 Corporate Governance and Directors’ Report
Approach to recruitment remuneration
The Committee will apply the 2025 Policy when considering
the recruitment of a new executive director in respect of base salary,
pension and benefits, and short- and long-term incentives. Executive
directors will be provided with a pension cash allowance (or
contribution) in line with the maximum level of pension provided to the
majority of the wider UK workforce (currently 6% of base salary). It is
envisaged that the maximum level of variable remuneration which
may be granted to a new executive director would be within plan rules
and consistent with the 2025 Policy maximum opportunity for existing
executive directors and the Group CEO.
Other arrangements may be established specifically to
facilitate recruitment of a particular individual, albeit that any such
arrangement would be made within the context of aiming to minimise
the cost to the Company. The policy for the recruitment of executive
directors includes the facility to provide a level of compensation for
forfeited remuneration arrangements from an existing employer if
these are required in order to achieve a successful recruitment. Any
arrangement established specifically to facilitate the recruitment of a
particular individual would be intended to be of comparable form,
timing and commercial value to the benefits forfeited, and capped as
appropriate. The quantum, form and structure of any buyout
arrangement will be determined by the Committee taking into account
the terms of the previous arrangement being forfeited. The buyout
may be structured as an award of cash or shares. However, the
Committee will normally have a preference for replacement awards to
be made in the form of shares, deliverable no earlier than the original
awards. Where an executive director is appointed from either within
the Group or following corporate activity/reorganisation, the normal
policy would be to honour any legacy incentive arrangements to run
off in line with their original terms and conditions.
In cases where an executive director must be relocated from their
home location as part of their appointment, additional benefits in kind
and other allowances may be payable at the Committee’s discretion,
including but not limited to relocation, education, repatriation costs,
tax equalisation or other reasonable international assignment support
consistent with the relevant policies applicable to the wider workforce.
It is the Board’s intention that the policy on the recruitment of
new non-executive directors during the 2025 Policy period will apply
remuneration elements consistent with those in place for the existing
non-executive directors. It is not intended that cash supplements, day
rates or benefits in kind be offered, although in exceptional
circumstances such remuneration may be required in currently
unforeseen circumstances. Non-executive directors are not eligible for
pension scheme membership, bonus or other incentive arrangements.
Executive directors’ service agreements
It is the Company’s policy that executive directors have rolling service
contracts.
The executive directors in office at the date of this DRR have served
on the Board for the periods shown below and have service
agreements dated as follows:
Executive director Date of contract
Length of Board service
as at 30 Sep 2024
Dominic Blakemore 12 Dec 2011
7 Nov 2017
1
12 years, 7 months
Petros Parras 21 Sept 2023 0 years, 10 months
Palmer Brown 3 Oct 2021
21 Sep 2023
2
3 years, 0 months
1. Appointment was formally revised from 1 October 2017.
2. Appointment was formally revised with effect from 1 December 2023.
The current executive directors’ service contracts contain the key
terms shown in the table below:
Service contract key terms by provision
Provision Detailed terms
Remuneration
– base salary, pension and benefits
– car benefit
– family private health insurance
– life assurance
– financial planning advice
– minimum of 25 days’ paid annual leave
– participation in the annual bonus plan,
subject to plan rules
– participation in the LTIP, subject to
plan rules
Change
of control
– no special contractual provisions apply
in the event of a change of control
Notice period
– 12 months’ notice from the Company
– 6 months’ notice from the director
(12 months from the Group CEO)
Termination
payment
Payment in lieu of notice equal to
12 months:
– base salary
– pension supplement
– 10% of base salary in respect of benefits
All of the above would be paid in monthly
instalments, subject to an obligation on the
part of the director to mitigate their loss
such that payments will either reduce, or
cease completely, in the event that the
director gains new employment/
remuneration
Restrictive
covenants
– during employment and for 12 months
after leaving
105Compass Group PLC Annual Report 2024
The Company may pay for reasonable costs in relation to termination
of employment, for example tax, legal and outplacement support,
where appropriate.
All executive directors’ service contracts impose a clear obligation to
mitigate their position should a departing executive director take on
new employment or receive alternative remuneration.
Whilst unvested share awards will normally lapse, the Committee may
in its absolute discretion allow for awards to continue until the normal
vesting date, or for vesting to be accelerated (for example on death),
subject to achievement of the attendant performance conditions. In
such circumstances, awards vesting will normally be prorated on a
time-apportioned basis, unless the Committee determines otherwise.
Any such discretion in respect of leavers would only be applied by the
Committee to ‘good leavers’ where it considers that continued
participation is justified, for example by reference to performance
prior to the date of leaving. The malus and clawback provisions would
continue to apply in the event that any such discretion was exercised.
Chair of the Board’s remuneration
The fee for the Chair of the Board (Chair) is reviewed annually by the
Committee with any increase normally taking effect on 1 October. The
Chair is not eligible for pension scheme membership, bonus or
incentive arrangements. Costs in relation to business travel are
reimbursed. The Chair’s appointment is terminable without
compensation on six months’ notice from either side. The fee paid to
Ian Meakins for the 2024 financial year is set out on page 111.
Chair of the Board length of service
Non-executive
Chair
Original date
of appointment
Letter of
appointment/
re-appointment
1
Total length of
service as at
30 Sep 2024
Ian Meakins 1 Sep 2020 17 Aug 2020
9 May 2023
4 years,
1 month
1. The Chair has a letter of appointment setting out the Chair’s duties and the
time commitment expected. The Chair is appointed for an initial period of
three years, after which the appointment is renewable at three-year intervals
by mutual consent. Re-appointment is not automatic. In accordance with
the Code, all directors offer themselves for annual re-election by
shareholders.
Non-executive directors’ remuneration
The fees for the non-executive directors are reviewed and determined
by the Board each year to reflect appropriate market conditions and
may be increased if considered appropriate. All non-executive
directors receive a base fee. Additional fees are payable for other
Board duties and time commitments, including acting as Chair of the
Audit, Remuneration or Corporate Responsibility Committee, and
undertaking the role of Senior Independent Director (SID). An
additional fee may be payable for the role of Designated Non-
Executive Director for Workforce Engagement. Non-executive
directors are not eligible for pension scheme membership, bonus,
incentive arrangements or other benefits, save reimbursement of
travel costs and associated tax due if applicable. Fees paid in respect
of the 2024 financial year are set out on page 111.
Non-Executive Director length of service
Non-executive
director
Original date
ofappointment
Letter of
appointment/
re-appointment
1
Total length of
service as at
30 Sep 2024
Liat Ben-Zur 1 Jul 2024 20 June 2024 0 years,
3 months
Stefan
Bomhard
5 May 2016 5 May 2016
13 Mar 2019
17 Mar 2022
8 years,
5 months
John
Bryant
1 Sep 2018 17 May 2018
12 May 2021
3 June 2024
6 years,
1 month
Juliana
Chugg
26 Sep 2024 26 Sep 2024 0 years,
1 month
Arlene
Isaacs-Lowe
1 Nov 2021 22 Oct 2021
26 Sep 2024
2 years,
11 months
Anne-
Françoise
Nesmes
1 Jul 2018 17 May 2018
12 May 2021
3 June 2024
6 years,
3 months
Sundar
Raman
1 Jan 2022 22 Oct 2021
26 Sep 2024
2 years,
9 months
Leanne
Wood
4 May 2023 4 May 2023 1 year,
5 months
1. Non-executive directors have letters of appointment setting out their duties
and the time commitment expected. They are appointed for an initial period
of three years, after which the appointment is renewable at three-year
intervals by mutual consent. Re-appointment is not automatic.
Remuneration Policy continued106 Corporate Governance and Directors’ Report
Implementation of the 2022 Policy during the year ended 30 September 2024
Directors’ single total figure of remuneration
The table below sets out in a single figure the total amount of remuneration, including each element, received by each of the executive directors in
office for the year ended 30 September 2024.
Dominic Blakemore Petros Parras
4
Palmer Brown
4,5
Gary Green
4,5
2024
£000
2023
£000
2024
£000
2023
£000
2024
£000
2023
£000
2024
£000
2023
£000
Fixed pay
Base salary 1,144 1,083 617 – 1,043 821 214 1,315
Taxable benefits
1
23 28 66 – 110 153 6 75
Pension 69 75 37 – 63 49 13 121
Total fixed pay 1,236 1,186 720 – 1,216 1,023 233 1,511
Performance-related pay
Bonus
2
2,320 2,190 925 – 1,654 1,248 320 1,997
LTIP
3
5,943 4,122 – – 3,571 – 4,764 3,828
Total variable pay 8,263 6,312 925 – 5,225 1,248 5,084 5,825
Single total figure of remuneration 9,499 7,498 1,645 – 6,441 2,271 5,317 7,336
1. Taxable benefits comprise healthcare insurance, limited financial advice, life assurance and car benefit. Palmer Brown relocated from the US to the UK prior to his
appointment as Group CFO and returned to the US prior to his appointment as Group COO, North America. As a consequence, during 2023 and 2024, Palmer
received benefits relating to his assignment which are included in the figures above.
2. The performance measures and outcome of the 2023-2024 bonus can be found on pages 108 to 109. Two-thirds of the 2023-2024 bonus for executive directors
will be paid in cash with the remaining one-third being deferred into shares. In order to comply with certain US tax rules, Gary Green’s 2023-2024 bonus will be
paid entirely in cash without deferral into shares. The bonus earned by Petros Parras for the period 1 October to 30 November 2023 was earned prior to his
appointment as a director and is therefore not included in the bonus figure above.
3. The 2021-2022 LTIP award will vest in November 2024. Details of the performance measures and outcome are shown on pages 109 to 110. The amount
presented above includes the value of accrued dividend-equivalent shares. The values attributed to share price growth for Dominic Blakemore, Palmer Brown and
Gary Green were £1,539k, £925k and £1,234k respectively. Under the 2021-2022 LTIP, Petros Parras was awarded 16,121 shares prior to his appointment as
Group CFO. This award will vest in November 2024, together with accrued dividend-equivalent shares. The 2023 LTIP values for Dominic Blakemore and Gary
Green have been updated from a provisional value to the actual value to reflect the vesting on 21 November 2023.
4. The base salary, taxable benefits and pension figures for Petros Parras, Palmer Brown and Gary Green for 2024 are pro rated for their time in office/reflect a
change in role (as appropriate) during the year.
5. Palmer Brown and Gary Green’s base salary and other emoluments for the year are shown in sterling at an exchange rate of $1.2697/£1 (2023: $1.2217/£1).
Base salary
The Committee reviewed base salaries in the context of the Group’s strong performance in the year and its relative market positioning when
measured against companies of comparable size, scale and complexity. It also took into account the average salary increase in the wider
employee population. The base salary increase percentage for the Group CFO and Group COO, North America was lower than the average
percentage increase for the wider UK population.
The annual base salary for each executive director for the year ended 30 September 2024 is set out below:
Director Base salary Effective date
Dominic Blakemore £1,160,000 1 January 2024
Petros Parras £740,000 1 December 2023
1
Palmer Brown $1,400,000 1 December 2023
2
1. Petros Parras was appointed to the Board as Group CFO on 1 December 2023.
2. Palmer Brown was appointed as Group COO, North America on 1 December 2023.
Pensions
At 30 September 2024, there were no executive directors actively participating in any Compass Group defined benefit pension arrangements and
none of the executive directors were accruing additional entitlements to benefits under any arrangements that existed prior to their appointment
as executive directors.
The Company pension contribution, or pension cash allowance, as appropriate, paid to each executive director was 6% of their base salaries.
Remuneration report
107Compass Group PLC Annual Report 2024
Annual bonus plans
2023-2024 bonus
The bonus targets and outcomes for the year ended 30 September 2024 are set out below. The achievement of targets is calculated on a
straight-line basis between minimum and target (par) and between target and maximum, and by reference to budgeted exchange rates.
As was the case in previous years, results have been assessed on a holistic basis and adjusted, based on our Quality of Performance principles.
For example the measurement of the financial results is based on the underlying outcome achieved in the financial year, with gains/losses
attributable to currency movements, charges and the impacts of restructuring and/or acquisitions/disposals usually being excluded. This ensures
that outcomes are an appropriate reflection of underlying performance. Outcomes can be adjusted positively or negatively.
Structure
The bonus plan for 2023-2024 was designed to align to the Group’s strategy for growth and to establish targets that were achievable, fair and
within management’s control.
The bonus structure for 2023-2024 is set out below:
Dominic Blakemore and Petros Parras
Measure
1
Description of measure Weighting
Financial measures
Profit growth (%) A key measure of our financial performance encompassing revenue and margin
performance in one metric, by comparing the underlying operating profit
delivered in the current year with that of the prior year, expressed as a
percentage and adjusted for exchange rate movements.
60%
Cash conversion (%) Demonstrates the Group’s ability to convert profit into cash – by setting a target
percentage of profit to be converted to cash.
25%
ESG measures
Total Recordable Injury
Frequency Rate (TRIFR)
A reduction in injury rates is an important measure of the effectiveness of the
Group’s safety programmes. It also lowers rates of absenteeism and costs
associated with work-related injuries and illnesses.
5%
Food Safety Incident
Rate (FSIR)
Food safety is a measure of the Group’s ability to provide food that is safe and
of the right quality to its consumers globally.
5%
Food waste technology
deployment and usage
Food waste is a key contributor to carbon emissions. Reducing this also has a
high correlation with operating margin improvement. Raising awareness
through measurement will help to drive a significant reduction in food waste.
5%
Total 100%
Palmer Brown and Gary Green
Measure
1
Description of measure Weighting
Financial measures
Operating margin (%) Demonstrates the efficiency of the region’s operations in delivering great food
and support services.
45%
Cash conversion (%) Demonstrates the region’s ability to convert profit into cash – by setting a
target percentage of profit to be converted to cash.
20%
Organic revenue growth
(%)
Compares the revenue delivered from continuing operations in the current year
with that from the prior year, adjusting for the impact of acquisitions, disposals
and exchange rate movements.
20%
ESG measures
Total Recordable Injury
Frequency Rate (TRIFR)
A reduction in injury rates is an important measure of the effectiveness of the
Group’s safety programmes. It also lowers rates of absenteeism and costs
associated with work-related injuries and illnesses.
5%
Food Safety Incident
Rate (FSIR)
Food safety is a measure of the Group’s ability to provide food that is safe and
of the right quality to its consumers globally.
5%
Food waste technology
deployment and usage
Food waste is a key contributor to carbon emissions. Reducing this also has a
high correlation with operating margin improvement. Raising awareness
through measurement will help to drive a significant reduction in food waste.
5%
Total 100%
1. Measures for the Group CEO and Group CFO are assessed at a Group level. Those for the Group COO, North America are assessed at regional North America level.
Performance measures and targets
The outcomes against the annual bonus targets for 2023-2024 are set out below. 0% of the bonus is paid at minimum performance, 50% at par
performance, and 100% at maximum performance.
Dominic Blakemore and Petros Parras
1
Measures
2
Weighting Minimum Par (target) Maximum Achieved
% of performance
target achieved
Profit growth (%)
3
60% 4.0% 9.5% 14.0% 16.4% 100%
Cash conversion (%)
4
25% 78.5% 82.5% 84.5% 88.2% 100%
Total Recordable Injury Frequency Rate 5% – Limit 12.1 10.7 100%
Food Safety Incident Rate 5% – Limit 0.17 0.13 100%
Food waste (number of sites with regular usage of technology) 5% 7,555 7,780 8,000 9,947
†
100%
Total 100%
Remuneration Report continued108 Corporate Governance and Directors’ Report
Palmer Brown and Gary Green
1
Measures
2
Weighting Minimum Par (target) Maximum Achieved
% of performance
target achieved
Operating margin (%)
5
45% 7.9% 7.95% 8.05% 8.17% 100%
Cash conversion (%)
4
20% 81.1% 85.1% 87.1% 87.8% 100%
Organic revenue growth (%)
6
20% 6.0% 7.5% 9.0% 10.5% 100%
Total Recordable Injury Frequency Rate 5% – Limit 16.4 15.9 100%
Food Safety Incident Rate 5% – Limit 0.068 0.066 100%
Food waste (number of sites with regular usage of technology) 5% 3,300 3,400 3,500 4,175
†
100%
Total 100%
Dominic Blakemore Petros Parras
8
Palmer Brown
8
Gary Green
8
Value of bonus
7
£2,320,000 £925,000 $2,100,000 $406,718
Notes to bonus outcome tables:
1. Financial targets for 2023-2024 bonus purposes are all set and measured at 2024 foreign exchange budget rates, not actual rates. Where appropriate, results
have been adjusted, based on our quality of performance principles, to ensure that outcomes are an appropriate reflection of underlying performance.
2. Measures for the Group CEO and Group CFO are assessed at a Group level. Those for the Group COO, North America are assessed at regional North America level.
3. Profit growth is growth in underlying operating profit on a constant currency basis.
4. Cash conversion is underlying operating cash flow divided by underlying operating profit, expressed as a percentage.
5. Operating margin is underlying operating profit divided by underlying revenue.
6. Organic revenue growth is underlying revenue excluding businesses acquired, sold and closed.
7. One-third of the value of the bonus for each executive director (except Gary Green) will be deferred into shares. In order to comply with certain US tax rules,
GaryGreen’s 2023-2024 bonus will be paid entirely in cash without deferral into shares.
8. The bonus for Petros Parras and Gary Green reflects the period employed as an executive director. The bonus measures applicable to Palmer Brown were based
on North America performance for the full year.
† KPMG LLP has issued independent limited assurance over the selected data indicated, using assurance standard ISAE(UK)3000. KPMG’s assurance statement
and Compass’ Reporting Methodology are available at https://www.compass-group.com/en/sustainability/performance-and-reports.html.
Long-term Incentive Plan awards
Scheme interests vesting during the year
2021-2022 LTIP award
Awards made to Dominic Blakemore, Palmer Brown and Gary Green in February 2022 were subject to the achievement of three-year performance
targets for the year ended 30 September 2024. Performance conditions were ROCE, AFCF and relative TSR, weighted 40%, 40% and 20%
respectively. The definitions are set out in the table below:
Measure Definition of measure
ROCE
The definition aims to measure the underlying economic performance of the Group. ROCE is calculated at the end of the
three-year performance period as net underlying operating profit after tax (NOPAT) divided by 12-month average capital
employed. ROCE targets are updated at the end of the performance period to reflect actual acquisition spend, changes in
accounting standards and constant currency.
AFCF
The definition aims to measure the cash generation of the Group and is calculated as the three-year cumulative underlying free
cash flow, adjusted for constant currency.
TSR
Performance is compared to that of constituent members of the FTSE 100 (excluding the financial services sector). TSR is the
aggregate of share price growth and dividends paid (assuming reinvestment of those dividends in the Company’s shares during
the three-year performance period).
Shareholder experience over the three-year performance period has been extremely positive. The share price at the time of grant in February
2022 was £17.60. The average share price over the last three months of the performance period, upon which the TSR calculations are based, was
£23.37. Compass ended the performance period ranked 9th of the 73 companies that remained within the comparator group at the end of the
performance period. As this position is within the upper quartile of the comparator group, the proportion of shares subject to the TSR performance
condition will vest in full.
The business delivered ROCE of 19.16% and AFCF for the period was $4,756m. Our adjusted free cash flow performance over the three-year
period exceeded our target ranges and has far exceeded any reasonable forecast when the targets were originally set. As a result of our strong
performance over the three-year performance period, the 2021-2022 LTIP award will vest in full.
Historically, the Committee has taken a disciplined approach and continues to take a robust view in respect of the awards vesting in 2024. In
addition to the formulaic outcome, the Committee considered the level of vesting on both an absolute and relative basis. The Committee has
reviewed the performance through a number of different lenses and on that basis, following a thorough evaluation, the Committee is satisfied that
the performance levels achieved justify the vesting outcome.
The targets and outcomes for the 2021-2022 LTIP award are set out on the following page.
109Compass Group PLC Annual Report 2024
ROCE (40% weighting)
Level of performance Threshold Maximum Achieved
2
Vesting % of component 0% 100% 100%
As at date of award 17.05% 18.05%
Reconciled at the end of the performance period
1
16.93% 17.93% 19.16%
AFCF (40% weighting)
Level of performance Threshold Maximum Achieved
2
Vesting % of component 0% 100% 100%
AFCF (£) £2,570m £2,840m £3,484m
AFCF ($) $3,509m $3,877m $4,756m
Relative TSR (20% weighting)
Level of performance Below median Median Upper quartile Achieved
3
Vesting % of component 0% 25% 100% 100%
1. ROCE targets are updated at the end of the performance period to reflect actual acquisition spend, changes in accounting standards and constant currency.
2. The Committee applied the established framework to deal with items that were unforeseen at the time the targets were set in November 2021 and were in the
long-term interests of shareholders. AFCF and ROCE were adjusted to exclude the impact of strategic capital expenditure in the North America business. This
adjustment did not have any impact on the level of vesting under the award.
3. TSR ranking was 9th out of the 73 constituents that remained in the comparator group at the end of the performance period, resulting in upper quartile
performance.
Details of awards held for each executive director are set out below:
Performance conditions
Director
ROCE %
vested on
maturity
AFCF %
vested on
maturity
TSR %
vested on
maturity
Number of
shares awarded
Number of
shares vested
Number of dividend-
equivalent shares
Value of shares
on vesting
£000
1
Dominic Blakemore 100% 100% 100% 241,385 241,385 12,914 £5,943
Palmer Brown 100% 100% 100% 145,040 145,040 7,759 £3,571
Gary Green 100% 100% 100% 232,195 193,496 10,362 £4,764
1. The indicative value of the shares on vesting has been calculated by reference to the average market price of Compass Group PLC shares over the three months
from 1 July 2024 to 30 September 2024 of £23.37 per share. Dividend-equivalent shares accrued throughout the performance period and are included in the
value of shares on vesting.
2. Petros Parras received an award of 16,121 shares in respect of the 2021-2022 LTIP prior to his appointment as an executive director. The award, and 863
dividend-equivalent shares will vest in full.
Scheme interests awarded during the year
2023-2024 LTIP award
On 1 December 2023, executive directors received a conditional award of shares which may vest after a three-year performance period which will
end on 30 September 2026, based on the achievement of stretching performance conditions. Performance conditions were ROCE, AFCF and
relative TSR, weighted 40%, 40% and 20% respectively. Definitions of each of these measures are set out in the table on page 109.
The maximum levels achievable under these awards are set out in the table below:
Director Type of award
Value of award
(as a % of
base salary)
1
Value
of award
£000
Number of
shares awarded
2
Dominic Blakemore LTIP 2018 400% 4,380 215,728
Petros Parras LTIP 2018 350% 2,590 127,565
Palmer Brown
3
LTIP 2018 350% 3,872 190,687
1. Value of award calculated by reference to base salary at date of grant.
2. The share price used to calculate the award was £20.30, representing the average closing market price of the three trading days prior to the grant date of
1 December 2023.
3. Face value of award was converted to sterling at the time of award at an exchange rate of $1.2656/£1.
Executive directors are required to hold vested awards for a period of two years following vesting to strengthen the long-term alignment of
executives’ remuneration packages with shareholders’ interests and, if required, to facilitate the implementation of provisions related to
clawback. For awards granted after 4 February 2021 a two-year post-employment shareholding requirement also applies.
Remuneration Report continued110 Corporate Governance and Directors’ Report
In setting the performance targets, the Committee considers internal budgets and the Group’s strategic plan, market expectations and general
economic conditions. The targets under the 2023-2024 award are set out in the table below:
ROCE and AFCF
Level of performance
Vesting % of
each component ROCE AFCF
Threshold 0% 18.47% $4,355m
Par (target) 50% 19.07% $4,633m
Maximum 100% 19.67% $4,911m
TSR
Level of performance
Vesting % of each
component
Below median 0%
Median 25%
Upper quartile 100%
Non-executive directors’ remuneration
The fee for the Chair of the Board is reviewed annually by the Committee with any increase taking effect on 1 October. For the year ended
30September 2024 the fee paid was £595,900 per annum inclusive of any Board committee memberships.
Details of the fees received by Ian Meakins during the year ended 30 September 2024 are set out below:
Chair
Fees
£000
Benefits
£000
Total 2024
£000
Total 2023
£000
Ian Meakins 596 – 596 563
The fees for the non-executive directors are reviewed and determined by the Board each year to reflect appropriate market conditions. The base
fee paid to non-executive directors for the year ended 30 September 2024 was £99,575 which includes membership of the Audit, Corporate
Responsibility, Nomination and Remuneration Committees (as appropriate).
An additional fee of £30,000 per annum is payable where a non-executive director acts as Chair of the Audit, Remuneration or Corporate
Responsibility Committee and an additional fee of £30,000 per annum is also payable to the director nominated as Senior Independent Director.
Details of the amounts received by each of the non-executive directors in office for the year ended 30 September 2024 are set out below:
Non-executive director
Fees
£000
Benefits
1
£000
Total 2024
£000
Total 2023
£000
Carol Arrowsmith
2
36 18 54 117
Liat Ben-Zur
3
25 – 25 –
Stefan Bomhard 100 5 105 97
John Bryant
4
130 26 156 156
Juliana Chugg
5
1 – 1 –
Arlene Isaacs-Lowe 100 31 131 119
Anne-Françoise Nesmes
4
160 – 160 132
Sundar Raman 100 4 104 98
Nelson Silva 130 10 140 130
Ireena Vittal 100 13 113 107
Leanne Wood
6
100 7 107 39
1. Travel costs relating to attendance at Board meetings held in the UK are treated as a benefit.
2. Carol Arrowsmith stepped down from the Board at the conclusion of the AGM on 8 February 2024.
3. Liat Ben-Zur was appointed to the Board on 1 July 2024 and her fees for 2024 reflect her time in office.
4. John Bryant stepped down as Senior Independent Director on 20 July 2023. He was succeeded by Anne-Françoise Nesmes, and their respective fees for 2023
reflect these changes.
5. Juliana Chugg was appointed to the Board on 26 September 2024 and her fees for 2024 reflect her time in office.
6. Leanne Wood was appointed to the Board on 4 May 2023 and her fees for 2023 reflect her time in office.
111Compass Group PLC Annual Report 2024
Implementation of the 2025 Remuneration Policy for the 2025 financial year
A summary of how the Directors’ Remuneration Policy will be applied during the 2025 financial year is set out below.
Base salary
The Committee considered the salary review of the executive directors holistically, taking into account the macroeconomic environment and cost
of living and inflationary challenges faced by the business and our employees. The Committee also reviewed the base salary in the context of the
Group’s strong performance in the year, along with our relative market positioning when measured against companies of appropriate size, scale
and complexity. Salary increase budgets for the wider employee population were taken into consideration and the Committee determined that the
percentage increase for the Group CFO and Group COO, North America would be lower than the average percentage increase for the wider UK
population, which is expected to be around 5% during 2025, inclusive of the impact of national minimum wage and The Living Wage increases in
the UK. Further information on the Committee’s considerations when setting the base salary for the Group CEO is set out on page 90.
The base salaries for the executive directors as determined by the Committee are set out in the table below:
Director Base salary Effective date Increase
Dominic Blakemore £1,400,000 1 Jan 2025 20.7%
Petros Parras £755,000 1 Jan 2025 2.03%
Palmer Brown $1,429,000 1 Jan 2025 2.07%
Pension
In line with the Remuneration Policy, the pension cash allowance for each executive director is aligned with the maximum rate available to the
majority of the wider UK workforce (currently 6% of base salary).
Annual bonus plan
For the 2025 financial year, the maximum bonus opportunity for each executive director will be in line with the maximum available within the
2025 Policy, as shown in the table below:
Director % salary
Dominic Blakemore 250%
Petros Parras 200%
Palmer Brown 200%
2025 annual bonus plan measures will remain the same as 2024 for each executive director and are shown below. For the first time, the food
waste measure will track actual food waste reduction following two years of the recording technology roll out.
The measures and weightings are as follows:
Executive directors
Measure
1
Description of measure Weighting
Profit growth (%) A key measure of our financial performance encompassing revenue and margin performance in one
metric, by comparing the underlying operating profit delivered in the current year with that of the prior
year, expressed as a percentage and adjusted for exchange rate movements.
60%
Cash conversion (%) Demonstrates our ability to convert profit into cash – by setting a target percentage of profit to be
converted to cash.
25%
ESG
2
Emphasises our commitment to health and safety, and the impact of reducing food waste on climate
change.
15%
Total 100%
1. Measures for the Group CEO and CFO are assessed at Group level, and measures for the Group COO, North America are assessed at regional North America level.
2. The ESG measures are Total Recordable Injury Frequency Rate (TRIFR), Food Safety Incident Rate (FSIR) and food waste reduction, weighted equally.
The Committee has chosen not to disclose the details of the targets in this DRR, as in the opinion of the Committee they are commercially
sensitive. However, the specific targets and the extent to which the targets have been met (at both Group and regional levels) will be disclosed in
next year’s DRR.
Remuneration Report continued112 Corporate Governance and Directors’ Report
Long-term Incentive Plan award
During the 2025 financial year, the Committee intends to grant LTIP awards to the executive directors in two stages. An award will be granted
toexecutive directors in December 2024, in line with the current 2022 Policy. Subject to shareholder approval of the 2025 Policy, a further
awardwill be made immediately after the 2025 AGM in February 2025. Award levels will be in line with the two-stage implementation approach,
with awards granted in 2024-2025 not exceeding the first phase of the proposed implementation. The proposed awards are set out in the
following table:
Proposed LTIP award (% of base salary)
Director
To be granted in
December 2024
Total 2024-2025
LTIP award
(including top-up
award)
2025
Policy level
Group CEO 400% 500% 500%
Group CFO 350% 375% 400%
Group COO, North America 350% 400% 450%
The extent to which these LTIP awards will vest will be dependent on performance assessed over the three financial years 2025-2027, using the
following three performance measures, and with targets as shown in the table below.
Measure Description of measure
ROCE
The definition aims to measure the underlying economic performance of the Group. ROCE is calculated at the end of the
three-year performance period as net underlying operating profit after tax (NOPAT) divided by 12-month average capital
employed. ROCE targets are updated at the end of the performance period to reflect actual acquisition spend, changes in
accounting standards and constant currency.
AFCF
The definition aims to measure the cash generation of the Group and is calculated as the three-year cumulative underlying
free cash flow adjusted for constant currency.
Relative
TSR
Relative TSR performance is compared to that of constituent members of the FTSE 100 (excluding the financial services
sector). TSR is the aggregate of share price growth and dividends paid (assuming reinvestment of those dividends in the
Company’s shares during the three-year performance period).
Measure
Weighting
(% of award) Threshold Par (target) Maximum
ROCE 40% 17.70% 18.45% 19.20%
Vesting (of this component) 0% 50% 100%
AFCF 40% $4,972m $5,268m $5,564m
Vesting (of this component) 0% 50% 100%
Relative TSR 20% Median – Upper quartile
Vesting (of this component) 25% – 100%
There is no vesting for below-threshold performance, and straight-line vesting between the points shown.
Executive directors are required to hold shares from vested awards for a period of two years following vesting to strengthen the long-term
alignment of executives’ remuneration packages with shareholders’ interests; and, if required, to facilitate the implementation of provisions
related to clawback. For awards granted after 4 February 2021 a two-year post-employment shareholding requirement applies.
Non-executive director fees
The fees for non-executive directors for the coming year are set out below. Following a review of the market, the fee for the Chair was increased
from £595,900 to £620,000 (4.0%) with effect from 1 October 2024. The base fee for non-executive directors was increased from £99,575 to
£103,500 (3.9%) also with effect from 1 October 2024. The additional fees for acting as Chair of a committee or as the Senior Independent
Director remain unchanged.
Fees 2024
£
Fees 2023
£ Increase
Chair 620,000 595,900 4.0%
Base fee
1
103,500 99,575 3.9%
Chair of Audit, Remuneration or Corporate Responsibility Committee 30,000 30,000 –
Senior Independent Director 30,000 30,000 –
1. The non-executive director base fee is inclusive of membership of the Audit, Corporate Responsibility, Nomination and Remuneration Committees (as appropriate).
113Compass Group PLC Annual Report 2024
Extant equity incentive awards held by executive directors
Details of all existing equity incentive awards as at the date of this DRR, including the awards conditionally made under the various long-term
incentive plans to the executive directors at any time during the year ended 30 September 2024, are shown in the table below:
LTIP
1
Director
As at
30 Sep 2023:
number of shares
Awarded
during the year:
number of shares
Released
during the year:
number of shares
Lapsed
during the year:
number of shares
As at
30 Sep 2024:
number of shares
Market price at
date of award
5
£ Date of award Maturity date
Dominic Blakemore 195,907 – 195,907
6
– – 13.78 1 Dec 2020 1 Oct 2023
241,385 – – – 241,385 17.60 8 Feb 2022 1 Oct 2024
225,966 – – – 225,966 18.67 1 Dec 2022 1 Oct 2025
– 215,728 – – 215,728 20.26 1 Dec 2023 1 Oct 2026
Total 663,258 215,728 195,907 – 683,079
Petros Parras
2
– 127,565 – – 127,565 20.26 1 Dec 2023 1 Oct 2026
Total – 127,565 – – 127,565
Palmer Brown
3
145,040 – – – 145,040 17.60 8 Feb 2022 1 Oct 2024
152,979 – – – 152,979 18.67 1 Dec 2022 1 Oct 2025
– 190,687 – – 190,687 20.26 1 Dec 2023 1 Oct 2026
Total 298,019 190,687 – – 488,706
Gary Green
4
181,939 – 181,939
6
– – 13.78 1 Dec 2020 1 Oct 2023
232,195 – – 38,699 193,496 17.60 8 Feb 2022 1 Oct 2024
244,904 – – 122,452 122,452 18.67 1 Dec 2022 1 Oct 2025
Total 659,038 – 181,939 161,151 315,948
Deferred Bonus Plan/deferred annual bonus
Director
As at
30 Sep 2023:
number of shares
Awarded
during the year:
number of shares
Released
during the year:
number of shares
Lapsed
during the year:
number of shares
As at
30 Sep 2024:
number of shares
Market price at
date of award
5
£ Date of award Maturity date
Dominic Blakemore – 35,954 – – 35,954 20.26 1 Dec 2023 1 Oct 2026
Total – 35,954 – – 35,954
Palmer Brown
3
20,243 – – – 20,243 15.08 15 Dec 2021 15 Dec 2024
– 19,779 – – 19,779 20.26 1 Dec 2023 1 Oct 2026
Total 20,243 19,779 – – 40,022
Gary Green – 31,656 31,656 – – 20.26 01 Dec 2023 31 Mar 2024
Total – 31,656 31,656 – –
1. Each LTIP award is based on a three-year performance period. Awards granted from 4 February 2021 onwards are subject to a two-year post-employment holding
period.
2. At the date of his appointment, Petros Parras had an interest in 39,096 LTIP awards that were granted to him prior to him becoming a director of the Company.
They are due to vest in two tranches (16,121 in November 2024 and 22,975 in November 2025). In addition, Petros was granted 8,472 conditional awards under
the Company’s Restricted Share Award Plan (RSA) prior to him becoming a director. 2,824 RSA awards vested in accordance with the associated performance
conditions on 31 December 2023 and the balance of 5,648 is due to vest on 1 December 2024 subject to meeting the associated performance conditions.
3. At the date of his appointment, Palmer Brown had an interest in 137,026 LTIP awards that were granted to him prior to him becoming a director of the Company.
36,090 and 42,540 of these shares vested in 2021 and 2022 respectively and 57,136 LTIP shares and 1,860 dividend-equivalent shares vested in November
2023. A further 1,260 SMIPP shares and 40 dividend-equivalent shares also vested in December 2023. 20,243 shares were awarded on 15 December 2021 as a
deferred annual bonus award under the LTIP 2018.
4. Gary Green’s LTIP awards were prorated to his retirement date. The proportion of shares that lapsed as a result, are reflected in the above table.
5. The market price at the date of each award is shown to two decimal places.
6. The performance period of the award granted on 1 December 2020 ended on 30 September 2023. The awards vested in full.
7. Dividend equivalents apply to LTIP and deferred bonus share awards and are not included in the tables above.
Share ownership guidelines and directors’ interests in shares
In order that their interests are aligned with those of shareholders, directors are expected to build up and maintain a personal shareholding in the
Company as set out in the share ownership guidelines described in the 2025 Policy on page 104.
Executive directors are required to achieve their shareholding guideline within a five-year period commencing on the date of appointment or date
of increase in shareholding requirement, whichever is the later. Subject to shareholder approval, under the 2025 Policy the guideline for executive
directors will increase on 6 February 2025 to a level commensurate with the latest LTIP award; details can be found on page 90. Compliance with
the guideline is assessed annually, on a pro-rata basis.
Non-executive directors are required to achieve their shareholding guideline within a five-year period from the date of appointment.
Remuneration Report continued114 Corporate Governance and Directors’ Report
The Committee reviewed and noted that the guidelines were satisfied by all directors in office during the year. The interests of the directors in
office during 2024 in shares (including the interests of persons closely associated) and share incentives are shown in the table below:
Beneficial Conditional
Shares held as at
30 Sep 2024
Shares held as at
30 Sep 2023
LTIP
holdings as at
30 Sep 2024
LTIP
holdings as at
30 Sep 2023
Share
ownership
guideline
1
Compliance with
share ownership
guidelines
Executive directors Dominic Blakemore
2
383,761 276,789 683,079 663,258 400% ü
Petros Parras
3
15,057 – 127,565 – 350% ü
Palmer Brown
4
76,757 43,265 488,706 298,019 350% ü
Gary Green
5
380,367 275,560 315,948 659,038 350% ü
Non-executive directors Carol Arrowsmith
6
12,000 12,000 – – 100% ü
Liat Ben-Zur
7
4,300 – – – 100% ü
Stefan Bomhard 10,743 10,743 – – 100% ü
John Bryant 15,781 15,781 – – 100% ü
Juliana Chugg
8
– – – – 100% ü
Arlene Isaacs-Lowe 5,300 2,500 – – 100% ü
Ian Meakins 58,362 58,362 – – 100% ü
Anne-Françoise Nesmes 11,907 11,907 – – 100% ü
Sundar Raman 5,030 5,030 – – 100% ü
Nelson Silva 10,323 10,323 – – 100% ü
Ireena Vittal 5,461 5,461 – – 100% ü
Leanne Wood 2,777 1,477 – – 100%
ü
1. The share ownership guideline is a percentage of base salary or fee.
2. Dominic Blakemore’s LTIP holding includes 35,954 deferred bonus plan award shares and 6,378 dividend-equivalent shares.
3. Petros Parras was appointed to the Board on 1 December 2023 and has five years in which to meet the shareholding requirement.
4. Palmer Brown’s conditional LTIP holding includes 20,243 deferred annual bonus shares, 19,779 deferred bonus shares and 1,900 dividend-equivalent shares
which vested in December 2023. Palmer’s current shareholding exceeds his shareholding requirement as measured on a pro rata basis.
5. Gary Green retired as a director of the Company on 30 November 2023. In line with the 2022 Policy, Gary is required to comply with the Group’s post-employment
shareholding requirement for a period of two years post employment. Gary’s holding is shown at 30 November 2023. Gary’s LTIP holding includes 5,923
dividend-equivalent shares.
6. Carol Arrowsmith’s holding is shown at 8 February 2024.
7. Liat-Ben Zur was appointed to the Board on 1 July 2024 and has met the shareholding requirement. Liat’s holding is in American Depositary Receipts.
8. Juliana Chugg was appointed to the Board on 26 September 2024 and has five years in which to meet the shareholding requirement.
There were no changes in directors’ interests between 30 September 2024 and 26 November 2024.
Director appointments and role changes during the year
The Nomination Committee recommended the following changes to the Board during the year, which were duly approved by the Board:
– 30 November 2023: Gary Green’s retirement as an executive director of Compass Group PLC and as Group COO, North America
– 1 December 2023: Palmer Brown’s appointment as Group COO, North America and Petros Parras’ appointment as Group CFO on the same
date
– 8 February 2024: Carol Arrowsmith’s retirement as a non-executive director
– 1 July 2024: Liat Ben-Zur’s appointment as a non-executive director
– 26 September 2024: Juliana Chugg’s appointment as a non-executive director
Payments for loss of office
There were no payments for loss of office during the year.
Payments to past directors
As set out in the 2023 DRR on page 123, Gary Green retired as a director on 30 November 2023, and remained an employee under his existing
terms of employment until 31 March 2024 in order to facilitate an orderly handover. Gary retired on 31 March 2024. Gary was treated as a good
leaver and his remuneration has been treated in line with the 2022 Policy.
For the period between serving as a director and retiring as an employee of Compass Group, Gary received salary (£461k), pension (£28k),
benefits (£68k) and bonus (£641k). The bonus was calculated on the same basis as for the period between 1 October to 30 November as set out
on pages 108 to 109.
External non-executive director appointments
Executive directors may accept one non-executive directorship in a FTSE 100 company or other significant appointment outside the Company,
subject to the Board’s approval and provided that such an appointment is not likely to lead to a conflict of interest. It is recognised that
non-executive duties can broaden experience and knowledge which can benefit the Company. Dominic Blakemore received fees of £135,000 in
respect of his directorship at London Stock Exchange Group plc for the 2024 financial year. Dominic was unremunerated for his services to the
charity FareShare. At the date of this DRR, Petros Parras and Palmer Brown do not hold any external appointments.
115Compass Group PLC Annual Report 2024
Remuneration in detail for the year ended 30 September 2024
Pay for performance
The Committee believes that the Policy provides a clear alignment with the strategic objectives and performance of the Group. To maintain this
relationship, the Committee regularly reviews the business priorities of the Group and the environment in which it operates. The table below shows
the Group CEO’s total remuneration and achievement against the annual bonus plan and long-term incentive plans over the last 10 years, as a
percentage of the plan maximum.
2015 2016 2017 2018
1
2019 2020 2021 2022 2023 2024
Single total figure of remuneration (£000) 5,325 5,822 5,617 4,568 4,659 1,162 3,211 3,299 7,494 9,499
Annual bonus plan outcome (% of maximum opportunity) 88.7 85.8 68.9 95.9 78.3 0 99.9 100 100 100
LTIP outcome (% of maximum opportunity) 79.0 84.5 74.5 95.0 100 0 0 0 100 100
1. Dominic Blakemore became Group CEO from 1 January 2018.
Group CEO pay ratio
The ratio between the Group CEO’s remuneration and the lower quartile, median and upper quartile of UK employees is disclosed in the table
below. Figures include the Group CEO’s total remuneration as set out in the single figure table on page 107, and the remuneration paid to
employees at the 25th, 50th and 75th percentiles, over the past five financial years. Methodology A has been chosen to calculate the ratio, as it is
considered the most accurate approach. This method includes total full-time equivalent remuneration for UK employees received by an individual
in respect of the relevant financial year and is calculated in line with the methodology for the single figure of remuneration for the Group CEO.
The best equivalents for the three UK employees whose hourly rates of pay were at the 25th, median and 75th percentiles were selected, with a
small number of employees around each quartile reviewed, to ensure that the employees chosen at the three percentile points were, within
reason, representative of the pay of the UK workforce at each quartile. The Committee has considered the pay data of the three employees
identified and believes that it fairly reflects pay at the relevant quartiles amongst the UK workforce. The three individuals identified did not receive
any remuneration which would otherwise inflate their pay figures.
Executive remuneration, in line with market practice, includes a significant proportion subject to performance and therefore ‘at risk’. As a result,
remuneration of the Group CEO is weighted more heavily towards variable pay than that of the wider workforce. The ratio will therefore fluctuate
each year depending on the performance of the Company. During the financial years 2020, 2021 and 2022, remuneration was notably impacted
by the COVID-19 pandemic, which had a significant impact on variable pay elements.
The financial year 2023 included the first LTIP vesting for executive directors in three years, following the Committee electing not to exercise
positive discretion despite its strong recovery over the three years. The increase in the Group CEO’s remuneration and associated pay ratio
reflects the Group’s strong performance in 2024, where record levels of performance have been achieved in many areas. The ratio has therefore
increased, which reflects the correlation between pay and performance. We believe that the median pay ratio is consistent with the pay, reward
and progression policies for the Company’s UK employees taken as a whole.
Year and component Method
25th percentile
pay ratio
Median
pay ratio
75th percentile
pay ratio
2024 total remuneration A 372:1 330:1 297:1
2023 total remuneration A 323:1 303:1 236:1
2022 total remuneration A 159:1 129:1 115:1
2021 total remuneration A 172:1 138:1 125:1
2020 total remuneration A 63:1 54:1 42:1
The salary and total remuneration levels used in the pay ratio calculations are set out in the table below:
Financial year Component
Group CEO
£000
25th percentile
£000
Median
£000
75th percentile
£000
2024 Salary £1,144 £23 £26 £31
Total remuneration £9,499 £26 £29 £32
2023 Salary £1,083 £21 £24 £24
Total remuneration £7,494 £23 £25 £32
2022 Salary £1,034 £18 £22 £26
Total remuneration £3,299 £21 £26 £29
2021 Salary £1,000 £16 £19 £24
Total remuneration £3,211 £19 £23 £26
2020 Salary £894 £17 £21 £26
Total remuneration £1,162 £18 £21 £28
Remuneration Report continued116 Corporate Governance and Directors’ Report
Annual percentage change in remuneration of directors and employees
The following table shows the annual change in each individual director’s base salary/fees, benefits and bonuses, compared to the annual change
in average UK employee pay for the year ended 30 September 2024. Figures have been annualised to show a like-for-like comparison.
Change in pay between
2023 and 2024
Change in pay between
2022 and 2023
Change in pay between
2021 and 2022
Change in pay between
2020 and 2021
Change in pay between
2019 and 2020
Base
salary/
fees %
change
1
Bonus
%
change
2
Benefit %
change
3
Base
salary/
fees %
change
1
Bonus %
change
2
Benefit %
change
3
Base
salary/
fees %
change
1
Bonus %
change
2
Benefit %
change
3
Base
salary/
fees %
change
1
Bonus %
change
2
Benefit %
change
3
Base
salary/
fees %
change
1
Bonus %
change
2
Benefit %
change
3
Executive
directors
Dominic
Blakemore 5.7% 5.9% (20.3)% 4.7% 4.8% (52.0)% 3.4% 4.6% 18.1% 11.9% N/A
4
(27.4)% (6.5)% (100)% 105.0%
Petros Parras
5
N/A
4
N/A
4
N/A
4
N/A
4
N/A
4
N/A
4
N/A
4
N/A
4
N/A
4
N/A
4
N/A
4
N/A
4
N/A
4
N/A
4
N/A
4
Palmer Brown
5
32.0% 37.7% (25.4)% 4.4% 4.8% (30.3)% N/A
4
N/A
4
N/A
4
N/A
4
N/A
4
N/A
4
N/A
4
N/A
4
N/A
4
Gary Green
5
1.3% 0.0% (53.0)% 4.7% 4.8% 6.6% 3.6% 5.3% (32.4)% 10.5% N/A
4
(15.5)% (6.3)% (100)% 49.7%
Non-executive
directors
Carol
Arrowsmith
5
(5.3)% – 334.4% (12.6)% – 5,808.8% 1.7% – N/A
4
10.3% – (100)% (7.8)% – 79.1%
Liat Ben-Zur
5
N/A
4
– N/A
4
N/A
4
– N/A
4
N/A
4
– N/A
4
N/A
4
– N/A
4
N/A
4
– N/A
4
Stefan
Bomhard 5.9% – 113.1% 4.4% – 203.9% 2.3% – N/A
4
10.3% – (100)% (7.3)% – 1,012.9%
John Bryant
5
(5.7)% – 35.5% 14.5% – 804.3% 11.5% – N/A
4
35.0% – (100)% (7.3)% – 162.6%
Juliana Chugg
5
N/A
4
– N/A
4
N/A
4
– N/A
4
N/A
4
– N/A
4
N/A
4
– N/A
4
N/A
4
– N/A
4
Arlene
Isaacs-Lowe 5.9% – 25.0% 4.4% – 651.0% N/A
4
– N/A
4
N/A
4
– N/A
4
N/A
4
– N/A
4
Ian Meakins 5.9% – N/A
4
4.7% – N/A
4
18.9% – N/A
4
467.0% – (100)% – – –
Anne-
Françoise
Nesmes
5
22.8% – (89.8)% 8.3% – N/A
4
11.5% – N/A
4
35.0% – (100)% (7.3)% – N/A
4
Sundar Raman 5.9% – (3.9)% 4.4% – N/A
4
N/A
4
– N/A
4
N/A
4
– N/A
4
N/A
4
– N/A
4
Nelson Silva 4.5% – 60.4% 3.3% – 278.0% 1.7% – N/A
4
10.3% – (100)% (7.8)% – 23.8%
Ireena Vittal 5.9% – (1.5)% 4.4% – N/A
4
2.3% – N/A
4
10.3% – (100)% (7.3)% – 27.7%
Leanne Wood 5.9% –
N/A
4
N/A
4
– N/A
4
N/A
4
– N/A
4
N/A
4
– N/A
4
N/A
4
– N/A
4
Average
pay of UK
employees
6
6.5% 50.2% (41.5)% 11.5% (23.4)% (24.8)% 3.8% 191.8% 2.5% 5.2% 113.1% 7.5% 3.4% (12.3)% (13.4)%
1. The annual percentage change in salary is calculated by reference to actual salary paid and for directors is calculated on a full-time equivalent basis.
2. The annual percentage change in bonus is calculated by reference to the bonus payable in respect of performance applicable to the financial year for executive
directors, and by reference to all bonus payments received during the financial year for UK employees.
3. The annual percentage change in benefits is calculated by reference to the value of benefits received in respect of the financial year. Non-executive directors’
travel expenses to/from meetings in the UK are considered a benefit and are disclosed in the DRR. The decrease in benefits value between 2023 and 2024 for the
Group CEO and UK employees is due to the continued take-up of electric company vehicles, which have a lower taxable value than a cash for car allowance or a
non-electric Company vehicle.
4. N/A refers to a nil value in the previous year, meaning that a year-on-year change cannot be calculated.
5. Fees for 2024 have been pro-rated to reflect time in office and change of role as appropriate.
6. Average employee pay is calculated by reference to the mean average pay of employees within the UK.
Relative importance of spend on pay
The following table sets out the amounts paid in share buybacks, dividends and total employee costs for the 2023 and 2024 financial years.
Disbursements
2024
$m
2023 (restated)
$m
Change
%
1
Share buybacks
2
557 1,151 (51.6)%
Dividends paid
3
963 796 21.0%
Total employee costs
4
19,598 17,625 11.2%
1. The year-on-year percentage change in disbursements reflects the Company’s continued strong performance.
2. At the AGM on 8 February 2024, shareholders approved Resolution 22 to give the directors authority to make limited on-market purchases of up to 10% of the
Company’s ordinary shares. 20,406,756 shares were repurchased during the financial year ended 30 September 2024 at a cost of $557 million excluding
transaction costs. The directors consider it desirable for such general authority to be available to maintain an efficient capital structure whilst at the same time
retaining the flexibility to fund any bolt-on acquisitions.
3. The share capital in issue on 30 September 2024 and on the same date in 2023 was 1,785 million ordinary shares of 11
1
⁄
20
pence each, including treasury shares.
4. Total employee costs include wages and salaries, social security costs, share-based payments and pension costs for all employees, including directors.
The average number of employees, including directors and part-time employees in operations, during 2024 was 579,126 (2023: 562,460).
117Compass Group PLC Annual Report 2024
Shareholder vote at the 2024 and 2022 Annual General Meetings
The table below sets out the voting outcome at the AGM held on 8 February 2024 in respect of the 2023 Annual Remuneration Report resolution:
Number of votes
‘For’ and ‘Discretionary’
% of votes cast
‘For’
Number of votes
‘Against’
% of votes cast
‘Against’
Total number
of votes cast
Number of votes
‘Withheld’
1
Annual Remuneration Report
2
1,330,707,235 95.69 59,950,926 4.31 1,390,658,161 1,608,559
The table below sets out the voting outcome at the AGM held on 3 February 2022 for the Remuneration Policy which applies until February 2025:
Number of votes
‘For’ and ‘Discretionary’
% of votes cast
‘For’
Number of votes
‘Against’
% of votes cast
‘Against’
Total number
of votes cast
Number of votes
‘Withheld’
1
Remuneration Policy
3
973,341,831 67.50 468,571,337 32.50 1,441,913,168 34,029,557
1. A vote withheld is not a vote in law.
2. Advisory vote.
3. Binding vote.
The Committee welcomed the endorsement of the 2023 DRR and 2022 Policy by the majority of shareholders and took steps to understand the
concerns of shareholders who withheld their support for the Policy, as described in detail on pages 103 to 104 of the 2023 DRR. At the 2025
AGM, shareholders will be invited to vote on the 2024 Annual Remuneration Report (advisory vote) and the 2025 Policy (binding vote).
On behalf of the Board
John Bryant
Chair of the Remuneration Committee
26 November 2024
Remuneration of other senior executives and management
A number of senior executives and the executive directors comprise the
Executive Committee. These key management roles influence the ability of
the Group to meet its strategic targets. The Remuneration Committee sets
the remuneration for these individuals and considers the remuneration
levels and structure of the wider business. Total remuneration including
base salary and other short-term benefits, bonus and the expected value of
long-term incentives for this group is summarised in note 4 to the
consolidated financial statements on page 151.
Remuneration advice
The Group Chief People Officer and the Group Reward Director are
normally invited to attend each Committee meeting to advise on
remuneration matters. The Chair of the Board, Group CEO and
GroupCFO may also attend from time to time by invitation. They are
notpaid a fee for attending the Committee in addition to their normal
remuneration from the Company and none attend when their own
remuneration is discussed. Details of the members of the Committee who
served during the 2024 financial year are set out on pages 57 to 59.
Under its terms of reference, the Committee obtains the advice of
external independent remuneration consultants and is responsible for
their selection and appointment. Following an objective selection
process, the Committee appointed PricewaterhouseCoopers (PwC) as
its independent remuneration adviser. Prior to this, the adviser to the
Committee was Deloitte.
PwC advised the Committee from April 2024 and its fees for the period
April to September 2024 were £115,650 for advice relating to
executive remuneration. Deloitte’s fees for the period October 2023 to
April 2024 were £60,000. Fees covered attendance at Committee
meetings, general advice and updates on remuneration developments
with total fees paid to advisers of £175,650 for the year ended
30September 2024 (2023: £104,400).
PwC provided advice to the Group in relation to tax and accounting,
technology and other consulting services during the year. PwC is a
member of the Remuneration Consultants Group and complies with its
Code of Conduct.
Alithos Limited (Alithos) was appointed by the Company in 2002.
During the year, Alithos provided information for the testing of the TSR
performance conditions for the Company’s LTIP awards, for which it
received fixed fees of £24,000 (2023: £24,000). Alithos also provided
TSR data to the Committee during the year for which it received fees
of £500 (2023: £500).
The Committee is satisfied that the advice it received during the year was
objective and independent, based on the experience of its members.
Committee evaluation
The priorities set by the Committee in response to last year’s external
evaluation process were:
– determining appropriate performance measures and targets,
including ESG metrics
– investor engagement
These themes, together with the Committee’s regular programme of
work, shaped the Committee’s agenda and were included in the
principal activities during the year.
2024 evaluation
During the year, an internal evaluation of the effectiveness of the
Committee was conducted as part of the wider evaluation of the Board
and its committees. Details can be found on page 85. The top priorities
for the Remuneration Committee over the coming year were identified as:
– finalising the new Remuneration Policy and obtaining broad
stakeholder alignment with the new policy
– ensuring remuneration targets are appropriately stretching
– ensuring that reward is sufficiently competitive to attract and retain
the best talent
These matters, together with the regular work of the Committee,
willinform the Committee’s agenda for the coming year.
Remuneration Report continued118 Corporate Governance and Directors’ Report
The directors present their Annual Report and the audited
consolidated financial statements of the Company and its subsidiaries
for the financial year ended 30 September 2024.
This Directors’ Report forms part of the management report as
required under the Financial Conduct Authority (FCA) Disclosure
Guidance and Transparency Rules (DTR) 4. The Company has
chosen, in accordance with section 414C (11) of the Companies Act
2006, to include certain matters in its Strategic Report that would
otherwise be required to be disclosed in this Directors’ Report. The
Strategic Report can be found on pages 1 to 53 and includes an
indication of future likely developments in the Company, details of
important events and the Company’s business model and strategy.
The Corporate Governance and Directors’ Report on pages 54 to 123,
the Other Statutory Disclosures section on pages 119 to 122 and the
Directors’ Responsibilities Statement on page 123 are incorporated
into the Directors’ Report by reference.
Specifically, the following disclosures have been included elsewhere
within the Annual Report and are incorporated into this Directors’
Report by reference:
Disclosure Page
Financial risk management 17
Future developments in the business 11
Statement of directors’ responsibilities
including disclosure of information to the auditor 123
Disclosure of greenhouse gas (GHG) emissions 36
TCFD disclosure 41
Shareholder information 230
Viability statement 29
Going concern statement 20
Results and dividends
In the year ended 30 September 2024, the Group delivered an
underlying profit before tax of $2,749 million (2023: $2,426 million),
an increase of 13.3%; and a statutory profit before tax of
$2,056million (2023: $2,137 million), a decrease of 3.8%.
It is proposed that a final dividend of 39.1 cents per share be paid in
respect of the financial year ended 30 September 2024 on
27 February 2025 to shareholders on the register on 17 January 2025.
The final dividend of 39.1 cents per share will be paid in sterling
unless a shareholder has elected to receive the dividend in USdollars.
The last date for receipt of currency elections will be 3February 2025.
A Dividend Reinvestment Plan (DRIP) will be available. The last date
for receipt of DRIP elections will be 6February 2025.
Year Dividend Pence per share Cents per share
2024 Final N/A
^
39.1
2024 Interim 16.2
*
20.7
2023 Final 28.1 N/A
2023 Interim 15.0 N/A
^ The exchange rate for the sterling equivalent of the final dividend for the
financial year ended 30 September 2024 will be announced on the London
Stock Exchange Regulatory News Service on 11 February 2025.
* Based on an exchange rate of US$1 = £0.783 on 9 July 2024.
Generally, the trustee of the employee benefit trust, the Compass
Group PLC All Share Schemes Trust (ASST), which operates in
connection with the Company’s share plans, waives its right to receive
dividends on any shares held by it. Details of the ASST can be found
on page 120 of this Report. The value of the dividends payable during
the year ended 30 September 2024 that were waived by the ASST was
$205,341 (£162,059) (2023: $106,615 (£88,042)).
At the date of this Report, there were 90,348,203 ordinary shares of
11
1
⁄
20
pence each held in treasury for the purpose of satisfying the
Company’s obligations under its employee equity incentive schemes.
Shares held in treasury are not entitled to receive dividends.
Share capital
The Company has a single share class which is divided into ordinary
shares of 11
1
⁄20 pence each. At the date of this Report, 1,785,403,977
ordinary shares of 11
1
⁄20 pence each (of which 90,348,203 are held in
treasury) have been issued, are fully paid up and are quoted on the
London Stock Exchange. Each share (excluding treasury shares) has
one vote. The total number of voting rights attaching to the issued
ordinary share capital (excluding treasury shares) at the date of this
Report is 1,695,055,774. In addition, the Company sponsors a Level 1
American Depositary Receipts programme with BNY, through which
the Company’s shares are traded on the over-the-counter market in
the form of American Depositary Shares.
During the year ended 30 September 2024, 2,862,514 awards were
released pursuant to the Company’s long-term incentive plans and
other discretionary share schemes. All awards released were satisfied,
as appropriate, by the reissue of 2,585,610 treasury shares and the
release of 274,511 shares from the ASST. No treasury shares have
been reissued since the end of the financial year to the date of this
Report. 2,393 shares were released on 1 October 2024 by the ASST to
satisfy an award under the Compass Group PLC Restricted Share
Award Plan which had vested on 30 September 2024.
There are no restrictions on the transfer of ordinary shares in the
capital of the Company other than those restrictions which may from
time-to-time be imposed by law. The Company is not aware of any
agreements between shareholders that may result in restrictions on
the transfer of securities and/or voting rights.
The Company is not aware of any significant agreements to which it is
party that take effect, alter or terminate upon a change of control of
the Company following a takeover.
More detailed information relating to the rights and obligations
attaching to the Company’s ordinary shares, and those conferred by
law, are set out in the Company’s articles of association.
Articles of association
The Company’s articles of association were adopted by shareholders
at the 2021 AGM, and may only be amended by special resolution at a
general meeting of shareholders, and are available on the Company’s
website: www.compass-group.com.
In accordance with the Company’s articles of association, directors
have been granted an indemnity by the Company to the extent
permitted by law in respect of liabilities incurred as a result of their
office. The indemnity would not provide any coverage where a director
is proved to have acted fraudulently or dishonestly. The Company has
also arranged appropriate insurance cover in respect of potential legal
action against its directors and officers.
Other statutory disclosures
119Compass Group PLC Annual Report 2024
Other statutory disclosures continued
Purchase of own shares
From 4 December 2023 until 8 May 2024, the Company bought back
9,140,246 ordinary shares related to a $500 million share buyback.
These purchases were made under the shareholder authority obtained
by the Company at its 2023 AGM authorising the Company to
purchase up to a maximum of 175,720,000 shares.
As permitted by the articles, the Company obtained shareholder
authority at the 2024 AGM to purchase its own shares up to a
maximum of 171,140,000 ordinary shares. On 21 June 2024, the
Company announced, consistent with its capital allocation framework,
the second and final portion of the $500 million share buyback to be
completed by 17 December 2024. At the date of this Report
7,265,498 shares have been bought back.
During the financial year ended 30 September 2024, the Company
purchased in aggregate 20,406,756 ordinary shares of 11
1
⁄20 pence
and subsequently transferred these to treasury. The cost of the shares
purchased during the financial year ended 30 September 2024 was
$557 million excluding transaction costs. A further 2,356,198 shares
have been repurchased between 1 October 2024 and the date of this
Report at a cost of $77 million excluding transaction costs. As at the
date of this Report there are 90,348,203 ordinary shares held in
treasury (representing 5.3% of the issued ordinary shares) for the
purpose of satisfying the Company’s obligations under employee
equity incentive schemes. Shares held in treasury are not eligible to
participate in dividends and do not carry any voting rights. Further
details of treasury shares and the share buybacks are set out on
page193.
At the 2025 AGM, a special resolution will be proposed to renew the
directors’ limited authority (last granted at the 2024 AGM) to
purchase the Company’s ordinary shares in the market. The authority
will be exercised only if the directors believe that to do so would be
likely to promote the success of the Company for the benefit of its
shareholders as a whole.
Issue of shares
At the 2025 AGM, the directors will ask shareholders to renew
the authority last granted to them at the 2024 AGM to allot equity
shares representing approximately one-third of the issued ordinary
shares calculated at the latest practicable date prior to the publication
of the Notice of AGM (the section 551 authority) and, in accordance
with the Investment Association Share Capital Management
Guidelines, the directors propose to extend this by a further one-third
of the Company’s issued ordinary share capital, provided that such
amount shall only be used in connection with a rights issue. If
approved, the authority will expire no later than 15 months from the
date the resolution is passed, or at the conclusion of the Company’s
2026 AGM, whichever is the earlier. Changes in the Company’s share
capital during 2024, including details of purchases and releases by
the ASST, and the reissue of treasury shares during the year, together
with details of options granted over unissued capital, are set out in
notes 25 and 26 to the consolidated financial statements.
Substantial shareholdings
As at 30 September 2024, and up to the date of this Report, the
following information has been received, in accordance with DTR 5, from
holders of notifiable interests in the Company’s issued share capital:
% of Compass Group PLC’s
voting rights
Blackrock, Inc. 9.99
Artisan Partners Limited Partnership 4.96
Invesco Limited 4.95
Massachusetts Financial Services Company 4.60
The information provided relating to substantial shareholdings above
was correct at the date of notification but may have changed since.
However, the holder is not required to make another notification to
theCompany until the next notifiable threshold (as defined in DTR 5)
is crossed.
Employee share trusts
The Compass Group Employee Share Trust (ESOP) was established on
13 January 1992 in connection with the Company’s share option
plans. The Compass Group Long Term Incentive Plan Trust was
established on 5 April 2001 in connection with the Company’s
long-term incentive plans. In 2019, it was adapted to allow it to source
shares for all the Company’s share schemes and renamed the
Compass Group PLC All Share Schemes Trust (ASST).
Details of employee equity incentive plans are set out in the Directors’
Remuneration Report on pages 86 to 118. As at 30 September 2024,
the trustees of the ESOP and ASST held nil (2023: nil) and 298,712
(2023: 573,223) ordinary shares of the Company respectively.
Awards under employee share schemes
Details of awards made during the year and held by executive
directors as at 30 September 2024 are disclosed in the Directors’
Remuneration Report on pages 86 to 118.
Details of employee equity incentive plans and grants made during the
year ended 30 September 2024, and extant awards held by
employees, are disclosed in the consolidated financial statements on
pages 195 and 196.
Employee engagement
Compass places particular importance on engaging with employees,
recognising that its people have an important role to play in delivering
the Group’s commitments and strategy and to living its values.
Employee engagement is based on commitments to respect,
teamwork, and growth within the workforce.
The Group continues to operate on a decentralised basis. This
provides a foundation for an entrepreneurial approach balanced by a
strong control framework supported by a small head office team. Local
management teams are responsible for maintaining high standards of
health and safety and for ensuring that there is appropriate
consideration of employees’ views in decision-making.
A variety of mechanisms are used to keep employees regularly
informed about matters of interest to them as employees, and to
promote a common awareness of the financial, economic and
environmental factors affecting the performance of the Company.
Employees regularly share feedback about how it feels to work
at Compass through engagement surveys. These provide
management with useful information that helps the businesses to form
a good understanding of how employees feel about their workplace
and to understand what more can be done to make Compass a great
place to work.
Examples of engagement during the year can be found in other
sections of this Report as follows:
People – pages 30 to 33
Meetings with the Designated Non-Executive Director for
Workforce Engagement – page 66
Stakeholder engagement – pages 69 to 71
Corporate Responsibility Committee Report – page 79
Certain employees globally are eligible to participate in the Company’s
share plans, details of which are published on pages 195 and 196,
and UK-based employees are eligible to participate in the Company’s
Share Incentive Plan.
120 Corporate Governance and Directors’ Report
Employee benefits and policies
Employees are offered a range of benefits, such as private
medical cover, depending on the local environment. Priority is given
tothe training of employees and the development of their skills.
Employment and promotion of people with disabilities is considered
on merit with regard only to the ability of any applicant to carry out
therole. Arrangements to enable people with disabilities to carry
outthe duties required will be made if it is reasonable to do so.
An employee who becomes disabled would, where appropriate,
beoffered retraining.
Prior to 1 January 2024, eligible employees in the UK were invited to
join the Company’s defined contribution pension arrangement, the
Compass Retirement Income Savings Plan (CRISP). On 1 January 2024,
CRISP transferred into the Compass Group Pension Plan (the ‘Plan’)
so that the Group could manage all its UK pension arrangements
under a single corporate trustee. Eligible employees in the UK are now
invited to join the CRISP Section of the Compass Group Pension Plan
(the CRISP Section). The Plan has a corporate trustee, Compass
Group Pension Trustee Company Limited.
The Company is subject to the Pension Automatic Enrolment
Regulations for its workforce in the UK. All new UK employees who
meet the statutory eligibility criteria, and who do not join the CRISP
Section, are automatically enrolled into the National Employment
Savings Trust.
Permanent employees outside the UK are usually offered membership
of local pension arrangements, if and where they exist, and where it is
appropriate to have Company-sponsored arrangements.
Employee diversity and human rights
Our Code of Business Conduct (CBC) provides principles-based
guidance to help our businesses do what’s right and sets out clearly
the standards of behaviour that we expect. Our values, CBC and
Group policies serve as a foundation for how we conduct business and
compete fairly, globally. Together, they underpin our environmental,
social and governance activities including incorporating the Ten
Principles of the UN Global Compact, of which Compass has been a
signatory since 2004, into strategies, policies and procedures. This
demonstrates Compass’ commitment to continue fostering an ethos
of integrity and inclusion, whilst playing our part in shaping a
sustainable future for our people, the communities in which we
operate, and the planet.
Our people have an important role to play in the continued success of
the Group. Individuality and diversity are respected and valued, and
relationships with employees are based on respect for the dignity of
the individual and fair treatment for all. The Company publishes an
annual statement in accordance with the requirements of the Modern
Slavery Act 2015 and a copy of the statement is available on the
Company’s website: www.compass-group.com.
As at 30 September 2024, there were 579,126 (2023: 562,460)
people employed by the Group (average number of employees
including directors and part-time employees), 323,182 of whom were
female (2023: 316,474) and 255,944 were male (2023: 245,986).
460 were senior managers, of whom 150 were female and 310 were
male (2023: 170 female and 326 male), which includes members of
our global leadership team and statutory directors of corporate
entities whose financial information is consolidated in the
Group’s financial statements in this Annual Report.
As at 30 September 2024, there were 14 directors, eight of whom
were male and six were female. Prior to any appointment to the Board,
the Nomination Committee gives due regard to diversity and gender
with a view to recommending the appointment of the most suitable
candidate for the role.
Compass seeks to create a positive and open working environment.
Employee policies are set locally to comply with local law within an
overall Group framework, and employee satisfaction and engagement
are monitored through a number of indicators.
Consideration is given to the concerns of the wider communities in
which the Group’s businesses operate, including national and local
interests, and we utilise relevant expertise to help contribute to the
wellbeing of communities in ways which are appropriate to the
Group’s business objectives. Furthermore, the Group supports the
rights of all people as set out in the UN Universal Declaration of
Human Rights (UN Declaration) and considers carefully before doing
any business in countries that do not adhere to the UN Declaration.
Business relationships
The directors regard positive business relationships with suppliers,
clients, consumers and others as critical to the Company’s long-term
success. The Group’s culture, values and behaviours support open
and honest engagement with its stakeholders. High standards of
ethical behaviour and probity are maintained in all Compass’ business
dealings. For further information on how the Company fosters
business relationships and how the directors have had regard to
stakeholders’ interests in their principal decision-making processes,
see pages 68 to 72.
Directors’ conflicts of interest
As part of their ongoing development, executive directors are
permitted to take on one external non-executive role on a non-
competitor listed company board, subject to prior approval by the
Board. Fees earned for the appointment may be retained by the
director. The Board monitors the extent of directors’ other interests
and the time commitment required to fulfil those interests to ensure
that the effectiveness of the Board is not compromised.
Each director has a duty under the Companies Act 2006 to avoid a
situation in which they have, or might have, a direct or indirect interest
that conflicts, or possibly may conflict, with the interests of the
Company. This duty is in addition to the obligation owed to the
Company to disclose to the Board an interest in any transaction or
arrangement being considered by the Company. The Company’s
articles of association authorise the directors to approve such
situations where appropriate and to apply other provisions to allow
conflicts of interest to be managed. The Board follows an established
procedure when deciding whether to authorise an actual or potential
conflict of interest. Only independent directors (i.e. those with no
interest in the matter under consideration) can make the relevant
decision. In making a decision, the directors must act in good faith
and in a way they consider most likely to promote the Company’s
success. Further, the directors may, if appropriate, impose limits or
conditions when granting authorisation.
The Board considered and authorised each director’s reported actual
and potential conflicts of interest at its meeting in July 2024. It also
considered any changes on an ad-hoc basis throughout the year. Any
authorised conflicts are reviewed at least every 15 months.
Non-financial reporting
The Companies, Partnerships and Groups (Accounts and Non-
Financial Reporting) Regulations 2016 (the Regulations) require
companies to disclose non-financial information necessary to provide
investors and other stakeholders with a better understanding of a
company’s development, performance and position, and the impact
of its activity. The Audit Committee, which advises the Board on
suchmatters, has concluded that the Company is compliant with
theRegulations.
121Compass Group PLC Annual Report 2024
Throughout this Annual Report the directors have disclosed a mix of
financial and non-financial KPIs that they believe best reflect the
Group’s strategic priorities and will help convey an understanding of
the Group’s culture and the drivers contributing to the ongoing
success of the Company. The Non-financial and sustainability
information statement on page 53 identifies where information
relating to non-financial matters can be found.
Post-balance-sheet events
– on 31 October 2024, we agreed the sale of our business in
Kazakhstan, subject to regulatory approval
– on 31 October 2024, the Group acquired 100% of the issued share
capital of DR Holding (trading as Dupont Restauration), a provider
of contract catering services in France, for cash of €296 million
($321 million)
– in the period from 1 October to 26 November 2024, 2,356,198
shares were repurchased for a total price of $77 million (excluding
transaction costs)
– on 13 November 2024, the Group entered into an agreement to
acquire 4Service AS, a provider of catering and facility management
services in Norway, for an enterprise value of approximately
NOK5.5 billion ($494 million). The acquisition is subject to
regulatory approval, which we expect to receive during the 2025
financial year
– on 26 November 2024, a final dividend in respect of the financial
year ended 30 September 2024 of 39.1 cents per share, $664
million (based on issued share capital excluding treasury shares as
at 30 September 2024) in aggregate, was proposed
Greenhouse gas emissions reporting
The Company is required to state the annual quantity of emissions in
tonnes of carbon dioxide equivalent from activities for which the Group
is responsible, including the combustion of fuel and the operation of
directly controlled facilities. Details of our emissions during the year
ended 30 September 2024 are set out within the Purpose section of
the Strategic Report on page 36 and form part of the Directors’ Report
disclosures and are incorporated by reference. Further details of the
Group’s actions to reduce emissions can also be found in the Purpose
and TCFD sections of this Annual Report on pages 34 to 52. This
Annual Report is certified as a CarbonNeutral® publication, supporting
an emissions reduction project to offset the emissions arising from the
production, printing and delivery of this Report. This year, the
Company has supported a community-based project in Malawi,
targeting the conservation of forestry whilst working with local
households to reduce fuelwood usage, which will help develop
sustainable livelihoods, increase community resilience to climate
change and promote biodiversity.
Task Force on Climate-related Financial Disclosures (TCFD)
In accordance with provisions of the UK Listing Rules, the Company is
required to state whether it has made disclosures consistent with the
TCFD’s recommendations, or if not, to provide an explanation of why it
has not complied and a description of the steps that are being taken
or will be taken to enable the Company to make consistent disclosures
in the future and the timeframe for compliance. Details of Compass’
TCFD progress and compliance are set out in the Strategic Report on
pages 41 to 52, and form part of the Directors’ Report disclosures and
are incorporated by reference.
Donations and political expenditure
Charitable objectives support the Company’s sustainability strategy
and have primarily focused on the environment, education, health
and wellbeing, community engagement, and responsible business
practice. Donations have included employee involvement through
fundraising and financial support.
Group charitable donations $m
2024 9.4
2023
1
8.7
1. The figure for the financial year ended 30 September 2023 of £7.1 million
has been restated in USdollars at a rate of $1.2217:£1.
Since 2004, shareholders have passed an annual resolution, on a
precautionary basis, to approve donations to EU political organisations
and to incur political expenditure (as such terms were defined under
the then relevant legislation) not exceeding a monetary limit approved
by shareholders. The Board has consistently confirmed that it
operates a policy of not giving any cash contribution to any political
party in the ordinary meaning of those words and that it has no
intention of changing that policy.
No material amount of corporate funds or paid employee time
has been utilised during the year for political activities and,
in accordance with the Company’s Code of Business Conduct,
employees must not engage in any form of lobbying or have contact
with political representatives, government employees or public
interest groups unless they are doing so legitimately and adhering to
internal control processes. Further information regarding the CBC can
be found on pages 13 and 76 of this Annual Report and on the
Company’s website: www.compass-group.com.
The directors propose to renew the authority last granted at the 2024
AGM for the Group to make political donations and incur political
expenditure (as such terms are defined in sections 362 to 365 of the
Companies Act 2006) until the Company’s next AGM, which they
might otherwise be prohibited from making or incurring under the
terms of the Companies Act 2006 and which would not amount to
‘donations’ in the ordinary sense of the word. It is proposed to
maintain the limit of such authority at £100,000.
CREST
The Company’s ordinary shares and sterling Eurobonds are in CREST,
the settlement system for stocks and shares.
Disclosures required under UKLR 6.6.1
There are no disclosures required to be made under the FCA’s Listing
Rule UKLR 6.6.1 which have not already been disclosed elsewhere in
this Report. Details of long-term incentive plans can be found in the
Directors’ Remuneration Report on pages 86 to 118 and details of
dividends waived by shareholders can be found on page 119.
AGM
The Notice of Meeting setting out the resolutions to be proposed at the
2025 AGM, together with explanatory notes, will be sent to
shareholders as a separate document and made available on the
Company’s website: www.compass-group.com and also on the
National Storage Mechanism at: https://data.fca.org.uk/#/nsm/
nationalstoragemechanism.
The directors consider that each of the resolutions is in the best
interests of the Company and the shareholders as a whole, and
recommend that shareholders vote in favour of all the resolutions.
On behalf of the Board
Alison Yapp
Group General Counsel and Company Secretary
26 November 2024
Compass Group PLC
Registered in England and Wales
Company no. 4083914
Other statutory disclosures continued122 Corporate Governance and Directors’ Report
Directors’ responsibilities statement
The Annual Report and Accounts complies with the Disclosure
Guidance and Transparency Rules of the United Kingdom’s
Financial Conduct Authority and the UK Corporate Governance
Code 2018 in respect of the requirements to produce an annual
financial report.
The Annual Report and Accounts is the responsibility of, and
has been approved by, the directors.
We confirm that to the best of our knowledge:
– the Annual Report and Accounts, taken as a whole, is fair,
balanced and understandable and provides the information
necessary for shareholders to assess the Group’s position
and performance, business model and strategy
– the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair
view of the assets, liabilities, financial position and profit or
loss of the Company and the undertakings included in the
consolidation taken as a whole
– the Annual Report and Accounts includes a fair review of the
development and performance of the business and the
position of the Company, and the undertakings included in
the consolidation taken as a whole, together with a
description of the principal risks and uncertainties that
theyface
The directors have permitted the auditor to undertake whatever
inspections it considers to be appropriate for the purpose of
enabling the auditor to give its audit opinion.
On behalf of the Board
Alison Yapp
Group General Counsel and Company Secretary
26 November 2024
Statement of directors’ responsibilities in respect
oftheAnnual Report and the financial statements
The directors are responsible for preparing the Annual Report and the
Group and Parent Company financial statements in accordance with
applicable law and regulations.
Company law requires the directors to prepare Group and Parent
Company financial statements for each financial year. Under that law
they are required to prepare the Group financial statements in
accordance with UK-adopted international accounting standards and
applicable law and have elected to prepare the Parent Company
financial statements in accordance with UK accounting standards and
applicable law, 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 Group and Parent Company and of the
Group’s profit or loss for that period. In preparing each of the Group
and Parent Company financial statements, the directors are
requiredto:
– select suitable accounting policies and then apply them
consistently
– make judgements and estimates that are reasonable, relevant,
reliable and prudent
– for the Group financial statements, state whether they have been
prepared in accordance with UK-adopted international accounting
standards
– for the Parent Company financial statements, state whether
applicable UK accounting standards have been followed, subject to
any material departures disclosed and explained in the Parent
Company financial statements
– assess the Group and Parent Company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern
– use the going concern basis of accounting unless they either intend
to liquidate the Group or the Parent 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 Parent Company’s
transactions and disclose with reasonable accuracy at any time the
financial position of the Parent Company, and enable them to ensure
that its financial statements comply with the Companies Act 2006.
They have a general responsibility for taking such steps as are
reasonably open to them to safeguard the assets of the Group and to
prevent and detect fraud and other irregularities.
Under applicable law and regulations, the directors are also
responsible for preparing a Strategic Report, Directors’ Report,
Directors’ Remuneration Report and Corporate Governance statement
that comply with that law and those regulations.
The directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company’s
website. Legislation in the UK governing the preparation and
dissemination of financial statements may differ from legislation in
other jurisdictions. In accordance with Disclosure Guidance and
Transparency Rule (DTR) 4.1.16R, the financial statements will form
part of the annual financial report prepared under DTR 4.1.17R and
4.1.18R. The auditor’s report on these financial statements provides
no assurance over whether the annual financial report has been
prepared in accordance with those requirements.
Disclosure of relevant audit information
The directors confirm that, so far as they are each aware, there is no
relevant audit information of which the auditor, KPMG, is unaware and
each director has taken all the steps that ought to have been taken as
a director to be aware of any relevant audit information and to
establish that KPMG is aware of that information.
123Compass Group PLC Annual Report 2024
KPMG LLP’s Independent Auditor’s Report
to the members of Compass Group PLC
1. Our opinion is unmodified
In our opinion:
– the financial statements of Compass Group PLC give a true and fair
view of the state of the Group’s and of the Parent Company’s affairs
as at 30 September 2024, and of the Group’s profit for the year
then ended;
– the Group financial statements have been properly prepared in
accordance with UK-adopted international accounting standards;
– the Parent Company financial statements have been properly
prepared in accordance with UK accounting standards, including
FRS 101 Reduced Disclosure Framework; and
– the Group and Parent Company financial statements have been
prepared in accordance with the requirements of the Companies
Act 2006.
What our opinion covers
We have audited the Group and Parent Company financial statements
of Compass Group PLC (“the Company”) for the year ended
30September 2024 included in the Annual Report, which comprise:
Group (Compass Group PLC
and its subsidiaries)
Parent Company
(Compass Group PLC)
– Consolidated Income Statement
– Consolidated Statement of
Comprehensive Income
– Consolidated Statement of Changes
in Equity
– Consolidated Balance Sheet
– Consolidated Cash Flow Statement
– Notes 1 to 36 to the Group financial
statements, including the accounting
policies included within the
respective notes.
– Parent Company
Balance Sheet
– Parent Company
Statement of Changes
in Equity
– Notes 1 to 8 to the
Parent Company
financial statements,
including the
accounting policies in
note 1.
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 believe that the audit evidence we have
obtained is a sufficient and appropriate basis for our opinion. Our
audit opinion and matters included in this report are consistent with
those discussed and included in our reporting to the Audit Committee
(“AC”).
We have fulfilled our ethical responsibilities under, and we remain
independent of the Group in accordance with, UK ethical
requirements including the FRC Ethical Standard as applied to listed
public interest entities.
2. Overview of our audit
Factors driving our view of risks
Our risk assessment is driven by understanding of the applicable
financial reporting framework, our knowledge of the business,
theindustry, and the wider economic environment in which the
Groupoperates.
Whilst the UK business has continued to recover its trading
performance with operating profit margin improving from prior year,
there is still an elevated level of estimation uncertainty regarding the
assumptions used in the impairment test particularly related to
sustained growth of the UK business. We therefore consider that the
risk associated with goodwill impairment in respect of the UK
cash-generating unit as a whole, continues to be heightened,
consistent with 2023.
Tax authorities around the world continue to provide a high level of
scrutiny of transfer pricing arrangements. We therefore consider that
the risk associated with uncertain direct tax positions as a whole,
continues to be heightened, consistent with 2023.
We also identified a new Key Audit Matter for 2024 related to two
material acquisitions made during the year, Hofmann-Menü Holdings
GmbH (HOFMANN
S
) and Orchestra Topco Limited (CH&CO). The risk
focuses on the judgement applied in the allocation of consideration
between intangible assets and goodwill arising on acquisitions.
Our assessment is that the risk of recoverability of the Parent
Company’s investments in subsidiaries remains consistent with 2023.
Key audit matters Vs 2023 Item
Goodwill impairment in respect of the UK
cash-generating unit
4.1
Uncertain direct tax provisions
4.2
Allocation of consideration between
intangibles and goodwill related to the
acquisition of HOFMANN
S
and CH&CO
4.3
Recoverability of the Parent Company’s
investment in subsidiaries
4.4
Audit Committee interaction
During the year, the AC met three times. KPMG are invited to attend
all AC meetings and are provided with an opportunity to meet with the
AC in private sessions without the Executive Directors being present.
For each Key Audit Matter, we have set out communications with the
AC in section 4, including matters that required particular judgement
for each.
The matters included in the Audit Committee Chair’s report on page
74 are materially consistent with our observations of those meetings.
Independent Auditor’s Report124
Our independence
We have fulfilled our ethical responsibilities under, and we remain
independent of the Group in accordance with, UK ethical
requirements including the FRC Ethical Standard as applied to listed
public interest entities.
We have not performed any non-audit services during the financial
year ended 30 September 2024 or subsequently which are prohibited
by the FRC Ethical Standard.
We were first appointed as auditor by the shareholders for the year
ended 30 September 2014. The period of total uninterrupted
engagement is for the 11 financial years* ended 30 September 2024.
The Group engagement partner is required to rotate every five years.
As these are the first set of the Group’s financial statements signed by
Jonathan Downer, he will be required to rotate off after the 2028 audit.
The average tenure of partners responsible for component audits as
set out in section 7 below is four years, with the shortest being two and
the longest being six.
Total audit fee $ 9.7 million
Audit related fees (including interim
review)
$ 0.9 million
Other services Nil
Non-audit fee as a % of total audit and
audit related fee %
Nil
Date first appointed 14 March 2014
Uninterrupted audit tenure 11 years*
Next financial period which requires a
tender
30 September 2034
Tenure of Group engagement partner 1 year
Average tenure of component signing
partners
4 years
* A competitive tender took place in advance of the 30 September 2023 year
end and KPMG LLP was subsequently reappointed.
Materiality
(Item 6 below)
The scope of our work is influenced by our view of materiality and our
assessed risk of material misstatement.
We have determined overall materiality for the Group financial
statements as a whole at $113 million (2023: $90 million, retranslated
from £74 million, as a result of the change in presentational currency
as disclosed in Note 1 to the financial statements) and for the Parent
Company financial statements as a whole at £49 million (2023: £49
million).
We determined that Group normalised profit before tax is the
benchmark for the Group. As such, we based our Group materiality on
Group normalised profit before tax, of which it represents 4.6% (2023:
4.2% of the Group profit before tax).
Materiality for the Parent Company financial statements was
determined with reference to a benchmark of Parent Company total
assets of which it represents 0.3% (2023: 0.3%).
Group Group Materiality
GPM Group Performance Materiality
HCM Highest Component Materiality
PLC Parent Company Materiality
LCM Lowest Component Materiality
AMPT Audit Misstatement Posting Threshold
2024
2023
$5.0
$4.5
AMPT
LCM
PLC
HCM
GPM
Group
$113.0
$90.4
$84.7
$67.8
$90.0
$76.8
£49.0
£49.0
$16.0
$13.6
Materiality levels used in our audit (millions)
125Compass Group PLC Annual Report 2024
Group scope
(Item 7 below)
We have performed risk assessment and planning procedures to
determine which of the Group’s components are likely to include risks
of material misstatement to the Group financial statements, the type
of procedures to be performed at these components and the extent of
involvement required from our component auditors around the world.
Of the Group’s 45 (2023: 49) reporting components, we subjected 12
(2023:15) to full- scope audits for Group purposes.
The components within the scope of our work accounted for the
percentages illustrated opposite.
In addition, we have performed Group-level analysis on the remaining
components to determine whether further risks of material
misstatement exist in those components.
We consider the scope of our audit, as communicated to the Audit
Committee, to be an appropriate basis for our audit opinion.
The impact of climate change on our audit
In planning our audit, we considered the potential impacts of climate
change on the Group’s business and its financial statements.
The Group has set out in the Strategic Report its commitment to reach
net zero greenhouse gas (GHG) emissions across the global value
chain by 2050, to reach climate neutrality in the Group’s direct
operations by 2030, and its commitment to several other shorter-term
targets.
As part of our audit, we have performed a risk assessment, including
enquiries of management, to understand how the impact of
commitments made by the Group in respect of climate change, as well
as the physical or transition risks of climate change, may affect the
financial statements and our audit. There was no material impact from
this work on our key audit matters.
Whilst the Group is still undertaking work to quantify and assess the
potential impact of climate change on the business, based on the risk
assessment procedures we performed, including reading the Group’s
roadmap for transitioning to net zero GHGs, we did not identify any
significant risk in this period of climate change having a material
impact on the Group’s critical accounting estimates. This is due to the
shorter-term nature of certain estimates (tax provisioning), the nature
of the estimate itself (pension liabilities) and the impact on the level of
headroom (impairment of goodwill and intangible assets). In addition,
we did not identify any significant risks in this period to the carrying
value and useful economic lives of property, plant and equipment
caused by the projected physical risks of climate change or the
transition to a climate neutrality and net zero operating model.
We have read the disclosures of climate-related information in the
front half of the Annual Report and considered their consistency with
the financial statements and our audit knowledge. We have not been
engaged to provide assurance over the accuracy of the climate risk
disclosures in the Annual Report.
Full scope audits
89%
11%
Remaining components
Profit before tax 89%
(2023: 93%)
89%
11%
Full scope audits
Remaining components
Total assets 89%
(2023: 90%)
88%
12%
Full scope audits
Remaining components
Revenue 88%
(2023: 90%)
Coverage of Group financial statements
Independent Auditor’s Report126
3. Going concern, viability and principal risks
and uncertainties
The directors have prepared the financial statements on the going
concern basis as they do not intend to liquidate the Group or the
Parent Company or to cease their operations, and as they have
concluded that the Group’s and the Parent 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 their ability to continue as a going concern over the period
to 31 March 2026 (“the going concern period”).
Going concern
We used our knowledge of the Group, its industry and the general
economic environment to identify the inherent risks to its business
model and analysed how those risks might affect the Group’s and
Parent Company’s financial resources or ability to continue operations
over the going concern period. The risk that we considered most likely
to adversely affect the Group’s available financial resources and/or
metrics relevant to debt covenants over this period was the cost
inflation pressures leading to loss of revenue and profits and inability
to retain and/or secure new contracts that may lead to loss of market
share to competition.
We also considered less predictable but realistic second-order
impacts, such as a significant decline in volumes as a consequence of
a global economic downturn.
We considered whether these risks could plausibly affect the liquidity
or covenant compliance in the going concern period by comparing
severe but plausible downside scenarios that could arise from these
risks individually and collectively against the level of available financial
resources and covenants indicated by the Group’s financial forecasts.
We considered whether the going concern disclosure on page 145 of
the Group financial statements gives a full and accurate description of
the directors’ assessment of going concern, including the identified
risks and related sensitivities.
Accordingly, based on those procedures, we found the directors’ use
of the going concern basis of accounting without any material
uncertainty for the Group and Parent Company to be acceptable.
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 Group or the Parent
Company will continue in operation.
Our conclusions
– 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 Group’s or Parent Company’s ability to continue as a
going concern for the going concern period;
– We have nothing material to add or draw attention to in relation to
the directors’ statement in note 1 to the financial statements on the
use of the going concern basis of accounting with no material
uncertainties that may cast significant doubt over the Group and
Parent Company’s use of that basis for the going concern period,
and we found the going concern disclosure in note 1 to be
acceptable; and
– The related statement under the Listing Rules set out on page 20 is
materially consistent with the financial statements and our audit
knowledge.
Disclosures of emerging and principal risks and longer-term viability
Our responsibility
We are required to perform procedures to identify whether there is a
material inconsistency between the directors’ disclosures in respect of
emerging and principal risks and the viability statement, and the
financial statements and our audit knowledge.
Based on those procedures, we have nothing material to add or draw
attention to in relation to:
– the directors’ confirmation within risk management on page 23 that
they have carried out a robust assessment of the emerging and
principal risks facing the Group, including those that would threaten
its business model, future performance, solvency and liquidity;
– the Principal Risks disclosures describing these risks and how
emerging risks are identified and explaining how they are being
managed and mitigated; and
– the directors’ explanation in the viability statement of how they have
assessed the prospects of the Group, over what period they have
done so and why they considered that period to be appropriate, and
their statement as to whether they have a reasonable expectation
that the Group will be able to continue in operation and meet its
liabilities as they fall due over the period of their assessment,
including any related disclosures drawing attention to any
necessary qualifications or assumptions.
We are also required to review the viability statement set out on page
29 under the Listing Rules.
Our work is limited to assessing these matters in the context of only
the knowledge acquired during our financial statements audit. 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 absence of
anything to report on these statements is not a guarantee as to the
Group’s and Parent Company’s longer-term viability.
Our reporting
We have nothing material to add or draw attention to in relation to
these disclosures.
We have concluded that these disclosures are materially consistent
with the financial statements and our audit knowledge.
127Compass Group PLC Annual Report 2024
4. Key audit matters
What we mean
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements and
include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those which had the
greatest effect on:
– the overall audit strategy;
– the allocation of resources in the audit; and
– directing the efforts of the engagement team.
We include below the Key Audit Matters in decreasing order of audit significance together with our key audit procedures to address those matters
and our results from those procedures. These matters were addressed, and our results are based on procedures undertaken, for the purpose of
our audit of the financial statements as a whole. We do not provide a separate opinion on these matters.
4.1 Goodwill impairment in respect of the UK cash-generating unit (Group)
Financial statement elements
2024 2023
Goodwill (UK CGU)
$2,081
million
$1,877
million
Our assessment of risk vs 2023
Our assessment is that the risk is similar to 2023.
Our results
2024: Acceptable
2023: Acceptable
Description of the key audit matter Our response to the risk
Forecast-based assessment:
The Group has a significant carrying amount of goodwill which is
spread across a range of cash-generating units (CGUs) in different
countries.
The value-in-use calculation for the CGUs, which represents the
estimated recoverable amount, is subjective due to the inherent
uncertainty involved in forecasting estimated future cash flows
(specifically the key assumptions such as revenue, operating margin
and long-term growth rate).
Estimation uncertainty in relation to the UK business especially
remains higher, as the recoverable amount is dependent on the
ability of the business to continue to grow at levels it has done
historically in the longer term and to keep improving its margins.
The effect of these matters is that, as part of our risk assessment, we
determined that the carrying amount of the UK CGU has a high
degree of estimation uncertainty, with a potential range of reasonable
outcomes greater than our materiality for the financial statements as
a whole, and possibly many times that amount.
The financial statements (note 9) disclose the sensitivity estimated by
the Group. These disclosures give relevant information about the
estimation uncertainty including the risk of a reduction in the
headroom or need for an impairment as a result of a reasonably
possible change in one or more of the key assumptions.
We performed the tests below rather than seeking to rely on any of the
Group’s controls because the nature of the balance is such that we
would expect to obtain audit evidence primarily through the detailed
procedures described.
Our procedures to address the risk included:
– Historical comparisons: We assessed the Group’s ability to forecast
accurately by comparing assumptions made in historic forecasts to
actual results achieved;
– Our sector experience: We critically assessed the Group’s
assumptions on revenue and operating profit margin taking account of
strategic plans approved by the Board, our wider knowledge of the
industry and the performance of other comparable CGUs;
– Benchmarking assumptions: We challenged the Group’s long-term
growth rate assumption by corroborating this to external data sources
such as industry reports and media reports;
– Sensitivity analysis: We performed sensitivity analysis on the key
assumptions noted above to identify the extent to which changes in
those assumptions could give rise to an impairment; and
– Assessing transparency: We assessed whether the Group’s
disclosures about the sensitivity of the outcome of the impairment
assessment to a reasonably possible change in key assumptions
reflects the risks inherent in the estimation of the recoverable amount
of goodwill.
Communications with Compass Group PLC’s Audit Committee
Our discussions with and reporting to the Audit Committee
included:
– Our audit approach as set out above, including not seeking to rely
on any of the Group’s controls;
– Our conclusions from procedures performed; and
– Our views on the disclosures included in the financial statements
with respect to the UK CGU and the sensitivity of the impairment
conclusions to reasonably possible changes in assumptions.
Areas of particular auditor judgement
We identified the following as the areas of particular auditor judgement:
– The estimate is particularly sensitive to key assumptions in the
impairment model including revenue growth rates, operating profit
margins, and long-term growth rates, and auditor judgement is
required to assess whether the directors’ overall estimate falls within
an acceptable range.
Our results
We found the Group’s conclusion that there is no impairment of the UK
CGU’s goodwill to be acceptable (2023: acceptable) and we found the
sensitivity disclosures made to be acceptable (2023: acceptable).
Further information in the Annual Report and Accounts: See the Audit Committee Report on page 74 for details on how the Audit Committee
considered goodwill impairment in respect of the UK CGU as an area of significant attention, page 158 for the accounting policy on goodwill,
andnote 9 for the financial disclosures.
Independent Auditor’s Report128
4.2 Uncertain direct tax provisions (Group)
Financial statement elements
Direct tax provisions included within current tax
liabilities of $ 235 million (2023: $ 261 million)
Disclosure of other sources of estimation uncertainty-
note 6 to the Group financial statements
Our assessment of risk vs 2023
Our assessment is that the risk is similar to 2023.
Our results
2024: Acceptable
2023: Acceptable
Description of the key audit matter Our response to the risk
Subjective estimate:
The Group operates across a large number of jurisdictions and is
subject to periodic challenges by local tax authorities on a range
oftax matters during the normal course of business, including
transfer pricing.
As a result of the complexities of tax rules on transfer pricing, the
provisioning for uncertain direct tax positions is judgemental and
requires the directors to make estimates in relation to these
uncertainties.
The directors’ estimation includes assessing the likelihood of
potentially material exposures as a result of changes in local tax
regulations and evaluating ongoing inspections by local tax
authorities and international bodies. Whilst a material adjustment
tothe carrying amounts of the liabilities is not expected within the
next financial year, there remains a possibility of a material impact
onthe amounts recognised in the Group’s financial statements in
future periods.
We performed the tests below rather than seeking to rely on any of the
Group’s controls because the small number of transactions meant that
detailed testing is inherently the most effective means of obtaining
auditevidence.
Our procedures to address the risk included:
– Our taxation expertise: With the assistance of our tax specialists, we
analysed and challenged the assumptions used to determine the
provisions recognised using our knowledge and experience of the
application of international and local legislation by the relevant
authorities and courts and assessing whether the approach applied by
the Group is supported by custom and practice. We also considered
whether the judgements applied to each significant provision,
including the maximum potential exposure and the likelihood of a
payment being required, were appropriate.
– Tests of detail: We examined the calculations prepared by the
directors and agreed key assumptions used to underlying data. We
inspected correspondence with relevant tax authorities and assessed
third-party tax advice received by the directors to evaluate the
conclusions drawn in the advice where relevant to the significant
exposures faced by the Group, and how these have been used by the
directors in their assessment of the likelihood of any outflow and
estimate of the provision.
– Assessing transparency: We assessed the adequacy of the Group’s
disclosures in respect of tax and uncertain direct tax positions.
Communications with Compass Group PLC’s Audit Committee
Our discussions with and reporting to the Audit Committee
included:
– Our audit approach as set out above, including not seeking to rely
on any of the Group’s controls, and the involvement of our
taxation specialists;
– Our conclusions from procedures performed; and
– Our views on the disclosures of the direct tax provisions
disclosed.
Area of particular auditor judgement
We identified the following as the areas of particular auditor judgement:
– The assessment of the outcome of investigations by the authorities, if
a liability exists and in making an estimate of any future economic
outflows.
Our results
We found the level of tax provisioning to be acceptable (2023:
acceptable).
Location of further information in the Annual Report and Accounts: see the Audit Committee Report on page 74 for details on how the Audit
Committee considered direct tax provisions as an area of significant attention, page 153 for the accounting policy on tax and note 6 for the
financial disclosures.
129Compass Group PLC Annual Report 2024
4.3 Allocation of consideration between intangibles and goodwill related to the acquisition of HOFMANN
S
and CH&CO (group)
Financial statement elements
Acquired intangibles of $644 million and goodwill arising on acquisitions
of $452 million. (2023: not applicable)
Our assessment of risk vs 2023
This is a new risk for the
2024 audit.
Our results
2024: Acceptable
Description of the key audit matter Our response to the risk
Subjective valuation:
During the year, the Group acquired 100% of the issued share capital
of HOFMANN
S
for consideration of $103 million (excluding third-party
debt acquired and repaid on the date of acquisition of $185 million).
The Group also acquired 100% of the issued share capital of CH&CO
for consideration of $344 million (excluding third-party debt acquired
and repaid on the date of acquisition of $246 million).
Acquisition accounting can require significant estimation and
judgement with regards to the purchase price allocation, in particular
in the fair valuation of acquired intangible assets. In determining these
fair values, management is required to adopt an appropriate valuation
methodology and make significant judgements and estimates including
those relating to the brand royalty rates. Performing audit procedures
to evaluate the appropriateness and the reasonableness of these
judgements and estimates required a high degree of auditor judgement
and an increased extent of effort, including the need to involve our
valuation specialists.
We therefore determined that the allocation of consideration between
acquired intangible assets and goodwill as a key audit matter.
We performed the tests below rather than seeking to rely on any of the
Group’s controls because the nature of the balance is such that we
would expect to obtain audit evidence primarily through the detailed
procedures described.
Our procedures to address the risk included:
– Methodology choice: With the assistance of our own valuation
specialists, we assessed the appropriateness of the methodology
used in the valuation models by considering if it was in accordance
with relevant accounting standards.
– Our valuation expertise: With the assistance of our own valuation
specialists, we also challenged the appropriateness of the key
assumptions underlying the intangible valuation, including the brand
royalty rates used.
– Sensitivity analysis: We considered the sensitivity of the acquired
intangible asset valuation to reasonably possible changes in
assumptions and focused our attention to revenue growth and brand
royalty assumptions which we considered the most critical to the
valuation.
– Assessing transparency: We assessed the appropriateness of the
Group’s disclosures in respect of the results of the acquisition
accounting.
Communications with Compass Group PLC’s Audit Committee
Our discussions with and reporting to the Audit Committee included:
– Our audit approach as set out above, including not seeking to rely
on any of the Group’s controls, and the involvement of our
valuation specialists;
– Our conclusions from procedures performed; and
– Our views on the disclosures included in the financial statements
with respect to the sensitivity of the acquired intangible asset and
goodwill valuation to reasonably possible changes in assumptions.
Area of particular auditor judgement
We identified the following as the areas of particular auditor
judgement:
– The estimate is particularly sensitive to key assumptions in the
models including brand royalty rates and auditor judgement is
required to assess whether the directors’ overall estimate falls within
an acceptable range.
Our results
We found the balance of intangible assets and goodwill recognised on
acquisition to be acceptable (2023: not applicable).
Independent Auditor’s Report130
4.4 Recoverability of Parent Company’s investment in subsidiaries (Parent company)
Financial statement elements
2024 2023
Investment in subsidiaries £6,763
million investments
£6,714
million investments
Our assessment of risk vs 2023
Our assessment is that the risk is
similar to 2023.
Our results
2024: Acceptable
2023: Acceptable
Description of the key audit matter Our response to the risk
Low risk, high value:
The carrying amount of the Parent Company’s investments in
subsidiaries represents 48% (2023: 44%) of the Company’s total
assets.
We do not consider the recoverability of these investments to be at a
high risk of significant misstatement, or to be subject to a significant
level of judgement. However, due to their materiality in the context of
the Parent Company financial statements as a whole, this is considered
to be the area which had the greatest effect on our overall Parent
Company audit.
We performed the tests below rather than seeking to rely on any of the
Company’s controls because the nature of the balance is such that we
would expect to obtain audit evidence primarily through the detailed
procedures described.
Our procedures to address the risk included:
– Test of detail: We compared a sample of the highest value
investments carrying amounts to the net assets of the relevant
subsidiary included within the Group consolidation, to identify
whether the net asset value, being an approximation of the minimum
recoverable amount, was in excess of the investment carrying value.
When the net assets of the relevant subsidiary were insufficient to
support the carrying value, we considered the performance of the
underlying investments held by the relevant subsidiary in order to
assess whether there was an indication of impairment.
– Assessing subsidiary net assets: For the relevant subsidiaries
(investment holding companies), we compared the net assets of the
relevant subsidiary with the Group consolidation to the final net
assets in the most recent audited standalone financial statements.
Based on the knowledge acquired during the audit of the
consolidated Group, including reporting received from component
auditors for the underlying trading operations, we considered
whether there were any events indicating that the net assets would
be materially different from the prior year position.
Communications with Compass Group PLC’s Audit Committee
Our discussions with and reporting to the Audit Committee included:
– Our audit approach as set out above; and
– Our conclusions from procedures performed.
Area of particular auditor judgement
We did not identify any areas of particular auditor judgement.
Our results
We found the Parent Company’s conclusion that there is no
impairment of its investment in subsidiaries to be acceptable
(2023:acceptable).
131Compass Group PLC Annual Report 2024
5. Our ability to detect irregularities, and our response
Fraud — Identifying and responding to risks of material misstatement due to fraud
Fraud risk assessment
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, the Audit Committee and Internal Audit, and inspection of policy documentation as to
the Group’s high-level policies and procedures to prevent and detect fraud, including the Internal Audit
function and the Group’s channel for ‘whistleblowing’, as well as whether they have knowledge of any actual,
suspected, or alleged fraud.
– Reading Board, Audit and Corporate Responsibility Committee meeting minutes.
– Considering remuneration incentive schemes (primarily the annual bonus plan) and performance targets for
management and directors including revenue, operating profit margin and cash flow targets for management
remuneration.
– Using analytical procedures to identify any unusual or unexpected relationships.
– Our forensic specialists assisted us in identifying key fraud risks. This included attending the Risk Assessment
and Planning Discussion, holding a discussion with the engagement partner, engagement manager and
engagement quality control reviewer, and assisting with designing relevant audit procedures to respond to the
identified fraud risks.
Risk communications
We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud
throughout the audit. This included communication from the Group audit team to component audit teams of
relevant fraud risks identified at the Group level and request to component audit teams to report to the Group
audit team any instances of fraud that could give rise to a material misstatement at the Group level.
Fraud risks
As required by auditing standards, and taking into account possible pressures to meet profit targets and our
overall knowledge of the control environment, we perform procedures to address the risk of management override
of controls and the risk of fraudulent revenue recognition, in particular the risk that Group and component
management may be in a position to make inappropriate accounting entries. We did not identify any additional
fraud risks.
Procedures to address
fraud risks
In determining the audit procedures, we took into account the results of our evaluation of some of the Group-wide
fraud risk management controls.
We also performed procedures including:
– Identifying journal entries and other adjustments to test based on risk criteria and comparing the identified
entries to supporting documentation. These included those posted by senior management and those posted to
unexpected account pairings.
– Assessing whether the judgement made in making accounting estimates are indicative of a potential bias.
Independent Auditor’s Report132
Laws and regulations – identifying and responding to risks of material misstatement relating to compliance with laws and regulations
Laws and regulations
risk assessment
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 from inspection of the Group’s
regulatory and legal correspondence; and discussed with the directors and other management the policies and
procedures regarding compliance with laws and regulations.
As the Group is regulated, our assessment of risks involved gaining an understanding of the control environment
including the entity’s procedures for complying with regulatory requirements.
Risk communications
We communicated identified laws and regulations throughout our team and remained alert to any indications of
non-compliance throughout the audit. This included communication from the Group audit team to component
audit teams of relevant laws and regulations identified at the Group level, and a request for component auditors to
report to the Group team any instances of non-compliance with laws and regulations that could give rise to a
material misstatement at Group level.
Direct laws context
and link to audit
The potential effect of these laws and regulations on the financial statements varies considerably.
Firstly, the Group 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
legislation, and we assessed the extent of compliance with these laws and regulations as part of our procedures
on the related financial statement items.
Most significant
indirect law/regulation
areas
Secondly, the Group 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 (food and employees), anti-bribery, data privacy, competition and employment law. 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.
Context
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.
133Compass Group PLC Annual Report 2024
6. Our determination of materiality
The scope of our audit was influenced by our application of materiality. We set quantitative thresholds and overlay qualitative considerations to
help us determine the scope of our audit and the nature, timing and extent of our procedures, and in evaluating the effect of misstatements, both
individually and in the aggregate, on the financial statements as a whole.
$113m
(2023: $90m)
Materiality for the
group financial
statements as a
whole
What we mean
A quantitative reference for the purpose of planning and performing our audit.
Basis for determining materiality and judgements applied
Materiality for the Group financial statements as a whole was set at $113 million (2023: $90 million). This was
determined with reference to a benchmark of Group normalised profit before tax from continuing operations
(normalised PBTCO).
We determined that normalised PBTCO is the main benchmark for the Group considering the sector in which it
operates, its ownership and financing structure, and the focus of users of the financial statements. We normalised
by adding back the adjustments that do not represent normal, continuing operations of the Group. The items we
adjusted for were net loss on sale and closure of businesses amounting to $203 million (note 27), non-cash
impairment of computer software assets amounting to $146 million (note 3), acquisition transaction costs
amounting to $41 million (note 3) and impairment of investment in joint venture amounting to $10 million (note
3). As such, we based our Group materiality on normalised PBTCO of $2,456 million (2023: PBTCO $2,137
million).
Our Group materiality of $113 million was determined by applying a percentage to the normalised PBTCO. When
using a benchmark of normalised PBTCO to determine overall materiality, KPMG’s approach for listed entities
considers a guideline range of 3% to 5% of the measure. In setting overall Group materiality, we applied a
percentage of 4.6% (2023: 4.2%) to the benchmark.
Materiality for the Parent Company financial statements as a whole was set at £49 million (2023: £49 million),
determined with reference to a benchmark of Parent Company total assets, limited to be less than materiality for
Group materiality as a whole. It represents 0.3% (2023: 0.3%) of the Parent Company total assets.
$84.7m
(2023: $67.8m)
Performance
materiality
What we mean
Our procedures on individual account balances and disclosures were performed to a lower threshold,
performance materiality, so as to reduce to an acceptable level the risk that individually immaterial misstatements
in individual account balances add up to a material amount across the financial statements as a whole.
Basis for determining performance materiality and judgements applied
We have considered performance materiality at a level of 75% (2023: 75%) of materiality for Compass Group PLC
Group financial statements as a whole to be appropriate.
The Parent Company performance materiality was set at £36.7m (2023: £36.7m), which equates to 75% (2023:
75%) of materiality for the Parent Company financial statements as a whole.
We applied this percentage in our determination of performance materiality because we did not identify any
factors indicating an elevated level of risk.
$5m
(2023: $4.5m)
Audit misstatement
posting threshold
What we mean
This is the amount below which identified misstatements are considered to be clearly trivial from a quantitative
point of view. We may become aware of misstatements below this threshold which could alter the nature, timing
and scope of our audit procedures, for example if we identify smaller misstatements which are indicators of fraud.
This is also the amount above which all misstatements identified are communicated to Compass Group PLC’s
Audit Committee.
Basis for determining the audit misstatement posting threshold and judgements applied
We set our audit misstatement posting threshold at 4.4% (2023: 5%) of our materiality for the Group financial
statements. We also report to the Audit Committee any other identified misstatements that warrant reporting on
qualitative grounds.
The overall materiality for the Group financial statements of $113 million (2023: $90 million) compares as follows to the main financial statement
caption amounts:
Group revenue ($ million) Group profit before tax ($ million) Total Group assets ($ million)
2024 2023 2024 2023 2024 2023
Financial statement caption 42,002 37,907 2,056 2,137 24,349 21,483
Group materiality as % of caption 0.27% 0.24% 5.5% 4.2% 0.46% 0.42%
Independent Auditor’s Report134
7. The scope of our audit
Group scope What we mean
How the Group audit team determined the procedures to be performed across the Group.
The Group has 45 (2023: 49) reporting components. In order to determine the work performed at the reporting
component level, we identified those components which we considered to be of individual financial significance,
those which were significant due to risk and those remaining components on which we required procedures to be
performed to provide us with the evidence we required in order to conclude on the Group financial statements as
a whole.
We determined individually financially significant components as those contributing at least 10% (2023: 10%) of
Group revenue or Group total assets. We selected Group revenue and Group total assets because these are the
most representative of the relative size of the components. We identified 1 (2023: 1) component as an individually
financially significant component and performed a full scope audit on this component.
In addition to the individually financially significant component, we identified 2 (2023: 1) components as
significant, owing to significant risk of material misstatement affecting the Group financial statements. We
performed full scope audits on these components.
In addition, to enable us to obtain sufficient appropriate audit evidence for the Group financial statements as a
whole, we selected 9 (2023: 13) components on which to perform full scope audit procedures. The components
within the scope of our work accounted for the following percentages of the Group’s results, with the prior year
comparatives indicated in brackets:
Scope Number of components
Range of materiality
applied ($ million) Group Revenue
Group Profit
before tax Group total assets
Full scope audit 12 (15) 16-90 (14-77) 88% (90%) 89% (93%) 89% (90%)
The remaining 12% (2023: 10%) of Group revenue, 11% (2023: 7%) of Group profit before tax and 11% (2023:
10%) of total Group assets is represented by 33 (2023: 34) reporting components, none of which individually
represented more than 2% (2023: 2%) of any of Group revenue, Group profit before tax or total Group assets. For
these components, we performed analysis at an aggregated Group level to re-examine our assessment that there
were no significant risks of material misstatement within these.
The work on 9 of the 12 components (2023: 12 of the 15 components) was performed by component auditors and
the rest, including the audit of the Parent Company, was performed by the Group team.
The Group team instructed component auditors as to the significant areas to be covered, including the relevant
risks detailed above and the information to be reported back. The Group team approved the component
materiality levels, as detailed in the table above, having regard to the mix of size and risk profile of the Group
across the components.
The scope of the audit work performed was predominately substantive as we placed limited reliance upon the
Group’s internal control over financial reporting.
Group audit team
oversight
What we mean
The extent of the Group audit team’s involvement in component audits.
In working with component auditors, we:
– Held planning calls with all component audit teams to discuss the significant areas of the audit relevant to the
components.
– Issued Group audit instructions to component auditors on the scope of their work, including specifying the
minimum procedures to perform in their audit of significant risk areas, including management override of
controls and revenue recognition.
– Held risk assessment update discussions with all component audit teams before the commencement of the
final phases of the audit led by the Group engagement partner and engagement quality control partner.
– Visited five (2023: four) components in person as the audit progressed to understand and challenge the audit
approach and organised regular video conferences with the Group and component audit teams. At these
meetings and video conferences, the findings reported to the Group team were discussed in more detail, and
any further work required by the Group team was then performed by the component audit teams.
– Inspected the component audit teams’ key work papers (using remote technology capabilities) to evaluate the
quality of execution of the audits of the components, with a particular focus on work related to significant risks
135Compass Group PLC Annual Report 2024
8. Other information in the Annual Report
The directors are responsible for the other information presented in the Annual Report together with the financial statements. Our opinion on the
financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except as explicitly stated
below, any form of assurance conclusion thereon.
All other information
Our responsibility
Our responsibility is to read the other information 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.
Our reporting
Based solely on that work we have not
identified material misstatements or
inconsistencies in the other information.
Strategic Report and Directors’ Report
Our responsibility and reporting
Based solely on our work on the other information described above we report to you as follows:
– 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.
Directors’ Remuneration report
Our responsibility
We are required to form an opinion as to whether the part of the Directors’ Remuneration
Report to be audited has been properly prepared in accordance with the Companies Act
2006.
Our reporting
In our opinion the part of the Directors’
Remuneration Report to be audited has been
properly prepared in accordance with the
Companies Act 2006.
Corporate governance disclosures
Our responsibility
We are required to perform procedures to identify whether there is a material
inconsistency between the financial statements and our audit knowledge, and:
– the directors’ statement that they consider that the annual report and financial
statements taken as a whole is fair, balanced and understandable, and provides the
information necessary for shareholders to assess the Group’s position and
performance, business model and strategy;
– the section of the annual report describing the work of the Audit Committee, including
the significant issues that the Audit Committee considered in relation to the financial
statements, and how these issues were addressed; and
– the section of the annual report that describes the review of the effectiveness of the
Group’s risk management and internal control systems.
Our reporting
Based on those procedures, we have
concluded that each of these disclosures is
materially consistent with the financial
statements and our audit knowledge.
We are also required to review the part of the Corporate Governance Statement relating to
the Group’s compliance with the provisions of the UK Corporate Governance Code
specified by the Listing Rules for our review.
We have nothing to report in this respect.
Other matters on which we are required to report by exception
Our responsibility
Under the Companies Act 2006, we are required to report to you if, in our opinion:
– adequate accounting records have not been kept by the Parent Company, or returns
adequate for our audit have not been received from branches not visited by us; or
– the Parent Company financial statements and the part of the Directors’ Remuneration
Report to be audited 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.
Our reporting
We have nothing to report in these respects.
Independent Auditor’s Report136
9. Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page 123, the
directors are responsible for: the preparation of the financial
statements including being satisfied that they give a true and fair view;
assessing the Group and Parent 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 Group or the Parent Company or to cease
operations, or have no realistic alternative but to do so. In addition, the
directors are 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.
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.
The Company is required to include these financial statements in an
annual financial report prepared under Disclosure Guidance and
Transparency Rule 4.1.17R and 4.1.18R and using the single
electronic reporting format specified in the EU ESEF regulation.
Thisauditor’s report provides no assurance over whether the annual
financial report has been prepared in accordance with those
requirements.
10. 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.
Jonathan Downer (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
15 Canada Square, London E14 5GL
26 November 2024
137Compass Group PLC Annual Report 2024
138 Consolidated financial statements
Consolidated income statement for the year ended 30 September 2024
Restated
1
2024 2023
Notes $m $m $m $m
Revenue
2
42,002
37,907
Operating costs
3
(39,462)
(35,662)
Operating profit before joint ventures and associates
2,540
2,245
Share of results of joint ventures and associates
2, 14
44
68
Underlying operating profit
2
2, 34
2,998
2,592
Acquisition-related charges
3, 34
(235)
(153)
Charges related to the strategic portfolio review
3, 34
(170)
(118)
Other
3
34
(9)
(8)
Operating profit
2
2,584
2,313
Net (loss)/gain on sale and closure of businesses
27, 34
(203)
24
Finance income
5
37
59
Finance expense
5
(286)
(225)
Acquisition-related charges
5, 34
(9)
–
Other financing items
5, 34
(67)
(34)
Finance costs
(325)
(200)
Profit before tax
2,056
2,137
Income tax expense
6
(642)
(525)
Profit for the year
1,414
1,612
Attributable to
Equity shareholders
1,404
1,607
Non-controlling interests
10
5
Profit for the year
1,414
1,612
Basic earnings per share
7
82.3c
92.2c
Diluted earnings per share
7
82.2c
92.1c
1. See note 1.
2. Operating profit excluding specific adjusting items (see note 34).
3. Other specific adjusting items include one-off pension charge and tax on share of profit of joint ventures (see note 34).
The accompanying notes form part of these consolidated financial statements.
Compass Group PLC Annual Report 2024 139
Consolidated statement of comprehensive income for the year ended 30 September 2024
Restated
1
2024 2023
Notes $m $m
Profit for the year
1,414
1,612
Other comprehensive income
Items that will not be reclassified to the income statement
Remeasurement of post-employment benefit obligations
24
(286)
33
Return on plan assets, excluding interest income
24
63
(331)
Change in asset ceiling, excluding interest income
24
(1)
6
Change in fair value of financial assets at fair value through other comprehensive income
2
15
322
115
Tax (charge)/credit on items relating to the components of other comprehensive income
(37)
36
61
(141)
Items that may be reclassified to the income statement
Currency translation differences
3
267
229
Change in fair value of financial assets at fair value through other comprehensive income
2
15
28
–
Reclassification of cumulative currency translation differences on sale of businesses
27
250
(1)
Tax credit on items relating to the components of other comprehensive income
2
4
547
232
Total other comprehensive income for the year
608
91
Total comprehensive income for the year
2,022
1,703
Attributable to
Equity shareholders
2,012
1,698
Non-controlling interests
10
5
Total comprehensive income for the year
2,022
1,703
1. See note 1.
2. The credit totalling $350m (2023: $115m) from the change in fair value of financial assets at fair value through other comprehensive income includes $171m
(2023: $69m) in respect of assets held by the Rabbi Trust arrangements and $179m (2023: $46m) in respect of trade and other investments in the US.
3. Includes a gain of $318m (2023: $203m) in relation to the effective portion of net investment hedges.
The accompanying notes form part of these consolidated financial statements.
140 Consolidated financial statements
Consolidated statement of changes in equity for the year ended 30 September 2024
Attributable to equity shareholders
Other Retained Non-controlling
Share capital Share premium
reserves
1
earnings interests Total equity
Notes $m $m $m $m $m $m
At 1 October 2023 (restated
2
)
346
317
4,582
1,018
37
6,300
Profit for the year
–
–
–
1,404
10
1,414
Other comprehensive income
Remeasurement of post-employment benefit
24
–
–
–
(286)
–
(286)
obligations
Return on plan assets, excluding interest income
24
–
–
–
63
–
63
Change in asset ceiling, excluding interest income
24
–
–
–
(1)
–
(1)
Change in fair value of financial assets at fair value
through other comprehensive income
15
–
–
–
350
–
350
Currency translation differences
–
–
267
–
–
267
Reclassification of cumulative currency translation
27
–
–
250
–
–
250
differences on sale of businesses
Tax credit/(charge) on items relating to the
components of other comprehensive income
6
–
–
2
(37)
–
(35)
Total other comprehensive income for the year
–
–
519
89
–
608
Total comprehensive income for the year
–
–
519
1,493
10
2,022
Fair value of share-based payments
26
–
–
–
68
–
68
Change in fair value of non-controlling interest
–
–
7
–
–
7
put options
Changes to non-controlling interests due to
acquisitions and disposals
–
–
(54)
–
40
(14)
Reclassification of revaluation reserve on sale of
businesses
–
–
(14)
14
–
–
Cost of shares transferred to employees
–
–
64
(64)
–
–
Purchase of own shares – share buyback
–
–
(512)
–
–
(512)
Tax credit on items taken directly to equity
6
–
–
–
8
–
8
346
317
4,592
2,537
87
7,879
Dividends paid to equity shareholders
8
–
–
–
(963)
–
(963)
Dividends paid to non-controlling interests
–
–
–
–
(10)
(10)
At 30 September 2024
346
317
4,592
1,574
77
6,906
1. Other reserves are analysed in note 25.
2. See note 1.
The accompanying notes form part of these consolidated financial statements.
Compass Group PLC Annual Report 2024 141
Attributable to equity shareholders
Other Retained Non-controlling
Share capital Share premium reserves earnings interests Total equity
Notes $m $m $m $m $m $m
At 1 October 2022 (restated
1
)
346
317
5,559
325
44
6,591
Profit for the year
–
–
–
1,607
5
1,612
Other comprehensive income
Remeasurement of post-employment benefit
24
–
–
–
33
–
33
obligations
Return on plan assets, excluding interest
income
24
–
–
–
(331)
–
(331)
Change in asset ceiling, excluding interest income
24
–
–
–
6
–
6
Change in fair value of financial assets at fair value
through other comprehensive income
15
–
–
–
115
–
115
Currency translation differences
–
–
229
–
–
229
Reclassification of cumulative currency translation 27
–
–
(1)
–
–
(1)
differences on sale of businesses
Tax credit on items relating to the components of
other comprehensive income
6
–
–
4
36
–
40
Total other comprehensive
income/(loss) for the year
–
–
232
(141)
–
91
Total comprehensive income for the year
–
–
232
1,466
5
1,703
Fair value of share-based payments
26
–
–
–
54
–
54
Change in fair value of non-controlling interest
–
–
16
–
–
16
put options
Changes to non-controlling interests due to
acquisitions and disposals
–
–
(2)
–
2
–
Reclassification of non-controlling interest put
–
–
7
–
(7)
–
options reserve on exercise of put options
Cost of shares transferred to employees
–
–
35
(35)
–
–
Purchase of own shares – share buyback
–
–
(1,246)
–
–
(1,246)
Purchase of own shares – employee share-based
–
–
(19)
–
–
(19)
payments
Tax credit on items taken directly to equity
6
–
–
–
4
–
4
346
317
4,582
1,814
44
7,103
Dividends paid to equity shareholders
8
–
–
–
(796)
–
(796)
Dividends paid to non-controlling interests
–
–
–
–
(7)
(7)
At 30 September 2023 (restated
1
)
346
317
4,582
1,018
37
6,300
1. See note 1.
The accompanying notes form part of these consolidated financial statements.
142 Consolidated financial statements
Consolidated balance sheet at 30 September 2024
Restated
1
Restated
1
30 September 30 September 1 October
2024 2023 2022
Notes $m $m $m
Non-current assets
Goodwill
9
6,899
6,105
5,715
Other intangible assets
10
3,325
2,480
2,188
Costs to obtain and fulfil contracts
11
1,525
1,316
1,235
Right-of-use assets
12
1,144
992
917
Property, plant and equipment
13
1,411
1,166
1,058
Interests in joint ventures and associates
14
203
298
301
Other investments
15
1,149
1,049
881
Post-employment benefit assets
24
542
525
649
Trade and other receivables
16
410
309
180
Deferred tax assets
6
179
237
256
Derivative financial instruments
20
69
55
85
Non-current assets
16,856
14,532
13,465
Current assets
Inventories
17
734
692
570
Trade and other receivables
16
5,686
5,094
4,452
Tax recoverable
141
109
119
Cash and cash equivalents
18
623
1,029
2,214
Derivative financial instruments
20
36
22
79
7,220
6,946
7,434
Assets held for sale
27
273
5
29
Current assets
7,493
6,951
7,463
Total assets
24,349
21,483
20,928
Current liabilities
Borrowings
19
(822)
(1,327)
(774)
Lease liabilities
12
(273)
(237)
(216)
Derivative financial instruments
20
(21)
(45)
(6)
Provisions
23
(370)
(284)
(301)
Current tax liabilities
(235)
(261)
(274)
Trade and other payables
22
(8,172)
(7,166)
(6,281)
(9,893)
(9,320)
(7,852)
Liabilities held for sale 27
(179)
–
–
Current liabilities
(10,072)
(9,320)
(7,852)
Non-current liabilities
Borrowings
19
(3,774)
(2,787)
(3,651)
Lease liabilities
12
(1,042)
(916)
(803)
Derivative financial instruments
20
(187)
(253)
(265)
Post-employment benefit obligations
24
(1,274)
(983)
(847)
Provisions
23
(344)
(349)
(346)
Deferred tax liabilities
6
(287)
(132)
(178)
Trade and other payables
22
(463)
(443)
(395)
Non-current liabilities
(7,371)
(5,863)
(6,485)
Total liabilities
(17,443)
(15,183)
(14,337)
Net assets
6,906
6,300
6,591
Equity
Share capital
25
346
346
346
Share premium
317
317
317
Other reserves
25
4,592
4,582
5,559
Retained earnings
1,574
1,018
325
Total equity shareholders’ funds
6,829
6,263
6,547
Non-controlling interests
77
37
44
Total equity
6,906
6,300
6,591

1. See note 1.
The accompanying notes form part of these consolidated financial statements.
Approved by the Board of Directors on 26 November 2024 and signed on its behalf by:
Dominic Blakemore, Director
Petros Parras, Director
Compass Group PLC Annual Report 2024 143
Consolidated cash flow statement for the year ended 30 September 2024
Restated
1
2024 2023
Notes $m $m
Cash flow from operating activities
Cash generated from operations
28
4,095
3,283
Interest paid
(267)
(208)
Tax received
18
31
Tax paid
(711)
(570)
Net cash flow from operating activities
3,135
2,536
Cash flow from investing activities
Purchase of subsidiary companies
27
(784)
(389)
Purchase of interests in joint ventures and associates
14
(9)
(9)
Net proceeds from sale of subsidiary companies, joint ventures and associates net of exit costs
2
27
225
58
Purchase of intangible assets
(329)
(263)
Purchase of contract fulfilment assets
(508)
(380)
Purchase of property, plant and equipment
(572)
(445)
Proceeds from sale of property, plant and equipment/intangible assets/contract fulfilment assets
81
78
Purchase of other investments
15
(2)
(4)
Proceeds from sale of other investments
3
330
4
Dividends received from joint ventures and associates
14
65
60
Interest received
39
61
Loans to third parties
(25)
–
Net cash flow from investing activities
(1,489)
(1,229)
Cash flow from financing activities
Purchase of own shares – share buyback
(577)
(1,148)
Purchase of own shares – employee share-based payments
–
(19)
Increase in borrowings
1,381
1
Repayment of borrowings
(1,161)
(543)
Repayment of borrowings acquired through business acquisitions
27
(431)
–
Net cash flow from derivative financial instruments
46
157
Repayment of principal under lease liabilities
(227)
(215)
Purchase of non-controlling interests
–
(10)
Dividends paid to equity shareholders
8
(963)
(796)
Dividends paid to non-controlling interests
(10)
(7)
Net cash flow from financing activities
29
(1,942)
(2,580)
Cash and cash equivalents
Net decrease in cash and cash equivalents
(296)
(1,273)
Cash and cash equivalents at 1 October
830
1,934
Currency translation gains on cash and cash equivalents
59
169
593
830
Cash reclassified to held for sale
(40)
–
Cash and cash equivalents at 30 September
553
830
Cash and cash equivalents
4
18
623
1,029
Bank overdrafts
4
19
(70)
(199)
Cash and cash equivalents at 30 September
553
830
1. See note 1.
2. 2024 includes $35m of tax payments arising on the disposal of businesses.
3. 2024 includes $327m received in respect of the sale of the Group’s 19% effective interest in ASM Global Parent, Inc. in August 2024.
4. As per the consolidated balance sheet.
The accompanying notes form part of these consolidated financial statements.
144 Consolidated financial statements
Notes to the consolidated financial statements for the year ended 30 September 2024
1 Basis of preparation
Introduction
The consolidated financial statements of Compass Group PLC (the
Company) have been prepared on a going concern basis, as discussed
on page 145, in accordance with UK-adopted International
Accounting Standards. The consolidated financial statements have
been prepared under the historical cost convention, as modified by
the revaluation of certain financial instruments.
Change in reporting currency
With effect from 1 October 2023, the reporting currency of the Group
was changed from sterling to US dollars. The change in presentation
currency provides investors and other stakeholders with greater
transparency in relation to the Group’s performance and reduces
foreign exchange volatility on earnings given that approximately three-
quarters of the Group’s underlying operating profit originates in US
dollars. The amounts for prior periods have been translated into US
dollars at average exchange rates for the relevant periods for income
statements and cash flows, with spot rates used for significant
transactions, and at the exchange rates on the relevant balance sheet
dates for assets and liabilities. Share capital, share premium and other
equity items have been translated into US dollars at historical
exchange rates either at 1 October 2004, the date of transition to
International Financial Reporting Standards (IFRS), or on the date of
each relevant transaction.
Consolidation
The consolidated financial statements of the Company are prepared in
US dollars, which is different from its functional currency. The
functional currency of the Company is sterling as this is the currency
of the primary economic environment in which it operates.
The consolidated financial statements consolidate the results of the
Company and entities controlled by the Company (its subsidiaries),
and include the Group’s share of the results of its interests in joint
ventures and associates using the equity method.
Subsidiaries are entities over which the Company has control. Control
exists when the Company has power over an entity, exposure to
variable returns from its involvement with an entity and the ability to
use its power over the entity to affect its returns. The existence and
effect of potential voting rights that are currently exercisable or
convertible are also considered when assessing control.
Where necessary, adjustments are made to the financial statements
of subsidiaries, joint ventures and associates to bring the accounting
policies used in line with those used by the Group.
The results of subsidiaries, joint ventures and associates acquired or
disposed of during the year are included in the consolidated income
statement from the effective date of acquisition or up to the effective
date of disposal, as appropriate.
All intra-group transactions, balances, income and expenses are
eliminated on consolidation. Where a subsidiary transacts with a joint
operation of the Group, profits or losses are eliminated to the extent of
the Group’s interest in the relevant joint operation.
In preparing the financial statements of individual companies within
the Group, transactions in currencies other than the companies’
functional currency are recorded at the rates of exchange on the dates
of the transaction. At each balance sheet date, monetary assets and
liabilities that are denominated in foreign currencies are retranslated
at the rates on the balance sheet date. Gains and losses arising on
retranslation are included in the consolidated income statement for
the year, except where they arise on items taken directly to other
comprehensive income, in which case they are also recognised in the
consolidated statement of comprehensive income.
On consolidation, the assets and liabilities of the Group’s overseas
operations (expressed in their functional currencies, being the
currency of the primary economic environment in which each entity
operates) are translated at the exchange rates on the balance sheet
date. Income and expense items are translated at the average
exchange rates for the period. Exchange differences arising, if any, are
classified as equity and transferred to the Group’s translation reserve.
Such translation differences are recognised as income or expense in
the period in which the operation is disposed of.
Goodwill and fair value adjustments arising on the acquisition of a
foreign entity are treated as assets and liabilities of the foreign entity
and translated at the closing exchange rate.
Whilst Türkiye has been a hyperinflationary economy since 2022,
IAS 29 Financial Reporting in Hyperinflationary Economies has not
been applied as it would not have a significant impact on the Group’s
consolidated financial statements.
Significant accounting policies
The significant accounting policies applied in the preparation of these
consolidated financial statements are set out in the relevant notes.
These policies have been applied consistently to all the years
presented, unless otherwise stated.
Significant accounting policies are indicated by the following icon:
Significant accounting policy
Changes in accounting policies
There were no new accounting standards or amendments to existing
standards effective in the current year that had a significant impact on
the Group’s consolidated financial statements. There are a number of
changes to accounting standards, effective in future years, which are
not expected to significantly impact the Group’s consolidated financial
statements.
Judgements
The preparation of the consolidated financial statements requires
management to make judgements in respect of the application of its
accounting policies which impact the reported amounts of assets,
liabilities, income and expenses.
Whilst there are no judgements that management considers to be
critical in the preparation of these financial statements, there is a
significant judgement in respect of the classification of cash payments
relating to contract fulfilment assets in the cash flow statement (see
note 11).
Estimates
The preparation of the consolidated financial statements requires
management to make estimates which impact the reported amounts
of assets, liabilities, income and expenses. These estimates are based
on historical experience and other factors that are believed to be
reasonable under the circumstances. Actual results may differ
from these estimates.
Sources of estimation uncertainty are indicated by the following icon:
Source of estimation uncertainty
Compass Group PLC Annual Report 2024 145
1 Basis of preparation continued
Major sources of estimation uncertainty
The Group’s major sources of estimation uncertainty are in relation to
goodwill in the UK cash-generating unit and post-employment benefit
obligations on the basis that a reasonably possible change in key
assumptions could have a material effect on the carrying amounts of
assets and liabilities in the next 12 months (see notes 9 and 24,
respectively).
Other sources of estimation uncertainty
In addition to the major sources of estimation uncertainty, tax and
acquisition intangibles have been identified as additional sources of
estimation uncertainty. Whilst not considered to be major sources of
uncertainty as defined by IAS 1 Presentation of Financial Statements,
the recognition and measurement of certain material assets and
liabilities are based on assumptions and/or are subject to longer-term
uncertainties (see notes 6 and 10).
Climate change
Climate change is identified as a principal risk as its impact on the
environment may lead to issues around food sourcing and security,
and supply chain continuity in some of the Group’s markets (see page
24). The potential impact of climate change has been assessed with
scenario analysis conducted in line with the Task Force on Climate-
Related Financial Disclosures (TCFD) recommendations (see pages
47 and 48). The Group has a commitment to reach climate net zero
greenhouse gas (GHG) emissions across its global operations and
value chain by 2050 (see page 48). Climate change considerations
are indicated by the following icon:
Climate change
The potential impact of climate change and the Group’s net zero
commitments on the following areas has been considered:
– going concern (see below) and viability (see page 29) assessments
– tax (see note 6)
– goodwill (see note 9)
– other intangible assets (see note 10)
– post-employment benefits (see note 24)
There was no impact on the reported amounts in the financial
statements as a result of this review.
Going concern
The Group’s business activities, together with the factors likely to affect its future development, performance and position are set out in the
Strategic Report on pages 1 to 53. The financial position of the Group, its cash flows, liquidity position and borrowing facilities are discussed
in the Financial Review on pages 15 to 20.
The directors consider it appropriate to prepare the financial statements on a going concern basis for the reasons stated below.
At 30 September 2024, the Group’s financing arrangements included sterling and euro bonds ($3.9bn) and US dollar US Private Placement
(USPP) notes ($0.7bn). In addition, the Group had a Revolving Credit Facility of $2.7bn, committed to August 2026, which was fully
undrawn, and $0.6bn of cash, net of overdrafts. With the exception of a €296m ($321m) payment to acquire Dupont Restauration on
31 October 2024 (see note 33), the liquidity position of the Group has remained substantially unchanged at the date of approving these
consolidated financial statements.
For the purposes of the going concern assessment, the directors have prepared monthly cash flow projections for the period to
31 March 2026 (the assessment period) from the most recent three-year strategic plan approved by the Board in November 2024. The
directors consider 18 months to be a reasonable period for the going concern assessment as it enables them to consider the potential impact
of macroeconomic and geopolitical factors over an extended period.
Debt maturities in the going concern period include, in December 2024, a $100m USPP note and, in September 2025, a £250m ($335m)
Eurobond and $300m USPP note. No additional refinancing of debt is assumed in the going concern assessment.
The USPP notes are subject to leverage and interest cover covenants which are tested on 31 March and 30 September each year. The Group
met both covenants at 30 September 2024. The Group’s other financing arrangements do not contain any financial covenants.
The cash flow projections show that the Group has significant headroom against its committed facilities and meets its financial covenant
obligations under the USPP notes without any refinancing.
The Group has performed a stress test against the base case to determine the performance level that would result in a reduction in
headroom against its committed facilities to nil or a breach of its covenants. The Group’s committed facilities would be reached in the event
that underlying operating profit reduced by more than 40% of the strategic plan level. The directors do not consider this scenario to be likely.
The stress test assumes no new business acquisitions (with the exception of Dupont Restauration in October 2024 and 4Service AS in 2025)
as a mitigating action.
Consequently, the directors are confident that the Group and Parent Company will have sufficient funds to continue to meet their liabilities as
they fall due for at least the period to 31 March 2026 and, therefore, have prepared the financial statements on a going concern basis.
Climate change
Climate change and the Group’s net zero commitments are not expected to have a material impact during the going concern period.
146 Consolidated financial statements
Notes to the consolidated financial statements for the year ended 30 September 2024 continued
2 Segmental analysis
Significant accounting policy
Segmental information
The segmental information presented is consistent with management reporting provided to the Executive Committee (the chief operating
decision maker). The Executive Committee monitors the underlying revenue and operating profit of its three geographical segments, North
America, Europe and Rest of World, to assess performance and allocate resources. The Group also has a separate segment for central
activities which includes costs in respect of central functions, including finance, legal, commercial, IT and human resources. Underlying
revenue and operating profit are reconciled to GAAP measures below. Finance costs and income tax expense are managed on a Group basis.
Revenue
Revenue represents income derived from contracts for the provision of food and support services by the Group to customers in exchange for
consideration in the normal course of business. The Group’s revenue is comprised of revenues under its contracts with clients. Clients
engage the Group to provide food and support services at their locations. Depending on the type of client and service, we are paid either by
our client and/or directly by the consumers to whom we have been provided access by our client, such as the client’s employees, visitors,
pupils, patients and spectators. Payment terms are set at contract level and vary according to country, sector and individual client.
Performance obligations
At contract inception, the contract is assessed to identify each promise to transfer either a distinct good or service or a series of distinct
goods or services that are substantially the same and have the same pattern of transfer to the customer. Goods and services are distinct and
accounted for as separate performance obligations in the contract if the customer can benefit from them either on their own or together with
other resources that are readily available to the customer and they are separately identifiable in the contract.
Transaction price
The transaction price is the amount of consideration to which the Group expects to be entitled in exchange for transferring the promised
goods and services to the customer, excluding value-added tax and similar sales taxes. For example, the transaction price may be based on a
price per meal, which may vary with volume, or could be based on costs incurred plus an agreed management fee.
The Group makes a variety of ongoing payments to clients, mainly commissions, concession rentals and reimbursement of utility costs.
These are assessed for treatment as consideration paid to customers, and where they are not in exchange for a distinct good or service,
they are recognised as a reduction of the transaction price. In addition, the Group may make a payment to a client typically at the start of a
contract which is not an investment in service assets and does not generate or enhance the Group’s resources. Such payments are reported
as prepayments and, as they are not considered to be in exchange for a distinct good or service, they are charged to the income statement as
a deduction to revenue recognised over the contract term rather than as an operating cost.
Revenue recognition
The Group recognises revenue when its performance obligations are satisfied as control of the goods and services is transferred to the client
and/or consumers. In certain cases, clients engage the Group to provide food and support services in a single multi-service contract.
Revenue is recognised for each separate performance obligation in respect of food and support services as these are provided. There is little
judgement involved in determining if a performance obligation has been satisfied.
For each performance obligation in a contract, the Group determines whether it is satisfied over time or at a point in time.
The Group has determined that most of its performance obligations are satisfied over time as the client simultaneously receives and
consumes the benefits provided as the food and/or support services are rendered at the client site. Generally, where the Group has the
obligation to its clients to make available the provision of food service for a predetermined period, its performance obligation represents a
series of services delivered over time. Revenue is recognised at the amount which the Group has the right to invoice, where that amount
corresponds directly with the value to the customer of the Group’s performance completed to date. Where the Group is contracted to sell
directly to consumers, for example, in a retail café concession, the performance obligation is satisfied at a point in time, namely when the
products are sold to the consumer.
The nature, amount, timing and uncertainty of revenue and cash flows for performance obligations within a contract that are satisfied over
time and at a point in time are considered to be similar and they are affected by the same economic factors.
Operating profit
Operating profit is stated after the share of profit after tax of joint ventures and associates, and before finance costs.
Specific adjusting items
Specific adjusting items are disclosed and described separately in the consolidated financial statements where it is necessary to do so to
provide further understanding of the financial performance of the Group. Specific adjusting items are material items of income or expense
that have been shown separately due to the significance of their nature or amount. Further details are provided in note 34.
Compass Group PLC Annual Report 2024 147
2 Segmental analysis continued
Geographical segments
Revenue by sector and geographical segment
1,2
North America Europe Rest of World Total
$m $m $m $m
Year ended 30 September 2024
Business & Industry
9,912
4,720
1,284
15,916
Education
5,932
1,393
259
7,584
Healthcare & Senior Living
7,991
1,479
503
9,973
Sports & Leisure
4,396
1,317
163
5,876
Defence, Offshore & Remote
350
978
1,499
2,827
Underlying revenue
3,4
28,581
9,887
3,708
42,176
Less: Share of revenue of joint ventures
(24)
(150)
–
(174)
Revenue
28,557
9,737
3,708
42,002
Year ended 30 September 2023 (restated
5
)
Business & Industry
8,078
3,985
1,360
13,423
Education
5,481
1,239
257
6,977
Healthcare & Senior Living
7,424
1,352
518
9,294
Sports & Leisure
4,409
1,123
162
5,694
Defence, Offshore & Remote
376
899
1,553
2,828
Underlying revenue
3,4
25,768
8,598
3,850
38,216
Less: Share of revenue of joint ventures
(23)
(286)
–
(309)
Revenue
25,745
8,312
3,850
37,907
1. There is no inter-segment trading.
2. An analysis of revenue recognised over time and at a point in time is not provided on the basis that the nature, amount, timing and uncertainty of revenue and cash
flows are considered to be similar.
3. Revenue plus share of revenue of joint ventures.
4. Underlying revenue arising in the UK, the Group’s country of domicile, was $3,461m (2023: $2,915m). Underlying revenue arising in the US region was $27,136m
(2023: $24,456m). Underlying revenue arising in all countries outside the UK from which the Group derives revenue was $38,715m (2023: $35,301m).
5. See note 1.
Geographical segments
North America Europe Rest of World Central activities Total
Profit by geographical segment $m $m $m $m $m
Year ended 30 September 2024
Underlying operating profit/(loss) before results of joint ventures
2,313
560
224
(144)
2,953
and associates
Add: Share of profit before tax of joint ventures
1
16
–
–
17
Add: Share of results of associates
21
7
–
–
28
Underlying operating profit/(loss)
1
2,335
583
224
(144)
2,998
Less: Acquisition-related charges
2
(84)
(151)
–
–
(235)
Less: Charges related to the strategic portfolio review
2
–
(43)
–
(127)
(170)
Less: One-off pension charge
2
–
(8)
–
–
(8)
Less: Tax on share of profit of joint ventures
2
–
(1)
–
–
(1)
Operating profit/(loss)
2,251
380
224
(271)
2,584
Net loss on sale and closure of businesses
2
 (203)
Finance costs
(325)
Profit before tax 2,056
Income tax expense
(642)
Profit for the year 1,414
1. Operating profit excluding specific adjusting items (see note 34).
2. Specific adjusting item (see note 34).
148 Consolidated financial statements
Notes to the consolidated financial statements for the year ended 30 September 2024 continued
2 Segmental analysis continued
Geographical segments
North America Europe Rest of World Central activities Total
Profit by geographical segment $m $m $m $m $m
Year ended 30 September 2023 (restated
1
)
Underlying operating profit/(loss) before results of joint ventures
2,001
429
214
(120)
2,524
and associates
Add: Share of profit before tax of joint ventures
1
35
–
–
36
Add: Share of results of associates
17
15
–
–
32
Underlying operating profit/(loss)
2
2,019
479
214
(120)
2,592
Less: Acquisition-related charges
3
(88)
(56)
(9)
–
(153)
Less: Charges related to the strategic portfolio review
3
–
(118)
–
–
(118)
Less: One-off pension charge
3
–
(8)
–
–
(8)
Operating profit/(loss)
1,931
297
205
(120)
2,313
Net gain on sale and closure of businesses
3
 24
Finance costs
(200)
Profit before tax
2,137
Income tax expense
(525)
Profit for the year 1,612
1. See note 1.
2. Operating profit excluding specific adjusting items (see note 34).
3. Specific adjusting item (see note 34).
Geographical segments
Unallocated
North Central Current and
America Europe Rest of World activities deferred tax Net debt Total
Assets and liabilities by geographical segment $m $m $m $m $m $m $m
At 30 September 2024
Total assets
1
13,787
7,577
1,218
719
320
728
24,349
Total liabilities
1
(6,869)
(2,663)
(801)
(469)
(522)
(6,119)
(17,443)
Net assets/(liabilities)
6,918
4,914
417
250
(202)
 (5,391) 6,906
Total assets include:
Interests in joint ventures and associates
58
145
–
–
–
–
203
Non-current assets
2
9,860
5,596
473
679
179
69
16,856
At 30 September 2023 (restated
3
)
Total assets
12,127
5,722
1,404
778
346
1,106
21,483
Total liabilities
(5,869)
(1,967)
(956)
(433)
(393)
(5,565)
(15,183)
Net assets/(liabilities)
6,258
3,755
448
345
(47)
(4,459)
6,300
Total assets include:
Interests in joint ventures and associates
74
224
–
–
–
–
298
Non-current assets
2
8,748
4,147
591
754
237
55
14,532
1. Rest of World includes assets and liabilities held for sale in respect of Chile, Colombia and Mexico (see note 27).
2. Non-current assets located in the UK, the Group’s country of domicile, were $3,325m (2023: $2,414m). Non-current assets located in the US region were $9,162m
(2023: $8,182m). Non-current assets located in all countries outside the UK in which the Group holds assets were $13,531m (2023: $12,118m).
3. See note 1.
Compass Group PLC Annual Report 2024 149
2 Segmental analysis continued
Geographical segments
North America Europe Rest of World Central activities Total
Other segmental disclosures Notes $m $m $m $m $m
Year ended 30 September 2024
Additions to other intangible assets
10
239
57
6
27
329
Additions to contract fulfilment assets
11
495
9
10
–
514
Additions to right-of-use assets
12
169
83
10
–
262
Additions to property, plant and equipment
13
357
171
44
–
572
Amortisation of other intangible assets
1
10
200
99
8
5
312
Amortisation of contract fulfilment assets
11
296
4
6
–
306
Depreciation of right-of-use assets
12
112
94
13
1
220
Depreciation of property, plant and equipment
13
226
107
40
1
374
Impairment losses – strategic portfolio review
3
–
29
–
127
156
Impairment losses – other non-current assets
3
1
2
–
7
10
Impairment reversals – non-current assets
3
(6)
(1)
–
–
(7)
Other non-cash items
2
26
27
13
5
23
68
Assets held for sale
27
–
–
273
–
273
Liabilities held for sale
27
–
–
(179)
–
(179)
Year ended 30 September 2023 (restated
3
)
Additions to other intangible assets
10
184
43
9
27
263
Additions to contract fulfilment assets
11
364
10
6
–
380
Additions to right-of-use assets
12
171
94
15
–
280
Additions to property, plant and equipment
13
261
135
49
–
445
Amortisation of other intangible assets
1
10
172
67
12
5
256
Amortisation of contract fulfilment assets
11
274
4
4
–
282
Depreciation of right-of-use assets
12
96
89
13
1
199
Depreciation of property, plant and equipment
13
202
89
45
1
337
Impairment losses – strategic portfolio review
3
–
60
–
–
60
Impairment losses – goodwill
9
–
–
6
–
6
Impairment losses – other non-current assets
3
12
–
–
–
12
Impairment reversals – non-current assets
3
–
(2)
–
–
(2)
Other non-cash items
2
26
23
11
5
15
54
Assets held for sale
–
–
5
–
5
1. Including the amortisation of acquisition intangibles.
2. Other non-cash items represent share-based payment charges.
3. See note 1.
150 Consolidated financial statements
Notes to the consolidated financial statements for the year ended 30 September 2024 continued
3 Operating costs
Restated
1
2024 2023
Operating costs Notes $m $m
Food and materials
Cost of inventories consumed
11,482
10,569
Labour
Employee remuneration
4
19,598
17,625
Overheads
Commissions and fees paid to clients
1,811
1,685
Expense relating to short-term leases, low-value assets and variable lease payments
12
192
182
Amortisation – other intangible assets
10
150
134
Amortisation – contract fulfilment assets
11
306
282
Depreciation – right-of-use assets
12
220
199
Depreciation – property, plant and equipment
13
374
337
Impairment losses – non-current assets
10
12
Impairment reversals – non-current assets
(7)
(2)
Net impairment losses – trade and other receivables
16
44
42
Acquisition-related charges (see below)
2
34
235
153
Charges related to the strategic portfolio review (see below)
2
34
170
118
Audit and non-audit services (see below)
11
10
Other
4,866
4,316
Total
39,462
35,662
1. See note 1.
2. Specific adjusting item (see note 34).
Acquisition-related charges
Represent amortisation and impairment charges in respect of intangible assets acquired through business combinations, direct costs incurred
through business combinations or other strategic asset acquisitions, business integration costs, changes in consideration in relation to past
acquisition activity and other acquisition-related items.
Restated
1
2024 2023
Acquisition-related charges Notes $m $m
Amortisation – acquisition intangibles
10
162
122
Impairment losses – goodwill
9
–
6
Acquisition transaction costs
27
41
21
Adjustment to contingent consideration payable on business acquisitions
21
67
4
Gains on bargain purchases
27
(35)
–
Total
235
153
1. See note 1.
Charges related to the strategic portfolio review
As part of our strategic portfolio review, and considering country exits, ongoing advancement of technologies and the increased decentralisation
of our business, we have reviewed our European regional business transformation ERP programme that commenced a number of years ago. We
have decided to discontinue the implementation and roll out of our cross-market ERP programme and, accordingly, have recognised a charge of
$160m as a specific adjusting item, which includes $146m for the non-cash impairment of work-in-progress head office (non-client-related)
computer software assets. An impairment charge of $10m has been recognised in respect of our business in Qatar.
In 2023, charges related to the strategic portfolio review reflect the impact of site closures and contract renegotiations and terminations in
the UK.
Restated
1
2024 2023
Charges related to the strategic portfolio review Notes $m $m
Other intangible assets
10
146
–
Right-of-use assets
12
–
52
Property, plant and equipment
13
–
8
Joint ventures and associates
14
10
–
Impairment losses
156
60
Write-off – other receivables
–
25
Onerous contracts and other costs – provisions
23
14
24
Other costs – other payables
–
9
Total
170
118
1. See note 1.
Compass Group PLC Annual Report 2024 151
3 Operating costs continued
Audit and non-audit services
Restated
1
2024 2023
Audit and non-audit services $m $m
Fees payable for the audit of the Company and consolidated financial statements
2.4
2.3
Fees payable for the audit of the Company’s subsidiaries and joint ventures
7.3
7.1
Audit services
9.7
9.4
Audit-related assurance
0.9
0.4
Non-audit services
0.9
0.4
Total
10.6
9.8
1. See note 1.
4 Employees
Average number of employees, including directors and part-time employees
2024
2023
North America
292,993
276,378
Europe
176,765
172,198
Rest of World
109,368
113,884
Total
579,126
562,460
Restated
1
2024 2023
Aggregate remuneration of all employees, including directors Notes $m $m
Wages and salaries
16,594
14,998
Social security costs
2,606
2,282
Share-based payments
26
68
54
Pension costs – defined contribution plans
24
289
254
Pension costs – defined benefit plans
24
41
37
Total
19,598
17,625
1. See note 1.
In addition to the pension costs shown in operating costs above, there is an interest charge on net post-employment benefit obligations of $29m
(2023: $11m).
The remuneration of directors and key management personnel
1
is set out below. Additional information on directors’ and key management
remuneration, long-term incentive plans, pension contributions and entitlements can be found in the audited section of the Directors’
Remuneration Report on pages 86 to 118 and forms part of these accounts.
Restated
2
Remuneration of key management personnel
1
2024 2023
$m $m
Salaries
10.7
10.1
Other short-term employee remuneration
15.0
13.7
Share-based payments
19.2
12.0
Pension salary supplement
0.4
0.5
Total
45.3
36.3
1. Key management personnel is defined as the Board and the individuals who made up the Executive Committee from time to time during the year, more details of
which can be found on pages 56 to 61.
2. See note 1.
152 Consolidated financial statements
Notes to the consolidated financial statements for the year ended 30 September 2024 continued
5 Finance costs
Significant accounting policy
Finance income and expenses are recognised in the income statement in the period in which they are incurred.
Restated
1
2024 2023
Finance costs Notes $m $m
Interest on cash and cash equivalents
30
53
Other
7
6
Finance income
37
59
Interest on bank loans and overdrafts
(4)
(2)
Interest on other borrowings
2
(207)
(158)
Interest on lease liabilities
12
(65)
(50)
Net present value adjustments
3
21, 23
(10)
(15)
Finance expense
(286)
(225)
Net present value adjustments
3
21
(9)
–
Acquisition-related charges
4
(9)
–
Net (losses)/gains on derivative financial instruments in a fair value hedge
(3)
1
Net losses on derivative financial instruments in a net investment hedge
(5)
–
Net losses on derivative financial instruments at fair value through profit or loss
(61)
(40)
Change in fair value of financial assets at fair value through profit or loss
15
2
(9)
Dividends received from Rabbi Trust investments
15
28
23
Interest on net post-employment benefit obligations
24
(29)
(11)
Other
1
2
Other financing items
4
(67)
(34)
Total
(325)
(200)
1. See note 1.
2. Includes interest expense on derivative financial instruments in a fair value hedge of $95m (2023: $83m), interest expense on derivative financial instruments in a
net investment hedge of $8m (2023: $nil) and interest income on derivative financial instruments at fair value through profit or loss of $49m (2023: $57m).
3. From 2024, net present value adjustments on deferred and contingent consideration payable on business acquisitions are classified as a specific adjusting item.
Net present value adjustments on deferred and contingent consideration payable on business acquisitions were $6m in 2023 (see note 21).
4. Specific adjusting item (see note 34).
Compass Group PLC Annual Report 2024 153
6 Tax
Significant accounting policy
Income tax expense comprises current and deferred tax. Tax is recognised in the consolidated income statement except where it relates to
items taken directly to the consolidated statement of comprehensive income or equity, in which case it is recognised in the consolidated
statement of comprehensive income or equity as appropriate.
Current tax
Current tax is the expected tax payable on the taxable income for the period, using tax rates that have been enacted or substantively enacted
in respect of that period at the balance sheet date. Tax benefits are recognised if it is probable that these will be accepted by the relevant tax
authorities. Subsequently, they are reviewed each year to assess whether provisions against full recognition of the benefits are necessary.
Deferred tax
Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the amounts used for tax purposes. Deferred tax liabilities are generally recognised
for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be
available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary
difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets
and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests
in joint arrangements, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary
difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that
sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the enacted or substantively enacted tax rates that are expected to apply in the period when the liability is
settled or the asset realised.
Deferred tax assets and liabilities are offset against each other when they relate to income taxes levied by the same tax jurisdiction and the
Group intends to settle its current tax assets and liabilities on a net basis.
Other source of estimation uncertainty
The Group has operations in around 30 countries. The tax position in each country is often not agreed with the tax authorities until some time
after the relevant period end and, if subject to a tax audit, may be open for an extended period. In these circumstances, the recognition of tax
liabilities and assets requires management estimation to reflect a variety of factors, including historical experience, interpretations of tax law
and the likelihood of settlement.
The international corporate tax environment remains complex and the sustained increase in audit activity from tax authorities means that the
potential for tax uncertainties and disputes remains high. Where the final tax outcome of these matters is different from the amounts that were
initially recorded, such differences will impact the results in the year in which such determination is made. In addition, the calculation and
recognition of temporary differences giving rise to deferred tax assets requires estimates to be made of the extent to which future taxable profits
are available against which these temporary differences can be utilised.
Uncertain tax positions
Tax risk can arise from unclear regulations and differences in interpretation but, most significantly, where tax authorities apply diverging
standards in assessing intra-group cross-border transactions. The Group has recognised provisions in respect of uncertain tax positions, none of
which is individually material. In determining such liabilities, the Group assesses the range of potential outcomes and estimates whether
additional tax may be due.
The Group is currently subject to audits and reviews in a number of countries that primarily relate to complex corporate tax issues.
The UK tax authority’s inquiry into an intra-group refinancing was resolved during the year consistent with the provision previously held.
The Group does not currently anticipate any material changes to the amounts recorded at 30 September 2024.
154 Consolidated financial statements
Notes to the consolidated financial statements for the year ended 30 September 2024 continued
6 Tax continued
Other source of estimation uncertainty (continued)
Deferred tax assets
Deferred tax assets of $179m (2023: $237m) include $80m (2023: $103m) relating to the carry forward of unused tax losses. It is considered
probable that sufficient taxable profits over a period of between one and five years will be available against which the unused tax losses can be
utilised. In evaluating whether sufficient taxable profits will be available in the future, forecasts have been derived from the most recent three-
year strategic plan approved by management adjusted for the effect of applicable tax laws and regulations relevant to those future taxable profits.
No reasonably possible change in any of the key assumptions would result in a significant reduction in projected taxable profits such that the
recognised deferred tax assets would not be realised.
Climate change
Climate change and the Group’s net zero commitments are not expected to have a material impact on taxable profits over the period during
which deferred tax assets are expected to be utilised.
Income tax expense
Restated
1
2024 2023
Income tax expense $m $m
Current tax
Current year
703
593
Adjustment in respect of prior years
(38)
(47)
Current tax expense
665
546
Deferred tax
Current year
(39)
(12)
Impact of changes in statutory tax rates
–
(1)
Adjustment in respect of prior years
16
(8)
Deferred tax credit
(23)
(21)
Total
642
525
1. See note 1.
The income tax expense for the year is based on the effective UK statutory rate of corporation tax for the period of 25% (2023: 22%). Overseas tax
is calculated at the rates prevailing in the respective jurisdictions.
The income tax effects of the adjustments between statutory and underlying results are shown in note 34 to the consolidated financial statements.
Restated
1
2024 2023
Reconciliation of effective tax rate $m $m
Profit before tax
2,056
2,137
Notional income tax expense at the effective UK statutory rate of 25% (2023: 22%) on profit before tax
514
470
Effect of different tax rates of subsidiaries operating in other jurisdictions
45
71
Impact of changes in statutory tax rates
–
(1)
Permanent differences
103
37
Tax on profit of joint ventures and associates
1
–
Losses and other temporary differences not previously recognised
–
(1)
Unrelieved current year tax losses
1
4
Prior year items
(22)
(55)
Income tax expense
642
525
1. See note 1.
Permanent differences include the current year movement in our estimated liability for uncertain tax positions, the benefit of tax credits and the
tax effect of non-deductible expenditure, including losses arising on disposals. Prior year items relate to the reassessment of prior year tax
estimates and the resolution of open items.
The global nature of the Group’s operations gives rise to various factors which could affect the future tax rate. These include the mix of profits,
changes to overseas statutory tax rates or tax legislation and the foreign exchange rates applicable when those profits are translated into US
dollars. The UK government enacted an increase in the UK corporation tax rate from 19% to 25% with effect from 1 April 2023. In addition, the
future tax charge may be affected by the impact of acquisitions, disposals or other restructuring activities and the resolution of open issues with
tax authorities.
Compass Group PLC Annual Report 2024 155
6 Tax continued
Tax charged/(credited) to other comprehensive income
Restated
1
2024 2023
Tax charged/(credited) to other comprehensive income $m $m
Current and deferred tax credit on actuarial and other movements on post-employment benefits
(11)
(53)
Deferred tax charge on change in fair value of financial assets at fair value through other comprehensive income
48
17
Current tax credit on foreign exchange movements
(2)
(4)
Total
35
(40)
1. See note 1.
Tax credited to equity
Restated
1
2024 2023
Tax credited to equity $m $m
Current and deferred tax credit on share-based payments
(8)
(4)
Total
(8)
(4)
1. See note 1.
Deferred tax
Intangibles Net pensions
and contract and post- Net self-funded Net short-term
Movement in net deferred tax Tax fulfilment employment insurance temporary
depreciation assets benefits Tax losses provisions differences Total
asset/(liability) $m $m $m $m $m $m $m
At 1 October 2022 (restated
1
)
(63)
(496)
78
106
105
348
78
Credit/(charge) to income
12
7
10
(11)
5
(2)
21
Credit/(charge) to other
comprehensive income/equity
–
–
53
–
–
(15)
 38
Business acquisitions
–
(22)
–
–
–
(1)
(23)
Sale and closure of businesses
–
–
–
–
–
(1)
(1)
Reclassification
5
(2)
–
1
–
(4)
–
Exchange adjustment
6
(7)
(16)
7
–
2
(8)
At 30 September 2023 (restated
1
)
(40)
(520)
125
103
110
327
105
(Charge)/credit to income
(22)
(2)
18
(16)
4
41
23
Credit/(charge) to other
comprehensive income/equity
–
–
14
–
–
(48)
(34)
Business acquisitions
–
(173)
–
(2)
–
2
(173)
Sale and closure of businesses
–
–
–
–
–
(14)
(14)
Transfer to held for sale
(1)
–
–
(6)
–
(10)
(17)
Reclassification
1
–
–
(1)
–
14
14
Exchange adjustment
6
(16)
(11)
2
–
7
(12)
At 30 September 2024
(56)
(711)
146
80
114
319
(108)
1. See note 1.
Net short-term temporary differences relate principally to provisions and other liabilities of overseas subsidiaries. After netting off balances within
countries, the following are the deferred tax assets and liabilities recognised in the consolidated balance sheet:
Restated
1
2024 2023
Net deferred tax balance $m $m
Deferred tax assets
179
237
Deferred tax liabilities
(287)
(132)
Net deferred tax (liability)/asset
(108)
105
1. See note 1.
Deferred tax assets have not been recognised in respect of tax losses of $101m (2023: $129m) and other temporary differences of $13m
(2023:
$26m). Of the unrecognised tax losses, $38m (2023: $61m) will expire at various dates between 2025 and 2032. These deferred tax
assets have not been recognised as the timing of recovery is uncertain.
The Group does not recognise any deferred tax liability on temporary differences relating to potentially taxable unremitted earnings of overseas
subsidiaries totalling $763m (2023: $730m) because it is able to control the timing of reversal of these differences. It is probable that no reversal
will take place in the foreseeable future.
156 Consolidated financial statements
Notes to the consolidated financial statements for the year ended 30 September 2024 continued
6 Tax continued
Regulatory developments
The legislation implementing the Pillar Two Model Rules in the UK will apply from the financial year ending 30 September 2025. The Group is
reviewing this legislation and also monitoring the status of implementation of the model rules worldwide. The impact is not expected to be
material. The Group has applied the temporary exception under IAS 12 Income Taxes in relation to the accounting for deferred taxes arising from
the implementation of the Pillar Two Model Rules.
Earnings per share
Significant accounting policy
Basic earnings per share is calculated based on profit for the year attributable to equity shareholders and the weighted average number of
ordinary shares in issue during the year, which excludes shares held in treasury.
Diluted earnings per share is calculated based on the weighted average number of ordinary shares in issue during the year, adjusted to
assume conversion of all the dilutive potential ordinary shares into ordinary shares.
Restated
1
2024 2023
Profit for the year attributable to equity shareholders $m $m
Profit for the year attributable to equity shareholders
1,404
1,607
1. See note 1.
2024 2023
Ordinary Ordinary
shares of shares of
11
1
/
p each
11
1
/
p each
20 20
Weighted average number of ordinary shares millions millions
Weighted average number of ordinary shares for basic earnings per share
1,705
1,743
Dilutive effect of share-based payment plans
2
2
Weighted average number of ordinary shares for diluted earnings per share
1,707
1,745
Restated
1
2024 2023
Earnings per share cents cents
Basic
82.3
92.2
Diluted
82.2
92.1
1. See note 1.
Underlying earnings per share for the year ended 30 September 2024 was 119.5c (2023: 105.2c). Underlying earnings per share is calculated
based on earnings excluding the effect of acquisition-related charges, charges related to the strategic portfolio review, one-off pension charge,
gains and losses on sale and closure of businesses and other financing items, together with the tax attributable to these amounts (see note 34).
Compass Group PLC Annual Report 2024 157
8 Dividends
Significant accounting policy
Interim dividends are recognised in the financial statements when they are paid. Final dividends, which are subject to approval by the
shareholders in a general meeting after the balance sheet date, are not included as a liability in the financial statements. Instead, they are
disclosed as a post-balance sheet event and recognised in the financial statements when they are approved (see note 33).
A final dividend in respect of 2024 of 39.1c per share, $664m in aggregate
1
, has been proposed, giving a total dividend in respect of 2024 of
59.8c per share (2023: 52.6c per share). The proposed final dividend is subject to approval by shareholders at the Annual General Meeting to be
held on 6 February 2025.
Restated
2
2024 2023
Dividends Dividends
per share per share
Dividends on ordinary shares cents $m cents $m
Amounts recognised as distributions to equity shareholders during the year
Final 2022
–
–
27.7
462
Interim 2023
–
–
17.9
334
Final 2023
34.7
606
–
–
Interim 2024
20.7
357
–
–
Total
55.4
963
45.6
796
1. Based on the number of ordinary shares in issue at 30 September 2024, excluding shares held in treasury and the Compass Group PLC All Share Schemes Trust
(1,697m shares).
2. See note 1.
158 Consolidated financial statements
Notes to the consolidated financial statements for the year ended 30 September 2024 continued
Goodwill
Significant accounting policy
Goodwill arising on consolidation represents the excess of the cost of acquisition over the fair value of the Group’s share of the identifiable
assets and liabilities of the acquired subsidiary at the date of acquisition. Goodwill is tested annually for impairment and is carried at cost less
any accumulated impairment losses.
Goodwill is allocated to the cash-generating units (CGUs) or groups of CGUs that are expected to benefit from the acquisition, which is
usually the geographical location of the operations of the Group. Goodwill is subsequently monitored and tested for impairment at the level at
which it is allocated. Gains and losses on the disposal of businesses take account of the carrying amount of goodwill relating to the business
sold, allocated where necessary on the basis of relative fair value, unless another method is determined to be more appropriate.
The recoverable amount of a CGU is determined based on value-in-use calculations. If the recoverable amount of a CGU is less than its
carrying amount, an impairment loss is recognised in the consolidated income statement which is allocated first to reduce the carrying
amount of any goodwill allocated to the CGU and then to the other assets of the CGU pro rata on the basis of the carrying amount of each
asset in the CGU. An impairment loss recognised in respect of goodwill is not subsequently reversed.
Major source of estimation uncertainty
The value in use of the UK CGU is estimated for the purposes of impairment testing based on assumptions, including the most recent three-
year strategic plan approved by management, long-term growth rates and discount rates. A reasonably possible change in the assumptions
used to derive this estimate could have a material effect on the carrying amount of goodwill in the UK CGU in the next 12 months. The key
assumptions used in the value-in-use calculations, together with sensitivity analysis, are set out below.
Climate change
The potential impact of climate change and the Group’s net zero commitments on forecast cash flows beyond the Group’s three-year planning
period has been considered during impairment testing by including in the sensitivity analysis assumptions consistent with the quantitative
scenario analysis performed for the Task Force on Climate-Related Financial Disclosures (see pages 47 and 48).
Restated
1
2024 2023
Goodwill $m $m
Cost
At 1 October
6,748
6,323
Business acquisitions
618
225
Sale and closure of businesses
(78)
(33)
Transfer to held for sale
(14)
–
Currency adjustment
407
233
At 30 September
7,681
6,748
Impairment
At 1 October
643
608
Impairment
–
6
Sale and closure of businesses
(7)
–
Transfer to held for sale
(1)
–
Currency adjustment
147
29
At 30 September
782
643
Net carrying amount
At 30 September
6,899
6,105
1. See note 1.
6
Compass Group PLC Annual Report 2024 159
Goodwill continued
Restated
1
2024 2023
Goodwill by business segment $m $m
US
2,961
2,889
Canada
328
265
North America
3,289
3,154
UK
2
2,081
1,877
CH&CO
3
352
–
Finland
159
151
HOFMANN
S 3
125
–
Other
629
602
Europe
3,346
2,630
Japan
121
116
Other
143
205
Rest of World
264
321
Total
6,899
6,105
1. See note 1.
2. Includes $1.7bn which arose in 2000 on the Granada transaction.
3. Goodwill recognised on the acquisition of CH&CO and HOFMANN
S
(see note 27) has not yet been allocated to the UK and Germany CGUs, respectively, pending
completion of the integration of the businesses.
Impairment testing
The key assumptions used in the value-in-use calculations are operating cash flow forecasts from the most recent three-year strategic plan
approved by management, adjusted to remove the expected benefits of future restructuring activities and improvements to assets, externally-
derived long-term growth rates and pre-tax discount rates.
The strategic plan is based on expectations of future outcomes taking into account past experience, adjusted for anticipated revenue growth from
both new business and like-for-like growth, and taking into consideration macroeconomic and geopolitical factors, including the impact
of inflation.
Cash flows beyond the three-year period covered by the plan are extrapolated using estimated growth rates based on local expected economic
conditions and do not exceed the long-term average growth rate for the country. Cash flow forecasts for a period of up to five years are used by
exception to reflect the medium-term prospects of the business if the initial level of headroom in the impairment test for a country is low, with cash
flows beyond five years extrapolated using estimated growth rates that do not exceed the long-term average growth rate for that country.
The pre-tax discount rates are based on the Group’s Weighted Average Cost of Capital (WACC) adjusted for specific risks relating to the country
in which the CGU operates. The beta and gearing ratio assumptions used in the calculation of the discount rates represent market participant
measures based on the averages of a number of companies with similar assets.
2024 2023
Long-term growth Pre-tax discount Long-term growth Pre-tax discount
Growth and discount rates rates rates rates rates
US
2.6%
11.3%
2.1%
11.3%
Canada
2.1%
11.5%
2.1%
11.8%
UK
2.0%
11.1%
2.1%
11.7%
Finland
2.0%
8.3%
2.0%
9.4%
Rest of Europe
1
1.2% – 15.5%
10.3% – 27.1%
1.2% – 16.4%
10.7% – 31.3%
Japan
1.4%
10.5%
1.0%
10.6%
Rest of World
1.6% – 4.2%
10.3% – 15.9%
1.8% – 4.3%
10.6% – 20.2%
1. Rest of Europe includes Türkiye which has residual growth rate and pre-tax discount rate assumptions of 15.5% (2023: 16.4%) and 27.1% (2023: 31.3%),
respectively. Excluding Türkiye, the residual growth rate and pre-tax discount rate assumptions for Rest of Europe range from 1.2% to 2.2% (2023: 1.2% to 2.5%)
and 10.3% to 13.3% (2023: 10.7% to 14.6%), respectively.
Consistent with prior years, the goodwill impairment testing was performed as at 31 July. Subsequent to 31 July, management has considered
whether there have been any indicators that the goodwill may be impaired. There was no impact on the reported amounts of goodwill as a result of
this review.
6
160 Consolidated financial statements
Notes to the consolidated financial statements for the year ended 30 September 2024 continued
Goodwill continued
Sensitivity analysis
The Group has performed a sensitivity analysis based on changes in key assumptions considered to be reasonably possible by management.
There was no impact on the reported amounts of goodwill as a result of this review.
The UK CGU is sensitive to reasonably possible changes in key assumptions. Most of the UK goodwill arose in 2000 on the Granada transaction.
The estimated recoverable amount of the Group’s operations in the UK exceeds its carrying value by $512m (2023: $227m). The associated
impact of changes in key assumptions on the impairment assessment is presented in the table below. The sensitivity analysis presented is
prepared on the basis that a change in each key assumption would not have a consequential impact on other assumptions used in the
impairment review.
In order for the recoverable amount to be equal to the carrying value, the pre-tax discount rate would have to be increased by 1.8% (2023: 0.9%),
projected operating profit decreased by 16% (2023: 9%) or the long-term growth rate decreased to a decline of 0.6% (2023: growth of 1.0%).
Other than as disclosed above, the directors do not consider that any reasonably possible changes in the key assumptions would cause the value
in use of the net operating assets of the individually significant CGUs disclosed above to fall below their carrying values.
UK CGU
2024 2023
Decrease in recoverable amount $m $m
Increase in pre-tax discount rate by 1%
(309)
(243)
Decrease in projected operating profit by 3%
(95)
(77)
Decrease in the long-term growth rate by 0.1%
(25)
(23)
6
Compass Group PLC Annual Report 2024 161
10 Other intangible assets
Significant accounting policy
Acquisition intangibles
Intangible assets acquired as part of a business combination are capitalised at fair value at the date of acquisition and mainly relate to client
contracts and brands.
Client contract intangibles
Client contract intangibles are capitalised at cost and relate to payments made to clients, typically at the start of a contract, to obtain the
right to generate significant consumer revenue through the provision of food services at the client site.
Computer software
Software licences acquired for use by the Group are capitalised at cost, including the cost of purchasing the licence and the directly
attributable cost of bringing the software application to use.
Software-as-a-Service (SaaS) arrangements are service contracts providing the Group with the right to access the cloud provider’s
software over the contract period. As such, the Group does not receive a software intangible asset at the contract commencement date.
Implementation services are assessed to determine whether they are distinct from the underlying use of the software. Where implementation
services are not distinct, the cost is expensed as incurred. Where implementation services are distinct, an intangible asset is recognised if it
satisfies the conditions for recognition as an intangible asset in accordance with IAS 38 Intangible Assets, otherwise the cost is expensed
as incurred.
Trademarks and licences
Trademarks and licences are capitalised at cost.
Amortisation and impairment
The method of amortisation reflects the pattern in which the economic benefits of the asset are expected to be consumed. The following
methods are applied:
– acquisition intangibles: straight line over the life of the contract, including the renewal period where appropriate. The typical useful lives
range from 2 to 20 years.
– client contract intangibles: straight line over the life of the contract. The typical useful lives range from 3 to 5 years.
– computer software: straight line or a method which better reflects the pattern in which the economic benefits of the asset are expected to
be consumed. The typical useful lives range from 3 to 10 years.
– trademarks and licences: straight line over the term of the trademark or licence.
Other intangible assets are tested for impairment if there are any indicators of impairment.
Other source of estimation uncertainty
During the year, the Group recognised acquisition intangibles on business acquisitions of $901m largely relating to the acquisitions of
HOFMANN
s
in Germany and CH&CO in the UK and Ireland (see note 27). Where appropriate, external valuation specialists are engaged to
perform the identification and valuation of acquisition intangibles, which primarily comprise client contracts and brands. The fair value of
acquired intangibles is estimated based on assumptions, including operating cash flow forecasts, long-term growth rates and discount rates,
as well as retention rates for client contracts and royalty rates for brands. The Group does not currently anticipate any material changes to
the amounts recorded at 30 September 2024.
Climate change
In the event that there are indicators of impairment in respect of long-life acquisition intangibles, the potential impact of climate change and
the Group’s net zero commitments on forecast cash flows beyond the Group’s three-year planning period is considered during impairment
testing by including in the sensitivity analysis assumptions consistent with the quantitative scenario analysis performed for the Task Force on
Climate-Related Financial Disclosures (see pages 47 and 48).
162 Consolidated financial statements
Notes to the consolidated financial statements for the year ended 30 September 2024 continued
10 Other intangible assets continued
Acquisition Client contract Computer Trademarks and
intangibles intangibles software licences Total
Other intangible assets $m $m $m $m $m
Cost
At 1 October 2022 (restated
1
)
1,993
894
748
7
3,642
Additions
–
103
159
1
263
Disposals
(4)
(23)
(12)
–
(39)
Business acquisitions
271
–
–
–
271
Sale and closure of businesses
(22)
(2)
(7)
–
(31)
Reclassification
–
2
1
1
4
Currency adjustment
37
(3)
34
1
69
At 30 September 2023 (restated
1
)
2,275
971
923
10
4,179
Additions
–
156
173
–
329
Disposals
–
(72)
(72)
(2)
(146)
Business acquisitions
901
1
5
–
907
Sale and closure of businesses
(34)
(6)
(13)
(3)
(56)
Transfer to held for sale
–
(2)
(7)
–
(9)
Reclassification
(1)
19
2
–
20
Currency adjustment
74
10
38
1
123
At 30 September 2024
3,215
1,077
1,049
6
5,347
Amortisation
At 1 October 2022 (restated
1
)
615
438
394
7
1,454
Charge for the year
122
74
59
1
256
Impairment
–
10
–
–
10
Disposals
(2)
(22)
(9)
–
(33)
Sale and closure of businesses
(6)
(2)
(2)
–
(10)
Reclassification
–
1
(1)
–
–
Currency adjustment
7
(2)
16
1
22
At 30 September 2023 (restated
1
)
736
497
457
9
1,699
Charge for the year
162
80
69
1
312
Impairment – strategic portfolio review
2
–
–
146
–
146
Impairment – other
–
–
7
–
7
Disposals
–
(60)
(65)
(2)
(127)
Sale and closure of businesses
(28)
(3)
(10)
(2)
(43)
Transfer to held for sale
–
(2)
(6)
–
(8)
Currency adjustment
14
6
16
–
36
At 30 September 2024
884
518
614
6
2,022
Net book value
At 30 September 2023 (restated
1
)
1,539
474
466
1
2,480
At 30 September 2024
2,331
559
435
–
3,325
1. See note 1.
2. In 2024, we have recognised a charge of $146m for the non-cash impairment of work-in-progress head office (non-client-related) computer software assets (see
note 3). The residual value of the impaired computer software assets is $78m, with remaining useful economic lives between 7 and 10 years.
Significant acquisition intangibles
Net book value
Restated
1
Remaining useful 2024 2023
Acquisition
Year
Acquisition intangibles economic life $m $m
Fazer Food Services
2020
Client contracts
6-14 years
224
234
CH&CO
2024
Client contracts
11 years
317
–
CH&CO
2024
Brands
5-20 years
152
–
HOFMANN
s
2024
Client contracts
8-10 years
118
–
HOFMANN
s
2024
Brands
19 years
65
–
1. See note 1.
Compass Group PLC Annual Report 2024 163
11 Contract balances
Significant accounting policy
Contract fulfilment assets
Costs incurred in the fulfilment of the Group’s obligations to the client under the contract include contributions towards service assets,
such as kitchen and restaurant fit-out costs and equipment, which are capitalised as contract fulfilment assets. Contract fulfilment assets
originate when payments are made, normally upfront at the start of the client contract, that provide enhanced resources to the Group over
the contract term. Contract fulfilment costs covered within the scope of another accounting standard, such as property, plant and equipment
and intangible assets, are not capitalised as contract fulfilment assets, but are treated according to other standards.
Costs to obtain contracts
Costs incurred during the bidding period, prior to a contract being awarded, are expensed to the income statement. Costs incurred in
securing the contract after preferred bidder status has been obtained are generally expensed as incurred, unless they fulfil the conditions for
capitalisation as an asset.
The incremental costs to obtain a contract with a customer, such as commissions to the salesforce, are capitalised if it is expected that those
costs will be recoverable. Only commissions directly attributable to an individual contract award are capitalised, while commissions payable
due to multiple contract wins or due to a portfolio of client contracts are expensed as incurred as they cannot be directly attributable to an
identified contract. Costs to obtain contracts that would have been incurred regardless of whether the contract was obtained are recognised
as an expense in the period.
Amortisation and impairment
Contract fulfilment assets are amortised on a straight-line basis over the shorter of the life of the client contract and the useful economic life
of the assets. The amortisation charge is included in operating costs.
Capitalised costs to obtain contracts are unwound over the life of the client contract as an expense.
Contract fulfilment assets and capitalised costs to obtain contracts are reviewed annually to identify indicators of impairment. Whenever
impairment indicators exist, the Group determines the recoverability of the contract fulfilment assets and capitalised costs to obtain
contracts by comparing their carrying amount to the remaining amount of consideration that the Group expects to receive, less the costs that
relate to providing services under the relevant contract.
The following table provides information about contract costs, assets and liabilities from contracts with customers and other contract-related balances.
Restated
1
2024 2023
Contract balances Notes $m $m
Contract costs
Contract fulfilment assets
1,405
1,210
Costs to obtain contracts
120
106
Costs to obtain and fulfil contracts
1,525
1,316
Contract assets
Accrued income
16
537
498
Contract liabilities
Deferred income
22
(768)
(552)
Other contract balances
Contract prepayments
16
299
177
Trade receivables
16
4,139
3,734
Net contract balances
5,732
5,173
1. See note 1.
The Group’s accrued and deferred income balances solely relate to revenue from contracts with customers. The timing of revenue recognition
may differ from the timing of invoicing to customers. Accrued income typically arises where the timing of the related billing cycle occurs in a
period after the performance obligation is satisfied and is recognised as a contract asset. Deferred income generally arises as a result of upfront
payments under client contracts, including prepaid customer cards, and is recognised as contract liabilities, which are released over the term of
the contract as revenue is recognised. Generally, such contract liabilities are recognised as revenue within 12 months. Movements during the year
were driven by transactions entered into by the Group in the normal course of business.
164 Consolidated financial statements
Notes to the consolidated financial statements for the year ended 30 September 2024 continued
11 Contract balances continued
Contract fulfilment assets
Contract fulfilment assets relate to contributions towards assets that the Group uses in the performance of its obligations in its contracts
with clients.
Restated
1
2024 2023
Contract fulfilment assets $m $m
At 1 October
1,210
1,143
Additions
514
380
Derecognition
(23)
(29)
Business acquisitions
3
–
Amortisation charge for the year
(306)
(282)
Impairment reversal
6
–
Reclassification
(2)
(3)
Currency adjustment
3
1
At 30 September
1,405
1,210
1. See note 1.
With the exception of contract fulfilment assets, cash payments in respect of contract balances are classified as cash flows from operating
activities. There is a significant judgement in respect of the classification of cash payments relating to contract fulfilment assets in the cash flow
statement. The Group classifies additions to contract fulfilment assets as cash flows from investing activities as they arise from cash payments in
relation to assets that will generate long-term economic benefits. During the year, the purchase of contract fulfilment assets in cash flows from
investing activities was $508m (2023: $380m).
Compass Group PLC Annual Report 2024 165
12 Leases
Significant accounting policy
At the inception of a contract, the Group assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if it conveys
the right to control the use of an identified asset for a period of time in exchange for consideration. Control is conveyed where the Group has
both the right to direct the identified asset’s use and to obtain substantially all the economic benefits from that use. The Group allocates the
consideration in the contract to each lease and non-lease component. The non-lease component, where it is separately identifiable, is not
included in the right-of-use asset.
When a contract is or contains a lease, the Group recognises a right-of-use asset and a corresponding lease liability at the lease
commencement date with respect to all lease arrangements in which it is the lessee, except for leases of low-value assets with an initial fair
value less than approximately $7,500 and short-term leases of 12 months or less. For these leases, the lease payments are charged to the
income statement as an operating expense on a straight-line basis over the period of the lease.
The lease term is the non-cancellable period beginning at the contract commencement date plus periods covered by an option to extend the
lease, if it is reasonably certain that the Group will exercise the option, and periods covered by an option to terminate the lease, if it is
reasonably certain that the Group will not exercise this option.
Right-of-use assets
The right-of-use asset is initially measured at cost, comprising the initial lease liability adjusted for any lease payments already made,
plus any initial direct costs incurred and an estimate of restoration costs, less any lease incentives received.
Depreciation and impairment
The right-of-use asset is depreciated on a straight-line basis over the shorter of the lease term or the useful life of the underlying asset. The
estimated useful lives of right-of-use assets are determined on the same basis as those of property, plant and equipment. The right-of-use
asset is tested for impairment if there are any indicators of impairment.
Lease liabilities
The lease liability is measured at the present value of the lease payments that are reasonably certain and not paid at the commencement
date, discounted at the incremental borrowing rate specific to the term, country and start date of the lease. The lease liability is subsequently
measured at amortised cost using the effective interest method. The lease liability is remeasured, with a corresponding adjustment to the
right-of-use asset, by discounting the revised lease payments as follows:
– using the initial discount rate at the commencement of the lease when lease payments change as a result of changes to residual value
guarantees and changes in an index other than a floating interest rate
– using a revised discount rate when lease payments change as a result of the Group’s reassessment of whether it is reasonably certain to
exercise a purchase, extension or termination option, changes in the lease term or as a result of a change in floating interest rates
Variable lease payments that are not included in the measurement of the lease liability are recognised in the consolidated income statement
in the period in which the event or condition that triggers payment occurs.
Information regarding leases for which the Group is a lessee is provided below. The Group does not have any material arrangements where it
acts as a lessor.
The Group’s lease portfolio consists of office premises, concession rentals and other assets, such as catering equipment, vending machines and
motor vehicles. Lease terms are negotiated on an individual basis and contain a broad range of terms and conditions.
Some lease agreements contain variable payments that are not linked to an index or rate, but are based on the performance of the underlying
asset. The variable payments depend on sales and, consequently, on overall economic developments over the next few years. Variable payment
terms are used to link rental payments to cash flows and reduce fixed costs.
The Group does not expect any significant changes in the overall ratio of the variable payments to the Group’s entire lease portfolio.
Extension and termination options are included in a number of lease agreements and provide the Group with operational flexibility. These options
are assessed at contract commencement to determine whether they are reasonably certain to be exercised and are reassessed if a significant
event or change in circumstances occurs which is in the control of the Group.
166 Consolidated financial statements
Notes to the consolidated financial statements for the year ended 30 September 2024 continued
12 Leases continued
Right-of-use assets
Land and Plant and Fixtures and
buildings machinery fittings Total
Right-of-use assets $m $m $m $m
At 1 October 2022 (restated
1
)
646
270
1
917
Additions
156
123
1
280
Amendments
2
43
1
–
44
Depreciation charge for the year
(126)
(72)
(1)
(199)
Impairment – strategic portfolio review
(52)
–
–
(52)
Impairment – other
(1)
–
–
(1)
Sale and closure of businesses
(4)
(6)
–
(10)
Reclassification
(4)
(13)
–
(17)
Currency adjustment
27
3
–
30
At 30 September 2023 (restated
1
)
685
306
1
992
Additions
117
144
1
262
Amendments
2
62
1
–
63
Business acquisitions
33
4
–
37
Depreciation charge for the year
(135)
(84)
(1)
(220)
Sale and closure of businesses
(4)
–
–
(4)
Transfer to held for sale
(1)
(4)
–
(5)
Reclassification
–
(11)
–
(11)
Currency adjustment
26
4
–
30
At 30 September 2024
783
360
1
1,144
1. See note 1.
2. Amendments include lease terminations, modifications, reassessments and extensions to existing lease agreements.
Lease liabilities
Restated
1
2024 2023
Lease liabilities $m $m
Current
273
237
Non-current
1,042
916
Total
1,315
1,153
1. See note 1.
A maturity analysis of contractual undiscounted cash flows relating to lease liabilities is presented in note 20.
Income statement
Restated
1
2024 2023
Amounts recognised in the income statement $m $m
Leases of low-value assets, excluding short-term leases of low-value assets
58
54
Short-term leases
112
108
Variable lease payments
22
20
Expense relating to short-term leases, low-value assets and variable lease payments
192
182
Depreciation expense of right-of-use assets
220
199
Impairment – strategic portfolio review
–
52
Impairment – other
–
1
Interest on lease liabilities
65
50
Total
477
484
1. See note 1.
Cash flow statement
The Group had total cash outflows for leases of $292m (2023: $265m), comprising $65m (2023: $50m) of interest in cash flow from operating
activities and $227m (2023: $215m) of principal in cash flow from financing activities. The Group has various non-cancellable lease contracts
that had not yet commenced at 30 September 2024. The future lease payments for these non-cancellable lease contracts are $1m within one
year (2023: $3m), $1m between one and five years (2023: $16m) and $2m thereafter (2023: $26m).
Compass Group PLC Annual Report 2024 167
13 Property, plant and equipment
Significant accounting policy
Freehold land is carried at cost and is not depreciated. All other property, plant and equipment assets are carried at cost less accumulated
depreciation and any recognised impairment in value. When assets are sold, the difference between the sales proceeds and the carrying
amount of the assets is recognised in the consolidated income statement.
Depreciation and impairment
Depreciation is provided on a straight-line basis over the anticipated useful lives of the assets. The following rates are applied for the Group:
freehold buildings: 2% per annum; plant and machinery: 8% to 33% per annum; and fixtures and fittings: 8% to 33% per annum.
Property, plant and equipment is tested for impairment if there are any indicators of impairment.
Land and Plant and Fixtures and
buildings machinery fittings Total
Property, plant and equipment $m $m $m $m
Cost
At 1 October 2022 (restated
1
)
445
2,105
921
3,471
Additions
33
302
110
445
Disposals
(31)
(173)
(64)
(268)
Business acquisitions
6
21
1
28
Sale and closure of businesses
(4)
(68)
(17)
(89)
Reclassification
2
17
2
21
Currency adjustment
8
44
44
96
At 30 September 2023 (restated
1
)
459
2,248
997
3,704
Additions
28
397
147
572
Disposals
(21)
(247)
(91)
(359)
Business acquisitions
34
37
12
83
Sale and closure of businesses
–
(52)
(44)
(96)
Transfer to held for sale
–
(44)
(8)
(52)
Reclassification
–
5
4
9
Currency adjustment
14
43
44
101
At 30 September 2024
514
2,387
1,061
3,962
Depreciation
At 1 October 2022 (restated
1
)
277
1,426
710
2,413
Charge for the year
27
227
83
337
Impairment – strategic portfolio review
–
3
5
8
Impairment – other
–
1
–
1
Impairment reversal
–
(2)
–
(2)
Disposals
(20)
(140)
(73)
(233)
Sale and closure of businesses
(4)
(50)
(13)
(67)
Reclassification
(1)
6
–
5
Currency adjustment
5
36
35
76
At 30 September 2023 (restated
1
)
284
1,507
747
2,538
Charge for the year
29
255
90
374
Impairment
–
2
1
3
Impairment reversal
–
–
(1)
(1)
Disposals
(19)
(223)
(83)
(325)
Sale and closure of businesses
–
(37)
(33)
(70)
Transfer to held for sale
–
(34)
(6)
(40)
Reclassification
–
1
(3)
(2)
Currency adjustment
8
34
32
74
At 30 September 2024
302
1,505
744
2,551
Net book value
At 30 September 2023 (restated
1
)
175
741
250
1,166
At 30 September 2024
212
882
317
1,411
1. See note 1.
168 Consolidated financial statements
Notes to the consolidated financial statements for the year ended 30 September 2024 continued
14 Interests in joint ventures and associates
Significant accounting policy
Joint arrangements are entities in which the Group holds an interest on a long-term basis and which are jointly controlled by the Group and
other entities under a contractual agreement. A joint venture is a joint arrangement whereby the parties that have joint control of the
arrangement have rights to the net assets of the arrangement. An associate is an undertaking that is not a subsidiary or joint arrangement
over which the Group has significant influence and can participate in financial and operating policy decisions.
Joint ventures and associates are accounted for using the equity method. The consolidated income statement includes the Group’s share of
the results of joint ventures and associates and the consolidated balance sheet includes the Group’s share of their net assets.
Investments in associates include goodwill identified on acquisition and are carried in the consolidated balance sheet at cost plus post-
acquisition changes in the Group’s share of the net assets of the associate, less any impairment in value.
Restated
1
2024 2023
Interests in joint ventures and associates Notes $m $m
Net book value
At 1 October
298
301
Additions
2
15
9
Sale and closure of businesses
27
(61)
–
Step acquisitions
27
(30)
(29)
Loss on step acquisitions
27
(1)
–
Share of profit before tax of joint ventures
2
17
36
Tax on share of profit of joint ventures
3
2
(1)
–
Share of results of associates
2
28
32
Transfer to held for sale
4
(10)
(6)
Dividends received
(65)
(60)
Currency adjustment
13
15
At 30 September
203
298
Comprised of
Interests in joint ventures
1
104
Interests in associates
202
194
Total
203
298
1. See note 1.
2. 2024 includes $6m of contingent consideration payable.
3. Specific adjusting item (see note 34).
4. Following transfer to held for sale in 2024, the Group’s business in Qatar was fully impaired (see note 3).
Significant interests in joint ventures and associates measured using the equity method are as follows:
Carrying amount
Restated
1
Principal 2024 2023
Significant joint ventures and associates Interest Holding place of business $m $m
Twickenham Experience Limited
2
Associate
40%
UK
105
97
Abu Dhabi National Hotels Compass Middle East LLC
Joint venture
50%
UAE
–
79
1. See note 1.
2. The holding of 40% is based on the Group’s share of voting rights. Based on the nominal value of share capital, the Group’s holding is 16% (see note 36).
The Group’s 50% interest in Abu Dhabi National Hotels Compass Middle East LLC was sold in March 2024.
The Group’s joint ventures and associates provide food and/or support services. None of these investments is considered to be individually
material to the results or financial position of the Group.
Compass Group PLC Annual Report 2024 169
15 Other investments
Significant accounting policy
Other investments comprising debt and equity instruments are recognised at fair value plus direct transaction costs.
Debt instruments are classified at fair value through other comprehensive income. Gains and losses arising from changes in fair value are
recognised directly in other comprehensive income, except for impairment gains or losses, interest income and foreign exchange gains and
losses, which are recognised in the income statement. When the debt instrument is derecognised, cumulative amounts in other
comprehensive income are reclassified to the income statement.
Equity investments have been irrevocably designated at fair value through other comprehensive income. Gains and losses arising from
changes in fair value are recognised directly in other comprehensive income, and are not subsequently reclassified to the Group income
statement, including on derecognition. Impairment losses are not recognised separately from other changes in fair value. Dividends are
recognised in the consolidated income statement when the Group’s right to receive payment is established.
Other investments that are not equity investments, whose cash flows are not solely principal and interest or are not held in order to collect
contractual cash flows, are classified and measured at fair value through profit and loss. Investments are included in non-current assets
unless management intends to dispose of the investment within 12 months of the balance sheet date.
Restated
1
2024 2023
Other investments Notes $m $m
Net book value
At 1 October
1,049
881
Additions
2
4
Disposals
(330)
(4)
Change in fair value of financial assets at fair value through other comprehensive income
350
115
Change in fair value of financial assets at fair value through profit or loss
5
2
(9)
Rabbi Trust contributions
2
101
90
Rabbi Trust benefits paid
2
(53)
(54)
Dividends received from Rabbi Trust investments
2
5
28
23
Currency adjustment
–
3
At 30 September
1,149
1,049
Comprised of
Rabbi Trust investments
2
1,022
760
Mutual fund investments
3
62
58
Life insurance policies
3
36
35
Trade investments
4
29
181
Other investments
–
15
Total
1,149
1,049
1. See note 1.
2. The Rabbi Trust arrangements are deferred compensation plans for US employees (see note 24).
3. Held by overseas companies to meet the cost of unfunded post-employment benefit obligations (see page 191).
4. 2023 primarily represented a 19% effective interest in ASM Global Parent, Inc., which was sold in August 2024.
The Group’s 19% effective interest in ASM Global Parent, Inc. was sold in August 2024 for $327m.
The credit totalling $350m (2023: $115m) from the change in fair value of financial assets at fair value through other comprehensive income
includes $171m (2023: $69m) in respect of assets held by the Rabbi Trust arrangements and $179m (2023: $46m) in respect of trade and other
investments in the US (including ASM Global Parent, Inc.).
170 Consolidated financial statements
Notes to the consolidated financial statements for the year ended 30 September 2024 continued
16 Trade and other receivables
Significant accounting policy
The carrying value of all trade receivables is recorded at amortised cost and reduced by provisions for impairment, which are measured at an
amount equal to lifetime expected credit losses. In determining credit risk, the Group considers reasonable and supportable information that
is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the
Group’s historical experience and forward-looking information.
Restated
1
2024 2023
Current Non-current Total Current Non-current Total
Trade and other receivables $m $m $m $m $m $m
Trade receivables
4,139
–
4,139
3,734
–
3,734
Accrued income
537
–
537
498
–
498
Rebates receivable
2
578
–
578
513
–
513
Prepayments – contract
54
245
299
32
145
177
Prepayments – other
211
3
214
163
4
167
Deferred consideration receivable on business
27
80
107
6
72
78
disposals
3
Other
4
140
82
222
148
88
236
Total
5,686
410
6,096
5,094
309
5,403
1. See note 1.
2. Rebates receivable are net of a provision for impairment of $7m (2023: $12m).
3. Includes $57m (2023: $67m) in respect of the sale of four businesses in Central and Eastern Europe receivable over four years from the date of disposal in
October 2022.
4. Other receivables are net of a provision for impairment of $14m (2023: $43m).
The ageing of gross trade receivables and of the provision for impairment is as follows:
2024
0-3 months 3-6 months 6-12 months Over 12 months
Not yet due overdue overdue overdue overdue Total
Trade receivables $m $m $m $m $m $m
Expected loss rate
–
4%
26%
83%
94%
3%
Gross
3,387
738
66
24
48
4,263
Provision
(14)
(28)
(17)
(20)
(45)
(124)
Total
3,373
710
49
4
3
4,139
Restated
1
2023
0-3 months 3-6 months 6-12 months Over 12 months
Not yet due overdue overdue overdue overdue Total
Trade receivables $m $m $m $m $m $m
Expected loss rate
1%
3%
33%
89%
74%
3%
Gross
3,161
538
78
22
48
3,847
Provision
(17)
(16)
(25)
(20)
(35)
(113)
Total
3,144
522
53
2
13
3,734
1. See note 1.
Movements in the provision for impairment of trade receivables, rebates receivable and other receivables are as follows:
Restated
1
2024 2023
Trade Rebates Trade Rebates
receivables receivable Other Total receivables receivable Other Total
Provision for impairment $m $m $m $m $m $m $m $m
At 1 October
113
12
43
168
107
10
49
166
Charged to income statement
48
17
2
67
44
17
–
61
Credited to income statement
(11)
(12)
–
(23)
(10)
(9)
–
(19)
Utilised
(24)
(10)
(2)
(36)
(31)
(6)
(10)
(47)
Sale and closure of businesses
(4)
–
(29)
(33)
(1)
–
–
(1)
Transfer to held for sale
(2)
–
–
(2)
–
–
–
–
Reclassification
–
–
–
–
2
–
(1)
1
Currency adjustment
4
–
–
4
2
–
5
7
At 30 September
124
7
14
145
113
12
43
168
1. See note 1.
Trade receivable days at 30 September 2024 were 42 days (2023: 41 days on a constant-currency basis).
Compass Group PLC Annual Report 2024 171
1 Inventories
Significant accounting policy
Inventories are valued at the lower of cost and net realisable value. Cost is calculated using either the weighted average price or the first in,
first out method as appropriate to the circumstances. Net realisable value is the estimated selling price in the ordinary course of business,
less applicable variable selling expenses.
Agreed discounts relating to inventories are credited to the income statement in cost of sales as the goods are consumed.
Rebates relating to items purchased, but still held at the balance sheet date, are deducted from the carrying value of these items so that the
cost of inventories is recorded net of applicable rebates.
Restated
1
2024 2023
Inventories $m $m
Net book value
At 1 October
692
570
Business acquisitions
30
13
Sale and closure of businesses
(21)
(11)
Transfer to held for sale
(11)
–
Net movement
36
119
Currency adjustment
8
1
At 30 September
734
692
1. See note 1.
18 Cash and cash equivalents
Significant accounting policy
Cash and cash equivalents comprise cash at bank and in hand, money market funds and short-term deposits with an original maturity of
three months or less. Cash and overdrafts are presented on a net basis in cash and cash equivalents when the Group has a legally
enforceable right to set off the balances and it regularly settles the balances on a net basis.
Bank overdrafts classified as borrowings (see note 19) are an integral part of the Group’s cash management and are included in cash and
cash equivalents in the consolidated cash flow statement.
Restated
1
2024 2023
Cash and cash equivalents by type $m $m
Cash at bank and in hand
437
382
Short-term bank deposits
60
137
Money market funds
126
510
Total
623
1,029
1. See note 1.
Restated
1
2024 2023
Cash and cash equivalents by currency $m $m
US dollar
38
46
Sterling
174
701
Euro
215
45
Japanese yen
40
7
Other
156
230
Total
623
1,029
1. See note 1.
The Group’s policy to manage the credit risk associated with cash and cash equivalents is set out in note 20. The book value of cash and cash
equivalents represents the maximum credit exposure.
172 Consolidated financial statements
Notes to the consolidated financial statements for the year ended 30 September 2024 continued
18 Cash and cash equivalents continued
Master netting or similar agreements
The Group has an agreement with a bank counterparty such that, following each quarter end, all balances are net settled simultaneously to a
single sterling value which is transferred to the sterling bank account of Compass Group PLC and included in cash and cash equivalents at the
balance sheet date. The cash and overdraft figures before netting are shown in the table below:
Restated
1
2024 2023
Gross Offset Net Gross Offset Net
$m $m $m $m $m $m
Cash and cash equivalents
1,634
(1,011)
623
1,708
(679)
1,029
Bank overdrafts
(1,081)
1,011
(70)
(878)
679
(199)
1. See note 1.
1 Borrowings
Significant accounting policy
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost
unless they are part of a fair value hedge accounting relationship. Borrowings that are part of a fair value hedge accounting relationship are
measured at amortised cost adjusted for the fair value attributable to the risk being hedged.
Restated
1
2024 2023
Borrowings by type
Nominal value
Redeemable
Interest $m $m
US Private Placement
$352m
Oct 2023
4.12%
–
352
Eurobond
€750m
Jul 2024
0.63%
–
772
US Private Placement
$100m
Dec 2024
3.54%
100
100
Eurobond
£250m
Sep 2025
2.00%
326
282
US Private Placement
$300m
Sep 2025
3.81%
297
287
Eurobond
£250m
Jun 2026
3.85%
335
304
US Private Placement
$300m
Dec 2026
3.64%
300
300
Eurobond
€500m
Sep 2028
1.50%
517
459
Eurobond
£300m
Jul 2029
2.00%
353
299
Eurobond
€500m
Mar 2030
3.00%
547
486
Eurobond
€750m
Feb 2031
3.25%
849
–
Eurobond
£250m
Sep 2032
4.38%
317
270
Eurobond
€500m
Sep 2033
3.25%
556
–
Issued debt
4,497
3,911
Commercial paper
25
–
Bank loans
4
4
Bank overdrafts
70
199
Total
4,596
4,114
Comprised of
Current
822
1,327
Non-current
3,774
2,787
Total
4,596
4,114
1. See note 1.
The US Private Placements and Eurobonds are shown net of unamortised issue costs. The Group adjusts the carrying values of the US Private
Placements and Eurobonds that are designated in effective fair value hedge relationships for fair value gains and losses (based on observable
market inputs) attributable to the risk being hedged.
Interest on bank overdrafts is at the relevant money market rates.
6
Compass Group PLC Annual Report 2024 173
1 Borrowings continued
Restated
1
2024 2023
Borrowings by maturity $m $m
Within 1 year, or on demand
822
1,327
Between 1 and 2 years
335
669
Between 2 and 3 years
300
304
Between 3 and 4 years
517
300
Between 4 and 5 years
353
459
In more than 5 years
2,269
1,055
Total
4,596
4,114
1. See note 1.
Restated
1
2024 2023
Borrowings by currency $m $m
US dollar
771
1,231
Sterling
1,334
1,157
Euro
2,480
1,716
Other
11
10
Total
4,596
4,114
1. See note 1.
Financial covenants
The US Private Placement (USPP) notes contain financial covenants which consist of a leverage covenant test and an interest cover covenant test
which are tested semi-annually at 31 March and 30 September.
The leverage covenant test stipulates that net debt after adjustments (including removal of leases, derivatives and fair value adjustments) must be
less than or equal to 3.5 times underlying EBITDA after adjustments (including non-underlying items, depreciation on right-of-use assets and
lease interest) and can be increased to 4 times without breach for a limited period of time following a material acquisition and subject to a coupon
step-up being paid.
The interest cover covenant test stipulates that underlying EBITDA after adjustments (including non-underlying items, depreciation on right-of-
use assets and lease interest) must be more than or equal to 3 times net finance costs after adjustments (including removal of lease interest and
other financing items) and can be reduced to 2.5 times without breach for a limited period of time following a material acquisition and subject to a
coupon step-up being paid.
Covenant
Ratio
2
Covenant ratio
3
requirement
1
2024
2023
2024
2023
Leverage covenant
<=3.5
1.3
1.2
1.1
1.0
Interest cover covenant
>=3
16.6
21.8
19.6
27.6
1. Can be exceeded by 0.5 for three consecutive reporting periods following a material acquisition and subject to a coupon step-up being paid.
2. Calculated using Alternative Performance Measures (see note 34). The leverage ratio reflects net debt divided by underlying EBITDA. The interest cover ratio
reflects underlying EBITDA divided by underlying net finance costs.
3. Calculated using Alternative Performance Measures (see note 34) and adjusted as per the USPP agreements.
6
174 Consolidated financial statements
Notes to the consolidated financial statements for the year ended 30 September 2024 continued
20 Financial risk management
Significant accounting policy
Derivative financial instruments and hedge accounting
The Group uses derivative financial instruments, such as forward currency contracts and interest rate swaps or options, to hedge the risks
associated with changes in foreign exchange rates and interest rates. Such derivative financial instruments are initially measured at fair value
on the contract date and are remeasured to fair value at subsequent reporting dates.
The use of financial derivatives is governed by the Group’s policies approved by the Board that provide written principles on the use of
financial derivatives consistent with the Group’s risk management strategy. The Group does not use derivative financial instruments for
speculative purposes.
The fair value of forward currency contracts is calculated by reference to current forward exchange rates for contracts with similar maturity
profiles. The fair value of interest rate swaps is determined by reference to market values for similar instruments.
For the purpose of hedge accounting, hedges are classified as either fair value hedges when they hedge the exposure to changes in the fair
value of a recognised asset or liability or an unrecognised firm commitment, or net investment hedges where they hedge the exposure to
foreign currency arising from a net investment in foreign operations.
On adoption of IFRS 9 Financial Instruments, the Group elected to continue to apply the hedge accounting guidance in IAS 39 Financial
Instruments: Recognition and Measurement.
Fair value hedges
In relation to fair value hedges which meet the conditions for hedge accounting, any gain or loss from remeasuring the hedging instrument at
fair value is recognised immediately in the consolidated income statement. Any gain or loss on the hedged item attributable to the hedged
risk is adjusted against the carrying amount of the hedged item and recognised in the consolidated income statement. Where the adjustment
is to an unrecognised firm commitment, an asset or liability is recognised on the balance sheet. When the hedged transaction occurs, that
asset or liability is recognised in the initial measurement of the acquisition cost and carrying amount of the asset or liability. Where the
adjustment is to the carrying amount of a hedged interest-bearing financial instrument, the adjustment is amortised to the net profit and loss
such that it is fully amortised by maturity.
When fair value hedge accounting is discontinued, any adjustment to the carrying amount of the hedged item for the designated risk for
interest-bearing financial instruments is amortised to profit or loss, with amortisation commencing no later than when the hedged item
ceases to be adjusted.
Net investment hedges
The Group uses foreign currency-denominated debt, forward currency contracts and cross currency swaps to partially hedge against the
change in the value of its foreign currency-denominated net assets due to movements in foreign exchange rates. The Group designates these
as a hedge of its net investments in foreign operations and recognises the gains or losses on the retranslation of the borrowings in other
comprehensive income. If the Group uses derivatives as the hedging instrument, the effective portion of the hedge is recognised in other
comprehensive income, with any ineffective portion being recognised immediately in the income statement. Exchange differences arising
from a monetary item receivable from or payable to a Group foreign operation, the settlement of which is neither planned nor likely in the
foreseeable future, are considered to form part of a net investment in a foreign operation and are recognised directly in equity in the
translation reserve.
Gains and losses accumulated in other comprehensive income are recycled through the consolidated income statement on disposal of the
foreign operation.
For derivative financial instruments that do not qualify for hedge accounting, any gains or losses arising from changes in fair value are taken
directly to the consolidated income statement in the period.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or no longer qualifies for
hedge accounting.
Compass Group PLC Annual Report 2024 175
20 Financial risk management continued
The Group’s financial instruments comprise cash, borrowings, receivables and payables that are used to finance the Group’s operations.
The Group also uses derivatives, principally interest rate swaps, forward currency contracts and cross currency swaps, to manage interest rate
and currency risks arising from the Group’s operations. The Group does not trade in financial instruments. The Group’s treasury policies are
designed to mitigate the impact of fluctuations in interest rates and exchange rates and to manage the Group’s financial risks. The Board
approves any changes to the policies.
Liquidity risk
Liquidity risk is the risk that the Group may not be able to meet its financial obligations as they fall due.
The Group finances its operations through cash generated by the business and borrowings from a number of sources, including banking
institutions, the public and the private placement markets. The Group has developed long-term relationships with a number of financial
counterparties with the balance sheet strength and credit quality to provide credit facilities as required.
The Group seeks to avoid a concentration of debt maturities in any one period to spread its refinancing risk. The maturity profile of the Group’s
principal borrowings at 30 September 2024 shows that the average period to maturity is 4.6 years (2023: 3.3 years).
Liquidity risk faced by the Group is mitigated by having diverse sources of finance available to it and by maintaining substantial unutilised
committed banking facilities to maintain a level of headroom in line with Board approval.
The Group has a £2,000m ($2,683m) Revolving Credit Facility (RCF) committed to August 2026. At 30 September 2024, no amounts were drawn
under the RCF (2023: £nil).
The Group has a $4bn commercial paper programme. Commercial paper is issued to meet short-term liquidity requirements and is supported by
the RCF. At 30 September 2024, commercial paper of $25m was outstanding under the programme (2023: $nil).
Foreign currency risk
The Group’s policy is to balance its principal projected cash flows by currency with actual or effective borrowings in the same currency.
As currency cash flows are generated, they are used to service and repay debt in the same currency. Where necessary, to implement this policy,
forward currency contracts and cross currency swaps are taken out which, when applied to the actual currency borrowings, convert these to the
required currency.
The borrowings in each currency can give rise to foreign exchange differences on translation. Where the borrowings are less than, or equate to,
the net investment in overseas operations, these exchange rate variances may be treated as movements on reserves and recorded in the
consolidated statement of comprehensive income rather than in the consolidated income statement.
Non-dollar earnings streams are translated at the average rate of exchange for the year. Fluctuations in exchange rates have given and will
continue to give rise to translation differences. The Group is only partially protected against the impact of such differences through the matching
of cash flows to currency borrowings.
The Group has minimal exposure to the foreign currency risk of trade receivables and payables as operations within individual countries have littl e
cross-border activity which might give rise to translation risks on trade-related balances.
The main currencies to which the Group’s reported US dollar financial position is exposed are sterling and euro. As set out above, the Group
seeks to hedge its exposure to currencies by matching debt in currency against the cash flows generated by the Group’s foreign operations in
such currencies.
The effect on profit for the year (after tax) and total equity of a 10% strengthening of the US dollar against these currencies on the Group’s
financial instruments is shown below. A 10% weakening would result in an equal and opposite impact on the profit or loss and equity of the Group .
This table shows the impact on the financial instruments in place at 30 September and has been prepared on the basis that the 10% change in
exchange rates occurred on the first day of the financial year and applied consistently throughout the year. The majority of the exposure relates t o
the Company, which has a sterling functional currency.
Restated
1
2024 2023
Sterling Euro Sterling Euro
Financial instruments: impact of US dollar strengthening by 10% $m $m $m $m
Decrease in profit for the year (after tax)
(3)
–
(19)
–
Increase/(decrease) in total equity
31
96
(36)
102
1. See note 1.
Interest rate risk
As set out above, the Group has effective borrowings in a number of currencies. The Group raises fixed-rate capital market debt and may swap
this to floating rate using interest rate swaps on a case-by-case basis. The Group’s policy is to ensure that, in the short term, it is not materially
exposed to fluctuations in interest rates in its principal currencies. The Group implements this policy either by borrowing fixed-rate debt or by
using interest rate swaps or options so that the interest rates on at least 80% of the Group’s projected debt are fixed or capped for one year. For
the second and third years, interest rates are fixed within ranges of 30% to 70% and 0% to 40% of projected debt, respectively.
176 Consolidated financial statements
Notes to the consolidated financial statements for the year ended 30 September 2024 continued
20 Financial risk management continued
During the year, the Group issued fixed-rate sustainable bonds of €750m ($806m) and €500m ($557m) maturing in 2031 and 2033,
respectively. The Group entered into cross currency and interest rate swaps to effectively convert these to US dollars and euros paying a floating
interest rate. The bonds and swaps are accounted for as fair value hedges and net investment hedges.
The sensitivity analysis given below has been determined based on the derivative and non-derivative financial instruments the Group had in place
at the year-end date.
The effect of a 1% increase in interest rates prevailing at the balance sheet date on the Group’s cash and cash equivalents and debt subject to
variable rates of interest at the balance sheet date would be to decrease profit for the year (after tax) by $14m (2023: increase of $1m). A similar
1% decrease in interest rates would result in an equal and opposite effect.
2024
US dollar Sterling Euro Other Total
Interest rate sensitivity analysis $m $m $m $m $m
Increase in interest rate
+1%
+1%
+1%
+1%
Floating rate exposure – debt
(666)
(629)
(241)
(274)
(1,810)
Decrease in profit for the year (after tax)
(5)
(5)
(2)
(2)
(14)
Restated
1
2023
US dollar Sterling Euro Other Total
Interest rate sensitivity analysis $m $m $m $m $m
Increase in interest rate
+1%
+1%
+1%
+1%
Floating rate exposure – (debt)/cash
(208)
275
(29)
93
131
(Decrease)/increase in profit for the year (after tax)
(2)
2
–
1
1
1. See note 1.
These changes are the result of the exposure to interest rates from the Group’s floating-rate cash and cash equivalents and debt. The sensitivity
gains and losses given above may vary because cash flows vary throughout the year and interest rate and currency hedging may be implemented
after the year-end date in order to comply with the treasury policies outlined above.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations.
The Group’s policy is to minimise its exposure to credit risk from the failure of any single financial counterparty by spreading its risk across a
portfolio of financial counterparties and managing the aggregate exposure to each against certain pre-agreed limits. Exposure to counterparty
credit risk arising from deposits and derivatives (including forward currency contracts and cross currency swaps) is concentrated at the Group
centre where possible. Financial counterparty limits are derived from the long-term and short-term credit ratings, and the balance sheet strength
of the financial counterparty. All financial counterparties are required to have a minimum long-term credit rating from Moody’s of Baa2 and a
short-term credit rating from Moody’s of P-2 or equivalent from another recognised agency. To reduce credit exposures, the Group has
International Swaps and Derivatives Association (ISDA) Master Agreements with all of its counterparties for financial derivatives, which permit net
settlement of assets and liabilities in certain circumstances. The maximum exposure to credit risk resulting from financial activities, without
considering netting arrangements, is equal to the carrying value of the Group’s financial assets.
At 30 September 2024, 70% of cash and cash equivalents were held with investment-grade bank counterparties, 20% with AAA money market
funds and 10% with non-investment-grade bank counterparties. In addition, 100% of derivative instruments were held with investment-grade
bank counterparties.
Credit sales are only made after credit approval procedures have been completed satisfactorily. The policy for making provisions for expected
credit losses varies from country to country as different countries and markets have different payment practices. Various factors are considered,
including how overdue the debt is, the type of receivable and its past history, and current market and trading conditions. Full provision is made for
debts that are not considered to be recoverable.
There is limited concentration of credit risk with respect to trade and other receivables due to the diverse and unrelated nature of the Group’s
client and supplier base. Expected credit losses are measured using historical cash collection data grouped according to payment terms. The
historical default rates are adjusted where macroeconomic factors are expected to have a significant impact when determining future expected
credit loss rates. The expected credit loss provision is calculated using a provision matrix, in which the provision increases as balances age.
Trade and other receivables are written off when there is no reasonable expectation of recovery and enforcement activity has ceased. An
impairment analysis is performed at each reporting date to measure expected credit losses. Accordingly, the directors believe that there is no
further credit provision required in excess of the provision for the impairment of receivables. The book value of trade and other receivables
represents the Group’s maximum exposure to credit risk.
At 30 September 2024, trade receivables of $766m (2023: $590m) were past due but not impaired (see note 16). The Group has made a
provision based on a number of factors, including past history of the debtor and expected credit losses, and all amounts not provided for are
considered to be recoverable.
Compass Group PLC Annual Report 2024 177
20 Financial risk management continued
Management has considered the impact of reasonable changes in the expected credit loss rates used in the estimates made and does not
consider that a reasonable change would lead to a material adjustment to the estimate in the next 12 months.
Hedging activities
An analysis of the Group’s derivative financial instruments is shown below:
Restated
1
2024 2023
Current Non-current Current Non-current Current Non-current Current Non-current
assets assets liabilities liabilities assets assets liabilities liabilities
Derivative financial instruments $m $m $m $m $m $m $m $m
Fair value hedges
Interest rate swaps
–
4
(19)
(67)
–
–
(32)
(143)
Cross currency swaps
–
1
–
(105)
–
–
–
(107)
Net investment hedges
Cross currency swaps
12
60
–
–
–
–
–
(1)
Forward currency contracts
11
–
(1)
–
2
–
(11)
–
Cash flow hedges
Forward currency contracts
1
–
(1)
–
–
–
–
–
Not in a hedging relationship
Interest rate swaps
12
4
–
(12)
11
55
–
(2)
Interest rate options
–
–
–
(3)
–
–
–
–
Forward currency contracts
–
–
–
–
9
–
(2)
–
Total
36
69
(21)
(187)
22
55
(45)
(253)
1. See note 1.
On adoption of IFRS 9 Financial Instruments, the Group elected to continue to apply the hedge accounting guidance in IAS 39 Financial
Instruments: Recognition and Measurement.
Fair value hedges
The Group uses interest rate and cross currency swaps to hedge the fair value of some of its fixed-rate borrowings. These instruments swap the
fixed interest payable on the borrowings into floating interest rates and hedge the fair value of the borrowings against changes in interest rates and
foreign exchange rates. These swaps all qualify for fair value hedge accounting as defined by IAS 39.
Net investment hedges
The Group uses foreign currency-denominated debt, cross currency swaps and forward currency contracts to partially hedge against the change
in the sterling value of its foreign currency-denominated net assets due to movements in foreign exchange rates.
The carrying value of debt and derivatives in a net investment hedge was $1,196m (2023: $851m). A foreign exchange gain of $318m
(2023: $203m) relating to the net investment hedges has been netted off during the year within currency translation differences as presented in
the consolidated statement of comprehensive income. During the year, cumulative foreign exchange gains on net investment hedges attributable
to business disposals of $8m (2023: losses of $4m) were recycled to the consolidated income statement. The balance remaining in the foreign
currency translation reserve from net investment hedging relationships for which hedge accounting continues to apply is a loss of $566m
(2023: $876m) and for which hedge accounting is no longer applied is $nil (2023: $nil).
Derivatives not in a hedging relationship
The Group has a number of derivative financial instruments that do not meet the criteria for hedge accounting. These include some interest rate
swaps, interest rate options and forward currency contracts used for interest and cash management.
Impact of hedging activities
The impact of the hedged items on the Group’s financial statements is as follows:
Restated
1
2024 2023
Accumulated
Accumulated
amount of fair
amount of fair
value hedge
Change in fair
value hedge
Change in fair
adjustments
value of
adjustments value of
on the hedged
hedged items
on the hedged hedged items
items included
used to
items included used to
Carrying amount in the carrying
determine
Carrying amount
in the carrying determine
of the hedged amount of the
hedge
of the hedged
amount of the hedge
items hedged items
effectiveness
items
hedged items effectiveness
Hedged items $m $m
$m
$m
$m $m
Fair value hedges
Interest rate risk
Short-term borrowings
(623)
12
(1,124)
22
Long-term borrowings
(3,139)
88
(2,083)
238
Total
(3,762)
100
(175)
(3,207)
260
(32)
1. See note 1.
178 Consolidated financial statements
Notes to the consolidated financial statements for the year ended 30 September 2024 continued
20 Financial risk management continued
The impact of the hedging instruments on the Group’s financial statements is as follows:
Restated
1
2024 Change in fair 2023 Change in fair
value of value of
hedging hedging
instruments instruments
used to used to
Nominal amount Carrying amount determine Nominal amount Carrying amount determine
of the hedging of the hedging hedge of the hedging of the hedging hedge
instruments instruments effectiveness instruments instruments effectiveness
Hedging instruments $m $m $m $m $m $m
Fair value hedges
Interest rate risk
Derivative financial instruments – non-current
1,395
5
–
–
assets
Derivative financial instruments – current liabilities
635
(19)
1,146
(32)
Derivative financial instruments – non-current
1,853
(172)
2,336
(250)
liabilities
Total
3,883
(186)
172
3,482
(282)
33
Net investment hedges
Foreign currency risk
Derivative financial instruments – current assets
(1,553)
23
(1,067)
2
Derivative financial instruments – non-current
(1,137)
60
(308)
–
assets
Derivative financial instruments – current liabilities
(201)
(1)
(467)
(11)
Derivative financial instruments – non-current
–
–
(215)
(1)
liabilities
Short-term borrowings
(425)
(422)
(352)
(352)
Long-term borrowings
(858)
(856)
(493)
(489)
Total
(4,174)
(1,196)
318
(2,902)
(851)
203
1. See note 1.
The notional amount of interest rate and cross currency swaps by currency is as follows:
Restated
1
2024 2023
Notional amount of interest rate and cross Fair value Net investment Not in a hedging Fair value Net investment Not in a hedging
hedges hedges relationship hedges hedges relationship
currency swaps by currency $m $m $m $m $m $m
US dollar
300
813
885
652
–
1,424
Sterling
1,072
–
–
976
–
305
Euro
2,511
649
313
1,854
522
485
Japanese yen
–
–
60
–
–
92
Other
–
–
325
–
–
592
Total
3,883
1,462
1,583
3,482
522
2,898
1. See note 1.
The effective currency denomination of borrowings and leases after the effect of derivatives is as follows:
Restated
1
Effective currency denomination of 2024 Forward Effective 2023 Forward Effective
borrowings and leases after the Gross currency currency of Gross currency currency of
borrowings Lease liabilities
contracts
2
borrowings borrowings Lease liabilities
contracts
2
borrowings
effect of derivatives $m $m $m $m $m $m $m $m
US dollar
771
672
1,214
2,657
1,231
550
835
2,616
Sterling
1,334
286
(946)
674
1,157
261
(857)
561
Euro
2,480
203
(1,103)
1,580
1,716
184
(773)
1,127
Japanese yen
–
–
141
141
–
–
104
104
Other
11
154
703
868
10
158
714
882
Total
4,596
1,315
9
5,920
4,114
1,153
23
5,290
1. See note 1.
2. Includes cross currency contracts.
Compass Group PLC Annual Report 2024 179
20 Financial risk management continued
Maturity analysis of the contractual cash flows of financial liabilities
The following table provides an analysis of the expected contractual cash flows, including interest payable, of certain financial liabilities and
derivative financial instruments on an undiscounted basis. Where interest payments are calculated at a floating rate, rates of each cash flow until
maturity of the instruments are calculated based on the forward yield curve prevailing at the respective year-ends. The gross cash flows of
derivatives are presented net for the purposes of this table.
2024
Between Between Between Between
Maturity analysis of the contractual Less than 1 and 2 2 and 3 3 and 4 4 and 5 Over Carrying
1 year years years years years 5 years Total amount
cash flows of financial liabilities $m $m $m $m $m $m $m $m
Borrowings
834
335
300
558
402
2,288
4,717
4,596
Interest on borrowings
137
117
101
93
85
188
721
48
Trade and other payables
6,570
80
87
3
27
1
6,768
6,752
Lease liabilities
282
255
212
173
150
553
1,625
1,315
Interest rate swaps
30
14
10
10
11
5
80
78
Cross currency swaps
36
17
36
85
16
(10)
180
32
Forward currency contracts
(10)
–
–
–
–
–
(10)
(10)
Restated
1
2023
Between Between Between Between
Maturity analysis of the contractual Less than 1 and 2 2 and 3 3 and 4 4 and 5 Over Carrying
1 year years years years years 5 years Total amount
cash flows of financial liabilities $m $m $m $m $m $m $m $m
Borrowings
1,349
706
305
300
530
1,201
4,391
4,114
Interest on borrowings
102
88
68
54
45
106
463
45
Trade and other payables
4,996
164
30
5
–
16
5,211
5,207
Lease liabilities
244
214
189
155
125
517
1,444
1,153
Interest rate swaps
22
29
18
16
15
23
123
111
Cross currency swaps
31
35
31
33
55
2
187
108
Forward currency contracts
2
–
–
–
–
–
2
2
1. See note 1.
180 Consolidated financial statements
Notes to the consolidated financial statements for the year ended 30 September 2024 continued
21 Financial instruments
Significant accounting policy
Financial assets and liabilities are recognised on the Group’s balance sheet when the Group becomes a party to the contractual provisions of
the instrument and derecognised when it ceases to be party to such provisions. Financial assets are classified as current if they are expected
to be received within 12 months of the balance sheet date. Financial liabilities are classified as current if they are legally due to be paid within
12 months of the balance sheet date.
Financial assets and liabilities, including derivative financial instruments, denominated in foreign currencies are translated into US dollars at
period-end exchange rates. Financial assets are classified as either fair value through profit and loss, fair value through other comprehensive
income or amortised cost. Classification and subsequent remeasurement depends on the Group’s business model for managing the financial
asset and its cash flow characteristics. Assets that are held for collection of contractual cash flows, where those cash flows represent solely
payments of principal and interest, are measured at amortised cost.
Certain of the Group’s financial instruments are held at fair value.
The fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the balance sheet date.
The fair value measurement hierarchy is as follows:
– Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities
– Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices)
– Level 3: Inputs for the asset or liability that are not based on observable market data (i.e. unobservable inputs)
There were no transfers of financial instruments between levels of the fair value hierarchy in either the year ended 30 September 2024 or 2023.
The carrying amounts of financial instruments measured at fair value are shown in the table below:
Restated
1
2024 2023
Financial instruments measured at fair value Notes Level $m $m
Non-current
Rabbi Trust investments
2
15
1
1,022
760
Mutual fund investments
2
15
1
62
58
Other investments
2
15
1
–
15
Life insurance policies
2
15
2
36
35
Derivative financial instruments – assets
20
2
69
55
Derivative financial instruments – liabilities
20
2
(187)
(253)
Trade investments
2
15
3
29
181
Contingent consideration payable on business acquisitions
3
22
3
(102)
(97)
Non-controlling interest put options
3
22
3
(65)
(22)
Current
Money market funds
4
18
1
126
510
Derivative financial instruments – assets
20
2
36
22
Derivative financial instruments – liabilities
20
2
(21)
(45)
Contingent consideration payable on business acquisitions
3
22
3
(250)
(61)
Non-controlling interest put options
3
22
3
(5)
–
1. See note 1.
2. Classified as other investments in the consolidated balance sheet.
3. Classified as trade and other payables in the consolidated balance sheet.
4. Classified as cash and cash equivalents in the consolidated balance sheet on the basis that they have a maturity of three months or less from the date of acquisition.
Due to the variability of the valuation factors, the fair values presented at 30 September 2024 may not be indicative of the amounts the Group
would expect to realise in the current market environment. The fair values of financial instruments at levels 2 and 3 of the fair value hierarchy have
been determined based on the valuation methodologies listed below:
Level 2
Life insurance policies Cash surrender values provided by third-party insurance providers.
Derivative financial instruments Present values determined from future cash flows discounted at rates derived from market-sourced data.
The fair values of derivative financial instruments represent the maximum credit exposure.
Compass Group PLC Annual Report 2024 181
21 Financial instruments continued
Level 3
Trade investments Estimated values using income and market value approaches.
Contingent consideration payable on business acquisitions Estimated amounts payable based on the likelihood of specified conditions, such as
earnings targets, being met.
Non-controlling interest put options Estimated amounts payable based on the likelihood of options being exercised by minority shareholders.
A reconciliation from opening to closing balances for Level 3 financial instruments is as follows:
Restated
1
2024 2023
Contingent Contingent
consideration Non- consideration Non-
payable on controlling payable on controlling
Trade business interest put Trade business interest put
investments acquisitions options investments acquisitions options
Level 3 financial instruments $m $m $m $m $m $m
At 1 October
181
(158)
(22)
142
(77)
(50)
Change in fair value recognised in the income
–
(67)
–
–
(4)
–
statement
Change in fair value recognised in the statement of
comprehensive income
175
–
–
39
–
–
Change in fair value recognised in the statement of
changes in equity
–
–
7
–
–
16
Additions
–
(153)
(54)
–
(121)
(2)
Disposals
(327)
–
–
–
–
–
Purchase of non-controlling interests
–
–
–
–
–
10
Payments relating to businesses acquired in
previous years
–
50
–
–
44
4
Net present value adjustments
–
(9)
–
–
(6)
–
Currency translation
–
(15)
(1)
–
6
–
At 30 September
29
(352)
(70)
181
(158)
(22)
1. See note 1.
The directors do not consider that any reasonably possible changes in the key assumptions would cause the fair value of the Level 3 financial
instruments to be significantly higher or lower.
With the exception of borrowings, the carrying amounts of financial instruments measured at amortised cost approximate to their fair values.
Borrowings are measured at amortised cost unless they are part of a fair value hedge, in which case amortised cost is adjusted for the fair value
attributable to the risk being hedged. The carrying amount of borrowings at 30 September 2024 is $4,596m (2023: $4,114m). The fair value of
borrowings at 30 September 2024, calculated by discounting future cash flows to net present values at current market rates for similar financial
instruments (Level 2 inputs), is $4,625m (2023: $4,131m).
182 Consolidated financial statements
Notes to the consolidated financial statements for the year ended 30 September 2024 continued
22 Trade and other payables
Significant accounting policy
Trade and other payables are initially recognised at fair value, including transaction costs, and subsequently carried at amortised cost.
Trade payables are not interest-bearing and are stated at their nominal value.
The Group evaluates supplier arrangements against a number of indicators to assess if the liability has the characteristics of a trade payable
or should be classified as borrowings. This assessment considers the commercial purpose of the arrangement, whether the payment terms
are similar to customary payment terms, whether the Group is legally discharged from its obligation towards the supplier before the end of
the original payment term and the Group’s involvement in agreeing terms between the bank and the supplier.
Contingent consideration recognised in a business combination is initially measured at fair value at the date of acquisition and
subsequently remeasured at fair value at each reporting date, with changes in the fair value after the date of acquisition recognised
in the income statement.
Restated
1
2024 2023
Current Non-current Total Current Non-current Total
Trade and other payables $m $m $m $m $m $m
Trade payables
3,317
–
3,317
2,940
–
2,940
Accruals
2,896
9
2,905
2,464
27
2,491
Deferred income
554
214
768
347
205
552
Social security and other taxes
569
32
601
619
34
653
Contingent consideration payable on business acquisitions
250
102
352
61
97
158
Non-controlling interest put options
5
65
70
–
22
22
Other payables
2
581
41
622
735
58
793
Total
8,172
463
8,635
7,166
443
7,609
1. See note 1.
2. Includes a $119m (2023: $184m) commitment in respect of the share buyback.
The current trade and other payables are payable on demand.
Trade payable days at 30 September 2024 were 65 days (2023: 64 days on a constant-currency basis).
Supply chain financing
The Group has Supply Chain Financing (SCF) arrangements in place. The principal purpose of these arrangements is to enable the supplier, if it so
wishes, to sell its receivables due from the Group to a third-party bank prior to their due date, thus providing earlier access to liquidity. From the
Group’s perspective, the invoice payment due date remains unaltered and the payment terms of suppliers participating in the SCF programmes
are similar to those of suppliers that are not participating, and to the wider industry more generally.
If a receivable is purchased by a third-party bank, that third-party bank does not benefit from additional security when compared to the security
originally enjoyed by the supplier.
At 30 September 2024, the value of invoices sold under the SCF programmes was $1,025m, with $989m related to the Group’s programme in the
US (2023: $963m and $897m, respectively). These amounts are included in trade payables and all cash flows associated with the programmes
are included in net cash flow from operating activities as they continue to be part of the normal operating cycle of the Group.
Compass Group PLC Annual Report 2024 183
23 Provisions
Significant accounting policy
Provisions are recognised when the Group has a present obligation as a result of a past event, it is probable that the Group will be required to
settle that obligation and a reliable estimate can be made of the amount of the obligation. Provisions are measured at the directors’ best
estimate of the cost of settling these liabilities and are discounted to present value where the effect is material using the discount rate
applicable to the liability.
Provisions
Workers’ in respect of
compensation discontinued
and similar Onerous Legal and and disposed
obligations Severance contracts other claims businesses Other Total
Provisions $m $m $m $m $m $m $m
At 1 October 2022 (restated
1
)
462
49
37
29
13
57
647
Charged to income statement –
–
2
18
–
–
4
24
strategic portfolio review
Charged to income statement – other
168
–
16
7
–
8
199
Released to income statement
(40)
(1)
(13)
(5)
–
(4)
(63)
Utilised in the year
(121)
(35)
(20)
(4)
–
(6)
(186)
Sale and closure of businesses
–
–
–
–
(1)
(1)
(2)
Net present value adjustments
9
–
–
–
–
–
9
Reclassification
–
(13)
1
–
–
5
(7)
Currency adjustment
2
4
1
1
–
4
12
At 30 September 2023 (restated
1
)
480
6
40
28
12
67
633
Charged to income statement –
–
5
–
–
–
9
14
strategic portfolio review
Charged to income statement – sale
–
–
–
–
63
–
63
and closure of businesses
Charged to income statement – other
172
9
9
15
–
7
212
Released to income statement
(17)
(2)
(9)
(1)
–
(2)
(31)
Utilised in the year
(139)
(2)
(18)
(8)
–
(7)
(174)
Business acquisitions
–
–
1
1
–
3
5
Sale and closure of businesses
–
–
–
–
–
(14)
(14)
Transfer to held for sale
–
(1)
–
–
–
(7)
(8)
Net present value adjustments
10
–
–
–
–
–
10
Reclassification
–
–
5
(3)
(2)
(3)
(3)
Currency adjustment
2
–
1
1
1
2
7
At 30 September 2024
508
15
29
33
74
55
714
1. See note 1.
Restated
1
2024 2023
Comprised of $m $m
Current
370
284
Non-current
344
349
Total
714
633
1. See note 1.
184 Consolidated financial statements
Notes to the consolidated financial statements for the year ended 30 September 2024 continued
23 Provisions continued
In estimating the provisions above, management has made estimates and used assumptions in determining the nature, amount and timing of
potential outflows. Management does not consider that a reasonable change in key assumptions in any of the provision estimates made at the
date of the balance sheet could lead to a material adjustment in the next 12 months to the carrying amount of the liability recorded.
Workers’ compensation and similar obligations The provision for workers’ compensation and similar obligations relates mainly to the potential
settlement of claims by employees in the US for medical benefits and lost wages associated with injuries incurred in the course of their
employment, and is essentially long-term in nature. The provision is estimated with the assistance of a third-party actuary using assumptions
based on claims history. The maximum potential exposure per individual claim is $2m.
Severance Provisions for severance primarily represent redundancy costs. The Group expects these provisions to be substantially utilised within
the next year.
Onerous contracts A provision for onerous contracts is recognised when the expected benefits to be derived by the Group from a contract are
lower than the unavoidable cost of meeting its obligations under the contract. Provisions for onerous contracts represent the liabilities in respect
of unavoidable contract losses which will be utilised over the remaining life of each individual contract. The typical length of a client contract is
three to five years. A full analysis is performed at least annually of the future profitability of all loss-making contracts and contracts with low
profitability, and of the balance sheet items directly linked to these contracts.
Legal and other claims Provisions for legal and other claims relate principally to provisions for the estimated cost of litigation and other sundry
claims. The timing of the settlement of these claims is uncertain.
Provisions in respect of discontinued and disposed businesses Provisions in respect of discontinued and disposed businesses relate to
estimated amounts payable in connection with onerous contracts and claims in respect of warranties and indemnities arising from disposals. The
final amount payable remains uncertain as, at the date of approval of these financial statements, negotiations in relation to claims are ongoing and
there remains a period during which further claims may be received. The timing of any settlement will depend upon the nature and extent of
claims received.
Other Other provisions include environmental provisions in respect of potential liabilities relating to the Group’s responsibility for maintaining its
operating sites in accordance with statutory requirements. The Group’s aim is to have a low impact on the environment. These provisions are
expected to be utilised as operating sites are closed or as environmental matters are resolved.
Compass Group PLC Annual Report 2024 185
24 Post-employment benefits
Significant accounting policy
Pension obligations
The Group operates two types of pension plans:
– defined contribution plans where the Group makes contributions to a member’s pension plan, but has no further payment obligations
once the contributions have been paid
– defined benefit plans which provide pension payments upon retirement to members as defined by the plan rules
For defined contribution plans, the Group pays contributions to separately administered pension plans. The contributions payable by the
Group are charged to the consolidated income statement when they are due. Payments made to state-managed schemes are treated as
payments to defined contribution plans where the Group’s obligations under the plans are equivalent to those arising in a defined
contribution pension plan.
For defined benefit plans, the calculation of the defined benefit obligation is performed half-yearly by a qualified actuary using the projected
unit credit method. A current service cost is recognised which represents the expected present value of the defined benefit pension
entitlement earned by members in the period. The consolidated balance sheet reflects a net asset or net liability for each defined benefit
pension plan. The net asset or liability recognised is the present value of the defined benefit obligation discounted using the yields on high-
quality corporate bonds, less the fair value of plan assets (at bid price), if any. If the fair value of the plan assets exceeds the defined benefit
obligation, a pension surplus is only recognised if the Group considers that it has an unconditional right to a refund.
For the UK defined benefit plan, the Group considers that it has an unconditional right to a refund of a surplus, assuming the gradual
settlement of the plan liabilities over time until all members have left the plan. The trustees cannot unconditionally wind up the plan or use
the surplus to enhance member benefits without employer consent. The Group’s judgement is that these trustee rights do not prevent the
Group from recognising an unconditional right to a refund and therefore a surplus.
Net interest income (if a plan is in surplus) or net interest expense (if a plan is in deficit) is calculated using yields on high-quality corporate
bonds and recognised in the consolidated income statement.
Remeasurements, which include gains and losses as a result of changes in actuarial assumptions, the effect of the limit on the plan surplus
(if any) and returns on plan assets (other than amounts included in net interest) are recognised in the consolidated statement of
comprehensive income in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.
Other post-employment obligations
Some Group companies provide other post-employment benefits. The expected costs of these benefits are accrued over the period of
employment using a similar basis to that used for defined benefit pension schemes. Actuarial gains and losses are recognised immediately in
the consolidated statement of comprehensive income.
The non-qualified deferred compensation plans in the US (Rabbi Trust arrangements) do not meet the definition of a defined contribution
plan under IAS 19 and are, therefore, accounted for as defined benefit plans.
Major source of estimation uncertainty
The present value of defined benefit liabilities is estimated based on actuarial assumptions determined with independent actuarial advice,
including discount rates, inflation, pension and salary increases, and mortality and other demographic assumptions. A reasonably possible
change in the assumptions used to derive these estimates could have a material effect on the present value of defined benefit liabilities in the
next 12 months. The key assumptions used to value the liabilities, together with sensitivity analysis, are set out below.
Climate change
Plan assets
The trustees of the Compass Group Pension Plan (UK Plan), the Group’s largest defined benefit plan, have integrated climate change
considerations into their long-term decision-making and reporting processes across all classes of assets, actively engaging with all fund and
portfolio managers.
Defined benefit obligations
The actuarial assumptions used to calculate the present value of defined benefit obligations comprise financial and demographic
assumptions. The key financial assumptions are discount rates and inflation and, as these reflect long-term market expectations, they
implicitly reflect the market’s expectations of the potential impact of climate change. The directors have considered the potential impact of
climate change on demographic assumptions, in particular on the long-term mortality assumptions and, at the present time, do not believe
that there is sufficient evidence to require a change in the assumptions used in the calculation of the defined benefit liabilities. The directors
will continue to monitor any potential future impact on the assumptions used.
186 Consolidated financial statements
Notes to the consolidated financial statements for the year ended 30 September 2024 continued
24 Post-employment benefits continued
Pension schemes
The Group operates a number of pension arrangements throughout the world which have been developed in accordance with statutory
requirements and local customs and practices. The majority of schemes are self-administered and the schemes’ assets are held independently of
the Group’s assets. Pension costs are assessed in accordance with the advice of independent, professionally qualified actuaries.
UK schemes
Current UK employees in a pension arrangement are in the Compass Retirement Income Savings Plan (CRISP) section of the UK Plan, a GAD
section of the UK Plan or the National Employment Savings Trust (NEST).
Prior to 1 January 2024, the main vehicle for pension provision for eligible new joiners in the UK was CRISP. CRISP was a defined contribution
(money purchase) arrangement whereby the Group matched employee contributions up to 6% of pay (minimum 5%). Senior employees who
contributed to CRISP were also offered a Compass Higher Income Plan (CHIP) payment that they could take as an additional employer-only
pension contribution or, in part or in whole, as a cash allowance instead of a pension contribution. On 1 January 2024, CRISP transferred into the
UK Plan and, from that date, eligible new joiners in the UK have been invited to join the CRISP section of the UK Plan with the same matched
contribution structure and additional employer-only pension contribution for senior employees who choose to take their CHIP payment in
that way.
The GAD section of the UK Plan is a defined benefit arrangement, which provides predominantly final salary benefits. Those UK employees who
transferred from the public sector under the Transfer of Undertakings (Protection of Employment) Regulations 2006, typically up until 31 March
2015, have been eligible to join the UK Plan, which has otherwise been closed to new entrants since 2003. Such transferees entered into the GAD
section of the UK Plan and are known as ‘GAD members’. However, under the UK government’s revised guidance for ‘Fair Deal for staff pensions’,
the expectation is, and the approach has been, that the Group participates in the relevant public sector pension scheme and closes the UK Plan
to future entrants. The UK Plan closed to future accrual for all existing members, other than GAD members, on 5 April 2010. The affected
members were offered membership of CRISP from 6 April 2010.
The GAD section of the UK Plan operates on a funded basis. The funding policy is to contribute such variable amounts, on the advice of the
actuary, as to achieve a 100% funding level on a projected salary basis. The actuarial assessments covering expense and contributions are carried
out by independent qualified actuaries. A formal actuarial valuation of the GAD section is carried out every three years. The most recent valuation
of the GAD section took place as at 5 April 2022. At the valuation date, the total market value of the assets of the GAD section was $3,420m,
which represented 113% of the benefits that had accrued to members after allowing for expected future increases in earnings. With effect from
1 October 2022, the Company has paid contributions to the GAD section at a revised rate of 47.1% of pensionable pay (previously 57.2%) and,
with effect from 1 January 2024, the schedule of contributions was revised to reflect the CRISP section contributions.
The GAD section of the UK Plan is reappraised half-yearly for accounting purposes by independent actuaries in accordance with IAS 19 Employee
Benefits requirements.
The UK Plan has a corporate trustee, Compass Group Pension Trustee Company Limited (the Trustee). Following the transfer of CRISP into the UK
Plan on 1 January 2024, there are 12 trustee directors, including an independent chairman and one other independent trustee director. The other
10 trustee directors are either UK-based employees or former employees of the Group (three of whom have been nominated by UK Plan
members). The composition of the Trustee board, including the arrangements relating to trustee directors nominated by members, is currently
being reviewed by the Trustee and the Company and the results of the review will be implemented by no later than 31 December 2024. The UK
Plan operates under the Fifth Definitive Trust Deed dated 25 March 2013 and subsequent amendments and relevant legislation (principally the
Pensions Acts 1993, 1995, 2004 and 2021), with regulatory oversight from the Pensions Regulator. A new section of the rules was created
following the transfer of CRISP into the UK Plan to mirror the existing CRISP rules.
The Group is subject to the Pension Automatic Enrolment Regulations for its workforce in the UK. All new UK employees who meet the statutory
eligibility criteria, and who do not join the CRISP section, are automatically enrolled into the NEST. Responsibility for the Group’s ongoing
compliance with the Pension Automatic Enrolment Regulations and for ensuring that the administration and investment of funds relating to
automatic enrolment remain appropriate lies with the Group’s Pension Automatic Enrolment Governance Committee.
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. In July 2024, the Court of Appeal
dismissed the appeal brought by Virgin Media Limited against aspects of the June 2023 decision. The Trustee and the Company have considered
the implications of the case for the UK Plan. Based on the outcome of a legal review of the UK Plan’s governing deeds and rules provided by the
Trustee’s lawyers, the UK Plan is not impacted by the outcome of the case.
US schemes
In the US, the main vehicle for retirement provision is the defined contribution plan. There are several legacy defined benefit plans which are all
closed to new participants. These legacy defined benefit plans are non-qualified plans that are intended to be unfunded arrangements for US tax
and Employee Retirement Income Security Act (ERISA) purposes. Compass USA has taken out life insurance policies and invested in mutual
funds to meet these unfunded defined benefit pension obligations, working towards a 100% funding level on a projected salary basis.
The Group also has non-qualified deferred compensation plans (Rabbi Trust arrangements), which are salary sacrifice schemes providing a tax-
efficient way of saving for senior management. Employee and employer contributions credited to the plans are deemed invested on behalf of the
employees in investment funds and they are entitled to the account balance, as adjusted for deemed investments, on or after leaving the Group.
Plan benefits are paid in cash. Participants can elect to receive payment either as a lump sum or in annual instalments over 5 or 10 years.
Compass Group PLC Annual Report 2024 187
24 Post-employment benefits continued
Compass USA engages with a number of unions and is required to abide by the individual collective bargaining agreements (CBAs) negotiated
with each union. Under the terms of certain CBAs, Compass USA is required to pay the union members’ salary and contribute to various multi-
employer benefit plans which include: post-employment benefits, including pensions and post-employment healthcare; defined contribution
plans, such as 401(k) and annuity and savings plans; and other plans which include legal funds, training funds and education funds.
Participation in multi-employer pension plans bears risks that differ from single-employer plans. These risks include:
– assets contributed to the plans by Compass USA may be used to provide benefits to employees of other participating employers i.e. there are
no individual accounts in these plans
– if a participating employer stops contributing to the plan for any reason, the unfunded obligation remaining may transition to the remaining
employers participating in the plan
– if Compass USA stops participating in the plan for any reason, or has a significant decrease in its level of participation, it may be required to pay
a proportionate amount to the plan for its share of the unfunded liability, known as withdrawal liability
Compass USA is involved with 41 multi-employer defined benefit pension plans (2023: 38). The Group is not aware, and has no
reasonable expectation, that any plan in which it currently participates is in imminent danger of becoming insolvent or is likely to experience
a mass withdrawal.
These plans are accounted for as defined contribution plans as the information provided by the plan administrators is insufficient for them to be
accounted for as defined benefit plans. The Group made total contributions of $52m in the year (2023: $54m) to these arrangements.
Other schemes
In Canada, Germany, Norway, Spain and Switzerland, the Group also participates in funded defined benefit arrangements. In other countries,
Group employees participate primarily in state arrangements to which the Group makes the appropriate contributions.
Other than where required by local regulation or statute, the defined benefit schemes are closed to new entrants. For these schemes, the current
service cost will increase under the projected unit credit method as the members of the schemes approach retirement.
Defined benefit schemes
The Group’s obligations in respect of defined benefit pension schemes are calculated separately for each scheme by estimating the amount of
future benefit that employees have earned in return for their service in the current and prior years. That benefit is discounted to determine its
present value and the fair value of scheme assets is then deducted. The discount rate used is the yield at the valuation date on high-quality
corporate bonds, with terms consistent with the timing of the expected benefit payments over future years.
The Group takes advice from independent actuaries relating to the appropriateness of the assumptions, which include inflation, expected salary
and pension increases, and life expectancy of members. It is important to note that comparatively small changes in the assumptions used may
have a significant effect on the consolidated income statement and balance sheet.
The split of defined benefit liabilities on an IAS 19 basis between active, deferred and pensioner members is shown below:
2024
2023
Split of defined benefit liabilities
Active
Deferred
Pensioner
Active
Deferred
Pensioner
UK Plan
1%
41%
58%
1%
43%
56%
UK unfunded arrangements
–
4%
96%
–
4%
96%
US
1
38%
1%
61%
40%
1%
59%
Other
67%
3%
30%
65%
3%
32%
1. Excluding the Rabbi Trust arrangements.
Disclosures showing the assets and liabilities of the schemes are set out below. The liabilities have been calculated using the following
assumptions, which are presented as weighted averages where appropriate:
UK schemes
US schemes
1
 Other schemes
Assumptions
2024
2023
2024
2023
2024
2023
Discount rate
5.1%
5.7%
4.7%
5.6%
5.9%
6.1%
Inflation
3.4%
3.6%
2.3%
2.3%
1.3%
1.5%
CPI inflation
3.0%
3.2%
n/a
n/a
n/a
n/a
Rate of increase in salaries
3.4%
3.6%
3.2%
3.2%
6.6%
4.7%
Rate of increase for pensions in payment
3.2%
3.3%
2.3%
2.3%
0.2%
0.2%
Rate of increase for deferred pensions
3.2%
3.3%
n/a
n/a
n/a
n/a
1. Excluding the Rabbi Trust arrangements.
The mortality assumptions used to value the UK pension schemes are derived from the S3PA generational mortality tables (2023: S3PA
generational mortality tables) with improvements in line with the projection model prepared by the 2023 Continuous Mortality Investigation of the
UK actuarial profession (2023: 2022 model), with an S-kappa of 7.0 (2023: 7.0), with 115% (2023: 115%) weighting for male non-pensioners and
109% (2023: 109%) weighting for male pensioners, 103% (2023: 103%) weighting for female non-pensioners and 99% (2023: 99%) weighting for
female pensioners, and with a long-term underpin of 1.5% per annum (2023: 1.5% per annum). These mortality assumptions take account of
experience to date and assumptions for further improvements in the life expectancy of scheme members. The Group estimates the average
duration of the liabilities of the UK and US plans to be 12 years (2023: 12 years) and 8 years (2023: 8 years), respectively. Examples of the
resulting life expectancies for the UK Plan are as follows:
188 Consolidated financial statements
Notes to the consolidated financial statements for the year ended 30 September 2024 continued
24 Post-employment benefits continued
2024
2023
Life expectancy at age 65 Male Female Male Female
Member aged 65 in 2024 (2023)
20.9
23.6
20.9
23.6
Member aged 65 in 2049 (2048)
22.6
25.6
22.6
25.5
The other demographic assumptions have been set having regard to the latest trends in scheme experience and other relevant data. The
assumptions are reviewed and updated as necessary as part of the periodic actuarial valuation of pension schemes.
For the overseas schemes, regionally appropriate assumptions have been used where recommended by local actuaries. The mortality
assumptions used to value the US schemes are derived from the mortality table Pri-2012 (2023: Pri-2012) and MP2021 generational scale
(2023: MP2021). Examples of the resulting life expectancies for the US schemes are as follows:
2024
2023
Life expectancy at age 65 Male Female Male Female
Member aged 65 in 2024 (2023)
22.0
23.5
22.0
23.4
Member aged 65 in 2049 (2048)
23.7
25.1
23.7
25.1
Risks
The Group bears a number of risks in relation to its defined benefit pension schemes. These risks and how they are mitigated for the Group’s
largest defined benefit plan are described below:
Risk
Description of risk
Mitigation
Interest rate A decrease in corporate bond yields will increase the As part of the investment strategy, the UK Plan aims to
schemes’ benefit obligations under IAS 19. The mitigate this risk through investment in a liability-driven
schemes are therefore exposed to the risk that falls investment (LDI) portfolio. LDI is a form of investing designed
in interest rates will decrease the schemes’ surplus.
to match to a large extent the movement i
n pension plan
assets with the movement in projected benefit obligations
over time.
Inflation The schemes’ benefit obligations are linked to The UK Plan contains caps on increases in scheme benefits
inflation. A higher rate of expected long-term
to mitigate the risk of increase
s in inflation. Additionally, the
inflation will therefore lead to higher liabilities, for UK Plan invests in LDI products which increase (decrease) in
both the IAS 19 and funding liability. value when expectations of future inflation rates increase
(fall), thus providing protection against inflation risk.
Investment Asset returns can be volatile and there is a risk that To mitigate against investment risk, the UK Plan invests in a
the value of pension schemes’ assets may not move
way which aims to hedge a large proportion of th
e movements
in line with changes in pension scheme liabilities. in the corresponding liabilities, and investments are
diversified across and within asset classes to avoid
overexposure to any one asset class or market. The trustees
and the Group regularly monitor th
e funding position and
operate a diversified investment strategy.
Life expectancy The schemes’ obligations are to provide benefits for The UK Plan’s trustees and the Group regularly monitor the
the life of the member and therefore increases in life impact of changes in longevity on scheme obligations.
expectancy will lead to higher liabilities.
Sensitivity analysis
Measurement of the Group’s defined benefit obligations is particularly sensitive to changes in key assumptions, including the discount rate, inflation
and life expectancy. The sensitivities of the principal assumptions used to measure the defined benefit obligations of the schemes are set out below:
Increase/(decrease) in defined benefit obligations
Restated
1
2024 2023
+0.5% -0.5% +0.5% -0.5%
Financial assumptions $m $m $m $m
Discount rate
UK
(109)
120
(94)
104
US and other
Inflation
(12)
13
(10)
11
UK
59
(58)
51
(51)
US and other
CPI inflation
5
(5)
4
(4)
UK
12
(13)
11
(11)
1. See note 1.
Compass Group PLC Annual Report 2024 189
24 Post-employment benefits continued
Increase in defined benefit
obligations
Restated
1
2024 2023
+1 year +1 year
Demographic assumptions $m $m
Life expectancy from age 65
UK
78
61
US and other
6
5
1. See note 1.
Management has also considered the impact of a 1% change in the discount rate and inflation assumptions used to measure the defined benefit
obligations of the UK schemes. A 1% increase or decrease in the discount rate would decrease or increase the liabilities by $208m and $253m
(2023: $181m and $220m), respectively. A 1% increase or decrease in inflation would increase or decrease the liabilities by $119m and $115m
(2023: $104m and $99m), respectively.
The sensitivities above consider the impact of the single change shown, with the other assumptions assumed to be unchanged. The sensitivity
analyses have been determined based on a method that extrapolates the impact on the defined benefit obligations as a result of reasonable
changes in key assumptions occurring at the end of the reporting period. In practice, changes in one assumption may be accompanied by
offsetting changes in another assumption (although this is not always the case). The impact of a change in the UK inflation rate shown above
includes the impact of a change in both the RPI and CPI inflation rates.
The Group’s net pension surplus or deficit is the difference between the schemes’ assets and liabilities. Changes in the assumptions may occur at
the same time as changes in the market value of scheme assets. These may or may not offset the changes in assumptions. For example, a fall in
interest rates will increase the schemes’ liabilities, but may also trigger an offsetting increase in the market value of certain assets so there may be
little effect on the Group’s net asset or liability.
Plan assets
At 30 September 2024, the assets of the various schemes were invested in a diversified portfolio that consisted primarily of debt securities and
property funds. The UK Plan’s unquoted property fund assets comprise a UK property fund of $70m (2023: $189m) and a global property fund of
$36m (2023: $160m). The UK property fund’s value is based on the net asset value at 30 September 2024. The global property fund’s value is
based on the net asset value at 30 June 2024. There has been no material change in the fair value of the global property fund between 30 June
and 30 September 2024. The majority of the remainder of the UK Plan’s assets are held in a bespoke liability-driven investment portfolio in a unit-
linked insurance policy managed by Legal & General. The cash balance at 30 September 2024 includes $360m of cash in transit from the
redemption of the UK Plan’s corporate bond fund, which was invested in the LDI portfolio on 1 October 2024.
The fair value of the Group’s plan assets is shown by major category below:
Restated
1
2024 2023
UK Plan
2
Other Total
UK Plan
2
Other Total
Fair value of plan assets by major category $m $m $m $m $m $m
Equities
Quoted global equities
1
45
46
–
37
37
Government bonds
Quoted UK fixed interest
820
–
820
635
–
635
Quoted UK index-linked
1,090
–
1,090
783
–
783
Corporate bonds
Quoted corporate bonds
–
29
29
314
23
337
Quoted diversified securities
–
20
20
–
17
17
Other
Quoted property funds
–
10
10
–
25
25
Unquoted property funds
106
18
124
349
–
349
Unquoted insurance policies
–
7
7
–
6
6
Derivatives
5
–
5
(17)
–
(17)
Cash and cash equivalents
418
3
421
99
2
101
Other
–
18
18
1
18
19
At 30 September
2,440
150
2,590
2,164
128
2,292
1. See note 1.
2. The UK Plan does not hold any assets related to the Company's transferable financial instruments. There are no pension assets that are property occupied by, or
other assets used by, the Company.
190 Consolidated financial statements
Notes to the consolidated financial statements for the year ended 30 September 2024 continued
24 Post-employment benefits continued
Net post-employment benefit assets and obligations recognised in the balance sheet
2024
Present value
of defined
Fair value of benefit Effect of
plan assets obligations asset ceiling Total
Post-employment benefit assets/(obligations) recognised in the balance sheet $m $m $m $m
UK Plan
2,440
(1,898)
–
542
Post-employment benefit assets
2,440
(1,898)
–
542
UK unfunded arrangements
–
(40)
–
(40)
US
–
(1,122)
–
(1,122)
Other
150
(261)
(1)
(112)
Post-employment benefit obligations
150
(1,423)
(1)
(1,274)
Net post-employment benefit obligations
2,590
(3,321)
(1)
(732)
Restated
1
2023
Present value
of defined
Fair value of benefit Effect of
plan assets obligations asset ceiling Total
Post-employment benefit assets/(obligations) recognised in the balance sheet $m $m $m $m
UK Plan
2,164
(1,639)
–
525
Post-employment benefit assets
2,164
(1,639)
–
525
UK unfunded arrangements
–
(34)
–
(34)
US
–
(860)
–
(860)
Other
128
(217)
–
(89)
Post-employment benefit obligations
128
(1,111)
–
(983)
Net post-employment benefit obligations
2,292
(2,750)
–
(458)
1. See note 1.
Compass Group PLC Annual Report 2024 191
24 Post-employment benefits continued
Restated
1
2024 2023
Present value Present value
Fair value of defined Effect of Fair value of defined Effect of
of plan benefit asset of plan benefit asset
assets obligations ceiling Total assets obligations ceiling Total
Movements in net defined benefit asset/(obligation) $m $m $m $m $m $m $m $m
At 1 October
2,292
(2,750)
–
(458)
2,375
(2,567)
(6)
(198)
Reclassification
–
(15)
–
(15)
–
–
–
–
Current service cost
–
(32)
–
(32)
–
(27)
–
(27)
Past service credit/(cost)
–
1
–
1
–
(4)
–
(4)
Administration expenses
2
(10)
–
–
(10)
(6)
–
–
(6)
Interest income/(expense)
128
(157)
–
(29)
132
(143)
–
(11)
Remeasurements – financial assumptions
–
(280)
–
(280)
–
46
–
46
Remeasurements – demographic assumptions
–
5
–
5
–
46
–
46
Remeasurements – experience adjustments
–
(11)
–
(11)
–
(59)
–
(59)
Return on plan assets, excluding interest income
63
–
–
63
(331)
–
–
(331)
Change in asset ceiling, excluding interest income
–
–
(1)
(1)
–
–
6
6
Employer contributions
3
14
–
–
14
35
–
–
35
Employee contributions
3
(84)
–
(81)
4
(77)
–
(73)
Benefits paid
(126)
179
–
53
(135)
189
–
54
Business acquisitions
–
(1)
–
(1)
–
–
–
–
Currency adjustment
226
(176)
–
50
218
(154)
–
64
At 30 September
2,590
(3,321)
(1)
(732)
2,292
(2,750)
–
(458)
1. See note 1.
2. The expenses of running the UK Plan are met directly by the UK Plan rather than by the principal employer.
3. Employer contributions in 2024 are shown net of amounts paid by the GAD section of the UK Plan into the CRISP section from 1 January 2024 totalling $12m.
Employer contributions in 2023 included $10m following a change in legislation in Türkiye effective from March 2023.
The present value of defined benefit obligations includes $1,022m (2023: $760m) in respect of the Rabbi Trust arrangements, which is exactly
matched by their investments (see note 15).
The $280m increase in the present value of defined benefit obligations due to changes in financial assumptions in 2024 includes the impact of
the increase in the Rabbi Trust investments and the impact on the liabilities of the UK Plan of a 0.4 percentage point reduction in the discount
rate, net of inflation.
Certain Group companies have taken out life insurance policies and invested in mutual funds to meet unfunded pension obligations. The current
value of these policies and other assets of $98m (2023: $93m) may not be offset against post-employment benefit obligations under IAS 19
(see note 15).
Net post-employment benefit assets, including the Rabbi Trust investments, life insurance policies and mutual fund investments, is shown below:
Restated
1
2024 2023
Net post-employment benefit assets Notes $m $m
Net post-employment benefit obligations
(732)
(458)
Rabbi Trust investments
15
1,022
760
Mutual fund investments
15
62
58
Life insurance policies
15
36
35
Total
388
395
1. See note 1.
192 Consolidated financial statements
Notes to the consolidated financial statements for the year ended 30 September 2024 continued
24 Post-employment benefits continued
Amounts recognised in the income statement
Restated
1
Amounts recognised 2024 2023
UK US Other Total UK US Other Total
in the income statement $m $m $m $m $m $m $m $m
Current service cost
–
20
12
32
–
17
10
27
Past service (credit)/cost
–
–
(1)
(1)
–
–
4
4
Administration expenses
10
–
–
10
6
–
–
6
Charged to operating expenses
10
20
11
41
6
17
14
37
Interest on net post-employment benefit
(28)
52
5
29
(34)
42
3
11
assets/obligations
(Credited)/charged to finance costs
(28)
52
5
29
(34)
42
3
11
Total
(18)
72
16
70
(28)
59
17
48
1. See note 1.
The Group recognised a charge of $289m (2023: $254m) in respect of contributions to defined contribution schemes during the year.
Amounts recognised in other comprehensive income
Restated
1
2024 2023
Amounts recognised in other comprehensive income $m $m
Effect of changes in financial assumptions
(280)
46
Effect of changes in demographic assumptions
5
46
Effect of experience adjustments
(11)
(59)
Remeasurement of post-employment benefit obligations
(286)
33
Return on plan assets, excluding interest income
63
(331)
Change in asset ceiling, excluding interest income
(1)
6
Total
(224)
(292)
1. See note 1.
Contributions
During the year, the Group made total contributions to defined benefit schemes of $46m (including the Rabbi Trust arrangements) (2023: $52m).
Contributions in 2023 included $10m following a change in legislation in Türkiye effective from March 2023. The Group expects to make a similar
level of contributions to these schemes in 2025.
The UK Plan is the largest scheme in the Group and was in surplus on a funding basis at the date of the most recent actuarial valuation as at
5 April 2022, and no deficit contributions are currently required. The remaining Group-funded schemes do not have significant minimum funding
requirements whilst contributions to unfunded pension schemes are quite stable. As a result, we do not expect the required future contributions
to change substantially beyond next year.
Compass Group PLC Annual Report 2024 193
25 Share capital and other reserves
Significant accounting policy
Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.
Capital
The capital structure of the Group consists of net debt (see note 34) and total equity. Our capital allocation framework is clear and unchanged.
Our priority is to invest in the business to fund growth opportunities, target a strong investment-grade credit rating with a leverage target of around
1x-1.5x net debt to EBITDA and pay an ordinary dividend, with any surplus capital being returned to shareholders. At 30 September 2024, the
ratio of net debt to underlying EBITDA was 1.3x (2023: 1.2x) (see note 34).
Share capital
Restated
1
2024 2023
Share capital Number $m Number $m
Allotted, called up and fully paid
Ordinary shares of 11
1
⁄
p each
1,785,403,977
346
1,785,403,977
346
20
At 30 September
1,785,403,977
346
1,785,403,977
346
1. See note 1.
During the year, 20,406,756 shares in Compass Group PLC were purchased under the share buybacks announced in May 2023 and November
2023 (2023: 46,311,952 shares were purchased under the share buybacks announced in May 2022, November 2022 and May 2023), which are
held in treasury, and 2,585,610 (2023: 1,343,592) shares were released to satisfy awards under the Company’s long-term incentive plans,
leaving a balance held in treasury at 30 September 2024 of 87,992,005 (2023: 70,170,859). The shares purchased had an average price of
$27.44 per share (2023: $24.96 per share) and represent 1.1% (2023: 2.6%) of the Company’s issued share capital. Shares held in treasury are
not entitled to receive dividends.
Other reserves
Capital redemption reserve
The nominal value of shares in the Company purchased and subsequently cancelled is shown as a reduction in share capital and an equal and
opposite transfer to the capital redemption reserve.
Own shares reserve
The own shares reserve represents shares in Compass Group PLC held either in treasury, including transaction costs, or by employee share trusts
to satisfy liabilities to employees for long-term incentive plans. Own shares are treated as a deduction to equity until the shares are cancelled,
reissued or sold, at which point they are transferred to retained earnings.
The own shares reserve comprises $2,288m (2023: $1,833m) in respect of 87,992,005 (2023: 70,170,859) shares in Compass Group PLC held
in treasury and $8m (2023: $15m) in respect of 298,712 (2023: 573,223) shares in Compass Group PLC held by the Compass Group PLC All
Share Schemes Trust (ASST).
The share buyback announced in May 2023 was completed in November 2023, with 6,357,210 shares repurchased during the year for a total
price, including transaction costs, of $161m.
In November 2023, the Company announced that it was commencing a further share buyback to repurchase up to $500m of its own shares.
During the year, 14,049,546 shares were repurchased for a total price, including transaction costs, of $399m, of which $392m was paid in cash
during the year. The mandate issued to the broker to purchase the shares was irrevocable at 30 September 2024 and, therefore, a creditor of
$112m in respect of the value of the shares not yet purchased has been recognised. In the period from 1 October to 26 November 2024,
2,356,198 shares were repurchased for a total price, including transaction costs, of $77m. The share buyback is scheduled to complete by
17 December 2024.
The ASST is a discretionary trust for the benefit of employees and the shares held are used to satisfy some of the Group’s liabilities to employees for
long-term incentive plans. During the year, no shares (2023: 800,000) in Compass Group PLC were purchased by the ASST and 274,511
(2023: 448,686) shares were released from the ASST to satisfy awards under the Company’s long-term incentive plans. At 30 September 2024,
the nominal value of the shares in the ASST was $44,274 (2023: $77,314), with a market value of $10m (2023: $14m).
No treasury shares have been reissued since the end of the financial year to the date of this Report. On 1 October 2024, 2,393 shares were
released by the ASST to satisfy an award under the Compass Group PLC Restricted Share Award Plan which had vested on 30 September 2024.
Merger reserve
The merger reserve arose in 2000 as a result of the merger between Compass and Granada.
Revaluation reserve
The revaluation reserve arose on the acquisition of the remaining 50% interest in GRSA during 2008. The portion of the fair value adjustment
pertaining to the Group’s existing 50% shareholding in GRSA was credited to the revaluation reserve in accordance with IFRS 3 Business
Combinations. The revaluation reserve was reclassified to retained earnings on disposal of GRSA in 2024.
194 Consolidated financial statements
Notes to the consolidated financial statements for the year ended 30 September 2024 continued
25 Share capital and other reserves continued
Translation reserve
The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations.
Non-controlling interest put options reserve
Where put options are held in respect of a non-controlling interest in a subsidiary and the minority shareholders hold present access to the returns
of the entity, the Group recognises a non-controlling interest, together with a put option liability measured at fair value and a corresponding
non-controlling interest put options reserve. Subsequent remeasurements of put option liabilities under the present access and anticipated
acquisition methods are recognised in the non-controlling interest put options reserve.
Non-
controlling
Capital Own interest put
redemption shares Merger Revaluation Translation options
reserve reserve reserve reserve
reserve
1
reserve Total
Other reserves $m $m $m $m $m $m $m
At 1 October 2023 (restated
2
)
511
(1,848)
7,554
14
(1,544)
(105)
4,582
Other comprehensive income
Currency translation differences
–
–
–
–
267
–
267
Reclassification of cumulative currency translation
–
–
–
–
250
–
250
differences on sale of businesses
Tax credit on items relating to the components of
other comprehensive income
–
–
–
–
2
–
2
Total other comprehensive income for the year
–
–
–
–
519
–
519
Change in fair value of non-controlling interest
–
–
–
–
–
7
7
put options
Changes to non-controlling interests due to
acquisitions and disposals
–
–
–
–
–
(54)
(54)
Reclassification of revaluation reserve on sale
–
–
–
(14)
–
–
(14)
of businesses
Cost of shares transferred to employees
–
64
–
–
–
–
64
Purchase of own shares – share buyback
3
–
(512)
–
–
–
–
(512)
At 30 September 2024
511
(2,296)
7,554
–
(1,025)
(152)
4,592
1. Includes a loss of $566m in relation to the balance remaining in the foreign currency translation reserve from net investment hedging relationships for which hedge
accounting continues to apply.
2. See note 1.
3. The difference between the $512m charged to the own shares reserve during the year and the $577m cash outflow in respect of share buybacks (see page 143)
reflects a $119m creditor at 30 September 2024 in respect of the $500m share buyback announced in November 2023, less a $184m creditor at 30 September
2023 in respect of the share buyback announced in May 2023 (see note 22).
Non-
controlling
Capital Own interest put
redemption shares Merger Revaluation Translation options
reserve reserve reserve reserve
reserve
1
reserve Total
Other reserves $m $m $m $m $m $m $m
At 1 October 2022 (restated
2
)
511
(618)
7,554
14
(1,776)
(126)
5,559
Other comprehensive income
Currency translation differences
–
–
–
–
229
–
229
Reclassification of cumulative currency translation
–
–
–
–
(1)
 – (1)
differences on sale of businesses
Tax credit on items relating to the components of
other comprehensive income
–
–
–
–
4
–
4
Total other comprehensive income for the year
–
–
–
–
232
–
232
Change in fair value of non-controlling interest
–
–
–
–
–
16
16
put options
Changes to non-controlling interests due to
acquisitions and disposals
–
–
–
–
–
(2)
(2)
Reclassification of non-controlling interest put
–
–
–
–
–
7
7
options reserve on exercise of put options
Cost of shares transferred to employees
–
35
–
–
–
–
35
Purchase of own shares – share buyback
–
(1,246)
–
–
–
–
(1,246)
Purchase of own shares – employee share-based
–
(19)
–
–
–
–
(19)
payments
At 30 September 2023 (restated
2
)
511
(1,848)
7,554
14
(1,544)
(105)
4,582
1. Includes a loss of $876m in relation to the balance remaining in the foreign currency translation reserve from net investment hedging relationships for which hedge
accounting continues to apply.
2. See note 1.
Compass Group PLC Annual Report 2024 195
26 Share-based payments
Significant accounting policy
The Group issues equity-settled share-based payments to certain employees, which are measured at fair value at the date of grant using
option pricing models. The fair value is expensed on a straight-line basis over the vesting period based on the Group’s estimate of the number
of shares expected to vest.
Income statement expense
The Group recognised a charge of $68m (2023: $54m) in respect of share-based payment transactions. All share-based payment plans are
equity-settled. The charge is broken down by share-based payment plan as follows:
Restated
1
2024 2023
Share-based payment charge $m $m
Long-term incentive plans
59
47
Restricted shares
8
7
Other share-based payment plans
1
–
Total
68
54
1. See note 1.
Long-term incentive plans (LTIP)
Full details of The Compass Group PLC Long Term Incentive Plan 2018 (2018 LTIP) can be found in the Directors’ Remuneration Report on
pages 86 to 118.
The following table shows the movements in shares during the year:
2024 2023
Number of Number of
Long-term incentive plans shares shares
Outstanding at 1 October
8,878,102
7,547,857
Awarded
3,024,294
3,153,815
Notional Dividend Shares awarded
1
182,806
160,952
Vested
(2,528,072)
(1,113,799)
Lapsed
(509,663)
(870,723)
Outstanding at 30 September
9,047,467
8,878,102
1. Eligible awards granted under the 2018 LTIP accrue dividends in the form of Notional Dividend Shares.
The following Executive Committee and leadership LTIP awards were made under the terms of the 2018 LTIP during the year:
2024
LTIP awards
Award date
Fair value
Executive Committee
1 Dec 2023
1,474.16p
Leadership
1 Dec 2023
1,656.36p
Leadership
20 May 2024
2,097.80p
2023
LTIP awards
Award date
Fair value
Executive Committee
1 Dec 2022
1,363.71p
Leadership
1 Dec 2022
1,507.63p
Leadership
17 May 2023
2,134.32p
The vesting conditions of the LTIP awards are included in the Directors’ Remuneration Report. The fair value of awards subject to Adjusted Free
Cash Flow (AFCF) and Return On Capital Employed (ROCE) performance targets is calculated using the Black-Scholes option pricing model.
The vesting probability of these non-market conditions has been assessed based on a simulation model of the AFCF and ROCE forecasts. The fair
value of awards subject to Total Shareholder Return (TSR) performance targets is calculated using the Monte Carlo model.
The following assumptions were used in calculating the fair value of LTIP awards made during the year:
Weighted average assumptions – long-term incentive plans
2024
2023
Expected volatility
1
22.2%
39.6%
Risk-free interest rate
4.1%
3.1%
Expected life
3.0 years
3.0 years
Share price at date of grant
2,036.36p
1,856.77p
1. Expected volatility is calculated based on the Group’s weekly share price during the three years prior to the date of each award.
196 Consolidated financial statements
Notes to the consolidated financial statements for the year ended 30 September 2024 continued
26 Share-based payments continued
Eligible awards granted under the 2018 LTIP accrue dividends in the form of Notional Dividend Shares. Accordingly, the dividend yield in the fair
value calculation is nil.
The weighted average share price at the date of vesting for the 2,528,072 shares (2023: 1,113,799) that vested during the year was 2,037.92p
(2023: 1,824.00p).
The LTIP awards outstanding at the end of the year have a weighted average remaining contractual life of 1.2 years (2023: 1.2 years).
Restricted shares
These are awards to certain employees in order to incentivise the achievement of particular business objectives under specific circumstances or
where similar such shares have been forfeited by a new employee on joining the Group. The plan can take different forms, such as an award of
shares dependent on service or achievement of specific performance conditions other than service.
The following table shows the movements in shares during the year:
2024 2023
Number of Number of
Restricted shares shares shares
Outstanding at 1 October
825,280
1,083,225
Awarded
342,180
365,818
Notional Dividend Shares awarded
1
15,584
16,228
Vested
(304,146)
(570,398)
Lapsed
(85,283)
(69,593)
Outstanding at 30 September
793,615
825,280
1. Eligible awards granted under the Restricted Share Award Plan accrue dividends in the form of Notional Dividend Shares.
The following assumptions were used in calculating the fair value of restricted share awards made during the year:
Weighted average assumptions – restricted shares
2024
2023
Expected volatility
1
21.5%
37.0%
Risk-free interest rate
4.1%
3.4%
Expected life
2.4 years
2.2 years
Share price at date of grant
2,101.49p
1,920.21p
1. Expected volatility is calculated based on the Group’s weekly share price during the three years prior to the date of each award.
Eligible awards granted under the Restricted Share Award Plan accrue dividends in the form of Notional Dividend Shares. Accordingly, the
dividend yield in the fair value calculation is nil.
The weighted average share price at the date of vesting for the 304,146 shares (2023: 570,398) that vested during the year was 2,074.05p
(2023: 1,989.24p).
Other share-based payment plans
Other share-based payment plans comprise The Compass Group Share Option Plan 2010 (CSOP), Deferred Annual Bonus Plan (DAB) and
Deferred Bonus Plan (DBP). The last CSOP award was made in November 2013 and expired in November 2023. The last DAB award was made in
November 2018 and all remaining shares had lapsed by the end of the year. The DBP is used to facilitate the grant of deferred bonus shares for
executive directors. The first awards under the DBP were made in December 2023.
The following table shows the movements in shares during the year:
2024 2023
Number of Number of
Other share-based payment plans shares shares
Outstanding at 1 October
7,422
202,422
Awarded
88,931
–
Vested and exercised
(32,065)
(108,081)
Lapsed (following net settlement)
–
(84,579)
Lapsed
(7,422)
(2,340)
Outstanding at 30 September
56,866
7,422
The expense relating to these plans is not significant.
Compass Group PLC Annual Report 2024 197
2 Acquisition, sale and closure of businesses
Significant accounting policy
Business acquisitions
The acquisition of subsidiaries is accounted for using the purchase method. The cost of acquisition is measured at the aggregate of the fair
values, at the date of exchange, of assets given, liabilities incurred or assumed and equity instruments issued.
Identifiable assets acquired and liabilities and contingent liabilities assumed are recognised at the fair values at the acquisition date, except
for non-current assets (or disposal groups) that are classified as held for sale which are recognised and measured at fair value less costs
to sell.
The cost of the acquisition in excess of the Group’s interest in the net fair value of the identifiable net assets acquired is recorded as goodwill.
If the cost of the acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the
consolidated income statement.
Where not all the equity of a subsidiary is acquired, the non-controlling interest is recognised either at fair value or at the non-controlling
interest’s proportionate share of the net assets of the subsidiary. This election is made for each acquisition. Put options over non-controlling
interests are recognised as a financial liability measured at fair value, which is re-evaluated at each year-end with a corresponding entry in
the non-controlling interest put options reserve.
Business disposals
The Group ceases to consolidate a subsidiary when it has lost control. Upon losing control of a subsidiary, a gain or loss is recognised in the
consolidated income statement which includes any cumulative currency translation differences previously recognised in other
comprehensive income. Any retained interest in the entity is remeasured to its fair value, with the change in carrying amount recognised in
profit or loss.
Assets held for sale
Non-current assets and disposal groups are classified as held for sale if the carrying amount will be recovered through a sale transaction
rather than through continuing use. This condition is regarded as met only when the sale is highly probable, management is committed to a
sale plan, the asset is available for immediate sale in its present condition and the sale is expected to be completed within one year from the
date of classification.
Assets held for sale are measured at the lower of carrying value and fair value less costs to sell. Goodwill is allocated to the held-for-sale
business on a relative fair value basis where this business forms part of a larger CGU. Investments in joint ventures and associates that have
been classified as held for sale are no longer accounted for using the equity method.
If the non-current asset or disposal group that ceases to be classified as held for sale is a subsidiary, joint venture or associate, prior year
comparatives are restated for the periods since classification as held for sale and accounted for retrospectively.
198 Consolidated financial statements
Notes to the consolidated financial statements for the year ended 30 September 2024 continued
2 Acquisition, sale and closure of businesses continued
Acquisition of businesses
The total cash spent on the acquisition of subsidiaries during the year, net of cash acquired, was $1,256m (2023: $410m), including $431m
(2023: $nil) on the repayment of borrowings acquired through business acquisitions, $61m (2023: $48m) of deferred and contingent
consideration and other payments relating to businesses acquired in previous years, and $41m (2023: $21m) of acquisition transaction costs
included in net cash flow from operating activities.
The Group made two individually material acquisitions during the year (HOFMANN
s
and CH&CO). Detailed disclosures in respect of these
acquisitions are provided below.
HOFMANN
s
On 19 December 2023, the Group acquired 100% of the issued share capital of Hofmann-Menü Holdings GmbH (trading as HOFMANN
s
), a
German producer of high-quality cook and freeze meals, for cash consideration of €94m ($103m) net of cash acquired. The cash consideration
excludes third-party debt acquired and repaid on the date of acquisition of €168m ($185m).
The goodwill of $123m represents the premium the Group has paid to acquire a company that complements its existing businesses and creates
significant opportunities for synergies. In particular, the ability to offer additional services to the Group’s existing customers and to leverage cross-
selling opportunities with customers of HOFMANN
s
will deliver significant economies of scale.
The fair value of net assets acquired includes $197m in respect of other intangible assets which mainly relate to brands ($66m) and client
contracts ($126m). The brands were valued using the relief from royalty method, with the key assumptions being forecast revenue, royalty rate,
useful life and discount rate. The client contracts were valued using the multi-period excess earnings method, with the key assumptions being
forecast operating profit, attrition rate, useful life and discount rate. The intangible assets were valued by independent valuation experts.
The acquisition did not have a material impact on the Group’s revenue or profit for the year. If the acquisition had occurred on 1 October 2023, it
would not have had a material impact on the Group’s revenue or profit for the year.
The following table summarises the recognised amounts of assets acquired and liabilities assumed at the date of acquisition of HOFMANN
s
:
Fair value
$m
Net assets acquired
Other intangible assets
197
Right-of-use assets 5
Property, plant and equipment 30
Trade and other receivables 13
Inventories 18
Cash and cash equivalents 41
Borrowings (185)
Lease liabilities (5)
Current tax liabilities (18)
Trade and other payables (23)
Deferred tax liabilities (52)
Fair value of net assets acquired 21
Goodwill
123
Total consideration 144
Satisfied by
Cash consideration paid
144
Total consideration 144
Cash flow
Cash consideration paid
144
Less: Cash and cash equivalents acquired (41)
Cash consideration net of cash acquired 103
Add: Repayment of borrowings acquired through business acquisitions
1
 185
Add: Acquisition transaction costs
2
 7
Total cash outflow from purchase of subsidiary companies 295
Consolidated cash flow statement
Net cash flow from operating activities
2
 7
Net cash flow from investing activities 103
Net cash flow from financing activities
1
 185
Total cash outflow from purchase of subsidiary companies 295
1. Repayment of borrowings acquired through business acquisitions is included in net cash flow from financing activities.
2. Acquisition transaction costs are included in net cash flow from operating activities.
Compass Group PLC Annual Report 2024 199
2 Acquisition, sale and closure of businesses continued
CH&CO
On 30 April 2024, the Group acquired 100% of the issued share capital of Orchestra Topco Limited (trading as CH&CO), a provider of premium
contract and hospitality services in the UK and Ireland, for cash consideration of £274m ($344m) net of cash acquired. The cash consideration
excludes third-party debt acquired and repaid on the date of acquisition of £197m ($246m).
Contingent consideration is payable in 2025 and 2026 based on EBITDA for the years ending 30 April 2025 and 2026, with an additional payment due in
2027 in respect of contracts won but not mobilised by the end of the second year. The fair value of these contingent payments, which has been estimated
based on forecast EBITDA and contract wins and losses, is £63m ($79m), with minimum and undiscounted maximum values of £nil and £165m ($207m),
respectively.
The goodwill of $329m represents the premium the Group has paid to acquire a company that complements its existing businesses and creates
significant opportunities for synergies, including economies of scale in purchasing and overhead cost savings.
The fair value of net assets acquired includes $452m in respect of other intangible assets which relate to brands ($145m) and client contracts
($307m). The brands were valued using the relief from royalty method, with the key assumptions being forecast revenue, royalty rate, useful life
and discount rate. The client contracts were valued using the multi-period excess earnings method, with the key assumptions being forecast
operating profit, attrition rate, useful life and discount rate. The intangible assets were valued by independent valuation experts.
The acquisition did not have a material impact on the Group’s revenue or profit for the year. If the acquisition had occurred on 1 October 2023, it
would not have had a material impact on the Group’s revenue or profit for the year.
The following table summarises the recognised amounts of assets acquired and liabilities assumed at the date of acquisition of CH&CO:
Fair value
$m
Net assets acquired
Other intangible assets
452
Right-of-use assets 7
Property, plant and equipment 11
Trade and other receivables 113
Tax recoverable 2
Inventories 5
Cash and cash equivalents 12
Deferred tax assets 10
Borrowings (246)
Lease liabilities (5)
Provisions (5)
Trade and other payables (137)
Deferred tax liabilities (113)
Fair value of net assets acquired 106
Goodwill
329
Total consideration 435
Satisfied by
Cash consideration paid
356
Contingent consideration payable 79
Total consideration 435
Cash flow
Cash consideration paid 356
Less: Cash and cash equivalents acquired (12)
Cash consideration net of cash acquired 344
Add: Repayment of borrowings acquired through business acquisitions
1
 246
Add: Acquisition transaction costs
2
 16
Total cash outflow from purchase of subsidiary companies 606
Consolidated cash flow statement
Net cash flow from operating activities
2
 16
Net cash flow from investing activities 344
Net cash flow from financing activities
1
 246
Total cash outflow from purchase of subsidiary companies 606
1. Repayment of borrowings acquired through business acquisitions is included in net cash flow from financing activities.
2. Acquisition transaction costs are included in net cash flow from operating activities.
200 Consolidated financial statements
Notes to the consolidated financial statements for the year ended 30 September 2024 continued
2 Acquisition, sale and closure of businesses continued
All acquisitions
In addition to the acquisitions set out above, the Group also completed a number of individually immaterial acquisitions during the year. A
summary of all acquisitions completed during the year is presented in aggregate below:
Fair value
Restated
1
2024 2023
$m $m
Net assets acquired
Other intangible assets
907
271
Contract fulfilment assets
3
–
Right-of-use assets
37
–
Property, plant and equipment
83
28
Trade and other receivables
144
18
Deferred tax assets
11
–
Inventories
30
13
Tax recoverable
3
–
Cash and cash equivalents
61
13
Borrowings
(431)
–
Lease liabilities
(35)
–
Provisions
(5)
–
Current tax liabilities
(18)
(2)
Trade and other payables
(181)
(21)
Post-employment benefit obligations
(1)
–
Deferred tax liabilities
(184)
(23)
Fair value of net assets acquired
424
297
Less: Step acquisitions
(30)
(29)
Less: Gains on bargain purchases
(35)
–
Less: Non-controlling interests
(40)
(2)
Goodwill
618
225
Total consideration
937
491
Satisfied by
Cash consideration paid
784
354
Deferred and contingent consideration payable
145
137
Non-cash consideration
8
–
Total consideration
937
491
Cash flow
Cash consideration paid
784
354
Less: Cash and cash equivalents acquired
(61)
(13)
Cash consideration net of cash acquired
723
341
Add: Repayment of borrowings acquired through business acquisitions
2
431
–
Add: Acquisition transaction costs
3
41
21
Net cash outflow arising on acquisition
1,195
362
Deferred and contingent consideration and other payments relating to businesses
61
48
acquired in previous years
Total cash outflow from purchase of subsidiary companies
1,256
410
Consolidated cash flow statement
Net cash flow from operating activities
3
41
21
Net cash flow from investing activities
784
389
Net cash flow from financing activities
2
431
–
Total cash outflow from purchase of subsidiary companies
1,256
410
1. See note 1.
2. Repayment of borrowings acquired through business acquisitions is included in net cash flow from financing activities.
3. Acquisition transaction costs are included in net cash flow from operating activities.
Contingent consideration is an estimate at the date of acquisition of the amount of additional consideration that will be payable in the future.
The actual amount paid can vary from the estimate depending on the terms of the transaction and, for example, the actual performance of the
acquired business.
Compass Group PLC Annual Report 2024 201
2 Acquisition, sale and closure of businesses continued
The goodwill arising on the acquisition of the businesses represents the premium the Group has paid to acquire companies which complement
its existing businesses and create significant opportunities for cross-selling and other synergies. The goodwill arising is not expected to be
deductible for tax purposes.
The acquisitions did not have a material impact on the Group’s revenue or profit for the year. If the acquisitions had occurred on 1 October 2023,
they would not have had a material impact on the Group’s revenue or profit for the year.
Sale and closure of businesses
The Group has recognised a net loss of $203m (2023: net gain of $24m) on the sale and closure of businesses, including exit costs of $92m
(2023: $14m). Activity in the year includes the sale of the Group’s businesses in Argentina, Brazil, mainland China and the United Arab Emirates,
the exit from Angola and sale of the final 5% shareholding in Highways Royal Co., Limited (Japanese Highways).
A summary of business disposals completed during the year is presented in aggregate below:
Restated
1
2024 2023
$m $m
Net assets disposed
Goodwill
71
33
Other intangible assets
13
21
Right-of-use assets
4
10
Property, plant and equipment
26
22
Interest in joint ventures and associates
61
–
Trade and other receivables
200
33
Deferred tax assets
14
1
Inventories
21
11
Tax recoverable
1
–
Cash and cash equivalents
30
35
Assets held for sale
5
32
Lease liabilities
(4)
(11)
Provisions
(14)
(2)
Current tax liabilities
(15)
–
Trade and other payables
(210)
(50)
Net assets disposed
203
135
Consolidated income statement
Cash consideration
319
102
Deferred consideration
24
70
Less: Net assets disposed
(203)
(135)
Less: Exit costs
(92)
(14)
Less: Loss on step acquisitions
(1)
–
(Less)/add: Reclassification of cumulative currency translation differences on sale of businesses
2
(250)
1
Net (loss)/gain on sale and closure of businesses
(203)
24
Consolidated cash flow statement
Cash consideration received
319
102
Tax payments arising on disposal of businesses
(35)
–
Exit costs paid
(29)
(9)
Cash and cash equivalents disposed
(30)
(35)
Net proceeds from sale of subsidiary companies, joint ventures and associates net of exit costs
225
58
1. See note 1.
2. Includes cumulative foreign exchange gains of $8m (2023: losses of $4m) on net investment hedges (see note 20).
202 Consolidated financial statements
Notes to the consolidated financial statements for the year ended 30 September 2024 continued
2 Acquisition, sale and closure of businesses continued
Assets and liabilities held for sale
In July 2024, the Group agreed the sale of its businesses in Chile, Colombia and Mexico. The disposals, which are subject to regulatory approval
and completion procedures, are expected to complete in the first half of the 2025 financial year. Accordingly, the assets and liabilities of the
Group’s businesses in Chile, Colombia and Mexico are classified as held for sale at 30 September 2024. The Group’s investment in its joint
venture in Qatar is also classified as held for sale at 30 September 2024, with a carrying value of $nil.
Carrying value
$m
Assets held for sale
Goodwill
13
Other intangible assets 1
Costs to obtain contracts 1
Right-of-use assets 5
Property, plant and equipment 12
Trade and other receivables 165
Deferred tax assets 17
Inventories 11
Tax recoverable 8
Cash and cash equivalents 40
Total 273
Liabilities held for sale
Lease liabilities
(6)
Provisions (8)
Current tax liabilities (8)
Trade and other payables (157)
Total (179)
Compass Group PLC Annual Report 2024 203
28 Reconciliation of operating profit to cash generated from operations
Restated
1
2024 2023
Reconciliation of operating profit to cash generated from operations $m $m
Operating profit before joint ventures and associates
2,540
2,245
Adjustments for:
Acquisition-related charges
2
194
132
Charges related to the strategic portfolio review
170
118
One-off pension charge
8
8
Amortisation – other intangible assets
3
150
134
Amortisation – contract fulfilment assets
306
282
Amortisation – contract prepayments
94
66
Depreciation – right-of-use assets
220
199
Depreciation – property, plant and equipment
374
337
Unwind of costs to obtain contracts
33
27
Impairment losses – non-current assets
4
10
12
Impairment reversals – non-current assets
(7)
(2)
Gain on disposal of property, plant and equipment/intangible assets/contract fulfilment assets
(5)
(4)
Other non-cash changes
–
(1)
Increase/(decrease) in provisions
7
(50)
Investment in contract prepayments
(213)
(88)
Increase in costs to obtain contracts
5
(47)
(45)
Post-employment benefit obligations net of service costs
7
(21)
Share-based payments – charged to profit
68
54
Operating cash flow before movements in working capital
3,909
3,403
Increase in inventories
(36)
(119)
Increase in receivables
(670)
(680)
Increase in payables
892
679
Cash generated from operations
4,095
3,283
1. See note 1.
2. Includes amortisation and impairment of acquisition intangibles. Excludes acquisition transaction costs of $41m (2023: $21m) as acquisition transaction costs are
included in net cash flow from operating activities.
3. Excludes amortisation of acquisition intangibles.
4. Excludes impairment losses of $156m (2023: $60m) included in charges related to the strategic portfolio review.
5. Cash payments in respect of contract balances are classified as cash flows from operating activities, with the exception of contract fulfilment assets which are
classified as cash flows from investing activities as they arise out of cash payments in relation to assets that will generate long-term economic benefits. During the
year, the purchase of contract fulfilment assets in cash flows from investing activities was $508m (2023: $380m).
204 Consolidated financial statements
Notes to the consolidated financial statements for the year ended 30 September 2024 continued
2 Movements in assets and liabilities arising from financing activities
Restated
1
New lease Currency
Movements for the year ended 1 October Cash outflow/ Other non-cash liabilities and translation 30 September
2023 (inflow) movements amendments (losses)/gains 2024
30 September 2024 $m $m $m $m $m $m
Borrowings (excluding bank overdrafts)
(3,915)
211
(610)
–
(212)
(4,526)
Lease liabilities
(1,153)
227
(25)
(325)
(39)
(1,315)
Derivative financial instruments
(221)
(46)
115
–
49
(103)
Net movement in assets and liabilities arising from
financing activities
392
Purchase of own shares – share buyback
577
Dividends paid to equity shareholders 963
Dividends paid to non-controlling interests 10
Net cash flow from financing activities 1,942
New lease Currency
Movements for the year ended 1 October Cash outflow/ Other non-cash liabilities and translation 30 September
30 September 2023 (restated
1
)
2022 (inflow) movements amendments (losses)/gains 2023
$m $m $m $m $m $m
Borrowings (excluding bank overdrafts)
(4,145)
542
(37)
–
(275)
(3,915)
Lease liabilities
(1,019)
215
11
(323)
(37)
(1,153)
Derivative financial instruments
(107)
(157)
(9)
–
52
(221)
Net movement in assets and liabilities arising from
financing activities
600
Purchase of own shares – share buyback
1,148
Purchase of own shares – employee share-based 19
payments
Purchase of non-controlling interests
10
Dividends paid to equity shareholders
796
Dividends paid to non-controlling interests
7
Net cash flow from financing activities
2,580
1. See note 1.
Other non-cash movements are as follows:
Restated
1
2024 2023
Other non-cash movements $m $m
Borrowings acquired through business acquisitions
(431)
–
Amortisation of fees and discounts on issue of debt
(4)
(5)
Changes in fair value of borrowings in a fair value hedge
(175)
(32)
Borrowings
(610)
(37)
Lease liabilities acquired through business acquisitions
(35)
–
Lease liabilities derecognised on sale and closure of businesses
4
11
Lease liabilities transferred to held for sale
6
–
Lease liabilities
(25)
11
Changes in fair value of derivative financial instruments
115
(9)
Total
(520)
(35)
1. See note 1.
6
Compass Group PLC Annual Report 2024 205
30 Contingent liabilities
Significant accounting policy
Provisions for legal and other claims are recognised when the Group has a present obligation as a result of a past event, it is probable that the
Group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation. Where it is possible that a
settlement will be reached or it is not possible to make a reliable estimate of the amount of the obligation, no provision is recognised, but
appropriate disclosure as a contingent liability is made.
Performance bonds, guarantees and indemnities
The Company and certain subsidiary undertakings have, in the normal course of business, given guarantees and entered into counter-indemnities
in respect of such guarantees relating to the Group’s own contracts and/or the Group’s share of certain contractual obligations of joint
arrangements and associates. Where the Group enters into such arrangements, it does so in order to provide assurance to the beneficiary,
typically the client, that it will fulfil its contractual obligations, rather than to provide an insurance contract to compensate the client in the event
that it does not fulfil those contractual obligations. The issue of such guarantees and indemnities does not increase the Group’s overall exposure
and is not in scope of IFRS 17 Insurance Contracts.
Litigation and claims
The Group is involved in various legal proceedings incidental to the nature of its business and maintains insurance cover to reduce financial risk
associated with claims related to these proceedings. Where appropriate, provisions are made to cover any potential uninsured losses.
Although it is not possible to predict the outcome or quantify the financial effect of these proceedings, or any claim against the Group related
thereto, in the opinion of the directors, any uninsured losses resulting from the ultimate resolution of these matters will not have a material effect
on the financial position of the Group. The timing of the settlement of these proceedings or claims is uncertain.
During the period of the Group’s ownership of its business in Brazil, which was sold during the year, the federal tax authorities issued notices of
deficiency in respect of 2014 and 2017 relating primarily to the PIS/COFINS treatment of certain food costs which we formally objected to and
which are proceeding through the appeals process. At 30 September 2024, the total amount assessed in respect of these matters is $87m,
including interest and penalties. The possibility of further notices of deficiency for subsequent years during the period of the Group’s ownership
cannot be ruled out and the judicial process is likely to take a number of years to conclude. Based on the opinion of our local legal advisers, we do
not currently consider it likely that we will have to settle a liability with respect to these matters and, on this basis, no provision has been recorded.
The Group is currently subject to audits and reviews in a number of countries that primarily relate to complex corporate tax issues. None of these
audits is currently expected to have a material impact on the Group’s financial position. We continue to engage with tax authorities and other
regulatory bodies on payroll and sales tax reviews, and compliance with labour laws and regulations.
Food safety
In the ordinary course of business, food safety incidents are identified from time to time and our businesses’ operations receive external reviews
of their food hygiene and safety practices, both on a periodic basis and in connection with identified incidents. At any point, a number of reviews
will be ongoing. Although it is not possible to predict the outcome or quantify the financial effect of the outcome of these reviews, or any claim
against Group companies related thereto, in the opinion of the directors, any uninsured losses resulting from the ultimate resolution of these
ongoing reviews are not expected to have a material effect on the financial position of the Group. The timing of the outcome of these reviews is
generally uncertain.
206 Consolidated financial statements
Notes to the consolidated financial statements for the year ended 30 September 2024 continued
31 Commitments
Restated
1
2024 2023
Contracted for but not provided for $m $m
Client contract intangibles
89
88
Contract balances
790
696
Property, plant and equipment
70
45
Total
949
829
1. See note 1.
32 Related party transactions
The following transactions were carried out with related parties of Compass Group PLC:
Subsidiaries
Transactions between the ultimate parent company and its subsidiaries, and between subsidiaries, have been eliminated on consolidation.
Joint ventures
With the exception of the sale of the Group’s joint venture in the United Arab Emirates, there were no significant transactions between joint
ventures or joint venture partners and the rest of the Group during the year.
Associates
There were no significant transactions with associated undertakings during the year.
Key management personnel
The remuneration of directors and key management personnel is set out in note 4. During the year, there were no other material transactions or
balances between the Group and its key management personnel or members of their close families.
Post-employment benefit schemes
Details of the Group’s post-employment benefit schemes are set out in note 24.
33 Post-balance sheet events
On 31 October 2024, the Group acquired 100% of the issued share capital of DR Holding (trading as Dupont Restauration), a provider of contract
catering services in France, for cash of €296m ($321m). If the acquisition had occurred on 1 October 2023, it would not have had a material
impact on the Group’s revenue or profit for the year ended 30 September 2024. Given the proximity of the completion date to the date of this
Annual Report, certain elements of the acquisition accounting are not yet available. Full disclosures will be provided in the 2025 Half Year Results
Announcement and Annual Report.
On 31 October 2024, the Group agreed the sale of its business in Kazakhstan, subject to regulatory approval. The net assets of the business at
30 September 2024 are not material.
On 13 November 2024, the Group entered into an agreement to acquire 4Service AS, a provider of catering and facility management services in
Norway, for an enterprise value of approximately NOK5.5bn ($494m). The acquisition is subject to regulatory approval which we expect to receive
during the 2025 financial year.
In the period from 1 October to 26 November 2024, 2,356,198 shares were repurchased for a total price, including transaction costs, of $77m
under the share buyback announced in November 2023. The share buyback is scheduled to complete by 17 December 2024.
On 26 November 2024, a final dividend in respect of 2024 of 39.1c per share, $664m in aggregate, was proposed.
Compass Group PLC Annual Report 2024 207
34 Non-GAAP measures
Introduction
The Executive Committee manages and assesses the performance of the Group using various underlying and other Alternative Performance
Measures (APMs). These measures are not defined by International Financial Reporting Standards (IFRS) or other generally accepted accounting
principles (GAAP) and may not be directly comparable with APMs used by other companies. Underlying measures reflect ongoing trading and,
therefore, facilitate meaningful year-on-year comparison. The Group’s APMs, together with the results prepared in accordance with IFRS, provide
comprehensive analysis of the Group’s results. Accordingly, the relevant statutory measures are also presented where appropriate. Certain of the
Group’s APMs are financial Key Performance Indicators (KPIs) which measure progress against our strategy.
In determining the adjustments to arrive at underlying results, we use a set of established principles relating to the nature and materiality of
individual items or groups of items, including, for example, events which: (i) are outside the normal course of business; (ii) are incurred in a
pattern that is unrelated to the trends in the underlying financial performance of our ongoing business; or (iii) are related to business acquisitions
or disposals as they are not part of the Group’s ongoing trading business and the associated cost impact arises from the transaction rather than
from the continuing business.
Definitions
Measure
Definition
Purpose
Income statement
Underlying revenue
Revenue plus share of revenue of joint ventures.
Allows management to monitor the sales
performance of the Group’s subsidiaries and
j
oint ventures.
Underlying
Operating profit excluding specific adjusting items
2
.
Provides a measure of operating profitability
operating profit that is comparable over time.
Underlying
Underlying operating profit divided by underlying revenue.
An important measure of the efficiency of
operating margin
1
our operations in delivering great food and
support services to our clients and consumers.
Organic revenue
1
Current year: Underlying revenue excluding businesses acquired, Embodies our success in growing and retaining
sold and closed in the year. Prior year: Underlying revenue our customer base, as well as our ability to drive
including a proforma 12 months in respect of businesses volumes in our existing businesses and
acquired in the year and excluding businesses sold and closed maintain appropriate pricing levels in light of
in
the year translated at current year exchange rates.
input cost inflation.
Where applicable, a 53rd week is excluded from the current or
prior year.
Organic operating profit Current year: Underlying operating profit excluding businesses Provides a measure of operating profitability
acquired, sold and closed in the year. Prior year: Underlying that is comparable over time.
operating profit including a proforma 12 months in respect of
businesses acquired in the year and excluding businesses sold
and clo
sed in the year translated at current year exchange rates.
Where applicable, a 53rd week is excluded from the current or
prior year.
1. Key Performance Indicator.
2. See page 211 for definitions of the specific adjusting items and a reconciliation from the statutory to the underlying income statement.
208 Consolidated financial statements
Notes to the consolidated financial statements for the year ended 30 September 2024 continued
34 Non-GAAP measures continued
Definitions (continued)
Measure
Definition
Purpose
Income statement (continued)
Underlying finance costs
Finance costs excluding specific adjusting items
2
.
Provides a measure of the Group’s cost of
financing excluding items outside of the control
of management.
Underlying profit before
Profit before tax excluding specific adjusting items
2
.
Provides a measure of Group profitability that is
tax comparable over time.
Underlying income tax Income tax expense excluding tax attributable to specific Provides a measure of income tax expense that
expense
adjusting items
2
.
is comparable over time.
Underlying effective Underlying income tax expense divided by underlying profit Provides a measure of the effective tax rate that
tax rate before tax. is comparable over time.
Underlying profit for
Profit for the year excluding specific adjusting items
2
and tax
 Provides a measure of Group profitability that is
the year attributable to those items. comparable over time.
Underlying profit Profit for the year attributable to equity shareholders excluding Provides a measure of Group profitability that is
attributable to equity
specific adjusting items
2
and tax attributable to those items.
comparable over time.
shareholders (underlying
earnings)
Underlying earnings
Earnings per share excluding specific adjusting items
2
and tax
 Measures the performance of the Group in
per share
1
attributable to those items. delivering value to shareholders.
Net operating profit after Underlying operating profit excluding the operating profit Provides a measure of Group operating
tax (NOPAT) of non-controlling interests, net of tax at the underlying profitability that is comparable over time.
effective tax rate.
Underlying EBITDA
Underlying operating profit excluding underlying impairment,
 Provides a measure of Group operating
depreciation and amortisation of intangible assets, tangible profitability that is comparable over time.
assets and contract-related assets.
Balance sheet
Net debt
Bank overdrafts, bank and other borrowings, lease liabilities and
 Allows management to monitor the
derivative financial instruments, less cash and cash equivalents. indebtedness of the Group.
Net debt to EBITDA
Net debt divided by underlying EBITDA.
Provides a measure of the Group’s ability to
finance and repay its debt from its operations.
Capital employed
Total equity shareholders’ funds, excluding: net debt;
 Provides a measure of the Group’s efficiency in
post-employment benefit assets and obligations; allocating its capital to profitable investments.
and investments held to meet the cost of unfunded
post-employment benefit obligations.
Return on Capital
NOPAT divided by 12-month average capital employed.
ROCE demonstrates how we have delivered
Employed (ROCE)
1
against the various investments we make in the
business, be it operational expenditure, capital
expenditure or bolt-on acquisitions.
1. Key Performance Indicator.
2. See page 211 for definitions of the specific adjusting items and a reconciliation from the statutory to the underlying income statement.
Compass Group PLC Annual Report 2024 209
34 Non-GAAP measures continued
Definitions (continued)
Measure
Definition
Purpose
Cash flow
Capital expenditure Purchase of intangible assets, purchase of contract fulfilment Provides a measure of expenditure on
assets, purchase of property, plant and equipment and
long
-term intangible, tangible and contract-
investment in contract prepayments, less proceeds from sale of related assets, net of the proceeds from
property, plant and equipment/intangible assets/contract disposal of intangible, tangible and
fulfilment assets. contract-related assets.
Underlying operating Net cash flow from operating activities, including purchase of Provides a measure of the success of the Group
cash flow intangible assets, purchase of contract fulfilment assets, in turning profit into cash that is comparable
purchase of property, plant and equipment, proceeds from sale over time.
of property, plant and equipment/intangible assets/contract
fulfilment assets, repayment of principal
under lease liabilities
and share of results of joint ventures and associates, and
excluding interest and net tax paid, post
-employment benefit
obligations net of service costs, cash payments related to the
cost action programme and COVID-19 resizing costs, strategic
portfolio review and one-off pension charge, and acquisition
transaction costs.
Underlying operating cash Underlying operating cash flow divided by underlying Provides a measure of the success of the Group
flow conversion
operating
profit.
in turning profit into cash that is comparable
over time.
Free cash flow Net cash flow from operating activities, including purchase of Provides a measure of the success of the Group
intangible assets, purchase of contract fulfilment assets, in turning profit into cash that is comparable
purchase of property, plant and equipment, proceeds from sale over time.
of property, plant and equipment/intangible assets/contract
fulfilment assets, purchase of other investments, proceeds from
sale of oth
er investments, dividends received from joint ventures
and associates, interest received, repayment of principal under
lease liabilities and dividends paid to non
-controlling interests.
Underlying free Free cash flow excluding cash payments related to the cost Provides a measure of the success of the Group
cash flow
1
action programme and COVID-19 resizing costs, strategic in turning profit into cash that is comparable
portfolio review and one-off pension charge, and acquisition over time.
transaction costs.
Underlying free cash flow Underlying free cash flow divided by underlying profit for Provides a measure of the success of the Group
conversion
2
the
year.
in turning profit into cash that is comparable
over time.
Underlying cash Net tax paid included in net cash flow from operating activities Provides a measure of the cash tax rate that is
tax rate divided by underlying profit before tax. comparable over time.
Business growth
New business Current year underlying revenue for the period in which no The measure of incremental revenue in the
revenue had been recognised in the prior year. current year from new business.
Lost business Prior year underlying revenue for the period in which no revenue The measure of lost revenue in the current year
has been recognised in the current year. from ceased business.
Net new business New business minus lost business as a percentage of prior year The measure of net incremental revenue in the
organic revenue
.
current year from business wins and losses.
Retention 100% minus lost business as a percentage of prior year The measure of our success in retaining business.
organic
revenue.
1. Key Performance Indicator.
2. Underlying profit for the year has replaced underlying operating profit as the denominator in the calculation of underlying free cash flow conversion.
210 Consolidated financial statements
Notes to the consolidated financial statements for the year ended 30 September 2024 continued
34 Non-GAAP measures continued
Reconciliations
Income statement
Underlying revenue and operating profit are reconciled to GAAP measures in note 2 (segmental analysis).
Geographical segments Central
North America Europe Rest of World activities Total
Organic revenue $m $m $m $m $m
Year ended 30 September 2024
Underlying revenue
28,581
9,887
3,708
–
42,176
Organic adjustments
(105)
(570)
(480)
–
(1,155)
Organic revenue
28,476
9,317
3,228
–
41,021
Year ended 30 September 2023
Underlying revenue (restated
1
)
25,768
8,598
3,850
–
38,216
Currency adjustments
(6)
49
(112)
–
(69)
Underlying revenue – constant currency
25,762
8,647
3,738
–
38,147
Organic adjustments
14
(322)
(764)
–
(1,072)
Organic revenue
25,776
8,325
2,974
–
37,075
Increase in underlying revenue at reported rates – %
10.9%
15.0%
(3.7)%
10.4%
Increase in underlying revenue at constant currency – %
10.9%
14.3%
(0.8)%
10.6%
Increase in organic revenue – %
10.5%
11.9%
8.5%
10.6%
1. See note 1.
Geographical segments Central
North America Europe Rest of World activities Total
Organic operating profit $m $m $m $m $m
Year ended 30 September 2024
Underlying operating profit/(loss)
2,335
583
224
(144)
2,998
Underlying operating margin – %
8.2%
5.9%
6.0%
7.1%
Organic adjustments
2
(61)
(33)
–
(92)
Organic operating profit/(loss)
2,337
522
191
(144)
2,906
Year ended 30 September 2023
Underlying operating profit/(loss) (restated
1
)
2,019
479
214
(120)
2,592
Underlying operating margin – %
7.8%
5.6%
5.6%
6.8%
Currency adjustments
–
(1)
(11)
(4)
(16)
Underlying operating profit/(loss) – constant currency
2,019
478
203
(124)
2,576
Organic adjustments
1
(24)
(53)
–
(76)
Organic operating profit/(loss)
2,020
454
150
(124)
2,500
Increase in underlying operating profit at reported rates – %
15.7%
21.7%
4.7%
15.7%
Increase in underlying operating profit at constant currency – %
15.7%
22.0%
10.3%
16.4%
Increase in organic operating profit – %
15.7%
15.0%
27.3%
16.2%
1. See note 1.
Compass Group PLC Annual Report 2024 211
34 Non-GAAP measures continued
Reconciliations (continued)
Specific adjusting items
2024 2024
Statutory Underlying
Underlying income statement Notes
$m
1
2
3
4
5
$m
Operating profit
2
2,584
235
8
1
170
–
2,998
Net loss on sale and closure of businesses
(203)
–
–
–
203
–
–
Finance costs
5
(325)
9
–
–
–
67
(249 )
Profit before tax
2,056
244
8
1
373
67
2,749
Income tax expense
6
(642)
(43)
(2)
(1)
1
(15)
(702 )
Profit for the year
1,414
201
6
–
374
52
2,047
Less: Non-controlling interests
(10)
–
–
–
–
–
(10 )
Profit attributable to equity shareholders
1,404
201
6
–
374
52
2,037
Earnings per share (cents)
82.3c
11.8c
0.4c
–
22.0c
3.0c
119.5c
Effective tax rate (%)
31.2%
25.5%
2023 Specific adjusting items 2023
Underlying income statement (restated
1
)
Statutory Underlying
Notes
$m
1
2
3
4
5
$m
Operating profit
2
2,313
153
8
–
118
–
2,592
Net gain on sale and closure of businesses
24
–
–
–
(24)
–
–
Finance costs
5
(200)
–
–
–
–
34
(166 )
Profit before tax
2,137
153
8
–
94
34
2,426
Income tax expense
6
(525)
(32)
(1)
–
(21)
(9)
(588 )
Profit for the year
1,612
121
7
–
73
25
1,838
Less: Non-controlling interests
(5)
–
–
–
–
–
(5 )
Profit attributable to equity shareholders
1,607
121
7
–
73
25
1,833
Currency adjustments
(15 )
Profit attributable to equity shareholders – constant 1,818
currency
Earnings per share (cents)
92.2c
7.0c
0.4c
–
4.2c
1.4c
105.2c
Earnings per share – constant currency (cents)
104.3c
Effective tax rate (%)
24.6%
24.2%
1. See note 1.
Specific adjusting items are as follows:
1. Acquisition-related charges
Represent amortisation and impairment charges in respect of intangible assets acquired through business combinations, direct costs incurred
through business combinations or other strategic asset acquisitions, business integration costs, changes in consideration in relation to past
acquisition activity, other acquisition-related items (see note 3) and, from 2024, net present value adjustments on deferred and contingent
consideration payable on business acquisitions (see note 5).
2. One-off pension charge
Mainly reflects a past service cost following a change in legislation in Türkiye eliminating the minimum retirement age requirement for certain
employees effective from March 2023 (see note 24).
3. Tax on share of profit of joint ventures
Reclassification of tax on share of profit of joint ventures to income tax expense.
4. Gains and losses on sale and closure of businesses and charges related to the strategic portfolio review
Profits and losses on the sale of subsidiaries, joint ventures and associates, exit costs on closure of businesses (see note 27) and charges in
respect of a strategic portfolio review to focus on the Group’s core markets (see note 3).
5. Other financing items
Financing items, including hedge accounting ineffectiveness, change in the fair value of derivatives held for economic hedging purposes, change
in the fair value of investments and financing items relating to post-employment benefits (see note 5).
212 Consolidated financial statements
Notes to the consolidated financial statements for the year ended 30 September 2024 continued
34 Non-GAAP measures continued
Reconciliations (continued)
Restated
1
2024 2023
Net operating profit after tax (NOPAT) $m $m
Underlying operating profit
2,998
2,592
Deduct:
Tax on underlying operating profit at effective tax rate
(762)
(626)
Operating profit of non-controlling interests net of tax
(10)
(5)
NOPAT
2,226
1,961
1. See note 1.
Restated
1
2024 2023
Underlying EBITDA $m $m
Underlying operating profit
2,998
2,592
Add back/(deduct):
Depreciation of property, plant and equipment and right-of-use assets
594
536
Amortisation of other intangible assets, contract fulfilment assets and contract prepayments
2
550
482
Impairment losses –non-current assets
3
10
12
Impairment reversals –non-current assets
(7)
(2)
Underlying EBITDA
4,145
3,620
1. See note 1.
2. Excludes amortisation of acquisition intangibles.
3. Excludes impairment losses of $156m (2023: $60m) included in charges related to the strategic portfolio review.
Balance sheet
Restated
1
2024 2023
Components of net debt $m $m
Borrowings
(4,596)
(4,114)
Lease liabilities
(1,315)
(1,153)
Derivative financial instruments
(103)
(221)
Gross debt
(6,014)
(5,488)
Cash and cash equivalents
623
1,029
Net debt
(5,391)
(4,459)
1. See note 1.
Restated
1
2024 2023
Net debt reconciliation $m $m
Net decrease in cash and cash equivalents
(296)
(1,273)
(Deduct)/add back:
Increase in borrowings
(1,381)
(1)
Repayment of borrowings
1,161
543
Repayment of borrowings acquired through business acquisitions
431
–
Net cash flow from derivative financial instruments
(46)
(157)
Repayment of principal under lease liabilities
227
215
Decrease/(increase) in net debt from cash flows
96
(673)
New lease liabilities and amendments
(325)
(323)
Borrowings acquired through business acquisitions
(431)
–
Amortisation of fees and discounts on issue of debt
(4)
(5)
Changes in fair value of borrowings in a fair value hedge
(175)
(32)
Lease liabilities acquired through business acquisitions
(35)
–
Lease liabilities derecognised on sale and closure of businesses
4
11
Changes in fair value of derivative financial instruments
115
(9)
Currency translation losses
(143)
(91)
Increase in net debt
(898)
(1,122)
Net debt at 1 October
(4,459)
(3,337)
Cash and lease liabilities transferred to held for sale
(34)
–
Net debt at 30 September
(5,391)
(4,459)
1. See note 1.
Compass Group PLC Annual Report 2024 213
34 Non-GAAP measures continued
Reconciliations (continued)
Restated
1
2024 2023
Net debt to EBITDA $m $m
Net debt
(5,391)
(4,459)
Underlying EBITDA
4,145
3,620
Net debt to EBITDA (times)
1.3
1.2
1. See note 1.
Restated
1
2024 2023
Return on capital employed (ROCE) $m $m
NOPAT
2,226
1,961
Average capital employed
11,722
10,138
ROCE (%)
19.0%
19.3%
1. See note 1.
Cash flow
Restated
1
2024 2023
Capital expenditure $m $m
Purchase of intangible assets
329
263
Purchase of contract fulfilment assets
508
380
Purchase of property, plant and equipment
572
445
Investment in contract prepayments
213
88
Proceeds from sale of property, plant and equipment/intangible assets/contract fulfilment assets
(81)
(78)
Capital expenditure
1,541
1,098
1. See note 1.
Restated
1
2024 2023
Underlying operating cash flow $m $m
Net cash flow from operating activities
3,135
2,536
Purchase of intangible assets
(329)
(263)
Purchase of contract fulfilment assets
(508)
(380)
Purchase of property, plant and equipment
(572)
(445)
Proceeds from sale of property, plant and equipment/intangible assets/contract fulfilment assets
81
78
Repayment of principal under lease liabilities
(227)
(215)
Share of results of joint ventures and associates
44
68
Add back/(deduct):
Interest paid
267
208
Net tax paid
693
539
Post-employment benefit obligations net of service costs
2
(7)
11
Cash payments related to the cost action programme and COVID-19 resizing costs
8
35
Cash payments related to the strategic portfolio review
8
24
Cash payments related to the one-off pension charge
8
11
Acquisition transaction costs
41
21
Underlying operating cash flow
2,642
2,228
1. See note 1.
2. 2023 excludes $10m of cash payments related to the one-off pension charge.
Restated
1
2024 2023
Underlying operating cash flow conversion $m $m
Underlying operating cash flow
2,642
2,228
Underlying operating profit
2,998
2,592
Underlying operating cash flow conversion (%)
88.1%
86.0%
1. See note 1.
214 Consolidated financial statements
Notes to the consolidated financial statements for the year ended 30 September 2024 continued
34 Non-GAAP measures continued
Reconciliations (continued)
Restated
1
2024 2023
Free cash flow $m $m
Net cash flow from operating activities
3,135
2,536
Purchase of intangible assets
(329)
(263)
Purchase of contract fulfilment assets
(508)
(380)
Purchase of property, plant and equipment
(572)
(445)
Proceeds from sale of property, plant and equipment/intangible assets/contract fulfilment assets
81
78
Purchase of other investments
(2)
(4)
Proceeds from sale of other investments
2
3
4
Dividends received from joint ventures and associates
65
60
Interest received
39
61
Repayment of principal under lease liabilities
(227)
(215)
Dividends paid to non-controlling interests
(10)
(7)
Free cash flow
1,675
1,425
1. See note 1.
2. 2024 excludes $327m received in respect of the sale of the Group’s 19% effective interest in ASM Global Parent, Inc. in August 2024.
Restated
1
2024 2023
Underlying free cash flow $m $m
Free cash flow
1,675
1,425
Add back:
Cash payments related to the cost action programme and COVID-19 resizing costs
8
35
Cash payments related to the strategic portfolio review
8
24
Cash payments related to the one-off pension charge
8
11
Acquisition transaction costs
41
21
Underlying free cash flow
1,740
1,516
1. See note 1.
Restated
1,2
2024 2023
Underlying free cash flow conversion $m $m
Underlying free cash flow
1,740
1,516
Underlying profit for the year
2,047
1,838
Underlying free cash flow conversion (%)
85.0%
82.5%
1. See note 1.
2. As underlying free cash flow includes interest and tax cash flows, underlying profit for the year has replaced underlying operating profit as the denominator in the
calculation of underlying free cash flow conversion. Underlying free cash flow conversion would be 58.0% in 2024 (2023: 58.5%) using underlying operating profit
as the denominator.
Restated
1
2024 2023
Underlying cash tax rate $m $m
Tax received
18
31
Tax paid
(711)
(570)
Net tax paid
(693)
(539)
Underlying profit before tax
2,749
2,426
Underlying cash tax rate (%)
25.2%
22.2%
1. See note 1.
Business growth
Restated
1
2024 2023
Net new business $m $m
New business less lost business
1,573
1,472
Prior year organic revenue
37,075
31,872
Net new business (%)
4.2%
4.6%
1. See note 1.
Compass Group PLC Annual Report 2024 215
35 Exchange rates
Average rates are used to translate the income statement and cash flow statement. Closing rates are used to translate the balance sheet. Only the
most significant currencies are shown.
2024
2023
Average exchange rate for the year
Australian dollar
1.51
1.51
Brazilian real
5.20
5.09
Canadian dollar
1.36
1.35
Euro
0.92
0.94
Japanese yen
150.03
140.07
Pound sterling
0.79
0.82
Turkish lira
31.33
21.51
Closing exchange rate at 30 September
Australian dollar
1.44
1.55
Brazilian real
5.45
5.00
Canadian dollar
1.35
1.35
Euro
0.90
0.94
Japanese yen
143.04
149.22
Pound sterling
0.75
0.82
Turkish lira
34.19
27.41
Principal subsidiaries
Principal activities
Australia
Ground Floor 35 – 51 Mitchell
Street, McMahons Point,
NSW 2060,
Australia
Food and
Compass Group (Australia) Pty support
Limited services
Belgium
1831
Diegem, Hermeslaan 1H,
Belgium
Compass Group Belgium NV
Food services
Canada
1 Prologis Boulevard, Suite 400,
Mississauga, Ontario L5W 0G2,
Canada
Compass Group Canada Ltd. Food and
Groupe Compass Canada Ltée support
(iii)(iv)(v)(vi)(viii) services
Chile
Av. Las Condes 11.774, 7th
floor, Vitacura, Santiago, Chile Food and
Compass Catering Y Servicios support
Chile Limitada services
Denmark
Rued Langgards Vej 8, 1. sal,
2300
København S, Denmark
Compass Group Danmark A/S
Food services
Finland
P.O. Box 210, FI-00281
Helsinki, Finland
Compass Group Finland Oy
Food services
France
123
Avenue de la République
– Hall A, 92320
Châtillon,
France
Compass Group France Holding
Holdings SAS company
Food and
support
Compass Group France SAS services
Germany
Helfmann-Park 2, 65760,
Eschborn, Germany
Compass Group Deutschland Holding
GmbH company
Food services
to Business
Eurest Deutschland GmbH and Industry
Support
services to
Business and
Eurest Services GmbH Industry
Italy
Via Angelo Scarsellini, 14,
20161,
Milano, Italy
Food and
support
Compass Group Italia S.p.A. services
Japan
Hamarikyu Kensetsu Plaza,
5-5-12, Tsukiji, Chuo-ku, Tokyo
104-0045, Japan Food and
support
Compass Group Japan Inc. services
Netherlands
Haaksbergweg 70, 1101 BZ,
Amsterdam, Netherlands Holding
Compass Group International B.V. company
Food and
support
Compass Group Nederland B.V. services
Compass Group Nederland Holding
Holding B.V. company
Norway
Drengsrudbekken 12, 1383,
PO Box 74, NO-1371, Asker,
Norway
Holding
Compass Holding Norge AS
Spain
company
Calle Pinar de San José 98
planta 1ª 28054 Madrid, Spain Food and
support
Eurest Colectividades S.L.U. services
Sweden
Box 1183,
Stockholm, Sweden
171 23 Solna,
Holding
Compass Group Sweden AB company
Switzerland
Oberfeldstrasse 14, 8302,
Kloten, Switzerland
Food and
support
Compass Group (Schweiz) AG services
Türkiye
Ünalan Mah. Libadiye Cad.
Emaar Square Sit. F Blok
No:82F/77 Üsküdar Istanbul,
Türkiye
Food and
Sofra Yemek Űretim Ve support
Hizmet A.Ş.
(iii)
services
United Kingdom
Parklands Court, 24 Parklands,
Birmingham Great Park,
Rubery, Birmingham, B45 9PZ,
United Kingdom
Food and
Compass Contract Services support
(U.K.) Limited services
Compass Group, UK and Holding
Ireland Limited company
Client
procurement
services
management
Foodbuy Europe Limited
(iii)(iv)
in the UK
Compass House, Guildford
Street, Chertsey, Surrey,
KT16 9BQ, United Kingdom
Holding
company and
corporate
Compass Group Holdings PLC
(i)(iii)
activities
Intermediate
holding
Hospitality Holdings Limited
(i)
company
United States
2710
Gateway Oaks Drive,
Suite 150N, Sacramento,
CA 95833-3505, US
Bon Appétit Management Co.
(viii)
Food services
251
Little Falls Drive,
Wilmington, DE 19808, US
Compass Group USA Holding
Investments Inc. company
Food and
support
Compass Group USA, Inc.
(viii)
services
Support
services to the
Healthcare
Crothall Services Group market
Purchasing
services in
Foodbuy, LLC North America
Vending,
coffee, dining
and micro
market
Markvend Co. services
Fine dining
Restaurant Associates Corp. facilities
80 State Street, Albany,
NY 12207-2543, US
Fine dining
Flik International Corp. facilities
801
Adlai Stevenson Drive,
Springfield, IL 62703, US Fine dining and
food service at
Sports and
Levy Restaurant Limited entertainment
Partnership facilities
2 Sun Court, Suite 400,
Peachtree Corners,
GA 30092,
US
Food services to
the Healthcare
Morrison Management and Senior
Specialists, Inc.
(viii)
Living market
36 Details of related undertakings of Compass Group PLC
A full list of related undertakings as at 30 September 2024 is set out below. Related undertakings include: wholly-owned subsidiary undertakings,
joint arrangements, memberships, and associates. Unless otherwise stated, the Group’s shareholding represents 100% ordinary shares held
indirectly by Compass Group PLC.
Notes
1. Unless stated otherwise, country shown is
place of incorporation.
2. In some of the jurisdictions where we
operate, share classes are not defined and
in these instances, for the purposes of
disclosure, we have classified these
holdings as ordinary.
3. A number of the companies listed are
legacy companies which no longer serve
any operational purpose.
Classifications key
(i) Directly owned by Compass Group PLC
(ii) Dormant/non-trading
(iii) A Ordinary shares
(iv) B Ordinary shares
(v) C Ordinary and/or Special shares
(vi) D, E and/or F Ordinary shares
(vii) Deferred shares
(viii) Preference including cumulative,
non-cumulative and redeemable shares
(ix) Redeemable shares
(x) No share capital, share of profits
(xi) Limited by guarantee
Consolidated financial statements216
Notes to the consolidated financial statements for the year ended 30 September 2024 continued
Other wholly owned subsidiaries
Algeria
Eurojapan Résidence No.23, RN n°3 BP 398,
Hassi Messaoud, Algeria
Eurest Algerie SPA
Angola
Condominio Dolce Vita, Via S8, Edifício 1D,
Fração A & B, 2º andar, Talatona, Município de
Belas, Luanda, República de Angola
Express Support Services, Limitada
Australia
Ground Floor 35 – 51 Mitchell Street,
McMahons Point, NSW 2060, Australia
28 Villages Pty Ltd
Compass (Australia) Catering & Services PTY Ltd
(iii)(iv)
Compass Group B&I Hospitality Services PTY Ltd
Compass Group Defence Hospitality Services PTY Ltd
Compass Group Education Hospitality Services PTY Ltd
Compass Group Events Stadia Venues Hospitality
Services Pty Ltd
Compass Group Healthcare Hospitality Services
PTY Ltd
Compass Group Health Services Pty Ltd
Compass Group Management Services PTY Ltd
Compass Group Relief Hospitality Services PTY Ltd
Compass Group Remote Hospitality Services PTY Ltd
Delta Facilities Management PTY Ltd
Delta FM Australia PTY Ltd
Eurest (Australia) Food Services PTY Ltd
Eurest (Australia) PTY Ltd
Foodbuy Pty Ltd
HEC Hospitality Services Pty Ltd
Omega Security Services PTY Ltd
Village Hospitality Holdings Pty Ltd
Village Hospitality Services Pty Ltd
Austria
Ignaz-Köck-Str. 8/6, 1210 Vienna, Austria
Die Menü-Manufaktur GmbH
IZD Tower, Wagramer Strasse 19/4. Stock,
1220
Wien, Austria
Compass Group Austria Holdings One GmbH
Compass Group Austria Holdings Two GmbH
Eurest Restaurationsbetriebsgesellschaft m.b.H
Kunz Gebäudereinigung GmbH
Belgium
1831
Diegem, Hermeslaan 1H, Belgium
Compass Group Service Solutions NV
F.L.R. Holding NV
(ii)
Xandrion Belgie BV
Boomseseenweg 28, 2627 Schelle, Belgium
J&M Catering Services NV
Flinckheuvel BV
Silverspoon BV
Gemeentepark 5, 2930 Brasschaat, Belgium
Kasteel Van Brasschaat NV
British Virgin Islands
Craigmuir Chambers, PO Box 71, Roadtown,
Tortola, VG1110, British Virgin Islands
Compass Group Holdings (BVI) Limited
Cambodia
c/o Action Group Ltd., No.12, Street 614,
Sangkat Boeung Kok II, Khan Tuol Kork, Phnom
Penh City, Cambodia
Compass Group (Cambodia) Co. Ltd.
(ii
Cameroon
100, Rue n° 1044 Hydrocarbures, Bonapriso,
BP 5767,
Eurest Cameroun SARL
(ii)
Douala, Cameroon
Eurest Camp Logistics Cameroun SARL
(ii)
Canada
12 Kodiak Crescent, Toronto, Ontario, M3J 3G5,
Canada
Imperial Coffee and Services Inc.
(iii)(iv)(v)
1 Prologis Boulevard, Suite 400, Mississauga,
Ontario L5W 0G2, Canada
Canteen of Canada Limited
(iii)
Compass Canada Support Services Ltd
(iii)(iv)(v)(vi)(viii)
Compass Group Canada Operations Ltd
(iii)
GoJava Inc.
(iii)(viii)
1600-421 7 Avenue SW, Calgary, Alberta
T2P 4K9, Canada
McMurray Coin Machines (1983) Ltd
1969
Upper Water Street, Purdy’s Wharf Tower
II, Suite 1300, Halifax, Nova Scotia B3J 3R7,
Canada
Crothall Services Canada Inc.
(iii)(iv)
5B rue De Montgolfier, Boucherville, Québec,
J4B 8C4, Canada
Caf-Caf Inc.
(iii)(iv)(v)(vi)
1959
Upper Water Street, Suite 1100, Halifax,
Nova Scotia, B3J 3E5, Canada
East Coast Catering (NS) Limited
(iii)
30 Queen’s Road, St. John’s, Newfoundland and
Labrador, A1C 2A5, Canada
East Coast Catering Limited
(iii)(iv)(v)(viii)
Long Harbour Catering Limited Partnership
(x)
Long Harbour Catering Limited
(iii)(viii)
2580
Rue Dollard, Lasalle, Quebec, H8N 1T2,
Canada
Groupe Compass (Québec) Ltée
(iii)(iv)(v)(vi)(viii)
Chile
Av. Las Condes 11.774, 7th floor, Vitacura,
Santiago, Chile
Cadelsur S.A.
Compass Catering S.A.
Compass Servicios S.A.
Scolarest S.A.
Colombia
Calle 98#11B – 29 Bogotá – Colombia
Compass Group Services Colombia S.A.
Congo
Enceinte de Brometo Centre Ville, BP 5208,
Pointe-Noire, The Democratic Republic of
the Congo
Eurest Services Congo SARL
(ii)
Cyprus
195, Arch. Makariou III Avenue, Neocleous
House, 3030 Limassol, Cyprus
Eurest Support Services (Cyprus) International Ltd
France
123
Avenue de la République – Hall A, 92320
Châtillon, France
Academie Formation Groupe Compass SAS
Caterine Restauration SAS
Eurest Sports & Loisirs SAS
La Puyfolaise de Restauration SAS
Levy Restaurants France SAS
Mediance SAS
Memonett SAS
Servirest SAS
SHRM Angola SAS
(ii)
Société Nouvelle Lecocq SAS
Sud Est Traiteur SAS
Rue des Artisans, ZA de Bel Air, 12000 Rodez,
France
Central Restauration Martel (CRM)
Zone Artisanale, 40500 Bas Mauco, France
Culinaire Des Pays de L’Adour SAS
40, Bd de Dunkerque, 13002 Marseille, France
Société International D’Assistance SA
(ii)
Lieu Dit la Prade, 81580 Soual, France
Occitanie Restauration SAS
3 rue Camille Claudel Atlanparc Bat.M, Zone
Kerluherne, CS 20043, 56890 Plescop, France
Océane de Restauration SAS
Rue Eugène Sué, Zone Industrielle de Blanzat,
03100 Montluçon, France
Sogirest SAS
Gabon
ZONE OPRAG, (Face á Bernabé Nouveau Port),
BP 1292,
Eurest Support Services Gabon SA
(ii)
Port Gentil, Gabon
Germany
Adelbert-Hofmann-Straße 6, 97944 Boxberg,
Germany
Hofmann Catering-Service GmbH
Hofmann-Menü Holdings GmbH
Hofmann Menü-Manufaktur GmbH
Adolphsplatz 1, 20457 Hamburg, Germany
Maison van den Boer Deutschland GmbH
Helfmann-Park 2, 65760, Eschborn, Germany
Compass Group GmbH
Eurest Süd GmbH
Food affairs GmbH
Kanne Café GmbH
Medirest GmbH
MU Catering Bremen GmbH
Konrad-Zuse-Platz 2, 81829 München, Germany
Leonardi HPM GmbH
Leonardi SVM GmbH
Levy Restaurants GmbH
Sankt-Florian-Weg 1, 30880, Laatzen, Germany
orgaMed Betriebsgesellschaft für
Zentralsterilisationen GmbH
PLURAL Gebäudemanagement GmbH
PLURAL Personalservice GmbH
PLURAL Servicepool GmbH
Guernsey
Plaza House, Third Floor, Elizabeth Avenue,
St. Peter Port, Guernsey GY1 2HU
Compass Group Finance Ltd
Hong Kong
Room 805, 8/F, New Kowloon Plaza, 38 Tai Kok
Tsui Road, Kowloon, Hong Kong
Compass Group Hong Kong Ltd
Encore Catering Ltd
Shing Hin Catering Group Ltd
India
7th Floor, Tower B, Spaze I – Tech Park, Sector
49, Sohna Road, Gurgaon – 122018, India
Compass Group (India) Private Limited
Compass India Food Services Private Limited
36 Details of related undertakings of Compass Group PLC continued
217Compass Group PLC Annual Report 2024
Ireland
3rd Floor, 43a, Yeats Way, Parkwest Business
Park, Dublin 12, Ireland
Amstel Limited
(ii)
Catering Management Ireland Limited
(ii)
Cheyenne Limited
(ii)
Compass Catering Services, Ireland Limited
COH Ireland Investments Unlimited Company
(viii)(ix)
Drumburgh Limited
(ii)
Fitzers Catering Events, Venue & Location
Catering Limited
Management Catering Services Limited
National Catering Limited
(ii)
Rushmore Investment Company Limited
(ii)(viii)
Sutcliffe Ireland Limited
Zadca Limited
(ii)
Unit 3, 2050
Orchard Avenue, Cooldown
Commons, Dublin, Ireland
Levy Ireland Limited
Unit 3, Northwest Business Park,
Blanchardstown, Dublin 15, Ireland
Glanmore Foods Limited
79 Fitzwilliam Lane, Dublin 2, Dublin, D02 V567,
Ireland
Gather & Gather International Limited
Gather & Gather Ireland Limited
Isle of Man
Tower House, Loch Promenade, Douglas,
IM1 2LZ, Isle of Man
Queen’s Wharf Insurance Services Limited
(viii)
Japan
Hamarikyu Kensetsu Plaza, 5-5-12, Tsukiji,
Chuo-ku, Tokyo 104-0045, Japan
Fuyo, Inc.
Jersey
44 Esplanade, St Helier, JE4 9WG, Jersey
Malakand Unlimited
(i)
Kazakhstan
060011,
Beibarys Sultan Avenue 506, Kazakhstan
Atyrauskaya Oblast, Atyrau City,
Compass Kazakhstan LLP
Eurest Support Services Kazakhstan LLP
(ii)
ESS Support Services LLP
Mangilik El Avenue, Building 55/23, Block C4.4,
Office No.133, Esil district, Astana, Z05T3F6,
Republic of Kazakhstan
EC Holding Limited
Kenya
209/8919 Sigma Road Off Enterprises Road, PO
BOX 14 662, Nairobi, Kenya
Kenya Oilfield Services Ltd
(ii)
Luxembourg
1-5 rue de I’Innovation, L-1896 Kockelscheuer,
Luxembourg
Eurest Luxembourg S.A.
IMMO Capellen S.A.
Innoclean S.A.
Novelia Senior Services S.A.
Malaysia
Level 21, Suite 21.01, The Gardens South Tower,
Mid Valley City, Lingkaran Syed Putra, 59200
Kuala Lumpur, Malaysia
Compass Group Malaysia Sdn Bhd
Mexico
Calle Jaime Balmes 11, Oficina 101 letra D,
Colonia Los Morales Polanco, Alcaldía Miguel
Hidalgo, 11510 Ciudad de México, Mexico
Compass México Servicios de Soporte, S.A. De C.V.
(iii)(iv)
Eurest Proper Meals de Mexico S.A. de C.V.
(iii)(iv)
Servicios Corporativos Eurest-Proper Meals de
Mexico S.A. De C.V.
(iii)(iv)
251
Little Falls Drive, Wilmington, DE 19808,
USA
Food Works of Mexico, S. de R.L. de C.V.
(ii)(iii)(iv)
Food Works Services of Mexico, S. de R.L. De C.V.
(ii)(iii)(iv)
Netherlands
Haaksbergweg 70, 1101 BZ, Amsterdam,
Netherlands
CGI Holdings (2) B.V.
Compass Group Finance Netherlands B.V.
Compass Group Holding B.V.
Compass Group International 2 B.V.
Compass Group International 3 B.V.
Compass Group International 4 B.V.
Compass Group International 5 B.V.
Compass Group International 9 B.V.
Compass Group International Finance 1 B.V.
Compass Group International Finance 2 B.V.
Compass Group Vending Holding B.V.
Compass Hotels Chertsey B.V.
Eurest Services B.V.
Famous Flavours B.V.
(viii)
Middenweg 168e, 1782BL Den Helder,
Netherlands
Eurest Support Services (ESS) B.V.
De Amert 207, 5462GH, Veghel, Netherlands
Maison van den Boer B.V.
Stationsweg 95, 6711 PM Ede, Netherlands
Xandrion B.V.
New Caledonia
85 Avenue du Général de Gaulle, Immeuble
Carcopino 3000, BP 2353, 98846 Nouméa
Cedex, New Caledonia
Eurest Caledonie SARL
(ii)
New Zealand
Level 3, 7-11 Kenwyn Street, Parnell, Auckland,
1052,
Compass Group New Zealand Limited
New Zealand
Crothall Services Group Limited
(ii)
Eurest NZ Limited
(ii)
Norway
Drengsrudbekken 12, 1383, PO Box 74,
NO-1371,
Compass Group Norge AS
(iii)
Asker, Norway
Stavanger Postterminal, 4068, Stavanger,
Norway
ESS Mobile Offshore Units AS
ESS Support Services AS
Papua New Guinea
c/o Warner Shand Lawyers Waigani, Level 1 RH
Hypermarket, Allotment 1 Section 479
(off Kennedy Road), Gordons NCD,
Papua New Guinea
Eurest (PNG) Catering & Services Ltd
(ii)
Philippines
37F Cyberscape Gamma. Topaz and Ruby
Roads. Ortigas Center, Pasig City
Compass Group Philippines Inc
(ii)
Forusparken 2, 4031 Stavanger, Postboks 8083
Poland
Ul. Olbrachta 94, 01-102 Warszawa, Poland
Compass Group Poland Sp. Z o.o.
Portugal
Edíficio Prime, Avenida Quinta Grande, 53-60,
Alfragide 2614-521 Amadora, Portugal
Eurest (Portugal) – Sociedade Europeia de
Restaurantes, Lda.
Eurest Catering & Services Group Portugal, Lda.
Singapore
82 Ubi Avenue 4, #07-03 Edward Boustead
Centre, 408832,
Compass Group (Singapore) PTE Ltd
(iii)(iv)
Singapore
8 Marina Boulevard, # 05-02, Marina Bay
Financial Centre, 018981, Singapore
Compass Group Asia Pacific PTE. Ltd
(ii)
Spain
Calle Frederic Mompou 5, planta 5a, Edificio
Euro 3, 08960,
Spain
San Just Desvern, Barcelona,
Asistentes Escolares, S.L.
Eurest Catalunya, S.L.U.
Medirest Social Residencias, S.L.U.
Calle Castilla 8-10 – C.P. 50.009, Zaragoza,
Spain
Servicios Renovados de Alimentacion, S.A.U.
Calle Pinar de San José 98, Planta 1a, 28054,
Madrid, Spain
Eurest Parques, S.L.U.
Eurest Servicios Feriales, S.L.U.
Poligono Ugaldeguren 1, Parcela 7, 48160 Derio
(Vizcaya), Spain
Eurest Euskadi S.L.U.
Calle R, s/n, Mercapalma, 07007 Palma de
Mallorca, Baleares, Spain
Compass Group Holdings Spain, S.L.U.
Levy Compass Group Holdings, S.L.
(ii)
Sweden
Box 1183,
Compass Group AB
171 23 Solna, Stockholm, Sweden
Switzerland
c/o BDO AG, Industriestrasse 53, 6312
Steinhausen, Switzerland
Creative New Food Dream Steam GmbH
c/o Buchhaltungs- und Revisions – AG,
Bundesstrasse 3, 6302 Zug, Switzerland
Hofmann Swiss Prime Menue AG
Gwattstrasse 8, 3185 Schmitten FR, Switzerland
Sevita Group GmbH
Oberfeldstrasse 14, 8302, Kloten, Switzerland
Restorama AG
Türkiye
Ünalan Mah. Libadiye Cad. Emaar Square Sit. F
Blok No:82F/73 Üsküdar Istanbul, Türkiye
Euroserve Gűvenlik A.Ş.
Ünalan Mah. Libadiye Cad. Emaar Square Sit. F
Blok No:82F/78 Üsküdar Istanbul, Türkiye
Euroserve Hizmet ve İşletmecilik A.Ş.
Ünalan Mah. Libadiye Cad. Emaar Square Sit. F
Blok No:82F/74 Üsküdar Istanbul, Türkiye
Turkaş Gıda Hizmet ve İşletmecilik A.Ş.
36 Details of related undertakings of Compass Group PLC continued
Consolidated financial statements218
Notes to the consolidated financial statements for the year ended 30 September 2024 continued
United Kingdom
Parklands Court, 24 Parklands, Birmingham
Great Park, Rubery, Birmingham, B45 9PZ,
United Kingdom
14Forty Limited
(ii)
3 Gates Services Limited
(ii)
A.C.M.S. Limited
(ii)
Air Publishing Limited
Bateman Catering Limited
(ii)(vii)
Bateman Healthcare Services Limited
(ii)
Baxter and Platts Limited
(iii)(iv)(v)
Bromwich Catering Limited
(ii)
Business Clean Limited
(ii)
Capitol Catering Management Services Limited
Carlton Catering Partnership Limited
(ii)(iii)
Castle Independent Limited
(ii)
Cataforce Limited
(ii)
Caterexchange Limited
(ii)
Caterskill Group Limited
(ii)
Caterskill Management Limited
(ii)
Chalk Catering Ltd
(ii)
Chartwells Hounslow (Feeding Futures) Limited
(iii)(iv)
Chartwells Limited
(ii)
Circadia Limited
(ii)
Cleaning Support Services Limited
(ii)
Compass Accounting Services Limited
(ii)
Compass Catering Services Limited
(ii)
Compass Cleaning Services Limited
(ii)
Compass Contract Services Limited
(ii)
Compass Contracts UK Limited
(ii)(viii)
Compass Experience Limited
(ii)(vii)
Compass Food Services Limited
Compass Group Medical Benefits Limited
(ii)
Compass Mobile Catering Limited
(ii)
Compass Office Cleaning Services Limited
(ii)
Compass Payroll Services Limited
(ii)
Compass Planning and Design Limited
(ii)
Compass Purchasing Limited
Compass Road Services Limited
(ii)
Compass Security Limited
(ii)(vii)
Compass Security Oldco Group Limited
(ii)
Compass Security Oldco Holdings Limited
(ii)
Compass Security Oldco Investments Limited
(ii)
Compass Services (Midlands) Limited
(ii)
Compass Services for Hospitals Limited
(ii)(viii)
Compass Services Group Limited
(ii)
Compass Services Limited
(ii)
Compass Services Trading Limited
(ii)
Compass Services, UK and Ireland Limited
Compass Services (U.K.) Limited
Compass Staff Services Limited
(ii)
Cookie Jar Limited
(ii)
CRBS Resourcing Limited
(ii)
CRN 1990 (Four) Limited
(ii)
Customised Contract Catering Limited
(ii)
Cygnet Food Holdings Limited
(ii)
Cygnet Foods Limited
Dine Contract Catering Limited
DRE Developments Limited
(ii)
E-Foods Limited
Eat Dot Limited
(ii)(iii)
Eaton Catering Limited
(ii)
Eaton Wine Bars Limited
(ii)
EF Group Ltd
(iii)(iv)
Elvendon Restaurants Limited
Equinoxe Solutions Limited
Eurest Airport Services Limited
(ii)
Eurest Defence Support Services Limited
(ii)
Eurest Offshore Support Services Limited
(ii)(viii)
Eurest Prison Support Services Limited
(ii)
Eurest UK Limited
(ii)
Everson Hewett Limited
(ii)(iii)(iv)
Facilities Management Catering Limited
(ii)
Fads Catering Limited
(ii)
Fairfield Catering Company Limited
(ii)
Fingerprint Managed Services Limited
(ii)
Funpark Caterers Limited
(ii)(iii)
Goodfellows Catering Management Services
Limited
(ii)
Gruppo Events Limited
(ii)
Hallmark Catering Management Limited
(ii)
Hamard Catering Management
Services Limited
(ii)(vii)
Hamard Group Limited
(ii)
Henry Higgins Limited
(ii)
Hospital Hygiene Services Limited
(ii)
Integrated Cleaning Management Limited
Integrated Cleaning Management Support
Services Limited
Keith Prowse Limited
(ii)
Kennedy Brookes Finance Limited
(ii)
Knott Hotels Company of London
(ii)
Langston Scott Limited
(ii)
Leisure Support Services Limited
(iii)(iv)
Leith’s Limited
(ii)
Letheby & Christopher Limited
(ii)
Meal Service Company Limited
(ii)
Milburns Catering Contracts Limited
(ii)
Milburns Limited
(ii)
Milburns Restaurants Limited
(ii)(iii)
National Leisure Catering Limited
(ii)
NLC (Holdings) Limited
(ii)
NLC (Wembley) Limited
(ii)
P & C Morris (Catering) Ltd
(ii)(vii)
P & C Morris Catering Group Limited
(ii)
Payne & Gunter Limited
(ii)
Pennine Services Limited
(ii)
Peter Parfitt Leisure Overseas Travel Limited
(ii)
Peter Parfitt Sport Limited
(ii)(vii)
PPP Infrastructure Management Limited
Prideoak Limited
(ii)
QCL Limited
(ii)
Regency Purchasing Group Limited
(iii)(iv)(v)(vi)
Regency Technologies Ltd
(iii)(iv)
Reliable Refreshments Limited
Rhine Four Limited
(ii)(vii)
Rocket Food Ltd
(iii)
Roux Fine Dining Limited
(ii)
Scolarest Limited
(ii)
Security Office Cleaners Limited
(ii)
Selkirk House (CVH) Limited
(ii)
Selkirk House (FP) Limited
(ii)(iii)(iv)(v)
Selkirk House (GHPL) Limited
(ii)(viii)
Selkirk House (GTP) Limited
(ii)
Selkirk House (WBRK) Limited
Shaw Catering Company Limited
Ski Class Limited
(ii)
Solutions on Systems Ltd
(ii)
Summit Catering Limited
(ii)
Sunway Contract Services Limited
Sutcliffe Catering Midlands Limited
(ii)
Sutcliffe Catering South East Limited
(ii)
Sycamore Newco Limited
(ii)
The Bateman Catering Organization Limited
(ii)(viii)
The Cuisine Centre Limited
(ii)
THF Oil Limited
(ii)
Tunco (1999)
103
Limited
(ii)
Vendepac Holdings Limited
(viii)
Vivo Markets Ltd
Waseley Fifteen Limited
(ii)
Waseley Nominees Limited
(ii)
Wembley Sports Arena Limited
(ii)
Wheeler’s Restaurants Limited
(ii)(vii)
Woodin & Johns Limited
(ii)
Compass House, Guildford Street, Chertsey,
Surrey, KT16 9BQ, United Kingdom
Audrey (London) Limited
(ii)
Audrey Investments Limited
(ii)
Bateman Services Limited
(ii)
Compass Group Finance No.2 Limited
(i)
Compass Group Finance No.3 Limited
Compass Group Finance No.4 Limited
(i)(iii)(iv)(viii)
Compass Group Finance No.5 Limited
(i)(ii)(xi)
Compass Group North America Investments No.2
Compass Group North America Investments
Limited
Compass Group Pension Trustee Company
Limited
(ii)
Compass Group Procurement Limited
Compass Group Trustees Limited
(ii)
Compass Healthcare Group Limited
(ii)(viii)
Compass Hotels Chertsey
(iii)
Compass Nominee Company Number
Fourteen Limited
(ii)
Compass Overseas Holdings Limited
Compass Overseas Holdings No.2 Limited
Compass Overseas Services Limited
(ii)
Compass Pension Trustees Limited
(ii)
Compass Quest Limited
(ii)
Compass Secretaries Limited
(ii)
Compass Site Services Limited
(ii)(vii)
Compass UK Pension Trustee Co Limited
(ii)
CRISP Trustees Limited
(ii)
Meritglen Limited
(ii)(vii)(viii)
Nextonline Limited
(iii)(iv)
Sevita (UK) Limited
The Compass Group Foundation
The Excelsior Insurance Company Limited
Kings Park House, Laurelhill Business Park,
Stirling, Scotland, FK7 9JQ, United Kingdom
Inspire Catering Scotland LLP
Suite D, Pavilion 7 Kingshill Park, Venture Drive,
Arnhill Business Park, Westhill, Aberdeenshire,
AB32 6FL, United Kingdom
CCG (UK) Ltd
(ii)
Coffee Partners Limited
(ii)
Compass Offshore Catering Limited
(ii)(viii)
Compass Scottish Site Services Limited
(ii)
Waseley (CVI) Limited
(ii)
Waseley (CVS) Limited
(ii )
36 Details of related undertakings of Compass Group PLC continued
219Compass Group PLC Annual Report 2024
36 Details of related undertakings of Compass Group PLC continued
1st Floor, 12 Cromac Quay, Cromac Wood,
Belfast, Northern Ireland, BT7 2JD,
United Kingdom
Lough Erne Holiday Village Limited
(ii)
550
Second Floor Thames Valley Park, Reading,
RG6 1PT, United Kingdom
Absolutely Catering Limited
Catermasters Contract Catering Limited
(ii)
CH & Co Catering Group (Holdings) Limited
CH & Co Catering Group Limited
CH & CO Catering Limited
Company of Cooks Ltd
Concerto Group Holdings Limited
(ii)
Concerto Group Limited
Gather & Gather Limited
Orchestra Bidco Limited
Orchestra Holdco Limited
Orchestra Midco Limited
Orchestra Topco Limited
Principal Catering Consultants Limited
Public Restaurant Partner Limited
The Brookwood Partnership Limited
(ii)
Ultimate Experience Limited
(ii)
Vacherin Limited
C/O Evelyn Partners LLP, 4th Floor, Cumberland
House, 15-17 Cumberland Place, Southampton,
SO15 2BG, United Kingdom
Bite Catering Limited
Concerto Events Limited
(ii)
Create Food Limited
(ii)
Creativevents Limited
(ii)
Ensemble Combined Services Limited
(ii)
Harbour and Jones Limited
(ii)
HCMGH Limited
(ii)
Host Management Limited
(ii)
Juice for Life LTD
Upfront Reception Services Limited
Linea House, Harvest Crescent, Fleet,
GU51 2UZ, United Kingdom
Citrea Catering Limited
(ii)
Citrea Limited
Pabulum Catering Limited
(ii)
Pabulum Limited
C/O James Cowper Kreston, 8th Floor South,
Reading Bridge House, George Street, Reading,
RG1 8LS, United Kingdom
Blue Apple Catering Holdings Limited
Blue Apple Contract Catering Limited
United States
2710
Gateway Oaks Drive, Suite 150N,
Sacramento, CA 95833-3505, US
Bon Appétit Management Company Foundation
C&B Holdings, LLC
H&H Catering, L.P.
211
E. 7th Street, Suite 620, Austin,
TX 78701-3218, US
Bamco Restaurants of Texas LLC
Levy Premium Foodservice, L.L.C.
(ii)
Levy Texas Beverages, LLC
Morrison’s Health Care of Texas, Inc.
University Food Services, Inc.
Wolfgang Puck Catering & Events of Texas, LLC
2345
Rice Street, Suite 230, Roseville,
MN 55113,
Canteen One, LLC
US
Street Eats Limited
84 State Street, Boston, MA 02109, US
Fame Food Management Inc.
7 St. Paul Street, Suite 820, Baltimore,
MD 21202,
US
Levy Baltimore, LLC
251
Little Falls Drive, Wilmington, DE 19808, US
A.Anthony, LLC
BenchWorks, Inc.
BlueStar Refreshment Services, LLC
CCL Hospitality Group, LLC
CG Analytics and Consulting, LLC
CLS Par, LLC
Compass LATAM Corp.
Compass LCS, LLC
Compass LV, LLC
Compass Paramount, LLC
Concierge Consulting Services, LLC
Convenience Foods International, Inc.
Coreworks, LLC
Corporate Essentials LLC
Crothall Healthcare Inc.
Eat Cloud LLC
Epicurean Group, LLC
Epicurean Federal, LLC
Epicurean Management Group, LLC
Eurest Services, Inc.
Facilities Holdings, LLC
Flik One, LLC
Fresh & Ready Foods LLC
HC Foods, LLC
Levy Oklahoma, Inc.
Levy Prom Golf, LLC
Morrison Investment Company, Inc.
MMS JV Holdings, LLC
National Produce Consultants, LLC
Parlay Solutions, LLC
RAC Holdings Corp.
(iii)
Rank + Rally, LLC
Restaurant Services I, LLC
S-82 LLC
SpenDifference LLC
The HUB Design Innovation & Hospitality
Services, LLC
Touchpoint Support Services, LLC
Unidine Corporation
Unidine Lifestyles, LLC
Unidine Nevada, LLC
University Food Services, LLC
Wolfgang Puck Catering and Events, LLC
WPL, LLC
Yorkmont Four, Inc.
801
Adlai Stevenson Drive, Springfield,
IL 62703,
E15, LLC
US
Levy (Events) Limited Partnership
Levy (IP) Limited Partnership
Levy Food Service Limited Partnership
Levy GP Corporation
Levy Holdings GP, Inc.
Levy Illinois Limited Partnership
Levy Premium Foodservice Limited Partnership
Levy R&H Limited Partnership
Levy World Limited Partnership
Professional Sports Catering, LLC
Restaurant One Limited Partnership
RT Wholesale, LLC
Superior Limited Partnership
508
Meeting Street, West Columbia,
SC 29169,
US
CGSC Capital, Inc.
450
Laurel Street, 8th Floor, Baton Rouge,
LA 70801,
Coastal Food Service, Inc.
US
S.H.R.M. Catering Services, Inc.
80 State Street, Albany, NY 12207-2543, US
CulinArt Group, Inc.
CulinArt, Inc.
Hudson Yards Catering, LLC
Hudson Yards Enterprises LLC
Hudson Yards Sports & Entertainment LLC
Mazzone Hospitality, LLC
NYMM F&B Management, LLC
Quality Food Management, Inc.
RA Tennis Corp.
RANYST, Inc.
Restaurant Associates LLC
Restaurant Associates, Inc.
Restaurant Services Inc.
USE LI F&B Management, LLC
USE 1V F&B Management, LLC
USE 520 5th F&B Management, LLC
545
West 30th Street F&B Management, LLC
2626
Glenwood Avenue, Suite 550, Raleigh,
NC 27608,
Compass 2K12 Services, LLC
US
Compass HE Services, LLC
Compass One, LLC
Compass Two, LLC
Strategic Dining Services, LLC
Waveguide LLC
2595
Interstate Drive, Suite 103, Harrisburg,
PA 17110,
Crothall Facilities Management, Inc.
US
Custom Management Corporation of Pennsylvania
Morrison’s Custom Management Corporation of
Pennsylvania
Newport Food Service, Inc.
40 Technology Pkwy South, #300, Norcross,
GA 30092,
Food Services Management By Mgr, LLC
US
Morrison Alumni Association, Inc.
The M-Power Foundation, Inc.
221
Bolivar Street, Jefferson City, MO 65101, US
Fresh Ideas Management, LLC
Princeton South Corporate Ctr, Suite 160, 100
Charles Ewing Blvd, Ewing, NJ 08628, US
Gourmet Dining, LLC
2900
SW Wanamaker Drive, Suite 204, Topeka,
KS 66614,
Levy Kansas, LLC
US
Myron Green Corporation
PFM Kansas, Inc.
Treat America Limited
2908
Poston Avenue, Nashville, TN 37203, US
Southeast Service Corporation
8585
Old Dairy Road, Suite 208, Juneau,
AK 99801,
Statewide Services, Inc.
US
600
S, 2nd Street, Suite 155, Bismarck,
ND 58504,
Compass ND, LLC
US
2 Sun Court, Suite 400, Peachtree Corners,
GA 30092,
Eversource LLC
US
Consolidated financial statements220
Notes to the consolidated financial statements for the year ended 30 September 2024 continued
Other subsidiaries, joint arrangements,
memberships, associates and other %
significant holdings holding
Australia
Level 3, 12 Newcastle Street, Perth
6000,
ESS Thalanyji PTY Ltd
Australia
60%
Canada
1 Prologis Boulevard, Suite 400, Mississauga,
Ontario, L5W 0G2, Canada
Chef’s Hall Inc.
(iii)
67%
Compass Group Sports and
Entertainment – (Quebec)
(x)
67%
Mercatino Foods Inc.
(iii)(iv)
60%
2455624
Ontario Inc.
(iii)
51%
2686613
Ontario Inc.
(iii)
51%
Ace Kosher Inc.
(iii)(iv)(v)
51%
Bluff FD Inc.
(iii)
51%
FDX Inc.
(iii)
51%
Food Dudes Restaurant Group Inc.
(iii)(iv)(v)
51%
The Food Dudes Inc.
(iii)(iv)(v)(vi)
51%
ECC – ESS Support Services
(x)
50%
2265668
Ontario Limited
(iii)(iv)(v)(vi)(viii)
49%
Amik Catering LP
(x)
49%
Dease River – ESS Support Services
(x)
49%
Dene West Limited Partnership
(x)
49%
ESS – East Arm Camp Services
(x)
49%
ESS – Kaatodh Camp Services
(x)
49%
ESS – Loon River Support Services
(x)
49%
ESS – Mi’kmaq Support Services
(x)
49%
ESS – Missanabie Cree Support Services
(x)
49%
ESS – Na Cho Nyak Dun Camp Services
(x)
49%
ESS – N’deh Support Services
(x)
49%
ESS – Ochapowace Support Services
(x)
 49%
ESS – Pessamit Camp Services
(x)
49%
ESS – Wapan Manawan Services de Soutien
(x)
49%
ESS-CreeQuest Support Services
49%
ESS-Nuvumiut Support Services
(x)
49%
Nuvumiut-ESS Support Services
(x)
49%
Services de Soutien ESS-SDEUM
(x)
49%
ESS-White River Support Services
49%
ESS Haisla Support Services
(x)
49%
ESS HLFN Support Services
(x)
49%
ESS KNRA Support Services
(x)
49%
ESS Komatik Support Services
(x)
49%
ESS Liard First Nation Support Services
(x)
49%
ESS McKenzie Support Services
(x)
49%
ESS Okanagan Indian Band Support
Services
(x)
49%
ESS Tataskweyak Camp Services
(x)
49%
ESS/Bushmaster Camp Services
(x)
49%
ESS/McLeod Lake Indian Band Support
Services
(x)
 49%
ESS/Mosakahiken Cree Nation Support
Services
(x)
 49%
ESS/Takla Lake Support Services
(x)
49%
ESS/WEDC Support Services
(x)
49%
First North Catering
(x)
49%
Hill Plain – ESS Support Services
(x)
49%
HLCS-ESS Support Services
(x)
49%
JCP – ESS Support Services
(x)
49%
KDM – ESS Support Services
(x)
49%
Metis Infinity – ESS Support Services
49%
Mi’kma’ki Domiculture
49%
Mi’Kmaq-ECC Nova Scotia Support
Services
(x)
49%
Nisga’a Village – ESS Support Services
(x)
49%
Poplar Point Catering
(x)
49%
Songhees Nation Support Services
(x)
49%
30 Queen’s Road, St. John’s,
Newfoundland and Labrador, A1C 2A5,
Canada
Labrador Catering Inc.
(iii)
49%
Labrador Catering LP
(x)
49%
Clearwater River Dene Nation Reserve
No. 222, P.O. Box 5050, Clearwater,
Saskatchewan, S0M 3H0, Canada
Clearwater Catering Limited
(iii)(iv)(v)(vi)
49%
77 King Street West, No. 400, Toronto,
Ontario, M5K 0A1, Canada
O&B Yonge Richmond LP*
33.4%
1600-421 7 AVE SW, Calgary, Alberta
T2P 4K9, Canada
Komplete Modular Solutions Ltd.
(iii)
(iv)
51%
Rimfire Solutions Ltd.
40%
Finland
Linnankatu 26 A 41, 20100, Turku,
Finland
Unica Oy
49%
Keskussairaalantie Opinkivi 2, 40600
Jyväskylä, Finland
Semma Oy
45%
France
Le Puy Du Fou, 85590 Les Epesses,
France
Puy Du Fou Restauration SAS
99.8%
Germany
Steenbeker Weg 25, 24106, Kiel,
Germany
Lubinus – orgaMed Sterilgut GmbH
49%
India
1st Floor, VK Kalyani Commercial
Complex, Sankey Rd, Opp: BDA Head
Office, Bengaluru, Karnataka, 560020,
India
Bottle Lab Technologies Private Limited
79.55%
Nextup Technologies Private Limited
79.55%
Innov8 Raj Vilas, Lower Ground Floor,
Salcon Ras Vilas, D-1 Saket District
Centre, Saket (South Delhi), South Delhi,
New Delhi-110017, India
I.C.S Foods Private Limited
70%
Japan
Hamarikyu Kensetsu Plaza, 5-5-12,
Tsukiji, Chuo-ku, Tokyo 104-0045,
Japan
Chiyoda Kyushoku Services Co., Ltd
90%
5-7-5, Chiyoda, Naka-ku, Nagoya-City,
Aichi-Prefecture, 460-0012, Japan
Seiyo General Food Co., Ltd
50%
Kazakhstan
060011,
city, Beibarys Sultan avenue 506,
Kazakhstan
Atyrauskaya Oblast, Atyrau
Eurest Support Services Company B LLP
(ii)
50%
Luxembourg
39 Boulevard Joseph, II L-1840,
Luxembourg
Geria SA
25%
Malaysia
Suite 1301,
13th Floor, City Plaza Jalan
Tebrau, 80300
Johor Bahru Johor,
Malaysia
Knusford Compass Sdn. Bhd.
49%
Monaco
30, Boulevard Princesse Charlotte Le
Labor – RDC, 98000 MC, Monaco
Eurest Monaco S.A.
99.99%
Netherlands
Haaksbergweg 70, 1101 BZ,
Amsterdam, Netherlands
Compass Group International Finance C.V.
(x)
100%
Norway
Okesnoyveien 16, 1366, Lysaker, 1366,
Norway
Forpleiningstjenester AS
Harbitzalléen 2A, 0275 Oslo, PÅ Box
33.33%
4148,
Gress Gruppen AS
Papua New Guinea
Sjølyst, 0217 Oslo, Norway
33.33%
c/o Warner Shand Lawyers Waigani,
Level 1 RH Hypermarket, Allotment 1
Section 479 (off Kennedy Road),
Gordons NCD, Papua New Guinea
Eurest OKAS Catering Ltd
(ii)
55%
Eurest Lotic (PNG) JV Ltd
(ii)
50%
Qatar
2 Floor, Al Mana Commercial Tower,
C-Ring road, Doha, PO BOX 22481,
Qatar
Compass Catering Services WLL
20%
Saudi Arabia
3927,
Al Jawhara Dist 9618, Saudi Arabia
Al Khobar, Street Prince Sultan,
Compass Arabia Co. Ltd (LLC)
30%
Spain
Calle Pinar de San José 98, Planta 1a,
28054,
Eurest Servicios, S.L
Madrid, Spain
99%
United Kingdom
Parklands Court, 24 Parklands,
Birmingham Great Park, Rubery,
Birmingham, B45 9PZ, United Kingdom
Quaglino’s Limited
(iii)
99%
County Ground, Edgbaston,
Birmingham, B5 7QU, United Kingdom
Edgbaston Experience Limited
(iii)(iv)
 25%
67 Shrivenham Hundred Business Park
Majors Road, Watchfield, Swindon,
Oxfordshire, SN6 8TY, United Kingdom
Benchmark Designs Limited
(iii)
50%
Lower Ground 04 Edinburgh House,
154-182 Kennington Lane, London,
SE11 5DP, United Kingdom
Peppermint Events Limited
50%
POP (Purveyors of Plenty) Collective
Limited
50%
2nd Floor, Fourways House,57 Hilton
Street, Manchester, M1 2EJ, United
Kingdom
FC Sportswear and Retail Services
Limited
45%
Rugby House, Allianz Stadium, 200
Whitton Road, Twickenham, Middlesex,
TW2 7BA, United Kingdom
Twickenham Experience Limited
15.53%
1
1. As a percentage of nominal value of total share capital in issue.
36 Details of related undertakings of Compass Group PLC continued
221Compass Group PLC Annual Report 2024
The Oval, Kennington, London,
SE11 5SS, United Kingdom
Oval Events Holdings Limited
(iv)(v)(vi)
37.5%
Oval Events Limited
(iv)(v)(vi)
37.5%
1st Floor 4 Tabernacle Street, London,
EC2A 4LU, United Kingdom
Cucumber Holdings Limited
(iii)
33.9%
Kerb Berlin Limited
(iii)
33.9%
Kerb Events Limited
(iii)(iv)
 33.9%
Kerb Group Limited
(iii)(v)(vi)
33.9%
Kerb Seven Dials Limited
(iii)
33.9%
Kerb Ventures Limited
(iii)
33.9%
United States
251
Little Falls Drive, Wilmington,
DE 19808,
HHP-MMS JV1, LLC
US
90%
HHP-Partner COL, LLC
90%
HHP-Partner, LLC
90%
Levy LA Concessions, LLC
62.5%
Learfield Levy Foodservice, LLC
50%
DIOSS LLC
49%
Pure Solutions, LLC
49%
Thompson Facilities Services LLC
49%
Thompson Hospitality Services, LLC
49%
Chicago Restaurant Partners, LLC
42%
Two Tree Management, LLC
30%
8585
Old Dairy Road, Suite 208,
Juneau, AK 99801, US
KIJIK/ESS, LLC
80%
Statewide/GanaAYoo JV
50%
980
N. Michigan Ave., Suite 400,
Chicago, IL 60611, US
Convention Hospitality Partners
75%
Atlanta Sports Catering
50%
Orlando Foodservice Partners
50%
84 State Street, Boston, MA 02109, US
Levy Maryland, LLC
74%
2710
Gateway Oaks Drive, Suite 150N,
Sacramento, CA 95833-3505, US
Cosmopolitan Catering, LLC
60%
1090
Vermont Ave N.W., Washington,
DC 20005,
Seasons Culinary Services, Inc
US
50.1%
PO Box 1409, Lakeville, CT 06039, US
Tory Hill, LLC
49%
4605
Duke Drive, Suite 110, Mason,
OH 45040,
Linkage Solutions, LLC
US
49%
3903
Volunteer Drive, Suite 200,
Chattanooga, TN 37416, US
Sifted, LLC
40%
1209
Orange Street, Wilmington,
DE 19801,
AEG Venue Management Holdings, LLC
US
38%
Link-Age Venture Labs, LLC
30%
945
Market Street, San Francisco,
CA 94103,
Saluhall SF Inc.
US
33.9%
1201
Hays Street, Tallahassee,
FL 32301,
Food Fleet Inc.
US
25%
36 Details of related undertakings of Compass Group PLC continued
Consolidated financial statements222
Notes to the consolidated financial statements for the year ended 30 September 2024 continued
Compass Group PLC Annual Report 2024 223
Parent Company balance sheet at 30 September 2024
30 September
Compass Group PLC
Notes
2024
£m
2023
£m
Fixed assets
Investments in subsidiary undertakings 2 6,763 6,714
Current assets
Debtors: amounts falling due within one year 3 1,413 2,034
Debtors: amounts falling due after more than one year 3
5,881 5,993
Cash at bank and in hand
12 434
Current assets
7,306 8,461
Creditors: amounts falling due within one year
Creditors: amounts falling due within one year 4
(7,245) (9,271)
Net current assets/(liabilities)
61 (810)
Total assets less current liabilities
Total assets less current liabilities 6,824 5,904
Creditors: amounts falling due after more than one year
Creditors: amounts falling due after more than one year 4 (3,293) (2,500)
Provisions
(3) (3)
Net assets
3,528 3,401
Equity
Share capital 6 198 198
Share premium
189 189
Capital redemption reserve
295 295
Own shares reserve
(1,857) (1,513)
Retained earnings
1
4,703 4,232
Total equity
3,528 3,401
1. The Company’s profit on ordinary activities after tax was £1,227m (2023: £1,077m), which includes dividend income of £1,306m (2023: £1,039m) from an
intermediate holding company, Hospitality Holdings Limited.
The accompanying notes form part of these Parent Company financial statements.
Approved by the Board of Directors on 26 November 2024 and signed on its behalf by:
Dominic Blakemore, Director
Petros Parras, Director
224 Parent Company financial statements
Parent Company statement of changes in equity for the year ended 30 September 2024
Equity
Share
capital
£m
Share
premium
£m
Capital
redemption
reserve
£m
Own
shares
reserve
£m
Retained
earnings
1
£m
Total
£m
At 1 October 2022 198 189 295 (515) 3,785 3,952
Own shares held by the Compass Group PLC All
Share Schemes Trust
– – – (4) – (4)
Profit for the year – – – – 1,077 1,077
Fair value of share-based payments – – – – 44 44
Cost of shares transferred to employees
– – – 26 (26) –
Purchase of own shares – share buyback
– – – (1,004) – (1,004)
Purchase of own shares – employee share-based
payments
– – – (16) – (16)
Dividends paid to shareholders
2
– – – – (648) (648)
At 30 September 2023
198 189 295 (1,513) 4,232 3,401
Profit for the year – – – – 1,227 1,227
Fair value of share-based payments
– – – – 54
54
Cost of shares transferred to employees
– – – 52 (52)
–
Purchase of own shares – share buyback
– – – (396) –
(396)
Dividends paid to shareholders
2
– – – – (758) (758)
At 30 September 2024
198 189 295 (1,857) 4,703
3,528
1. The non-distributable portion of retained earnings is £389m at 30 September 2024 (2023: £340m).
2. Details of the £758m ($963m) of dividends paid to equity shareholders in 2024 (2023: £648m ($796m)) are shown in note 8 to the consolidated financial
statements.
The accompanying notes form part of these Parent Company financial statements.
Capital redemption reserve
The nominal value of shares in the Company purchased and subsequently cancelled is shown as a reduction in share capital and an equal and
opposite transfer to the capital redemption reserve.
Own shares reserve
The own shares reserve represents shares in Compass Group PLC held either in treasury, including transaction costs, or by employee share trusts
to satisfy liabilities to employees for long-term incentive plans. Own shares are treated as a deduction to equity until the shares are cancelled,
reissued or sold, at which point they are transferred to retained earnings.
The own shares reserve comprises £1,851m (2023: £1,501m) in respect of 87,992,005 (2023: 70,170,859) shares in Compass Group PLC held
in treasury and £6m (2023: £12m) in respect of 298,712 (2023: 573,223) shares in Compass Group PLC held by the Compass Group PLC All
Share Schemes Trust (ASST).
The share buyback announced in May 2023 was completed in November 2023, with 6,357,210 shares repurchased during the year for a total
price, including transaction costs, of £131m.
In November 2023, the Company announced that it was commencing a further share buyback to repurchase up to $500m of its own shares.
During the year, 14,049,546 shares were repurchased for a total price, including transaction costs, of £312m ($399m), of which £307m was paid
in cash during the year. The mandate issued to the broker to purchase the shares was irrevocable at 30 September 2024 and, therefore, a
creditor of £84m in respect of the value of the shares not yet purchased has been recognised. In the period from 1 October to 26 November 2024,
2,356,198 shares were repurchased for a total price, including transaction costs, of £60m. The share buyback is scheduled to complete by
17 December 2024.
The ASST is a discretionary trust for the benefit of employees and the shares held are used to satisfy some of the Group’s liabilities to employees
for long-term incentive plans. During the year, no shares (2023: 800,000) in Compass Group PLC were purchased by the ASST and 274,511
(2023: 448,686) shares were released from the ASST to satisfy awards under the Company’s long-term incentive plans. At 30 September 2024,
the nominal value of the shares in the ASST was £33,008 (2023: £63,341), with a market value of £7m (2023: £11m).
No treasury shares have been reissued since the end of the financial year to the date of this Report. On 1 October 2024, 2,393 shares were
released by the ASST to satisfy an award under the Compass Group PLC Restricted Share Award Plan which had vested on 30 September 2024.
Compass Group PLC Annual Report 2024 225
Notes to the Parent Company financial statements for the year ended 30 September 2024
1 Basis of preparation
Introduction
The separate financial statements of Compass Group PLC (the
Company) have been prepared on a going concern basis, as discussed
on page 145, in accordance with Financial Reporting Standard 101
Reduced Disclosure Framework (FRS 101). The separate financial
statements have been prepared under the historical cost convention,
as modified by the revaluation of certain financial instruments.
In preparing these financial statements, the Company applies the
recognition, measurement and disclosure requirements of UK-
adopted International Accounting Standards, but makes amendments
where necessary to comply with the Companies Act 2006, and has set
out below where advantage of the FRS 101 disclosure exemptions has
been taken.
The financial statements present information about the Company as
an individual undertaking, not as a Group undertaking, and are
included in the Compass Group PLC consolidated financial
statements for the year ended 30 September 2024. As permitted by
section 408 of the Companies Act 2006, the Company has not
presented its own income statement. The amount of profit for the year
of the Company is disclosed in the Parent Company balance sheet and
statement of changes in equity.
FRS 101 exemptions
In these financial statements, the Company has applied the
exemptions under FRS 101 in respect of the following disclosures:
– cash flow statement and related notes
– financial instruments and fair values
– share-based payments
– transactions with wholly-owned subsidiaries
– compensation of key management personnel
– capital management
– the effect of new but not yet effective accounting standards
Significant accounting policies
The significant accounting policies applied in the preparation of
these separate financial statements are set out below. These policies
have been applied consistently to all the years presented, unless
otherwise stated.
Changes in accounting policies
There have been no significant changes in accounting policies during
the year.
Investments in subsidiary undertakings
Investments are stated at cost less provision for any impairment. In
the opinion of the directors, the value of such investments is not less
than shown at the balance sheet date.
Investment income is measured at the fair value of the consideration
received or receivable. It represents dividend income, which is
recognised when the right to receive payment is established.
Foreign currency
Assets and liabilities in foreign currencies are translated into sterling
at the rates of exchange ruling at the year-end. Gains and losses
arising on retranslation are included in the income statement for
the period.
Financial assets and liabilities
Financial assets and liabilities are recognised on the Company’s
balance sheet when the Company becomes a party to the contractual
provisions of the instrument and derecognised when it ceases to be
party to such provisions. Financial assets are classified as current if
they are expected to be received within 12 months of the balance
sheet date. Financial liabilities are classified as current if they are
legally due to be paid within 12 months of the balance sheet date.
Financial assets and liabilities are initially recorded at fair value
including, where permitted by IFRS 9 Financial Instruments, any
directly attributable transaction costs. For those financial assets that
are not subsequently held at fair value, the carrying amounts are
reduced by a provision equal to the lifetime expected credit losses
using historical and forward-looking data on credit risk.
The Company classifies its financial assets and liabilities into the
following categories:
– financial assets and liabilities at amortised cost
– financial assets and liabilities at fair value through profit or loss
Where financial assets or liabilities are eligible to be carried at either
amortised cost or fair value, the Company does not apply the fair
value option.
The Company uses derivative financial instruments to manage its
exposure to fluctuations in foreign exchange rates and interest rates.
Derivative instruments utilised include interest rate swaps, currency
swaps and forward currency contracts. The Company and Group
policy is disclosed in note 20 to the consolidated financial statements.
226 Parent Company financial statements
Notes to the Parent Company financial statements for the year ended 30 September 2024 continued
1 Basis of preparation continued
Borrowings are recognised initially at fair value, net of transaction
costs incurred. Borrowings are subsequently stated at amortised cost
unless they are part of a fair value hedge accounting relationship.
Borrowings that are part of a fair value hedge accounting relationship
are measured at amortised cost adjusted for the fair value attributable
to the risk being hedged.
Amounts owed by subsidiary undertakings are initially measured at
fair value and are subsequently reported at amortised cost. Provisions
on intra-group receivables are calculated at an amount equal to the
lifetime expected credit losses using historical and forward-looking
data on credit risk.
Amounts owed to subsidiary undertakings are initially measured at fair
value and are subsequently reported at amortised cost.
Non-interest-bearing payables are stated at their nominal value as
they are due on demand.
Dividends
Interim dividends are recognised in the financial statements when
they are paid. Final dividends, which are subject to approval by the
shareholders in a general meeting after the balance sheet date, are
not included as a liability in the financial statements. Instead, they are
disclosed as a post-balance sheet event and recognised in the
financial statements when they are approved (see note 7).
Deferred tax
Deferred tax is provided at the anticipated rates on temporary
differences arising from the inclusion of items of income and
expenditure in tax computations in periods different from those in
which they are included in the financial statements. Deferred tax
assets are recognised to the extent that it is regarded as more likely
than not that they will be recovered.
Share-based payments
The Company issues equity-settled share-based payments to certain
employees, which are measured at fair value at the date of grant using
option pricing models. The fair value is expensed on a straight-line
basis over the vesting period based on the Company’s estimate of the
number of shares expected to vest.
The issue of share incentives by the Company to employees of its
subsidiaries represents additional capital contributions. An addition to
the Company’s investment in subsidiary undertakings is reported with
a corresponding increase in shareholders’ funds.
Financial guarantees and loan commitments
Financial guarantee contract liabilities are measured initially at their
fair values. These liabilities are subsequently measured at the higher
of the expected credit loss determined under IFRS 9 Financial
Instruments and the initial fair value.
Compass Group PLC Annual Report 2024 227
2 Investments in subsidiary undertakings
Investments in subsidiary undertakings
2024
£m
2023
£m
Cost
At 1 October 6,715 1,106
Additions
– 5,570
Share-based payments to employees of subsidiaries
54 44
Recharged to subsidiaries during the year
(5) (5)
At 30 September
6,764 6,715
Provisions
At 1 October and 30 September (1) (1)
Net book value
At 30 September 6,763 6,714
In 2023, the Company subscribed for shares in a direct subsidiary company, Hospitality Holdings Limited, for consideration totalling £5.6bn as
part of a restructuring of certain intra-group loans which resulted in an increase in investments in subsidiary undertakings of £5.6bn and a
corresponding change in balances with subsidiary undertakings.
On the basis that the Company’s investments in subsidiary undertakings mainly comprise an investment in Hospitality Holdings Limited, which
indirectly owns all of the Company’s trading businesses, there are no indicators that the carrying value may be impaired.
The principal subsidiary undertakings are listed in note 36 to the consolidated financial statements.
3 Debtors
2024 2023
Debtors
Notes
Falling due
within
one year
£m
Falling due
after more
than one year
£m
Total
£m
Falling due
within
one year
£m
Falling due
after more
than one year
£m
Total
£m
Amounts owed by subsidiary undertakings 1,375 5,827 7,202
2,016 5,948 7,964
Derivative financial instruments 5 26 52 78
18 45 63
Current tax 12 –
12
– – –
Deferred tax
1
– 2 2
– – –
Total 1,413 5,881
7,294
2,034 5,993 8,027
1. The deferred tax asset relates to net losses on certain derivative financial instruments recognised in the income statement.
Amounts owed by subsidiary undertakings may be interest-free or interest-bearing loans. Interest-free loans are repayable on demand. Interest-
bearing loans incur interest at fixed rates (between 5.0% and 7.0%) or various floating rates with margins ranging from 0% to 1.50% (subject to a
minimum all-in rate of 0%) and have maturities ranging from repayable on demand up to May 2031.
The book value of amounts owed by subsidiary undertakings falling due within one year approximates to fair value due to the short-term nature of
these receivables. The fair value of amounts owed by subsidiary undertakings falling due after more than one year is £5,721m (2023: £5,556m).
Details of the derivative financial instruments are shown in note 20 to the consolidated financial statements.
4 Creditors
2024 2023
Creditors
Notes
Falling due
within
one year
£m
Falling due
after more
than one year
£m
Total
£m
Falling due
within
one year
£m
Falling due
after more
than one year
£m
Total
£m
Issued debt 5 538 2,022 2,560 288 1,510 1,798
Commercial paper 5 19 – 19 – – –
Bank overdrafts 5 634 –
634 410 – 410
Amounts owed to subsidiary undertakings 5 5,920 1,131
7,051 8,341 773 9,114
Derivative financial instruments 5 15 140
155 37 207 244
Other payables
1
5 89 – 89 152 – 152
Accruals 30 –
30 25 – 25
Current tax – –
– 18 – 18
Deferred tax
2
– – – – 10 10
Total 7,245 3,293
10,538 9,271 2,500 11,771
1. Represents a commitment in respect of the share buyback.
2. The deferred tax liability relates to net gains on certain derivative financial instruments recognised in the income statement.
228 Parent Company financial statements
Notes to the Parent Company financial statements for the year ended 30 September 2024 continued
4 Creditors continued
Issued debt
Nominal value Redeemable
Interest
2024
Carrying
value
£m
2023
Carrying
value
£m
US Private Placement $352m Oct 2023 4.12% – 288
US Private Placement $100m Dec 2024 3.54% 75 82
Eurobond £250m Sep 2025 2.00%
243 231
US Private Placement $300m Sep 2025 3.81%
220 235
Eurobond £250m Jun 2026 3.85%
250 249
US Private Placement $300m Dec 2026 3.64%
224 246
Eurobond £300m Jul 2029 2.00%
263 245
Eurobond €750m Feb 2031 3.25%
633 –
Eurobond £250m Sep 2032 4.38%
237 222
Eurobond €500m Sep 2033 3.25%
415 –
Total
2,560 1,798
The Company has a £2,000m Revolving Credit Facility (RCF) committed to August 2026. At 30 September 2024, no amounts were drawn under
the RCF (2023: £nil).
The Company has a $4bn commercial paper programme. Commercial paper is issued to meet short-term liquidity requirements and is supported
by the RCF. At 30 September 2024, commercial paper of £19m was outstanding under the programme (2023: £nil).
Amounts owed to subsidiary undertakings may be interest-free or interest-bearing loans. Interest-free loans are repayable on demand and
classified as current. Interest-bearing loans incur interest at fixed rates (between 1.60% and 3.10%) or various floating rates with margins ranging
from -0.15% to +0.70% (subject to a minimum all-in rate of 0%) and have maturities ranging from repayable on demand up to September 2048.
The book value of amounts owed to subsidiary undertakings falling due within one year approximates to fair value due to the short-term nature of
these payables. The fair value of amounts owed to subsidiary undertakings falling due after more than one year is shown below:
Amounts owed to subsidiary undertakings
falling due after more than one year
2024 2023
Nominal value Redeemable
Interest
Carrying
value
£m
Fair
value
£m
Carrying
value
£m
Fair
value
£m
Euro intra-group loan €405m Jul 2027 2.05% 337 332 – –
Euro intra-group loan €500m Sep 2028 1.60% 385 398 375 387
Euro intra-group loan €500m Mar 2030 3.10%
409 419 398 409
Total
1,131 1,149 773 796
Details of the derivative financial instruments are shown in note 20 to the consolidated financial statements.
Compass Group PLC Annual Report 2024 229
5 Maturity of financial liabilities and derivative financial instruments
The maturity of financial liabilities and derivative financial instruments at 30 September is as follows:
2024
Maturity of financial liabilities and derivative financial instruments
Less than 1
year
£m
Between 1
and 2 years
£m
Between 2
and 5 years
£m
Over 5 years
£m
Total
£m
Issued debt 538 250 487 1,285 2,560
Commercial paper 19 – – – 19
Bank overdrafts 634 – – –
634
Amounts owed to subsidiary undertakings 5,920 – 722 409
7,051
Derivative financial instruments (10) (8) 110 (15)
77
Other payables 89 – – –
89
2023
Maturity of financial liabilities and derivative financial instruments
Less than 1
year
£m
Between 1
and 2 years
£m
Between 2
and 5 years
£m
Over 5 years
£m
Total
£m
Issued debt 288 548 495 467 1,798
Bank overdrafts 410 – – – 410
Amounts owed to subsidiary undertakings 8,341 – 375 398 9,114
Derivative financial instruments 19 (5) 73 94 181
Other payables 152 – – – 152
6 Share capital
Details of the share capital and share-based payments of the Company are shown in notes 25 and 26 to the consolidated financial statements.
Post-balance sheet events
In the period from 1 October to 26 November 2024, 2,356,198 shares were repurchased for a total price, including transaction costs, of £60m
under the share buyback announced in November 2023. The share buyback is scheduled to complete by 17 December 2024.
On 26 November 2024, a final dividend in respect of 2024 of 39.1c per share, $664m in aggregate, was proposed.
8 Other information
Company audit fee
Fees payable to the Company’s auditor for the audit of the Company’s annual financial statements totalled £1.9m (2023: £1.9m).
Directors
Information on directors’ remuneration, long-term incentive plans, pension contributions and entitlements can be found in the audited section of
the Directors’ Remuneration Report on pages 86 to 118 and forms part of these accounts.
Employees
The Company had no direct employees in the course of the year (2023: none).
Related party transactions
With the exception of transactions between the Company and its wholly-owned subsidiaries, there are no material related party transactions in the
current or prior year.
Shareholder information
Company’s registrar
The Company’s registrar is Link Group. Shareholders should contact
Link directly if they have questions about their shareholding. Link
Group can be contacted by:
– post: Central Square, 29 Wellington Street, Leeds LS1 4DL, UK
– email: shareholderenquiries@linkgroup.co.uk
– telephone: within the UK: Freephone 0800 029 4520, and from
overseas: +44 333 300 1568. Lines are open between 9.00 am and
5.30 pm UK time, Monday to Friday, excluding public holidays in
England and Wales
Manage your holding online
Shareholders can register online to view their shareholding
details using the Share Portal, a service offered by the registrar at:
www.signalshares.com. To register for the Share Portal, shareholders
need their investor code, which is shown on their share certificate or
dividend confirmation. The service enables shareholders to check
their shareholdings, gain easy access to a range of shareholder
information, and to appoint a proxy to attend general meetings.
Electronic communications and published information
The Annual Report and Accounts and all other shareholder
communications can be found on our website: www.compass-group.com.
Shareholders are encouraged to receive and view documents from the
Company electronically. Shareholders will be notified by email each
time a new shareholder document is available. Register to receive
email communications at: www.signalshares.com. To receive a copy
of the Annual Report or Notice of Annual General Meeting in another
format, e.g. large print, Braille or an audio version, contact the Group
Secretariat, CompassGroup PLC, Compass House, Guildford Street,
Chertsey, Surrey KT16 9BQ.
Dividends
The Company normally pays a dividend twice each year. Dividends are
paid in accordance with the instructions given to the registrar. We
strongly encourage shareholders to have dividends paid directly into
their bank account. Alternatively, shareholders can reinvest the
dividends via the Dividend Reinvestment Plan. Shareholders who
appear on the Register of Members will automatically receive their
dividends in sterling. Shareholders who wish to receive their dividends
in US dollars should contact our registrar for a dividend election form
and further information regarding the US dollar dividend option.
Alternatively, shareholders can view and update their current dividend
elections by registering to use the Link Share Portal. Details above.
Most shareholders resident outside the UK can have dividends of
more than £10 paid into their bank account directly via the Link Group
international payments service. Details and terms and conditions may
be viewed at ips.linkgroup.eu. Shareholders outside the UK who are
unable to use the international payments service should contact Link
to discuss the payment options available.
Share price information, share dealing and ShareGift
The price of a Compass share is available on our website:
www.compass-group.com. Shares can be traded through most banks,
building societies, stockbrokers or online dealing services.
ShareGift operates a scheme enabling shareholders with small
shareholdings that may be too small to sell economically to
makedonations of shares to charity. Details of the scheme can be
obtained fromShareGift’s website: www.sharegift.org, by telephoning:
+44 20 7930 3737, or by email: help@sharegift.org.
American Depositary Receipts
Compass Group PLC operates an American Depositary Receipts
(ADR) programme under which ADRs are traded on the over-the-
counter market under the symbol CMPGY. One ADR represents one
ordinary Compass share. BNY is the depositary bank and maintains
the Company’s ADR register. BNY can be contacted by:
– post: BNY Shareowner Services, P.O. Box 43006, Providence,
Rhode Island 02940-3078, USA
– overnight post: BNY Shareowner Services, 150 Royall St.
Suite 101, Canton, Massachusetts 02021, USA
– email: shrrelations@cpushareownerservices.com
– telephone: +1 888 269 2377 (toll-free number in the USA) or
+1 201 680 6825 (international)
Further information can also be found on BNY’s website:
www.adrbny.com and searching by using the symbol CMPGY.
Identity theft
Shareholders should take measures to protect their personal
information and Compass Group PLC shares:
– keep all Compass correspondence in a safe place, or destroy
correspondence by shredding
– inform the registrar, Link Group, when changing address
– if a letter is received from Link Group regarding a change of
address and there has been no change of address, contact
the registrar immediately using the contact information at
the top of this page
– have dividends paid directly into a bank or building society
account. This will reduce the risk of a cheque being
intercepted or lost in the post
– when changing a bank or building society account, inform
the registrar of the details of the new account and respond,
as requested, to any letters Link Group sends regarding
this matter
Shareholder Information230
www.compass-group.com
Warning about share fraud
Investment scams are often sophisticated and difficult to spot.
Fraudsters are persuasive and use high-pressure tactics to lure
investors into scams. Shareholders should be wary if they are
contacted out of the blue, pressured to invest quickly or
promised returns that sound too good to be true. The higher the
return promised, the more likely it’s a high-risk investment or a
scam.
The Financial Conduct Authority (FCA) has issued guidance for
shareholders on how to recognise and avoid investment fraud.
If you receive an unsolicited phone call, donot get into a
conversation, note the name of the person andfirm contacting
you and then end the call.
Check theFinancial Services Register available at:
https://www.fca.org.uk/firms/financial-services-register to see if
the person and firm contacting you is authorised by the FCA.
Call the FCA on 0800 111 6768 if the firm does not have any
contact details on the FCA’s register, or if you are told that they
are out of date.
Remember if you do buy or sell shares through an unauthorised
firm, you will not have access to the Financial Ombudsman
Service or the Financial Services Compensation Scheme.
Consider obtaining independent financial and professional
advice before you hand over any money.
Report a firm or scam by contacting the FCA’s Consumer
Helpline on 0800 111 6768, or using the FCA’s reporting form
which can be found on their website, www.fca.org.uk/
scamsmart.
Any concerns about a potential scam should be reported to the
FCA immediately.
w
ww.
c
The Investor section of the Company’s website: www.compass-group.com,
contains a wide range of useful information for shareholders,
including: the date, time and place of the Company’s AGM and
documents related to the AGM, financial calendar and share price,
dividend history, share dealing information, taxation, annual reports,
and regulatory announcements and statements.
23 1Compass Group PLC Annual Report 2024
Forward-looking statements
Certain information included in this Annual Report and Accounts 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 COVID-19 pandemic on the economy,
nationally and internationally, and on the Group, its operations and
prospects; risks associated with changes in environmental scenarios
and related regulations including (without limitation) the evolution and
development of the global transition to a low carbon economy
(including increasing societal and investor expectations); disruptions
and inefficiencies in supply chains (such as resulting from the wars in
Ukraine and the Middle East); 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; prices
and changes in exchange and interest rates; and the impacts of
technological advancements. 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 Annual Report and Accounts are
not guarantees of future performance. All forward-looking statements
in this Annual Report and Accounts are based upon information
known to the Company on the date of this Annual Report and
Accounts. 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 Annual Report and Accounts shall exclude
any liability under applicable laws that cannot be excluded in
accordance with such laws.
232 Forward-looking Statements
This report is printed on paper certified in accordance with the FSC® (Forest Stewardship
Council®) and is recyclable and acid-free.
Pureprint Ltd is FSC certified and ISO 14001 certified showing that it is committed to all round
excellence andimproving environmental performance is an important part ofthisstrategy.
Pureprint Ltd aims to reduce at source the effect itsoperations have on the environment and is
committed to continual improvement, prevention ofpollution and compliance with any
legislation or industrystandards.
Pureprint Ltd is a CarbonNeutral® Printing Company.
The images in the Annual Report and Accounts are representative of the services provided by
Compass Group PLC and its subsidiaries and partners.
Designed and produced by Black Sun Global
www.blacksun-global.com
Carbon Neutral
©
Publication Certificate
This certificate verifies that:
The stated subject is carbon neutral through the use of high quality environmental
instruments in accordance with The CarbonNeutral Protocol.
All credits adhere to standards approved by the International Carbon Reduction and
OffsetAlliance (ICROA).
Certification: CarbonNeutral® publication
Duration: 01 Jan 2024 - 31 Dec 2024
Name of organisation: Compass Group PLC
Quantity of contractual instruments: 3 tCO
2
e
Subject: Compass Group PLC Annual Report 2024
Project Information: Kulera REDD+ and Cookstoves, Malawi, VCS+CCB
Certificate number: CN20240712718
Compass Group PLC
Compass House
Guildford Street, Chertsey
Surrey KT16 9BQ
United Kingdom
Registered in England and Wales
Company no. 4083914
Domiciled in the United Kingdom
T +44 1932 573 000
Find this Report online at
www.compass-group.com