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 million¹. 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 of the full Annual Report.

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.

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 continued to refine our portfolio to become an even more focused business, going deeper into our core markets, where there remain significant growth opportunities.

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 million¹ (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 million¹ (2023: $2,228 million) and underlying free cash flow of $1,740 million¹ (2023: $1,516 million). Leverage (net debt to underlying EBITDA) remains well within the Group’s guided range at 1.3x¹ 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 revenue1. 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.

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.