Compass Group Plc · LSE:CPG
Compass — Corporate Update (September 2005)
14 slides from Compass's corporate update, Sep 28, 2005
Slide 1: Compass Group PLC: Update on trading and strategy
Compass Group PLC Update on trading and strategy 28 September 2005 1
Slide 2: Today's agenda
Today’s agenda 1. Current trading 2. Update on business review 2
Slide 3: Current trading – by geography
Current trading – by geography Group • Overview • Contract – Turnover growth c. 5%, margins c.6% – Cost pressure (particularly B&I) – Reduced capital investment • Concessions UK – Turnover growth c. 5%, margin c.10% – Cost pressure – London bombings / Gatwick Meridien • Accelerated reorganisation pr
Slide 4: Current trading – by geography
Current trading – by geography • Overall c.3% top line growth – Rest of World strong C. Europe – Continental Europe & RoW • Full year margins broadly in line with last year • Middle East declining c.£40m exceptional charge • c. 11% top line growth North • Full year margins broadly in line with last
Slide 5: Current trading – full year expectations
Current trading – full year expectations Actual currency, unless stated otherwise Overall operating profit (1) £710m UK (excluding fuel) £200m Profit before Tax £580m Tax Rate 23-24% EPS 19.0p FCF at 2004 exchange rates £350m Notes: 5 (1) Before exceptional costs and goodwill, but including fuel and
Slide 6: Review of commitments given in May
Review of commitments given in May 1. Improved communication 2. Deliver programme of change 3. New roles and responsibilities 4. New financial objectives 6
Slide 7: Driving future value
Driving future value • Priorities – Balancing entrepreneurial spirit with financial discipline – Driving operational efficiencies • Different geographies different priorities – North America • Well developed retail model • Future focus: new business & base estate • Investing proportionally more capi
Slide 8: UK review
UK review • Refreshed management team • Streamlining structure • Reviewed contract base • Accelerating migration to retail-oriented operating model 8
Slide 9: Business review
Business review Key conclusions: • Simplify the Group – 8 Divisions down to 4 • Focus on value creation – Sell Travel Concessions – Refocus on Contract Catering and Support Services • Prioritise capital – To businesses offering greatest long term growth 9
Slide 10: Streamlined divisional structure
Streamlined divisional structure CEO (Michael Bailey) UK, Middle East Rest of World Americas Continental Europe & Africa (Didier Coutte) (Gary Green) (Miguel Ramis) (Peter Harris) 8 Divisions down to 4 10
Slide 11: Overheads
Overheads • Targeted £50m reduction • Full £50m already identified • Restructuring to be completed by December 2005 • Full £50m saving in 2006, one-off restructuring cost c.£40m 11
Slide 12: Focus on Contract Catering & Support Services
Focus on Contract Catering & Support Services • Proven track record in Contract Catering • Support Services – Building on existing capabilities – Client-led demand • Significant market opportunity • Reducing capital intensity 12
Slide 13: Disposal of Travel Concessions
Disposal of Travel Concessions • What – European Travel Concessions • Why – Focus on Contract Catering & Support Services – Retain benefits of brands and purchasing scale – Release capital • Proceeds – Reduce debt & return cash to shareholders • When – Start process by December 2005 – Expect complet
Slide 14: Recap of actions taken to-date
Recap of actions taken to-date • Focus on Contract Catering and Support Services • Restructuring the business • On track for £50m overhead reduction • Management changes 14