Compass Group Plc, UK

Strong despite Covid

Dominic Blackmore, Group Chief Executive, Compass Group
Compass Group
Dominic Blackmore, Group Chief Executive, Compass Group

The British Compass Group reports a total turnover of 20.2 bn pounds sterling (GBP) (€22.8 bn) for the 2019 financial year, which ended on 30 September 2020 - this means a drop in turnover of GBP4.6 bn or €5.2 bn. Operating profit slumped by 81.9 percent to GBP294 m (approx. € 330 m). Compass CEO Dominic Blakemore: "2020 was a challenging year for Compass. I am very proud of how the organisation has responded to the pandemic."

At the beginning of the year, the Group was well on the way to "delivering our strongest performance yet. Then came the Covid brake with consequences. Under Blackmore's leadership, costs were reduced, liquidity increased and the balance sheet strengthened. This included increasing equity by GBP2 bn to reduce debt financing - liquidity was increased to around GBP5 bn. Another consequence was that the company returned to profitability in the fourth quarter. The company was now liquidity neutral.

"We are working quickly and expect the underlying operating margin to be around 2.5 percent in the first quarter of 2021. Before the Corona crisis, it was 7 percent. Although Covid-19 had a strong impact on business from the end of the second quarter, the retention rate remained stable and new business was high."

In North America, new business increased by 6.9 percent and existing contracts were maintained at a rate of 96.4 percent, despite significant interruptions due to the pandemic. In Europe, business stabilized with good results in the healthcare and senior citizen market. The Sports & Leisure and Business & Industry segments suffered losses. Overall, Blakemore is convinced: "Compass is well positioned for the future, despite the challenges of Covid. As previously announced, the Group will not pay a final dividend to its shareholders.
About the Compass Group
Compass Group PLC is one of the world's leading food service companies with annual sales of GBP20.2 bn (€22.8 bn, as of 09/2020). The company operates in around 45 countries and employs around 600,000 people. The Compass Group also provides services in the core sectors of business & industry, healthcare & seniors, education, sports & leisure as well as defence, offshore & remote specialised with an established brand portfolio.

The British Compass Group is the parent company of Compass Group Germany. This is the market leader for catering and food services and one of the leading providers of support services in Germany. The contract caterer's portfolio includes the brands Eurest, Food Affairs, Kanne Café and Leonardi. Compass Group Germany employs around 14,300 people and, according to the exclusive gv-praxis ranking, achieved sales of €612.9 million (-0.2%) in the 2019 financial year.