Compass Group

World's largest caterer reports top results

imago images / ZUMA Press

Compass Group, headquartered in the British town of Chertsey, has reported excellent figures and strong sales growth for the fiscal year. For example, the world's largest catering company posted a 37.5 percent increase in revenue to £28.5 billion  (€32.9 billion) for the fiscal year ending September 30, 2022. The contract caterer is performing extremely well in all disciplines - and compared to its competitors.

Margin at 6.2 percent

Compass Group's adjusted operating margin is 6.2 percent, a top figure. Sodexo had recently communicated a figure of 5.0 percent and Aramark of 4.9 percent in its annual results.
New business increased to £2.5 billion (€2.9 billion), with strong contributions from North America and Europe. In Europe, organic sales grew 32 percent to £5.9 billion (€6.8 billion), with net new business growth of 5.6 percent. This was driven by double-digit new business and a 160 basis point improvement in customer retention to 95.3 percent, the company says.

European business recovers

Encouragingly, net new business growth accelerated in the second half of 2022, driven by improving trends, particularly in the UK, France and Germany, Compass Group says. Overall, sales in Europe for the year were at 98 percent of 2019 levels - and as high as 109 percent in the fourth quarter. These strong results were due in particular to the recovery in the Business & Industry and Sports & Leisure sectors.

Business & Industry above pre-Covid level

Dominic Blakemore, Group Chief Executive
, said, "The Group's performance has exceeded our expectations both in terms of net new business growth and base volume recovery." He added that the Business & Industry division is now even ahead of pre-pandemic revenues. Specifically, B&I's Q4 broad-based revenue was 106.1 percent compared to 2019. "Our clients are continuing to face operational complexities and inflationary pressures, which are driving increased outsourcing, and we are successfully capitalising on the resulting growth opportunities," Blakemore emphasized.
Announces top figures: Dominic Blakemore, Group Chief Executive, Compass Group
Compass Group
Announces top figures: Dominic Blakemore, Group Chief Executive, Compass Group

North America continues to show strong performance, and they are particularly pleased with progress in Europe, which is benefiting from an increased focus on growth and customer retention - supported by investments in their own people, brands and processes. 
„Thanks to the hard work of our teams across the world, Compass has emerged from the pandemic as a stronger and more resilient business, reflecting our clear strategy and market-leading growth enablers.“
Dominic Blakemore, Compass Group

Also on course for growth in 2023

Even though the macroeconomic environment is uncertain, the company is working closely with clients to mitigate inflationary pressures, Blakemore said. For 2023, Compass Group expects operating profit to grow by more than 20 percent in constant currency. This is expected to be achieved through organic sales growth of around 15 percent, weighted for the first half of the year, and an adjusted operating margin of over 6.5 percent.

"Following the completion of the previously announced £500 million share buy back, we have announced a further share buyback of up to £250 million, bringing the total to 750 million, Dominic Blakemore explained. Looking ahead, he says the company remains excited about the structural growth opportunities around the world, which will both drive sales and profit growth above historical rates, return margins to pre-pandemic levels and reward shareholders with further returns.