Interim Management Statement

RNS Number : 7382G

Compass Group PLC

05 February 2010

5 February 2010

Compass Group PLC

AGM and Interim Management Statement

Compass Group PLC is today issuing its first Interim Management Statement for 2010 ahead of its Annual General Meeting to be held at 11.00am today at the Queen Elizabeth II Conference Centre, Broad Sanctuary, Westminster, London SW1P 3EE. At this meeting shareholders will be provided with the following Interim Management Statement on the Group's performance for the first three months of the current financial year.

Group

Compass has had a good start to the year. Encouragingly, organic revenue has improved from a decline of approximately 3% in the fourth quarter of 2009, to a decline of 1.7% in the first quarter of the year and the pipeline of new business remains strong.

Benefiting from the flow through of significant efficiency gains which accelerated through 2009 and the rigorous application of our management and performance programme, MAP, Compass has been able to deliver a further good improvement in operating margin compared to the same period last year and free cash flow conversion remains strong.

Geographies

The trends in organic revenue have improved in all four of our geographies in the first quarter of the year compared to the fourth quarter of 2009. We continue to see strong growth in new business both in foodservice and in our fast growing support services business and retention rates remain high. We have won exciting new contracts for example with Aviva, Banca d'Italia, Visa and CSN Corporative Brasil. Like for like volume remains solid in the Education, Healthcare and Defence, Offshore & Remote Sites sectors and whilst the Business & Industry and Sports & Leisure sectors continue to be impacted by the economy, the trends seen in the first quarter are encouraging.

The ongoing focus on driving greater efficiency has once again enabled us to make good progress in the operating margin across all four geographies, including another significant increase in the Rest of the World margin.

Acquisitions

We are pleased to announce today the acquisition of the Canadian business of Hurley Corporation ("Hurley") from M.P. Hurley, J.M. Horgan and their associates for a cash consideration of CAN $50 million. Hurley provides predominantly soft support services across Canada and further strengthens our ability to offer multi services across the Business & Industry, Healthcare and Education sectors of our market.

Financial Position

The Group's £200 million sterling bond was repaid at its stated maturity from cash on 19 January 2010. Other than this, there has been no significant change in the strong financial position of the Group in the period since the 2009 full year results announcement.

Note to Editors:

(a) Compass Group is the world's largest foodservice company with annual revenues in 2009 of over £13 billion operating in 55 countries. For more information visit www.compass-group.com

(b) MAP (Management and Performance) is a simple, but clearly defined Group operating framework. MAP focuses on five key value drivers, enabling the businesses to deliver disciplined, profitable growth with the focus more on organic growth and like for like growth.

The five key value drivers are:

MAP 1: Client sales and marketing

MAP 2: Consumer sales and marketing

MAP 3: Cost of food

MAP 4: Unit costs

MAP 5: Above unit overheads

(c) Organic revenue growth, a term used throughout the announcement, is calculated by adjusting for acquisitions (excluding current period acquisitions and including a full period in respect of prior period acquisitions), disposals (excluded from both periods) and exchange rate movements (translating the prior period at current period exchange rates) and compares the current period results against the prior period.

(d) Operating margin, a term used throughout this announcement, excludes share of profit of associates and is wholly consistent with the presentation in the Group's 2009 Annual Report and Accounts.

(e) This Press Release contains forward looking statements within the meaning of Section 27A of the Securities Act 1933, as amended, and Section 21E of the Securities Exchange Act 1934, as amended. These statements are subject to a number of risks and uncertainties and actual results and events could differ materially from those currently being anticipated as reflected in such forward looking statements. The terms 'expect', 'should be', 'will be', 'is likely to' and similar expressions identify forward looking statements. Factors which may cause future outcomes to differ from those foreseen in forward looking statements include, but are not limited to: general economic conditions and business conditions in Compass Group's markets; exchange rate fluctuations; customers' and clients' acceptance of its products and services; the actions of competitors; and legislative, fiscal and regulatory developments.

A copy of this release, together with all other recent announcements can be found on Compass Group's website at www.compass-group.com. Copies of the presentation given to institutional investors and analysts are also available at this site.