Interim Management Statement

RNS Number : 6001A

Compass Group PLC

03 February 2011

3 February 2011

Compass Group PLC

AGM and Interim Management Statement

Compass Group PLC is today issuing its first Interim Management Statement for 2011 ahead of its Annual General Meeting to be held at 12:00 noon today at the Queen Elizabeth II Conference Centre, Broad Sanctuary, Westminster, London SW1P 3EE. At this meeting shareholders will be provided with the following update 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. The positive trends in organic revenue growth seen in the second half of 2010 have continued into the first quarter of the new financial year, with organic revenue growth of around 5.5%. This reflects strong growth both in foodservice and in our fast growing support services business and we are encouraged by the pipeline of new business opportunities.

Our ongoing focus on efficiency and the rigorous application of our management and performance programme, MAP, has enabled us to deliver further operating efficiencies and achieve good leverage of our overhead base. We are using these efficiencies in part to support the exciting future growth opportunities in the business and to deliver a further improvement in the operating margin, in line with our expectations. Free cash flow conversion remains strong.

Geographies

Organic revenue trends across the four geographies are broadly in line with those seen in the second half of last year, with strong growth continuing in North America and in the Rest of the World operations. Organic revenue continues to be driven by solid growth in net new business and steady like for like revenue growth.

Acquisitions

Since 30 September 2010, we have announced £25 million of infill acquisitions. These include the acquisition in foodservice of Life's A Party in Australia, a 90% interest in Chiyoda Food in Japan, Menke Menue in Germany and Sabora in Spain. The acquisition of Reilimpa marked our entry into the support services market in Portugal.

Whilst our primary focus remains on driving organic growth, we continue to evaluate infill acquisition opportunities that enable us to take advantage of the significant opportunities in our core food and fast growing support services markets in both developed and emerging countries.

Financial Position

On 23 November 2010, the Group repaid US$35 million of Private Placement debt from surplus cash. Other than this, there has been no significant change in the strong financial position of the Group in the period since 30 September 2010.

Note to Editors:

(a) Compass Group is the world's largest foodservice company with annual revenues in 2010 of over £14 billion operating in 50 countries.

(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) 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 presentations given to institutional investors and analysts are also available at this site.