Interim Management Statement

RNS Number : 6487W

Compass Group PLC

02 February 2012

2 February 2012

Compass Group PLC

AGM and Interim Management Statement

Compass Group PLC is today issuing its first Interim Management Statement for 2012 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 first quarter and our expectations for the full year remain positive and unchanged. We have seen good levels of new business wins and the improved level of retention we achieved in the second half of last year has continued into the new financial year. As expected, like for like volumes in North America and the Fast Growing & Emerging Markets continue to be robust, whilst in Europe they have been impacted by the continuing challenging macro economic environment. Excluding the one-off impact of the NBA strike in the US (which is now resolved and impacted organic revenue growth by approximately 1%), organic revenue growth in the first quarter was almost 5%; including the impact of acquisitions, overall revenue growth was over 8% on a constant currency basis.

Using our performance management framework, MAP, we are continuing to drive efficiencies across the business. These efficiencies are being partially re-invested in the business to support the exciting growth opportunities around the world as well as underpinning our expectations that we can continue to deliver further improvement in the operating margin. Free cash flow conversion remains strong.

Geographies

The trends seen in the geographies in the last financial year have continued into the first quarter of the new financial year. In North America we have continued to see good levels of organic revenue growth across all sectors. In the Fast Growing & Emerging Markets organic revenue growth has been strong, with good performances in Australia, Brazil, Turkey, India, China and Russia. Like for like volumes in Europe have continued to be impacted by the challenging economic environment in some countries, while in Japan, encouragingly, we are seeing a gradual return to normal activity levels.

Acquisitions

Since 30 September 2011 we have announced £140 million of infill acquisitions. In support services we have completed the acquisition of Integrated Cleaning Management Limited in the UK and have also agreed to buy Supercare Services Group (Pty) Limited in South Africa, both of which are leading providers of cleaning services in their respective countries. In foodservice, we agreed to acquire DORA Gastro a.s. in the Czech Republic and completed the acquisition of Obasan in Turkey.

Financial Position

On 20 December 2011, the Group pre-paid the $450 million US Private Placement notes that were due for repayment in May 2012. On 27 January 2012, the Group launched a 7 year €600 million Eurobond with a coupon of 3.125%. The proceeds from the bond issue will be received on 13 February 2012. Other than this, there has been no significant change in the strong financial position of the Group in the period since 30 September 2011.

Note to Editors:

(a) Compass Group PLC is a world leading food and support services company, which generated annual revenues of £15.8 billion in the year to 30 September 2011. It operates in around 50 countries, employs over 470,000 people and serves over 4 billion meals every year. The Company specialises in providing food and a range of support services across the core sectors of Business & Industry, Defence, Offshore & Remote Site, Healthcare, Education, Sports & Leisure and Vending with an established brand portfolio.

(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) Forward looking statements

Certain information included in this announcement is forward-looking and involves risks, assumptions and uncertainties that could cause actual results to differ materially from those expressed or implied by forward-looking statements. Forward-looking statements cover all matters which are not historical facts and include, without limitation, projections relating to results of operations and financial conditions and the Company's plans and objectives for future operations, including, without limitation, discussions of expected future revenues, financing plans, expected expenditures and divestments, risks associated with changes in economic conditions, the strength of the foodservice and support services markets in the jurisdictions in which the Group operates, fluctuations in food and other product costs and prices and changes in exchange and interest rates. Forward-looking statements can be identified by the use of forward-looking terminology, including terms such as "believes", "estimates", "anticipates", "expects", "forecasts", "intends", "plans", "projects", "goal", "target", "aim", "may", "will", "would", "could" or "should" or, in each case, their negative or other variations or comparable terminology. Forward-looking statements are not guarantees of future performance. All forward-looking statements in this announcement are based upon information known to the Company on the date of this announcement. Accordingly, no assurance can be given that any particular expectation will be met and readers are cautioned not to place undue reliance on forward-looking statements, which speak only at their respective dates. Additionally, forward-looking statements regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Other than in accordance with its legal or regulatory obligations (including under the UK Listing Rules and the Disclosure and Transparency Rules of the Financial Services Authority), the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Nothing in this announcement shall exclude any liability under applicable laws that cannot be excluded in accordance with such laws.

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.