Compass Group PLC CPG
Q4 2012 Earnings Call Transcript

Transcript Call Date 11/21/2012

Sir Roy Gardner - Chairman: Good morning, ladies and gentlemen, and welcome to our 2012 Full Year Results Presentation. Now we have the usual agenda for the morning, and of course, there will be plenty of time at the end for questions and answers.

In a moment, Dominic and Richard will take you through the detail but, first of all, I'd like to cover the business highlights. Compass has had another good year with constant currency revenue growth of just under 8% and organic revenue growth of 5.4%. We've had similarly strong performance in operating profits as well, up nearly 9% on a constant currency basis, resulting in a slight increase in the margin than last year.

Across the Group, our businesses in North America and the Fast Growing & Emerging Markets are generating excellent growth. We continue to see high levels of new business wins and retention. For example, Universal Hospital Group in Turkey and the University of Illinois in Chicago. The ongoing efficiencies we've generated have been reinvested to drive growth and we delivered an 8% margin in North America for the first time. The outlook for both regions is exciting.

Now as we set out in September the fundamentals of our business in Europe are solid. However, economic conditions have become increasingly challenging through the year and we expect them to remain so. We, therefore, announced the series of measures to protect profit and make our operations more competitive for the future.

We've delivered another year of strong cash flow, which is enabling us to invest in the business and reward shareholders. During the year, we've made a number of important acquisitions, including Obasan in Turkey and Supercare in South Africa and NKS in Japan, all of which are making a valuable contribution to the Group.

The strength of the cash flow gives the Board the confidence to continue the progressive dividend policy and we are increasing the full year dividend by 10% to 21.3 pence. Furthermore, we are announcing today a further share buyback of GBP400 million following the expected completion of the current GBP500 million program by the calendar year end.

Looking forward, the positive outlook in North America and the Fast Growing & Emerging Markets combined with the European Action Plans underpin our expectations of delivery against market estimates for 2013. In the longer-term, we remain very positive about the opportunities to grow the business around the world and to deliver further margin progression.

Now I'd like to conclude by thanking all my Compass colleagues for their hard work and the significant contribution they've made to delivering another very strong year of performance.

Thank you and I'll now handover to Dominic.

Dominic Blakemore - Group Finance Director: Thanks, Roy. Good morning. First of all, let's take look at revenue. On a constant currency basis, the Group has achieved nearly 8% revenue growth, 5.4% organic growth and 2.5% from infill acquisitions net of disposals.

We performed extremely well in North America delivering organic growth of 8.3%. The new Ascension contract which mobilized in January this year has contributed just over 1% of this. New business and retention rates remain high and we've seen some positive like-for-like revenue growth.

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