Full-year results announcement for the year
ended 30 September 2024
|
|
Underlying1
results
|
Statutory results
|
|
|
2024
|
Restated2
2023
|
Change
|
2024
|
Restated2
2023
|
Change
|
|
Revenue
|
$42.2bn
|
$38.1bn3
|
10.6%4
|
$42.0bn
|
$37.9bn
|
10.8%
|
|
Operating profit
|
$2,998m
|
$2,576m3
|
16.4%3
|
$2,584m
|
$2,313m
|
11.7%
|
|
Operating margin
|
7.1%
|
6.8%
|
30bps
|
6.2%
|
6.1%
|
10bps
|
|
Earnings per share
|
119.5c
|
104.3c3
|
14.6%3
|
82.3c
|
92.2c
|
(10.7)%
|
|
Operating cash flow
|
$2,642m
|
$2,228m
|
18.6%
|
$3,135m
|
$2,536m
|
23.6%
|
|
Free cash flow
|
$1,740m
|
$1,516m
|
14.8%
|
|
|
|
|
Annual dividend per
share
|
59.8c
|
52.6c
|
13.7%
|
59.8c
|
52.6c
|
13.7%
|
Another year of strong
performance.
Confident in delivering
high single-digit profit growth5 in
2025.
Strong revenue and profit
growth:
·
Underlying operating profit growth of
16.4%3
- organic revenue increased by
10.6% with net new business growth of 4.2%, which accelerated in
H2
- underlying operating margin of
7.1% (+30bps year on year), with good progress in all
regions
·
Underlying operating cash flow increased by 18.6%
to $2.6bn, providing flexibility for investment
·
Invested $2.6bn in growth through capex (3.7% of
underlying revenue) and M&A ($1bn)
·
Returned $1.5bn to shareholders through dividends
and share buybacks
·
Strong balance sheet (net debt to EBITDA of 1.3x)
and consistent capital allocation model
Strategic highlights:
·
Increased focus and investment in the significant
growth opportunities across our core markets
·
Acquired, or agreed to acquire, attractive
businesses in Europe: HOFMANNS,
CH&CO, Dupont Restauration and 4Service AS
·
Further improved the quality of our portfolio by
exiting, or agreeing to exit, nine non-core markets
Outlook:
·
For 2025, we expect high single-digit underlying
operating profit growth5 driven by organic revenue
growth above 7.5% and ongoing margin progression
·
Longer term, we are confident in sustaining
mid-to-high single-digit organic revenue growth, ongoing margin
progression and profit growth ahead of revenue growth
Statutory results:
·
Revenue increased by 10.8% reflecting the strong
trading performance
·
Operating profit, including non-underlying
charges related to business acquisitions and reshaping our
portfolio, increased by 11.7% to $2,584m
·
Basic earnings per share decreased by 10.7%, to 82.3c, as the
higher operating profit is more than offset by the impact of the
reclassification of cumulative currency translation differences on
sale of businesses, higher finance costs and higher effective tax
rate
1. Reconciliation of
statutory to underlying results can be found in notes 2 (segmental
analysis) and 14 (non-GAAP measures) to the consolidated financial
statements.
2. With effect from 1
October 2023, the reporting currency of the Group was changed from
sterling to US dollars. The results for the year ended 30 September
2023 have been restated in US dollars.
3. Measured on a
constant-currency basis.
4. Organic revenue
change.
5. On a
constant-currency basis, including announced acquisitions,
disposals and exits in 2024 and to date in 2025.
Dominic Blakemore, Group Chief Executive,
said:
"2024 has been a year of strong
operational and financial performance, with net new business growth
accelerating in the second half as expected. The business continues
to successfully capitalise on the dynamic market trends, using its
proven competitive advantages to drive higher revenue and profit
growth.
We have exited, or agreed to exit,
nine non-core countries, further improving the quality of our
portfolio and enabling us to better focus on our core markets with
the greatest growth opportunities. To support this growth, we're
investing in capex to drive net new business and are currently
prioritising strategic acquisitions to further enhance our unique
sectorised approach to clients.
We have a proven track record of
successful M&A in North America and are using that blueprint to
unlock growth in other regions. The integration of recent
high-quality acquisitions in Europe is progressing well, and we're
excited by the capabilities they bring to the Group.
In 2025, we expect high
single-digit underlying operating profit growth, driven by organic
revenue growth above 7.5% and ongoing margin progression. Longer
term, we are confident in sustaining mid-to-high single-digit
organic revenue growth with ongoing margin progression, leading to
profit growth ahead of revenue growth. Our priority is to invest in
the business through capex and M&A to support future growth,
with surplus capital being returned to shareholders as we maintain
our strong track record of delivering long-term, compounding
shareholder returns."
Results presentation today
Today, 26 November 2024, management will
present Compass Group's Full Year 2024 results.
At 9:00 am (UK time), investors and analysts
will be able to view a video presentation which will stream
live on the Compass Group website at www.compass-group.com.
An audio-only telephone option is available if you are unable to
watch the video.
Following the video presentation, management
will host a live Q&A session for investors and
analysts. Participants must be connected by phone to ask a question
during the conference call.
Participant dial in details:
|
UK
|
+44 (0) 33 0551 0200
|
|
UK Toll-Free
|
0808 109 0700
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|
|
|
|
US
|
+1 786 697 3501
|
|
US Toll-Free
|
+1 866 580 3963
|
Enquiries
|
Investors
|
Agatha Donnelly, Helen Javanshiri
& Simon Bielecki
|
+44 1932 573 000
|
|
Press
|
Amy Shields, Compass
Group
|
+44 1932 573 000
|
|
|
Tim Danaher, Brunswick
|
+44 207 404 5959
|
|
Website
|
www.compass-group.com
|
|
Financial calendar
|
Ex-dividend date for 2024 final
dividend
|
16 January
|
|
Record date for 2024 final
dividend
|
17 January
|
|
Last day for dividend currency
elections
|
3 February
|
|
Last day for DRIP
elections
|
6 February
|
|
Q1 Trading Update / Annual General
Meeting
|
6 February
|
|
Sterling equivalent of 2024 final
dividend announced
|
11 February
|
|
Half-year results
|
14 May
|
Business review (continued)
Basis of preparation
With effect from 1 October 2023,
the reporting currency of the Group was changed from sterling to US
dollars. The change in presentation currency provides investors and
other stakeholders with greater transparency in relation to the
Group's performance and reduces foreign exchange volatility on
earnings given that approximately three-quarters of the Group's
underlying operating profit originates in US dollars. The amounts
for prior periods have been translated into US dollars at average
exchange rates for the relevant periods for income statements and
cash flows, with spot rates used for significant transactions, and
at the exchange rates on the relevant balance sheet dates for
assets and liabilities.
Throughout this Annual Results Announcement,
and consistent with prior years, underlying and other alternative
performance measures are used to describe the Group's performance
alongside statutory measures (see page 6).
Strategy
Compass is focused on the provision of food
services, with targeted support services where appropriate. By
divesting of non-core markets we have further improved the quality
of our portfolio. This also enables us to better focus on our core
markets, where there remain significant opportunities for growth.
We now operate in around 30 countries in North America, Europe, and
Asia-Pacific.
Our addressable market in food services is
worth c.$320bn, a significant proportion of which remains
self-operated. More demanding consumer expectations and increased
macroeconomic pressures have contributed to the acceleration of
first-time outsourcing, and we have clear competitive advantages
built over the last 30 years to capture these
opportunities.
Our sector and sub-sector portfolio enables us
to better differentiate our offer compared to our competitors and
create bespoke solutions for our clients. We also leverage our
scale, particularly in food procurement, and are increasing the
flexibility of our offer, ranging from different food models to
digital or sustainability initiatives.
Our thought leadership and solutions in these
areas are also often cited by clients as one of the reasons they
outsource to Compass.
Performance
Compass has delivered another strong year, with
organic revenue growth of 10.6%1 and underlying
operating margin improving by 30bps to 7.1%1. As a
result, underlying operating profit grew by 16.4%1 on a
constant-currency basis to $2,998m1 (2023:
$2,576m).
Statutory revenue increased by 10.8% reflecting
the strong trading performance. Statutory operating profit
increased by 11.7% to $2,584m.
Cash flow generation remains robust, with
underlying operating cash flow of $2,642m1 (2023:
$2,228m) and underlying free cash flow of $1,740m1
(2023: $1,516m). Leverage (net debt to underlying EBITDA) remains
well within the Group's guided range at 1.3x1 as at 30
September 2024.
Our strong balance sheet provides us with
flexibility to invest in future growth, both through M&A and
capital expenditure, which was 3.7% of underlying
revenue1. This was slightly higher than our guidance of
3.5% due to catch-up from the prior year.
Net M&A expenditure was $1,040m, the main
outflows being HOFMANNS (Germany) and CH&CO (UK and
Ireland), offset by an inflow from the disposal of Brazil.
Subsequent to the year-end, the Group also completed the
acquisition of Dupont Restauration, a food services business in
France, and agreed to acquire 4Service AS, a catering and facility
management services business in Norway.
The Group has refined its portfolio and has
exited five countries during the year, those being Argentina,
Angola, Brazil, mainland China and the United Arab Emirates. In
addition, we have also agreed to exit Chile, Colombia, Mexico and
Kazakhstan, subject to regulatory approval and completion
procedures.
Revenue
Organic revenue growth was strong
at 10.6%1, including net new business growth of
4.2%1, which remains above our historical level of
approximately 3%, pricing of around 4% and like-for-like volume
growth of around 2%. As expected, volume growth moderated during
the year as we lapped strong prior year comparatives. Client
retention rates remained strong at 96.0%.
On a statutory basis, revenue increased by
10.8% to $42,002m (2023: $37,907m).
Profit
Underlying operating profit increased by
16.4%1 on a constant-currency basis, to
$2,998m1, with underlying operating margin at
7.1%1 (2023: 6.8%). Strong margin progression was
achieved across all regions, underpinned by our operational scale,
efficiencies and appropriate levels of pricing to mitigate
inflation.
|
1.
|
Alternative Performance Measure
(APM). The Group's APMs are defined in note 14 (non-GAAP measures)
and reconciled to GAAP measures in notes 2 (segmental analysis) and
14 to the consolidated financial statements.
|
Business review (continued)
Statutory operating profit was $2,584m (2023:
$2,313m), an increase of 11.7%, with statutory operating margin of
6.2% (2023: 6.1%).
Statutory profit before tax of $2,056m (2023:
$2,137m) includes net charges of $693m1 (2023: $289m)
which are excluded from underlying profit before tax, including net
charges of $373m (2023: $94m) in relation to our strategic
portfolio review to focus on the Group's core markets and
acquisition-related charges of $244m (2023: $153m).
Charges related to our strategic portfolio
review include a net loss of $203m (2023: net gain of $24m) on the
sale and closure of businesses, including exit costs of $92m (2023:
$14m) and a charge of $250m (2023: credit of $1m) in respect of the
reclassification of cumulative currency translation differences. We
exited five countries during the year and, in July, the Group
agreed the sale of its businesses in Chile, Colombia and Mexico,
subject to regulatory approval and completion procedures.
Subsequent to the year-end, we agreed the sale of our business in
Kazakhstan, subject to regulatory approval. As part of our
strategic portfolio review, and considering country exits, ongoing
advancement of technologies and the increased decentralisation of
our business, we have reviewed our European regional business
transformation ERP programme that commenced a number of years ago.
We have decided to discontinue the implementation and roll out of
our cross-market ERP programme and, accordingly, have recognised a
charge of $160m as a specific adjusting item, which includes $146m
for the non-cash impairment of work-in-progress head office
(non-client-related) computer software assets. An impairment charge
of $10m has been recognised in respect of our business in
Qatar.
In the prior year, the net charge included the
exit from seven tail countries and the sale of a business, site
closures and contract renegotiations and terminations in the
UK.
2025 guidance
The Group expects to achieve high
single-digit underlying operating profit growth2 in 2025
with organic revenue growth above 7.5%1. We expect
underlying finance costs to be around $300m1, with an
underlying effective tax rate of around
25.5%1.
The net impact of announced
acquisitions, disposals and exits in 2024 and to date in 2025 is
expected to reduce underlying operating profit by around
$30m1 in 2025.
Capital allocation
Our capital allocation framework is clear and
unchanged. Our priority is to invest in the business to fund growth
opportunities, target a strong investment-grade credit rating with
a leverage target of around 1x-1.5x net debt to EBITDA and pay an
ordinary dividend, with any surplus capital being returned to
shareholders.
Growth investment consists of: (i) capital
expenditure to support organic growth in both new business wins and
retention of existing contracts; and (ii) bolt-on M&A
opportunities that strengthen our capabilities and broaden our
exposure. We have a proven track record of strong returns from our
investment strategy as evidenced by our historical returns on
capital employed.
Shareholder returns
Our dividend policy is to pay out around 50% of
underlying earnings through an interim and final dividend, with the
interim dividend reflecting around one-third of the total annual
dividend. The Board has proposed a final dividend of 39.1c which,
including the interim dividend of 20.7c, gives a total dividend of
59.8c for 2024.
Shareholders appearing on the
Register of Members or holding their shares through CREST will
automatically receive their dividends in sterling, but have the
option to elect to receive their dividends in US dollars. Details
on how to elect to receive the final dividend in US dollars are
provided on page 10.
At the date of this Announcement, $476m of the
$500m share buyback announced in November 2023 had been completed,
with the remainder scheduled to complete in December 2024. We
prioritise investment in the business through capex and M&A to
support future growth, with any surplus capital being returned to
shareholders as we maintain our strong track record of delivering
long-term, compounding shareholder returns.
People
Our team of about 580,000 colleagues delivers
exceptional experiences to clients and consumers worldwide every
day. These dedicated professionals are the core of our business,
and our people strategy is designed to identify, attract, develop,
support, and retain the high-calibre talent essential for achieving
our objectives.
Our goal is to provide lifelong opportunities
for diverse individuals from the communities we serve, ensuring
they work in a positive and secure environment. This approach is
bolstered by empowered teams and proactive leaders, grounded in
respect, teamwork, and growth.
|
1.
|
Alternative Performance Measure
(APM). The Group's APMs are defined in note 14 (non-GAAP measures)
and reconciled to GAAP measures in notes 2 (segmental analysis) and
14 to the consolidated financial statements.
|
|
2.
|
On a constant-currency basis,
including announced acquisitions, disposals and exits in 2024 and
to date in 2025.
|
Business review (continued)
When sourcing new talent, we assess the
specific requirements of each sector and organisational level,
adjusting our recruiting strategies accordingly. For example, our
North America business employs targeted campaigns, process
automation, AI, and other tools to locate suitable candidates and
facilitate their engagement with the selection process in their
preferred language and at convenient times.
We aspire to cultivate a diverse and inclusive
workforce at all levels. Our focus is on treating everyone with
fairness and respect, providing opportunities for growth and
development, and fostering a positive, supportive workplace
throughout their careers.
Recognising the challenges of daily life, we
offer a variety of support measures to ensure our employees'
wellbeing, encompassing physical, financial, and mental
health.
Purpose
We are dedicated to building a sustainable
future for everyone. We harness our passion for food, advocate for
responsible sourcing, and reduce food waste on a large scale to
drive global change and improve lives.
Through culinary innovation, collaboration, and
partnerships, we are committed to achieving climate net zero across
our global operations by 2050 as part of our Planet Promise. This
isn't achievable through a single solution; instead, we continually
review and enhance our practices across the Group to amplify our
impact and expedite our progress towards sustainability
goals.
One significant initiative demonstrating our
commitment to reducing food waste is linking a food waste-related
KPI to the annual bonus plan of our executive directors and senior
management.
Our culinary teams and front-line staff
understand the importance of minimising food waste and are
utilising various waste-reduction technologies. For example, Waste
Not 2.0 is our proprietary tablet-based online tracking tool for
chefs, and has been deployed in 12 countries, helping kitchen teams
to identify opportunities to reduce food waste and giving our unit
managers tools to report on their carbon footprint.
Whilst the Group's absolute Scope 1, 2 and 3
emissions increased year on year due to new business wins, our
overall greenhouse gas intensity ratio (normalised for revenue
growth) reduced by 4% compared to 2023.
Part of our core identity is being an ethical,
sustainable, and inclusive business. By integrating these
principles into our culture, we aim to make a meaningful difference
and positively influence the world. Our customers and partners
increasingly align with these values, which are crucial for our
growth goals and long-term success.
Summary
Our 2024 results were strong across all our key
performance metrics. We delivered double-digit organic revenue
growth and good margin progress, driving strong underlying
operating profit growth. The Group remains very cash generative,
enabling us to invest in future opportunities for growth and return
capital to shareholders, whilst maintaining a strong balance
sheet.
We have further improved the quality of our
portfolio, having exited, or agreed to exit, nine countries. The
Group is also increasing investment in its core markets,
particularly in Europe, where there are significant first-time
outsourcing opportunities. We are consistently delivering net new
business growth in our target 4 to 5% range, with excellent client
retention.
The Group is continuing to develop its
sub-sector portfolio, particularly in Europe, where we have
acquired, or agreed to acquire, four great businesses. These also
provide us with additional resources and talent to help drive
growth. We are also increasing investment in more flexible
operating models and innovating our offer to meet more
sophisticated consumer demands.
We remain excited about the significant global
structural opportunities and continue to anticipate profit growth
ahead of revenue growth. We expect our established value creation
model to continue to deliver strong earnings momentum, rewarding
shareholders with compounding returns over the long
term.
Dominic Blakemore
Group Chief Executive
Officer
26 November 2024
Group performance
We manage and assess the performance of the
Group using various underlying and other Alternative Performance
Measures (APMs). These measures are not defined by International
Financial Reporting Standards (IFRS) or other generally accepted
accounting principles (GAAP) and may not be directly comparable
with APMs used by other companies. Underlying measures reflect
ongoing trading and, therefore, facilitate meaningful year-on-year
comparison. The Group's APMs, together with the results prepared in
accordance with IFRS, provide comprehensive analysis of the Group's
results. Accordingly, the relevant statutory measures are also
presented where appropriate. Certain of the Group's APMs are
financial Key Performance Indicators (KPIs) which measure progress
against our strategy. The Group's APMs are defined in note 14
(non-GAAP measures) and reconciled to GAAP measures in notes 2
(segmental analysis) and 14 to the consolidated financial
statements.
|
|
2024
$m
|
Restated1
2023
$m
|
Change
|
|
Revenue
|
|
|
|
|
Underlying2
|
42,176
|
38,216
|
10.4%
|
|
Underlying (constant
currency)2
|
42,176
|
38,147
|
10.6%
|
|
Organic2
|
41,021
|
37,075
|
10.6%
|
|
Statutory
|
42,002
|
37,907
|
10.8%
|
|
Operating profit
|
|
|
|
|
Underlying2
|
2,998
|
2,592
|
15.7%
|
|
Underlying (constant
currency)2
|
2,998
|
2,576
|
16.4%
|
|
Statutory
|
2,584
|
2,313
|
11.7%
|
|
Operating margin
|
|
|
|
|
Underlying2
|
7.1%
|
6.8%
|
30bps
|
|
Statutory
|
6.2%
|
6.1%
|
10bps
|
|
Return on capital employed
(ROCE)
|
|
|
|
|
ROCE
|
19.0%
|
19.3%
|
(30)bps
|
|
Basic earnings per
share
|
|
|
|
|
Underlying2
|
119.5c
|
105.2c
|
13.6%
|
|
Underlying (constant
currency)2
|
119.5c
|
104.3c
|
14.6%
|
|
Statutory
|
82.3c
|
92.2c
|
(10.7)%
|
|
Cash flow
|
|
|
|
|
Underlying - free cash
flow2
|
1,740
|
1,516
|
14.8%
|
|
Statutory - net cash flow from
operating activities
|
3,135
|
2,536
|
23.6%
|
|
Dividend
|
|
|
|
|
Full-year dividend per ordinary
share
|
59.8c
|
52.6c
|
13.7%
|
|
1.
|
With effect from 1 October 2023,
the reporting currency of the Group was changed from sterling to US
dollars. The results for the year ended 30 September 2023 have been
restated in US dollars.
|
|
2.
|
Alternative Performance Measure
(APM) (see pages 48 to 55).
|
Financial review (continued)
Income statement
|
|
|
2024
|
|
|
|
Restated1
2023
|
|
|
|
Statutory
$m
|
Adjustments
$m
|
Underlying2
$m
|
|
Statutory
$m
|
Adjustments
$m
|
Underlying2
$m
|
|
Revenue
|
42,002
|
174
|
42,176
|
|
37,907
|
309
|
38,216
|
|
Operating profit
|
2,584
|
414
|
2,998
|
|
2,313
|
279
|
2,592
|
|
Net (loss)/gain on sale and closure
of businesses
|
(203)
|
203
|
-
|
|
24
|
(24)
|
-
|
|
Finance costs
|
(325)
|
76
|
(249)
|
|
(200)
|
34
|
(166)
|
|
Profit before tax
|
2,056
|
693
|
2,749
|
|
2,137
|
289
|
2,426
|
|
Tax expense
|
(642)
|
(60)
|
(702)
|
|
(525)
|
(63)
|
(588)
|
|
Profit for the year
|
1,414
|
633
|
2,047
|
|
1,612
|
226
|
1,838
|
|
Non-controlling
interests
|
(10)
|
-
|
(10)
|
|
(5)
|
-
|
(5)
|
|
Attributable profit
|
1,404
|
633
|
2,037
|
|
1,607
|
226
|
1,833
|
|
Average number of shares
|
1,705m
|
-
|
1,705m
|
|
1,743m
|
-
|
1,743m
|
|
Basic earnings per share
|
82.3c
|
37.2c
|
119.5c
|
|
92.2c
|
13.0c
|
105.2c
|
|
EBITDA
|
|
|
$4,145m
|
|
|
|
$3,620m
|
|
1.
|
With effect from 1 October 2023,
the reporting currency of the Group was changed from sterling to US
dollars. The results for the year ended 30 September 2023 have been
restated in US dollars.
|
|
2.
|
Alternative Performance Measure
(APM) (see pages 48 to 55).
|
Statutory income statement
Revenue
On a statutory basis, revenue increased by
10.8% to $42,002m (2023: $37,907m).
Operating profit
Statutory operating profit was $2,584m (2023:
$2,313m), an increase of 11.7%, with statutory operating margin of
6.2% (2023: 6.1%).
Statutory operating profit includes
non-underlying item charges of $414m (2023: $279m), including
acquisition-related charges of $235m (2023: $153m) and $170m (2023:
$118m) of charges related to the strategic portfolio
review.
As part of our strategic portfolio review, and
considering country exits, ongoing advancement of technologies and
the increased decentralisation of our business, we have reviewed
our European regional business transformation ERP programme that
commenced a number of years ago. We have decided to discontinue the
implementation and roll out of our cross-market ERP programme and,
accordingly, have recognised a charge of $160m as a specific
adjusting item, which includes $146m for the non-cash impairment of
work-in-progress head office (non-client-related) computer software
assets. An impairment charge of $10m has been recognised in respect
of our business in Qatar. In 2023, the net charge included the
impact of site closures and contract renegotiations and
terminations in the UK.
A full list of non-underlying items is included
in note 14 (non-GAAP measures).
Net gain or loss on sale and closure of
businesses
The Group has recognised a net loss of $203m
(2023: net gain of $24m) on the sale and closure of businesses,
including exit costs of $92m (2023: $14m) and a charge of $250m
(2023: credit of $1m) in respect of the reclassification of
cumulative currency translation differences. As part of our
strategic portfolio review, we exited five countries during the
year and, in July, the Group agreed the sale of its businesses in
Chile, Colombia and Mexico, subject to regulatory approval and
completion procedures. Subsequent to the year-end, we agreed the
sale of our business in Kazakhstan, subject to regulatory
approval.
Finance costs
Finance costs increased to $325m (2023: $200m)
mainly reflecting both higher net debt and interest rates during
the year, together with a partial reversal of the fair value gains
on derivatives held to minimise volatility in short-term underlying
finance costs in previous years.
Tax expense
Profit before tax was $2,056m (2023: $2,137m)
giving rise to an income tax expense of $642m (2023: $525m),
equivalent to an effective tax rate of 31.2% (2023: 24.6%). The
increase in rate primarily reflects the increase in the UK
corporate tax rate from 19% to 25% from 1 April 2023 and the impact
of non-taxable non-underlying items.
Financial review (continued)
Earnings per share
Basic earnings per share was 82.3c (2023:
92.2c), a decrease of 10.7%, as the higher operating profit is more
than offset by the impact of the reclassification of cumulative
currency translation differences on sale of businesses, higher
finance costs and higher effective tax rate.
Underlying income statement
Revenue
Organic revenue growth was strong at 10.6%,
including net new business growth of 4.2%, which remains above our
historical level of approximately 3%, pricing of around 4% and
like-for-like volume growth of around 2%. As expected, volume
growth moderated during the year as we lapped strong prior year
comparatives.
Growth in underlying revenue was broad-based
reflecting double-digit organic revenue growth, especially in North
America and Europe, and also the contributions from significant
acquisitions during the year. This was partly offset by the impact
of exits from non-core countries as part of the Group's strategy to
focus on our larger developed markets and de-risk our portfolio.
Client retention rates remained strong at 96.0%.
Operating profit
Underlying operating profit increased by 16.4%
on a constant-currency basis, to $2,998m, with underlying operating
margin at 7.1% (2023: 6.8%). Strong margin progression was achieved
across all regions, underpinned by our operational scale,
efficiencies and appropriate levels of pricing to mitigate
inflation.
Finance costs
Underlying finance costs increased to $249m
(2023: $166m) mainly reflecting both higher net debt and interest
rates during the year.
Tax expense
On an underlying basis, the tax
charge was $702m (2023: $588m), equivalent to an effective tax rate
of 25.5% (2023: 24.2%). The increase
in rate primarily reflects the increase in the UK corporate tax
rate from 19% to 25% from 1 April 2023. The tax environment
continues to be uncertain, with more challenging tax authority
audits and enquiries globally.
Earnings per share
On a constant-currency basis, underlying basic
earnings per share increased by 14.6% to 119.5c (2023: 104.3c)
reflecting the higher profit for the year.
Balance sheet
Liquidity
The Group finances its operations through cash
generated by the business and borrowings from a number of sources,
including banking institutions, the public and the private
placement markets. The Group has developed long-term relationships
with a number of financial counterparties with the balance sheet
strength and credit quality to provide credit facilities as
required.
The Group seeks to avoid a concentration of
debt maturities in any one period to spread its refinancing risk. A
$352m US Private Placement (USPP) note matured and was repaid in
October 2023. In February 2024, the Group issued a €750m ($806m)
fixed-rate sustainable bond maturing in February 2031. The new bond
effectively pre-financed a €750m ($809m) bond which matured and was
repaid in July 2024. In September 2024, the Group issued a €500m
($557m) fixed-rate sustainable bond maturing in September 2033. The
maturity profile of the Group's principal borrowings at 30
September 2024 shows that the average period to maturity is 4.6
years (2023: 3.3 years).
The Group's USPP notes contain leverage and
interest cover covenants which are tested semi-annually at 31 March
and 30 September. The leverage covenant test stipulates that
consolidated net debt must be less than or equal to 3.5 times
consolidated EBITDA. The interest cover covenant test stipulates
that consolidated EBITDA must be more than or equal to 3 times
consolidated net finance costs. Consolidated EBITDA and net finance
costs are based on the preceding 12 months. The leverage and
interest cover ratios were 1.1 times and 19.6 times, respectively,
at 30 September 2024. Net debt, consolidated EBITDA and net
finance costs are subject to certain accounting adjustments for the
purposes of the covenant tests.
At 30 September 2024, the Group had access to
$3,236m (2023: $3,271m) of liquidity, including $2,683m
(2023: $2,441m) of undrawn bank facilities committed to August
2026 and $553m (2023: $830m) of cash, net of overdrafts. Our credit
ratings remain strong investment grade: Standard & Poor's A/A-1
long-term/short-term (outlook Stable); and Moody's A2/P-1
long-term/short-term (outlook Stable).
Financial review (continued)
Net debt
Net debt has increased by $932m to $5,391m
(2023: $4,459m). The Group generated $1,675m of free cash flow and
received $327m in respect of the sale of its 19% effective interest
in ASM Global Parent, Inc., which was more than offset by $999m
spent on the acquisition of subsidiaries, joint ventures and
associates, net of disposal proceeds, dividends of $963m and share
buybacks of $577m. Adverse exchange translation was $143m. Cash net
of lease liabilities of $34m in Chile, Colombia and Mexico has been
reclassified to held for sale in the Group's balance sheet at 30
September 2024.
At 30 September 2024, the ratio of net debt to
underlying EBITDA was 1.3x (2023: 1.2x). Our leverage policy is to
maintain strong investment-grade credit ratings and to target net
debt to underlying EBITDA in the range of 1x‑1.5x.
Post-employment benefits
The Group has continued to review and monitor
its pension obligations throughout the year, working closely with
the trustees and actuaries of all schemes across the Group to
ensure appropriate assumptions are used and adequate provision and
contributions are made.
The accounting surplus in the Compass Group
Pension Plan is $542m at 30 September 2024 (2023: $525m). The
deficit in the rest of the Group's defined benefit pension schemes
has increased to $1,274m (2023: $983m). The net deficit in these
schemes is $154m (2023: $130m) including investments of $1,120m
(2023: $853m) held in respect of unfunded pension schemes and the
US Rabbi Trust arrangements which do not meet the definition of
pension assets under IAS 19 Employee Benefits.
The total pensions operating charge for defined
contribution schemes in the year was $289m (2023: $254m) and $41m
(2023: $37m) for defined benefit schemes.
Return on capital employed
Return on capital employed was 19.0% (2023:
19.3%) based on net underlying operating profit after tax.
Excluding the effect of the higher underlying effective tax rate of
25.5% (2023: 24.2%), the impact of recent business acquisitions on
capital employed was offset by the Group's strong trading
performance.
Cash flow
Free cash flow
Free cash flow totalled $1,675m (2023:
$1,425m). During the year, we made cash payments totalling $24m
(2023: $70m) in relation to restructuring and strategic
programmes and the one-off pension charge. Adjusting for this, and
for acquisition transaction costs of $41m (2023: $21m) which are
reported as part of operating cash flow, underlying free cash flow
was $1,740m (2023: $1,516m), with underlying free cash flow
conversion at 85.0% (2023: 82.5%). Underlying profit for the year
has replaced underlying operating profit as the denominator in the
calculation of underlying free cash flow conversion. Underlying
free cash flow conversion would be 58.0% (2023: 58.5%) using
underlying operating profit as the denominator.
Capital expenditure of $1,541m (2023: $1,098m)
is equivalent to 3.7% (2023: 2.9%) of underlying revenue. The
working capital inflow, excluding provisions and pensions, was
$186m (2023: outflow of $120m). The net interest outflow increased
to $228m (2023: $147m) consistent with the higher underlying
finance costs in the year. The net tax paid was $693m (2023:
$539m), which is equivalent to an underlying cash tax rate of 25.2%
(2023: 22.2%).
Acquisition and disposal of
businesses
The Group spent $1,224m (2023: $408m) on
business acquisitions during the year, net of cash acquired,
including $878m on CH&CO in the UK and Ireland and
HOFMANNS in Germany (including the repayment of acquired
borrowings), $285m on bolt-on acquisitions and interests in joint
ventures and associates, and $61m of deferred and contingent
consideration and other payments relating to businesses acquired in
previous years.
The Group received $225m (2023: $58m) in
respect of disposal proceeds net of exit costs, which primarily
comprises the sale of businesses in five countries during the
year.
Including $41m (2023: $21m) of acquisition
transaction costs included in net cash flow from operating
activities, the total net cash spent on the acquisition and
disposal of businesses is $1,040m (2023: $371m).
Sale of 19% effective interest in ASM Global
Parent, Inc.
The Group received $327m in respect of the sale
of its 19% effective interest in ASM Global Parent, Inc. in August
2024.
Dividends paid
Dividends paid in 2024 of $963m represents the
2023 final dividend ($606m) and the 2024 interim dividend
($357m).
Financial review (continued)
Purchase of own shares
The cash outflow in respect of share buybacks
totalled $577m during the year, which comprises $185m in respect of
the completion of the share buyback announced in May 2023 and $392m
in respect of the $500m share buyback announced in November 2023.
The share buyback is scheduled to complete in December
2024.
Foreign exchange translation
The $143m (2023: $91m) loss on foreign exchange
translation of net debt primarily arises in respect of the Group's
sterling and euro debt.
Other movements
Other movements primarily comprises fair value
movements on derivative financial instruments used to manage the
Group's interest rate exposure and lease liabilities acquired
through business acquisitions.
Shareholder returns
Our dividend policy is to pay out around 50% of
underlying earnings through an interim and final dividend, with the
interim dividend reflecting around one-third of the total annual
dividend.
In determining the level of dividend in any
year, the Board considers a number of factors, which include but
are not limited to:
|
·
|
the level of available distributable reserves
in the Parent Company
|
|
·
|
future cash commitments and investment
requirements to sustain the long-term growth prospects of the
business
|
|
·
|
potential strategic opportunities
|
|
·
|
the level of dividend cover
|
Further surpluses, after considering the
matters set out above, may be distributed to shareholders over time
by way of special dividend payments, share repurchases or a
combination of both.
Compass Group PLC, the Parent Company of the
Group, is a non-trading investment holding company which derives
its distributable reserves from dividends paid by subsidiary
companies. The level of distributable reserves in the Parent
Company is reviewed annually and the Group aims to maintain
distributable reserves that provide adequate cover for shareholder
returns. The distributable reserves of the Parent Company include
the distributable portion of retained earnings and the own shares
reserve, which total £2,457m at 30 September 2024 (2023:
£2,379m).
An interim dividend of 20.7c per share (2023:
17.9c per share), $357m in aggregate, was paid in July 2024. It is
proposed that a final dividend of 39.1c per share (2023: 34.7c per
share), $664m in aggregate, be paid on 27 February 2025 to
shareholders on the register on 17 January 2025. This will result
in a total dividend for the year of 59.8c per share (2023: 52.6c
per share), $1,021m in aggregate (2023: $940m). The dividend is
covered 2.0 times on an underlying earnings basis.
Shareholders appearing on the
Register of Members or holding their shares through CREST will
automatically receive their dividends in sterling, but have the
option to elect to receive their dividends in US dollars. The
closing date for the receipt of dividend currency elections is 3
February 2025. The sterling equivalent of the 2024 final dividend
will be announced on 11 February
2025.
For shares held in certificated
form on the register, US dollar elections can be made by contacting
our share registrar, Link Group. Link's contact details can be
found on our website under Dividend Information.
A Dividend Reinvestment Plan
(DRIP) will be available. The last date for receipt of elections
for the DRIP will be 6 February 2025.
The Group is in a strong position
to fund its dividend, which is well covered by cash generated by
the business. Details of the Group's going concern assessment can
be found on page 29. The ability of the Board to maintain its
future dividend policy will be influenced by a number of the
principal risks identified on pages 17 to 20 that could adversely
impact the performance of the Group, although we believe we have
the ability to mitigate those risks as outlined on pages 17 to
20.
At the date of this Announcement, $476m of the
$500m share buyback announced in November 2023 had been completed,
with the remainder scheduled to complete in December 2024. We
prioritise investment in the business through capex and M&A to
support future growth, with any surplus capital being returned to
shareholders as we maintain our strong track record of delivering
long-term, compounding shareholder returns.
Financial review (continued)
Treasury
The Group manages its liquidity, foreign
currency exposure and interest rate risk in accordance with the
policies set out below.
The Group's financial instruments comprise
cash, borrowings, receivables and payables that are used to finance
the Group's operations. The Group also uses derivatives,
principally interest rate swaps, forward currency contracts and
cross currency swaps, to manage interest rate and currency risks
arising from the Group's operations. The Group does not trade in
financial instruments. The Group's treasury policies are designed
to mitigate the impact of fluctuations in interest rates and
exchange rates and to manage the Group's financial risks. The Board
approves any changes to the policies.
Foreign currency risk
The Group's policy is to balance its principal
projected cash flows by currency with actual or effective
borrowings in the same currency. As currency cash flows are
generated, they are used to service and repay debt in the same
currency. Where necessary, to implement this policy, forward
currency contracts and cross currency swaps are taken out which,
when applied to the actual currency borrowings, convert these to
the required currency.
The borrowings in each currency can give rise
to foreign exchange differences on translation. Where the
borrowings are less than, or equal to, the net investment in
overseas operations, these exchange rate variances may be treated
as movements on reserves and recorded in the consolidated statement
of comprehensive income rather than in the consolidated income
statement.
Non-dollar earnings streams are translated at
the average rate of exchange for the year. Fluctuations in exchange
rates have given, and will continue to give, rise to translation
differences. The Group is only partially protected against the
impact of such differences through the matching of cash flows to
currency borrowings.
Interest rate risk
As set out above, the Group has effective
borrowings in a number of currencies and its policy is to ensure
that, in the short term, it is not materially exposed to
fluctuations in interest rates in its principal currencies. The
Group implements this policy either by borrowing fixed rate debt or
by using interest rate swaps or options so that the interest rates
on at least 80% of the Group's projected debt are fixed or capped
for one year. For the second and third years, interest rates are
fixed within ranges of 30% to 70% and 0% to 40% of projected debt,
respectively.
Tax
As a Group, we are committed to creating
long-term shareholder value through the responsible, sustainable
and efficient delivery of our key business objectives. This will
enable us to grow the business and make significant investments in
the Group and its operations.
We adopt an approach to tax that supports this
strategy and also balances the various interests of our
stakeholders, including shareholders, governments, employees and
the communities in which we operate. Our aim is to pursue a
principled and sustainable tax strategy that has strong commercial
merit and is aligned with our business strategy. We believe this
will enhance shareholder value whilst protecting our
reputation.
In doing so, we act in compliance with the
relevant local and international laws and disclosure requirements,
and we conduct an open and transparent relationship with the
relevant tax authorities that fully complies with the Group's Code
of Business Conduct and Business Integrity Policy.
After many years of operation, the Group has
numerous legacy subsidiaries across the world. Whilst some of these
entities are incorporated in low-tax territories, Compass does not
seek to avoid tax through the use of tax havens.
In an increasingly complex international
corporate tax environment, a degree of tax risk and uncertainty is,
however, inevitable. Tax risk can arise from unclear regulations
and differences in interpretation but, most significantly, where
tax authorities apply diverging standards in assessing intra-group
cross-border transactions. This is the situation for many
multinational organisations. We manage and control these risks in a
proactive manner and, in doing so, exercise our judgement and seek
appropriate advice from relevant professional firms. Tax risks are
assessed as part of the Group's formal governance process and are
reviewed by the Board and the Audit Committee on a regular
basis.
Financial review (continued)
Risks and uncertainties
The Board takes a proactive approach to risk
management aimed at protecting the Group's employees, clients and
consumers and safeguarding the interests of the Company and its
shareholders in a constantly changing environment.
The principal risks and uncertainties facing
the business, and the activities the Group undertakes to mitigate
these, are set out on pages 17 to 20.
Related party transactions
Details of transactions with related parties
are set out in note 12 to the consolidated financial statements.
These transactions have not had, and are not expected to have, a
material effect on the financial performance or position of the
Group.
Going concern
The factors considered by the directors in
assessing the ability of the Group to continue as a going concern
are discussed on page 29.
The Group has access to considerable financial
resources, together with longer-term contracts with a number of
clients and suppliers across different geographic areas and
industries. As a consequence, the directors believe that the Group
is well placed to manage its business risks
successfully.
Based on the assessment discussed on page 29,
the directors have a reasonable expectation that the Group has
adequate resources to continue in operational existence for at
least the period to 31 March 2026. For this reason, they continue
to adopt the going concern basis in preparing the financial
statements.
|
|
Underlying
revenue1
|
|
Change
|
|
Statutory revenue
|
|
Change
|
|
|
2024
$m
|
Restated2
2023
$m
|
|
Reported
rates
%
|
Constant
currency
%
|
Organic
%
|
|
2024
$m
|
Restated2
2023
$m
|
|
Reported
rates
%
|
|
North America
|
28,581
|
25,768
|
|
10.9%
|
10.9%
|
10.5%
|
|
28,557
|
25,745
|
|
10.9%
|
|
Europe
|
9,887
|
8,598
|
|
15.0%
|
14.3%
|
11.9%
|
|
9,737
|
8,312
|
|
17.1%
|
|
Rest of World
|
3,708
|
3,850
|
|
(3.7)%
|
(0.8)%
|
8.5%
|
|
3,708
|
3,850
|
|
(3.7)%
|
|
Total
|
42,176
|
38,216
|
|
10.4%
|
10.6%
|
10.6%
|
|
42,002
|
37,907
|
|
10.8%
|
|
|
Underlying operating
profit1
|
|
Change
|
|
Underlying operating
margin1
|
|
Statutory operating
profit
|
|
Statutory operating
margin
|
|
|
2024
$m
|
Restated2
2023
$m
|
|
Constant
currency
%
|
|
2024
%
|
2023
%
|
|
2024
$m
|
Restated2
2023
$m
|
|
2024
%
|
2023
%
|
|
North America
|
2,335
|
2,019
|
|
15.7%
|
|
8.2%
|
7.8%
|
|
2,251
|
1,931
|
|
7.9%
|
7.5%
|
|
Europe
|
583
|
479
|
|
22.0%
|
|
5.9%
|
5.6%
|
|
380
|
297
|
|
3.9%
|
3.5%
|
|
Rest of World
|
224
|
214
|
|
10.3%
|
|
6.0%
|
5.6%
|
|
224
|
205
|
|
6.0%
|
5.3%
|
|
Unallocated overheads
|
(144)
|
(120)
|
|
|
|
|
|
|
(271)
|
(120)
|
|
|
|
|
Total
|
2,998
|
2,592
|
|
16.4%
|
|
7.1%
|
6.8%
|
|
2,584
|
2,313
|
|
6.2%
|
6.1%
|
|
1.
|
Alternative Performance Measure
(APM) (see pages 48 to 55).
|
|
2.
|
With effect from 1 October 2023,
the reporting currency of the Group was changed from sterling to US
dollars. The results for the year ended 30 September 2023 have been
restated in US dollars.
|
North America - 67.8% of Group underlying
revenue (2023: 67.4%)
Underlying
Operating profit growth was 15.7% on a
constant-currency basis, increasing to $2,335m, driven by strong
revenue growth and operating margin progression.
Organic revenue growth was 10.5%, driven by net
new business growth, appropriate levels of pricing and
like-for-like volume growth. Client retention rates remained strong
at 96.4%.
Growth rates were high single-digit or greater
across all sectors, and notably strong in Business & Industry
driven by net new business growth and like-for-like volumes, which
benefited from the continued 'return to office' trend and value
proposition versus the high street. Across our other sectors,
Sports & Leisure and Education continued to benefit from high
attendance levels and per capita spend levels, while Healthcare
& Senior Living business performance included strong retail
sales and new business openings.
Operating margin increased by 40bps to 8.2%
driven by management productivity initiatives, cost control and
appropriate levels of pricing.
The region continues to acquire high-quality
businesses and talent within our existing sectors, with a
particular focus on vending.
Statutory
Statutory revenue increased by 10.9% to
$28,557m reflecting the strong organic revenue growth.
Statutory operating profit was $2,251m (2023:
$1,931m), with the difference from underlying operating profit
being acquisition-related charges of $84m (2023:
$88m).
Regional review (continued)
Europe - 23.4% of Group underlying revenue
(2023: 22.5%)
Underlying
The region continues to benefit from ongoing
investments in its people, brands and processes. Operating profit
was $583m, representing growth of 22.0% on a constant-currency
basis, driven by double-digit revenue growth, strong margin
progression and the impact of acquisitions during the
year.
Organic revenue growth of 11.9% comprised net
new business growth, volume growth and pricing. Client retention
rates at 95.5% remain significantly above historical levels. All
sectors delivered high single-digit growth rates or above, with
double-digit growth rates achieved in Business & Industry,
Education and Defence, Offshore & Remote.
Operating margin increased by 30bps to 5.9%,
reflecting management focus across the portfolio, ongoing
operational efficiencies and appropriate levels of
pricing.
We have increased our focus on M&A with
significant acquisitions to deepen our sectorisation and
sub-sectorisation strategy, unlock new capabilities and increase
the flexibility of our operating model. During the year, we
acquired HOFMANNS in Germany and CH&CO in the UK and
Ireland. Subsequent to the year-end, we also completed the
acquisition of Dupont Restauration in France and agreed to acquire
4Service AS in Norway. Additionally, as part of our focus on core
markets, we exited our joint venture in the United Arab
Emirates.
Statutory
Statutory revenue increased by 17.1% to
$9,737m, with the difference from underlying revenue being the
presentation of the share of results of our joint ventures
operating in the Middle East.
Statutory operating profit was $380m (2023:
$297m), with the difference from underlying operating profit mainly
reflecting acquisition-related charges of $151m (2023: $56m) and
charges related to the Group's strategic portfolio review of $43m
(2023: $118m).
Rest of World - 8.8% of Group underlying
revenue (2023: 10.1%)
Underlying
Operating profit grew by 10.3% on a
constant-currency basis, to $224m, driven by strong organic revenue
growth and margin progression. This growth was despite the impact
of exits from our operations in four non-core countries during the
year.
Organic revenue growth was 8.5% and strongest
in our Business & Industry sector, particularly in India,
driven by high levels of net new business growth and the 'return to
office' trend. All other sectors delivered mid-to-high single-digit
organic revenue growth underpinned by net new business growth,
like-for-like volume growth and pricing. Client retention rates
remained above historical levels at 94.3%.
Operating margin increased by a further 40bps
to 6.0% reflecting the benefits from strong focus on our core
markets, including Australia, Japan and India.
As part of the Group's strategy to increase
focus on its core markets, we exited Argentina, Angola, mainland
China and Brazil during the year and agreed to exit our businesses
in Chile, Colombia and Mexico, subject to regulatory approval and
completion procedures. Subsequent to the year-end, we agreed to
exit our business in Kazakhstan, subject to regulatory
approval.
Statutory
Statutory revenue decreased by 3.7% to $3,708m
reflecting the non-core business disposals. There is no difference
between statutory and underlying revenue.
Statutory operating profit was $224m (2023:
$205m), with the difference from underlying operating profit in
2023 being acquisition-related charges of $9m.
The Board takes a proactive
approach to risk management aimed at protecting the Group's
employees, clients and consumers and safeguarding the interests of
the Company and its shareholders in a constantly changing
environment.
Risk management is an essential
element of business governance. The Group has risk management
policies, processes and procedures in place to ensure that risks
are properly identified, evaluated and managed at the appropriate
level.
The identification of risks and
opportunities, the development of action plans to manage those
risks and maximise the opportunities, and the continual monitoring
of progress against agreed key performance indicators (KPIs) are
integral parts of the business process and core activities
throughout the Group.
In compliance with provision 28 of
the UK Corporate Governance Code 2018 (the Code), the Board has
conducted a robust assessment of the Company's emerging and
principal risks. The following pages set out the Board's approach
to assessing and mitigating risk, the principal risks of the
Company, and the procedures in place to identify emerging
risks.
Risk management framework
The Board has overall responsibility for risk
management. This includes establishing policies and procedures to
manage risk, overseeing the internal control framework, reviewing
the nature and extent of the principal risks, setting risk appetite
and embedding a mindset of risk management throughout the
business.
The Board has approved a Risk Management
Policy. The Group operates a formal risk management process in
accordance with this policy, under which the Group's principal
risks (set out on pages 17 to 20) are assessed and prioritised
biannually. In accordance with the Financial Reporting Council's
Guidance on Risk Management, Internal Control and Related Financial
Business Reporting 2014 and in the Code, this process has been in
place for the financial year under review. These systems are
designed to manage rather than eliminate the risk of failure to
achieve the Group's strategic objectives, safeguard the Group's
assets against material loss, fairly report the Group's performance
and position, and ensure compliance with relevant legislation,
regulation and best practice including that related to social,
environmental and ethical matters. These systems provide
reasonable, but not absolute, assurance against material
misstatement or loss.
The Board delegates aspects of risk management,
with the Executive Committee responsible for the day-to-day
management of significant risk, and the Audit Committee responsible
for the oversight of Compass' risk management systems and internal
financial controls. The Group Director of Risk and Internal Audit
maintains the risk management framework including the Risk
Management Policy.
The Audit Committee annually reviews the
effectiveness of the Group's approach to risk management and any
changes to the Risk Management Policy and recommends the principal
risks and uncertainties disclosures made in the Annual Report and
Accounts to the Board for approval.
Risks and the corresponding controls and
mitigations are reviewed by country and regional leadership teams
on an ongoing basis. Risk updates are integral to periodic
management reviews and are regularly reviewed by the Regional
Governance Committees (RGCs) and the Executive Committee. A
critical component of the risk review process is the dynamic
identification of emerging and developing risks at a country,
regional and Group-level. This bottom-up and top-down approach
provides a comprehensive assessment of the key risks facing the
Group. The findings of the risk reviews, including the principal
risks and any developing trends, are reported to and considered by
the Board twice a year.
Risks are considered at gross and net levels.
This allows the impact of each risk and likelihood of its
occurrence both before and after controls and mitigations to be
assessed. Risk management plans are developed for all significant
risks. They include a clear description of the nature of the risk,
quantification of the potential impact and likelihood of
occurrence, the owners for each risk, and details of the controls
and mitigations in place, proportionate to the risk, and in line
with the Company's business. The identification and assessment of
climate-related risks and opportunities are incorporated within the
risk management process. All country operating units are mandated
to consider climate-related risks and opportunities. These are
assessed in terms of percentage profit before interest and tax
(PBIT) impact in accordance with the criteria set out in the
Board-approved Risk Management Policy. All country and Group-level
risks are assigned risk owners and, together with the mitigations,
are recorded in the central risk reporting system.
Group companies also submit biannual risk and
internal control assurance letters to the Group CFO on internal
control and risk management issues, with comments on the control
environment within their operations. The Chair of the Audit
Committee reports to the Board on any matters arising from the
Committee's review of how the risk management and internal control
processes have been applied.
The Audit Committee keeps under review the
adequacy and effectiveness of the Company's and Group's internal
financial controls and risk management systems.
Risk management (continued)
Risk appetite
The Board interprets risk appetite
as the level of risk that the Company is willing to take to meet
its strategic objectives. The Board's attitude to and appetite for
risk are communicated to the Group's businesses through the
strategy planning process and the internal risk governance and
control frameworks. In determining its risk appetite, the Board
recognises that a prudent and robust approach to risk mitigation
must be carefully balanced with a degree of flexibility so that the
entrepreneurial spirit that has greatly contributed to the Group's
success is not inhibited.
In assessing risk appetite, the
Board reviews the three-year business plan and associated strategic
risks. Risk appetite for specific financial risks such as funding
and liquidity, counterparty, foreign exchange and interest rate
risk are set out in the Board approved treasury policies.
Compliance with legal and regulatory requirements, such as those
contained in the Companies Act, health and safety and other
risk-specific legislation, is mandatory.
New and emerging risks
The Board has established
processes for identifying emerging risks, and horizon scanning for
risks that may arise over the medium to long-term. Emerging and
potential changes to the Group's risk profile are identified
through the Group's risk management framework and through direct
feedback from management, including in regard to changing operating
conditions, and market and consumer trends.
The democratisation of generative
artificial intelligence (AI) has given widespread access to
powerful online AI services for content creation. This opportunity
presents several risks including breach of data confidentiality and
data privacy, and other intellectual property-related risks. In
response, to mitigate these risks, Compass has implemented
principles-based rules that apply globally, and we have developed a
framework for responsible use of AI to support all our
markets.
The ongoing tensions in the Middle
East and the Russia-Ukraine conflict have elevated geopolitical
risks and while we do not operate directly in those countries
currently affected, we do have interests elsewhere in Europe and
the Middle East. We continue to monitor these situations closely
with the safety and security of the Group's employees front of
mind.
Our principal risks
Over recent years, we have
reviewed our global portfolio of operations and as part of this we
have exited a number of countries deemed both higher-risk and
non-core to our long-term business objectives.
This has significantly reduced our
risk exposure in certain areas including political instability,
economic volatility, employee welfare (particularly foreign migrant
labour risks) and international tax. Risks arising in the immediate
aftermath of the COVID-19 pandemic have also reduced.
As a result, certain risks
(Political instability and International tax as set out in Annual
Report 2023) are no longer considered to be principal risks while
others have been combined and streamlined.
All risks disclosed in previous
years can be found in the annual reports available on our
website, www.compass‑group.com. These risks
remain important to the business and are kept under regular
review.
The principal risks and
uncertainties facing the business at the date of this Announcement
are set out on pages 17 to 20. These risks are not listed in any
order of priority.
Other risks
The principal risks do not comprise all the
risks that the Group may face. The Group faces a number of
operational risks on an ongoing basis, such as litigation and
financial risks. Additional risks and uncertainties not presently
known to management, or which are considered to be remote or are
deemed to be less material at the date of this Announcement, may
also have an adverse effect on the Group.
|
Risk and
description
|
|
Mitigation
|
|
Climate change
➊ ➋
➌ ➍ ➎
2024  2023
Strategic pillar
link:   
The impact of climate change on the environment may
lead to issues around food sourcing and security, and supply chain
continuity in some of the Group's markets. Issues in these areas
could affect the availability of some food products, and
potentially may lead to food cost inflation.
|
|
The Group continues to focus on evaluating its
exposure to climate change and seeks to identify potential future
issues early so that sourcing and operations can be adjusted, and
menus adapted appropriately. The Task Force on Climate-related
Financial Disclosures scenario analysis helps inform the
materiality of these risks. Work continues with clients and
suppliers to propose, execute and measure solutions to support
their efforts and those of Compass in reducing greenhouse gas (GHG)
emissions. Compass has targeted climate net zero GHG emissions by
2050 alongside validated science-based targets to reduce emissions
by 2030 (from a 2019 base year) in line with the 2015 Paris
Agreement.
|
|
Food safety1
➊ ➋
➌ ➍ ➎
2024  2023
Strategic pillar
link:
Compass Group companies feed millions of consumers
every day. For that reason, setting the highest standards for food
hygiene and safety is paramount. Safety breaches could cause
serious business interruption and could result in criminal and/or
civil prosecution, increased costs and potential damage to the
Company's reputation.
|
|
Management meetings throughout the Group feature a
health and safety update (food safety and/or occupational safety)
as one of their first substantive agenda items.
Food safety improvement KPIs are included in the
annual bonus plans for each of the businesses' management teams.
The Group has policies, procedures and standards in place to ensure
compliance with legal obligations and industry standards.
The safety and quality of the Group's global supply
chain are assured through compliance with a robust set of standards
which are regularly reviewed, audited and upgraded as necessary to
improve supply chain visibility and product integrity.
Further mitigations in place include our Global
Safety Standards, Global Supply Chain Integrity Standards and a
Global Allergen Management Plan.
|
|
Occupational safety1
➊ ➋
➌ ➍ ➎
2024 2023
Strategic pillar
link:
Compass Group companies employ hundreds of thousands
of people globally. Ensuring the safety of our employees,
consumers, and suppliers is our top priority. Failure to comply
with workplace safety standards can result in injuries to
employees, clients and consumers, or other third parties,
potentially causing operational disruptions and adverse financial,
legal, and reputational consequences.
|
|
In addition to the priority focus in management
meetings, occupational safety improvement KPIs are included in the
annual bonus plans for each of the businesses' management
teams.
Our safety framework outlines the methods for
executing and reporting safety measures, ensuring a secure
environment for colleagues, contractors, and consumers. We
regularly update and refine the health and safety framework to
address any challenges that may emerge from operational
changes.
Group standards are supplemented in country with
occupational safety standards that meet local regulatory
conditions.
|
1. Combined under Health and safety risk in Annual Report
2023.
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Key
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 Link
to
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Increased
risk
|
|
➊
MAP 1: Client sales and marketing
|
|
|
Static
risk
|
|
➋
MAP 2: Consumer sales and marketing
|
|
|
Decreasing risk
|
|
➌
MAP 3: Cost of food
|
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New risk
|
|
➍
MAP 4: In-unit costs
|
|
|
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➎
MAP 5: Above-unit overheads
|
Alignment with our strategic focus
areas
|
|
People
|
|
Performance
|
|
Purpose
|
|
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Principal risks (continued)
|
Risk and
description
|
|
Mitigation
|
|
Pandemic
➊ ➋
➌ ➍ ➎
2024  2023
Strategic pillar
link:
The Group's operations were significantly disrupted
due to the global COVID-19 pandemic and associated containment
measures. Compass recovered well and learned from the pandemic, and
this risk has now diminished. However, outbreaks of another
pandemic, could cause further business risk.
|
|
Operations and working practices have been adjusted
to retain the skills and experience of colleagues and provide
flexibility in the event of another pandemic which leads to a
resumption of containment measures.
To protect the Group's employees, clients and
consumers, in the event of another pandemic, enhanced health and
safety protocols and personal protective equipment requirements and
guidelines, hygiene requirements and site layout solutions
developed in consultation with expert advisers and with our
clients, would be adopted.
Careful management of the Group's cost base and
robust measures to protect the Group's liquidity position have
ensured that we remain resilient and well placed to take advantage
of appropriate opportunities as they arise.
Robust incident management and business continuity
plans are in place and are monitored for effectiveness and
regularly reviewed to ensure they reflect evolving best
practice.
|
|
Talent1
➍ ➎
2024 2023
Strategic pillar
link:
Attracting, retaining and motivating the best people
with the right skills, at all levels of the organisation, is key to
the long-term success of the Group.
Changes to economic conditions may increase the risk
of attrition at all levels of the organisation.
|
|
Leadership succession planning is performed at
Board, regional and country-levels. The Group has established
tools, training, development, performance management and reward
programmes to help retain, develop, motivate and support its
skilled workforce, including an increasing focus on global mobility
and opportunities.
The Group has a number of well-established
initiatives which help to monitor levels of engagement and to
respond to the needs of employees. Specifically, Compass has
increased its local focus and employee support on mental health
awareness, stress management and resilience and the provision of
financial advice and assistance to better equip its people in times
of uncertainty and change.
|
|
Sales and
retention2
➊ ➋
2024 2023
Strategic pillar
link:
The Group's growth ambitions rely on sustainably
driving positive net new business through securing and retaining a
diverse range of clients.
The Group's operating companies contract with a large
number of clients. Failure to comply with the terms of these
contracts, including proper delivery of services, could lead to the
loss of business and/or claims.
The potential loss of material client contracts and
the inability to secure additional new contracts in a competitive
market is a risk to Compass' businesses.
The emergence of new industry participants and
traditional competition using disruptive technology could adversely
affect the Group's businesses.
|
|
Compass has strategies based on quality, value,
innovation and investment in new technologies that strengthen its
long-term relationships with its clients and consumers.
The Group's business model is structured so that it
is not reliant on one particular sector or group of clients.
Technology is used to support the delivery of
efficiencies and to contribute to growth through, for example,
cashierless and cashless payment systems and the use of AI. This is
beneficial to clients and consumers and positively impacts
retention and new business wins.
Compass continues to focus on financial security and
safety. In today's environment, these are key strengths for
clients.
Processes are in place to ensure that the services
delivered to clients are of an appropriate standard and comply with
the required contract terms and conditions.
Compass continues to evolve its offer to increase
participation rates and service sites of different sizes.
|
1. Combines and streamlines risks relating to Recruitment and
Retention and motivation as set out in Annual Report
2023.
2. Incorporates and streamlines risks relating to Service
delivery, contractual compliance and retention, and Competition and
disruption as set out in Annual Report 2023.
|
Key
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Link
to
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Increased
risk
|
|
➊
MAP 1: Client sales and marketing
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|
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Static
risk
|
|
➋
MAP 2: Consumer sales and marketing
|
|
|
Decreasing risk
|
|
➌
MAP 3: Cost of food
|
|
|
New risk
|
|
➍
MAP 4: In-unit costs
|
|
|
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|
➎
MAP 5: Above-unit overheads
|
|
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Alignment with our strategic focus
areas
|
|
People
|
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Performance
|
|
Purpose
|
Principal risks (continued)
|
Risk and
description
|
|
Mitigation
|
|
Geopolitical
➊ ➋
➌ ➍ ➎
2024 2023 
Strategic pillar
link:
The conflict in the Middle East
and the ongoing Russia-Ukraine war have increased geopolitical
risks, heightened national security threats in those regions, and
disrupted the global energy market. These factors contribute to
risks such as economic volatility including cost inflation and
cybersecurity threats.
|
|
As a Group, Compass is monitoring
the situation closely with the safety and security of the Group's
employees front of mind.
Whilst we do not operate in Israel
or the Palestinian territories, we do have interests elsewhere in
the Middle East. Compass has permanently exited the Russian market
and moved away from all known Russian suppliers.
The Group has in place strategies
to manage economic volatility including cost inflation and
cybersecurity threats.
|
|
Economic
volatility1
➊ ➋
➌ ➍ ➎
2024 2023
Strategic pillar
link:
Certain sectors of Compass' business could be
susceptible to negative shifts in the economy and employment rates.
Compass has strategically exited a number of countries with high
economic volatility. This move, coupled with improved economic
conditions in our primary markets, has reduced the risks affecting
the Group.
|
|
As part of Compass' strategy, the Group is focused
on productivity and purchasing initiatives which help to manage the
cost base.
During adverse conditions, if necessary, actions can
be taken to reduce labour costs and action plans have been
implemented to protect profitability and liquidity.
As part of the MAP framework, and by sharing best
practice across the Group, Compass seeks to manage inflation by
continuing to drive greater efficiencies through menu management,
supplier rationalisation, labour scheduling and productivity, and
through the increased use of technology. Cost indexation in our
contracts also gives Compass the contractual right to review
pricing with clients.
Our success in managing cost inflation also provides
an opportunity, as the scale and maturity of our procurement
operations allows us to manage supply chain price increases more
effectively than some of our competitors and in-house operations.
We believe this is a factor in increasing levels of first-time
outsourcing.
|
|
Business ethics and
integrity2
➊ ➋
➌ ➍ ➎
2024 2023
Strategic pillar
link:
Ineffective compliance management systems, lack of an
embedded business integrity culture or serious violation of our
policies, relevant laws, or regulations (including but not limited
to anti-bribery and corruption, anti-competitive behaviour, fraud,
money laundering, tax evasion, trade and economic sanctions, human
rights and modern slavery, and data protection), could result in
civil and/or criminal proceedings leading to significant fines,
sanctions, financial loss and reputational harm.
Regulatory expectations and new laws in these areas
are being introduced in certain countries and regions, with a
heightened focus on corporate enforcement, accountability and
supply chain resilience.
|
|
The Group's zero-tolerance-based Code of Business
Conduct (CBC), Business Integrity Policy (BIP) and Human Rights
Policy (HRP), govern all aspects of its relationships with its
stakeholders. Compass operates a continuous improvement process as
part of the Group's Ethics and Integrity programme (EIP).
The Group's risk management process helps identify
major risks and informs the regular monitoring, effectiveness
testing and review of key areas of our internal control
framework.
A strong culture of integrity is promoted through
Compass' EIP (including training and awareness activities) and its
independently operated SpeakUp, We're Listening helpline and web
platform. All alleged breaches of the CBC, BIP and the HRP, and
other serious misconduct, are followed up and investigated (as
appropriate).
To enhance its ability to counter risks to its
businesses and supply chains from modern slavery, Compass has
focused on the areas where its human rights strategy can have the
greatest impact.
This has been done through the continued
implementation of the HRP, the work of the Human Rights Working
Group, the engagement of external specialist advisers, e-learning
and continued efforts to improve the Group's human rights due
diligence through supplier evaluation and labour agency
reviews.
The strategic exit of several countries has helped
to lower the risk around employee welfare.
|
1. Incorporates risk relating to Cost inflation as set out in
Annual Report 2023.
2. Combines and streamlines risks relating to Social and ethical
standards, and Compliance and fraud as set out in Annual Report
2023.
|
Key
|
|
Link
to
|
|
|
Increased
risk
|
|
➊
MAP 1: Client sales and marketing
|
|
|
Static
risk
|
|
➋
MAP 2: Consumer sales and marketing
|
|
|
Decreasing risk
|
|
➌
MAP 3: Cost of food
|
|
|
New risk
|
|
➍
MAP 4: In-unit costs
|
|
|
|
|
➎
MAP 5: Above-unit overheads
|
|
|
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Alignment with our strategic focus
areas
|
|
People
|
|
Performance
|
|
Purpose
|
|
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|
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|
Principal risks (continued)
|
Risk and
description
|
|
Mitigation
|
|
Cybersecurity and data privacy
➊ ➋
➌ ➍ ➎
2024 2023
Strategic pillar
link:
The digital world creates increasing risk for global
businesses including, but not limited to, technology failures, loss
of confidential data, data privacy breaches and damage to brand
reputation through, for example, the increased threat of
cyber-attacks, and use and instantaneous nature of social
media.
Disruption caused by the failure of key software
applications, security controls, or underlying infrastructure, or
disruption caused by cyber-attacks could impact day-to-day
operations and management decision-making or result in a regulatory
fine or other sanction and/or third-party claims.
The incidence of sophisticated phishing and malware
attacks (including ransomware) on businesses is rising with an
increase in the number of companies suffering operational
disruption, unauthorised access to and/or loss of data, including
confidential, commercial, and personal identifiable data.
A combination of geopolitical instability and
accessibility of sophisticated AI enabled tools and techniques have
contributed to an increase in the risk of phishing and malware
attacks including ransomware across all industries.
The democratisation of generative AI has given
widespread access to powerful online AI services for content
creation. This opportunity presents several risks including to data
privacy and confidentiality.
|
|
Compass continually assesses its cyber risk, and
monitors and manages the maturity of its enterprise infrastructure,
platforms and security controls to ensure that it can effectively
prevent, detect and respond to current or future cyber attacks.
Appropriate crisis management procedures are in place
to manage issues in the event of a cyber incident occurring. Our
response protocols are supported by using industry-standard
tooling, experienced IT and security professionals, and external
partners to mitigate potential impacts. Assurance is provided by
regular compliance monitoring of our key information technology
control framework, which is designed to prevent and defend against
cyber threats and other risks.
The Group relies on a variety of digital and
technology platforms to manage and deliver services and communicate
with its people, clients, consumers and suppliers. Compass'
decentralised model and infrastructure help to mitigate propagation
of attacks across the Group's technology estate.
Compass continues to be focused on the need to
maximise the effectiveness of its information systems and
technology as a business enabler. As such, the Group continues to
invest in technology and specialist resources in order to further
strengthen its platforms, cyber-security defences and controls to
prevent and detect cyber threats and respond to attacks in order to
mitigate the risk of operational disruption, technology failure,
unauthorised access to and/or loss of data.
The Group has implemented configuration changes
designed to block phishing emails, increased awareness campaigns,
and provided cyber training to help employees identify these kinds
of attacks.
In response to the potential risks posed by AI,
Compass has implemented principles-based rules that apply globally,
and we are currently developing a framework for the responsible use
of AI in all our markets.
Information systems, technology and cyber-security
controls and risks are assessed as part of the Group's formal
governance processes and are reviewed by the Audit Committee on a
regular basis.
|
|
Key
|
|
Link
to
|
|
|
Increased
risk
|
|
➊
MAP 1: Client sales and marketing
|
|
|
Static
risk
|
|
➋
MAP 2: Consumer sales and marketing
|
|
|
Decreasing risk
|
|
➌
MAP 3: Cost of food
|
|
|
New risk
|
|
➍
MAP 4: In-unit costs
|
|
|
|
|
➎
MAP 5: Above-unit overheads
|
|
|
|
|
|
Alignment with our strategic focus
areas
|
|
People
|
|
Performance
|
|
Purpose
|
|
|
|
|
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In accordance with provision 31 of the UK
Corporate Governance Code 2018, the directors have assessed the
Group's viability, considering its current trading performance,
financial position, financing, strategic plan and principal
risks.
Business prospects
The Board has considered the
long-term prospects of the Group based on its business model,
strategy and markets. Compass is a global leader in food services
and the geographical and sector diversification of the Group's
operations helps to minimise the risk of serious business
interruption or catastrophic damage to its reputation. The Group's
business model is structured so that it is not reliant on one group
of clients or sector. The Group's largest client constitutes
2% of underlying
revenue, with the top 10 clients accounting for
9%.
Assessment
The directors have determined that a three-year
period to 30 September 2027 is an appropriate period over which to
provide the Group's viability statement on the basis that it is the
period reviewed by the Board in its strategic planning process and
is aligned to the typical length of the Group's contracts (three to
five years). The directors believe that this presents the Board and
readers of the Annual Report with a reasonable degree of confidence
over this longer-term outlook.
The Board's assessment of the Group's viability
comprises the following business processes:
|
·
|
Risk management process
|
|
|
The Group operates a formal risk management
process under which the Group's principal risks are assessed and
prioritised biannually. Risks and corresponding controls and
mitigations are reviewed by country and regional leadership teams
on an ongoing basis. The findings of the risk reviews, including
the principal risks and any developing trends, are reported to the
Board twice a year. In making its viability assessment, the Board
carried out a robust evaluation of the emerging and principal risks
facing the Group (see pages 17 to 20), including those that would
threaten its business model, future performance, solvency or
liquidity.
|
|
·
|
Strategic planning process
|
|
|
The Board considers annually a three-year,
bottom-up strategic plan and a more detailed budget which is
prepared for the following year. Current-year business performance
is reforecast during the year. The plan is reviewed and approved by
the Board, with involvement throughout from the Group CEO, Group
CFO and the executive team. The Board's role is to consider the
appropriateness of key assumptions, taking into account the
external environment and business strategy. The most recent
three-year plan was approved by the Board in November
2024.
|
|
·
|
Headroom and covenant analysis
|
|
|
At 30 September 2024, the Group had $2.7bn of
undrawn committed bank facilities and $0.6bn of cash net of
overdrafts. Term debt maturities in the three-year period total
$1.4bn. Based on the forecast cash flows in the strategic plan, the
maturing debt is expected to be refinanced during the three-year
period to 30 September 2027 to maintain the desired level of
headroom. The $2.7bn of committed bank facilities mature in 2026,
but are expected to be refinanced during 2025. The Group's
long-term (A/A2) and short-term (A-1/P-1) credit ratings and
well-established presence in the debt capital markets provide the
directors with confidence that the Group could refinance the
maturing debt and facilities as required.
A reverse stress test has been undertaken to
identify the circumstances that would cause the Group to breach the
headroom against its committed facilities or the financial
covenants on its US Private Placement (USPP) debt. At
30 September 2024, the nominal value of USPP debt outstanding
totalled $700m (2023: $1,052m). The reverse stress test, which
removes discretionary M&A expenditure as a mitigating action,
shows that underlying operating profit1 would have to
reduce by more than 55% of the strategic plan level throughout the
three-year assessment period before the Group's committed
facilities are reached. The refinancing requirement is not
accelerated in the reverse stress test as a mitigating action given
the strong liquidity position of the Group.
The principal risks that would have the most
significant impact on the Group's business model, future
performance, solvency or liquidity are another pandemic and
associated containment measures and geopolitical tensions, and
these, together with the other principal risks identified on pages
17 to 20, have been considered as part of the viability assessment.
Specific scenarios based on the principal risks have not been
modelled on the basis that the level of headroom to absorb the
occurrence of such risks is substantial and there is a range of
other actions available that could be implemented to mitigate the
potential impact.
|
|
1.
|
Alternative Performance Measure
(APM). The Group's APMs are defined in note 14 (non-GAAP measures)
and reconciled to GAAP measures in notes 2 (segmental analysis) and
14 to the consolidated financial statements.
|
Viability statement (continued)
|
|
Substantial mitigating actions were identified
and implemented as part of the Group's COVID-19 pandemic response
in 2020, including reducing capital expenditure, resizing the cost
base, renegotiating client contracts, pausing M&A activity and
shareholder returns, raising equity, negotiating covenant waivers
and securing additional committed funding. These actions illustrate
the flexibility the Group has to mitigate the impact of adverse
events.
In the event that the financial covenants were
to come under pressure, mitigating actions include repaying the
loan notes from available liquidity, refinancing in advance of
their maturity or negotiating covenant waivers.
|
Conclusion
Based on the results of this analysis, the
Board has a reasonable expectation that the Group will be able to
continue in operation and meet its liabilities as they fall due
over the three-year period to 30 September 2027.
Petros Parras
Group Chief Financial
Officer
26 November 2024
Compass Group PLC
Consolidated Financial Statements
Consolidated income statement
For the year ended 30 September 2024
|
|
|
|
2024
|
|
Restated1
2023
|
|
|
|
Notes
|
$m
|
$m
|
|
$m
|
$m
|
|
|
Revenue
|
2
|
|
42,002
|
|
|
37,907
|
|
|
Operating costs
|
|
|
(39,462)
|
|
|
(35,662)
|
|
|
Operating profit before joint ventures and
associates
|
|
|
2,540
|
|
|
2,245
|
|
|
Share of results of joint ventures and
associates
|
2
|
|
44
|
|
|
68
|
|
|
|
|
|
|
|
|
|
|
|
Underlying operating profit2
|
2,14
|
2,998
|
|
|
2,592
|
|
|
|
Acquisition-related charges
|
3,14
|
(235)
|
|
|
(153)
|
|
|
|
Charges related to the strategic portfolio
review
|
3,14
|
(170)
|
|
|
(118)
|
|
|
|
Other3
|
14
|
(9)
|
|
|
(8)
|
|
|
|
Operating profit
|
2
|
|
2,584
|
|
|
2,313
|
|
|
Net (loss)/gain on sale and closure of
businesses
|
10,14
|
|
(203)
|
|
|
24
|
|
|
Finance income
|
|
37
|
|
|
59
|
|
|
|
Finance expense
|
|
(286)
|
|
|
(225)
|
|
|
|
Acquisition-related charges
|
14
|
(9)
|
|
|
-
|
|
|
|
Other financing items
|
14
|
(67)
|
|
|
(34)
|
|
|
|
Finance costs
|
|
|
(325)
|
|
|
(200)
|
|
|
Profit before tax
|
|
|
2,056
|
|
|
2,137
|
|
|
Income tax expense
|
4
|
|
(642)
|
|
|
(525)
|
|
|
Profit for the year
|
|
|
1,414
|
|
|
1,612
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to
|
|
|
|
|
|
|
|
|
Equity shareholders
|
|
|
1,404
|
|
|
1,607
|
|
|
Non-controlling interests
|
|
|
10
|
|
|
5
|
|
|
Profit for the year
|
|
|
1,414
|
|
|
1,612
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
5
|
|
82.3c
|
|
|
92.2c
|
|
|
Diluted earnings per share
|
5
|
|
82.2c
|
|
|
92.1c
|
|
1.
|
See note 1.
|
|
2.
|
Operating profit excluding specific
adjusting items (see note 14).
|
|
3.
|
Other specific adjusting items
include one-off pension charge and tax on share of profit of joint
ventures (see note 14).
|
Compass Group PLC
Consolidated Financial Statements
Consolidated statement of
comprehensive income
For the year ended 30 September 2024
|
|
Notes
|
2024
$m
|
Restated1
2023
$m
|
|
Profit for the year
|
|
1,414
|
1,612
|
|
Other comprehensive income
|
|
|
|
|
Items that will not be reclassified to the
income statement
|
|
|
|
|
Remeasurement of post-employment benefit
obligations
|
|
(286)
|
33
|
|
Return on plan assets, excluding interest
income
|
|
63
|
(331)
|
|
Change in asset ceiling, excluding interest
income
|
|
(1)
|
6
|
|
Change in fair value of financial assets at
fair value through other comprehensive
income2
|
|
322
|
115
|
|
Tax (charge)/credit on items relating to the
components of other comprehensive income
|
|
(37)
|
36
|
|
|
|
61
|
(141)
|
|
Items that may be reclassified to the income
statement
|
|
|
|
|
Currency translation differences3
|
|
267
|
229
|
|
Change in fair value of financial assets at
fair value through other comprehensive
income2
|
|
28
|
-
|
|
Reclassification of cumulative currency
translation differences on sale of businesses
|
10
|
250
|
(1)
|
|
Tax credit on items relating to the components
of other comprehensive income
|
|
2
|
4
|
|
|
|
547
|
232
|
|
Total other comprehensive income for the
year
|
|
608
|
91
|
|
Total comprehensive income for the
year
|
|
2,022
|
1,703
|
|
|
|
|
|
|
Attributable to
|
|
|
|
|
Equity shareholders
|
|
2,012
|
1,698
|
|
Non-controlling interests
|
|
10
|
5
|
|
Total comprehensive income for the
year
|
|
2,022
|
1,703
|
|
1.
|
See note 1.
|
|
2.
|
The credit totalling $350m (2023: $115m) from
the change in fair value of financial assets at fair value through
other comprehensive income includes $171m (2023: $69m) in respect
of assets held by the Rabbi Trust arrangements and $179m (2023:
$46m) in respect of trade and other investments in the
US.
|
|
3.
|
Includes a gain of $318m (2023: $203m) in
relation to the effective portion of net investment
hedges.
|
Compass Group PLC
Consolidated Financial Statements
Consolidated statement of changes in
equity
For the year ended 30 September 2024
|
|
|
Attributable to equity shareholders
|
|
|
|
|
Notes
|
Share capital
$m
|
Share premium
$m
|
Other reserves
$m
|
Retained earnings
$m
|
Non-controlling interests
$m
|
Total equity
$m
|
|
At 1 October 2023
(restated1)
|
|
346
|
317
|
4,582
|
1,018
|
37
|
6,300
|
|
Profit for the
year
|
|
-
|
-
|
-
|
1,404
|
10
|
1,414
|
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
Remeasurement of
post-employment benefit obligations
|
|
-
|
-
|
-
|
(286)
|
-
|
(286)
|
|
Return on plan assets, excluding interest
income
|
|
-
|
-
|
-
|
63
|
-
|
63
|
|
Change in asset ceiling, excluding interest
income
|
|
-
|
-
|
-
|
(1)
|
-
|
(1)
|
|
Change in fair value of financial assets at
fair value through other comprehensive income
|
|
-
|
-
|
-
|
350
|
-
|
350
|
|
Currency translation differences
|
|
-
|
-
|
267
|
-
|
-
|
267
|
|
Reclassification of cumulative currency
translation differences on sale of businesses
|
10
|
-
|
-
|
250
|
-
|
-
|
250
|
|
Tax credit/(charge) on items relating to the
components
of other comprehensive
income
|
|
-
|
-
|
2
|
(37)
|
-
|
(35)
|
|
Total other comprehensive income for the
year
|
|
-
|
-
|
519
|
89
|
-
|
608
|
|
Total comprehensive income for the
year
|
|
-
|
-
|
519
|
1,493
|
10
|
2,022
|
|
Fair value of share-based payments
|
|
-
|
-
|
-
|
68
|
-
|
68
|
|
Change in fair value of non-controlling
interest put options
|
|
-
|
-
|
7
|
-
|
-
|
7
|
|
Changes to non-controlling interests due to
acquisitions and disposals
|
|
-
|
-
|
(54)
|
-
|
40
|
(14)
|
|
Reclassification of revaluation reserve on
sale of businesses
|
|
-
|
-
|
(14)
|
14
|
-
|
-
|
|
Cost of shares transferred to
employees
|
|
-
|
-
|
64
|
(64)
|
-
|
-
|
|
Purchase of own shares - share
buyback
|
|
-
|
-
|
(512)
|
-
|
-
|
(512)
|
|
Tax credit on items taken directly to
equity
|
|
-
|
-
|
-
|
8
|
-
|
8
|
|
|
|
346
|
317
|
4,592
|
2,537
|
87
|
7,879
|
|
Dividends paid to equity
shareholders
|
6
|
-
|
-
|
-
|
(963)
|
-
|
(963)
|
|
Dividends paid to non-controlling
interests
|
|
-
|
-
|
-
|
-
|
(10)
|
(10)
|
|
At 30 September 2024
|
|
346
|
317
|
4,592
|
1,574
|
77
|
6,906
|
|
|
|
|
|
|
|
|
|
| |
Compass Group PLC
Consolidated Financial Statements
Consolidated statement of changes in
equity
For the year ended 30 September 2024
|
|
|
Attributable to equity shareholders
|
|
|
|
Notes
|
Share capital
$m
|
Share premium
$m
|
Other reserves
$m
|
Retained earnings
$m
|
Non-controlling interests
$m
|
Total equity
$m
|
|
At 1 October 2022
(restated1)
|
|
346
|
317
|
5,559
|
325
|
44
|
6,591
|
|
Profit for the year
|
|
-
|
-
|
-
|
1,607
|
5
|
1,612
|
|
Other comprehensive
income
|
|
|
|
|
|
|
|
|
Remeasurement of post-employment benefit
obligations
|
|
-
|
-
|
-
|
33
|
-
|
33
|
|
Return on plan assets, excluding interest
income
|
|
-
|
-
|
-
|
(331)
|
-
|
(331)
|
|
Change in asset ceiling, excluding interest
income
|
|
-
|
-
|
-
|
6
|
-
|
6
|
|
Change in fair value of financial assets at
fair value through other comprehensive income
|
|
-
|
-
|
-
|
115
|
-
|
115
|
|
Currency translation differences
|
|
-
|
-
|
229
|
-
|
-
|
229
|
|
Reclassification of cumulative currency
translation differences on sale of businesses
|
|
-
|
-
|
(1)
|
-
|
-
|
(1)
|
|
Tax credit on items relating to the components
of other comprehensive income
|
|
-
|
-
|
4
|
36
|
-
|
40
|
|
Total other comprehensive
income/(loss) for the year
|
|
-
|
-
|
232
|
(141)
|
-
|
91
|
|
Total comprehensive income for the
year
|
|
-
|
-
|
232
|
1,466
|
5
|
1,703
|
|
Fair value of share-based payments
|
|
-
|
-
|
-
|
54
|
-
|
54
|
|
Change in fair value of non-controlling
interest put options
|
|
-
|
-
|
16
|
-
|
-
|
16
|
|
Changes to non-controlling interests due to
acquisitions and disposals
|
|
-
|
-
|
(2)
|
-
|
2
|
-
|
|
Reclassification of non-controlling interest
put options reserve on exercise of put options
|
|
-
|
-
|
7
|
-
|
(7)
|
-
|
|
Cost of shares transferred to
employees
|
|
-
|
-
|
35
|
(35)
|
-
|
-
|
|
Purchase of own shares - share
buyback
|
|
-
|
-
|
(1,246)
|
-
|
-
|
(1,246)
|
|
Purchase of own shares - employee share-based
payments
|
|
-
|
-
|
(19)
|
-
|
-
|
(19)
|
|
Tax credit on items taken directly to
equity
|
|
-
|
-
|
-
|
4
|
-
|
4
|
|
|
|
346
|
317
|
4,582
|
1,814
|
44
|
7,103
|
|
Dividends paid to equity
shareholders
|
6
|
-
|
-
|
-
|
(796)
|
-
|
(796)
|
|
Dividends paid to non-controlling
interests
|
|
-
|
-
|
-
|
-
|
(7)
|
(7)
|
|
At 30 September 2023
(restated1)
|
|
346
|
317
|
4,582
|
1,018
|
37
|
6,300
|
|
|
|
|
|
|
|
|
| |
Compass Group PLC
Consolidated Financial Statements
Consolidated balance sheet
At 30 September 2024
|
|
|
|
Restated1
30 September
2023
$m
|
Restated1
1 October
2022
$m
|
|
|
Notes
|
30 September
2024
$m
|
|
Non-current assets
|
|
|
|
|
|
Goodwill
|
7
|
6,899
|
6,105
|
5,715
|
|
Other intangible assets
|
|
3,325
|
2,480
|
2,188
|
|
Costs to obtain and fulfil contracts
|
|
1,525
|
1,316
|
1,235
|
|
Right-of-use assets
|
|
1,144
|
992
|
917
|
|
Property, plant and equipment
|
|
1,411
|
1,166
|
1,058
|
|
Interests in joint ventures and
associates
|
|
203
|
298
|
301
|
|
Other investments
|
|
1,149
|
1,049
|
881
|
|
Post-employment benefit assets
|
|
542
|
525
|
649
|
|
Trade and other receivables
|
|
410
|
309
|
180
|
|
Deferred tax assets
|
|
179
|
237
|
256
|
|
Derivative financial instruments
|
|
69
|
55
|
85
|
|
Non-current assets
|
|
16,856
|
14,532
|
13,465
|
|
Current assets
|
|
|
|
|
|
Inventories
|
|
734
|
692
|
570
|
|
Trade and other receivables
|
|
5,686
|
5,094
|
4,452
|
|
Tax recoverable
|
|
141
|
109
|
119
|
|
Cash and cash equivalents
|
|
623
|
1,029
|
2,214
|
|
Derivative financial instruments
|
|
36
|
22
|
79
|
|
|
|
7,220
|
6,946
|
7,434
|
|
Assets held for sale
|
10
|
273
|
5
|
29
|
|
Current assets
|
|
7,493
|
6,951
|
7,463
|
|
Total assets
|
|
24,349
|
21,483
|
20,928
|
|
Current liabilities
|
|
|
|
|
|
Borrowings
|
|
(822)
|
(1,327)
|
(774)
|
|
Lease liabilities
|
|
(273)
|
(237)
|
(216)
|
|
Derivative financial instruments
|
|
(21)
|
(45)
|
(6)
|
|
Provisions
|
|
(370)
|
(284)
|
(301)
|
|
Current tax liabilities
|
|
(235)
|
(261)
|
(274)
|
|
Trade and other payables
|
|
(8,172)
|
(7,166)
|
(6,281)
|
|
Liabilities held for sale
|
10
|
(9,893)
(179)
|
(9,320)
-
|
(7,852)
|
|
-
|
|
Current liabilities
|
|
(10,072)
|
(9,320)
|
(7,852)
|
|
Non-current liabilities
|
|
|
|
|
|
Borrowings
|
|
(3,774)
|
(2,787)
|
(3,651)
|
|
Lease liabilities
|
|
(1,042)
|
(916)
|
(803)
|
|
Derivative financial instruments
|
|
(187)
|
(253)
|
(265)
|
|
Post-employment benefit obligations
|
|
(1,274)
|
(983)
|
(847)
|
|
Provisions
|
|
(344)
|
(349)
|
(346)
|
|
Deferred tax liabilities
|
|
(287)
|
(132)
|
(178)
|
|
Trade and other payables
|
|
(463)
|
(443)
|
(395)
|
|
Non-current liabilities
|
|
(7,371)
|
(5,863)
|
(6,485)
|
|
Total liabilities
|
|
(17,443)
|
(15,183)
|
(14,337)
|
|
Net assets
|
|
6,906
|
6,300
|
6,591
|
|
Equity
|
|
|
|
|
|
Share capital
|
|
346
|
346
|
346
|
|
Share premium
|
|
317
|
317
|
317
|
|
Other reserves
|
|
4,592
|
4,582
|
5,559
|
|
Retained earnings
|
|
1,574
|
1,018
|
325
|
|
Total equity shareholders' funds
|
|
6,829
|
6,263
|
6,547
|
|
Non-controlling interests
|
|
77
|
37
|
44
|
|
Total equity
|
|
6,906
|
6,300
|
6,591
|
Approved by the Board of Directors on 26
November 2024 and signed on its behalf by:
Dominic
Blakemore, Director
Petros Parras, Director
Compass Group PLC
Consolidated Financial Statements
Consolidated cash flow statement
For the year ended 30 September 2024
|
|
Notes
|
2024
$m
|
Restated1
2023
$m
|
|
Cash flow from operating activities
|
|
|
|
|
Cash generated from operations
|
8
|
4,095
|
3,283
|
|
Interest paid
|
|
(267)
|
(208)
|
|
Tax received
|
|
18
|
31
|
|
Tax paid
|
|
(711)
|
(570)
|
|
Net cash flow from operating
activities
|
|
3,135
|
2,536
|
|
Cash flow from investing activities
|
|
|
|
|
Purchase of subsidiary companies
|
|
(784)
|
(389)
|
|
Purchase of interests in joint ventures and
associates
|
|
(9)
|
(9)
|
|
Net proceeds from sale of subsidiary
companies, joint ventures and associates net of exit
costs2
|
|
225
|
58
|
|
Purchase of intangible assets
|
|
(329)
|
(263)
|
|
Purchase of contract fulfilment
assets
|
|
(508)
|
(380)
|
|
Purchase of property, plant and
equipment
|
|
(572)
|
(445)
|
|
Proceeds from sale of property, plant and
equipment/intangible assets/contract fulfilment assets
|
|
81
|
78
|
|
Purchase of other investments
|
|
(2)
|
(4)
|
|
Proceeds from sale of other
investments3
|
|
330
|
4
|
|
Dividends received from joint ventures and
associates
|
|
65
|
60
|
|
Interest received
|
|
39
|
61
|
|
Loans to third parties
|
|
(25)
|
-
|
|
Net cash flow from investing
activities
|
|
(1,489)
|
(1,229)
|
|
Cash flow from financing activities
|
|
|
|
|
Purchase of own shares - share
buyback
|
|
(577)
|
(1,148)
|
|
Purchase of own shares - employee share-based
payments
|
|
-
|
(19)
|
|
Increase in borrowings
|
|
1,381
|
1
|
|
Repayment of borrowings
|
|
(1,161)
|
(543)
|
|
Repayment of borrowings acquired through
business acquisitions
|
|
(431)
|
-
|
|
Net cash flow from derivative financial
instruments
|
|
46
|
157
|
|
Repayment of principal under lease
liabilities
|
|
(227)
|
(215)
|
|
Purchase of non-controlling
interests
|
|
-
|
(10)
|
|
Dividends paid to equity
shareholders
|
6
|
(963)
|
(796)
|
|
Dividends paid to non-controlling
interests
|
|
(10)
|
(7)
|
|
Net cash flow from financing
activities
|
|
(1,942)
|
(2,580)
|
|
Cash and cash equivalents
|
|
|
|
|
Net decrease in cash and cash
equivalents
|
|
(296)
|
(1,273)
|
|
Cash and cash equivalents at 1
October
|
|
830
|
1,934
|
|
Currency translation gains on cash and cash
equivalents
|
|
59
|
169
|
|
|
|
593
|
830
|
|
Cash reclassified to held for
sale
|
|
(40)
|
-
|
|
Cash and cash equivalents at 30
September
|
|
553
|
830
|
|
Cash and cash
equivalents4
|
|
623
|
1,029
|
|
Bank overdrafts4
|
|
(70)
|
(199)
|
|
Cash and cash equivalents at 30
September
|
|
553
|
830
|
|
1.
|
See note 1.
|
|
2.
|
2024 includes $35m of tax payments
arising on the disposal of businesses.
|
|
3.
|
2024 includes $327m
received in respect of the sale of the Group's 19% effective
interest in ASM Global Parent, Inc. in August 2024.
|
|
4.
|
As per the consolidated balance
sheet.
|
Compass Group PLC
Consolidated Financial Statements
Notes to the consolidated financial
statements
For the year ended 30 September 2024
1 Basis of preparation
Introduction
The consolidated financial statements of
Compass Group PLC (the Company) have been prepared on a going
concern basis, as discussed below, in accordance with UK-adopted
International Accounting Standards. The consolidated financial
statements have been prepared under the historical cost convention,
as modified by the revaluation of certain financial
instruments.
The financial information set out below does
not constitute the Company's statutory accounts for the years ended
30 September 2024 or 2023, but is derived from those accounts.
Statutory accounts for 2023 have been delivered to the Registrar of
Companies and those for 2024 will be delivered following the
Company's Annual General Meeting. The auditor has reported on those
accounts. The reports of the auditor were unqualified, did not draw
attention to any matters by way of emphasis without qualifying its
reports and did not contain statements under section 498 (2) or (3)
of the Companies Act 2006.
Change in reporting currency
With effect from 1 October 2023, the reporting
currency of the Group was changed from sterling to US dollars. The
change in presentation currency provides investors and other
stakeholders with greater transparency in relation to the Group's
performance and reduces foreign exchange volatility on earnings
given that approximately three-quarters of the Group's underlying
operating profit originates in US dollars. The amounts for prior
periods have been translated into US dollars at average exchange
rates for the relevant periods for income statements and cash
flows, with spot rates used for significant transactions, and at
the exchange rates on the relevant balance sheet dates for assets
and liabilities. Share capital, share premium and other equity
items have been translated into US dollars at historical exchange
rates either at 1 October 2004, the date of transition to
International Financial Reporting Standards (IFRS), or on the date
of each relevant transaction.
Going concern
The directors consider it appropriate to
prepare the financial statements on a going concern basis for the
reasons stated below.
At 30 September 2024, the Group's financing
arrangements included sterling and euro bonds ($3.9bn) and US
dollar US Private Placement (USPP) notes ($0.7bn). In addition, the
Group had a Revolving Credit Facility of $2.7bn, committed to
August 2026, which was fully undrawn, and $0.6bn of cash, net of
overdrafts. With the exception of a €296m ($321m) payment to
acquire Dupont Restauration on 31 October 2024 (see note 13), the
liquidity position of the Group has remained substantially
unchanged at the date of approving these consolidated financial
statements.
For the purposes of the going concern
assessment, the directors have prepared monthly cash flow
projections for the period to 31 March 2026 (the assessment period)
from the most recent three-year strategic plan approved by the
Board in November 2024. The directors consider 18 months to be a
reasonable period for the going concern assessment as it enables
them to consider the potential impact of macroeconomic and
geopolitical factors over an extended period.
Debt maturities in the going concern period
include, in December 2024, a $100m USPP note and, in September
2025, a £250m ($335m) Eurobond and $300m USPP note. No additional
refinancing of debt is assumed in the going concern
assessment.
The USPP notes are subject to leverage and
interest cover covenants which are tested on 31 March and 30
September each year. The Group met both covenants at 30 September
2024. The Group's other financing arrangements do not contain any
financial covenants.
The cash flow projections show that the Group
has significant headroom against its committed facilities and meets
its financial covenant obligations under the USPP notes without any
refinancing.
The Group has performed a stress
test against the base case to determine the performance level that
would result in a reduction in headroom against its committed
facilities to nil or a breach of its covenants. The Group's
committed facilities would be reached in the event that underlying
operating profit reduced by more than 40% of the strategic plan
level. The directors do not consider this scenario to be likely.
The stress test assumes no new business acquisitions (with the
exception of Dupont Restauration in October 2024 and 4Service AS in
2025) as a mitigating action.
Consequently, the directors are confident that
the Group will have sufficient funds to continue to meet its
liabilities as they fall due for at least the period to 31 March
2026 and, therefore, have prepared the financial statements on a
going concern basis.
Compass Group PLC
Consolidated Financial Statements
Notes to the consolidated financial
statements
For the year ended 30 September 2024
1 Basis of preparation (continued)
Changes in accounting policies
There were no new accounting
standards or amendments to existing standards effective in the
current year that had a significant impact on the Group's
consolidated financial statements. There are a number of changes to
accounting standards, effective in future years, which are not
expected to significantly impact the Group's consolidated financial
statements.
Judgements
The preparation of the consolidated financial
statements requires management to make judgements in respect of the
application of its accounting policies which impact the reported
amounts of assets, liabilities, income and expenses.
Whilst there are no judgements that management
considers to be critical in the preparation of these financial
statements, there is a significant judgement in respect of the
classification of cash payments relating to contract fulfilment
assets in the cash flow statement.
With the exception of contract fulfilment
assets, cash payments in respect of contract balances are
classified as cash flows from operating activities. The Group
classifies additions to contract fulfilment assets as cash flows
from investing activities as they arise from cash payments in
relation to assets that will generate long-term economic benefits.
During the year, the purchase of contract fulfilment assets in cash
flows from investing activities was $508m (2023: $380m).
Estimates
The preparation of the consolidated financial
statements requires management to make estimates which impact the
reported amounts of assets, liabilities, income and expenses. These
estimates are based on historical experience and other factors that
are believed to be reasonable under the circumstances. Actual
results may differ from these estimates.
Major sources of estimation
uncertainty
The Group's major sources of estimation
uncertainty are in relation to goodwill in the UK cash-generating
unit and post-employment benefit obligations on the basis that a
reasonably possible change in key assumptions could have a material
effect on the carrying amounts of assets and liabilities in the
next 12 months.
Other sources of estimation
uncertainty
In addition to the major sources of estimation
uncertainty, tax and acquisition intangibles have been identified
as additional sources of estimation uncertainty. Whilst not
considered to be major sources of uncertainty as defined by IAS 1
Presentation of Financial Statements, the recognition and
measurement of certain material assets and liabilities are based on
assumptions and/or are subject to longer-term
uncertainties.
Climate change
Climate change is identified as a principal
risk as its impact on the environment may lead to issues around
food sourcing and security, and supply chain continuity in some of
the Group's markets (see page 17). The potential impact of climate
change has been assessed with scenario analysis conducted in line
with the Task Force on Climate-Related Financial Disclosures (TCFD)
recommendations. The Group has a commitment to reach climate net
zero greenhouse gas (GHG) emissions across its global operations
and value chain by 2050.
The potential impact of climate change and the
Group's net zero commitments on the following areas has been
considered:
|
·
|
going concern and
viability assessments
|
|
·
|
tax
|
|
·
|
goodwill
|
|
·
|
other intangible
assets
|
|
·
|
post-employment
benefits
|
There was no impact on the reported amounts in
the financial statements as a result of this review.
Compass Group PLC
Consolidated Financial Statements
Notes to the consolidated financial
statements
For the year ended 30 September 2024
2 Segmental analysis
|
|
Geographical segments
|
|
|
Revenue by sector and geographical
segment1,2
|
North America
$m
|
Europe
$m
|
Rest of World
$m
|
Total
$m
|
|
Year ended 30 September 2024
|
|
|
|
|
|
Business & Industry
|
9,912
|
4,720
|
1,284
|
15,916
|
|
Education
|
5,932
|
1,393
|
259
|
7,584
|
|
Healthcare & Senior Living
|
7,991
|
1,479
|
503
|
9,973
|
|
Sports & Leisure
|
4,396
|
1,317
|
163
|
5,876
|
|
Defence, Offshore & Remote
|
350
|
978
|
1,499
|
2,827
|
|
Underlying revenue3,4
|
28,581
|
9,887
|
3,708
|
42,176
|
|
Less: Share of revenue of joint
ventures
|
(24)
|
(150)
|
-
|
(174)
|
|
Revenue
|
28,557
|
9,737
|
3,708
|
42,002
|
|
Year ended 30 September 2023
(restated5)
|
|
|
|
|
|
Business & Industry
|
8,078
|
3,985
|
1,360
|
13,423
|
|
Education
|
5,481
|
1,239
|
257
|
6,977
|
|
Healthcare & Senior Living
|
7,424
|
1,352
|
518
|
9,294
|
|
Sports & Leisure
|
4,409
|
1,123
|
162
|
5,694
|
|
Defence, Offshore & Remote
|
376
|
899
|
1,553
|
2,828
|
|
Underlying revenue3,4
|
25,768
|
8,598
|
3,850
|
38,216
|
|
Less: Share of revenue of joint
ventures
|
(23)
|
(286)
|
-
|
(309)
|
|
Revenue
|
25,745
|
8,312
|
3,850
|
37,907
|
|
1.
|
There is no inter-segment
trading.
|
|
2.
|
An analysis of revenue recognised
over time and at a point in time is not provided on the basis that
the nature, amount, timing and uncertainty of revenue and cash
flows are considered to be similar.
|
|
3.
|
Revenue plus share of revenue of
joint ventures.
|
|
4.
|
Underlying revenue
arising in the UK, the Group's country of domicile, was
$3,461m (2023: $2,915m). Underlying revenue arising in the US
region was $27,136m (2023: $24,456m). Underlying revenue
arising in all countries outside the UK from which the Group
derives revenue was $38,715m (2023: $35,301m).
|
|
5.
|
See note 1.
|
|
|
Geographical
segments
|
|
|
|
Profit by geographical segment
|
North
America
$m
|
Europe
$m
|
Rest of
World
$m
|
Central
activities
$m
|
Total
$m
|
|
Year ended 30 September 2024
|
|
|
|
|
|
|
Underlying operating profit/(loss) before
results of joint ventures and associates
|
2,313
|
560
|
224
|
(144)
|
2,953
|
|
Add: Share of profit before tax of joint
ventures
|
1
|
16
|
-
|
-
|
17
|
|
Add: Share of results of associates
|
21
|
7
|
-
|
-
|
28
|
|
Underlying operating profit/(loss)1
|
2,335
|
583
|
224
|
(144)
|
2,998
|
|
Less: Acquisition-related charges2
|
(84)
|
(151)
|
-
|
-
|
(235)
|
|
Less: Charges related to the strategic
portfolio review2
|
-
|
(43)
|
-
|
(127)
|
(170)
|
|
Less: One-off pension
charge2
|
-
|
(8)
|
-
|
-
|
(8)
|
|
Less: Tax on share of profit of joint
ventures2
|
-
|
(1)
|
-
|
-
|
(1)
|
|
Operating profit/(loss)
|
2,251
|
380
|
224
|
(271)
|
2,584
|
|
Net loss on sale and closure of
businesses2
|
|
|
|
|
(203)
|
|
Finance costs
|
|
|
|
|
(325)
|
|
Profit before tax
|
|
|
|
|
2,056
|
|
Income tax expense
|
|
|
|
|
(642)
|
|
Profit for the year
|
|
|
|
|
1,414
|
|
1.
|
Operating profit excluding specific
adjusting items (see note 14).
|
|
2.
|
Specific adjusting item (see note
14).
|
Compass Group PLC
Consolidated Financial Statements
Notes to the consolidated financial
statements
For the year ended 30 September 2024
2 Segmental analysis (continued)
|
|
Geographical segments
|
|
|
|
Profit by geographical segment
|
North America
$m
|
Europe
$m
|
Rest of World
$m
|
Central activities
$m
|
Total
$m
|
|
Year ended 30 September 2023
(restated1)
|
|
|
|
|
|
|
Underlying operating profit/(loss) before
results of joint ventures and associates
|
2,001
|
429
|
214
|
(120)
|
2,524
|
|
Add: Share of profit before tax of joint
ventures
|
1
|
35
|
-
|
-
|
36
|
|
Add: Share of results of associates
|
17
|
15
|
-
|
-
|
32
|
|
Underlying operating
profit/(loss)2
|
2,019
|
479
|
214
|
(120)
|
2,592
|
|
Less: Acquisition-related charges3
|
(88)
|
(56)
|
(9)
|
-
|
(153)
|
|
Less: Charges related to the strategic
portfolio review3
|
-
|
(118)
|
-
|
-
|
(118)
|
|
Less: One-off pension charge3
|
-
|
(8)
|
-
|
-
|
(8)
|
|
Operating profit/(loss)
|
1,931
|
297
|
205
|
(120)
|
2,313
|
|
Net gain on sale and closure of
businesses3
|
|
|
|
|
24
|
|
Finance costs
|
|
|
|
|
(200)
|
|
Profit before tax
|
|
|
|
|
2,137
|
|
Income tax expense
|
|
|
|
|
(525)
|
|
Profit for the year
|
|
|
|
|
1,612
|
|
1.
|
See note 1.
|
|
2.
|
Operating profit excluding specific
adjusting items (see note 14).
|
|
3.
|
Specific adjusting item (see note
14).
|
3 Operating costs
Acquisition-related charges
Represent amortisation and impairment charges
in respect of intangible assets acquired through business
combinations, direct costs incurred through business combinations
or other strategic asset acquisitions, business integration costs,
changes in consideration in relation to past acquisition activity
and other acquisition-related items.
|
Acquisition-related charges
|
|
2024
$m
|
Restated1
2023
$m
|
|
Amortisation - acquisition
intangibles
|
|
162
|
122
|
|
Impairment losses - goodwill
|
|
-
|
6
|
|
Acquisition transaction costs
|
|
41
|
21
|
|
Adjustment to contingent consideration payable
on business acquisitions
|
|
67
|
4
|
|
Gains on bargain purchases
|
|
(35)
|
-
|
|
Total
|
|
235
|
153
|
Charges related to the strategic portfolio
review
As part of our strategic portfolio review, and
considering country exits, ongoing advancement of technologies and
the increased decentralisation of our business, we have reviewed
our European regional business transformation ERP programme that
commenced a number of years ago. We have decided to discontinue the
implementation and roll out of our cross-market ERP programme and,
accordingly, have recognised a charge of $160m as a specific
adjusting item, which includes $146m for the non-cash impairment of
work-in-progress head office (non-client-related) computer software
assets. An impairment charge of $10m has been recognised in respect
of our business in Qatar.
In 2023, charges related to the strategic
portfolio review reflect the impact of site closures and contract
renegotiations and terminations in the UK.
|
Charges related to the strategic
portfolio review
|
|
2024
$m
|
Restated1
2023
$m
|
|
Other
intangible assets
|
|
146
|
-
|
|
Right-of-use assets
|
|
-
|
52
|
|
Property,
plant and equipment
|
|
-
|
8
|
|
Joint
ventures and associates
|
|
10
|
-
|
|
Impairment
losses
|
|
156
|
60
|
|
Write-off
- other receivables
|
|
-
|
25
|
|
Onerous
contracts and other costs - provisions
|
|
14
|
24
|
|
Other
costs - other payables
|
|
-
|
9
|
|
Total
|
|
170
|
118
|
|
1. See note 1.
|
|
|
|
Compass Group PLC
Consolidated Financial Statements
Notes to the consolidated financial
statements
For the year ended 30 September 2024
4 Tax
|
Income tax expense
|
2024
$m
|
Restated1
2023
$m
|
|
Current tax
|
|
|
|
Current year
|
703
|
593
|
|
Adjustment in respect of prior years
|
(38)
|
(47)
|
|
Current tax expense
|
665
|
546
|
|
Deferred tax
|
|
|
|
Current year
|
(39)
|
(12)
|
|
Impact of changes in statutory tax
rates
|
-
|
(1)
|
|
Adjustment in respect of prior years
|
16
|
(8)
|
|
Deferred tax credit
|
(23)
|
(21)
|
|
Total
|
642
|
525
|
The income tax expense for the year is based on
the effective UK statutory rate of corporation tax for the period
of 25% (2023: 22%). Overseas tax is calculated at the rates
prevailing in the respective jurisdictions.
The global nature of the Group's operations
gives rise to various factors which could affect the future tax
rate. These include the mix of profits, changes to overseas
statutory tax rates or tax legislation and the foreign exchange
rates applicable when those profits are translated into US dollars.
The UK government enacted an increase in the UK corporation tax
rate from 19% to 25% with effect from 1 April 2023. In addition,
the future tax charge may be affected by the impact of
acquisitions, disposals or other restructuring activities and the
resolution of open issues with tax authorities.
The Group has operations in around 30
countries. The tax position in each country is often not agreed
with the tax authorities until some time after the relevant period
end and, if subject to a tax audit, may be open for an extended
period. In these circumstances, the recognition of tax liabilities
and assets requires management estimation to reflect a variety of
factors, including historical experience, interpretations of tax
law and the likelihood of settlement.
The international corporate tax environment
remains complex and the sustained increase in audit activity from
tax authorities means that the potential for tax uncertainties and
disputes remains high. Where the final tax outcome of these matters
is different from the amounts that were initially recorded, such
differences will impact the results in the year in which such
determination is made. In addition, the calculation and recognition
of temporary differences giving rise to deferred tax assets
requires estimates to be made of the extent to which future taxable
profits are available against which these temporary differences can
be utilised.
Uncertain tax positions
Tax risk can arise from unclear regulations and
differences in interpretation but, most significantly, where tax
authorities apply diverging standards in assessing intra-group
cross-border transactions. The Group has recognised provisions in
respect of uncertain tax positions, none of which is individually
material. In determining such liabilities, the Group assesses the
range of potential outcomes and estimates whether additional tax
may be due.
The Group is currently subject to audits and
reviews in a number of countries that primarily relate to complex
corporate tax issues.
The UK tax authority's inquiry into an
intra-group refinancing was resolved during the year consistent
with the provision previously held.
The Group does not currently anticipate any
material changes to the amounts recorded at 30 September
2024.
Deferred tax assets
Deferred tax assets of $179m (2023: $237m)
include $80m (2023: $103m) relating to the carry forward of unused
tax losses. It is considered probable that sufficient taxable
profits over a period of between one and five years will be
available against which the unused tax losses can be utilised. In
evaluating whether sufficient taxable profits will be available in
the future, forecasts have been derived from the most recent
three-year strategic plan approved by management adjusted for the
effect of applicable tax laws and regulations relevant to those
future taxable profits. No reasonably possible change in any of the
key assumptions would result in a significant reduction in
projected taxable profits such that the recognised deferred tax
assets would not be realised.
Compass Group PLC
Consolidated Financial Statements
Notes to the consolidated financial
statements
For the year ended 30 September 2024
4 Tax (continued)
Regulatory developments
The legislation implementing the
Pillar Two Model Rules in the UK will apply from the financial year
ending 30 September 2025. The Group is reviewing this
legislation and also monitoring the status of implementation of the
model rules worldwide. The impact is not expected to be material.
The Group has applied the temporary exception under IAS 12 Income
Taxes in relation to the accounting for deferred taxes arising from
the implementation of the Pillar Two Model Rules.
5 Earnings per share
|
Profit for the year attributable to equity
shareholders
|
2024
$m
|
Restated1
2023
$m
|
|
Profit for the year attributable to equity
shareholders
|
1,404
|
1,607
|
|
Weighted average number of ordinary
shares
|
2024
Ordinary shares of 111/20p each millions
|
2023
Ordinary shares of
111/20p each
millions
|
|
Weighted average number of ordinary shares for
basic earnings per share
|
1,705
|
1,743
|
|
Dilutive effect of share-based payment
plans
|
2
|
2
|
|
Weighted average number of ordinary shares for
diluted earnings per share
|
1,707
|
1,745
|
|
Earnings per share
|
2024
cents
|
Restated1
2023
cents
|
|
Basic
|
82.3
|
92.2
|
|
Diluted
|
82.2
|
92.1
|
Underlying earnings per share for
the year ended 30 September 2024 was 119.5c (2023: 105.2c).
Underlying earnings per share is calculated based on earnings
excluding the effect of acquisition-related charges, charges
related to the strategic portfolio review, one-off pension charge,
gains and losses on sale and closure of businesses and other
financing items, together with the tax attributable to these
amounts (see note 14).
6 Dividends
A final dividend in respect of 2024 of 39.1c
per share, $664m in aggregate1, has been proposed, giving a total dividend in
respect of 2024 of 59.8c per share (2023: 52.6c per share). The
proposed final dividend is subject to approval by shareholders at
the Annual General Meeting to be held on 6 February
2025.
|
|
2024
|
|
Restated2
2023
|
|
Dividends on ordinary shares
|
Dividends
per share
cents
|
$m
|
|
Dividends
per share
cents
|
$m
|
|
Amounts recognised as distributions to equity
shareholders during the year
|
|
|
|
|
|
|
Final 2022
|
-
|
-
|
|
27.7
|
462
|
|
Interim 2023
|
-
|
-
|
|
17.9
|
334
|
|
Final 2023
|
34.7
|
606
|
|
-
|
-
|
|
Interim 2024
|
20.7
|
357
|
|
-
|
-
|
|
Total
|
55.4
|
963
|
|
45.6
|
796
|
|
1.
|
Based on the number of ordinary
shares in issue at 30 September 2024, excluding shares held in
treasury and the Compass Group PLC All Share Schemes Trust (1,697m
shares).
|
|
2.
|
See note 1.
|
Compass Group PLC
Consolidated Financial Statements
Notes to the consolidated financial
statements
For the year ended 30 September 2024
7 Goodwill
|
Goodwill
|
2024
$m
|
Restated1
2023
$m
|
|
Cost
|
|
|
|
At 1 October
|
6,748
|
6,323
|
|
Business acquisitions
|
618
|
225
|
|
Sale and closure of businesses
|
(78)
|
(33)
|
|
Transfer to held for sale
|
(14)
|
-
|
|
Currency adjustment
|
407
|
233
|
|
At 30 September
|
7,681
|
6,748
|
|
Impairment
|
|
|
|
At 1 October
|
643
|
608
|
|
Impairment
|
-
|
6
|
|
Sale and closure of businesses
|
(7)
|
-
|
|
Transfer to held for sale
|
(1)
|
-
|
|
Currency adjustment
|
147
|
29
|
|
At 30 September
|
782
|
643
|
|
Net carrying amount
|
|
|
|
At 30 September
|
6,899
|
6,105
|
|
Goodwill by business segment
|
2024
$m
|
Restated1
2023
$m
|
|
US
|
2,961
|
2,889
|
|
Canada
|
328
|
265
|
|
North America
|
3,289
|
3,154
|
|
UK2
|
2,081
|
1,877
|
|
CH&CO3
|
352
|
-
|
|
Finland
|
159
|
151
|
|
HOFMANNS 3
|
125
|
-
|
|
Other
|
629
|
602
|
|
Europe
|
3,346
|
2,630
|
|
Japan
|
121
|
116
|
|
Other
|
143
|
205
|
|
Rest of World
|
264
|
321
|
|
Total
|
6,899
|
6,105
|
|
1.
|
See note 1.
|
|
2.
|
Includes $1.7bn which
arose in 2000 on the Granada transaction.
|
|
3.
|
Goodwill recognised on the acquisition of
CH&CO and HOFMANNS (see note 10) has not yet been
allocated to the UK and Germany CGUs, respectively, pending
completion of the integration of the businesses.
|
Goodwill is tested annually for impairment and
is carried at cost less any accumulated impairment losses. Goodwill
is allocated to the cash-generating units (CGUs) or groups of CGUs
that are expected to benefit from the acquisition, which is usually
the geographical location of the operations of the Group. Goodwill
is subsequently monitored and tested for impairment at the level at
which it is allocated. The recoverable amount of a CGU is
determined based on value-in-use calculations.
Impairment testing
The key assumptions used in the value-in-use
calculations are operating cash flow forecasts from the most recent
three-year strategic plan approved by management, adjusted to
remove the expected benefits of future restructuring activities and
improvements to assets, externally-derived long-term growth rates
and pre-tax discount rates.
The strategic plan is based on expectations of
future outcomes taking into account past experience, adjusted for
anticipated revenue growth from both new business and like-for-like
growth, and taking into consideration macroeconomic and
geopolitical factors, including the impact of inflation.
Compass Group PLC
Consolidated Financial Statements
Notes to the consolidated financial
statements
For the year ended 30 September 2024
7 Goodwill (continued)
Cash flows beyond the three-year period covered
by the plan are extrapolated using estimated growth rates based on
local expected economic conditions and do not exceed the long-term
average growth rate for the country. Cash flow forecasts for a
period of up to five years are used by exception to reflect the
medium-term prospects of the business if the initial level of
headroom in the impairment test for a country is low, with cash
flows beyond five years extrapolated using estimated growth rates
that do not exceed the long-term average growth rate for that
country.
The pre-tax discount rates are based on the
Group's Weighted Average Cost of Capital (WACC) adjusted for
specific risks relating to the country in which the CGU operates.
The beta and gearing ratio assumptions used in the calculation of
the discount rates represent market participant measures based on
the averages of a number of companies with similar
assets.
|
|
2024
|
|
2023
|
|
Growth and discount rates
|
Long-term
growth rates
|
Pre-tax
discount rates
|
|
Long-term
growth rates
|
Pre-tax
discount rates
|
|
US
|
2.6%
|
11.3%
|
|
2.1%
|
11.3%
|
|
Canada
|
2.1%
|
11.5%
|
|
2.1%
|
11.8%
|
|
UK
|
2.0%
|
11.1%
|
|
2.1%
|
11.7%
|
|
Finland
|
2.0%
|
8.3%
|
|
2.0%
|
9.4%
|
|
Rest of Europe1
|
1.2% - 15.5%
|
10.3% - 27.1%
|
|
1.2% - 16.4%
|
10.7% - 31.3%
|
|
Japan
|
1.4%
|
10.5%
|
|
1.0%
|
10.6%
|
|
Rest of World
|
1.6% - 4.2%
|
10.3% - 15.9%
|
|
1.8% - 4.3%
|
10.6% - 20.2%
|
|
1.
|
Rest of Europe includes Türkiye
which has residual growth rate and pre-tax discount rate
assumptions of 15.5% (2023: 16.4%) and 27.1% (2023: 31.3%),
respectively. Excluding Türkiye, the residual growth rate and
pre-tax discount rate assumptions for Rest of Europe range from
1.2% to 2.2% (2023: 1.2% to 2.5%) and 10.3% to 13.3% (2023: 10.7%
to 14.6%), respectively.
|
Consistent with prior years, the
goodwill impairment testing was performed as at 31 July. Subsequent
to 31 July, management has considered whether there have been any
indicators that the goodwill may be impaired. There was no impact
on the reported amounts of goodwill as a result of this
review.
Sensitivity analysis
The Group has performed a sensitivity analysis
based on changes in key assumptions considered to be reasonably
possible by management. There was no impact on the reported amounts
of goodwill as a result of this review.
The UK CGU is sensitive to reasonably possible
changes in key assumptions. Most of the UK goodwill arose in 2000
on the Granada transaction. The estimated recoverable amount
of the Group's operations in the UK exceeds its carrying
value by $512m (2023: $227m). The associated impact of changes in
key assumptions on the impairment assessment is presented in the
table below. The sensitivity analysis presented is prepared on the
basis that a change in each key assumption would not have a
consequential impact on other assumptions used in the
impairment review.
|
|
UK CGU
|
|
Decrease in recoverable amount
|
2024
$m
|
2023
$m
|
|
Increase in pre-tax discount rate by
1%
|
(309)
|
(243)
|
|
Decrease in projected operating profit by
3%
|
(95)
|
(77)
|
|
Decrease in the long-term growth rate by
0.1%
|
(25)
|
(23)
|
In order for the recoverable amount
to be equal to the carrying value, the pre-tax discount rate would
have to be increased by 1.8% (2023: 0.9%), projected operating
profit decreased by 16% (2023: 9%) or the long-term growth rate
decreased to a decline of 0.6% (2023: growth of 1.0%).
Other than as disclosed above, the directors do
not consider that any reasonably possible changes in the key
assumptions would cause the value in use of the net operating
assets of the individually significant CGUs disclosed above to fall
below their carrying values.
Compass Group PLC
Consolidated Financial Statements
Notes to the consolidated financial
statements
For the year ended 30 September 2024
8 Reconciliation of operating profit to cash
generated from operations
|
Reconciliation of operating profit to cash
generated from operations
|
2024
$m
|
Restated1
2023
$m
|
|
Operating profit before joint ventures and
associates
|
2,540
|
2,245
|
|
Adjustments for:
|
|
|
|
Acquisition-related charges2
|
194
|
132
|
|
Charges related to the strategic portfolio
review
|
170
|
118
|
|
One-off pension charge
|
8
|
8
|
|
Amortisation - other intangible
assets3
|
150
|
134
|
|
Amortisation - contract fulfilment
assets
|
306
|
282
|
|
Amortisation - contract prepayments
|
94
|
66
|
|
Depreciation - right-of-use assets
|
220
|
199
|
|
Depreciation - property, plant and
equipment
|
374
|
337
|
|
Unwind of costs to obtain contracts
|
33
|
27
|
|
Impairment losses - non-current
assets4
|
10
|
12
|
|
Impairment reversals - non-current
assets
|
(7)
|
(2)
|
|
Gain on disposal of property, plant and
equipment/intangible assets/contract fulfilment assets
|
(5)
|
(4)
|
|
Other non-cash changes
|
-
|
(1)
|
|
Increase/(decrease) in provisions
|
7
|
(50)
|
|
Investment in contract prepayments
|
(213)
|
(88)
|
|
Increase in costs to obtain
contracts5
|
(47)
|
(45)
|
|
Post-employment benefit obligations net of
service costs
|
7
|
(21)
|
|
Share-based payments - charged to
profit
|
68
|
54
|
|
Operating cash flow before movements in
working capital
|
3,909
|
3,403
|
|
Increase in inventories
|
(36)
|
(119)
|
|
Increase in receivables
|
(670)
|
(680)
|
|
Increase in payables
|
892
|
679
|
|
Cash generated from operations
|
4,095
|
3,283
|
|
1.
|
See note 1.
|
|
2.
|
Includes amortisation and impairment of
acquisition intangibles. Excludes acquisition transaction costs of
$41m (2023: $21m) as acquisition transaction costs are included in
net cash flow from operating activities.
|
|
3.
|
Excludes amortisation of
acquisition intangibles.
|
|
4.
|
Excludes impairment losses of $156m (2023:
$60m) included in charges related to the strategic portfolio
review.
|
|
5.
|
Cash payments in respect of contract balances
are classified as cash flows from operating activities, with the
exception of contract fulfilment assets which are classified as
cash flows from investing activities as they arise out of cash
payments in relation to assets that will generate long-term
economic benefits. During the year, the purchase of contract
fulfilment assets in cash flows from investing activities was $508m
(2023: $380m).
|
Compass Group PLC
Consolidated Financial Statements
Notes to the consolidated financial
statements
For the year ended 30 September 2024
9 Financial instruments
Certain of the Group's financial instruments
are held at fair value.
The fair value of a financial
instrument is the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction
between market participants at the balance sheet date.
The fair value measurement hierarchy
is as follows:
|
·
|
Level 1: Quoted prices (unadjusted) in active
markets for identical assets or liabilities
|
|
·
|
Level 2: Inputs other than quoted prices
included within Level 1 that are observable for the asset or
liability, either directly (i.e. as prices) or indirectly (i.e.
derived from prices)
|
|
·
|
Level 3: Inputs for the asset or liability
that are not based on observable market data (i.e. unobservable
inputs)
|
There were no transfers of financial
instruments between levels of the fair value hierarchy in either
the year ended 30 September 2024 or 2023. The carrying amounts
of financial instruments measured at fair value are shown in the
table below:
|
Financial instruments measured at fair
value
|
|
Level
|
2024
$m
|
Restated1
2023
$m
|
|
Non-current
|
|
|
|
|
|
Rabbi Trust investments2
|
|
1
|
1,022
|
760
|
|
Mutual fund investments2
|
|
1
|
62
|
58
|
|
Other investments2
|
|
1
|
-
|
15
|
|
Life insurance policies2
|
|
2
|
36
|
35
|
|
Derivative financial instruments -
assets
|
|
2
|
69
|
55
|
|
Derivative financial instruments -
liabilities
|
|
2
|
(187)
|
(253)
|
|
Trade investments2
|
|
3
|
29
|
181
|
|
Contingent consideration payable on business
acquisitions3
|
|
3
|
(102)
|
(97)
|
|
Non-controlling interest put
options3
|
|
3
|
(65)
|
(22)
|
|
Current
|
|
|
|
|
|
Money market funds4
|
|
1
|
126
|
510
|
|
Derivative financial instruments -
assets
|
|
2
|
36
|
22
|
|
Derivative financial instruments -
liabilities
|
|
2
|
(21)
|
(45)
|
|
Contingent consideration payable on business
acquisitions3
|
|
3
|
(250)
|
(61)
|
|
Non-controlling interest put
options3
|
|
3
|
(5)
|
-
|
|
1.
|
See note 1.
|
|
2.
|
Classified as other investments in
the consolidated balance sheet.
|
|
3.
|
Classified as trade and other
payables in the consolidated balance sheet.
|
|
4.
|
Classified as cash and cash
equivalents in the consolidated balance sheet on the basis that
they have a maturity of three months or less from the date of
acquisition.
|
Due to the variability of the
valuation factors, the fair values presented at 30 September 2024
may not be indicative of the amounts the Group would expect to
realise in the current market environment. The fair values of
financial instruments at levels 2 and 3 of the fair value hierarchy
have been determined based on the valuation methodologies listed
below:
Level 2
Life insurance
policies Cash surrender values provided by
third-party insurance providers.
Derivative
financial instruments Present values determined
from future cash flows discounted at rates derived from
market-sourced data. The fair values of derivative financial
instruments represent the maximum credit exposure.
Compass Group PLC
Consolidated Financial Statements
Notes to the consolidated financial
statements
For the year ended 30 September 2024
9 Financial instruments (continued)
Level 3
Trade
investments Estimated values using income and
market value approaches.
Contingent
consideration payable on business acquisitions
Estimated amounts payable based on the likelihood of
specified conditions, such as earnings targets, being
met.
Non-controlling interest put
options Estimated amounts payable based on the
likelihood of options being exercised by minority
shareholders.
A reconciliation from opening to closing
balances for Level 3 financial instruments is as
follows:
|
|
2024
|
|
Restated1
2023
|
|
Level 3 financial
instruments
|
Trade investments
$m
|
Contingent consideration payable on business
acquisitions
$m
|
Non-
controlling interest put options
$m
|
|
Trade investments
$m
|
Contingent consideration payable
on business acquisitions
$m
|
Non-
controlling interest put options
$m
|
|
At 1
October
|
181
|
(158)
|
(22)
|
|
142
|
(77)
|
(50)
|
|
Change in
fair value recognised in the income statement
|
-
|
(67)
|
-
|
|
-
|
(4)
|
-
|
|
Change in
fair value recognised in the statement of comprehensive
income
|
175
|
-
|
-
|
|
39
|
-
|
-
|
|
Change in
fair value recognised in the statement of changes in
equity
|
-
|
-
|
7
|
|
-
|
-
|
16
|
|
Additions
|
-
|
(153)
|
(54)
|
|
-
|
(121)
|
(2)
|
|
Disposals
|
(327)
|
-
|
-
|
|
-
|
-
|
-
|
|
Purchase
of non-controlling interests
|
-
|
-
|
-
|
|
-
|
-
|
10
|
|
Payments
relating to businesses acquired in previous years
|
-
|
50
|
-
|
|
-
|
44
|
4
|
|
Net
present value adjustments
|
-
|
(9)
|
-
|
|
-
|
(6)
|
-
|
|
Currency
translation
|
-
|
(15)
|
(1)
|
|
-
|
6
|
-
|
|
At 30
September
|
29
|
(352)
|
(70)
|
|
181
|
(158)
|
(22)
|
The directors do not consider that any
reasonably possible changes in the key assumptions would cause the
fair value of the Level 3 financial instruments to be significantly
higher or lower.
With the exception of borrowings, the carrying
amounts of financial instruments measured at amortised cost
approximate to their fair values. Borrowings are measured at
amortised cost unless they are part of a fair value hedge, in which
case amortised cost is adjusted for the fair value attributable to
the risk being hedged. The carrying amount of borrowings at 30
September 2024 is $4,596m (2023: $4,114m). The fair value of
borrowings at 30 September 2024, calculated by discounting future
cash flows to net present values at current market rates for
similar financial instruments (Level 2 inputs), is $4,625m (2023:
$4,131m).
10 Acquisition, sale and closure of
businesses
Acquisition of businesses
The total cash spent on the acquisition of
subsidiaries during the year, net of cash acquired, was $1,256m
(2023: $410m), including $431m (2023: $nil) on the repayment of
borrowings acquired through business acquisitions, $61m (2023:
$48m) of deferred and contingent consideration and other payments
relating to businesses acquired in previous years, and $41m (2023:
$21m) of acquisition transaction costs included in net cash flow
from operating activities.
The Group made two individually material
acquisitions during the year (HOFMANNS and CH&CO).
Detailed disclosures in respect of these acquisitions are provided
below.
HOFMANNS
On 19 December 2023, the Group acquired 100% of
the issued share capital of Hofmann-Menü Holdings GmbH (trading as
HOFMANNS), a German producer of high-quality cook and
freeze meals, for cash consideration of €94m ($103m) net of cash
acquired. The cash consideration excludes third-party debt acquired
and repaid on the date of acquisition of €168m ($185m).
Compass Group PLC
Consolidated Financial Statements
Notes to the consolidated financial
statements
For the year ended 30 September 2024
10 Acquisition, sale and closure of businesses
(continued)
The goodwill of $123m represents the premium
the Group has paid to acquire a company that complements its
existing businesses and creates significant opportunities for
synergies. In particular, the ability to offer additional services
to the Group's existing customers and to leverage cross-selling
opportunities with customers of HOFMANNS will deliver
significant economies of scale.
The fair value of net assets acquired includes
$197m in respect of other intangible assets which mainly relate to
brands ($66m) and client contracts ($126m). The brands were valued
using the relief from royalty method, with the key assumptions
being forecast revenue, royalty rate, useful life and discount
rate. The client contracts were valued using the multi-period
excess earnings method, with the key assumptions being forecast
operating profit, attrition rate, useful life and discount rate.
The intangible assets were valued by independent valuation
experts.
The acquisition did not have a material impact
on the Group's revenue or profit for the year. If the acquisition
had occurred on 1 October 2023, it would not have had a material
impact on the Group's revenue or profit for the year.
The following table summarises the recognised
amounts of assets acquired and liabilities assumed at the date of
acquisition of HOFMANNS:
|
|
Fair value
$m
|
|
Net assets acquired
|
|
|
Other intangible assets
|
197
|
|
Right-of-use assets
|
5
|
|
Property, plant and equipment
|
30
|
|
Trade and other receivables
|
13
|
|
Inventories
|
18
|
|
Cash and cash equivalents
|
41
|
|
Borrowings
|
(185)
|
|
Lease liabilities
|
(5)
|
|
Current tax liabilities
|
(18)
|
|
Trade and other payables
|
(23)
|
|
Deferred tax liabilities
|
(52)
|
|
Fair value of net assets acquired
|
21
|
|
Goodwill
|
123
|
|
Total consideration
|
144
|
|
|
|
|
Satisfied by
|
|
|
Cash consideration paid
|
144
|
|
Total consideration
|
144
|
|
|
|
|
Cash flow
|
|
|
Cash consideration paid
|
144
|
|
Less: Cash and cash equivalents
acquired
|
(41)
|
|
Cash consideration net of cash
acquired
|
103
|
|
Add: Repayment of borrowings
acquired through business acquisitions1
|
185
|
|
Add: Acquisition transaction
costs2
|
7
|
|
Total cash outflow from purchase of subsidiary
companies
|
295
|
|
|
|
|
Consolidated cash flow statement
|
|
|
Net cash flow from operating
activities2
|
7
|
|
Net cash flow from investing
activities
|
103
|
|
Net cash flow from financing
activities1
|
185
|
|
Total cash outflow from purchase of subsidiary
companies
|
295
|
1.
Repayment of borrowings acquired through business acquisitions is
included in net cash flow from financing activities.
2.
Acquisition transaction costs are included in net
cash flow from operating activities.
Compass Group PLC
Consolidated Financial Statements
Notes to the consolidated financial
statements
For the year ended 30 September 2024
10 Acquisition, sale and closure of businesses
(continued)
CH&CO
On 30 April 2024, the Group
acquired 100% of the issued share capital of Orchestra Topco
Limited (trading as CH&CO), a provider of premium contract and
hospitality services in the UK and Ireland, for cash consideration
of £274m ($344m) net of cash acquired. The cash consideration
excludes third-party debt acquired and repaid on the date of
acquisition of £197m ($246m).
Contingent consideration is
payable in 2025 and 2026 based on EBITDA for the years ending 30
April 2025 and 2026, with an additional payment due in 2027 in
respect of contracts won but not mobilised by the end of the second
year. The fair value of these contingent payments, which has been
estimated based on forecast EBITDA and contract wins and losses, is
£63m ($79m), with minimum and undiscounted maximum values of £nil
and £165m ($207m), respectively.
The goodwill of $329m represents
the premium the Group has paid to acquire a company that
complements its existing businesses and creates significant
opportunities for synergies, including economies of scale in
purchasing and overhead cost savings.
The fair value of net assets
acquired includes $452m in respect of other intangible assets which
relate to brands ($145m) and client contracts ($307m). The brands
were valued using the relief from royalty method, with the key
assumptions being forecast revenue, royalty rate, useful life and
discount rate. The client contracts were valued using the
multi-period excess earnings method, with the key assumptions being
forecast operating profit, attrition rate, useful life and discount
rate. The intangible assets were valued by independent valuation
experts.
The acquisition did not have a
material impact on the Group's revenue or profit for the year. If
the acquisition had occurred on 1 October 2023, it would not have
had a material impact on the Group's revenue or profit for the
year.
Compass Group PLC
Consolidated Financial Statements
Notes to the consolidated financial
statements
For the year ended 30 September 2024
10 Acquisition, sale and closure of businesses
(continued)
The following table summarises the recognised
amounts of assets acquired and liabilities assumed at the date of
acquisition of CH&CO:
|
|
Fair value
$m
|
|
Net assets acquired
|
|
|
Other intangible assets
|
452
|
|
Right-of-use assets
|
7
|
|
Property, plant and equipment
|
11
|
|
Trade and other receivables
|
113
|
|
Tax recoverable
|
2
|
|
Inventories
|
5
|
|
Cash and cash equivalents
|
12
|
|
Deferred tax assets
|
10
|
|
Borrowings
|
(246)
|
|
Lease liabilities
|
(5)
|
|
Provisions
|
(5)
|
|
Trade and other payables
|
(137)
|
|
Deferred tax liabilities
|
(113)
|
|
Fair value of net assets acquired
|
106
|
|
Goodwill
|
329
|
|
Total consideration
|
435
|
|
|
|
|
Satisfied by
|
|
|
Cash consideration paid
|
356
|
|
Contingent consideration payable
|
79
|
|
Total consideration
|
435
|
|
|
|
|
Cash flow
|
|
|
Cash consideration paid
|
356
|
|
Less: Cash and
cash equivalents acquired
|
(12)
|
|
Cash consideration net of cash
acquired
|
344
|
|
Add: Repayment of borrowings
acquired through business acquisitions1
|
246
|
|
Add: Acquisition transaction
costs2
|
16
|
|
Total cash outflow from purchase of subsidiary
companies
|
606
|
|
|
|
|
Consolidated cash flow statement
|
|
|
Net cash flow from operating
activities2
|
16
|
|
Net cash flow from investing
activities
|
344
|
|
Net cash flow from financing
activities1
|
246
|
|
Total cash outflow from purchase of subsidiary
companies
|
606
|
1.
Repayment of borrowings acquired through business
acquisitions is included in net cash flow from financing
activities.
2.
Acquisition transaction costs are included in
net cash flow from operating activities.
Compass Group PLC
Consolidated Financial Statements
Notes to the consolidated financial
statements
For the year ended 30 September 2024
10 Acquisition, sale and closure of businesses
(continued)
All
acquisitions
In addition to the acquisitions set out above,
the Group also completed a number of individually immaterial
acquisitions during the year. A summary of all acquisitions
completed during the year is presented in aggregate
below:
|
|
|
|
Fair value
|
|
|
|
|
|
|
Restated1
2023
$m
|
|
|
|
|
2024
$m
|
|
|
Net assets acquired
|
|
|
|
|
|
|
Other intangible assets
|
|
|
907
|
|
271
|
|
Contract fulfilment assets
|
|
|
3
|
|
-
|
|
Right-of-use assets
|
|
|
37
|
|
-
|
|
Property, plant and equipment
|
|
|
83
|
|
28
|
|
Trade and other receivables
|
|
|
144
|
|
18
|
|
Deferred tax assets
|
|
|
11
|
|
-
|
|
Inventories
|
|
|
30
|
|
13
|
|
Tax recoverable
|
|
|
3
|
|
-
|
|
Cash and cash equivalents
|
|
|
61
|
|
13
|
|
Borrowings
|
|
|
(431)
|
|
-
|
|
Lease liabilities
|
|
|
(35)
|
|
-
|
|
Provisions
|
|
|
(5)
|
|
-
|
|
Current tax liabilities
|
|
|
(18)
|
|
(2)
|
|
Trade and other payables
|
|
|
(181)
|
|
(21)
|
|
Post-employment benefit obligations
|
|
|
(1)
|
|
-
|
|
Deferred tax liabilities
|
|
|
(184)
|
|
(23)
|
|
Fair value of net assets acquired
|
|
|
424
|
|
297
|
|
Less: Step acquisitions
|
|
|
(30)
|
|
(29)
|
|
Less: Gains on bargain purchases
|
|
|
(35)
|
|
-
|
|
Less: Non-controlling interests
|
|
|
(40)
|
|
(2)
|
|
Goodwill
|
|
|
618
|
|
225
|
|
Total consideration
|
|
|
937
|
|
491
|
|
Satisfied by
|
|
|
|
|
|
|
Cash consideration paid
|
|
|
784
|
|
354
|
|
Deferred and contingent consideration
payable
|
|
|
145
|
|
137
|
|
Non-cash consideration
|
|
|
8
|
|
-
|
|
Total consideration
|
|
|
937
|
|
491
|
|
Cash flow
|
|
|
|
|
|
|
Cash consideration paid
|
|
|
784
|
|
354
|
|
Less: Cash and cash equivalents
acquired
|
|
|
(61)
|
|
(13)
|
|
Cash
consideration net of cash acquired
|
|
|
723
|
|
341
|
|
Add: Repayment of borrowings acquired through
business acquisitions2
|
|
|
431
|
|
-
|
|
Add: Acquisition transaction costs3
|
|
|
41
|
|
21
|
|
Net cash outflow arising on
acquisition
|
|
|
1,195
|
|
362
|
|
Deferred and contingent consideration and
other payments relating to businesses acquired in previous
years
|
|
|
61
|
|
48
|
|
Total cash outflow from purchase of subsidiary
companies
|
|
|
1,256
|
|
410
|
|
Consolidated cash flow statement
|
|
|
|
|
|
|
Net cash flow from operating
activities3
|
|
|
41
|
|
21
|
|
Net cash flow from investing
activities
|
|
|
784
|
|
389
|
|
Net cash flow from financing
activities2
|
|
|
431
|
|
-
|
|
Total cash outflow from purchase of subsidiary
companies
|
|
|
1,256
|
|
410
|
|
|
|
|
|
|
| |
1. See
note 1.
2.
Repayment of borrowings acquired through business
acquisitions is included in net cash flow from financing
activities.
3. Acquisition transaction costs are included in net cash flow
from operating activities.
Compass Group PLC
Consolidated Financial Statements
Notes to the consolidated financial
statements
For the year ended 30 September 2024
10 Acquisition, sale and closure of businesses
(continued)
Contingent consideration is an estimate at the
date of acquisition of the amount of additional consideration that
will be payable in the future. The actual amount paid can vary from
the estimate depending on the terms of the transaction and, for
example, the actual performance of the acquired
business.
The goodwill arising on the acquisition of the
businesses represents the premium the Group has paid to acquire
companies which complement its existing businesses and create
significant opportunities for cross-selling and other synergies.
The goodwill arising is not expected to be deductible for tax
purposes.
The acquisitions did not have a material impact
on the Group's revenue or profit for the year. If the acquisitions
had occurred on 1 October 2023, they would not have had a material
impact on the Group's revenue or profit for the year.
Sale and closure of businesses
The Group has recognised a net loss of $203m
(2023: net gain of $24m) on the sale and closure of businesses,
including exit costs of $92m (2023: $14m). Activity in the year
includes the sale of the Group's businesses in Argentina, Brazil,
mainland China and the United Arab Emirates, the exit from Angola
and sale of the final 5% shareholding in Highways Royal Co.,
Limited (Japanese Highways).
A summary of business disposals completed
during the year is presented in aggregate below:
|
|
2024
$m
|
Restated1
2023
$m
|
|
Net
assets disposed
|
|
|
|
Goodwill
|
71
|
33
|
|
Other intangible assets
|
13
|
21
|
|
Right-of-use assets
|
4
|
10
|
|
Property, plant and equipment
|
26
|
22
|
|
Interest in joint ventures and
associates
|
61
|
-
|
|
Trade and other receivables
|
200
|
33
|
|
Deferred tax assets
|
14
|
1
|
|
Inventories
|
21
|
11
|
|
Tax recoverable
|
1
|
-
|
|
Cash and cash equivalents
|
30
|
35
|
|
Assets held for sale
|
5
|
32
|
|
Lease liabilities
|
(4)
|
(11)
|
|
Provisions
|
(14)
|
(2)
|
|
Current tax liabilities
|
(15)
|
-
|
|
Trade and other payables
|
(210)
|
(50)
|
|
Net assets disposed
|
203
|
135
|
|
|
|
|
|
Consolidated income statement
|
|
|
|
Cash consideration
|
319
|
102
|
|
Deferred consideration
|
24
|
70
|
|
Less: Net assets disposed
|
(203)
|
(135)
|
|
Less: Exit costs
|
(92)
|
(14)
|
|
Less: Loss on step acquisitions
|
(1)
|
-
|
|
(Less)/add: Reclassification of cumulative
currency translation differences on sale of
businesses2
|
(250)
|
1
|
|
Net (loss)/gain on sale and closure of
businesses
|
(203)
|
24
|
|
|
|
|
|
Consolidated cash flow statement
|
|
|
|
Cash consideration received
|
319
|
102
|
|
Tax payments arising on disposal of
businesses
|
(35)
|
-
|
|
Exit costs paid
|
(29)
|
(9)
|
|
Cash and cash equivalents disposed
|
(30)
|
(35)
|
|
Net proceeds from sale of subsidiary
companies, joint ventures and associates net of exit
costs
|
225
|
58
|
1. See note 1.
2. Includes cumulative foreign exchange gains
of $8m (2023: losses of $4m) on net investment hedges.
Compass Group PLC
Consolidated Financial Statements
Notes to the consolidated financial
statements
For the year ended 30 September 2024
10 Acquisition, sale and closure of businesses
(continued)
Assets and liabilities held for sale
In July 2024, the Group agreed the
sale of its businesses in Chile, Colombia and Mexico. The
disposals, which are subject to regulatory approval and completion
procedures, are expected to complete in the first half of the 2025
financial year. Accordingly, the assets and liabilities of the
Group's businesses in Chile, Colombia and Mexico are classified as
held for sale at 30 September 2024. The Group's investment in its
joint venture in Qatar is also classified as held for sale at 30
September 2024, with a carrying value of $nil.
|
|
Carrying value
$m
|
|
Assets held for sale
|
|
|
Goodwill
|
13
|
|
Other intangible assets
|
1
|
|
Costs to obtain contracts
|
1
|
|
Right-of-use assets
|
5
|
|
Property, plant and equipment
|
12
|
|
Trade and other receivables
|
165
|
|
Deferred tax assets
|
17
|
|
Inventories
|
11
|
|
Tax recoverable
|
8
|
|
Cash and cash equivalents
|
40
|
|
Total
|
273
|
|
Liabilities held for sale
|
|
|
Lease liabilities
|
(6)
|
|
Provisions
|
(8)
|
|
Current tax liabilities
|
(8)
|
|
Trade and other payables
|
(157)
|
|
Total
|
(179)
|
Compass Group PLC
Consolidated Financial Statements
Notes to the consolidated financial
statements
For the year ended 30 September 2024
11 Contingent liabilities
Litigation and claims
The Group is involved in various
legal proceedings incidental to the nature of its business and
maintains insurance cover to reduce financial risk associated with
claims related to these proceedings. Where appropriate, provisions
are made to cover any potential uninsured losses.
Although it is not possible to
predict the outcome or quantify the financial effect of these
proceedings, or any claim against the Group related thereto, in the
opinion of the directors, any uninsured losses resulting from the
ultimate resolution of these matters will not have a material
effect on the financial position of the Group. The timing of the
settlement of these proceedings or claims is uncertain.
During the period of the Group's
ownership of its business in Brazil, which was sold during the
year, the federal tax authorities issued notices of deficiency in
respect of 2014 and 2017 relating primarily to the PIS/COFINS
treatment of certain food costs which we formally objected to and
which are proceeding through the appeals process. At 30 September
2024, the total amount assessed in respect of these matters is
$87m, including interest and penalties. The possibility of further
notices of deficiency for subsequent years during the period of the
Group's ownership cannot be ruled out and the judicial process is
likely to take a number of years to conclude. Based on the opinion
of our local legal advisers, we do not currently consider it likely
that we will have to settle a liability with respect to these
matters and, on this basis, no provision has been
recorded.
The Group is currently subject to
audits and reviews in a number of countries that primarily relate
to complex corporate tax issues. None of these audits is currently
expected to have a material impact on the Group's financial
position. We continue to engage with tax authorities and other
regulatory bodies on payroll and sales tax reviews, and compliance
with labour laws and regulations.
Food safety
In the ordinary course of
business, food safety incidents are identified from time to time
and our businesses' operations receive external reviews of their
food hygiene and safety practices, both on a periodic basis and in
connection with identified incidents. At any point, a number of
reviews will be ongoing. Although it is not possible to predict the
outcome or quantify the financial effect of the outcome of these
reviews, or any claim against Group companies related thereto, in
the opinion of the directors, any uninsured losses resulting from
the ultimate resolution of these ongoing reviews are not expected
to have a material effect on the financial position of the Group.
The timing of the outcome of these reviews is generally
uncertain.
12 Related party transactions
The following transactions were carried out
with related parties of Compass Group PLC:
Subsidiaries
Transactions between the ultimate parent
company and its subsidiaries, and between subsidiaries, have been
eliminated on consolidation.
Joint ventures
With the exception of the sale of the Group's
joint venture in the United Arab Emirates, there were no
significant transactions between joint ventures or joint venture
partners and the rest of the Group during the year.
Associates
There were no significant transactions with
associated undertakings during the year.
Key management personnel
The remuneration of directors and key
management personnel is set out in note 4 to the consolidated
financial statements in the 2024 Annual Report. During the year,
there were no other material transactions or balances between the
Group and its key management personnel or members of their close
families.
Post-employment benefit schemes
Details of the Group's post-employment benefit
schemes are set out in note 24 to the consolidated financial
statements in the 2024 Annual Report.
Compass Group PLC
Consolidated Financial Statements
Notes to the consolidated financial
statements
For the year ended 30 September 2024
13 Post-balance sheet events
On 31 October 2024, the Group acquired 100% of
the issued share capital of DR Holding (trading as Dupont
Restauration), a provider of contract catering services in France,
for cash of €296m ($321m). If the acquisition had occurred on 1
October 2023, it would not have had a material impact on the
Group's revenue or profit for the year ended 30 September 2024.
Given the proximity of the completion date to the date of this
Announcement, certain elements of the acquisition accounting are
not yet available. Full disclosures will be provided in the 2025
Half Year Results Announcement and Annual Report.
On 31 October 2024, the Group agreed the sale
of its business in Kazakhstan, subject to regulatory approval. The
net assets of the business at 30 September 2024 are not
material.
On 13 November 2024, the Group entered into an
agreement to acquire 4Service AS, a provider of catering and
facility management services in Norway, for an enterprise value of
approximately NOK5.5bn ($494m). The acquisition is subject to
regulatory approval which we expect to receive during the 2025
financial year.
In the period from 1 October to 26 November
2024, 2,356,198 shares were repurchased for a total price,
including transaction costs, of $77m under the share buyback
announced in November 2023. The share buyback is scheduled to
complete by 17 December 2024.
On 26 November 2024, a final dividend in
respect of 2024 of 39.1c per share, $664m in aggregate, was
proposed.
Compass Group PLC
Consolidated Financial Statements
Notes to the consolidated financial
statements
For the year ended 30 September 2024
14 Non-GAAP measures
Introduction
The Executive Committee manages and assesses
the performance of the Group using various underlying and other
Alternative Performance Measures (APMs). These measures are not
defined by International Financial Reporting Standards (IFRS) or
other generally accepted accounting principles (GAAP) and may not
be directly comparable with APMs used by other companies.
Underlying measures reflect ongoing trading and, therefore,
facilitate meaningful year-on-year comparison. The Group's APMs,
together with the results prepared in accordance with IFRS, provide
comprehensive analysis of the Group's results. Accordingly, the
relevant statutory measures are also presented where appropriate.
Certain of the Group's APMs are financial Key Performance
Indicators (KPIs) which measure progress against our
strategy.
In determining the adjustments to arrive at
underlying results, we use a set of established principles relating
to the nature and materiality of individual items or groups of
items, including, for example, events which: (i) are outside the
normal course of business; (ii) are incurred in a pattern that is
unrelated to the trends in the underlying financial performance of
our ongoing business; or (iii) are related to business acquisitions
or disposals as they are not part of the Group's ongoing trading
business and the associated cost impact arises from the transaction
rather than from the continuing business.
Definitions
|
Measure
|
|
Definition
|
|
Purpose
|
|
Income statement
|
|
|
|
|
|
Underlying revenue
|
|
Revenue plus share of revenue of joint
ventures.
|
|
Allows management to monitor the sales
performance of the Group's subsidiaries and joint
ventures.
|
|
Underlying
operating profit
|
|
Operating profit excluding specific adjusting
items2.
|
|
Provides a measure of operating profitability
that is comparable over time.
|
|
Underlying
operating margin1
|
|
Underlying operating profit divided by
underlying revenue.
|
|
An important measure of the efficiency of
our operations in delivering great food and support services
to our clients and consumers.
|
|
Organic revenue1
|
|
Current year: Underlying revenue excluding
businesses acquired, sold and closed in the year. Prior year:
Underlying revenue including a proforma 12 months in respect of
businesses acquired in the year and excluding businesses sold and
closed in the year translated at current year exchange
rates.
Where applicable, a 53rd week is excluded from
the current or prior year.
|
|
Embodies our success in growing and retaining
our customer base, as well as our ability to drive volumes in our
existing businesses and maintain appropriate pricing levels in
light of input cost inflation.
|
|
Organic operating profit
|
|
Current year: Underlying operating profit
excluding businesses acquired, sold and closed in the year. Prior
year: Underlying operating profit including a proforma 12 months in
respect of businesses acquired in the year and excluding businesses
sold and closed in the year translated at current year exchange
rates.
Where applicable, a 53rd week is excluded from
the current or prior year.
|
|
Provides a measure of operating profitability
that is comparable over time.
|
|
Underlying finance costs
|
|
Finance costs excluding specific adjusting
items2.
|
|
Provides a measure of the Group's cost of
financing excluding items outside of the control of
management.
|
|
Underlying profit before tax
|
|
Profit before tax excluding specific adjusting
items2.
|
|
Provides a measure of Group profitability that
is comparable over time.
|
|
Underlying income tax expense
|
|
Income tax expense excluding tax attributable
to specific adjusting items2.
|
|
Provides a measure of income tax expense that
is comparable over time.
|
|
Underlying effective
tax rate
|
|
Underlying income tax expense divided by
underlying profit before tax.
|
|
Provides a measure of the effective tax rate
that is comparable over time.
|
|
1.
|
Key Performance
Indicator.
|
|
2.
|
See page 52 for definitions of the
specific adjusting items and a reconciliation from the statutory to
the underlying income statement.
|
Compass Group PLC
Consolidated Financial Statements
Notes to the consolidated financial
statements
For the year ended 30 September 2024
14 Non-GAAP measures (continued)
Definitions (continued)
|
Measure
|
|
Definition
|
|
Purpose
|
|
Income statement (continued)
|
|
|
|
Underlying profit for the year
|
|
Profit for the year excluding specific
adjusting items2 and tax attributable to those
items.
|
|
Provides a measure of Group profitability that
is comparable over time.
|
|
Underlying profit attributable to equity
shareholders (underlying earnings)
|
|
Profit for the year attributable to equity
shareholders excluding specific adjusting items2 and tax
attributable to those items.
|
|
Provides a measure of Group profitability that
is comparable over time.
|
|
Underlying earnings
per share1
|
|
Earnings per share excluding specific
adjusting items2 and tax attributable to those
items.
|
|
Measures the performance of the Group in
delivering value to shareholders.
|
|
Net operating profit after tax
(NOPAT)
|
|
Underlying operating profit excluding the
operating profit of non-controlling interests, net of tax at the
underlying effective tax rate.
|
|
Provides a measure of Group operating
profitability that is comparable over time.
|
|
Underlying EBITDA
|
|
Underlying operating profit excluding
underlying impairment, depreciation and amortisation of intangible
assets, tangible assets and contract-related assets.
|
|
Provides a measure of Group operating
profitability that is comparable over time.
|
|
Balance sheet
|
|
|
|
|
|
Net debt
|
|
Bank overdrafts, bank and other borrowings,
lease liabilities and derivative financial instruments, less cash
and cash equivalents.
|
|
Allows management to monitor the indebtedness
of the Group.
|
|
Net debt to EBITDA
|
|
Net debt divided by underlying
EBITDA.
|
|
Provides a measure of the Group's ability to
finance and repay its debt from its operations.
|
|
Capital employed
|
|
Total equity shareholders' funds, excluding:
net debt; post-employment benefit assets and obligations; and
investments held to meet the cost of unfunded post-employment
benefit obligations.
|
|
Provides a measure of the Group's efficiency
in allocating its capital to profitable investments.
|
|
Return on Capital Employed
(ROCE)1
|
|
NOPAT divided by 12-month average capital
employed.
|
|
ROCE demonstrates how we have delivered
against the various investments we make in the business, be it
operational expenditure, capital expenditure or bolt-on
acquisitions.
|
|
Cash flow
|
|
|
|
|
|
Capital expenditure
|
|
Purchase of intangible assets, purchase of
contract fulfilment assets, purchase of property, plant and
equipment and investment in contract prepayments, less proceeds
from sale of property, plant and equipment/intangible
assets/contract fulfilment assets.
|
|
Provides a measure of expenditure on long-term
intangible, tangible and contract-related assets, net of the
proceeds from disposal of intangible, tangible and contract-related
assets.
|
|
Underlying operating cash flow
|
|
Net cash flow from operating activities,
including purchase of intangible assets, purchase of contract
fulfilment assets, purchase of property, plant and equipment,
proceeds from sale of property, plant and equipment/intangible
assets/contract fulfilment assets, repayment of principal under
lease liabilities and share of results of joint ventures and
associates, and excluding interest and net tax paid,
post-employment benefit obligations net of service costs, cash
payments related to the cost action programme and COVID-19 resizing
costs, strategic portfolio review and one-off pension charge, and
acquisition transaction costs.
|
|
Provides a measure of the success of the Group
in turning profit into cash that is comparable over
time.
|
|
1.
|
Key Performance
Indicator.
|
|
2.
|
See page 52 for definitions
of the specific adjusting items and a reconciliation from the
statutory to the underlying income statement.
|
Compass Group PLC
Consolidated Financial Statements
Notes to the consolidated financial
statements
For the year ended 30 September 2024
14 Non-GAAP measures (continued)
Definitions (continued)
|
Measure
|
|
Definition
|
|
Purpose
|
|
Cash flow (continued)
|
|
|
|
|
Underlying operating cash flow
conversion
|
|
Underlying operating cash flow divided by
underlying operating profit.
|
|
Provides a measure of the success of the Group
in turning profit into cash that is comparable over
time.
|
|
Free cash flow
|
|
Net cash flow from operating activities,
including purchase of intangible assets, purchase of contract
fulfilment assets, purchase of property, plant and equipment,
proceeds from sale of property, plant and equipment/intangible
assets/contract fulfilment assets, purchase of other investments,
proceeds from sale of other investments, dividends received from
joint ventures and associates, interest received, repayment of
principal under lease liabilities and dividends paid to
non-controlling interests.
|
|
Provides a measure of the success of the Group
in turning profit into cash that is comparable over
time.
|
|
Underlying free
cash flow1
|
|
Free cash flow excluding cash payments related
to the cost action programme and COVID-19 resizing costs, strategic
portfolio review and one-off pension charge, and acquisition
transaction costs.
|
|
Provides a measure of the success of the Group
in turning profit into cash that is comparable over
time.
|
|
Underlying free cash flow
conversion2
|
|
Underlying free cash flow divided by
underlying profit for the year.
|
|
Provides a measure of the success of the Group
in turning profit into cash that is comparable over
time.
|
|
Underlying cash
tax rate
|
|
Net tax paid included in net cash flow from
operating activities divided by underlying profit before
tax.
|
|
Provides a measure of the cash tax rate that
is comparable over time.
|
|
Business growth
|
|
|
|
|
|
New business
|
|
Current year underlying revenue for the period
in which no revenue had been recognised in the prior
year.
|
|
The measure of incremental revenue in the
current year from new business.
|
|
Lost business
|
|
Prior year underlying revenue for the period
in which no revenue has been recognised in the current
year.
|
|
The measure of lost revenue in the current
year from ceased business.
|
|
Net new business
|
|
New business minus lost business as a
percentage of prior year organic revenue.
|
|
The measure of net incremental revenue in the
current year from business wins and losses.
|
|
Retention
|
|
100% minus lost business as a percentage of
prior year organic revenue.
|
|
The measure of our success in retaining
business.
|
|
1.
|
Key Performance
Indicator.
|
|
2.
|
Underlying profit for the year has
replaced underlying operating profit as the denominator in the
calculation of underlying free cash flow conversion.
|
Compass Group PLC
Consolidated Financial Statements
Notes to the consolidated financial
statements
For the year ended 30 September 2024
14 Non-GAAP measures (continued)
Reconciliations
Income statement
Underlying revenue and operating profit are
reconciled to GAAP measures in note 2
(segmental analysis).
|
|
Geographical segments
|
|
|
|
Organic revenue
|
North America
$m
|
Europe
$m
|
Rest of World
$m
|
Central activities
$m
|
Total
$m
|
|
Year ended 30 September 2024
|
|
|
|
|
|
|
Underlying revenue
|
28,581
|
9,887
|
3,708
|
-
|
42,176
|
|
Organic adjustments
|
(105)
|
(570)
|
(480)
|
-
|
(1,155)
|
|
Organic revenue
|
28,476
|
9,317
|
3,228
|
-
|
41,021
|
|
Year ended 30 September 2023
|
|
|
|
|
|
|
Underlying revenue
(restated1)
|
25,768
|
8,598
|
3,850
|
-
|
38,216
|
|
Currency adjustments
|
(6)
|
49
|
(112)
|
-
|
(69)
|
|
Underlying revenue - constant
currency
|
25,762
|
8,647
|
3,738
|
-
|
38,147
|
|
Organic adjustments
|
14
|
(322)
|
(764)
|
-
|
(1,072)
|
|
Organic revenue
|
25,776
|
8,325
|
2,974
|
-
|
37,075
|
|
|
|
|
|
|
|
|
Increase in
underlying revenue at reported rates - %
|
10.9%
|
15.0%
|
(3.7)%
|
-
|
10.4%
|
|
Increase in
underlying revenue at constant currency - %
|
10.9%
|
14.3%
|
(0.8)%
|
-
|
10.6%
|
|
Increase in
organic revenue - %
|
10.5%
|
11.9%
|
8.5%
|
-
|
10.6%
|
|
|
|
Geographical segments
|
|
|
|
|
Organic operating profit
|
North America
$m
|
Europe
$m
|
Rest of World
$m
|
Central activities
$m
|
Total
$m
|
|
|
Year ended 30 September 2024
|
|
|
|
|
|
|
|
Underlying operating profit/(loss)
|
2,335
|
583
|
224
|
(144)
|
2,998
|
|
|
Underlying operating margin - %
|
8.2%
|
5.9%
|
6.0%
|
|
7.1%
|
|
|
Organic adjustments
|
2
|
(61)
|
(33)
|
-
|
(92)
|
|
|
Organic operating profit/(loss)
|
2,337
|
522
|
191
|
(144)
|
2,906
|
|
|
Year ended 30 September 2023
|
|
|
|
|
|
|
|
Underlying operating profit/(loss)
(restated1)
|
2,019
|
479
|
214
|
(120)
|
2,592
|
|
|
Underlying operating margin - %
|
7.8%
|
5.6%
|
5.6%
|
|
6.8%
|
|
|
Currency adjustments
|
-
|
(1)
|
(11)
|
(4)
|
(16)
|
|
|
Underlying operating profit/(loss) - constant
currency
|
2,019
|
478
|
203
|
(124)
|
2,576
|
|
|
Organic adjustments
|
1
|
(24)
|
(53)
|
-
|
(76)
|
|
|
Organic operating profit/(loss)
|
2,020
|
454
|
150
|
(124)
|
2,500
|
|
|
Increase in
underlying operating profit at reported rates - %
|
15.7%
|
21.7%
|
4.7%
|
|
15.7%
|
|
|
Increase in
underlying operating profit at constant currency -
%
|
15.7%
|
22.0%
|
10.3%
|
|
16.4%
|
|
|
Increase in
organic operating profit - %
|
15.7%
|
15.0%
|
27.3%
|
|
16.2%
|
Compass Group PLC
Consolidated Financial Statements
Notes to the consolidated financial
statements
For the year ended 30 September 2024
14 Non-GAAP measures (continued)
Reconciliations (continued)
|
|
|
Specific adjusting items
|
|
|
Underlying income statement
|
2024
Statutory
$m
|
1
|
2
|
3
|
4
|
5
|
2024 Underlying
$m
|
|
|
Operating profit
|
|
2,584
|
235
|
8
|
1
|
170
|
-
|
2,998
|
|
|
Net loss on sale and closure of
businesses
|
(203)
|
-
|
-
|
-
|
203
|
-
|
-
|
|
|
Finance costs
|
|
(325)
|
9
|
-
|
-
|
-
|
67
|
(249)
|
|
|
Profit before tax
|
|
2,056
|
244
|
8
|
1
|
373
|
67
|
2,749
|
|
|
Income tax expense
|
|
(642)
|
(43)
|
(2)
|
(1)
|
1
|
(15)
|
(702)
|
|
|
Profit for the year
|
|
1,414
|
201
|
6
|
-
|
374
|
52
|
2,047
|
|
|
Less: Non-controlling interests
|
|
(10)
|
-
|
-
|
-
|
-
|
-
|
(10)
|
|
|
Profit
attributable to equity shareholders
|
1,404
|
201
|
6
|
-
|
374
|
52
|
2,037
|
|
|
Earnings per share (cents)
|
|
82.3c
|
11.8c
|
0.4c
|
-
|
22.0c
|
3.0c
|
119.5c
|
|
|
Effective tax rate (%)
|
|
31.2%
|
|
|
|
|
|
25.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
Specific adjusting items
|
|
|
Underlying income statement
(restated1)
|
2023
Statutory
$m
|
1
|
2
|
3
|
4
|
5
|
2023 Underlying
$m
|
|
|
Operating profit
|
|
2,313
|
153
|
8
|
-
|
118
|
-
|
2,592
|
|
|
Net gain on sale and closure of
businesses
|
24
|
-
|
-
|
-
|
(24)
|
-
|
-
|
|
|
Finance costs
|
|
(200)
|
-
|
-
|
-
|
-
|
34
|
(166)
|
|
|
Profit before tax
|
|
2,137
|
153
|
8
|
-
|
94
|
34
|
2,426
|
|
|
Income tax expense
|
|
(525)
|
(32)
|
(1)
|
-
|
(21)
|
(9)
|
(588)
|
|
|
Profit for the year
|
|
1,612
|
121
|
7
|
-
|
73
|
25
|
1,838
|
|
|
Less: Non-controlling interests
|
|
(5)
|
-
|
-
|
-
|
-
|
-
|
(5)
|
|
|
Profit attributable to equity
shareholders
|
1,607
|
121
|
7
|
-
|
73
|
25
|
1,833
|
|
|
Currency adjustments
|
|
|
|
|
|
|
(15)
|
|
|
Profit attributable to equity shareholders -
constant currency
|
|
|
|
|
|
|
1,818
|
|
|
Earnings per share (cents)
|
|
92.2c
|
7.0c
|
0.4c
|
-
|
4.2c
|
1.4c
|
105.2c
|
|
|
Earnings per share - constant currency
(cents)
|
|
|
|
|
|
104.3c
|
|
|
Effective tax rate (%)
|
|
24.6%
|
|
|
|
|
|
24.2%
|
|
Specific adjusting items are as
follows:
1. Acquisition-related
charges
Represent amortisation and
impairment charges in respect of intangible assets acquired through
business combinations, direct costs incurred through business
combinations or other strategic asset acquisitions, business
integration costs, changes in consideration in relation to past
acquisition activity, other acquisition-related items (see note 3)
and, from 2024, net present value adjustments on deferred and
contingent consideration payable on business
acquisitions.
2. One-off pension
charge
Mainly reflects a past service cost
following a change in legislation in Türkiye eliminating the
minimum retirement age requirement for certain employees effective
from March 2023.
3. Tax on share of profit of joint
ventures
Reclassification of tax on share of
profit of joint ventures to income tax expense.
4. Gains and losses on sale and
closure of businesses and charges related to the strategic
portfolio review
Profits and losses on the sale of subsidiaries,
joint ventures and associates, exit costs on closure of businesses
(see note 10) and charges in respect of a strategic portfolio
review to focus on the Group's core markets (see note
3).
5. Other financing items
Financing items, including hedge accounting
ineffectiveness, change in the fair value of derivatives held for
economic hedging purposes, change in the fair value of investments
and financing items relating to post-employment
benefits.
Compass Group PLC
Consolidated Financial Statements
Notes to the consolidated financial
statements
For the year ended 30 September 2024
14 Non-GAAP measures (continued)
Reconciliations (continued)
|
Net operating profit after tax
(NOPAT)
|
2024
$m
|
Restated1
2023
$m
|
|
Underlying operating profit
|
2,998
|
2,592
|
|
Deduct:
|
|
|
|
Tax on underlying operating profit at
effective tax rate
|
(762)
|
(626)
|
|
Operating profit of non-controlling interests
net of tax
|
(10)
|
(5)
|
|
NOPAT
|
2,226
|
1,961
|
|
1.
|
See note 1.
|
|
Underlying EBITDA
|
2024
$m
|
Restated1
2023
$m
|
|
Underlying operating profit
|
2,998
|
2,592
|
|
Add back/(deduct):
|
|
|
|
Depreciation of property, plant and equipment
and right-of-use assets
|
594
|
536
|
|
Amortisation of other intangible assets,
contract fulfilment assets and contract
prepayments2
|
550
|
482
|
|
Impairment losses - non-current
assets3
|
10
|
12
|
|
Impairment reversals - non-current
assets
|
(7)
|
(2)
|
|
Underlying EBITDA
|
4,145
|
3,620
|
|
|
|
| |
|
1.
|
See note 1.
|
|
2.
|
Excludes amortisation of
acquisition intangibles.
|
|
3.
|
Excludes impairment losses of $156m
(2023: $60m) included in charges related to the strategic portfolio
review.
|
Balance sheet
|
Components of net debt
|
2024
$m
|
Restated1
2023
$m
|
|
Borrowings
|
(4,596)
|
(4,114)
|
|
Lease liabilities
|
(1,315)
|
(1,153)
|
|
Derivative financial instruments
|
(103)
|
(221)
|
|
Gross debt
|
(6,014)
|
(5,488)
|
|
Cash and cash equivalents
|
623
|
1,029
|
|
Net debt
|
(5,391)
|
(4,459)
|
|
1.
|
See note 1.
|
|
Net debt reconciliation
|
2024
$m
|
Restated1
2023
$m
|
|
Net decrease
in cash and cash equivalents
(Deduct)/add back:
|
(296)
|
(1,273)
|
|
Increase in borrowings
|
(1,381)
|
(1)
|
|
Repayment of borrowings
|
1,161
|
543
|
|
Repayment of borrowings acquired through
business acquisitions
|
431
|
-
|
|
Net cash flow from derivative financial
instruments
|
(46)
|
(157)
|
|
Repayment of principal under lease
liabilities
|
227
|
215
|
|
Decrease/(increase) in net debt from cash
flows
|
96
|
(673)
|
|
New lease liabilities and
amendments
|
(325)
|
(323)
|
|
Borrowings acquired through business
acquisitions
|
(431)
|
-
|
|
Amortisation of fees and discounts on issue of
debt
|
(4)
|
(5)
|
|
Changes in fair value of borrowings in a fair
value hedge
|
(175)
|
(32)
|
|
Lease liabilities acquired through business
acquisitions
|
(35)
|
-
|
|
Lease liabilities derecognised on sale and
closure of businesses
|
4
|
11
|
|
Changes in fair value of derivative financial
instruments
|
115
|
(9)
|
|
Currency translation losses
|
(143)
|
(91)
|
|
Increase in net debt
|
(898)
|
(1,122)
|
|
Net debt at 1 October
|
(4,459)
|
(3,337)
|
|
Cash and lease liabilities transferred to held
for sale
|
(34)
|
-
|
|
Net debt at 30 September
|
(5,391)
|
(4,459)
|
|
|
|
| |
Compass Group PLC
Consolidated Financial Statements
Notes to the consolidated financial
statements
For the year ended 30 September 2024
14 Non-GAAP measures (continued)
Reconciliations (continued)
|
Net debt to EBITDA
|
2024
$m
|
Restated1
2023
$m
|
|
Net debt
|
(5,391)
|
(4,459)
|
|
Underlying EBITDA
|
4,145
|
3,620
|
|
Net debt to EBITDA (times)
|
1.3
|
1.2
|
|
1.
|
See note 1.
|
|
Return on capital employed (ROCE)
|
2024
$m
|
Restated1
2023
$m
|
|
NOPAT
|
2,226
|
1,961
|
|
Average capital employed
|
11,722
|
10,138
|
|
ROCE (%)
|
19.0%
|
19.3%
|
|
|
|
| |
Cash flow
|
Capital expenditure
|
2024
$m
|
Restated1
2023
$m
|
|
Purchase of intangible assets
|
329
|
263
|
|
Purchase of contract fulfilment
assets
|
508
|
380
|
|
Purchase of property, plant and
equipment
|
572
|
445
|
|
Investment in contract prepayments
|
213
|
88
|
|
Proceeds from sale of property, plant and
equipment/intangible assets/contract fulfilment assets
|
(81)
|
(78)
|
|
Capital expenditure
|
1,541
|
1,098
|
|
1.
|
See note 1.
|
|
Underlying operating cash flow
|
2024
$m
|
Restated1
2023
$m
|
|
Net cash flow from operating
activities
|
3,135
|
2,536
|
|
Purchase of intangible assets
|
(329)
|
(263)
|
|
Purchase of contract fulfilment
assets
|
(508)
|
(380)
|
|
Purchase of property, plant and
equipment
|
(572)
|
(445)
|
|
Proceeds from sale of property, plant and
equipment/intangible assets/contract fulfilment assets
|
81
|
78
|
|
Repayment of principal under lease
liabilities
|
(227)
|
(215)
|
|
Share of results of joint ventures and
associates
|
44
|
68
|
|
Add back/(deduct):
|
|
|
|
Interest paid
|
267
|
208
|
|
Net tax paid
|
693
|
539
|
|
Post-employment benefit obligations net of
service costs2
|
(7)
|
11
|
|
Cash payments related to the cost action
programme and COVID-19 resizing costs
|
8
|
35
|
|
Cash payments related to the strategic
portfolio review
|
8
|
24
|
|
Cash payments related to the one-off pension
charge
|
8
|
11
|
|
Acquisition transaction costs
|
41
|
21
|
|
Underlying operating cash flow
|
2,642
|
2,228
|
|
|
|
| |
|
1.
|
See note 1.
|
|
2.
|
2023 excludes $10m of cash payments
related to the one-off pension charge.
|
|
Underlying operating cash flow
conversion
|
2024
$m
|
Restated1
2023
$m
|
|
Underlying operating cash
flow
|
2,642
|
2,228
|
|
Underlying operating profit
|
2,998
|
2,592
|
|
Underlying operating cash flow conversion
(%)
|
88.1%
|
86.0%
|
Compass Group PLC
Consolidated Financial Statements
Notes to the consolidated financial
statements
For the year ended 30 September 2024
14 Non-GAAP measures (continued)
Reconciliations (continued)
|
Free cash flow
|
2024
$m
|
Restated1
2023
$m
|
|
Net cash flow from operating
activities
|
3,135
|
2,536
|
|
Purchase of intangible assets
|
(329)
|
(263)
|
|
Purchase of contract fulfilment
assets
|
(508)
|
(380)
|
|
Purchase of property, plant and
equipment
|
(572)
|
(445)
|
|
Proceeds from sale of property, plant and
equipment/intangible assets/contract fulfilment assets
|
81
|
78
|
|
Purchase of other investments
|
(2)
|
(4)
|
|
Proceeds from sale of other
investments2
|
3
|
4
|
|
Dividends received from joint ventures and
associates
|
65
|
60
|
|
Interest received
|
39
|
61
|
|
Repayment of principal under lease
liabilities
|
(227)
|
(215)
|
|
Dividends paid to non-controlling
interests
|
(10)
|
(7)
|
|
Free cash flow
|
1,675
|
1,425
|
2. 2024 excludes $327m
received in respect of the sale of the Group's 19% effective
interest in ASM Global Parent, Inc. in August
2024.
|
Underlying free cash flow
|
2024
$m
|
Restated1
2023
$m
|
|
Free cash flow
|
1,675
|
1,425
|
|
Add back:
|
|
|
|
Cash payments related to the cost
action programme and COVID-19 resizing costs
|
8
|
35
|
|
Cash payments related to the
strategic portfolio review
|
8
|
24
|
|
Cash payments related to the one-off pension
charge
|
8
|
11
|
|
Acquisition transaction costs
|
41
|
21
|
|
Underlying free cash flow
|
1,740
|
1,516
|
|
1.
|
See note 1.
|
|
Underlying free cash flow
conversion
|
2024
$m
|
Restated1,2
2023
$m
|
|
|
Underlying free cash flow
|
1,740
|
1,516
|
|
|
Underlying profit for the year
|
2,047
|
1,838
|
|
|
Underlying free cash
flow conversion (%)
|
85.0%
|
82.5%
|
|
|
|
|
|
| |
|
1.
|
See note 1.
|
|
2.
|
As underlying free cash flow
includes interest and tax cash flows, underlying profit for the
year has replaced underlying operating profit as the denominator in
the calculation of underlying free cash flow conversion. Underlying
free cash flow conversion would be 58.0% in 2024 (2023: 58.5%)
using underlying operating profit as the denominator.
|
|
Underlying cash tax rate
|
2024
$m
|
Restated1
2023
$m
|
|
Tax received
|
18
|
31
|
|
Tax paid
|
(711)
|
(570)
|
|
Net tax paid
|
(693)
|
(539)
|
|
Underlying profit before tax
|
2,749
|
2,426
|
|
Underlying cash tax
rate (%)
|
25.2%
|
22.2%
|
Business growth
|
Net new business
|
2024
$m
|
Restated1
2023
$m
|
|
New business less lost business
|
1,573
|
1,472
|
|
Prior year organic revenue
|
37,075
|
31,872
|
|
Net new business (%)
|
4.2%
|
4.6%
|
Compass Group PLC
Consolidated Financial Statements
Notes to the consolidated financial
statements
For the year ended 30 September 2024
15 Exchange rates
Average rates are used to translate the income
statement and cash flow statement. Closing rates are used to
translate the balance sheet. Only the most significant currencies
are shown.
|
|
2024
|
2023
|
|
Average exchange rate for the year
|
|
|
|
Australian dollar
|
1.51
|
1.51
|
|
Brazilian real
|
5.20
|
5.09
|
|
Canadian dollar
|
1.36
|
1.35
|
|
Euro
|
0.92
|
0.94
|
|
Japanese yen
|
150.03
|
140.07
|
|
Pound sterling
|
0.79
|
0.82
|
|
Turkish lira
|
31.33
|
21.51
|
|
|
|
|
|
Closing exchange rate at 30
September
|
|
|
|
Australian dollar
|
1.44
|
1.55
|
|
Brazilian real
|
5.45
|
5.00
|
|
Canadian dollar
|
1.35
|
1.35
|
|
Euro
|
0.90
|
0.94
|
|
Japanese yen
|
143.04
|
149.22
|
|
Pound sterling
|
0.75
|
0.82
|
|
Turkish lira
|
34.19
|
27.41
|
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, the direct and
indirect future impacts and implications of: public health crises
such as the COVID-19 pandemic on the economy, nationally and
internationally, and on the Group, its operations and prospects;
risks associated with changes in environmental scenarios and
related regulations including (without limitation) the evolution
and development of the global transition to a low carbon economy
(including increasing societal and investor expectations);
disruptions and inefficiencies in supply chains (such as resulting
from the wars in Ukraine and the Middle East); future domestic and
global political, economic and business conditions (such as
inflation or the UK's exit from the EU); 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 and expected expenditures and divestments; risks associated
with changes in economic conditions, levels of economic growth and
the strength of the food and support services markets in the
jurisdictions in which the Group operates; fluctuations in food and
other product costs and labour costs; prices and changes in
exchange and interest rates; and the impacts of technological
advancements. 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 in this Announcement
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 when making their investment decisions.
Additionally, forward-looking statements regarding past trends or
activities should not be taken as a representation or warranty 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 Guidance and
Transparency Rules of the Financial Conduct 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.