Compass - Compass Group CR Report 2010

Highlights 2010

We have delivered another year of strong performance, despite the challenging economic conditions, with record operating profit of over
£1 billion and a return to organic revenue growth. Our ongoing focus on operational efficiency has enabled us to both invest in future growth and deliver another increase in the margin of 40 basis points.

On a constant currency basis, underlying operating profit increased by
£92 million (10.1%) from the following key areas:

£38m from net new business
£24m from our existing base estate
£20m of above unit cost savings
£10m from acquisitions net of disposals and other

Compass Group share price performance
vs FTSE 100 Index over the last 3 years

Revenues

4.7% revenue growth on a constant currency basis

Total underlying operating profit

A 10.1% increase in underlying operating profit on a constant currency basis

Underlying operating margin

A 40 basis point increase in underlying operating margin

Underlying basic earnings per share

A 19.0% increase in underlying basic earnings per share

Dividends per ordinary share

A 32.6% increase in the total dividend per ordinary share

Free cash flow

A 25.5% increase in free cash flow

Constant currency restates the prior year results to 2010’s average exchange rates.
Total underlying operating profit includes share of profit of associates but excludes
the amortisation of intangibles arising on acquisition, acquisition transaction costs
and share-based payments expense – minority interest call option.
Underlying operating profit by region excludes share of profit of associates, the
amortisation of intangibles arising on acquisition, acquisition transaction costs and
share-based payments expense – minority interest call option.
Underlying operating margin is based on revenue and operating profit excluding
share of profit of associates, the amortisation of intangibles arising on acquisition,
acquisition transaction costs and share-based payments expense – minority interest
call option.
Underlying basic earnings per share excludes the amortisation of intangibles
arising on acquisition, acquisition transaction costs and share-based payments
expense – minority interest call option, hedge accounting ineffectiveness, the
change in the fair value of investments and minority interest put options and the tax
attributable to these amounts.
Organic growth is calculated by adjusting for acquisitions (excluding current year
acquisitions and including a full year in respect of prior year acquisitions), disposals
(excluded from both periods) and exchange rate movements (translating the prior
year at current year exchange rates) and compares the current year results against
the prior year.
Unless stated otherwise, all figures in this document relate to the year ended
30 September 2010.
The data shown in the Chief Executive’s statement and Our sectors is for the continuing business only.

Chief Executive's statement

photo: Compass Group CEO

Our commitment to Corporate Responsibility (‘CR’) reflects the fact that setting the highest standards for responsible business practice underpins the long-term success of any great business. Sound policies and practices make sound business sense.

We approach CR in the same way we manage every other major aspect of running our business. We set a global framework, stating our objectives, policies and measures, and empower our country management teams to deliver in the context of their local market.

I’m very proud of the great work our teams do around the world in driving progress on our CR journey and I’m delighted to be able to share some of these with you.

A further important step on our CR journey is the development of a global CR Framework in 2011 which will articulate our longer-term vision and clearly define the steps we wish our businesses to implement. We have a common set of CR targets and measures, to enable our stakeholders to evaluate our progress. These measures and targets relate to our key impacts including the environment, health and safety, our people, our supply chain as well as business ethics. Click here to view our 2009-2010 targets and progress.

Your feedback is important to us and if you do have any questions relating to our CR activity, please email our CR team at Responsibility@compass-group.co.uk

Richard Cousins
Group Chief Executive

Hide statement

Origin
Foods

Innovative environmental practices are important in our supply chain. Demonstrating true leadership in environmental supply chain practices, our Australian business has been recognised with the FIA Food and Beverage Industry Award for Environment and Sustainability 2010 for its ‘Origin Foods’ programme which reduces food packaging and transportation miles. This prestigious annual award recognises the achievements of organisations which implement environmental sustainability focused strategies.

Supporting coffee farming communities

Low carbon food

Working with our strategic community coffee partner, Pura Vida, our business in the US has been actively supporting the coffee farming communities. For every pound of Pura Vida coffee purchased, a donation is made to the Create Good Foundation to help support the coffee growing communities in Latin America and around the world; funding small business development projects, land renovation and health initiatives that create strong and self-reliant communities. Through this partnership, we have raised over $92,000 to date.