|Underlying1 results||Statutory results|
|Earnings per share||86.1p||65.0p2||32.5%2||75.4p||62.6p||20.4%|
|Operating cash flow||£1,825m||£1,351m||35.1%||£2,076m||£1,596m||30.1%|
|Free cash flow||£1,241m||£890m||39.4%|
|Annual dividend per share||43.1p||31.5p||36.8%||43.1p||31.5p||36.8%|
Underlying operating profit growth of 30%2 delivered through:
• Organic revenue growth of 19%, balanced across all regions and sectors.
• Operating margin of 6.8%, up 60bps year on year.
Capitalising on significant market opportunities with strong focus on growth:
• Signed £2.7bn4 of new business, with first-time outsourcing accounting for c.50%.
• Mobilised net new business of 4.6%, with strong client retention rate of 96.5%.
Underlying operating cash generation of £1.8bn supports strong balance sheet and flexibility for capital allocation:
• Invested £1.2bn in the business in capex (2.9% of underlying revenue) and M&A (net spend c.£300m).
• Returning surplus cash through a further share buyback of up to $500m, to complete in 2024 subject to M&A activity.
• Focusing on significant structural growth opportunities in core markets; exited nine tail countries.
• Evolving our existing operating model to further enhance our competitive advantages.
• Investing in future sources of growth through capex and M&A to enhance our capability and expertise, including agreement to acquire Hofmann Menü-Manufaktur GmbH in Germany.
• Underlying operating profit growth towards 13%5 delivered through high single-digit organic revenue growth and ongoing margin progression.
• Revenue increased by 21.6% reflecting the strong trading performance and favourable exchange rates.
• Operating profit, including charges relating to business acquisitions and reshaping our portfolio which are excluded from underlying operating profit, increased by 26.1% to £1,891m.
Dominic Blakemore, Group Chief Executive, said:
“2023 was a strong year for Compass. North America continued its long track record of excellent growth whilst Europe delivered a second year of net new growth in the 4-5% range. During the year, we continued to successfully capitalise on the dynamic outsourcing trends, resulting in another record year of new business wins and continued strong client retention.
We have a strong, balanced, and sustainable growth model across the Group. Our size, strength and scale enable us to continue investing in our operating model, further enhancing our competitive advantages. We have exited nine tail countries to focus on markets with the greatest growth opportunities and our strong cash generation continues to fuel investment in our business through capex and attractive M&A.
The business is in great shape operationally and financially and well positioned for a more focused growth phase. Despite some macroeconomic uncertainty, favourable market dynamics continue and, with a global market share of less than 15% and around 50% of the market still self-operated, we have an exciting structural growth opportunity. We are confident that the focus on our core markets, the ongoing investment in our market-leading offer and our proven processes will support high single-digit organic revenue growth in 2024.
Going forward, we expect to sustain mid to high single-digit organic revenue growth and ongoing margin progression leading to profit growth ahead of revenue growth and increased cash generation. We are investing in capex and strategic M&A to support future growth, returning any surplus cash through the share buyback programme, and delivering long-term, compounding shareholder returns.”
Watch the 2023 Full Year Results presentation, download the slides and more here.
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. Measured on a constant-currency basis.
3. Organic revenue change.
4. Expected annual revenue from new contracts signed during the year.
5. On a constant-currency basis, including announced disposals, exits and acquisitions in 2023 and to date in 2024.