|Underlying1 results||Statutory results|
|HY 2023||HY 2022||Change||HY 2023||HY 2022||Change|
|Earning per share||42.7p||29.9p2||42.8%2||36.4p||26.7p||36.3%|
|Operating cash flow||£871m||£557m||56.4%||£944m||£663m||42.4%|
|Free cash flow||£590m||£360m||63.9%|
|Interim dividend per share||15.0p||9.4p||59.6%||15.0p||9.4p||59.6%|
• Strong organic revenue growth of 25% with excellent net new business of 5.2%
- First-time outsourcing trends continue, accounting for c.45% of new business wins
- Balanced growth across all regions with very strong performance in Europe
- Maintaining strong client retention rate
• Operating profit over £1bn and operating profit margin of 6.6%, up 80bps
• Strong cash generation, net debt to EBITDA reduced to 1.1x
• Further share buyback of up to £750m to be completed this calendar year
Strategic priorities for growth – capturing the outsourcing market opportunities
• Sustaining the outperformance in North America
• Building a track record of growth in Europe and Rest of World
• Exited six tail countries as we continue to reshape our portfolio to focus on markets with higher growth opportunities
Raising FY 2023 outlook
• Operating profit growth2 towards 30% (from above 20%), delivered through:
- Organic revenue growth of around 18% (from around 15%)
- Operating margin in the range of 6.7% to 6.8% (from above 6.5%)
Change in reporting currency
• Group to report in US dollars from 1 October 2023 to align with our business exposure and reduce foreign exchange volatility on earnings
• Statutory revenue increased by 36.2% reflecting trading performance and favourable exchange translation
• Statutory operating profit, which includes charges from reshaping our portfolio and acquisition-related charges both of which are excluded from underlying operating profit, increased by 37.6%, with statutory operating margin up 10bps
Dominic Blakemore, Group Chief Executive, said:
“The Group performed strongly in the first half of the year, benefiting from balanced growth across all regions. Net new business continued to be excellent, and significantly higher than our historical rate. We are particularly pleased with the step change in our Europe performance which has benefited from growth initiatives as well as favourable outsourcing conditions.
Despite pockets of macroeconomic weakness, the outsourcing market remains very attractive. We believe that many of the complexities that drive outsourcing, such as increased regulations, changing client and consumer expectations, and inflation, are here to stay. With our strong cash generation, we continue to invest in our business and evolve our operating model, further enhancing our scale and competitive advantage.
Following our strong first-half performance, we now expect operating profit growth towards 30% on a constant-currency basis, to be delivered through organic revenue growth of around 18% and an underlying operating margin in the range of 6.7% to 6.8%. The strength of our balance sheet, along with our confidence in the prospects for the business, give us the platform for further returns to shareholders. In addition to our ordinary dividend, we are announcing a further share buyback of up to £750m in 2023, taking the total programme announced since May 2022 to £1.5bn.
Longer term, we expect the growth opportunities in the market to sustain mid-to-high single-digit organic growth and a path back to our historical margin, leading to profit growth above revenue growth. With our established value creation model intact, we will continue rewarding shareholders with compounding returns over the long term.”
1. Reconciliation of statutory to underlying results can be found in notes 2 (segmental analysis) and 11 (non-GAAP measures) to the consolidated financial statements.
2. Measured on a constant-currency basis.
3. Organic revenue change.
Results presentation today
A recording of the results presentation for investors and analysts will be available on the website today, Wednesday 10 May 2023, at 7.00am.
There will be a live Q&A session at 9.00am, accessible via the website and you will be able to participate by dialing:
UK Toll Number: +44 (0) 33 0551 0200
UK Toll-Free Number: 0808 109 0700
US Toll Number: +1 786 697 3501
US Toll-Free Number: +1 866 580 3963
Participant PIN Code: Compass
Please connect to the call at least 10 minutes prior to the start time.
2023 financial calendar
Ex-dividend date for 2023 interim dividend: 8 June
Record date for 2023 interim dividend: 9 June
Last day for DRIP elections: 6 July
Q3 Trading Update 25 July
2023 interim dividend date for payment: 27 July
Full-year results: 20 November
Investors: Agatha Donnelly, Helen Javanshiri & Simon Bielecki +44 1932 573 000
Press: Giles Robinson, Compass Group PLC +44 1932 963 486 Tim Danaher, Brunswick: +44 207 404 595