Compass North America Announces Over 50% Revenue Growth in 2022
Compass Group, the world’s largest catering contract management company, reported an overall revenue increase of 42.5% (37.5% organic) for its fiscal year 2022, ended September 30, compared to fiscal year 2021, with fourth quarter revenues amounting to 116% of its Q4 2019 figure. For the company’s North American unit, by far the largest with 66.5% of the total in 2022, the increase was even more substantial, up 53.6% (44.1% on an organic basis) driven by a jump of 244% in Sports/Leisure and 74% in B&I, while Education (including including C&U and K-12) increased by 54% and Healthcare/Seniors, the largest unit by revenue, increased by 18.6%.
Compass also notes an “excellent” net new business of 7.5% and a customer retention rate of 96.4% (a new record for the company). He cited “strong contributions” from North America and Europe in new business and suggested the market for first-time outsourcing “remains buoyant,” accounting for around 45% of new business.
In North America, net new business growth was 9% “reflecting both strong new business and continued high retention at 97.1%,” the company’s press release said, with growth “extended to all sectors, with solid gains thanks to the first outsourcing”. .” B&I and Sports/Leisure “benefited from a continued recovery in volumes throughout the year, reflecting the return to the office and live events, as well as higher per capita spending,” the statement added. “Both sectors recorded strong double-digit net new business growth,” while education, “despite strong reopening numbers last year, continued to rebuild volumes during the year and l ‘resilient health and life of the elderly business continued to perform well’.
In individual markets for the company as a whole in fiscal year 2022 versus 2021, sports/leisure organic revenue increased 126.5% while B&I increased 47.4%, education by 41.3% and health/senior life by 11.2%. Defense/Offshore/Remote, a minor part of North American operations and only about 8% of the company’s business as a whole, rose 9.5%. All but B&I also posted total revenue for the year that topped pre-pandemic fiscal 2019, while B&I accounted for 90.9% of revenue in fiscal 2019, steadily increasing each quarter to peak at 106.1% from Q4 2019 to Q4 2022.
For 2023, Compass expects organic revenue growth of around 15% weighted towards the first half of the fiscal year.
“Our strategic focus is food, with targeted support services,” the company’s statement commented. “There remains a significant opportunity for structural growth from the first outsourcing, as around half of the market is still self-sustaining. As the operating environment becomes increasingly challenging due to inflationary pressures, increased customer demands and other additional complexities, we have a clear strategy to capture the resulting acceleration of first outsourcing based our focus, scale and expertise.
Going forward, Compass says it expects a significant competitive advantage from its current market position.
“As the world’s largest player, our scale of supply and focus on profitability give us competitive advantages that translate into greater value for customers and consumers,” he noted. “Our sectorized and sub-sectored approach allows us to offer a tailor-made offer to meet the changing needs of customers. We continue to invest in our market-leading digital and ESG propositions, which are clear catalysts for growth in the foodservice market. »
Group CEO Dominic Blakemore echoed those expectations and celebrated the 2022 figures by announcing the results for the 2022 financial year.
“The Group’s performance exceeded our expectations in terms of both net new business growth and a recovery in base volume, with Business & Industry now operating above its pre-pandemic revenues,” it said. he declares. “The strong growth trends seen in the first half of the year continued, with a clear acceleration in new business throughout the year in all of our regions. Our clients continue to face operational complexities and inflationary pressures, which are driving increased outsourcing, and we are successfully capitalizing on the resulting growth opportunities.
He added that “North America continues to perform well” and that “thanks to the hard work of our teams around the world, Compass has emerged from the pandemic a stronger and more resilient company, reflecting our clear strategy and our growth at the forefront of the market”. catalysts. While the macroeconomic environment is uncertain, we are working in partnership with our clients to mitigate inflationary pressures and supporting our colleagues during this difficult time by providing financial support and other benefits.