Compass Group announces full-year 2022 financial results

Nov. 28, 2022
Record net new business accelerated through the year.

Compass Group announces full-year results for the year ending September 30, 2022.

Dominic Blakemore, group chief executive, said in the announcement: “The Group’s performance surpassed our expectations both in terms of net new business growth and base volume recovery, with Business & Industry now operating above its pre-pandemic revenues. The strong growth trends seen in the first half have continued, with net new business accelerating through the year in all our regions. Our clients are continuing to face operational complexities and inflationary pressures, which are driving increased outsourcing, and we are successfully capitalizing on the resulting growth opportunities.

“North America continues to perform strongly, and we are particularly pleased with our progress in Europe, which is benefiting from an increased focus on growth and retention, supported by investments in our people, brands, and processes. 

“Thanks to the hard work of our teams across the world, Compass has emerged from the pandemic as a stronger and more resilient business, reflecting our clear strategy and market-leading growth enablers. While the macroeconomic environment is uncertain, we are working in partnership with our clients to mitigate inflationary pressures and supporting our colleagues during this challenging period by offering financial support and other benefits.

“For 2023, we expect underlying operating profit growth to be above 20% on a constant-currency basis, to be delivered through organic revenue growth of around 15%, weighted towards the first half of the year, and underlying operating margin above 6.5%. Having completed the previously announced share buyback of £500m, we have announced a further share buyback of up to £250m, taking the total to £750m.

“Looking further ahead, we remain excited about the significant structural growth opportunities globally, leading to the potential for revenue and profit growth above historical rates, returning margin to pre-pandemic levels and rewarding shareholders with further returns.”

Performance highlights

• Strong organic revenue growth of 37.5%. In Q4 2022, Compass Group was at 116% of 2019 revenues with Business & Industry at 106%.

• Underlying operating margin improved by 170 bps year on year to 6.2%, with H2 2022 at 6.5%.

• Excellent net new business of 7.5% (5.7% rebased to 2019, above historical rate of 3%).

• Client retention rate up by 100 bps year on year to a new record of 96.4%.

• New business wins increased to £2.5bn, with strong contributions from North America and Europe.

• First-time outsourcing market remains buoyant, accounting for c.45% of new business wins.

• Investing in the business: Capex 2.7% of underlying revenue and net M&A expenditure of £268m.

• Leverage of 1.3x net debt/EBITDA, within target range of 1x-1.5x.


• Continuing to capitalize on the significant structural growth opportunities and the acceleration of outsourcing.

• Ongoing investment in market-leading digital and ESG capabilities.

• Successfully issued first sustainable bonds to help deliver climate net zero by 2050.

2023 outlook

Constant-currency underlying operating profit growth expected to be above 20%, delivered through:

• Organic revenue growth of around 15%, weighted toward H1 2023.

• Underlying operating margin above 6.5% Statutory results.

Group performance

Organic growth was 37.5% with underlying revenue, on a constant-currency basis, 105% of its 2019 level. Underlying operating margin increased by 170 bps to 6.2% (2021: 4.5%) despite mobilization costs associated with the higher new business growth and inflationary pressures. As a result, underlying operating profit increased to £1,590m (2021: £811m).

The company is continuing to invest in exciting growth opportunities both through capital expenditure and M&A. Capital expenditure was 2.7% of underlying revenue, lower than historic levels due to timing delays in some investments. Going forward, the company continues to expect capital expenditure to be around 3.5% of underlying revenue. 

Net M&A expenditure in the year was £268m, which was largely spent on a number of bolt-on acquisitions mainly in the U.S. Following the year end, in October 2022, the Group also divested of four Central and Eastern European businesses in Czech Republic, Hungary, Slovakia and Romania.


Organic growth of 37.5% reflected the reopening of sectors, with like-for-like volume growth of approximately 24%, the strong impact of winning and retaining business, with net new business of 7.5%, and pricing benefits of approximately 6%. Client retention rates continued to improve to a record 96.4%, 100bps higher than 2021, with underlying revenue growth from new business wins at 11.1%. The post-pandemic recovery accelerated in the fourth quarter of the prior year, particularly in Sports & Leisure and Education and, consequently, the percentage growth in the fourth quarter of this year is lower.

For the full year, underlying revenue increased to 105% of 2019 revenues, reaching 116% in the fourth quarter. All sectors and regions traded above pre-pandemic levels during the second half of 2022, with Business & Industry seeing a notable improvement as employees returned to work, exiting the year at 106% of its prepandemic level. Education and Sports & Leisure also performed particularly well, increasing to 117% and 125% of 2019 revenues, respectively, in the fourth quarter.

Regional performance

North America  66.5% of Group underlying revenue (2021: 61.6%)

Underlying full-year organic revenue growth was 44%, with revenue at 109% of 2019 levels, and 119% in the fourth quarter. Net new business growth was 9.0% reflecting both strong new business wins and continued high retention at 97.1%. Growth was broad based across all sectors, with strong wins from first-time outsourcing.

Business & Industry sector, along with Sports & Leisure, benefited from continued volume recovery throughout the year, reflecting the return to the office and live events, together with higher per capita spend. Both sectors delivered strong double-digit net new business growth. Education sector, despite lapping strong reopening numbers last year, continued to rebuild volumes during the year and the resilient Healthcare & Senior Living business continued to perform strongly.

Volume growth, combined with continued focus on efficiency and cost control, delivered margin progression throughout the year. Full-year margin increased by 180bps to 7.2%, with margin in the second half of the year improving by 40bps to 7.4%. Operating profit was £1,236m, which represents 91% growth on a constant-currency basis. 

Europe – 23.0% of Group underlying revenue (2021: 25.6%)

Underlying organic revenue grew by 32%, with net new business growth of 5.6%, driven by double-digit new business and a 160bps improvement in retention to 95.3%. Encouragingly, net new business growth accelerated in the second half of 2022 driven by improving trends in the UK, France and Germany. Overall, revenue for the year was 98% of 2019 levels, and 109% in the fourth quarter, reflecting the recovery in Business & Industry and Sports & Leisure.

With good volume recovery and higher growth, operating profit more than doubled to £299m, with margin increasing by 180bps to 5.0%. Despite the progressively challenging macroeconomic environment and increased new business mobilization, margin increased by 100bps between the first and second half of the year to 5.5%.

The region invested in several bolt-on acquisitions to enhance their offer, especially in the Sports & Leisure sector, and to drive procurement efficiencies. In March, the Group exited Russia and, following the year end, divested of four businesses in Central and Eastern Europe.

Rest of World – 10.5% of Group underlying revenue (2021: 12.8%)

The 15% organic revenue increase in Rest of World region reflects net new business growth of 3.6% and double-digit like-for-like volume growth, driven by good levels of pricing, especially in Latin America. Retention improved to 94.5% and revenues were 100% of 2019 levels, with the fourth quarter at 113%. With a higher exposure to the more defensive sectors of Healthcare and Defence, Offshore & Remote, the region had lower volume recovery as it was less impacted by the pandemic.


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