Earnings call transcript: Compass Group’s Q3 2025 revenue growth, stock rises

Compass Group PLC, a prominent player in the Hotels, Restaurants & Leisure industry with a market capitalization of $60.36 billion, reported a robust third quarter for 2025, with organic revenue growth of 8.6%. The company upgraded its full-year guidance, expecting constant currency underlying operating profit growth towards 11%. Following these announcements, Compass Group’s stock rose by 4.64%, closing at 2,641, reflecting investor confidence in the company’s performance and strategic outlook. According to InvestingPro analysis, the stock currently trades near its Fair Value, supported by strong financial health metrics and impressive growth momentum.

Key Takeaways

• Organic revenue growth reached 8.6% in Q3 2025.
• Full-year guidance upgraded to 11% profit growth.
• Stock price increased by 4.64% following earnings announcements.
• Acquisition of Vermaat to boost European market presence.
• Strong performance in North America and strategic focus on retention.

Company Performance

Compass Group demonstrated strong performance in Q3 2025, driven by significant organic revenue growth and strategic initiatives. The company’s focus on new business signings and client retention, which remained above 96%, contributed to its solid results. The acquisition of Vermaat, a European food services business, is expected to enhance Compass Group’s market position and drive further growth, particularly in Europe.

Financial Highlights

• Organic revenue growth: 8.6% in Q3 2025
• Full-year profit growth guidance: Upgraded to 11%
• New business signings: $3.7 billion, up 6-7% year-on-year
• Client retention: Above 96%

Outlook & Guidance

Compass Group has revised its full-year guidance, now anticipating an 11% increase in constant currency underlying operating profit. The company is targeting a net debt to EBITDA ratio of 1.5x by September 2026 and remains focused on exploring bolt-on acquisition opportunities. With a moderate debt level and beta of 0.63, indicating lower volatility than the market, the company maintains financial flexibility for strategic moves. The Vermaat acquisition is expected to accelerate sectorization in European markets, aligning with Compass Group’s long-term growth strategy. Analyst consensus gathered by InvestingPro suggests continued optimism about the company’s prospects, with price targets ranging from $29.95 to $41.10.

Executive Commentary

"We’re excited about the potential of this business within the Compass Group," said Dominique Blackmore, CEO, highlighting the strategic importance of the Vermaat acquisition. Petros, the CFO, added, "We see our clients having more events in the premises. It’s quite competitive out there where you grow companies at high street," reflecting the competitive advantages Compass Group holds in its operating model.

Risks and Challenges

• Inflationary pressures: Europe and North America face inflation rates of 3% and 4.5%, respectively.
• Labor market constraints: Ongoing pressure on minimum wage and labor supply.
• Market competition: Intense competition from high street restaurants.
• Economic uncertainties: Potential macroeconomic headwinds could impact future growth.

Compass Group’s Q3 2025 performance and strategic initiatives, including the acquisition of Vermaat, position the company for continued growth. However, challenges such as inflation and labor market constraints remain critical factors to monitor. For investors seeking deeper insights, InvestingPro offers comprehensive analysis through its Pro Research Report, featuring detailed financial health scores, valuation metrics, and expert analysis of Compass Group’s market position among 1,400+ top stocks.

Full transcript - Compass Group PLC (CPG) Q3 2025:

Conference Call Operator: Welcome to the Compass Group’s Third Quarter Trading Update Conference Call hosted by Dominique Blackmore, Group Chief Executive Officer. This call is being recorded. I will now turn the call over to Dominique Blackmore for his opening remarks. Please go ahead, sir.

Dominique Blackmore, Group Chief Executive Officer, Compass Group: Thank you. Good morning and welcome to our third quarter trading update. As usual, Petros is alongside me. I’ll start with some highlights on recent trading before discussing the exciting strategic platform acquisition in Europe that we’ve also announced today. The group delivered another strong quarter with organic revenue growth of 8.6%.

While both regions performed well, North America was particularly strong across all sectors. Net new business continued in the middle of our 4% to 5% range, supported by strong client retention of above 96%. Our M and A is performing better than expected with the integration of recent acquisitions progressing well. As a result, we’re upgrading our full year guidance. We now expect constant currency underlying operating profit growth to be towards 11%, driven by organic revenue growth above 8% and ongoing margin progression.

Now turning to the acquisition of Vermaat, which is subject to regulatory approval. Vermaat is an exceptional business and a unique asset, which will help us accelerate sectorization and provide a strong platform for expansion in Europe. It specializes in tailored on-site food concepts, delivered in solutions and strong consumer focused retail expertise, which will significantly strengthen our premium offer across the region. The exceptional leadership team has a strong track record of performance, delivering a compound annual growth rate of nearly 20% over the last fifteen years and industry leading margins. Its high retention rate reflects the quality of the offer and strong customer relationships.

In North America, we’ve leveraged acquisitions to build a high growth market leader and we’re replicating the same strategy in Europe. Its margin and EPS accretive to Compass in the first full year of ownership and represents a step change in our capabilities and offer. So in summary, our trading performance remains strong and we’re upgrading our profit guidance for the year. We’re excited about the potential acquisition of another fantastic business with an exceptional management team. The business is in great shape.

The market remains strong and we’re hugely excited about the future. Thank you. Now over to the operator and we’ll take your questions.

Conference Call Operator: Ladies and gentlemen, this call is being recorded. And our first question is from Jamie Rollo from Morgan Stanley. Please go ahead.

Jamie Rollo, Analyst, Morgan Stanley: Thanks. Good morning, everyone. Three questions, please. Just on the trading update first, the North America and international organic sales growth figures diverged quite materially in Q3, sort of three point spread. They were very similar in the first half.

You’ve obviously called out a couple of items in the statement, but how should we think about the underlying rate of those two regions and what that means for the Q4 exit rates and also 2026? Secondly, it looks like most of the profit guidance upgrade is that better acquisition performance. Are there any sort of changes to your underlying margin assumptions or thoughts for either this year or indeed next year? And then finally, just on for Matt, the return on capital looks somewhat low if you’re paying sort of 20 times EBIT on that double digit margin. I mean, can margins go any higher given where they are?

And secondarily, presumably with leverage at 1.5 times next year, that puts a buyback sort of off the table for maybe a year and a

Analyst: half or so? Thank you.

Dominique Blackmore, Group Chief Executive Officer, Compass Group: Thank you very much, Jamie. I’m going hand you over to Petros for those questions and then I’ll come back at the end.

Petros, CFO, Compass Group: Good morning, Jamie. How are you? Let me just put a quick color on North America and international. So we continue to be pleased on North America performance, broad based sector performance. If you look at the run rate in Q3, we have been both surprised by some additional hospitality events that is driving quarter three.

And you see some good recovery from Q2. We talked about a couple of noise in the Q2 numbers. Retention remains to be very strong across all of the sectors. And we expect to have some moderation of these trends in Q4 which is factored in our guidance. I will come to our guidance in a second.

When I go to international, practically there is about a point difference behind inflation between international and North America. And then we have a bit of a timing of mobilizations between Q2 and Q3 for the international business. We had a quite large event in Sports and Leisure in Australia in the first half of the year. We do expect the run rates of international in Q4 to do better than what we see in Q3. If you think about our guidance for the full year, we expect to be above 8%, which practically we factor in the additional events not to repeat in Q4.

If they were to repeat, we’re going to do a little better on a full year guidance. When it comes to profit upgrades, you have seen our guidance is towards 11%. Pretty much the upgrade is based on strong underlying organic growth above 8% And we have a better than expected M and A. You remember we are through four acquisitions. We are having bit better synergies than what we thought, which is very pleasing to see.

And on top of this, the timing you had assumed on some of these deals, we managed to close them a little faster. So no change on the underlying margin. It’s pretty much better M and A behind these two drivers I mentioned. When I go to the your third question was on the Vermaat. Dominic is going to reference few points here.

So my our view here is, Vermaat is an exceptional business, is a platform asset that helps us to further sectorize Europe. Its roots and founding is on a retail consumer facing offer that the business has built over time. It’s an exceptional management team. It reflects a point of the business on high single digit growth rates consistently for many, many years with double digit operating profit growth and this is reflected in the valuation. The experience we have so far from the deals we have executed is we deliver on the synergies.

So we expect synergies to help us to drive over the medium attractive returns. And we do expect with this acquisition to be around our 1.5 leverage by September. Within this, we have also the opportunity to continue to execute our bolt ons in fiscal year twenty twenty six. I’ll take a pause and I’m going to pass it to Dominic.

Dominique Blackmore, Group Chief Executive Officer, Compass Group: Yes. Thanks Petros and thank you, James. I think all I’d add to that is just really to say that we really do believe that Vimat is an exceptional business. I think it’s the best in class independent foodservice business outside of North America. I think it truly compares to both restaurant associates and Bon Appetit when we acquired those businesses.

It operates in the premium segments of B and I and also in certain other sectors. And we believe it can continue to grow at these levels in the three markets where it currently operates Netherlands, France and Germany. But it also has the potential to provide us with that premium BNI offer across other European markets. I think what we see with this acquisition is we’ve now built the foundations to be able to really address sub sectorization in BNI across Europe. That means having a premium brand and a core brand.

It also means we can address SMEs as well as large scale businesses on-site. The Mat has an exceptional delivered in offer through its joint technology program, a very high quality offer which is produced off-site. And with the other acquisitions that we have made, we now have the ability to provide our services to multi tenanted buildings as well as large scale single tenanted buildings and SMEs. So we really do feel both across the types of clients we have and the types of offer that those clients want. We’ve now built or are building a sectorization of offers that conserve all of those different communities.

And for that we think this is very exciting. As you rightly say look it commands a premium multiple as a very attractive high quality business and it will be accretive to us in gross margin and earnings in the first year. And we’re very confident that those attributes that we’ve described will ensure that we deliver attractive returns over the short term, medium term.

Jamie Rollo, Analyst, Morgan Stanley: Thanks. And the question about buyback, presumably that’s unlikely now till 2027 and are

Praveen Gandali, Analyst, Barclays: there any more deals in the hopper?

Petros, CFO, Compass Group: I would say by for next year September, you shouldn’t expect any buybacks. We’ll be able to do to continue to do some bolt ons for North America and international. In 2027, we’re going to reconsider what is the best allocation of capital. And remember our priorities remain the same on how we deploy capital.

Dominique Blackmore, Group Chief Executive Officer, Compass Group: In terms of your question Jamie on other acquisitions, there is one remaining deal we are interested in again the European region, that would be in the sort of low single digit hundreds of millions not anything like the scale of the deal we’ve announced today and would fit within our bolt on strategy. I think this really is for us sort of the end of this phase of building the platform assets that we feel we need so that we’ve got confidence in our offer in Europe to replicate that North American strategy. And then it’s very much about consistent execution. And we think what this does is really gives us the ability to sit in that medium to high single digit organic growth range in the international region consistently.

Leo Carrington, Analyst, Citi: Thank you very much.

Conference Call Operator: Thank you. Our next question is from Simona Sarli from Bank of America. Please go ahead.

Simona Sarli, Analyst, Bank of America: Yes, good morning and thanks for taking my question. There are a couple of follow-up on what has been discussed previously. Can you give a little bit more color on what is the synergy potential and phasing? And also here, to split it a little bit between cost and revenue synergies. And also, can you elaborate a little bit more on the lumpiness in mobilization in Europe?

So what has been causing that and what gives you confidence that you’re on track for some of these to come back in Q4? Thanks.

Dominique Blackmore, Group Chief Executive Officer, Compass Group: Sure. Thank you, Simona. I mean, look, you wouldn’t expect us to quantify the synergies on a day of this size, but the synergies would be typically the ones that you would expect from MAP3 and food purchasing in particular and from our overhead leverage particularly in the main market of The Netherlands. And that would be similar to other deals that we’ve done and we’re confident from past experience that we have good line of sight to those synergies and that we can execute strongly against them. In terms of lumpiness, as Petros says, it really is all about the Melbourne tennis where the Australian Open is the biggest single event in that contract.

It happens in the second quarter of our calendar year. So you’ll have seen that our Sports and Leisure performance was very strong in international in the first half. Obviously, we continue to operate that contract, but there’s less events, so it slows a little. But we’re confident in our net new and international and we’re confident in the run rate of organic growth in international for the fourth quarter that it will revert to something more like the group average.

Simona Sarli, Analyst, Bank of America: Thank you. And just one last one in on client retention that you mentioned is above 96%. Can you explain a little bit if it is sequentially slightly sequentially better compared to Q2 or flat? And also if you can elaborate a little bit between international and North America and the sequential trends there? Thank you.

Dominique Blackmore, Group Chief Executive Officer, Compass Group: Yes. I mean it’s broadly flat half on quarter and quarter on quarter around that 96% level. Retention in North America is slightly better than international. We’ve had a very strong run on retention in North America. Again, but those trends are broadly in line with what we’ve seen before, what we would expect and how we expect the trend as we go forward.

Simona Sarli, Analyst, Bank of America: Thank you.

Conference Call Operator: Thank you. We will now move to our next question from Simon Le Chipe from Jefferies. Please go ahead.

Simon Le Chipe, Analyst, Jefferies: Yes, good morning. Three, if I may. First of all, a follow-up on retention. In the previous earnings call, you’ve shared some forward looking data on retention. So wondering if you have any update and if these forward looking indicators continue to point towards retention above 96% for the coming quarter?

Secondly, on new business wins, I think it’s to that €3,600,000 in H1. So could you provide an update on where does it stand by Q3? And lastly, on Vermat, on the double digit growth achieved over the past years, was it purely organic or did you already completed any acquisitions? Thank you.

Dominique Blackmore, Group Chief Executive Officer, Compass Group: Thank you, Simon. I mean, on retention, think we said it on the previous question. We aim to remain above that 96% level as we go forward. I think we talked on previous calls about the opportunities we see to continue to improve sequentially. What we do on retention, we’re very focused on the disciplines of the strategic alliance group across all of our major markets and also deploying our retention processes on the tail of non tech accounts and we think there’s always more that we can do there.

So we remain super focused. But yes, staying about 96% is the aim. In terms of new business wins, I think we LTM new business signings last twelve months new business signings at the end of the third quarter was around $3,700,000,000 which was up sort of 6% or 7% on the same metric a year ago. I think we’re going in the right direction there. And then finally just on VMAT growth, it was about half half, so half organic, half inorganic and that has been part of their model as they have consolidated and brought in the smaller businesses very similar to what we’ve done, but a very attractive organic growth rate within that as well.

Petros, CFO, Compass Group: Just to add to Dominic’s point on just keep in mind first time outsourcing remains very positive. The trends continue to be intact. We’re capitalizing opportunities. Q3 was about 48% of new business wins. And we look forward to driving this further.

Analyst: Thank you. Thank

Conference Call Operator: you. And our next question is from Jaafar Mestari from BNP Paribas, Exane. Please go ahead.

Jaafar Mestari, Analyst, BNP Paribas, Exane: Hi, good morning. Two questions, please, on things you said. On North America, you’ve mentioned you expect a moderation of the trends into Q4. I just wanted to clarify that this applies entirely to your point on like for like volumes being strong in Q3. And then on Vermat, what are the acquisitions we need to keep in mind when assessing the growth of the business over time?

There’s a few different ways you’ve talked about this. They all look very strong. I think in the press release, you say 20% over fifteen years, obviously, from a small business. On this call, double digit operating profit growth. So you’re just trying to get a sense of just adding this business to your international platform.

How much stronger would organic growth instantly be before you maybe start cross colonizing and benefiting from their digital and branding superiority, etcetera? Thank you.

Dominique Blackmore, Group Chief Executive Officer, Compass Group: Thank you, Jafar. If I take the for Matt question, then I’ll hand to Petros to the question on North America. I mean, look, you’ve heard me just say that the Vemat growth has been double digit organic. So that would be slightly accretive to our international growth rate as it stands today. But what we really see in the MAX is the opportunity and ability to allow us to sustain the mid to high single digit organic growth rates sustainably and consistently over time and giving ourselves that premium brand in B and I, we really do think that the combination of our subsectors allows us to consistently perform and deliver over time.

I think that’s the key. We also said, look, it’s got a double digit operating margin. So it would be accretive off the bat from a margin standpoint. Then of course there will be synergies on top of that as well. Look, we’re still awaiting competition approval for it.

So we will give you more color on that when we speak to you in November.

Petros, CFO, Compass Group: On North America so far, it’s all driven by volumes were positive surprise in Q3 came stronger than what we anticipated. We do expect some of this to moderate in Q4 and this is what is back in the guidance.

Dominique Blackmore, Group Chief Executive Officer, Compass Group: Yes. Mean, I think it’s worth saying as well. We had a very good Q3 in both B and I and Education. So double digit growth in both of those sectors in North America as well as the events in the calendar and schools in Asia. Those events are broad based and positive.

As Petros has rightly said, we’re not factoring that into the guidance. But should we see that in the run rate that would be an upside to where we stand today.

Jaafar Mestari, Analyst, BNP Paribas, Exane: Thank you.

Conference Call Operator: Thank you. And we will now take our next question from Praveen Gandali from Barclays. Please go ahead.

Praveen Gandali, Analyst, Barclays: Hi, morning. Thanks for taking my questions. Firstly, on the volume growth, can you share a bit more color on the volume growth, the underlying volume growth in Q3 and excluding the one off hospitality contribution in this quarter and sort of confidence you have in delivering positive volume growth next year? And then on Varmat acquisition, can you just talk a bit more about more recent performance of the business in more recent year, especially after Q4? Yes, you talked about double digit organic growth here, but more on the margin front there as well.

Jaafar Mestari, Analyst, BNP Paribas, Exane: That would be helpful. Thank you.

Dominique Blackmore, Group Chief Executive Officer, Compass Group: Praveen, thank you. You wouldn’t expect us to go into that level of specificity around ongoing acquisition, think. But just as we said, performance has been consistent over fifteen years with double digit organic growth in recent years. We’re very excited about the potential of that business within the Compass Group. When it comes to the point about volume, we said around a point of positive volume.

This year we expect volume to continue to be positive next year, but we would expect it to moderate a fraction from what we’re seeing. And that’s our view in the short term for next year. Petros, would you add anything to that? I was

Petros, CFO, Compass Group: going to say practically you see the manifestation of our value gap to the high street. We talked this in the past. We saw about the gap when consumers are using our offer. We see our clients having more events in the premises. It’s quite competitive out there where you grow companies at high street and this is what we keep enjoying in North America and in international.

Praveen Gandali, Analyst, Barclays: Thank you. That’s really helpful.

Conference Call Operator: Thank you. And our next question is from Andre Juilliard from Deutsche Bank. Please go ahead.

Dominique Blackmore, Group Chief Executive Officer, Compass Group0: Good morning, Congratulations for this strong publication. Three questions, if I may. First one about The U. S. Could you give us some more color about the health care trend and in general, the way you see inflation evolving?

Second question about Europe. Could you give us some more granularity about the profitability you’re expecting to register in this region, considering that historically, their profitability has been lower compared to The U. S? And at last, a small question about leverage. You said this morning in the press release that you are targeting 1.5 times net debt on EBITDA at the end of twenty twenty six.

Could you give us some more visibility about the midterm target for leverage considering that correct me if I’m wrong it was more or less one time before today’s acquisition? Thank you.

Dominique Blackmore, Group Chief Executive Officer, Compass Group: Yes, thank you. I’ll let Petros take the first and third question and then just with regard to Europe. I mean, I think we look at it really in terms of sort of North America international is about a two point gap between the two regions. We expect over time that the margin in North America should continue to incrementally progress as we enjoy operational and overhead leverage at the growth levels that we’re delivering there. We’d expect the margin in the international region to incrementally grow but faster than North America to start to close that gap.

Part of that will be leverage, part of that will be acquisitions and parts of that will be the efficiency opportunities that we see. I think you have to remember that we have a different business model in international than we do in North America. We don’t enjoy the scale of North America. We don’t have the scale of food buy. But we see opportunities to build some of those attributes into our operating model outside of North America and continue to close the gap.

But as North America grows itself and that will contribute to ongoing consistent sequential margin progression in the group level.

Petros, CFO, Compass Group: Andre, good morning. On USA on the healthcare, we continue to perform well. I’m sure you have seen a lot of Medicaid articles there. We haven’t seen anything in our business yet. We’re not complacent.

We’re well placed and very close to our clients to see how these things evolve. I just want to tell you historically this sector has been always under pressure with Medicaid, Medicare and somehow the system was able to digest some changes. If this is not the case, I think it’s going to lead to a more first time outsourcing for us. Remember, healthcare in The U. S.

Half of this is in house, so it’s going to give us some good opportunities if we were to see any adverse impact. But so far we haven’t seen anything. When it comes to debt to EBITDA, our leverage ratio continues to be one to 1.5. In the last three years we have covered anywhere between 1.3 to 1.4. I don’t recall we were close to one times in the last three years or so.

We’ll continue to be there. I think what is interesting is by September 26, would be able, subject to regulatory approval, to have digested this acquisition of Vermont. We have opportunity to continue to invest in bolt ons. And this is going to give us further scope for ’26. We’ll start by deleveraging ’26 and we’re going to revisit the capital allocation decisions.

Dominique Blackmore, Group Chief Executive Officer, Compass Group0: Okay. Thank you very much. Just a follow-up maybe on Vermont. You’re expecting the closing to take place at the end of the fiscal year and therefore to have a full contribution in 2026 or it’s too short?

Petros, CFO, Compass Group: We don’t know. We sold some of regulatory approval it may take. We’ll have to follow the process. So we’ll let you know once we have an update.

Dominique Blackmore, Group Chief Executive Officer, Compass Group0: Okay. Thank you very much.

Conference Call Operator: Thank you. Our next question is from Leo Carrington from Citi. Please go ahead.

Leo Carrington, Analyst, Citi: Thank you. Three questions from me also. Firstly, just quickly on Vermat, how does the maybe 500,000,000 of Netherlands revenue you’re acquiring compared to your existing footprint in the country? Secondly, in North America, you’ve mentioned hospitality volumes again. It feels like sports and leisure is often positively surprising on volumes.

Can you just outline latest trends in terms of attendance numbers at your venues versus the success of your offer and the per cap? And then lastly, on margins, maybe this is something for the full year, but North America margins eventually back to twenty nineteen levels. What’s the right way to look at international given that some higher margin businesses have been disposed off? Should we really be expecting better underlying international margin expansion going forward?

Dominique Blackmore, Group Chief Executive Officer, Compass Group: Thank you for those questions. Let me just tackle margins first. Look, we talk about the sort of pre COVID margin level. I think we have to recognize that we are in many ways a different business today. We’ve disposed of a number of companies and you rightly say some of them did have higher margins but were more volatile and less attractive for longer term.

At the same time we’ve obviously been through a very significant spike in cost inflation that we’ve had to recover through pricing and efficiency. So I think the margin structure today is different. All of that said, we do believe that we’ll be trending toward twenty nineteen levels at on a group basis as we exit this year toward or at and we will continue to make progress from there. And yes, think it’s absolutely right that you should expect us to make progress from here in international. We’ve got attractive we’ve made attractive acquisitions as you’ve heard us say today that are performing well and we see lots of opportunity to grow the margin from here.

In terms of the points on volumes, yes, the hospitality volumes in B and I are positive and that’s exciting. In sports and leisure, we largely see increased footfall across most of the different sporting codes in North America and strong per capita spend patterns. As you’d expect that we’re probably seeing those starting to sort of flatten rather than be incremental period on period that’s still positive. But it’s not quite the level of growth that we experienced as we talked to you about what we described as a revenge spend post pandemic. I think that has now started to normalize in the sports and leisure sector, which again is fine.

It’s not negative, but it’s not quite as positive as we were experiencing.

Petros, CFO, Compass Group: To your question on Vermont, just to remind you the presence of Vermont, Netherlands, Germany, France, we aligned to our top 10 group markets. These three markets, Netherlands, Germany, France is about half of Continental Europe market size. We’ll be able to take opportunities on. Netherlands is pretty much three quarters of the Vermont business, nearly double the size of our business in Netherlands and here is opportunity to grow more. And in Germany and France, have great opportunities to build on the successful model the VerMA team has launched today.

And on top of this, as Dominik referenced before, we have an opportunity to roll out the premium offer of VerMAD within other continental European markets.

Leo Carrington, Analyst, Citi: Thanks very much. Thanks for the Dominic.

Conference Call Operator: Thank you. And our next question from Estelle Weingroth from JPMorgan. Please go ahead.

Dominique Blackmore, Group Chief Executive Officer, Compass Group1: Hi, good morning. Not too many questions left for me. The first one on higher education in North America. We’ve now entered the summer months, so you probably have slightly better visibility into the full term ahead. Is there anything worth flagging?

And then just another question. I mean, across the board, more generally speaking, any signs of some sort of macro weakness and slowdown in decision making process in Europe or North America? I mean, obviously your results are not pointing to any weakness whatsoever. Thank you.

Dominique Blackmore, Group Chief Executive Officer, Compass Group: Yes. Thank you, Estelle. I mean, on the second question first. I mean, the simple answer at this point is no. I mean you’ve heard us talk about further increase in our gross new signings over the last twelve months continuation in our retention trends and positive like for like volumes.

So look I think the macro environment remains pretty positive for us. Why do I say that? Again, we talked to you a lot about we do believe that our operating model is resilient. We think our operating model is even more resilient now that we’ve focused the portfolio of countries in which we operate. And I think the point that Petros made earlier remains really relevant that we talked about this value gap to the high street.

We’ve seen the pressure the high street is under for many reasons whether it’s NI costs in The UK, it’s minimum wage, it costs across the piece, it’s the food cost inflation that continues and has spiked again in North America. All of those factors are leading to we believe a significant cost advantage in our business models out of the high streets and we think that’s very attractive to outsourcing and to the first time outsourcing trends that we again referenced today being sort of nearly 50% of our total wins. So look, it feels like we’re a resilient business and performing well in the current macro and we’re not seeing any particular signs of weakness affecting that here and now. Petros on higher ed? On higher education, as Dominic referenced, we keep performing well.

To be honest, your

Petros, CFO, Compass Group: question on enrollment, we’re going to have a better view as we go towards September. So far, we haven’t seen anything worrying us. I just want to remind you the opportunities we have on first time outsourcing of higher education are quite significant. If they’re going to go through more cost pressure, we’ll create opportunities for us and this has been the case in the past. And what we’re seeing in higher education, we’re seeing a more of a multi tiered offer that spans different consumer base, not only the students, it’s the Board, it’s the visitors, it’s the faculty.

So we expect this to be fairly resilient. We’re going to monitor enrollments and provide an update as we go in the full year.

Dominique Blackmore, Group Chief Executive Officer, Compass Group1: Thank you very much.

Conference Call Operator: Thank you. And we’ll now take our final question today from Ivar Bifold Kelley from UBS. Please go ahead.

Analyst: Thank you very much. I’m sorry if I missed it, but I think you mentioned that inflation is tracking below in Europe, it’s tracking below where it is in North America. Given inflation, it seems to be pretty sticky. What does that actually mean going into next year? And secondly, looking at Vermont, it looks like it actually operates in some segments which aren’t in core operations for you like travel retail.

Does that actually represent a potential expansion of your planned scope of your addressable markets? And then lastly, maybe you can give us some color even if it’s only qualitative on how sorry, compliance rather is tracking within Foodbuy and how this acquisition of Vermat feeds into the potential for GBOs in Europe in future?

Dominique Blackmore, Group Chief Executive Officer, Compass Group: Thank you for those questions. Look in terms of inflation, what we’re seeing at the moment is inflation in Europe tracking around sort of 3% on food slightly higher in North America around 4.5% on labor and slightly higher again in North America. So around about a point of delta in the aggregate between the two regions. Obviously we managed to mitigate some of that before we take pricing. At present we probably expect to see those trends continue.

We continue to see pressure on upper pressure on minimum wage, upper pressure on labor supply. And obviously we’re seeing some of the we’re seeing both labor those higher labor levels feed into food conversion costs as well as seeing the impact of to a degree a little bit of the tariffs in North America on the food supply system. But again, all of that we think is fine. We can manage inflation at those levels. We will take some pricing accordingly and it goes back to my earlier point that when we see those levels of inflation we’re able to differentiate our offer to that of the High Street because we believe we can deal with it for the reasons we’ve explained to you on previous calls with greater agility than the High Street and many of our competitors.

In terms of the Matt’s position in other sectors, yes, it has some operations in sectors that aren’t typical to us today. It’s a very small part of what they do. They’re very attractive businesses. It’s part of what Petros referenced earlier. Their heritage of having been a high street restauranteur which actually is what we believe gives them their sort of current culture and attributes which are slightly different to what we have and actually is the history of both restaurant associates in North America and Levy and Sports and Leisure in North America.

So we think it is attractive and it may give us opportunities that we haven’t seen in other parts of our business.

Petros, CFO, Compass Group: Maybe one word on compliance. I think you have here the story and also the deep dive. One of our key KPIs is making sure we channel our purchasing through the best commercial deals. We continue to do this. The interesting part about Verma is the CEO of Rick, the first years of his career was in purchasing within the business.

So he’s very, I would say, knowledgeable about this, which gives us a very nice opportunity as we go through the integration starting with the regulatory approval to capitalize the opportunities there. You will continue to see Dominic spoke about international business growing margin faster than North America. And one of the key drivers there is improved compliance and purchasing excellence.

Analyst: That’s great. Thank you very much.

Conference Call Operator: Thank you. And this was the last question today. With this, I’d like to hand the call back over to Dominique Blackmore for closing remarks.

Dominique Blackmore, Group Chief Executive Officer, Compass Group: Thank you very much. Thank you all for joining us today. As you’ve heard, we’re both excited about our underlying trading performance, the performance of recent acquisitions and we’re very excited by the announced acquisition of Format today and everything that that can bring to our European business. We look forward to speaking to you in November with our full year earnings update. Thank you.

Jaafar Mestari, Analyst, BNP Paribas, Exane: Thank you.

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