Hamill Bassue

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Hamill Bassue Owen Hendershot Goran Nagradic
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Compass Group PLC

• Worlds largest foodservice company
• Providing services in more than 90 countries
• Providing food and beverages in myriad form from
  vending machines and corporate catering to
  bringing popular franchises such as Burger King,
  KFC, Taco Bell, Pizza Hut and T.G.I.-Fridays
• Operating in schools, airports, military bases
  and correctional and healthcare facilities
• Employing more than 400,000 people

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Operating Sectors
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Owned Franchised brands and Major Clients
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Mission and Vision Statements

• Our Vision

• Our Mission

• To be a world-class provider of contract
  foodservice and support services, renowned for
  our great people, our great service, and our
  great results.

• Everyone in Compass is committed to consistently
  delivering superior service in the most efficient
  way, for the shared benefit of our customers,
  shareholders and employees.

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New Mission and Vision Statement

• Our vision is to become the worldwide leader in
  food and support service, providing world class
  services, and setting the standard of excellence
  in the foodservice industry.
• To achieve this, everyone that is a part of
  Compass Group is passionate and committed to
  working together, to delivering superior food and
  service in the most efficient way for the share
  benefit of our environment, customers,
  shareholders and employees. We approach every
  opportunities and challenges with a positive and
  commercially aware "can-do" attitude. We operate
  with openness, trust and integrity and aim to
  never compromise on the safety and health of our
  customers and our people, and to manage
  responsibly the impact that our business has on
  the environment.

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Objectives

• Our objective is to deliver value to our
  shareholders and our customers by leveraging the
  benefits of being a Group to deliver structured
  and sustainable organic growth in our chosen
  markets and achieve our vision to be a
  world-class provider of contract foodservice and
  support services.

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Our Guiding Principles

• Safety, Health and Environment First
• Delivering for Clients and Consumers
• Developing our People and Valuing Diversity
• Profitable Growth
• Constant Focus on Performance and Efficiency

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Our Values

• Openness, Trust and Integrity
• Passion for Quality
• Win Through Teamwork
• Responsibility
• Can-do

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Management

• Sir Roy Gardner Chairman
• 
  
• Richard Cousins Group Chief Executive
  Andrew Martin Group Finance
  Director

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Brief History

• 1941 - Group founded in the UK as Factory
  Cateens Ltd
• 1960 - Bateman Midland Catering acquired by
  Grand Metropolitan and eventually merged as Grand
  Met Catering Services
• 1984 - Grandmet Catering re-launched as Compass
  Contract Services
• 1987 - Management buy out the contract services
  division of Compass Services from Grand
  Metropolitan and form the new Compass Group
• 1988 - Compass Group PLC listed on the London
  Stock Exchange
• Beginning of global expansion

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Global Presence
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MAP Strategy

• MAP is a performance driven strategy focused on
  five key points
• MAP 1 Client sales and marketing
• Achieved through better targeted businesses,
  tighter contracts and sharper contract
  evaluation.
• Concentrated on client pricing strategies and
  growing client volumes (through additional
  services cleaning, portering, reception and
  concierge).
• MAP 2 Consumer sales and marketing
• Focuses on developing our retail philosophy in
  order to increase participation and spend per
  head (extending our offer to include breakfast
  and Grab Go concepts.

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MAP Strategy (contd)

• MAP 3 Cost of food
• Addresses cost efficiencies through a systematic
  approach to menu planning, purchasing and supply
  chain, and unit processes.
• MAP 4 Unit costs
• We spend nearly 5.5 billion per year on unit
  costs and we have been managing this through
  labor productivity and scheduling control of
  labor costs and in-unit overhead opportunities.
• MAP 5 Above unit overheads
• we spend 0.8 billion on above unit overheads per
  year. The savings have been achieved through
  management reorganization consolidated back
  office functions change management processes
  and tightened control of discretionary spend.

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Internal Assessment

In the inside
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Compass Group PLCs performance chart 2007
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Financial Statements

• Income statement
• Balance sheet
• Cash flow

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Financial Ratios
Ratio Compass Group PLC Industry
Current 1.06 1
Quick 0.98 0.7
Debt-to Total assets 0.25
Debt-to Equity 0.74 1.07
Long-term debt-to Equity 0.67
Time-interest-earned 2.81 15.5
Net Profit Margin 0.05 8.0
Gross Profit Margin 0.05 16.5
Operating profit Margin 0.05 21.4
Ratio Compass Group PLC Industry
Return on Total Assets 0.08 8.14
Return on Equity 0.24 24.5
EPS 0.25
P/E 12.87 12.8
Sales (growth) 0.01 8.9
Net Income (growth) 77.63 13.71
EPS (growth) 92.31 24.6
Dividends (growth) 6.93 6.28
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Strengths Weaknesses

• Strengths

• Weaknesses

• EPS increased by 62
• Increase in net income 78
• Strong brand name
• High income clientele
• Large employee base

• Liquidation of assets
• Very low revenue growth
• Diversity (hard to manage)
• Very poor cash reserves
• Poor usage of Internet (as a marketing tool)

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IFE Matrix
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External Assessment

• Outside of the box

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Opportunities Threats

• Opportunities

• Threats

• Aging population
• Consumers value leisure time (want to spend less
  time cooking and cleaning)
• Industry experiences a steady growth
• Increasing environmental consciousness of
  consumers
• Increase in desire for awareness in healthy eating

• Food cost inflation
• Rise in unemployment rate
• Higher fuel prices
• Decrease in value of money
• Competition (Aramark, Sodexho)

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EFE Matrix
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Global Cost Foodservice Industry

• The global cost foodservice sector grew by 3.6
  in 2007 to reach a value of 250.9 billion.

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Global Cost Foodservice Industry (contd)

• The global cost foodservice sector grew by 0.7
  in 2007 to reach a volume of 116.6 billion
  transactions.

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Global Cost Foodservice Industry (contd)
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Future Forecast of the Industry
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Competitive Profile Matrix
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Strategic Formulation
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Space Matrix
FS
Conservative
Aggressive

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5
4
3
2
1
IS
-6
-5
-4
-3
-2
-1
1
2
3
4
5
6
-1
-2
-3
-4
-5
Defensive
Competitive
-6
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IE Matrix
Grow and Build
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SWOT Matrix
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The Grand Strategy Matrix
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Matrix Evaluation
Alternative Strategies IE SPACE GRAND Total count
Forward Integration X X 2
Backward Integration X X 2
Horizontal Integration X X 2
Market Penetration X X 2
Market Development X X 2
Product Development X X 2
Related Diversification X X 2
Unrelated Diversification X X 2
Joint Venture X 1
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QSPM
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Possible Strategies

• Developing new organic-only products (S2, S3, S4,
  O4, O5) 1.67
• Further global expansion Russia in particular
  (S2, S3, S4, O2, O3) 1.67
• Acquire local farms to minimize the cost of
  transport and to provide fresh and organic
  products(S2, S3, T1, T2, T3) 1.65

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Future Plans

• Grow Organic Groganic

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Objectives

• Continue exercising MAP Strategy
• Increase revenue
• Establish company as market leader in organic
  environment-friendly food industry
• Increase quality of food
• Selling out certain companies within our fast
  food sector (everyone except Burger King)

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Recommendations

• Turn into producing only organic (healthy)
  environment-friendly food (which is also applies
  going green) 1,000,000,000
• Get out of fast food business by selling out
  companys franchises and own brands to weaker
  competitors than the market leader
  10,000,000,000
• Acquiring local farms to minimize the
  transportation costs and to improve the freshness
  of products 1,000,000,000
• Invest into development of healthier and more
  organic products 1,000,000,000
• Build new organic menu for Burger King (adjust
  the fast food business to provide the new menu)
  2,500,000,000
• Build a recycling center for all of the companys
  waste 1,000,000,000
• Plant trees and spend money into cleaning the
  environment 2,000,000,000
• Total Profit 1,500,000,000

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Implementation

• A new beginning

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Other Issues

• Environment pollution
• Cultural differences
• Laws and regulations in foreign countries
• Use of Internet must improve

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Evaluation
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Update 2009

• Compass Group PLC
• Stock performance

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Questions ???