Hamill Bassue
Owen Hendershot
Goran Nagradic
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Compass Group PLC
• World’s 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
To be a world-class provider of
contract foodservice and
support services, renowned
for our great people, our
great service, and our great
results.
Our Mission
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
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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
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•
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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:
1. 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).
2. 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 (cont’d)
3. MAP 3 – Cost of food
•
Addresses cost efficiencies through a systematic approach to
menu planning, purchasing and supply chain, and unit
processes.
4. MAP 4 – Unit costs
•
5.
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 PLC’s 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
Ratio
Compass
Group PLC
Industry
Industry
Current
1.06
1
Return on Total Assets
0.08
8.14
Quick
0.98
0.7
Return on Equity
0.24
24.5
Debt-to Total assets
0.25
EPS
0.25
P/E
12.87
12.8
Debt-to Equity
0.74
Sales (growth)
0.01%
8.9
Long-term debt-to Equity
0.67
Net Income (growth)
77.63%
13.71
Time-interest-earned
2.81
15.5
EPS (growth)
92.31%
24.6
Net Profit Margin
0.05
8.0
Dividends (growth)
6.93%
6.28
Gross Profit Margin
0.05
16.5
Operating profit Margin
0.05
21.4
1.07
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Strengths & Weaknesses
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Strengths
EPS increased by 62%
Increase in net income 78%
Strong brand name
High income clientele
Large employee base
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Weaknesses
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
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•
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Opportunities
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
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Threats
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
(cont’d)
• 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
(cont’d)
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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
+6
+5
+4
+3
+2
+1
IS
-6
-5
-4
-3
-2
-1
-1
+1
+2 +3
+4
+5
+6
-2
-3
-4
Defensive
-5
-6
Competitive
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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
X
1
Joint Venture
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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 company’s 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 company’s 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
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Environment pollution
Cultural differences
Laws and regulations in foreign countries
Use of Internet must improve
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Evaluation
Healthy
Rotten
Polluted
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Update 2009
• Compass Group PLC
• Stock performance
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Questions ???
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