Compass (CMPGF) 21 Nov 222022 Q4 Earnings call transcript

Good morning, and welcome to Compass Group's Full Year Results Call. Hosting today's call will be Dominic Blakemore, Group Chief Executive Officer. This call is being recorded.

Following the opening remarks, you will have the opportunity to ask questions. [Operator Instructions] I will now turn the call over to Dominic Blakemore. ahead. go Please

Good Serge. Thank morning, you, everyone.

good resilient I'm delighted We're usual, from revenue which pandemic and half, strongly. High we're challenging although growth culinary doubled by continue to Margin All ESG as exceeding our We're milestone conscious yet been inflation with any digital Organic the expectations. XX.X%, levels to CFO. over the trade GBPX.X volume the second never as the outsourcing sectors environment, excellent group as XXX XXX% macro group's points the year recovery pricing. benefiting costs revenue more continue X.X% consumer to net recovering X% against of Street. stronger a level pressures, of growth the Palmer, XXXX the by well has as complexities and we performance, environment operational value and seeing despite new the of emerged reached inflationary In with important QX, the As weakness not market-leading mobilization strong accelerated capabilities. through stronger to we're profit at We've we on resulting capitalizing XXX%. drive business our to increased continuing with with like-for-like well business operating revenue growth, which was and successfully levels. particularly our strong surpassed was from offer in B&I billion. XXXX improved outsourcing. and basis The and demonstrate opportunities of to and and And

exciting. future accelerated prospects are our for above growth historical So levels

above margin basis. around of For resulting profit XXXX, constant currency operating organic a in on and we above XX% expect X.X%, XX% revenue growth

program further Lastly, reflecting total business in half, the announcing our first in positive buyback taking a and the GBPXXX the to million. GBPXXX we're of share million outlook, confidence

Let's Q&A. now move to

ahead. go Castle from Instructions] Please UBS first from question London. [Operator Our comes you. Jarrod Thank

'XX, Good for least the the we then least XQ? by I to everyone. 'XX Secondly, you're current get little XX to at guess, should I talking guidance about and be at for further that the expect morning, relation still your on this another can giving M&A medium Should front? into leader see? GBPXXX that we X%. 'XX, growth margin just 'XX, million read be so for Compass that market. you much. to opportunities relative M&A, currently better 'XX, you And terms now of kind out. margin I has of to organic be and least pre-COVID we very in than in anything X.X%. obviously at exit than that then organic growth mean, points you're the market to XXXX, higher guidance, term, been rate a thinking to rate time and versus X.X%, of your Sodexo, done margin the is should margin looking kind to relation in more in X.X%? X% a we has relative by higher And historically how exit guess one, saying guidance think lastly, just the And Sodexo I that the to bit Thanks X.X% and back than guess, you always on levels do

to medium-term capital Thanks, question, allocation. I'll comment and take 'XX guidance and the first, Jarrod. guidance then don't Palmer margin Why on I ask

medium feels say uncertain thing guess to So commitments for the to it the guidance on term. world I be very making is first medium-term a

appropriately are that we that environment. think conservative I in So

are the impact having and that the run forward I volume to current growth thing think is, the make pricing it's recovery say on on predictions rate. quite other difficult to both given

levels, was volume new rate around those our if contract you if will the what's think recall, X%. I point, net real and which at the from wins. that control, you story our comes like pricing within and new prepandemic growth our assume set some win net contract in is Again, delta more though aside think return I to prepandemic,

You'll like X% more well a into our of win points half by rate, rates, see published XX% new run results that gross than to and today, is X we've rate And as first the that's that stronger which from 'XX. second year-on-year. higher retention, in strong is being better the historic achieved the half as X

point enjoyed for growth we And X higher, high single net would sustain the at So historic be X%. could can I digit. that rate growth to we that mean that new points X if be of and additive us around to organic mid guess could rate is should our to

this guidance, can't reason of at terms margin margin why we point, no still prepandemic get levels. see back In to we

'XX, and inflation, start a that than we business. just reference, benefit therefore, we'll investments, becomes Palmer think with levels, the at I and mobilization inflation. mix, When as before of which is margin with will in around as and strong describing levels a grow and the seen these see business we lag give just long-term into I rate trading other us is the for new down margin recovery we've quoted as the we twice margin hopefully that there of dictated be EBIT pace in very very And growth the think can higher net look we strength really come I will the be I tailwind of elevated come at the margin to and by restore prepandemic. and recovery we're our to critical thing mean strong If that sure those are is new the I'm net will of levels think levels margin inevitably anything the prepandemic both significantly positive rates business. journey.

And as factors. point, two will to important. Palmer, also to we medium see we said, in trade through most the this want think do floor really balance you see at but margins don't growth because we always So we we've term, bias the prepandemic line we the top talk about as a that's strong business, do 'XX? for those particularly, need across how

margin progression, of the 'XX you're A and bit that. in terms X.X%. fiscal of In exit seasonality QX was of the right, like 'XX

new make if a come as third it. over drag X.X growth. half importantly, we 'XX, that of we Education like-for-likes as and would the produces floor expect of a the Dom later. through in that margin of X.X% up top making little year-on-year some got that you we you business, for fiscal would strong that About most profit that expect the have a mean fiscal view there's 'XX. come half the that a know, XX% in benchmark, net to it referenced, up from. we see of new 'XX. mobilization to fiscal from is importantly, which, be is just of And as drag, becomes second into floor. net a expect business, that we the we from third should So at look a margin mobilization rest, that and that has bit costs you -- foundation good some that of use to to and that top strength really I at When pricing, We've first flattish more sort Keep just then frankly, are line referenced timing When accelerated Dom expect mind, to compared look momentum progression QX. the there. in the we a line nice which we growth, 'XX

squarely seeing into in strength it, on on 'XX, the progression looking a generation second cash of the currency middle the business a X.X the the inflation target I the of you about over margin more and of business. the the second of mobilization some some feel margin of If We necessarily basis. right And not about taper the terms constant but that should horizon. in XX% we're of really expect with the I business clear, stronger factors. the the leverage of So horizon costs which we growth all be think second cognizant we're finished depend of it in we times, 'XX we the also M&A but our fiscal state And in bit some going very all of now, cognizant the so like-for-likes, is if will it in has, capital at see in those the good progression. business think on at not some to half, if we that part the We're half a profit seeing on allocation, what we're see in To the range. see year. half be normalize, see flow uncertainties might of

mind of through place of prudent And the make have see you leverage of X.X at We the to the in to will year, keep be. more more the optionality We gives mid year, we the as GBPXXX So the think lot investment returns. us range at of we'll That's the in us for that context half. decisions some of business, go land think is and potentially buybacks that's half leverage half but for to prudent. why a low we which the the at think M&A, for year. we'll remaining a the have shareholder million half on in first in that times end us first

Thanks Right. very much.

go Jamie Rollo, ahead. Morgan Please Stanley.

questions, on the Three Thanks. Good again, everyone. morning, please. guidance, really, just

margin the of on just X.X% appreciate margins I contract the you cetera? et But described underlying of lining dilution underlying guidance. seeing sector, Secondly, tech as floor. a guidance passing on like what costs pressure there's on sort inflation just or is any are pricing of the from the The in and things you the really first that the mobilization. sort contract margin dilution wins? flat sort cost layoffs of Or and from from

the sort do you be of what if know moderation might we ceiling of half get year. at a So the that

should on sort about to is from used next And be talk XX% QX's Is XX% just rather the of bookend? would give done, sort also appreciate margins XXX%. 'XX about of X% reasonable XX% than your volume above towards of I guidance 'XX, year. not Thank the guidance, XXX% then not improvement for you. which largely margin like is FY much that You up recovery sort guidance? at but sales that of

the environment questions. color. for thoughts of given those there think obviously, of to a then give at it's But just the bit uncertainty I amount Palmer you And more in I is couple say, maybe a precision moment. challenging and fair can mean, the thank Jamie,

the which made, now, announcements the I we've you we're some right seen or important tech recessionary say, think numbers, impacting were strong pressures you to still B&I we're office, saw it's with spend there is couple we regard Whilst mean, one layoffs our continue. expect described a not think being I sector. either to trends do consumer which seeing to seeing there. to the a in fourth business, I in of cancer return quarter

slightly to so there we lower but growth, B&I potentially, expect are strong. if And be that slightly moderate then may still the it headcount,

addition, may the the regard of growth which we to the we what in I for above In means headcount see in margin, seeing it on I parts number the talent think portfolio growth individuals, of of other and be With drivers We it's said some think picking of guidance, a as we'll a of still one floor. of war look, a yes, sort X.X%. other those were. are firms is in up business

net the managing As that and new our absolutely the acceleration. in factors are scale say, Palmer heard two of growth business inflation main relative and the you've

margin help we As accelerating the but quarter-on-quarter, our And we X% that be we a the again, short the from Where Yes, forward. which therefore, have factors, have favor anticipate go is in us as it's trend be it I be land? for it's to of half, yes, Palmer floor. of thoughtful is presentation, term. we repeat increasing you've mean we mobilization impact and in also seen year out obviously, go the the second during more do impact, positive, level mean those does quarter-on-quarter, year if the the full that six’s as super and half, could high in described, on towards the the could we positive. can in course beyond will second and figure therefore, you the would the therefore, today's

conservatism may also slight that know had opportunity thoughtful but have done to at point benefit on a of often And QX. I any we'd XX%, us again, to the gives Just weather see on seasonality again, changing impact potential -- conditions. that better, from Palmer, do year it. don't we a from that start absolutely the as sales, to imply like would QX right, some within we you're improvement

Nothing to that. add to

Okay, nothing to add to that.

So been helpful. hopefully, that's

Thanks lot. Yeah. a

Please ahead. Leo Carrington, go Citi.

the you and pandemic, quantify got of more please. in retention your new contracting a possible there's more in large boost rates since award if Or Many has speaking of to it to presentation, growth client And the initiated? fair of to to can to majority entire you've the thanks. in. been the European contracts of frame experience the Good morning. at But market? from clients then have terms now trend is is the of is Perhaps simply about. in answer do something Two this lower start the opportunity you've market first the Compass Compass operators be where effectively you question. to feature the across locals? it That's you Is say given improvements a Thank delivered post-pandemic than vending largest could to choosing mentioned for secondly, that questions, for there churn In been in terms the needs? increasing a European this Or this attributable retention you. kind what in due midterm see improvements European the this rates, rather structurally dynamic your solid category are competitor. in

Palmer will question. take the vending

origins it's clear, be further America business I time. actually Actually, at when strong that dates business look anything had Just for of the to long and mean, back the than a we've U.S., you the North in else. vending Compass vending a

certainly seven, through time, eight or ago of just for market more commissary COVID had micro we've and more We've the It's you probably years central especially as like. over kitchens and a So starting piece That the business getting vending did so. into the been and while. referenced evolved some accelerate solutions, there. the the

solutions, some we've of play. across ones. I of dynamics a And of the really it's more have then the the big in that sectors, education, factoring been think in just been being number in delivered B&I

would sure that you to hear those have the net think acceleration. into as when one historical there. the growth see But us in new not that are I got really go factors components that the that about above and medium this There talk expectation a for levels you short we've we number going quantum revenue additional go factors those forward, a are of see would term growth and just we profit we feel view the I'm be within forward. of good of that.

Thanks, Palmer.

the on I'm very On retention like European improve we others, how retention own sure our point, can better are we, focused self-help and levels. processes, therefore, through

things a and Europe CRMs We're that data. now of for to there's think helped I have client we've been with insight few able tech deploying that obviously that. the through deployment do us in full

allows which We than us waiting feedback us feedback, something turn have improve rather time. believe have into our of NPS Insight, of our improve out allows And also rate. We rolled state, any consumer got our to and Compass CCI, that client helps at helping Client which which insights with we've clients. operational get we in those us to is course-correct real-time business two-thirds might real for giving that quality us are us immediately in to the quarterly reviews retention called

with You've pleased seen churn? clients are with. minded existing issues complexity we're that the the the Is with referenced bigger to today. do today work of structural trust and I very less more of there because in that, we've strength providers that again believe presentation and which providers

the manifest do itself results. So us. think And it you're I help think seeing I those in

we in better of business, from pipeline new to of us is And and strong retention, new point forward. what portfolio net there we X% In that north improve as a sustain incredibly the do which to part go sort part to of is Europe believe improved significant and continue in elements pleasing. look self-help, trends. can CAGR to was For have a those

Dominic when of of net think you Just retention wins, function question the primarily it. to along business just part we self-help the referenced. a new is initiatives, But new lines business that's the your add, I really the focused that on overall, look at know

the to, think, gives on just are that more So net initiatives. in new the within our growth as we wins heard and Dom of can think there's we do. sustainability And both faith components Europe based referenced the lot us, a predominantly strong business retention you new, those And rates. of I growth

Okay. Thank you Dominic. Palmer. Thank you,

Vicki Stern, ahead. Barclays. Please go

God morning. Hi.

think you Just you've base in after firstly a drags some sort drags that even did on sort sort did X% putting that quarter, volumes. is stop that probably at on Education have could in be mean, I improvement, on I still signings, about I sight. some but decent Healthcare, there know and below. lot think job reflect on think pre-COVID in I land of QX, talking things? Or And I now? in where of basis, volumes on about of been obviously you what volume exit QX? a does the and we'll think talked normally obviously right And you aside you B&I. the of then losses what on a level? this line you risks QX still sustained

of they're referenced sort pipeline. dominate on that You've actually

then margin, level stay as if XX But the at reason of just with drags come we down months? to If on to on you've at the could year. think as you're at sort already you're out, mobilization evolution about net sort all but little seeing six that a X% suppressing starts that the should the which a become at just to bit short this net Any talking to moment, moment teasing the the level, definitely all rather the with of level new about else in big this understand sort side. obviously And new in entering finally of margin all? sort of net ramp-up talked were you to we share look decent out of new at at what help you us than be the level next this signing just that and of sort seeing over effect of pace elevated it 'XX we're norm base term? comp, us from a that equal, Can lapping you're obviously we're of that quite has the that

you the those? couple first Do of tackle to want

Yes, sure.

we but year. the volumes and On big the volume in did Leisure B&I, & Sports also step-up yes, particular, acceleration we Education. QX, a in see piece, a through into Certainly, nice in saw

You're difficult to that. the it gets somewhere that XX% to right, base Vicki, we be in think nail are quite to like-for-like But XX% volumes range.

I think We there. the the the we'll is are of question of that's ongoing all the pace reopened, actually majority. that is much and think how recovery that units that in reopen vast

I other catering in happening. Certainly, retail. of B&I, think to Within still the return us that's you bit a the tech industries heard the there's in Education, bit office within and there. Certainly, a there's retail still Healthcare, some some reference of there. and impact of some

spread on out we're mostly bit, it's B&I little is a So the but side it's where it. seeing still

good at as levels XX% previous signings, the pipeline record up year. it and point did ago reported On Palmer. this as when the business Thanks, looks we new year a on

got that probably a 'XX. of the quite to margin, of take as levels they're of would there's Vicki, probably new and that you the the business, with perhaps business. got And least hope compared difference. then we've the -- that at you've I X.X%, got you've And then regard maybe investment start So equal, think the but drag this drag drivers few into inflation, forward we put you've we X.X% a to not as point are sustainable into those look if

that new gets think above and us I business X%. the normalize, as inflation

to make the business choice how that, back leverage beyond therefore, the to at about think we the for choose we overhead and it's of get much accelerated I that for put investment prepandemic and the what point growth, in levels. all then investment progress

exactly when happen. how that's and I to think we going call can't

then new is moment, those be touch. to side. at us to start double acceleration X%; positive, first course, I that see around we second half may on in which coming but gross the business And at as half and thing inflation see the moderate, digits. expect digits; 'XX business high to the in of new fraction in acceleration the of broadly low probably level a think inflation we down need an the inflation first food inflation in If single think labor, continue, then to same a mid the is slow I 'XX, was is what

see a that, down, in sort that a to helps described. the of I've bit We which equation comes tailwind, just as expect of become

Within our margins. two you of got business new components business, new the net that really drag

only You've costs moderates normalization. over got margin And a period. the costs accelerating, mobilization increases don't it that is get business expensed mobilization It's once those that, new where time. are contract the in you normalize. progression But within as is not

much even more really beyond. the has see the bit this burn account item, very of XX costs, XX, increased that we a progression mobilization So we learn a until efficient, months lot we see of contract-specific that maybe longer be a get margin times materialize as It's absent but to year. case-by-case A better. don't much XX,

That’s pretty Thank you. helpful.

Richard Clarke, ahead. Bernstein. Please go

if good Three morning. Hi, I may. questions,

inflation inflation of reflect a begins become that readdress to time starting the takes to of a pricing was that you the inflation. in bit on with When for tailwind Just lag actually effect margin inflation. that a accelerating, When to by a from the decelerate, lag effect you how that sort from talked because And off about Maybe second prices decelerating that can CapEx. question increasing dynamic that? from actually you're just work Can benefit does then environment? the you? just it

of did low fairly amount a this CapEx year. You

you how Or lots number? to following capital-intensive those moment? Alphabet, sushi. up You're sector. more on question And contracts savings about Compass the I seeing guiding it some impacts? year. at then we to mean Jamie's of becoming going to at the market the spend cost going a those on next hear important in Are tech maybe free et cetera, is just again are of the year-on-year? that specific removing back that And is on just there Is that X.X% thirdly,

So with the let third the and me can Palmer CapEx. take the deal then and first

Richard, think, the your I we how see you in described of inflation. impact question exactly,

As in lag. it's a clearly there's a there's increasing and pricing, our lag margin

the we at to of our and of to be we the As is we sort have that continue ahead. there's with of down in at now, have seeing been structure them fall, of It's critical places. it, will model America. rate cost the run cost structures those levels the that can yet in of to I becomes sort see we We're same these to we we put starts protect we think tech pricing margin to that on P&L. to It's we're be has volumes fantastic benefit. decelerate to cautious sector. was. the cost year lag then inflation what to should tech reasons piece. the are the and of different the the types ultimately half there's our and we regard part two. That do that, the that. Clearly, but hopefully With and our willing plus, inflation that is portfolio the obviously that levels elevated And Again, be to knowledge, and for a for one progression overtakes it as varied. depends sector which factor Yes, neutral P&L in occurring. our place arrangements first in now those. the of could half, views great Right the Right us. work expect best North would some deceleration we half across XX% been second would also to different types the within start think, to taking forward. see in in contract right importantly, B&I a come And is impact seeing contract inflation see clients, around as not see be What now, able of would that X% variability obviously, And going the also expect to

to also of numbers me factors We're of those headcount yet grew impact. through As actually you may higher heard return be we're office, these number earlier, down significantly as say to headcount a their companies the well adjusted the then some pandemic. seeing albeit they see

not So we the perhaps tech that see the at the of anticipated. to still the expect we of to part were B&I get return earlier sort as in levels growth portfolio office,

And earlier, I think, we're acquire some a firms described still, elsewhere. keen up that that positive to talent, I lots and sectors see in of are So we overall. showing indicators as seeing volumes positive displaced other may which other of

could don't by year-on-year I if was fact, to progressing. it in you increased that as favorable this capital of the past But capital growth we intensity. being it to than rates, look way anticipated the we're much X.X%. more at In the Nothing at definition, our view look it to it we terms CapEx, And quite the expect the want overall do X.X% We as year model. -- lower is. as anything. much view you I than really it if normalization. you into at intensity relative guess, that look think really normalized to we and view lower what as read timing to return don't We

frankly In terms majority ESG, of client we're more digital, spending becoming client-facing vast vast the are the it's They still, bit clients. where towards to that nature of on little important majority, so, it, some more or But facing. things still on that shifted XX% items. a

Excellent. Thank you.

go Jaafar ahead. Mestari, Please Paribas. BNP

pipeline, good year on questions, Firstly, three all just right? that's you got I've ago. morning. Good as said, if as a Hi. the

guidance, smaller They'll been in number, Is contracts America Just we're it XXXX wanted within in much clarify there's improvement lastly, GBPX of 'XX, was year for if versus competitors by activity? billion renewal where to that? you you talking September to curious Or this contracts Europe? where the renew have you usual in you gave, think, if annualizing number XXXX North how X% like example. you and your breakdown the Or average? I'm billion, they levels? started like-for-like just describe ended and volumes. followed And number it that than just how granular retention, volume year last change GBPX expect for from of a higher-than-usual on a your of had much from anything in just the GBPX one-third I the is versus year the would like that incremental basically there mentioned of you? Secondly, to is billion on plus any of 'XX. the One renew how revenue average

quickly just take mean me I let retention. the

been I of 'XX, renewal. to blend fallen of think we generally We the contracts, lumpiness broadly into portfolio for percentage would the same say itself out -- XXXX, tends which like average. has 'XX, has the don't like the

think of sort same, which of more we the positive. So it's is

other On points, two the Palmer?

Pipeline, look seeing the expectations basis. is that I have we large all on weighted sort what subjectivity And times gross both see regions. on But that as weighted win probability basis. the guidance like. does I to a built probability a at pipeline, basis to should we'd pipeline way of in least Personally, in. sort we the as the like business at are as of provide new view We more although look X a probability a some mean, and Yes. it indicative, of

Again, as sources XX% combination that's so a of first-time of new When dynamics from significant the here that a it's business or a look about place. outsourcing of some new outsourcing. the that historical there. that's step-up well wins self-help are of big you we've initiatives at business, step-up lot taking XX% our talked the as think I of from are the in the

continue. expectations to very the have will be very, pipeline strong. And that, So continues we that

comes gap. and at, That's and want just if 'XX bit really 'XX. the we that We and roll, use of above you're margin in that's in that as terms into fiscal half some we're And like-for-like or factoring expectation third like-for-like when then it's the pricing XX% roughly that's looking strong well. at looking at little there, remaining of result less. mark that's there to the a a have clear, that, benchmark, is some of to be of In is growth line the top at the of a a all that honesty, combination you into And in so guidance. the new question and produce revenue a the looking three we're the there, like-for-like is as think do net remainder, those bit the

for you Thanks. the Thank right. All color.

Tyler, Please ahead. Neil go Redburn.

Thank morning. you. Good

Just please, a left. couple,

on a a on -- from bit an impact that new split has of on of Does progression. clarification the net Following previous margin obviously question. the

and little about the no So whether of of broadly talk difference, that, third a from which in outsourcing there's business, whether in source or sequential been effect you. we first-time the XX% you've XX wins. been could market source course the wonder change winning of a net on coming first especially slightly a XX question. the that therefore, new bit That's sort should last you months? over I as any of more of the growth the sort Thank margin new year-on-year? within just sort great from the assume XX% second and revenue components new, than of one, And

Neil. Thanks,

new I On think point, you're the broadly right. net yes,

think the an how the it to 'XX, important comes half-on-half. though again, is first which new also is new, I which of where goes spend half the the of of sort see I higher of looks that levels point that what's accelerating accelerating think gross mobilization And we'll is net in from.

it's a a on just all as seeing Education not actually for said, first-time is seeing that. We're I impacts that exciting a and still now. the coming broadly absolutes, what's the while sectors. but because business that's outsourcing. be new and opportunity been we then half-on-half just sort not Education. mix to want we're see and Healthcare And think as in don't Healthcare also bland I of XX% that from we're mean, across answer, it's in sectors, as I over-reliant we opportunity And broadly are new we source. And So of that's it particular B&I consistent much in but outsourcing lots albeit on first-time

That’s great. Thank you.

ahead. go Please from Juillard Bank. Andre Deutsche

before you and the for came you Thank crisis? type in of of clearer you Second were the answered, inflation of contracts just to different questions. back on terms my us sheet. on the correlation taking just of you to the you have, view. Could contracts between I been have clearer a view the morning. level but guidance, come them and already give to Part just if Good question type you back has on wanted are a balance where

comfortable times net well. So understand X.X is if debt a I EBITDA level and

Thank You keep some margin some dividend allocation more and and color you. of us maneuver, that consider could the but could share you give of about M&A, you cash? buyback

historical elevated the back that are say, structures, contracts, still P&L the the terms the much structures. from though, some of of contract fee in levels the I terms have to board. from across pretty shift In the base contracts clients will back we to contract within of subsidies we

of certainly, us Yes, it's be landscape. how where bit depending opportunities normalize sheet, we're would that's than on like We're that the based the disciplined in that different some be year the And cognizant to place certainly, but we'll about a we'll all low then have are good forward-looking we them in on in any can And advantage materialize. investing excess, a regions. all Frankly, to base time. over that always of M&A range the It's lot perfect then in correlation pretty to shareholders. And We've headcounts that in that We'd mid structures, be, at happening the opportunities. it's to volumes ideally We're be, And we're change. as not business the much subsidy continuing to it looking have historically. the to that's end been take that won't was opportunities see. of of that's it decisions terms what the we return So we And a would gives increase. we in unfolds. and of looking those balance on the some the it been level as extent we to at think past. contract terms variables optionality and will higher to a think make, But historically. are really a basis. of but the M&A

any mind in envelope you Do Or nothing for M&A? special? have

North America. them We're our other about a done we've in grow us. all to places. think to grow. M&A and core it's when disciplined look have And I you'll increasingly nothing certainly, then special. back help we view do us how the we're set We comes mean really within it opportunities, don't approach, at massive But I bit good our it of how expectations. part as any of question starting does them M&A anything looking don't but of see does in at it strategy, help from and us

question, about you anything if I that? Can And or level something last guide may, dividend. payout of midterm a Okay. on like

expect I stated basis, a mean payout earnings as policy where go forward. continue we underlying we've our and it's that that on we to XX% of

on change No that side? Okay.

No change.

Thank you.

today now Thomas Thank you. go HSBC. take our final we will Please ahead. question from And Joe from

morning you. the Good economic questions the outlook. of regarding risks both to Couple of really

around well. tech done about related and of and give a helpful, have As please. whether has activities could wondering that, bit would the dynamics stuff business that evolved and think I gearing time, operational specifically you've to delivery, of business just And changed? you suppose over be color as thinking that like I'm vending different If then you that the

ahead, wonder, actually in coming when what through are in now. you've clients period? protections in Thanks. about period changes workforce we got see whether just any just I contract you in to that that or subsidies there's contract about the of to place like-for-like think protections from talked You've difference sort

They think economic to first in were I both stress all, on here. a -- outlook, Thanks for I things interesting. terms couple questions. of there's of of mean, it's those really risk

growth XXXX, the enjoyed we've exposure sectors slower to from to as is has been our the in the recovery compare shown as portfolio B&I pandemic. we've in third. if presentation today other reduced the Firstly, well a from actually the today, that? It's the portfolio XX% of Why as our we strong very

We is as than projects. it because it also now then construction production ongoing exposure more has sector to lumpy our more to was think DOR resilient opposed

So and been when we defensive we add than think more that are more resilient we've we all up, before.

know I worth outsourcing. you In those it cost accelerants know we addition, this, saying, pressures and think that of clients on is are but

as absolutely go America, the come we happened negative look back, business. invest in revenues to that And contracts forward. you we was marked through to net will because back the continue particularly we actually, new new XXXX then and detect is if actually we the turn what held So in time, in up volume volumes which didn't should offset B&I. our acceleration winning strategy recession that where and saw those And be benefited and within beyond, declines over North cycle, widespread then the our

And vary we now got then ever. unit more and think we're us pandemic placed therefore, in fleet learned our And we -- I In than than a your terms cost agile any the gearing, we've I through terms that operating much to better got to how been. downturn. have base. through of foot think margins protect do lot would volume better protect how I of we've we to and ever And that operational we're the of about contracts think point, last

industry the Now a right economic the where I when way in volume hadn't adverse think a a Perhaps events bit I environment protections aggressive through now the the have learned pandemic in can't call that. and critical. contracts that we seen of we've we protect are hadn't got But out benign percentages to little happened, before. and

material should So I think contract see protections those are downturns. in we the

feel, pretty country-specific, industry-specific opportunity can for I we any So is today, manage we or growth. think out can and the to have that an it see recessionary impact feel good looking that that that we extent we shallow we beyond through or

you. Thank Okay.

back hand remarks. this, call Dominic Blakemore over Thank I'd to closing additional like for any you. With the or to

for like the first New in again just say and thank over enjoyable joining And you. restful I the all will to I'd us Christmas. quarter to you on simply Thank we you wish a you today. can Year. talk break

your for you participation. Thank call. conference today's concludes This

You may disconnect. now