Aramark (ARMK) 15 Nov 222022 Q4 Earnings call transcript

Good morning, and welcome to Aramark's Fourth Quarter and Full Year Fiscal 2022 Earnings Results Conference Call. My name is Luciana and I will be your operator for today's call. At this time, I would like to inform you that this conference is being recorded for rebroadcast. [Operator Instructions]. I will now turn the call over to Felise Kissell, Vice President of Investor Relations and Corporate Affairs. Ms. proceed. please Kissell,

Officer, welcome I and This Earnings Call Tom Chief Conference we our well Thank Financial Chief all to of Webcast. Officer, Executive our from hope be well. Zillmer; you and as will as you, Ondrof. hearing Aramark's John are morning, doing

reference. made will also As viewed These webcast. through there slides available our this remarks be be prepared following point easy a reference, call for for the slides accompanying of that be will can

our statements can press found Additionally, forward-looking release this on our regarding included in notice is website. morning, be which our

this comments Form result discussed XX-K other risk filings. factors, results expressed Actual During on important various will sections we from SEC implied in the of or call, and be those of that are those including and materially report differ making and MD&A risks, forward-looking. annual a other our as our uncertainties may factors,

financial GAAP this these discussing of measures. certain reconciliation will release press website. morning's be We can on as well non-GAAP be our A as U.S. found to items in

to So over turn I now the will call that, with John.

performance Felise, briefly throughout thanks Thanks, you Tom quarter and our all for recap I and will of fiscal fourth our 'XX. This us. progress review joining to morning, and

previously And fiscal the years. We second half uniformed finally the upon services the we in business expected the is provide will strong announced also to year of which anticipated is will preview update 'XX. momentum past set the has that ahead to of the on couple occur build off established transaction an over

value embodied we out environment, clients priorities. a and and across on our strategic am I profitable to establish. significant incredibly able growth the deliver for operating culture As of set I think year, focused past complex were globe, demonstrate have who client about to our teams Despite we challenging the the proud

extended client 'XX than historical average than greater this the is well a eight testament $XXX times fiscal coming broad annual our higher strong between of year achieve resulted 'XX. embedded talent fiscal during level retention half net to 'XX to rates growth nearly X% collectively, business lines XX% is revenues, of business and retention throughout representing the highest pre-COVID performance multiple revenues consecutive In a clients year the of of all our XX% 'XX our step pre-COVID went history, of organization. day which net as revenue based record five was the company's once the in X% and new and billion, from net improvement. financial with sustained about and to Aramark’s fiscal fiscal analysts exceptional fiscal second business, the million from again a XX% exceptional than business small, algorithm. business as new over gross were more represents top geographies, ability Again, X% in at Aramark's fiscal year. range of 'XX with new Our combined and exceeded of as This we end through annualized our provided $X.X new already change segments growth the across large

driven 'XX net and food wins, higher facilities business business U.S. new than significant and about 'XX higher growth over startup new from a wins net of $XXX facilities, fiscal ranging than across XX a growth net with small more more XX% rates Our of new International last been year. international reflected XX% new million healthcare nearly largest you year. than may performance new business and There strategies have more improvement segment in business Even corrections. a success than size earlier win fiscal the like than doubled in delivered net from excluding testament recall milestone was company's particularly fiscal team. the site new the ‘XX in than retention multi and the our last services of strong accounts higher this strong million times history with Merlin Uniform large to operations momentum and in $XXX retention which the growth significant segment, record by portfolio year. also business to results and reached our Merlin, awarded consistent maintain continued significant

opportunities. Despite The growth. would X% we coming in success XX to focus and commitment performance gain ongoing investment pricing have continue actively from as levels, address in in on top force, with drive sustainable quality Our are chain new remain clients confident of the an opportunities, vertical continuous providing I focused environment leveraging we greater portfolio, sales business capitalize and driven robust our real while time and supply growth, time pricing monitor tailored unprecedented is pricing our achieve specific our In outsourcing insights like drive mitigate something sectors I global review profitable implement on financial our and in U.S. closely year self-op quarter, effective we to over to inflation the in customer alone. clients, and more our and service Moreover, of greater our the sales to experience wins simultaneously to including contributed unit quarter. pricing ability strategies will costs, Across on the appropriate. wins working With conversions, first on targets, now increases. to our even teams to the heights. to fourth largest geographies. high wins business our with for this pipeline six XX% growth Aramark's robust to remain than revenue

experienced last cost quarter fourth year. top margin points XX% level revenue through net bottom levels quarter the to pricing nearly to pre-COVID sectors. educators food currency back welcome management growth, and at is Within Our start strong base our with academic end new slowdown on hospitality fourth a fiscal and quarter. XX% both months off the and basis the nutrition XXX and line of build collegiate typical rose results in recovery. on effective and to fourth summer reflecting year-over-year a year-over-year both in compared students of Organic and the ongoing revenue organic XXX% increased continued U.S. now record and AOI basis year from reaching we the student facilities constant as in seasonal contribution in grew Education the all

and closely with performance its have trajectory. attendance for than better on pricing new Sports, culinary plans possible worked campus additional concepts Sports introduced clients teams board Our and implement historic outlets. and entertainment including advances, offerings, technological action innovative and positive correction Where we dining to levels appropriate continued retail spaces. high with and Series. leisure level maintain across corrections to the and congratulate activity led record this Houston categories. Philadelphia want also reporting event reaching spending unforeseen opportunity capita I both and the despite per year-over-year to during weather year. gift sites, the by fire growth wins World Phillies take for greater and challenges new and certain our Destination Astros business at clients, enhanced

year-over-year at driven billion which for of retention start client in as We're progress by success strong initiatives we complete services to a B&I Plus existing Our our agreements. awarded driven that office venues, free across performance improved debt Healthcare to existing benefited back the off occurring the other in in to this X% year, volumes workplace momentum and in able last solution market details we $XX higher largely growth International in contracts, experience rentals demand on another under also prudent newly significantly scale strong success. activity making particularly spending resumed on and sports net rates the grew strategic growth P&L strategy executing and as of upon services. structure international clients current closed to had tax both spin And quarter increased has net to and retail providing end education companies I core across believe Similar it an fourth and uniform compared in Tom that well of the showed increased recorded contribution and increase. additional and team patient U.S. across portfolio, activity across And activity are portfolio. business geographies. will client our the the at year, segment from as fall September. levels we high semester. and consistent regarding revenue of of remain want contracts and XX% to planned year existing summer revenue transition the entertainment transaction. continued and the Organic the to or in from additional company internationally, increased needs sharing focused with and ongoing to Facilities creating America. reiterate results, on higher services recurring providing be level drive by the to will returned the conversions. estimated to with adjacency the review, growth per oriented expect We're largely continued their the Europe in customized the great group be capita both specific drove North was particularly into the building new locations business Came this Year from positioned their terms clients. organic strategic a capital independent the with and the place, offerings progress be of further transaction and throughout self-op will services New with

the on greater one recent of a with good our spend people to planet. focus like to our initiatives core and I'd Lastly, some contributing moment on goals focused sharing

First the greenhouse targets last our for reduction month initiative. validation targets science by we based proposed gas submitted

XX% plant the based. Next, commitment Society, XXXX, their least will residential at our in offerings partnership with menu that dining we be announced Humane by of

grow and who the recent service Community exhibited commend foodways XX% want Aramark And inequity, existing reduce Aramark we communities of consisted of an Building reduce planet. pledge by the by a Third, which XXXXs passion world by to Coast support food on teams extension find I to the local Day, finally, projects and Pacific of XXXX. worked the as to our commitment around waste protect

among just are financial culture people over And impact, to Our turn truly of call one created. it's we many, special speaks day volumes cornerstone the do. for this detailed of that I'll the have the review example of of Tom the business. we everything

Thanks, good morning, everyone. And John.

line and strategy. year is empowered continue management. high signed annualized quarter we client billion to cash culture. results performance focused field mentioned focused through hospitality the across the top priorities. approach new fourth our the in On growth is to us John once we improvement beginning. and re delivered long on business and we the mindset, driven in to results. yielding on We ongoing Cash resolve rebound. retention of analysts focused remain shared deleverage reflect and our built term track through growth the of establish an our to to just keeping macroeconomic new Our achieve These flows committed the rates on teams scale challenges, strategies day the our and fiscal year fact, our the field fiscal bottom throughout record resulting $X.X levels. stay it's our positive delivering again, and historic net in execute and in are our Despite globe And on XX% a business of leverage entire Revenue build plans focused gross above profits goals. 'XX rebuilding reducing, margin

reviewing want insights full billion pass by strong QX which through provide progressed revenue related about for outlook, up the estimated XX% 'XX driven in Performance the new over pre-COVID net exceeded year, an from to organic for billion last pricing to year-over-year additional XX% Before XX% fiscal XX% and levels fiscal ongoing our of our In compared just is in COVID 'XX $X.X on I to grew volumes, each the recovery fourth year XX% financial business $XX.X and the quarter fiscal is quarter, of some results. QX. year. first

full FX. AOI year. the to an nearly unit in fiscal continue in XXX both the of than million materially margin COVID AOI points We revenue first from the X.X% year. was margins, continued last on same quarter Constant of of in year for compared closing an the due resulting quarter pre-COVID in million, XX% the $XXX the year's compared constant better last currency expect basis in AOI 'XX resulting stabilizing cost currency fourth X.X%. results Adjusted currency operating by basis. half AOI on XX supply the XX% margin performance to margin point progression income AOI approximate the SG&A in and last in chain volume ability year, constant our in a This this contribute margin quarter was quarter. support higher of related fourth as AOI well to as recovery fourth management. X.X% XX% $XXX tight above This and was most to basis AOI sales with contain a operational was to margin to leverage from recovery, across unit volume driven benefits in increases reflects costs, impact quarter

with partnerships inflation our categories to us working food, across been through and and and actions and various teams be the passing and have continue labor, actively as ultimately to Our appropriate. through to price cost where direct clients available needed, mitigate

we've suppliers improved. products the back and been of gradually fill to to year, course transition rates preferred the Over as able

still there's this While an chain for more a step much to normal operations. year important to return go, was supply

area. and by In significantly generation current new increases we the net our deals addition, We're in growth of to is as our achieve work next opportunity front settles, to this business the supply us chain beginning. encouraged savings in management, renegotiate

have over have significantly short and past today exceed growth the add our chain our our drag related term line two ultimately accelerated to margin margin natural opportunity to and higher as on of AOI confidence deliver track the margins margin pre-COVID account before, tend new benefit over startup we the and delivered interim, levels time, ramp. they us with business mentioned profitability stay on In the due the and giving these years dollar top we've costs combined target. supply and accounts when will to new As a mature ability a analysts levels to profit the

the Our quarter adjusted currency $X.XX $X.XX EPS led last basis, fourth constant versus quarter year. on results in to the in of a

consolidated share for adjusted on basis, to billion, currency operating compared quarter. a year of fourth of penny impacted and the reported quarter, one On of $X.XX per fiscal $X.XX in full $X.XX revenue by constant year per for of GAAP earnings adjusted in Aramark $X.XX income $X.X a million loss and FX a $XXX EPS share the fourth basis, the diluted earnings was the by 'XX. For

earnings the $X.XX. For $XXX was million consolidated year, for diluted full operating income was and revenue fiscal $XX.X billion, share per

cash Now cash fourth turning typical was seasonality activities significant $XXX our the Net provided million quarter flow. free cash cash inflow. $XXX with and Consistent flow business, million. the to a operating of by was generated

lower higher working million, offset For to profit recovering $XXX year, of million, activity. expenditures, $XXX partially and cash net to performance and by activities base provided $XXX cash fiscal increase new the operating compared full million was and The business free year-over-year improved was 'XX. was net in result flow related slightly capital growth account the by capital

we the that each flexibility fully capital are ability other we times some agreement, company number balance what paths in a significantly strategic existing in spin execute we we also rate over our different our There of a partially with to our same swaps, are particularly We're to Our on end. million complete or availability and environment position fiscal of flow in related in to be leverage X.X ratio under for day, to fixed will in and current of positioned strong of choose structure, spin the XX% times we managing and Plan expect maximize than existing will cash XXXX net of well debt earnings cash that performance fiscal combined more maturities remain leverage uniform a sheet. success. and structure required 'XX. independent believe debt transaction, X.X no below to at environment way be navigate will to inclusive sustaining instruments as X.X create best of until year than shareholders significant with the portfolio reduce the X.X higher resulted for confident we the analyst year end in do. an value the current compared We replace improved not at capital degree times mentioned track

completing separation make We we targets closer and the leverage to completing continue the including forward company to transaction. the progress tasks get sharing distinct for essential financial as additional to in look and details, profiles necessary for each

XX% up by rose sharing full Based slightly total earnings our a higher XXXX. expectations, current reflecting the last the on call. we company me following XX% for revenue outlook performance. approximately and billion results Let fiscal mentioned wrap during $XX between projected Organic our and year

net X.X% operating and related to the recovery X% the of any half of fiscal costs We components XX% operating AOI June. With and from until include excluded X% we weighted first fibers expect dollar Adjusted of of contributions date the environment to as left constant, service. X.X% our of to to remain volumes our to of year, with AOI levels, XX% we new acquisition in remains from this of growth clients to balance the target, growth COVID income to to of pre-COVID with unions XXX% X% and achieve X% inclusive in pricing business, we to inflationary will portion our partner 'XX quality XX%. of which expect the

basis 'XX roughly nearly XXX progression margin margin improved in a at another this XXX Following point anticipate organic AOI coming and basis midpoint unproven outlook the revenue point fiscal AOI year.

to cash of expect million of we for items. the following Finally, flow free $XXX $XXX in to million a payment be range

First, last previously to and with make we will FICA the first million this we in quarter. associated make last Act the year, Cares payment a payments like expect $XX as approximately of the articulated, deferred two

related fees associated a range the flow specific cash anticipate these we After approximately spin. uniform to and in flow we of million. Second, $XXX charges, million a costs cash to $XXX items, of $XXX public million company free with impact be to million expect restructuring $XXX to transaction

by on day. fiscal times our next the combined This this benefit goals the we significant is the operating our and achieve to between year step the 'XX on analyst we to 'XX. ratio established journey anticipate strong with fiscal end flow expected leverage cash higher X.X generation, income, of X With be of

producing is keep strategy time excited on And results. momentum. Thanks this for morning. your Our to building this we're

Thank Tom. you,

have second very we've of stronger This million. performance Fiscal accomplished of just global With As past year this exceeding is doubled a fiscal realized fiscal well well we we of $XXX the milestones year, new than year poised enable to at year, our original of our we on annual beyond. 'XX. record strategic business this achieve achieved And the strong recovery operator, footing, substantially achieve us we everyone. beginning compared moved plans back to exceptional I'm with proud results Thank history, will And out highest a to new last year across revenue occurring, from nearly and for including company, big to wins to them. growth mode margin transformation place performance a and more as the underway goals questions. we've the opportunities as our we as extremely ahead. the pipeline midpoint of now our and AOI strategic like team. the in initiatives 'XX already the set client year are you, continue company expect the the mode company for we quickly, net in momentum call by targets believe to open consecutive

Thank line session. Heather coming and from Balsky the question Instructions] of now from you. and Bank of the answer And will our Ladies [Operator we begin gentlemen, America. question first

line open. Your is

revenue. on questions Two you. thank Hi,

And dynamic you your tougher can, you there next The and the first think of outlook you're is guess for look of I kind year growth, is can your where a you in macro sort if in the outlook. environment sort help about? terms of appreciate us Thanks. when take give of thinking you at

Yes.

tailwinds fiscal have And the we one We couple as things we 'XX. at into incredibly new think the trend. to wins, pipeline net of strong the a outsourcing there. a though continues the moment I as enter of be feel business

stability sort The So really their get of been confident teams of and years. we the are about starting feel pace to last over couple process that's that. to built

control. feel So Retention good within about that. our rates

so and actually we've lower of had we've issues, in than had probably have 'XX We rebate And that feels level a solid. in 'XX. activities

keep big So did activities. half will accelerate certainly as as year. inflation is pass continue pricing pace That pricing in to through second between mitigation for the that's with needed it Depending what variable. I really a and on Pricing helpful as we happens to well. us mentioned, this

might go keep then really and and the been, continues further inflation move that and getting pace is take hard of and track has off get away those. so and particularly and recovery And lastly segregate will and if debts early business some harder that then from harder we with ahead it effects recessionary some within to kicking mitigates dining, to we as pressure XXXX to it's pressures, to COVID further in

comments. the So those be would overall

it think helps John. I

I has think achievements excited very it that establish. been that We're to by company the the characterizes well. the by able revenue

the Our very teams the activity. new good operating the momentum business. retention sales great of on side very got side, focused We've account, on

aggressively So number, next couple we're always do. impact a macroeconomic confident and there revenue but that we factors are year in could that as respond of the we'll

your for Thank turns into did the you. that term inflationary a account think year. rather and that we're it you mean And higher years. environment ability price normal than well if consistently manage as your pretty a that what as good does about in business, follow line, kind basis, this type as a or taking environment up, of longer you margin to of a years, on in out of to sort that guess, two I one this on take job pricing, than ability your multiple for when that

decades, and years. inflationary it we've seen and over the have different Yes, we've and that that low Both seen environments environments. both operating high is absolutely been environments for in inflationary economic inflationary Tom the model I with

pricing inflation. technology frontline to food We support to basis activity costs pricing be got we we've component business respect be the on able And operators to expect with and disciplines of managers very adjust. tools a be we'll to field, that. And strong strong around very monthly and able to initiatives. data significant chain adjust will a our in it, the supply to So our the give support the activity

P&L. you in to the literally know, place manage as with they And this. order weekly run the have we So in business tools

supply changes, And business. our got they're are able to be of confident whether So And to able of to we've the or pressures, in. adjusting address managers to inflationary realities mitigate menu frontline the I'm be adjustments, those And constantly manage pricing expect operating we that through continue it's to chain nature our it. tools or through will just it. number the a people to

you. And our moment question line next Zaffino from from One of question. Thank our for coming next Oppenheimer. the Ian

is line Your open.

you Thank results Great. here. Very strong very Hi. much.

congratulations that. So on

a sweep says So on John Felice, it IR was clean the IR side and big also a accomplishment. Tom that's

mentioned growth business to I guys. John, just a You force, than new better other growth congratulations market COVID get industry like environment? you is So then se Thanks. much the far clearly in can new the know any that that and expected. when coming be you as putting the going you there on measures in in sales have joined, business, is as you versus driver a but is What you enhancing sales would per post any force? maybe the and share, on this to comment how of

their organization, needs. particular organization the the proposals organization, develop and resources, expertise, adding which years Well, taken to couple and the as operating the working of adding the there terms a drive and number business sales giving in this actions was, growth freedom sales to on customers, first last respond described meet to management of that have change Certainly. really over of are you new highly the been step to customized of sales

objective accelerate best tools frankly, grow well business. the order believe over that It's as it's our So organization time to both the activity. resources to improved the also as increase I to sales We that of grow. earnings is is think pathway the cultural. It to the in entire

programs implemented And aligned with are operators incentive for both the the that team sales so we've and that.

So team of entire growth. the focused on leadership incentive is compensation XX% the for

on rate. higher It's up we tactical going the So are resources. how growth higher made day every achieve just it's wake accounts focus. what are and And to how grow rates business. we and individual well the decisions about as going thinking inside We are we as working organization it's to cultural. retention It's

more have last the excited results else. high It entire the year, we but it's future do business expectations, So very the the only than is And we're over coming going not years, will of anything way very, the this about for that for we when cultural forward. organization. two

just it's an too that's a picking lot over started up the opportunity share I years got because important an of consider move is that in market of we're outsourcing. seen the industry tremendous couple as Ian on one, think last has point and to opportunity, that we've insourced

and that's we the focus of processes opportunity, the So place to We an a people shares. that as industry believe us tools overall for heck having we're the been grow. varies. line right just it really, to the on depends capture of for of a the advantage of tailwind much and taking a really just it And don't it's on it. and is really industry. in And that in, market It that a matter country business

back implications maybe then know then Thanks. upon you also, from well, touching transition for and you touched P&L upon you think Tom, thanks touch transition caller. are in and that maybe as margin that, the plus. Where cost to I Okay, about the upon the P&L? that P&L can inflation you as do as and you

we long the account, that it's the the before But We driven that Sure. where model we it. we to to doing the better back run. sure make profitable decisions We're more P&L. back like we can in do business purposefully side, a they about particularly P&L had bit had, as the more. that by thirds in we're it around economics the control we two are transition. entire very It But We're little we where back lot were the paced, of be yet. there P&L a not moving maybe quite that and volumes not making 'XX, and

really margin. in we are manage If hit. take that would the that it able to do So end we quickly, a we too

the to by in account client. conversation by to so basis we transition an with case account make sure conjunction that And case it's want in

it margin implications noticeable all, the if right the do at So not time. should we be at

back I first mind, to add increase would contractual modifications a P&L. to and clients service right, predominantly again, phenomenon. work requirements B&I much pretty we're of sites. back continue their return the And place that businesses, as keep this driven will in other as to take they P&L revenues the by this transition is our In That's in customers customers to

it as us execute based clients return strategies, us makes So need and service will move on to or transition to as want And our to us the need continues the to their COVID into account we past their businesses, work pandemic expectations. sense. as

moment next question. And you. with coming line our next queue Thank from JPMorgan. question in the Andrew Steinerman of One for

line is open. Your

Andrew. exact margin guide. want I to the the just Hi, Tom, in get

basis reported like, margin nearly 'XX nearly said a using expense you X.X a 'XX And of you a a constant should points currency margin fiscal basis? and when assume notable difference what think on fiscal there you base. target between I points, XXX say for So in 'XX. so operating XXX terms fiscal and reported basis is we of

up that can XX%, dollar XX% it line at you were sort margin to margin top work XX%, growth stick variables that XX% can range. if AOI to those you of to come Well, a with with a with growth and

continue So that to think point improvement that's to margin that's is drive about And we XXX the basis dollars. to focus going the for those us year-over-year. really grow midpoint again, at

or the currency? basis And XXX reported is constant points

reported. would It be

much. very you thank Okay,

from moment Kaplan in line Toni One next next Morgan our question from And for the of you. Stanley. question. coming queue our Thank

line open. is Your

competition. I Hi. ask wanted to about

wins players. where broke slide the this looks on wins. getting It like source you additional regional from you're new of out the So

more something because call of would to having sort trouble competing cost environment it of So higher smaller are anything to else? front on players that Thanks. or you out attribute the the

is John. this Toni Hi

probably that's think I assessment. a good

the higher change upconversion the are pace We to of XX to XX activity big continues to run at over industry continues a step and be has to the norm than self XX% norm probably the that's over last been the years. increased XX%,

the that step be would So that'd big be change.

activity rebid of compete date. what contract a and activity expiration the we other we analyzation higher their other on what other contracts exists of have, of base very, where kind are against based on There areas certain of excellent rebid level typical. big they in are had The based kind the companies three, this year, areas their

additional any smaller So three do the it regionals. the in between impact I competitive think big think I real cycles. But pressures it cost an change there's or have on just the probably the don't dynamic players.

to Our robust. really conversion is pressures And more competitors much but self-op of us supply tailwind it's are going for the respond the we're smaller chain kinds able cost to so mode. to those looks is in much And more continue. that big the like than

to And we from But I inflation the ask before to is confident to were supply time. that supply target see really issues you I out really and escalate. probably some it of the XXXX like moderating that. had X.X%. to quarters, prepared started now. Wanted put you're sounds think know there chain able at chain remarks, Understood. like consistent margin and this It sounded target still the being prior sounds it Yes. like is with X% on and achieve

the So just has I negotiations the mentioned, that that a to thinking there are the understand, some are Are needed that we factors other Tom it that become remarks, get just like, in offsets, or factor. offsets be to prepared should bigger you like to what there about? level? given Is Thanks. wanted inflation

we new with our 'XX. in, unit margin. over range, do, there to, as that fiscal will also from be be being end higher that mitigate. things we talked as all has the the but a that target our overhead And confident a of period, both towards And well to are inflation three continue continue about the said, supply negotiations, course towards the range, move given the to then the costs the the business the to as wins, We're supply are I years, some leverage impact to the settle year your point, and through those next of been inflation headwind equal, end of ago. chain Sure, lower than that certainly chain of to and to probably above offsets wins, ability tailwind going a

the net than So way about analyst delivered John of we're of quicker day. growth get X.X%, number, in anticipated. surprised ahead a X%. the talked was that pleasantly and little trying growing it a and actually results I probably and on bit to year we teams new with we're very to business pace, gelled terms that

build years. benefits again that next we going us scale forward three the So through as margin over

the So some think But I of growth, and I think inflation is the a headwind. offsets [survey]. the of pace are supply chain

And line Thank of Shlomo Stifel. you. One next the with next coming our moment question. from Rosenbaum question for

open. is line Your

you been in not little underlying represent you yet. a a ramp by bit us there Thank could Hey like to margin have deals. of not 'XX what amount, are new strong, questions. for coming of these they're and margin year give detail up. Tom in gross it wins from does up, yet very I the a limiting there terms sure is maybe faster but mature I'm little that Is Hi, headwind the there's improving terms of more Just some think my hey, X bit is That you in with business that new are XX? have the fiscal you expected. where one taking and a headwind follow in good a way then is new year deals kind and than fiscal morning. about

Yes.

account. the hate but it important longer ed XX about understand space So be you to the question. the of retention at tough and three an very it's that. just answer, retention the higher looking and I can to Then years ramp that months happens one. six the depends a ones, the is there. in of healthcare offsets so the on take the the bigger proactive to in accounts to the quickly, contend and or months as one does first before, But great to of and from margin what we or this Smaller a size the it into And little dig depend, to give to relative, area outside I natural it ramp margin in it most, talked to particularly got typically you

moving So, work you one if year to pieces probably it. the three of there's basis with margin a put you maturity right direction. But typically, in that lot that'll just of to

interrupt Keep year XXX. wins, and business in is net XXX, accelerating mind to last when you in it's this remember, these there. new this a mean in year day, didn't have Sorry, was

wins, you'd an are accelerating the during time accelerating that ramp so opening are So anticipated, account those new period. growth and the have are costs in maturity that anticipated that costs

to get and you steady predictable. that state a as more it's So normalizes much more

confident that little will up sales acceleration predict size difficult this exactly continue to a into weighed date the we based more this location, accounts, growth that ramp we we is, are the we've that continue targets. our ability to of program. but ramp of year it again we highly the and targets that to establish believe unfold in analysts As deliver the it's will process, we as on geography, that type how our the operation, those And on

so And the to way unfolded company, the much we that's is and and here it respect plan. performance established very as everything the I the of with Tom predicted

we've targets and we're those confident So in hit go that identified. ahead ability to our

coming our with from for One our question. Thank moment Redburn. the next next you. of And Tyler line Neil question

open. is line Your

you. of please. Good Thank morning. questions Couple left,

mentioned, speed term opportunities ahead the of new the the pie size of of conversion but some out or that first of it, original that the see taken of Tom, longer grown? the a Firstly, rate, sort pipeline Is that plan? has of the That's the basically you same the conversion year of you slice pie, you've when question. a bigger -- on U.S.

of as you And wins. board. chance if I'll out or sort the help just basis how ramped new so talked expected understand well. sequentially sizable sequential finally, actually the of the how then selling those something that's I wanted could to those and contribute that that role you playing a 'XX removal facilities in whether you And about that's think, or into whether cross brought wonder ask clients specifically uplift 'XX new of of fairly us cost price points? Secondly, clients some the versus that basis XXX to to existing are in terms XXX called was And sort on up on points of margin costs, versus

of them. Good of to all unpack. That's questions lot a

Let me margin. with start the

growth, about talked the into just 'XX obviously, from we've John Zero year. and had some As year in this acceleration ramp, to [indiscernible] of serious XX net

that of If at 'XX sort of we're getting speed you that's to a to is net the cruising growth. But look be annualized hitting to X% to XXX. going X.X% guidance, and north degree

that certainly costs going on. and where question is goes be startup prior just John's factor to speed. have the over a years. your much of So wane the first of as and prior but that we're will to new healing 'XX, lapping is won't half of the to costs a year I or of are point, more in then incremental staying the those the those at 'XX a become year year year And speed and we're cruising as next cruising startup couple to

pace going at in the the be to you're more half, so half think than just looking the of is I 'XX. So first if second it

thanks. Okay,

over size has be fortunately, source bit that a than taking self-ops, the us players here years. size then pie of the markets. bit of course, that, continued increased And But norm. little are the a has also for the terms In regional certain big historical [indiscernible] couple we to players in now both primary share pie the benefiting right from a other higher last

in both we 'XX. are And said, need again, outsourcing, single though and year, feel we digit an phenomena. at learned continue as expecting we And so, we industry that I to mid don't this into to stay reached benefiting from the those we're continue, rates as

and do facilities opportunities, then is good food build an starting into to been particularly investments our on throughout be getting if about be able position just And teams or based that, facilities, very selling us we pleased hasn't standalone all it good, in question it a could showing. made a with cross service, the the So are with can either pandemic, again, opportunity. they've you to that no for there this the to results capture a have had like and cross we're we opportunity be ultimately sell account, opportunity beachhead and to opportunities, and that because an been point matter

brought have multiple would existing I customers. industries, facilities just standalone geographies, the and add and that Yes, across based wins and been both multiple

business, for year got but we a in managed operate And healthcare. So customers it's of we business, in also facilities it's we've healthcare a by significant forms. serve couple Obviously, standalone different them. the facilities, a the very space

us, conversion. their great one segment authoring wins well the on that been and account one for continue a for versions as both focus as will had self year it's existing growing to So this

year as for nice really unit. they're business So a facilities

Fantastic.

Thank question you. next for in queue. One moment

of the from Our Wittmann in queue coming question line Andrew next with Baird.

Your line open. is

you've everyone. choose flexibility Good and have question don't structure, you questions, do. you Thanks the that mentioned Great. guess my capital anything to do what to that on the I morning. you got for taking

little Just end more I over guess, hoping explain with a million the representing of EBITDA bit four $XX about you could of times. leverage probably being at around year uniform means. the the what just that business the company's

how off the to it pay of get series existing somewhere. ability So in you give new you like effectuate partially without as new planned us and a a least? and the structure going could detail feels more to a half reformulated little bit there's capital there at having at least that's fall have to or have them of billion just to your debt, anytime over to you Do redeem debt to

detail Yes, at to give the point. best. move out evaluate still this into what's much markets continuing we're too to prefer go not Because or

transaction, that that I our a in put to in. us it's we're being really position do the to Andrew there's with key want forced think hands to the we really don't point be nothing is going in

all ultimately what get more is in being move what a closer on the transaction. details again, and you we that details, we refinance, we the and as we how pay finalize forward determined So little give will off,

more in to probably I helpful. on happening comment a that. has that's business affecting how for Certainly you profit those And variable be margins margins tuned could this down coming business that wanted the activities of what you recognizing potentially you segment little to be stay obviously, margins you. to have question. economy. XXXX could you're guess manage in in particular, bit costs COVID specifically in I got dynamic segment your a just on needed, that was want the a that much we'll a that's if would I where of follow understand there. out to lot it of us of and I already. actually about more kind lot up could Thank ask And more. help international Okay, my did if the margins, you that it how boil understand Maybe swing, just for those hoping

forward moved nicely, more stable. quite before. Yes, has have Their sales about that growth international have more been margins model actually. talked They a consistent. been We that's

in of scale So model, U.S. it and sorry, engine, as that a really source has is happening rebuild years. the growth what's a as bit of for we the a the to been margin through doing really business proof the number U.S., international

continue move of think, I very that. and we'll reach the north So X% close then to able they to 'XX, pre-COVID think this in or year, levels, were and I margin

the again, as So basis, levers supply in their same been But of margin. account accounts to U.S. terms benefiting drive of the able from the quite [indiscernible] DNA part expecting their the inflation year, in past what growth, to terms in both same the the unit as for then from of scale through got them this managing they And they've they've an just and nicely, and an chain, of countries. overheads we're they it's have, 'XX. standpoint, from many do

time. the their the some part face for many was the to for international again, them. face, in So what mix ability of they they business challenge And parts of part price of

One for you. next Thank question. moment

Bank. from question Alwy queue coming the from of next Faiza Deutsche line in Our

hi, I update on to get an the was hoping Yes, labor morning. good environment?

number of been been and needs pretty challenges are acquisition number a in however, and that's adept very the Labor use meet face, able for the meeting the our world. in at environment we both around established staffing people is resources the units to met, have able have very, place recruiting that of a We've years, the very everywhere a challenging continues technology organization been we strong talent to much that the business. tools of to, for businesses, and be we've through of we've

of have that know, up strong have you a couple activities. As seasonal very we businesses ramp

processes up order for the organization to meet and demands those So for ramp the we've businesses. built entertainment, in other and higher education sports

to the of so been ahead able business. go meet And the needs and we've

tools in a And their were the that's over the was successful for to little able we on pay daily wage put and terms basis they very, of ahead to in been of strong that with as incentive Aramark place join recruitment the very earners them. year course last a driving go cost access daily activity. very was very of to One that pay, lower

more people pressures seen all to the of and in And But layoffs in we're higher returned see announced market, beginning to others, do softening all, a as concern. the labor see you've so, level still, exist. a work we and

would I say shape. of normalized. recruitment So And turnover our our kind are activities are numbers very good in

you. Thank

question the next queue our in from Barclays. from line Now coming of Manav Patnaik

Your line is open.

by is for of each I XX% This Manav. reconfirm volume you. May COVID thank recovery? of particularly revenue the And to net And on gross for I come timing, insights segment? of you'd price Morning, expectations recovery then actually in most organic consideration should any for from the lastly, organic first be in XX% currency [indiscernible] COVID mindful half. I'd said, constant the just contributions think

better in the more we here to half we first weighted recovery, actually. COVID the quarter we lapped fourth that, to Yes. XX% expect got to a little The be than do as

we talked And it's be about recover. much that so less being time next should than the last waiting quarter of to by first [indiscernible] year quarter, the fourth versus

determine first that. to half the way So

by no comment other, geography. the real on On the split

you growth mean repeat Okay. net ask COVID recovery? then to from I price I can just And the contributions prior

on X.X to slides net to X environments. Again, assuming one from the for constant to attached X recovery, No all and problem, COVID the it's a growth. pricing. X X.X for it's inflationary of to X Sure, a it.

Okay, thank you.

up. follow a As

our coming the Stephanie from Thank lineup, Moore you. from last Jefferies. question And call

is Your line open. is open. Stephanie your line

seen just I have then pre-COVID companies business about might hybrid levels work versus new your thoughts schedule maybe improvement opportunity during on how see you kind returning at quarter, those a the areas I touch lagging where or where to here wanted same triangulate Hi, to means the and speak to industry those areas good space, what gain recovery some particularly and of you. other seen be and reduced throughout all the continuing Could areas you've office where morning. they there. that year? just business you've nice and maybe and level together. And time, given as wanted of to the just high the think to this business pre-COVID levels, to get that Thank you

new net of Yes. performing have very to recovery have business that year-over-year serve. it's business continued growth states the amongst We clients varying That nicely. we has and do a

back you on at lagging back operations the XXX%. blue operations Obviously, if the so particularly will, And call sector, collar collar XXX%. are the coastal white on based still Some these a environments, financial and course some in results saw last or sector. begun transition of those have tech high is of over the in those months, significant improve But the September. even to the We dramatically. couple it

be in change business profitable We were continue very I good throughout be that on. business this that of growth we to different highly But see first to client strong, may of than year, pre-COVID, be be of that is There going the will forward. business fundamentally while the plenty and overall, which acceleration do locations return the a accelerating. of opportunity segment they quarter comment to in. work individual believe will that this pace We an new see won't

services core company in locations. for of so in look we see want that team type and place customers And growth. ultimately, little a terms a may the and strong this we the leadership they individual dynamics, continue of different it But in very the bit serve growth a business to that strong with as and the

Great, appreciate the time. Thank you.

Thank you.

closing Thank you. going for to call Mr. to over will not back I Zillmer, remarks.

for company the to for the much, quarter, again growth and those you that both analyst the us We are of our to able in very we implications at for we together at excited And been wins. Terrific. goals organization morning. business have will both business the the about, fiscal And our here the everybody, to quarter commitment margin Thank going net to the that day We're for in about growth the achieve has about as forward. update the spin talk we we've obviously about and 'XX. of the strong very a then will first new prospects sides performance excited joining of an this fourth company and the established more end be during talk back and time. you

continuing our you the Thank for conversations this the again look So time to you. morning near future. in I thank and forward

thank Ladies for and conference. gentlemen, This you participating. today's concludes

now You day. may disconnect. Good