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04 Compass Group PLC Annual Report 2007Chairman’s statementDelivering on our commitmentsOur performance reflects a clear,well-executed strategy, which isstarting to deliver increased valueto our shareholders.The introduction of MAP, ourManagement and Performanceframework, has given us a commonlanguage and agenda resulting ingreater focus and visibility across thewhole business. We have delivered astep change in profit and free cashflow generation as new processesbegin to embed throughout theorganisation. Looking ahead, webelieve we are entering a new phaseof sustainable value creation, withexciting opportunities to growrevenues, improve margins andgenerate significant cash flow.I am delighted to report a year of outstandingprogress against the commitments we havegiven to improve returns to shareholders.The objective of the strategy we communicatedlast year is to grow our business in a disciplinedway to deliver sustainable profit and growth.This year represents an important first step indelivering this strategy.We remain firmly focused on developingour core foodservice business, in which wesee continued strong long-term growthopportunities in our chosen market sectors.Alongside this we are developing a range ofcomplementary support services, which we areprogressively bringing to market, prioritisingthose sectors and countries where our abilityto provide both food and support services willhelp us to develop our market. In particular,we see a growing number of internationalclients who are looking for a service partnersuch as us who can deliver these services toconsistently high standards, globally.The successful implementation of MAP hasgiven us the framework to manage thebusiness with the intensity necessary to driveimproved performance. MAP is now wellestablishedin the businesses. In the comingyear we will be taking further steps to embedMAP even deeper into the organisation.Our Group Chief Executive, RichardCousins, in his first full year in the role,has put in place a strong leadership teamto lead the continued development andimplementation of our strategy, bringing incompetencies in areas such as marketing andinternational clients to support the deliveryof our objectives and to help drive value fromthe combined strength of our global Group.I have continued the programme I initiatedto improve corporate governance andcontrols. Building on the progress we havealready made, our aim this year has beenreviewing and re-communicating Grouppolicies and practices, with processes andtraining to ensure that these are receivedand understood.Over the last year we have further reviewedour corporate social responsibility strategy(‘CSR’) to ensure that we are addressing thebroader social and environmental issues inthe way that we run our business. Thiscommitment is very much in evidence inour day-to-day operations, forming a firmfoundation to build on as we strive tocontinuously improve our CSR journey.We have made good progress in the last yearand, going forward, I will continue to takethe necessary steps to ensure that we set thehighest standards for corporate governanceand responsible business practice.Full year dividend10.8p(+7%)Sir Roy GardnerChairmanCompass Groupshare price performancevs FTSE 100 Index 2007Pence400375Compass GroupFTSE 100 Index35032530027525029/09200629/11200629/01200729/03200729/05200730/07200728/092007The FTSE 100 Index has been rebased to theCompass Group share price on 29 September 2006(268.25 pence)
05 Compass Group PLC Annual Report 2007Returns to shareholdersThe Board is proposing a final dividendof 7.2 pence per share for payment inMarch 2008. This brings our full yeardividend to 10.8 pence, a year on yearincrease of 7%.In July this year we completed the sale ofSelecta, the European vending business,for £772 million before transaction costs.Of these proceeds we are using £500 millionto extend our share buy-back programme.This is in addition to the return of£500 million to shareholders followingthe sale of SSP in 2006, taking the total sharebuy-back programme to £1 billion. As of30 September 2007 we had bought backshares for cancellation to the value of£720 million.A further £45 million of the Selecta proceedshave been contributed to Compass’ UKclosed defined benefit pension plans, takingthe total amount of special contributionsto these plans over the past 15 months to£325 million, significantly reducing thepension deficit in these schemes.The balance of the proceeds has been usedto further reduce net debt.ManagementOn becoming Chairman I began the processof reinvigorating the Board to achieve theright blend of expertise, experience andstrong independent scrutiny to guide thedecisions of the Board over managing andgrowing the business in the best interests ofour shareholders.This has been achieved through an orderlysuccession plan and without compromisingthe effectiveness of the Board and itscommittees.Peter Blackburn, Peter Cawdron and ValGooding have all stepped down from theBoard in the last year and I would like tothank each of them for the contributionthey have made to the Group.I am delighted that Sir Ian Robinson, TimParker, Sir James Crosby and Susan Murrayjoined the Board as non-executive directorsduring the last 12 months, with Sir JamesCrosby becoming the senior independentnon-executive director. Together with myother colleagues on the Board, I look forwardto our new directors’ continued contributionto the deliberations of the Board.In June we appointed Mark White as theGroup’s General Counsel and CompanySecretary, a new role within the Group.Mark, a qualified solicitor, has extensiveinternational legal and business experienceand joined us from Wolseley plc.Our peopleOn behalf of the Board, I would like to thankall of our people around the world for theircommitment and efforts in achieving theseresults and for the excellent service theydeliver daily; service that continues to earnthe loyalty of our clients and consumers andreinforces our position as a leader in ourchosen markets.OutlookThe results that we have reported for 2007demonstrate that we have the right strategy,the right leadership and, through MAP, theright focus to capitalise on the considerableopportunities that exist in our chosen markets.I believe that these results and the actionswe are taking give us a solid foundation onwhich to base sustainable performanceimprovements and deliver increasing valueto our shareholders.Sir Roy GardnerChairman28 November 2007Our strategyWe have a very clear and focused strategy,a significant market opportunity and a tightoperating model with much improvedcontrols and governance.Focus on our contractfoodservice businessGrow our supportservices businessCommitted to givingour customerssuperior levelsof serviceFocus on drivingcost efficiencies
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