Business Description

Compass Group Plc provides support services and food services. It serves the following sectors: healthcare, seniors, business, industry, education, defense and offshore, sports and leisure, vending, and defense. It has four segments: North America and Europe, the Rest of the World, and Central Activities. The headquarters of the company is located in Chertsey in the United Kingdom.

Key Financials

Revenue (US$ Mn):

• Compass Group Plc’s annual revenue for 2021 was US$ 22,029 Mn, a -19.14% decrease from 2020
• The annual revenue generated by Compass Group Plc in 2020 was US$ 27,244 Mn
• At a 12.64% increase, Compass Group Plc’s annual revenue of US$ 33,007 Mn was indexed in 2019
• Compass Group Plc generated total revenue of US$ 29,303 Mn in 2018

Operating Income (US$ Mn):

• US$ 869 Mn was Compass Group Plc’s operating income in 2021, a -6.41% decrease from 2020 figures
• Compass Group Plc indexed a -60.07% decrease in operating incomes from 2019, amounting to US$ 928 Mn in 2020
• Compass Group Plc generated an operating income of US$ 2,324 Mn in 2019
• An operating income of US$ 2,099 Mn was indexed by Compass Group Plc in 2018

Net Income (US$ Mn):

• US$ 439 Mn was the net income generated by Compass Group Plc in 2021
• Compass Group Plc’s net income for 2020 was US$ 182 Mn, a -87.64% decrease from 2019
• From 2018’s net incomes, Compass Group Plc registered a 2.58% increase in 2019, amounting to US$ 1,473 Mn
• A net income of US$ 1,436 Mn was generated in 2018 by Compass Group Plc

Operating Margin %:

• Compass Group Plc’s operating margin for 2021 was 4%, a 14.71% increase from 2020
• The operating margin generated by Compass Group Plc in 2020 was 3%
• At a -2.78% decrease, Compass Group Plc’s operating margin of 7% was indexed in 2019
• Compass Group Plc generated an operating margin of 7% in 2018

Gross Margin %:

• 32% was Compass Group Plc’s gross margin in 2021, a -0.63% decrease from 2020 figures
• Compass Group Plc indexed a -3.35% decrease in gross margins from 2019, amounting to 32% in 2020
• Compass Group Plc generated a gross margin of 33% in 2019
• A gross margin of 33% was indexed by Compass Group Plc in 2018

SWOT Analysis

Strengths

Implementation of MAP Framework

The strong focus on its MAP framework has offered continuous growth and efficiency in operations for Compass. The MAP framework focuses on the five key drivers of Compass’ performance, which include client sales and marketing (MAP 1), consumer sales and marketing (MAP 2), cost of food (MAP 3), unit costs (MAP 4), and above unit costs (MAP 5).

The MAP framework allowed the management and staff to benchmark them against group-wide best practices, improve the overall performance and thereby accelerate bottom-line growth. It also helped in providing management and staff with a focused strategy and operating structure to improve its cost composition. In FY2020, Compass delivered new business wins of 5.8%, with strong growth rates in Brazil, Chile, and India.

Solvency position the enhanced financial leverage or solvency position of the company strengthens its ability to borrow and repay the money, which in turn enhances its business operations. The solvency position of the company improved due to limited debt funding than equity. It recorded debt to equity ratio of 0.98 in FY2020, which improved from a debt-to-equity ratio of 1.15 in FY2019.

Furthermore, at the end of FY2020, the company recorded total equity of GBP4,790 million, in comparison with GBP3,360 million at the end of FY2019. A strong solvency position indicates utilization of lower financial leverage and its comparatively higher equity position, underlining the better creditworthiness of the company.

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