Compass North America is a division of London-based Compass Group PLC. It accounted for 44% of the parent company's revenues in fiscal 2009, a four percent increase from 2008 as the company's European operations faltered while the North American unit benefited from a strong focus on driving efficiencies and winning new business. It grew 3.6% in constant currency terms while Europe (0.1%) and UK/Ireland (-5%) stagnated. In the first half of fiscal 2010, revenues and profit margin were both on pace to surpass 2009.
The growth is led by the Education, Healthcare and Recreation segments while B&I has been challenged by headcount drops and reductions in catering expenditures. The gap is illustrated by the fact that B&I dropped from 37% of unit revenues in fiscal 2009 to 29% in the first half of 2010.
Nevertheless, a strong focus on value and grab-and-go offerings, combined with aggressive promotion and tight cost management boosted B&I margin growth, while contract wins like the World Bank Group, Wells Fargo, Visa, Citizens Bank and Pfizer Conference Solutions have added needed volume. Also making an impact was the acquisition deal in early 2009 for B&I support services specialist Kimco, which allows the company to offer corporate clients a wider range of support services.
Expanded service offerings, thanks to the integration of recent acquisitions Professional Services and Medi-Dyn into the Crothall division, have also boosted healthcare revenues. Recent contract additions in this sector include Mount Sinai Hospital in New York, Staten Island University Hospital, the Kaiser Foundation Hospitals in California and the Miami Jewish Health System, where the services will include senior dining.
The Education segment is benefitting from increases in board plan participation and in enrollment as well as strong retention rates. New clients include the University of North Carolina-Greensboro, Duval County (FL) Public Schools, the University of Pennsylvania and Bowling Green (OH) State University.
In the Sports & Recreation area, Compass continues to add accounts, especially through its Levy Restaurants unit. Additions over the past year include the Palace of Auburn Hills near Detroit, the United Center in Chicago, Philips Arena in Atlanta, Arco Arena in Sacramento and the 2010 U.S. Open Golf Championship.
A year ago, Compass acquired Lackmann Culinary Services, an East Coast regional contractor (#17 on the 2009 Top 50) with a strong concentration in the B&I and college segments. Earlier this year it added SSC (Southeast Service Corp.), a provider of cleaning and maintenance services to the K-12, college and B&I segments with annual sales of $150 million.
Major Segments Served:
B&I (37%), Education (22%), Healthcare (26%), Recreation (12%), Other (3%)
No. of Contracts