Hello, and welcome to Compass Group full year results conference call. Hosting today's call will be Dominic Blakemore, Group Chief Executive Officer. Please note this conference is being recorded and for the duration of the call, your lines will be on listen only. However, you will have the opportunity to ask questions at the end of the call. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero and you will be connected to an operator. I'll now hand you over to your host, Dominic Blakemore, to begin today's conference. Thank you. Thank you. Good morning and thank you for dialing in. You've seen today's results and heard our presentation. We're really, really pleased with what was achieved in 2021, and just as excited by the prospects for 2022. In particular, reinforcing the dividend was a key staging post in our confidence in recovery. Though what I think is most important is that in my 10 years in the business, I've never seen more opportunity, and we've never been stronger or better placed in such an exciting market. What do I mean by that? The pipeline is exceptional. We've reported record wins in all regions. We're converting more first time outsourcing than ever. We're seeing very strong recoveries and positive momentum in our sectors. We've got the digital and climate offers to win. We've the balance sheet to exploit all of these opportunities, and we're the partner of choice for businesses wishing to sell or scale. That all points us to fully restoring our pre-COVID size and shape and growing faster than ever before. As we know, there are short-term challenges, but we have the experience, scale, and means to deal with them. When I step back to take a longer term view, these are tailwinds that will ultimately create more growth opportunity. I truly believe the actions we've taken over the past 18 months have set us up for a period of strong performance in the years ahead. I'm joined by Palmer Brown, our new permanent CFO this morning, now let's open the call to questions. Thank you. Thank you very much. If you would like to ask a question or make a contribution on today's call, please press star one on your telephone keypad now, please. Please ensure your line is unmuted locally, and then you will be introduced into the call. That is star one on your telephone keypad now, please. Okay, our first question comes from Bilal Aziz from UBS. Please go ahead. Good morning, everyone. Thank you for taking my questions, two from my side, please. Firstly, just on the rate of new business wins, and you've clearly grown that by 15% this year. Perhaps what do you think a sustainable win rate is going forward now? One of your competitors was suggesting some normalization of that first time outsourcing trend, but Dominic, it felt that you were perhaps a bit more optimistic on the presentation. Then number two, just on the revenue guidance, I appreciate the uncertainty. The low end still implies a small sequential improvement. Perhaps can you flesh out your expectation by vertical and any comments what you may have seen in October, November to get an idea of the pace of the improvement going forward? Thank you. Yeah. Thanks, Bilal. Why don't I'll take the second question first and then ask Palmer to speak to the rate of new business wins. In terms of our revenue guidance of 20%-25%, that broadly means achieving 90%-95% of 2019 revenues on a full year basis, with an expectation of exiting at or around the 100% level by the fourth quarter. In terms of what we've seen by sector, you know, it. Let me start with the stronger sectors first. Perhaps it's probably worth just illustrating what we're seeing in terms of volume trend, but also in terms of what we're seeing in first time outsourcing trend, and that might go some way to answering your first question, too. If we start with the more defensive sectors, you know, our healthcare sector has performed consistently above 2019 levels. I think it's worth pointing out a couple of things, though. Let's remember that our retail business, which is around 10% of that portfolio, is still some way from recovery. We would expect to see that come back in due course. Separately, it's very clear that there are waiting lists for clinical treatments all around the world. As we talk to our clients in that sector today, we do expect longer hours, additional days and potentially more shifts. Therefore, over time, and particularly once we're through the tricky next few months, we would expect to see higher volumes in that sector. Then finally, we've continued to win new business strongly, and particularly in the Senior Living space. We in the beginnings of the new financial year, we've seen the biggest single first time outsourcing within the senior living space. Often when we see these things happen, like we did with Ascension and Texas A&M, respectively, in the healthcare and education spaces, they tend to put more pressure on the opening up of first time outsourcing. We're really pleased with that. If we move next to defense offshore remote, again, consistently performed above 2019 levels. Again, we've continued to take share in that sector through the pandemic. I think looking forward, a couple of points. Again, you know, the retail levels on site are not back where they were, we would expect those to continue to recover. Secondly, we do expect there to be significant demand for oil, gas, and commodities, as we witness global economic recovery. We are expecting to see higher volumes within that sector again over time. Lastly, there continues to be opportunities for new contract wins. As we see the emergence of hydro, wind farms and so forth, there's new subsectors and opportunity opening up within that market. Thinking now about the sort of three sectors that were a little bit more impacted, let's start with education. We've seen a very strong recovery in education. Again, that may slow a little as we go through the next few months in the Northern Hemisphere winter. Broadly, we've seen a strong return. I think we've got less concerns today about virtual learning, particularly within the higher ed space. It's very clear that both academics and students are keen on the campus experience. In particular, we've seen where students have returned, they are spending more, participating more and more social than ever. I think those are all positives in that sector. Of course, you know, again, learnings of the pandemic have been around the provision of food in the ed space and nutritional quality. Lots of opportunity, we believe, for investment from government there. In the higher ed space, of course, we see institutions that are looking to sort of work their assets more, and therefore we expect roles to be strong. In Sports and Leisure, you've seen a very strong fourth quarter recovery, up to 90-odd% of 2019. At the moment, you've got to remember, not everywhere is yet open. Conference centers aren't open. We're not yet seeing artists, international artists touring globally, and therefore, you know, there are lesser events still at the moment. We do expect all of those to recover. Again, as events go indoors, it may slow a touch over the coming months, but we expect it to be strong beyond the sort of spring and summer of next year. What we're also witnessing in that sector is strong per capita spend. Whilst participation is probably 10% down, we're seeing anywhere between 20%-30% higher levels of spend, which is more than compensating. Then finally in B&I think we have to remember, we need to split that sector into manufacturing and offices. In the manufacturing part of our business, which is half of that 40% of our portfolio, you know, we have continued to see people going into the workplace for obvious reasons. Because of the kind of quite strict COVID protocols that operate, you know, we have seen people participating strongly, and the need for our services is as great as ever. Slightly different picture in the office space, and we've talked about that today. A slower return, particularly in large urban areas, probably around 50% on the average around our world. Lower in some countries, higher in others. We're obviously in a different pattern of days, which we've talked about. Again, we're seeing individuals spend longer in the office, higher participation, higher spend rates, clients willing to offer free food programs as an attraction to the return to office and working with us on providing sort of compelling offers to bring them back in. I think we do believe that once we get beyond again, the spring, we would expect to see a degree more normalization in that sector, maybe a bit trickier through the winter months, as I think we'll all be cautious, won't we? As I talk to a few CEOs and our clients, you know, clearly the mood has moved from we can work virtually to we want to work on a hybrid basis to, you know, we're now concerned about our culture, our productivity, the training of our colleagues and all around well-being. There's definitely a sort of keenness to get back to more presence than there is today. I'm optimistic about what that could look like once we get through these winter months. I can say as well, both within Sports and Leisure and B&I, while highly outsourced sectors, we are still seeing first-time opportunities because of all these pressures we've described. I think momentum is positive. You've seen today us talk about, you know, 20% of our 2019 volume sort of still potentially to come back, as well as that net new business opportunity, which is what gives us the optimism. Over to Palmer for the net new win rates. I think this part of the question really hits to, you know, one of the themes and one of the things we're most excited about, in the business now and then looking ahead. Dominic talked about the opportunity for the recovery in the base business. One of the other things that's quite exciting when it comes to the growth trajectory is the new business opportunity. When you look at the GBP 1 billion of net new business that we mobilized in the year, that's on an annualized basis, the GBP 2.1 billion of new business wins, the record retention rate that we established, that all has us feeling quite excited. I think when you drill down a bit, I think it really speaks to the ongoing opportunity. 50% of those new business wins came from first-time outsourcing. We think that the market dynamics are ripe for that to continue. When you think about the macroeconomic challenges, the things that make things quite difficult for our operators on a daily basis, things like supply chain disruption, labor shortages, inflation, those are things that can be a catalyst for outsourcing. Even if you look at those items and you think they may be temporary, there are other challenges and complexities that are coming online that are catalysts as well. When you look at increased regulation, changing consumer sentiment, heightened expectations when it comes to digital and technology, those are the kind of things that really play to our favor and have us feeling quite comfortable about, you know, how we feel about things going forward. I think when you look at it, the pipeline is quite strong at the moment. We have strongest pipelines ever in North America, the U.K. and Europe. North America pipeline is about GBP 5 billion in total and about GBP 3 billion on a weighted basis. That's with the probability greater than 50%. Europe is about GBP 3 billion total and GBP 700 million on a weighted basis. We've had a great start to the year. We've won two contracts, in excess of GBP 100 million apiece that have yet to be reported. I think when you look at the, you know, the last year, the new business wins and the momentum in this year, combined with the opportunity in the marketplace, it has us feeling quite good about what lies ahead. Exactly where that lands in terms of a normalized number, I think it's a bit too early to tell. I think it's quite reasonable to expect it will be north of where we've been historically. Brilliant. Thank you very much. Okay, thank you. Our next question comes from the line of Jamie Rollo from Morgan Stanley. Please go ahead. Good morning, everyone. Thanks for taking my questions. Three, please, but I think the first you may have just answered. On the GBP 2.1 billion of new business wins, I'm probably reading too much into it, but versus the H1 GBP 1.1 billion annualized, which was 20% higher, and I think on the May call you were talking about maybe 200 basis points of faster net gains, and it's 100 now. Is there a slowdown in the pace of signings in H2? It doesn't sound like it from your comments just then, but keen for any sort of commentary there, and also whether you're still seeing sort of discipline amongst your main competitors on the tendering process. Secondly, it'd be great if you could please give us a sort of steer on the cadence of margins in the year. You know, how much stronger will H2 be than H1? How much of the slowdown in H1 is cost inflation versus mobilization, sticking to those sort of buckets. Finally, on cash returns, anything to stop you instigating a share buyback this year? Thank you. I think I'm gonna hand all three of those over to Palmer. Thanks, Jamie. Sure. Jamie, on your first one, I think you are probably reading a little too much into it. I think when you look at the, you know, the sales aspect, it can be lumpy at times. You know, I just referred to a couple of new deals. Had they closed in, you know, P12 as opposed to the beginning of the year, you know, you wouldn't ask the question at all. So I think it doesn't speak to any overall trend you're seeing in the marketplace. In terms of cadence of margins in the year, you know, we talked a little bit about the sort of the challenges that are happening on an operational basis. You know, when you look at things like the supply chain disruption, the labor shortage, inflation, those are things that we're not sure how long they're gonna be around. They might be around for a while, and I think we've, you know, got to be prepared to deal with it for a while. I think the good thing is we've got the business model and the track record to do just that. I think there are a couple things that will have an impact on the margin specifically. One is the heightened mobilizations that are occurring, the reopening of the base business coupled with the mobilization of the new business wins. As you know, the margin trajectory of contracts increases over the life cycle of the contracts that come online. It dilutes margins, w e absorb the mobilization costs, you know, as they occur. That's having a weighting because that has not yet normalized yet with the heightened activity that's happening. You know, the other thing is there's simply the lag of pricing. We've got the business model to deal with inflation. We've shown the ability to digest it, whether it's on the mitigation side of things or pricing. Pricing has a lag. We saw a pickup in pricing in the second half of last year. We're going through lots of pricing activity at the moment and, you know, something that will continue. I think the combination of the two really points to a heightened margin in the second half. We expect the first quarter, most likely the first half, to be flat-ish with our exit rate of Q4. We will expect that to accelerate to around 7% by the end of the year and then progressing onward toward our historical levels thereafter. You know, with respect to returns to shareholders, you know, you'll recognize the capital allocation framework from before. I think over the last 10 years pre-COVID, we returned a little over GBP 8 billion to shareholders. We fully anticipate that and commencing again, and we think the reinstatement of the ordinary dividend is the first step of that. Jamie, if I might just add to a point of detail there. You talked about sort of a point of higher net new. I think it's slightly above that just on the annualized benefits of the net new we mobilized last year. With the record new business ARO as well, I think that range is probably one to two points. Thank you very much. Thank you. Our next question comes from the line of James Ainley from Citi. Please go ahead. Yeah. Morning, everybody. Some sort of related questions on the margin outlook, please. When you sort of blend together the sort of labor and food cost inflation that you're seeing, what does that imply in terms of an overall kind of cost, potentially cost increase you need to offset? As we then sort of roll forward, and I know you're guiding on absolute level lead margin, but how should we think about the sort of drop-through on the revenue rebuild as it continues to ramp up? I guess the final piece is on sort of labor cost inflation, one of your competitors mentioned they saw, thought they saw some easing in labor cost pressures in North America in recent weeks. Is that something you've seen too? Thank you. Thank you, James. I think I'll hand those questions over to Palmer. Just one comment to make. Of course, in the guidance we've given today, we have reflected our view of both cost inflation, our pricing, and obviously the drop-through on that volume recovery. All of those factors have been taken into account, but a little bit more color from Palmer. I think your first one and your third one are very similar when it comes to margin and the inflation pressures. We're currently seeing labor inflation around 5%, food inflation around 4%. That's what we're experiencing. We think the external market's about 1%-1.5% higher than that. I mean, usually we're a bit better in terms of mitigating on the food side of things, but the supply chain disruption is playing a role in that. For instance, our substitution levels in terms of products are running around 10% at the moment. Historically, they've never been above 2%. That certainly has an impact to, you know, our savings and what we're able to do on the mitigation front. Are we seeing a bit of easing on the, you know, the labor inflation side of things? Perhaps. I think it's a bit early. We've still got a lot of open positions in North America. I mean, we've hired about 240,000 employees globally since the trough of the pandemic, 140,000 in North America. We've got about 35,000 open positions at the moment, and we're doing all kinds of things to try to fill those positions. So I think it's probably a bit early to tell. We certainly think it will subside over time, but exactly what time period remains to be seen. Just in terms of the margin progression and the drop-through, that really depends on the shape of the recovery. The base business coming back online will certainly have a higher drop-through than the new business that's mobilizing. I think you've heard us talk about the significant opportunities we see on both fronts, and that will continue not only for this year, but a bit beyond this year, as well. It's gonna really depend on that mix. Regardless, as those volumes return, you will see the margin progression. That's one of the other reasons why we think the margin progress will be second half weighted. Okay. Very good. Thank you. Thanks, James. Thank you very much. Our next question comes from the line of Vicki Stern from Barclays. Please go ahead. Yeah. Morning. Just firstly, thinking about the incremental returns on the new business, I think you mentioned on the prerecorded call that you're expecting a roughly similar level of CapEx despite this higher growth rate. Can you just help us understand that and sort of why is it? Is it because it's more coming from first-time outsourcing or it's about specific regions or segments that that's falling in? Secondly, you also mentioned this higher participation rates in B&I coming from a few factors. Just sort of how sustainable do you think that is? Is some of it really about companies sort of really trying to get people back into the office with a bit of an incentive, but that could fade in the future? Just generally where that all leaves you versus the 3%-4% potential structural headwind you'd called out for B&I, or for the group from B&I in the future. Then just finally on Europe, really encouraging to see that sort of good portion of the wins are coming from Europe. Obviously, historically, that's a slightly more challenging region for you. Just if you can remind us, what are the reasons why that's been more of a challenge for you? I suppose, do you think you're sort of turning the corner in Europe now? Thanks. Yeah. Thank you, Vicki. Maybe I'll have a go at the first one and then the second, then ask Palmer to give a fresh perspective, I guess, on Europe, which I think could be helpful. Look, first of all, in terms of the returns on new business, yeah, we've said today that, you know, our CapEx and sales ratio is broadly the same as it's been. Of course, in absolute numbers, that's lower off of a suppressed top line and for our higher new business. So it's quite positive. We expect some of the CapEx to come into this financial year as we open that record new business. I think broadly the mix in being more first time has a slightly lower CapEx requirement and is more about driving efficiency and quality in the early years of a first generation contract. I think that opportunity in first time outsourcing is particularly positive for us. You know, perhaps also the weighting would be towards the healthcare and senior living space as well is helpful. I think it's probably worth pointing out finally that, you know, one of the interesting opportunities around how we invest in our clients is to do that through the life of contract, through digital type deployment, through the unattended micro markets, which, you know, will become an investment that we can get returns on, through the life of a contract that is attractive to our clients and, you know, is a different way rather than deploying the CapEx up front. So I think at the moment, you know, we'll stick around that 3.5% level, even with the higher growth levels. I think what's really important is that, you know, the move you've heard from us today is it's an exciting market, we should always buy us for growth. We believe we can generate the returns on it. It would be exciting to see how sustainable levels of growth and our ability to fund CapEx and use CapEx is one of those tools. On the B&I recovery, yeah, look, I think, you know, inevitably there will be, you know, some short-term measures that are taken and, you know, maybe some of that will be free food programs. What we're also hearing is a number of our clients are keen to sustain those programs over time, particularly from a wellbeing standpoint. I think there is a change going on there. You know, again, you know, perhaps higher participation and higher spend will be there for a while, but it'll certainly help compensate until the volumes come back as I expect them to do from, you know, the clients that we are talking to. Net, I think there's a broad change in behavior which will be positive for us within the sector. What does that mean vis-a-vis the 3%-4%? I mean, I think we stand by that now. I think we feel a little bit less risk on the higher ed side. Maybe a fraction more here on B&I, but I think only time will tell. I don't think it's significantly different, and I think we think there's loads of opportunity, particularly when we talk about digital and sustainability and our ability to bring offers to clients that, you know, they can't do themselves and that others are struggling to build the differentiation around. Palmer, you? Yeah. When it comes to Europe, I think it's one of the things we're, you know, we're quite excited about the sort of the positive movement that we've seen and the, I think, the momentum going into this year and what we think can carry forward. I think the biggest thing I've probably seen in Europe is an expansion of the growth mentality. I think that's something that's existed in parts of our business globally, most notably North America, but has not been consistent overall. It's one of the opportunities we see in the rest of the business. I think you're starting to see that take shape in Europe. What I'm really talking about there is a growth mentality throughout the entirety of the organization. It's not just, you know, the sales team working in isolation to try to win new business. It's sales, ops, it's all the departments, it's everyone working together in tandem with that growth mentality. I think once that exists, you really start to see the momentum going forward. You're starting to see that take shape in Europe. We're starting to have a bit different mentality when it comes to the type of people that we want in certain roles, the types of training that we wanna utilize. You're starting to see that take root in some of the results already. You've seen where we've had net new business in Europe is 2.5x what it was in fiscal 2019. You heard me talk about the impressive pipeline that exists right now, and there's every reason to think that that can continue going forward. We're quite positive on Europe. Great. Thanks very much. Thank you. Our next question comes from Richard Clarke from Bernstein. Please go ahead. Hi, good morning. Thanks for taking my questions. First one, three if I may, but first one, I guess throughout this pandemic, you've normally been given quite specific guidance into the next quarter, which you haven't given this time. I'm just wondering whether there's any specific commentary you'd give on Q1. You know, could margins be down from Q4 or can you think you keep them around that sort of high five level? Second question, looks like you're a little bit more positive on support services. Obviously, you've always done those in DOR and healthcare, but it seems like you're getting a little bit more excited about education. Maybe you can just talk about that opportunity. Are you seeing some higher margin opportunities to do support services and education? What do those look like? I think, Palmer, you said that you've won two contracts in 2022, FY 2022 already that are over $100 million in revenue. If I look at your slide 27, it looks like you won no contracts in 2021 that are of that kind of size. Can you maybe talk to are you beginning to see some bigger contracts either way, or am I kind of misreading that slide or your commentary? Are these new wins getting bigger? Well, no, I'll ask Palmer to answer questions one and three, and then I'll come back on support services. Yeah, I think Richard, on the margin profile, we are trying to get away from the quarterly margin progression. I think it was appropriate over the pandemic, but I think at this point where we are in business, I think we can look more towards a traditional view, and that's what you're seeing. You've heard me say, you know, earlier here on the call that we would expect Q1 and probably the first half to be flattish with the exit rate of Q4. Don't necessarily think that will be lower, but we wouldn't expect much margin progression in that first half and much more second half weighted. In terms of the new business wins, those two contracts are over GBP 100 million, not dollars, to start with. You are right when it says that it is bigger than anything we won last year. I would not read too much into that. Again, it's lumpy. Sales can be lumpy. I think the biggest thing is to look at the longer term trends over time and the sort of underlying growth profile, the strength of the pipeline, things of that. I think that's probably the better indicators. Richard, on the support services, I think we've always said where we've got a point of differentiation and where it's embedded in our model, then we are very minded towards support services. You heard in the presentation today, I talked about high single digit growth throughout the pandemic at accretive margins, and the support service business has been good for us through the pandemic. We particularly favor it in healthcare and DOR. Healthcare, we've always talked about the pricing power and the importance of hygiene in that environment, and that doesn't change. In DOR, it's always been about, you know, the challenge is actually mobilizing labor into these locations, and, you know, that's a point of differentiation for us. I think what's happening in education is we're now seeing the importance of hygiene services within that space. We've got a terrific business in the U.S. we acquired a day ago, which has grown very, very attractively throughout that period of time. We may be minded to it again where we believe it's critical and integral to the model, and we have a great opportunity to cross sell. You know, at the moment, we wouldn't see that in the other sectors, right? You know, we're very focused and targeting on where we think we have that point of differentiation. You know, if it can be growth accretive, then at the right margins, then we should absolutely pursue it. Very clear. Thanks very much. Thank you. Now the next question comes from the line of Kean Marden from Jefferies. Please go ahead. Morning, all. I've got three if I can. Just first of all, starting with some of the big pipeline statistics that you provided earlier on, Palmer. So would that suggest if we compare the sort of TCV versus the weighted and the unweighted numbers a win rate in the U.K. of about 25%-30% assumed, but U.S. about 16%. I guess within that is therefore the U.S. one distorted by some of the recent wins I think you referenced that may have not moved down the bid pipeline into the order book yet. I guess more generally, is your win rate higher in the States and have you seen the competitive field narrow a little bit and therefore your win rate percentage may be drifting up? A couple of quick ones. Just secondly, how have you treated the bad debt provisions this year? In common with lots of other companies, you increased provisions a lot in the last fiscal year. Have any of them made their way back to the P&L in the final quarter of this year? Thirdly, I can see that you put some initiatives in place in the U.K., sort of big data collection and interrogation. I guess we think sort of more broadly about that. How does that play out and what sort of economic benefits does it deliver over the next year or two? If there's any sort of particular territory that happens to be particularly sort of best in class or front of the line with those initiatives, which one should we be following? Thank you. Yeah. Thanks, Kean. I'll take the last one and then hand the other two to Palmer. Just with regards to data, we talked about before our E15 business in the U.S., which was established to effectively data mine on clients accounts, and sports and leisure sector, to create the opportunity to drive dynamic pricing, promotions and therefore really focus on what we can do as a partner to our clients on per capita spend. You know, the benefit is weighted to them. We benefit too. It becomes a unique point of opportunity. You know, we're looking to do that in other parts of our world where we have the right clients and opportunities. The U.K. is one where we're focusing on that along with, you know, a significant investment in the digital opportunity. Then on the first two over to Palmer. Yeah, I think the win rate question. I think the best way to look at the win rate is historically, we have been a good bit better in North America than we have elsewhere. One of the things we're seeing is that's improving in both the U.K., Europe and in rest of world. I think it's a good bit of self-help that's happening, a lot of the good training that's taking place, hiring the right people, a bit more of the growth mentality that's there. We are seeing, you know, some improvements in that win rate. I'll say that, on the flip side, I don't wanna see a win rate that's way too high because that implies that maybe we're not going after enough. I do think that there's a right balance to play, that's there. Certainly you're seeing improvements in the sort of overall mentality and the quality of what we're doing in the U.K. and Europe. I think your question on, you know, on the bad debt provision, Kean, is really getting to an overall quality of profits piece. The bad debt provision, yeah, we did establish some provisions at the beginning of the pandemic, which we thought were appropriate for the time. We have not seen the sort of downside really take place on the client side. That did have some movements over this past year. There were some things on the other side as well. When you look at an overall quality of profits perspective, it's almost an exact wash for the entire year. I do think you can look at our underlying operating margin is really reflective of the trading of the business. Thanks, Palmer. That's really helpful. Cheers. Thank you. Our next question comes from Stuart Gordon from Berenberg. Please go ahead. Yeah, good morning. A couple of things that are kind of linked. I think you've spoken historically about the flight to quality, particularly from smaller players. Is that still happening? Could you go into a bit of detail on the sort of mix of the gross wins that you saw this year? Off the back of that, I think because of this flight to quality, you also saw quite a lot of M&A opportunities. If there was nothing significant during 2021, how's the landscape for that looking just now? Thanks. Yeah. Well, I'll take the first point on flight to trust and then have Palmer pick up on M&A. Yeah, on the flight to trust, it absolutely is still happening. I think we probably see that more in the first time outsourcing. It's about, you know, self-operated clients who simply struggle with the operational complexities that are facing them at the moment, whether it's hygiene, it's the variability of volume, it's the difficulty in sourcing labor. It's all of those challenges we've talked about, which, you know, we believe is the driver in that shift. If you look at our mix with first time outsourcing going 30%-50%, on a number which has grown, you know, our wins from our share gains from others remains broadly in line with the historic levels. Clearly within that, I think we, you know, we're still seeing some of the factors that I described, but I think this is really about unlocking that first time outsourcing opportunity. Then M&A, Palmer? Yeah. I think with respect to M&A, it is something that we're, you know, we're still looking at very keenly. If you look back to the two years pre-COVID, we spent about GBP 1 billion on M&A in those two years. We certainly have the wherewithal to do a good bit of M&A, and we have the inclination to do it as well. It's just a matter of finding the right deals. I mean, we've looked at a number of things that we passed on. We've done some smaller deals. We are looking at a number of things at the moment. It's something that we do see as part of our overall strategy. We will be selective and disciplined, just like you've seen from us historically. Very much. Thank you. Thank you. Our next question comes from Jaafar Mestari, from BNP Paribas. Please go ahead. Hi. Morning, everyone. I've got three questions, if that's okay. Firstly, just on the new business signing, how much of this GBP 2.1 billion that you've signed in 2021 would you say has already been opened in 2021 as part of the GBP 7.2? How much would be truly left to roll out? Related to that, could you give us some color on the top ten new wins in North America, just very roughly by sector? Is it broad base, or are you seeing some of the bigs starting to move? I'm thinking, for example, about self-operated university campuses. Some of those you've been going after since 2013. We know that Aramark has won the first ever contract with Purdue University, for example. Are they going towards outsourcing? Just lastly, you seem to be talking, if I piece together your comments about the Q4 2021 exit rates. On the revenue side, it would be at or around 100% of pre-COVID revenue, and on the margin side, it would be around 7%. Do you still think there have been structural cost improvements in the business that could allow you to deliver 7% margins with revenue below pre-COVID levels, or is the picture now that you pretty much need 100% to get to 7%? Yeah. Thank you, Jaafar. Just on the top 10 new business wins, broadly, sort of a third of those would have been in the healthcare and senior living space, a couple within education and a couple each in Sports & Leisure and B&I. I think most positively, it's broad-based across all of the sectors. Healthcare is a great sector for us, and we've done particularly well there. So I think it goes to the, you know, the story of we were delighted with the big wins that we've had previously. That's given us the reference sites and reference accounts to accelerate the first time outsourcing. I think we're seeing that again. I'll just take the Q4 volume and margin points. Look, I think broadly we know in this business we could get to a margin outcome faster if we thought it was necessary. We don't wanna do that. We want to continue to build this business back to the best it can possibly be. As you've heard Palmer say today, whilst at 90% volume, 80% of that is like-for-like, so there's a lot of new in pricing which comes with different margin attributes. So I think we've, you know, we're really pleased with the 7%. We see the ability to get back to pre-COVID margin beyond that, with significant progress again in the following year. You know, we've learned a lot, right? So, you know, it's all about how we deploy those additional efficiencies. You know, right now we're in a period of, you know, incredible reopening and incredible mobilization, which comes with a cost, and, you know, we wanna do that flawlessly to reward our clients, with whom the goodwill has been absolutely outstanding throughout the pandemic. I think it's absolutely critical we don't let any of our clients down through this phase. We know that we can grow the margins up over time beyond that. It's a balance. We would be super excited to really exploit this growth opportunity and then enjoy the margin thereafter. I think when it comes to the new business signings and the mobilization, roughly 40% or so has been mobilized and captured in fiscal 2021. That would be mobilization and ITT within fiscal 2021. The remainder would be a roll into fiscal 2022 and perhaps a little beyond. I do think it's worth pointing out that even though you've seen mobilization, you may not have seen, you know, full population. I think that is a very important factor. You're certainly seeing that play out with some of the fiscal 2019, fiscal 2020 new business wins. I think that's the case in fiscal 2021. That will continue to occur over time. When you look at the base volume, that will return over a number of years. It won't be all this year. It will extend into 2023 certainly. It is something to factor into the math. Thanks. Did you say 40% for you has been mobilized? That's correct. That's correct. Thank you very much. Thanks. Thank you. Just as a reminder, if you would like to ask a question on today's call, please press star one on your telephone keypads now, please. Our next question comes from Joe Thomas from HSBC. Please go ahead. Good morning. A couple of questions, please. Firstly, you were talking about the ESG and decarbonization. I just wonder what that's practically involving in terms of product sourcing, etc, and what the margin implications of that might be, whether it extends the recovery further out. Also, just back to the point on transaction values being higher, it sounds as though that's being driven by some of the free food that's being given out in offices at the moment. Is there anything, aside from that, I'm just wondering what sort of benefit that technology brings in the long term. Sorry, finally, if I may, what is the status now with respect to contract renegotiations, things that you previously had on sort of temporary measures? I know, have they all been moved off those temporary measures now? Thanks, Joe. Just taking the point on transaction values. I don't think we should read into it that this is about free food. I think it's about a number of factors. I think consumers are spending more. I think the fact that we are cashless creates less price sensitivity. And I think there's a mood to enjoy the moment with colleagues or friends, whether it's in the office or the sports and leisure sector. So I think there's a number of positives that are driving that uplift in transaction values. Just on ESG and decarbonization, I mean, we address this through a number of measures. Of course, we are consolidating the commitments of our suppliers, who are also seeking to achieve their own net zero targets. That's highly beneficial. A lot of what we're doing is looking at menu choices and how we nudge consumers to different choices. Some of those means less animal protein and potentially less cost as opposed to it being more costly sourcing. There may be an element of that in it at some point as we look at regenerative agriculture in the longer term. We also think there's an opportunity for premiumization of an offer where it's a really critical requirement for our clients and their colleagues. We know that a lot of colleagues want to work for companies with the right values, and this is a very visible show of values that we can help our clients with. If in the short term before supply chains really address sort of alternative means, that means a little bit of pricing. We think that is something that we can work with our clients on. Look, I'm not sure it has tremendous margin implications in the short term, but we're working through it all. Just as an example, when we catered COP, we had the, you know, the low carbon menus with the carbon ratings. We're actually deploying that at 300 sites already in the U.K. It is scaling up at some pace, and it's a real point of interest for a lot of our customers. With respect to the contract negotiations, don' t think of this as, you know, simple conversations that took place, you know, at the beginning of COVID and then are yet to take place at another point in time, but rather about ongoing dialogue. That's the way that most of these work. It's an ongoing dialogue with the clients about the offers that they want to have, about their population levels, and the like. What you're seeing take place is that a number of these are shifting back and forth over time, but it will be a function of a number of variables. We fully expect that to continue over the course of a year. It's not like we have any definitive timeframe on when that will be complete, but these are ongoing conversations. Thank you. Our next question comes from Neil Tyler from Redburn p lease go ahead. Good morning. Two follow-up questions from me, please. Firstly, so going back to your point on free food and the offering there, can you explain whether that represents a meaningful proportion of the B&I or potentially the B&I revenues at the moment? Whether there would be any meaningful margin implication of that proportion growing, where you're essentially billing the customer as opposed to the consumer? That's the first question. The other one is around M&A, just picking up on the comments you made earlier around the pipeline. Is it the case that you know, the pipeline of opportunities still exists, but the prices have risen, the multiples have risen? Or you know, that's perhaps slowing down the level of activity there? You know, is that not yet reflected in the way that you're viewing the opportunities there? Thank you. Yeah. Thanks, Neil. Just on the free food points, I mean, the example I would give is within one of our B&I sectors, around 40% of our clients are offering free food programs. So that would be, you know, just to dimensionalize it, sort of 15% of our U.K. business. So it is significant for that subsector. Obviously, behaviors are different in different sectors, but, you know, an interesting development in B&I. Broadly, you know, we work with our clients to ensure that we're getting a, you know, a fair margin in line with our expectations and that it's not punitively costly for them. It's really important that it's fair on both sides and, you know, it's encouraging them to take this step, which we think is a great way of us building, you know, our position on site with all of the employees. Palmer just on M&A. Just a little more on the free food margin impact. Those are gonna mostly be cost reimbursable type of contracts that are there. Those clients would really be on the same type of contract structures already pre-COVID. The implications on margin really aren't significant. Ultimately, it's the client making that decision on what they want to spend. I think the key for us is that we need to operate that with a P&L mentality so that we treat the client's dollars like our dollars. With respect to M&A, we are seeing some valuations that are really consistent with what we saw pre-COVID. I think there's a bit of sort of mental expectation in a lot of owners' minds that the business ultimate value really hasn't changed even though the current trading has. When we get into conversations about, you know, how to structure deals, it really comes down to the underwriting risk of the recovery and where that lies. We, you know, we're willing to take that on in certain places where, you know, we wanna share that a little bit more. But we really aren't seeing any significant, you know, changes in value. I'll tell you, it's not necessarily the value that's kept us from doing the deals. It's just a matter of the right deals that really work for us. Got it. Thank you. Very clear. Thank you very much. Our final question comes from the line of Tim Barrett from Numis. Please go ahead. Hi. Morning, everyone. I have two things left, please. One, we haven't really talked much about the retention rate. As you said, it's a good level. Can you talk a bit about non-retain business and any constituents that might be a bit different post-COVID? Secondly, I just wanted to understand the dividend policy. Is the intention to go to 50% payout with 1/3, 2/3 split as you had before? Thanks very much. I think the answer on dividend is yes. On the retention rate, Tim, you know, we're really pleased that it's continued to improve. You know, we're already at very high levels. We've continued to nudge it on, and we would hope to continue to do so. You know, we used the pandemic as an opportunity to, you know, lock up a few contracts for longer. We always sought to term out sort of the bigger contracts wherever we can. Hopefully, that will give us a bit of benefit as we look forward. In terms of, you know, what we've not held on to, I don't think, you know, the reasons have changed. You know, we're just very pleased with the improving retention rate. I'm really pleased as well that it's across all three regions. I think that's really important for us to recognize. Is there anything to call out in terms of customers, going out of business or retrenching? No. Do you know what? I think it's been one of the positive surprises for us of how you know our client base has been able to withstand the pandemic. I mean, clearly, you know, I think we typically trade you know in B&I with resilient blue chips and you know they've been strong through this. You know, that hasn't been a feature as it were. Got it. I do think. Thank you very much. I do think you know, an interesting anomaly there is, you know, within the retention rate, it does pick up any, what we call, white losses. So that would be, you know, businesses going out of business or being acquired by other businesses. I mean, we have seen a bit of that this happening. I think the good thing is with the, you know, the scale that we have in our clientele, we've been net winners when it comes to that kind of thing. It also would pick up remote site businesses that would run their, you know, life, their natural life. So all of those white losses would be picked up in the retention rate as well. Thank you. Thanks, Tim. Okay, I will hand you back over to your hosts. Thank you. Just thank you all for joining us today and, thanks for the questions, and we'll look forward to speaking to you in February. Thank you very much for joining today's call. You may now disconnect your handsets.