Executives: Richard Cousins - Group Chief Executive Johnny Thomson - Group Finance

Director
Analysts: Tim Ramskill - Credit Suisse Jamie Rollo - Morgan Stanley Angus Tweedie - Bank of America Jarrod Castle - UBS Vicki Stern - Barclays Richard Clark - Bernstein David Phillips - Redburn Erik Karlsson - Bodenholm Capital

Richard Cousins: Good morning, ladies and gentlemen, and thank you for joining us today. Today, we have the usual agenda, and there’ll plenty of time for question and answers at the end. Before Johnny takes you through the financial detail, I’d like to begin by making a few comments on the highlights of this half year. Compass has delivered another good set of results. Organic revenue grew by 3.6%, in line with our expectations.

We’re confident that this would accelerate in the second half of the year. Our operating margin improved by 20 basis points, reflecting the generation of efficiencies in the business and the absence of restructuring costs. Free cash flow was up by 27% due to good cash conversion and FX. EPS on a reported basis was up by 23%, but more honestly, constant currency earnings per share were up by 4.1%, and we’re proposing to increase the interim dividend by 5.7%. Finally and importantly, today, we announced a £1 billion special dividend as we continue to execute our policy of returning surplus cash to shareholders.

And on that positive note, I’d like to hand over to Johnny.

Johnny Thomson: Good morning, everyone. So let’s start with revenue. I’m working from left to right. Sterling’s weakness against all of our major trading currencies benefited revenues by almost £1.6 billion, which gives us a rebased first half 2016.

North America grew organic revenue by 7.1%. New business wins were very good, particularly in our core B&I sectors, Canteen and Healthcare. Retention remained excellent at 96.5%. Like for like revenues reflected modest price increases and some volume growth in Sports & Leisure, partly offset by continued weakness in our commodity-related business. Revenue in Europe grew by 1.6% in the half.

New business wins improved in the U.K. following a post Brexit pause, and these contracts are now mobilizing as expected. We continue to work on retention, and like for like revenues were up slightly due to some price increases and flat volumes. The timing of Easter also benefited growth in the first half. Rest of World, excluding Offshore & Remote, grew by 2.6%.

Good performances in New Zealand, India, China and Spanish speaking Latin America were partly offset by continued weakness in Brazil. Our Offshore & Remote business contracted by 20% as expected due to the impact of construction cycle in Australia and continued weakness in our commodity related businesses around the region. Taking all of these movements together, group organic revenue grew by 3.6%. The number of working days has affected our organic revenue growth in quarter two. Adjusting for the benefit of Easter and the impact of the 2016 leap year, we estimate that our underlying growth improved from 2.8% in quarter 1 to 3.8% in quarter two.

The timing of Easter will dampen our reported quarter three growth by a little more than 1%. However, the underlying trends will continue to be positive as growth accelerates in the second half, and we remain confident about our full year growth expectations. Starting on the left of the chart, FX was a £126 million benefit to operating profit. The strong performance in North America and continued improvement in Europe increased operating profit by £ 38 million and £ 5 million, respectively. And Rest of World, a decline of £ 10 million in Australia offset a £ 2 million improvement elsewhere.

And finally, the absence of restructuring costs added £ 9 million to operating profit. So taking all these movements together, the group’s constant currency operating profit grew by 5.2%. In North America, margins remained strong at 8.5%. The business generated efficiencies, which together with price increases, offset labor headwinds, the impact of weak volumes in oil and gas and the dilutive impact of the recently acquired CulinArt business. In Europe, we’re starting to see some benefits from the business unit reorganization, and this together with ongoing pricing and efficiencies, more than offset pressures from labor inflation.

Margins improved by 10 basis points to 7.5%. Margins in Rest of World reduced by 10 basis points, due entirely to Australia. Excluding Australia, we’re pleased that margins improved as the benefits of last year’s restructuring more than offset the impact of weak volumes in Brazil and in our Offshore & Remote sector. The absence of restructuring costs also benefited margins this year. So overall, the group’s margin improved by 20 basis points in the half.

As you know, FX has a translation impact only for Compass. Currency movements due to the weakening of sterling against most of our major currencies continued to benefit operating profit. In the first half, this totaled £ 126 million. If current spot rates continue through 2017, FX would benefit full year 2016 operating profit by around £ 168 million. To give you a sensitivity, a 1% move in sterling against all of our trading currencies would change full year 2016 operating profit by around £14 million.

And further details regarding FX sensitivities can be found in the appendices to the presentation. Moving on now to the bottom half of the income statement. Net finance costs were £ 52 million, slightly above last year due to FX. We expect net finance costs for the full year to be around £ 110 million, reflecting additional debt to fund the special dividend for around 1 quarter as well as the impact of continued weakness on, of sterling on our foreign currency borrowings. The underlying tax rate was slightly higher than last year at 25.5% due to changes in international tax rules as part of the OECD BEPS project, and we expect the same rates for the full year.

The tax environment remains uncertain, particularly proposed changes in legislation in the U.S. And we will update you on our expectations for future tax rates at the appropriate time. Constant currency EPS grew by 4.1%. We’re proposing to increase the half year dividend by 5.7%, slightly more than constant currency earnings growth, in recognition of the fact that our growth this year is second half weighted. Moving on now to the cash flow.

Depreciation and amortization increased to £ 239 million due to our investment in CapEx and currency movements. Gross capital expenditure was 2.9% of revenues, and we expect CapEx for the full year to be around the same level. Our working capital was a £78 million outflow, reflecting the seasonality of the business. As a result, operating cash grew by 24% and operating cash conversion was 80%]. Post employment benefits were £5 million.

Last year, we completed the triannual valuation of the U.K. defined benefit plan, which is now in a funding surplus. We have agreed with the trustees to stop the cash contributions to that plan. Total group payments to pension plans are, therefore, expected to be around £20 million per year going forward. The cash tax rates at 19% was relatively low, as usual, due to phasing.

For the full year, we expect the rate to be between 20% and 23%. Our free cash flow grew by 27%, of which around 18% was currency. I am pleased that we’ve continued to make positive progress in our cash performance this year. And looking now at the balance sheet. Again, starting on the left of the chart, opening net debt was 2.9 billion and the business generated cash of £827 million before CapEx.

We reinvested £371 million to support our long term growth, and we returned £365 million to shareholders. FX and other items were £83 million. And so on 31st of March 2017, net debt to EBITDA was 1.4 times. Our priorities for uses of cash are unchanged. We continue to be excited by the structural growth opportunity in our sector, and invest in the business via CapEx and M&A to support our long term growth ambitions.

We’re also committed to returning significant cash to shareholders through a policy of growing dividends in line with constant currency earnings. We will maintain a strong investment grade credit rating, and we will continue to target a full year net debt-to-EBITDA ratio of around 1.5 times. We will do this by returning surplus cash to shareholders through share buybacks or special dividends, which takes me to today’s announcement. The business continues to generate significant amounts of cash. We expect both M&A and share buybacks to be modest in 2017.

As a result, our net debt-to-EBITDA ratio at the end of 2017 was on track to form meaningfully below 1.5 times. We, therefore, propose to return £1 billion to shareholders by way of a special dividend. Post dividend, our deleveraging profile is such that we are currently expecting net debt-to-EBITDA for the full year to be around 1.7 times, before it returns back to around 1.5 times during 2018. We will pause the share buyback for now. Given the size of the return, it will be accompanied by shared consolidation to minimize the impact on the share price.

The special dividend is subject to shareholder approval at a General Meeting to be held on the 7th of June and is expected to be paid on the 17th of July. In order to fund the special dividend, we have a committed bank facility now in place and expect to replace this by accessing capital markets in the coming months, subject, of course, to market conditions. More details have been included in the appendices to this presentation, and will also be presented in the circular to be published on 15th of May. As usual, I’ve pulled together some of the key 2017 full year assumptions on one page as a reference for your modeling. In conclusion, we’re pleased with the first half.

The business is performing as expected, and we continue to see acceleration in our organic growth trends to generate significant amounts of cash, to invest in the business, and finally, to return cash to shareholders. Thank you. Back to you, Richard.

Richard Cousins: Thanks, Johnny. New business wins were 8.1%, driven by strong performances in most countries.

Lost business was around 5.7%, and like-for-like revenue grew by 1.2% with sensible price increases around the world, partly offset by weak volumes in our commodity-related business and in Brazil. As a result, organic revenue growth for the first half of the year was 3.6%. We remain obsessed with margins. The business generated 10 basis points of margins improvement as we successfully offset headwinds through efficiencies, overhead leverage and pricing. The absence of restructuring costs this year increased margins by a further 10 basis points.

North America, the group’s core growth engine, continues to perform exceptionally well. New business wins are strong, retention is high and like-for-likes are good. Efficiencies are offsetting labor pressures, and our margins remain strong at 8.5%. The North American market is so dynamic and vast. The future growth prospects are very exciting.

Our strategy of subsectorization is delivered growth right across the business except in Offshore & Remote. Unsurprisingly, Healthcare and Education are vibrant sectors, given the low rate of outsourcing. Interestingly, our supposedly mature B&I business is performing very well with an increasing proportion of new wins coming from startups and new locations with existing clients. Performance in the Rest of World is a bit mixed. Excluding Offshore & Remote, revenue was up by 2.6%, driven by strong performances in New Zealand, India, China, Spanish-speaking Latin America and the non-commodity-related side of our Australian business.

I remain excited about this region. We believe it will return to reasonable growth in 2018 and will accelerate strongly from that base. We believe we’ve turned a corner in our commodity-related business. While those market conditions remain volatile and 2018 might still be tough, the drag on growth will reduce in the second half of this year as prior year comparators become easier. We’re pleased with our progress in Europe.

The business is performing as expected, and the acceleration we saw in the second quarter is set to continue into the second half. I’m particularly excited about the trends we’re seeing in the U.K., where the head, where the win rate is improving and contracts are mobilizing as planned. Overall, margins improved nicely as the benefits from the creation of the 9 business units starts to come through. We’ve fully integrated functional and leadership teams such as finance, IT and HR, which has improved our overhead leverage. As this new operating structure becomes embedded, we’ll improve our food procurement, drive additional efficiencies and use the scale to drive revenue growth.

Globally, our strategy is clear and unchanged. Food is our core competence, and we continue to adopt an incremental approach to support services. Our priority is organic growth, and we will only do bolt on M&A if there are attractive targets. Finally, our focus is on execution and leveraging the cost advantage of our scale with an emphasis on quality and innovation. As, we’re putting more and more resource behind innovation.

Our business model remains clear and unchanged. Top of our agenda is organic growth, driving new business and retention and consumer sales. Our obsession with cost is never ending. There is still considerable opportunity to improve margins. We invest as required to support growth and create value for our shareholders by delivering a balanced package of EPS growth, a strong and progressive dividend and return of surplus capital.

It’s a proven and sustainable model. Johnny has already taken you through the details of the £1 billion special dividend. Since 2006, we have returned £9 billion to shareholders. This is the consistency underperforming this graph, which is really pleasing. And so to summarize, it’s been another good 6 months; the business is performing as expected; North America is in great shape; Rest of the World will improve in H2 as the drive from commodities reduces; and the acceleration in Europe is encouraging.

Our expectations for 2017 are positive and unchanged, with growth improving as the year unfolds. We remain focused on strong growth with discipline and continue to return surplus cash to shareholders. Thank you for your time and attention. We’ll now take questions in the normal way. And if you would wait for the microphone, and please state your name and organization.

Okay, who is going to start first? Tim, over here. Q -

Tim Ramskill: Tim Ramskill from Credit Suisse. Rich, when you look at the commodity business down 20%, can you just give us some sense as to what proportion of that would have impacted like for like? And to what extent it sort of fits into this sort of lost business component? And then, maybe you can talk through the margin delivery. Now I think, probably most of us were expecting a little bit more margin pressure in Rest of the World in the first half and it was fairly limited. So how have you manage to sort of achieve that, please?

Richard Cousins: Yes, yes.

I mean, margins, is just hard work. I think, our businesses right across the world have done really well, particularly Australia. We’ve taken out a huge amount of cost. Johnny, do you want to talk about the trends?

Johnny Thomson: Normally, our like-for-likes, Tim, on average across the group would be about 2% for the group. In the first half, it’s been just touch over 1%.

And of course, the main delta there is volumes in our commodity business. To give you some sense, the fall in volumes has been around 7% in the commodity business in the Rest of the World, which is mainly driven by Australia. Of course, even outside of the commodity business, we also have the impacts of challenging volumes in Brazil too. So that just means there are like-for-likes, as a group, we’re just a fraction lower than par.

Richard Cousins: In the front, Jamie, there?

Jamie Rollo: Jamie Rollo from Morgan Stanley.

I was just wondering whether you could help us understand how the Board determines whether to return the surplus cash through buybacks, which you’ve purposely slowed or the special dividend. And whether we should read anything on the company’s view on the value of the shares?

Richard Cousins: It’s a nice problem, isn’t it? And we wrestle with it all the time. We are committed to having a balanced balance sheet, and we think net debt-to-EBITDA of 1.5 times represents that. On the one hand, we’re cautious people, and we think our clients expect us to have a serious professional balance sheet. On the other hand, this is such a cash generative business, we can obviously have a little bit of debt there.

So we review it all the time. As you rightly say, we’ve done a mixture over the past years of share buybacks. And special, we thought given that the buybacks have slowed over the last few months, it was,- and as Johnny said in his presentation, the cash was coming through very strongly, we were heading for a net debt-to-EBITDA well below 1.5 times. We thought it was time to up the debt and hence the special.

Angus Tweedie: It’s Angus Tweedie from Bank of America.

Just perhaps more questions on balance sheet and specials. Could you remind us in terms of what sort of headroom you have in terms of net debt and EBITDA, if you want to pay a big cash return before pull deleveraging. And also in terms of the sort of M&A environment, clearly, the spend hasn’t been huge in the first half...

Richard Cousins: Sorry, could you clarify your first question?

Johnny Thomson: If we want to? We’ve just announced it 10 minutes ago, right?

Angus Tweedie: But for example, you’re running...

Richard Cousins: We won’t do another one, not this week.

Angus Tweedie: But if you are running at 1.7 times, you’re, clearly, over your guidance, not massively. But I mean, how much room do you have to be flexible around that?

Johnny Thomson: Well, we target a strong investment-grade credit rating. And clearly, at 1.5 times, we still have some headroom within that. As Richard said, we’re comfortable at 1.5 times. Roughly, the mathematics of it works at about 0.1times is about £ 200 million of that order of magnitude.

So we’re going to touch up a bit above our target rate at the full year. But I don’t think it’s significant. And it will come back down to 1.5 times, as I said in the presentation, pretty quickly.

Angus Tweedie: And I was just going to say in terms of the sizable cash return and the rather limited M&A spend in the first half, I mean, is it a very tough environment to find acquisitions at the moment?

Richard Cousins: Yes, that’s an interesting one. We remain interested in doing acquisitions.

But we’re not going to insult your intelligence and imply that we’re doing lots, because we really haven’t over the last 3 or 4 years. But I do think there is a year out there. I don’t whether it’s 1 year out or 3 years out, when we might do a few hundred million. And so we do need the flexibility in the system. At the moment, I think the volume is quite low, as it has been for the last few years.

But we do like the concept of bolt-ons, but we’re not going to do them at any price.

Jarrod Castle: It’s Jarrod Castle from UBS. May be one for Johnny. I appreciate, you can’t really say anything about the U.S. tax rate at the moment, but is it possible to give us, maybe, a bit of color on the effective tax rate and cash tax rates in the U.S.?

Johnny Thomson: Yes, I don’t think I want to talk about specific numbers, as you can understand.

What I will say is, if you look at the proposals that are out there, clearly, if a headline rate were to come down to a federal tax of 15%, then that’s on face value would have a significant benefit to our U.S. and our group tax rate, obviously. But I think what’s imperative and important to understand is the fact that it has to be funded somehow. And of course, we enjoy deductions on our taxable profit in the U.S., which we would expect to be addressed as well. And therefore, as it stands at the moment, I couldn’t really comment on whether that will be a net positive or a net negative.

Jarrod Castle: And you don’t disclose your effective tax rates in the U.S., separately. Yes.

Richard Cousins: Okay, Vicki.

Vicki Stern: It’s Vicki Stern from Barclays. On Europe, I think, your medium term organic growth guidance is somewhere between 2% to 4%.

It sounds like you might be ramping up to somewhere closer to the higher end of that by Q4, at least. Just, how should we think about the sustainability of that kind of pace of growth in Europe?

Richard Cousins: Yes, I think, we will spot in Q4, as you rightly say, the higher end of that, particularly maybe due to the U.K., which does look quite strong. I think in the medium term, we would stick with the 2% to 4% range. I think, I would do feel uncomfortable about you writing down 4% of sustainable. I don’t think that’s fair.

I think 2%, 3%, 4% is the right medium term range. I mean, we see excellent growth in U.K. and a great pipeline. Turkey, despite the political issues, is performing well for us. And the continent of Europe is patchy, as you would expect.

We’ve seen a nice recovery in Spain. France remains challenging. So I think we need to be balanced.

Vicki Stern: Just picking sort of pipeline, given what you can see in terms of signings and the potential openings, how do you think about 2018, potentially?

Richard Cousins: Well, I guess, Q4 inevitably rolls into Q1, doesn’t it, and Q2, but then in the second half of next year, obviously, lapping those comparators. So, I think, we might be in the middle of that range, 2% to 4% next year, but slightly above it in Q4 this year.

Okay, one in the middle there. Yes?

Richard Clarke: Richard Clark from Bernstein. Just a couple of questions on the Rest of the World ex-extractive industries. I mean, you mentioned Brazil, but the total number is slowed from, I think, 3.6% organic growth to 2.1%, excluding the Easter impact. Is that all Brazil, is Brazil slowing down or is there anything else going on? And you mentioned specifically in the release, India and China as exciting opportunities.

How do you go about growing in those? What are the structurally -- the challenges of getting into those markets and which parts is it, Healthcare, Education, B&I? Where are the excitement -- exciting opportunities there?

Richard Cousins: Yes, interesting question. So, yes, Brazil does remain tough. I think, it will begin to turn in the next few months, but it has been difficult for us. So we’re excited about progress in a number of countries. We mentioned Spanish speaking Latin America is by and large doing well for us.

And you talk about India and China, now we have to be honest and say, from a fairly small base. But in China, we’re growing at nicely over 10%, and in India over 20%, largely through Business and Industry, where we do address Healthcare and Education, certainly, in the private sector, we think that’s very important. But we see excellent growth across all of those. It’s all about getting the right management, transferring the best practice, working hard, no rocket science to what we do. We’re just waiting really for scale.

And I am really delighted the fact that we’re now making a little bit of money in China. Truth is we could make more, but we’ve decided to reinvest it into SG&A or MAP 5, as we call it, to grow the business. And I think we’ll make, we’ll breakeven in India probably next year. Once again, we will reinvest most of that profit thereafter to support the growth. So it’s not going to come through the numbers in the next year or 2.

But in 4 or 5 years, I think India could be quite exciting for Compass.

Richard Clarke: Why is the public sector so unattractive in those countries?

Richard Cousins: We think from a governance point of view, it’s wiser to stick with big corporates and B&I and private health care and private education. A question over there.

David Phillips: David Phillips from Redburn. Could you give me the retention rate by region, please?

Richard Cousins: Do you want it by country and by week as well?

David Phillips: Just the big 3.

Thank you.

Richard Cousins: Johnny?

Johnny Thomson: Well, I just said in my presentation, the retention rates in North America are fantastic, 96.5%. It has been around that mark for some time now, so that’s a bedrock to their success and growth. Europe is around 92% to 93%, about 92.5% at the moment. Some contract exits, particularly in the oil and gas, extractive industries happening...

Richard Cousins: Retention rate, we penalize ourselves for losses that are not our fault -- closures in effect.

Johnny Thomson: Right, but there’s still some room for us to edge forward on our retention rates in Europe. And in the Rest of the World, our retention rates are around 90%. Now structurally, they are and will always be a fraction lower and, probably, a little lower than we would expect right now because again of the extractive industry. So we’d expect that to tick up as Rest of the World starts to grow.

Richard Cousins: Biggest, one of the biggest engines of our revenue improvement in Rest of the World over the next 2 years will be those losses, those closures, sorry,- those closures falling away.

David Phillips: And presumably within the Rest of World, there is some, might actually be some deliberate attrition on your part where you just said to the customer we’re not playing at that level.

Richard Cousins: One or 2 of those.

David Phillips: And just on the U.K. in December, you were talking about the ramp-up likely happening post-Q2.

Was any of that pulled forward, or is that something that is happening now and will benefit Q3 and Q4?

Richard Cousins: It is happening now. Q3 will be stronger and Q4 materially stronger, again. I suppose with hindsight, I was surprised by the way the win rate slowed or the volume of contracts we were asked to bid for slowed so massively in the spring and summer of 2016, presumably because of Brexit, although I don’t really understand why there should be a link. What we’ve seen over the last 6 months is an acceleration in that win rate. So I think as you’ve already touched on, the second half of this year and next looks pretty good.

Come back to you in a moment, Tim. Any other questions?

Tim Ramskill: Just a couple of U.S. related questions. I see in your segmentation, you’ve sort of, I think, you’ve added colors for the first time, so we can see which business are where. But a couple of education businesses are leading there.

So I just wondered what’s sort of driving that very strong performance? And then margin is flattish in the first half. I know that you’ve been asked a dozen times about labor inflation in the U.S. But is that in any way curtailing your margin progress?

Richard Cousins: No, I mean, we got a very simple model in the U.S., whereby if we can maintain growth, as we believe we can, at strong levels, maybe not always in the 7%, 8% range that we’ve done in the last couple of years, but certainly in the 6% plus, plus range, then the amount of margin expansion will be small. Underlying the line, we will get a little bit of expansion. CulinArt, obviously, has pulled us down a little bit in this half.

If revenues were to be less spectacular, which I’m not predicting by the way, I’m very bullish on the U.S., then I think we would expect to see more margin expansion so this will offset each other. Labor is an issue in the U.S., as it is in a number of other countries, and it does need to be managed. Sorry, was there another question?

Tim Ramskill: It was on Education?

Richard Cousins: On Education, yes. Yes, Education looks good both in U.S. and indeed in the U.K.

as well. In the U.S., we’ve created a separate subsector for independent schools, and we seem to be rewarded with that. That’s growing nicely. K-12, as they call it, is strong. Higher Ed, a little less so, but still reasonable.

I mean, what excites me about that U.S. chart, other than oil and gas, is the consistency of it. We’re growing at really 5% to 9% in basically every subsector. Whilst we take a pause in the hall, are there any questions on the line?

Operator: [Operator Instructions] We have a question coming from the line of Erik Karlsson with Bodenholm Capital. Please go ahead.

Your line is open.

Erik Karlsson: Could you just help us understand how the pipeline for new business wins is looking in your major geographies, so North America and Europe, please?

Richard Cousins: John, do you want to touch on that?

Johnny Thomson: Yes. Talking about North America, I think we remain very positive about the pipeline in North America. We were reviewing it with the team recently, and it looks as strong as it’s ever been. What’s encouraging, and we say this throughout our conversations, is that it’s very much broad based across all of our key sectors.

And it’s also got a very healthy split between first time outsourcing as well as second time and so on. So the pipeline still looks very, very encouraging in North America. I think in Europe, we touched on it before. The U.K. pipeline is very exciting.

We’ve won a lot of good business and that’s coming through. And as to the Rest of the World, while the environment that we’re in sometimes helps, of course, outsourcing too. So we still do see some good pipelines in the Rest of the World too. Overall, I’d say, we’re encouraged by the new business pipeline as a group.

Operator: No further questions in queue for the moment.

Richard Cousins: We got one back in the hall here.

Unidentified Analyst: Richard, you mentioned innovation and investment there. Can you give some color in terms of some of the areas for ‘17 and ‘18?

Richard Cousins: Yes, we had a slide on it and took it out because we felt it didn’t really do justice to the amount of work that’s going on. So some of the innovation is just spread in the basic best practice, and I’ve been saying that for years, haven’t I?. I mean, the more we run this business, the more opportunity we see to just do that.

A lot of innovation is going into MAP 2, how we present to the consumer, how we up sell, how we incent our staff, how we use technology to communicate with consumers, either in the building or on the campus. In MAP 3, the U.S. food [Indiscernible] model, we’ve implemented that in the U.K. and Holland. And we’re looking at doing that in a number of other European countries, and maybe, one or two in the Rest of the World.

And MAP 4, the Americans have invested heavily in how we recruit people. We have to recruit nearly 100,000 people a year in the U.S. alone. And we’re now -- to about two thirds of that is online. We did some work, some old fashioned [Indiscernible] almost, and found that our unit managers in the U.S.

were spending a huge amount of their time recruiting. And now 2/3 of that is online and that frees them up to focus more on the consumer and MAP 2 and so on. And we think that’s the right way to go. We’re also investing in systems on labor scheduling, because we think there are some labor inflation issues out in the world and we need to be more productive. And of course, MAP 5, you have to invest all the time, where we’re investing in systems in Europe, which will help to support the 9 business units and so on.

So it’s ongoing, it’s not a revolution. Compass is not like that. But we think step-by-step innovation is important. Any more questions? Any more on the line?

Operator: No questions on the line.

Richard Cousins: I think, I’ve won the sweepstake for how long the meeting goes.

I’ll have to end it there. Thank you very much for your time.