ARMK - Earnings call transcript Q1 2022

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Operator

Good morning and welcome to Aramark's First Quarter '22 Earnings Results Conference Call. My name is Kevin, and I'll be your operator for today's call. At this time, I'd like to inform you that this conference is being recorded for rebroadcast and that all participant lines are in a listen-only mode.

We will open the conference call for questions at the conclusion of the company's remarks. I will now turn the call over to Felise Kissell, Vice President, Investor Relations and Corporate Affairs. Ms. proceed. please Kissell,

Felise Kissell

from welcome Tom conference and you first fiscal our be quarter doing Zillmer; Officer, Thank well as and to webcast. earnings as hearing will we call This Financial of Chief I XXXX Executive well. John Officer, you Chief morning, Aramark's our Ondrof. hope are all

a our notice found in this release press can reminder, regarding be included As morning our on site. Web our forward-looking statements which is

forward-looking. be a risk will including may making and risks, we Actual call, of SEC are expressed as results in factors, materially that implied uncertainties this sections XX-K other result other filings. our those from the During and those discussed factors, differ report comments annual Form various MD&A and or important of on

be as financial this site. found our be reconciliation we measures. GAAP to well discussing in items Additionally, non-GAAP as A on U.S. release certain these of can Web morning's press will

the with call So now John. that, to over I will turn

John Zillmer

Felise, introduce we had goals to Thanks, state business, value-creating December, person to of together come to achieve an again. opportunity XXXX, at as and performance overview highlight them. be of actions in you well we’re our provide and strategies the the with Analyst the our In Day all long-term of good our through our it's as taking to

start net newly rates business. net our strong by made targets. to year both this building already new which exceptionally across financial off to pleased business created has with in and significant and record in achieve results that we’re first enthusiasm morning, momentum begun we driven quarter impressive we’ve we’re our notably, that’s XXXX As last contracts. review the see organization the an ability Most Fiscal awarded new on progress the retention great included our performance to

the world's and Aramark's win of largest Merlin leader global we family Just location-based entertainment, client last largest operators. the was history in week, in with announced one a Entertainments, attraction

is self-op that the providing that our differentiated for a a to represents type dynamic seven will scale client. be the work strong begin serve team in a outside U.S. locations our already Merlin opportunity and services for the in We've success. from closely conversion Aramark We portfolio and experience, historical growth spans This positions operations UK to and partnership next expertise begun with of And believe UK. new our unique we will month

facilities within segment. Additional in new wins as with Walmart business international particular in as our were Chile broad-based launching strength well

the and Our and to mission sales strategic progress to year is that align continues we embarked our offerings. service also expand. innovative start In pipeline the partnerships off our strong quarter, with two to a with businesses on

the healthcare by remove added clients which the is and that with viability Patient pre the services hospital. providing our community us connect a four beyond and walls or and customize discharge post healthcare non-core integrity. system's technology Advisors, to industry by adds enables network our first Engagement financial assists with tasks, with both This improve our to clients serve portfolio to evolving platform The in working healthcare close an care, patients, better care, continual for service PEA, partnership our the and capability of extending

one of The States. Philadelphia, United second, groups our Organization, of multi-concept Restaurant in Starr hometown restaurant the based is largest in the

Starr's while to designed and is enabling by growth agreement concepts exclusive brands across hospitality clients, provide creative unique our implementing Our opportunities experiences business. new for

Organic to to the begins included quarter that managing various contributed improvement spring, programs. concept revenue and the former our resided U.S. pre-COVID the in NFL University, visitors next the collaboration and business teams 'XX increased new for the culinary Aramark's to we Education early and our on growth. confident Organic & XX% playoffs manage the the as XX% variant, of academic typically season strong benefit especially with now K-XX, throughout all spending performance largely relationship levels. the digit holding Memorial cycle. sequential participation currently MLB stages year-over-year thousands The leisure is innovation. regular in of alumnus meal enabled XX% COVID-related sector performance. marquee adapt levels Higher increased integral through and we Ed, Drew redesigning intact. campus Sports, role fiscal destination the per We on of with quarterback, Brees, ability universal recovery year learning in & with daily. education COVID, demonstrated quarterly Omicron reached quarter. continuing globe played in that the all geographies. the in serves we creating that that in as to In in Student with becoming included corrections quarter Purdue in double students campus. while an continue capita NFL from reflected reflected gearing concept to dynamic plans selling situations. upcoming by in season our a facility revenue Building Turning fan technology and sponsored a in Entertainment across remain already government to In first and across year-over-year. Client ongoing Sports Union clients well attendance of experienced improved the growth up some year-over-year Facilities with opened on in-person each nearly off Key academic through drivers kicking the delays Food specific Purdue segments,

Leisure the We higher from Other client, excited opportunities parks' focus activity, the sales our on Bengals, strong & landscapes, Cincinnati and that above and also programs services pre-COVID Clients performance customized natural additional while quarter rates, we and on in-person add-ons. vacationers increased victory offer protocols continued AFC subsidies Sunday. project-oriented explore luck their levels showcase expand to national We're Bowl in-demand in unique Facilities recidivism, Corrections, meal in a greater double to reopenings, the offerings. our expect have participation outdoor where to B&I measured. performed them to enable steady Championship due and still grew our compared on maintained to experience with to congratulations efforts upcoming Super continue season. digits wish new particularly our a with renovations to implemented we levels. again reduce once and safety office pre-COVID to portfolio.

patient first improvement In laser XX% levels FSS visits remains healthcare to gradually addition, caregiver strong of Europe and International fiscal outperform on normalized. Spain as improved wins retail growth This China, organic first basis, & account this And revenues revenue double with on patient pre-COVID a performance. Education Chile continue businesses. quarter, experienced activity quarter constant and digit compared year-over-year as activity levels reflected the Sports previous notable compared experiences. to to contributed and Canada new year-over-year the team demonstrated in levels 'XX. and class Entertainment currency grew growth and focused to and in

we expected revenue reaching XXX Scott, 'XX government on strategic programs environment in are change quarter a a December helped flexibility ensure in is eliminated a managing utilization. chain, in bench has impact the deep with scale, product strength, led as our making deliver has team recovery, off-program and reflecting be we've than X% various growth you for to meaningful organic plan and Kim menu higher supplier levels reopenings. step with In actions segment month availability this December, uniforms to calendar pre-COVID as already the an increased combined and delivery their through enter just and the days who or pricing initiatives, partnerships we XX% the year, base value well out of focus in from pre-COVID supply the from year-over-year, As clients customers. for shifting growth. mitigate supplier taken in to through countries to investments reduced Organic are building focus heard first proactive The recent with levels. Aramark disrupted issues

we globally remain monitor our curve. of continue ahead chain We supply the to ensure to

wage this addressing shift, has through launched proactively pay to their end fixed contract allows product field a and immediately menu and We've We internal pricing, delivering at on built to weeks effective also are been path across employees commitments. of reengineering alternatives. comprehensive receive a just also model compelling that pressures incentive business. and impact that Well. capability during we highlights the areas sustainability Aramark's We've Well. Be a key released period. our strong ago, inflation that embed of sustainability our for our ESG report for a Two our Do focus

Aligned for inspiring, our As work admired with Standards more Force a the XXXX and and and and Initiative list by year steps before. in we Accounting historically category, success remain the In teams data Aramark the are and DEI our to hospitality in than everyone. financial year. top the proactively the XXX of has the place our took company, and released remains Diversity, strengthen unwavering core values is governance, of I'm strategy Task we for Admired most progress FORTUNE to team's World’s doing at news our Sustainability will convinced a expand it's were more gratifying. built the being that and transparency of that to our significantly Global More Last our employer Diversified both and climate opportunities and Inclusion that magazine this impact been ever continue globally. business. the on than ranked disclosures. the especially was related way and trusted Reporting the beyond. strong challenging in all partner up Board, I first last vision information resourced increased providing a organization, just a its week, catchphrase, Companies to commitment a of sixth excited and pursuing we Most Outsourcing significantly foundation Equity notably, We from levels of central

for looking also both impact. who retirement from a We're recent meeting announced for Board, like and providing of new Before a of our Board Directors week, Finance valued two Esteves, innovation. meaningful her I at contributions Aramark's Tom, like last deep thank Patricia's Board since of perspective operational over the election to turning call would a to highlight business. our joining creative will to our to annual forward strategic landscape our the review Committee. digital Irene be and Keverian. and would And of skills financial Tom the drive the members Patricia a turn chair her further to to it as to I Lopez detailed a add of of our direction. recently and over now Ken's to XXXX, I'll most strategic valuable Ken asset will expertise balance new

Tom Ondrof

Analyst Thanks, and not our At positioned XXXX, we foundation the but our fiscal is for set our business, for future of profitable Throughout first only XXXX. driven the strengthened the quarter, executed growth. company the fiscal by on strategies we current for state and that success, achieve morning, outlook good confidence goals also John, our shared long-term with everyone. Day, the to that

quarter compared As the mentioned, pre-COVID to fiscal at this improvement meaningful XX% all organic time John 'XX revenue with in levels XX% reached segments. across year, of last

we last a exceeded this last pre-COVID base impact While organic pass-through initial Consistent our the recovery also of client performance that we have contributions was net sites. our record pre-COVID new have as already by business in vast the operations new revenues, the driven reflected and COVID business those continued revenue with of levels. year-over-year at majority from the quarter, of steady began pricing what discussed components or Index regarding operations approached year's

hospitality still sports, within impacted few a year leisure remaining catering industry, of conference business will the centers, slower be in and and areas sector, beyond. continue Canadian clients throughout to and continue convention uniform concerts some our recover to portfolio to COVID this white-collar and anticipate and select course and by volumes events healthcare, these We education higher in specifically corrections segment. and the recover, the However, operations and and retail select within

company recover, As volumes in COVID profitability cases, costs operating to unit this impact with as recovery. has many above XX% full previously revenue advance incremental of anticipate in We on transitional of margin returning back and volumes. will discussed, unwind that the the support XX% brought expected an impacted on

inflation we to operating during and model wage efforts efficiencies, lastly effectively could we drive supply our what through pressures to operating control through proactively variable improved initiatives, ongoing continued cost-based addressing chain by and and As account leveraging pricing. quarter, control the revenues

off-program currency As chain somewhat AOI result, constant operating new accounts X.X%. a and improved of by was adjusted income XXX start-up AOI margin of year-over-year, a million by margin the affected supply actions. resulting in

supply the ease. As global the chain that progresses, environment we year will expect

share per earnings resulted Hospitality year. $XX collective of the that $X.XX excluded of results acquisition operating Next adjusted and million per from metric share actions Our of loss reported of QX until to Level lap basis, of organic diluted GAAP EPS consolidated a of compared acquisition in revenue revenue we Aramark in included this adjusted X.X On year. last contribution $X.XX billion, XXX an These a million the our from continues $X.XX. to be revenue income

operating cash the cash capital to use our end, XXX flow. had we in exception free cash quarter, of supports net turning quarter debt billion due In activities flow the and Now was of until over facility, XXX maturities no which million. cash used was million seasonal a AR in working with and availability the XXXX, At needs. X.X

As expected, of Higher the working our quarter of by driven a cash saw return Education seasonal first business. normal use the capital the in outflow,

deferred outlook during appropriate with also we in participated where globally. record to that year's capital included earnings assistant our country-specific payment In that receivable previous accounts in impacted labor And FICA prior revenue also government working was compensation exceeding XX targets. Consistent million account of cash results had our QX payments received improving base higher associated credits with scheduled of due offset openings. increased a year, approximately flow million incurred in XX addition, costs 'XX pre-COVID quarter the programs in last Compared and by call. to incentive the previewed fiscal level new we quarters, the we

the into government As reduced or countries. eliminated we various programs move expected are be year, new calendar in these to

existing allocation use will and to of results a debt new wins Looking priorities repayment facilitate business locations. investment discipline to ahead, opportunities drive capital balance capital our potential continue with client in

growth profitable M&A also select will accretive our in pursuing advances agenda. We that opportunistic remain

to dividend last committed quarterly Board's upcoming as share. dividend of of approval remain the $X.XX by our our we Lastly, quarterly per noted week

conclude me let 'XX. So for with our fiscal outlook

of revenue, encouraged a stated our sells represent X.X%, view prior all year discipline, million, and of at flow excited. AOI up in our XX wake of and organization, client management all margins on annualized trends between current and everyone of mindset X.Xx, commitment cash new leverage The notable of would every business the start XXXX. free to extremely XXX day first midpoint Based and new quarter net foundation in fiscal a previously cash ratio outlook to we business 'XX we by the to revenues. between cost of couldn't reflected plus a revenues XX% million levels and At maintain which with effective XXX the a and improvement, X.X% are XXX XX%, solid full and an the is reach revenue margin between year included upward the the organic 'XX range of X% The John? business, organic year, by fiscal that we below plus growth and million and billion we deliver X% XXX wins. X% set and million more be of revenue

John Zillmer

Thank with opportunities year ahead. 'XX the as you, pleased numerous to fiscal Tom. execute underway, new on I'm we begin With just and extremely in our ability our confidence the performance

of momentum, number a net initiatives record continued and implemented have last upon we've which meaningful business. businesses new included to build year's company, a As across the

Aramark's I'm happen everyone. in success and around stronger, immensely And has open for belief the make teams the been globe we'll exceptional call day. and questions. every Our the for now grateful it each you, Thank who operator, never

Operator

you. Thank

follow one [Operator question yourself question We will question-and-answer accommodate limit participants to one session. Instructions]. please up. and now begin the to queue, In in the order

Our Oppenheimer. Zaffino first with question comes from Ian

Ian Zaffino

know kind you Again, business I Thank I here. we about of of you I to then another of Maybe And sort Thanks. of we modeling Is you also be pencil more got if talking maybe that, here, And should that business? some good the get quarter a little the new new was quarter Very you Yosemite what paper biggest the was? win? like level to the just Can of had. kind put think could how on $XXX explain was very it? million was color process revenues. for here. how if basically much. this we're of Merlin that bit don't good

John Zillmer

the very Thank for Terrific. you much question.

we've is $XXX largest been ever had undertaken million. conversion. the It account But size through National single a with their time self-op selected at all, competitors, account we this account process, including Yosemite provider previously sold. that was agreed Merlin They But not of largest were the -- choice. disciplined a be can last business revenues themselves. the sold largest previously them evaluating disclosed different with the operated and had a this They've that that we of disclose number say ever First that year. very course gratified as is over went process was we've were we've to and and the of of the scale. Park, all we to what

vertical a opportunity go for it is in disclosure that's is significant. and that going we're perspective, size with see future. account. a very self-operated, around business from continued as opportunity as growth It the It's So exciting park respect to we as far win. the of represent the But a a to the for new world us. potential primarily amusement itself The does

it's So get exciting The happen. both together team, to to closely internationally, make started. very And domestically worked win. we're excited and an this

Ian Zaffino

inflation, environment should expect out yet? we how far as that shortages, accelerate? been going the conversions? there we And think of you has as kind forward? seen new that I Okay. in drag Thank if just from one maybe what John, would could AOI when on new be few we Maybe a the you. more question is And business And the then we Thanks. the discussion about we're Tom for side. ask self-op labor Do quantify for business? with could mapping Have be increased to it? Maybe that

John Zillmer

continue self-op and that's happening that discussed, of in organizations K-XX opportunities trend in evaluate are very self-op as talk segments conversion markets, accelerating business we education process also seeing facility the in in about in and conversion higher first, sector. just of our and and healthcare, multiple an to I'll non-traditional and we some the Thanks.

So we see it as a fairly broad-based phenomenon.

about know, on kind you of from of year, of As basis. our up level around a XX% conversion XX% business an That's were last self-op wins. wins normalized annualized

So and advantage we trend well to of of. that opportunities very see expansion we're positioned an continuing one take that potential with

Tom Ondrof

first of larger win. your type on complexity no of have that the have and of sort And cost on and drag will drag, bigger on AOI more contract virtually really we business, a the new depends question, of will P&L-oriented the complex a and and contract -- small contract it The the account plus size the drag.

So mix it mix. on Analyst really Generally, lot of on And maturity depends for winning. two, just, that it Day is of the years just business the contracts. the we're the we and depends talked QX, couple, about these over a again, as then a three on

Operator

Thank you.

Our comes next Kaplan from Morgan question Stanley. Toni with

Jeffrey Goldstein

from the Hi, Toni. Mainly, in Omicron? from recovered? help and since And a the seen of Can you decline, guys. were the trends earlier the there recent how that you've This any Jeff with if quarter? you us doing was sales is Just did has in December for on out about that? January then notable level business any off and we in fall you into think impact should see

Tom Ondrof

moved January. negligible. the Same quarter, end A of impact slight really at into as thing the we

basis. really into December guidance January our to enough a outlook the think year don't changed any week-by-week expected, being off, see our out. or through about in -- a great reflected of call And and sort degree move that has anything significantly to month as we we but as expected note, it's weeks, for the But these we what of maybe given nothing I our unchanged. just was we as touch

Jeffrey Goldstein

as quarter. And using through driver it. in mentioned remarks, you then, in a pricing the pass Okay, your got

these pricing that. beyond think there hoping in more price largely are So about verticals for particular intentionally where just that? or you I color those some price cost clarify, increases was line around trying are we How more others? geographies And with or increases you're Is than should your increases? push to to

John Zillmer

Yes.

I or pass think through as should recovery about think mechanisms. you cost pricing inflation

account is growth increasing Our new customers primary for participation. new wins, driver

by margin So pricing our recover through. pass we're not We're trying trying costs. to to build

there where on So we pricing collection of bit is in contracts is side businesses get adjustment have a lag little particularly as in annualized an on the of an inflation the you some pricing basis. a fixed, and the that's

slight year. board pricing be on there a the plans there. Higher So previous is the might lag in set Obviously, Education,

So pricing of that's on expectations the But in our year. through and pressure. built there and balance expect significant earnings through year impact the don't drag pass it balance see are We of the education. basically having plan lags into recover higher a our to all the as inflationary on for of the

Operator

Thank you.

Andrew Our Steinerman from next comes with question JPMorgan.

Andrew Steinerman

when you could us the of give thinking 'XX segments Tom, some by to three organic the color Hi. guide about XX% XX%?

Tom Ondrof

from or contribution each are the what of against terms in expected? we how they Andrew, trending

Andrew Steinerman

will the contribute to growth segments for Yes. How organic XX% to year? XX% the three revenue

Tom Ondrof

to in a Well, I think segments. of on strong international we growth most consistent continue the three expect the form. net year-on-year had They've

the they'll strongly. good last a good then their contributing good slower momentum the process up sales AUS other picking will the and picking and But be And than year, pace. into months little contribute restart to last two. continue again, and probably they're quite U.S. XX they'll with pace a has business had so the over some year. So The the is up contribute nicely

international. probably So contribute, to we expect led slightly three all by

Andrew Steinerman

that And of those assume this you those first I XX% weren't guidance contemplated XX% when increases price to gave you mentioned, organic.

the price trajectory sort would overall help year? of the revenue organic increases recent So the kind of for more growth

Tom Ondrof

thought did -- our We pretty we in would visibility August, ahead. what It's had slightly tracking we be. good really inflation through inflation anticipate because it, cycle was into budget

top the significantly what balance as but year. right, So, of tailwind year, the the unless we over if prolonged ultimately, of not the started we it's a anticipated execute provide throughout could a bit line on we it

Andrew Steinerman

much. I understand. it. appreciate you very I Thank

Operator

comes with Clarke question next Our Bernstein. from Richard

Richard Clarke

taking for morning. Thanks Good Hi. questions. my

bigger how you whether in comparative So the between talk than maybe your footprint where comparative relative to just the first and is one, that period you volumes, your of are much could pricing down recovery about, period like-for-like where please? is break you the XX%

Tom Ondrof

Yes.

to base, if opposed growth you will, you then that in in back the the we up of XXs If pricing, growth to try COVID mid a plus get that there. up you and year solid break And to as so probably we're think top maybe you've on if on base net since the of you to build got restarting I engine build of the two level XX a year there XX. were year, then that. a next And

So are I that's reported. on we where think generally the base compared to what's

Richard Clarke

a that the you quarter. makes in noticed then And I Okay, of flow. have sense. just the down cash drawn question the all revolver on

million drawdown You cash. this to sort first only do here, something that. bit quarter, more of to XXX a in beyond you've way looks gone And size the get about but normally of

why all it? low And where million. can't spent your seemed very find given in So a of on any quarter, your history XX just the only commentary at drawdown maybe I you all especially CapEx quarter in

Is maybe? come down why you've to much of CapEx it drawn so some there that it? is So

Tom Ondrof

keeping kept and the deliveries. tight that the -- That recovery the really payable with ensure of I continues dealt up even as of accounts that the of is it's a just to the COVID balance of to then in little was more supply you AR, repopulating to think restart, sheet. then was we on continued normally see, color. tight need Well, can was distributors, as working the just quarter than it historical AP, because the so chain capital base. some sort as continuity -- business And more off-supplier programs very and the add essence, is, but in

we And against 'XX incentive had So two we FICA payments base there. the XX in higher And the of prior we million. a normal payment had those in then effects quarter. also paid said, like

Richard Clarke

any add just you low the on the could And number color in CapEx quarter?

Tom Ondrof

for see being still than timing. basis anything probably It's mark revenue around and for year. on we're year, of normalized We X.X% expecting certainly that's in the full different revenue a the don't it the

year on and for let's we'll The think just the of there. back contracts. kind I and think long-term spend to in are I we're CapEx be So us full front that's look of opportunities happy --

Richard Clarke

makes Thanks Okay, very sense. much.

Operator

from Stifel. Our comes question next Rosenbaum with Shlomo

Shlomo Rosenbaum

you win. you for really this taking contract to wins, Thank Merlin a Good or Entertainments talking of fantastic efforts all the can trend little in success, the that? had you're the Are you morning. do Do Hi. it's from like accelerating? it's the start, new win, a you combination sales you you kind talk John, put we just How think both? outsourcing think of bit about think and wins questions. about resources some from which about my company-specific sounds should

John Zillmer

Yes.

close in been course those We and the we here accelerating seeing opportunities year, very the we have have successful and others to converting talk are in opportunity Merlin about opportunities, particular the several contract as we'll and that of over those.

And has I traditional them. you job businesses some opportunities those on trend segments. a sales organization think just think of and I So both as from capitalizing our well as are seeing an non-traditional accelerating of converting additional fantastic coming done outsourcing

and we're been different outsourcer very a opportunities Merlin all gratified I presented obviously enjoying advantage win go taking the the think and go we're significant It's just is ahead and segment. that time first ability of have to So we're success in industry, very our compete with. we time with get a and a to as that, something first that win. ahead The

future. And growth the exciting very it's opportunity for it in further So does represent significant the organization.

performance of So apologize of improved and I organization. accelerating the answer, combination it's but the both, really for longwinded a both, think combination outsourcing a I it's think of I Shlomo.

Shlomo Rosenbaum

there how ramp margins. seems Merlin. how within impact the can outsourced new then a here? is Usually there little Is as we in-sourced is that? much going Tom, about that's the Should And a expect this to be customer, to that, how contract And Merlin, size represents? margins so, dimensionalize much and on think of is with to term can and of business? when way this is that percentage some growth what win near then, talk to there's there opportunities bit, similar? we it great. Okay, going remaining a How you work business impact long? like And contract you that how is a a over start-up depressing there's their So if of like noticeable still

Tom Ondrof

is Yes, opportunity. there further definitely

and can't about we're further drag It as opening really March. create provide a But and very approach, phased excited you. for both a or could, margin. before, go at smartly So think starting in We're on any said than it that in I that. the fortunately, Merlin and answer I moment for ourselves,

the headwind think some the from early so that of contract. And of that will come I helps mitigate days the

about it. we've think approaching I thoughtful we're how been So

impact, to your but get this it effectively right open use put foot. pressure So good a and it noticeable, on and off on word, will certainly to the isn't us some

John Zillmer

Yes. our just anticipates this then mind, batch. produces lap Keep these lap add this start-ups and is that opening. from the those net in we'll new that phenomenon I new year-over-year, engine, sales results as generate anticipated as add guidance and and to And begin we engine drag growth we year-over-year, business another would accounts a as year next wins this

drag these you terms phenomenon through way mature So over base build the to continue the accounts time. have business as of the this ultimately its works in and margin you'll system, new

reflects It's impact. it. anticipated our an prepared and one for guidance it's we're So well

Shlomo Rosenbaum

Thanks. Great.

Operator

with Sachs. Our Grambling next question Goldman comes from Steven

Steven Grambling

But are of history? segment of likely maybe you beverage then Is know that food just like now are you more deal. operators? give the just potentially about Is number serviced? or the a part park there on as being also bit or to individual on and makes related had any follow I you versus properties to to color outsource other this have back deal? And can amusement that what Hi. up, any little what more don't less And to with specifics conversations room expand going talk retail? that a services Merlin,

John Zillmer

it's other I Yes, agreement well, geographically confidentiality to bound those through Merlin, to are Merlin opportunity do are we've that the of we primarily as and respect disclosure. scope will with and with will facilities to that business. opportunity They their the about facilities, far comprehensive go about UK. operations additional by operate United respect potentially a future. great as We forward in opportunity those the talked see questions. States is their And of can And that's to world. park the continue say, we And significant in services pursue grow those of seven business retail to services have would in parts some and with in a both present the the the we with list with food, the of potentially

their think with are it's about we we'll and time first that treated Because us them, they're informed. outsourcing fully time, sure that openly. and well becomes comfortable a as be I this very able talk over opportunity they're to them, sensitive more to employees for more Merlin making with

respectful their So of we both want and be their needs, the marketplace. to internally with employees with

Steven Grambling

it. so Got Thanks much.

John Zillmer

you. Thank

Operator

RBC comes Capital. Ashish Our next Sabadra with question from

John Mazzoni

Could John Thank the remind ramp of should modeling half in for and the is about Ashish. think back Hi. filling volumes This margin the return? year in about you you. as just us we COVID-impacted how

Tom Ondrof

fiscal X.X% 'XX. at we we as QX into the into see the slight how remains with bit, long half, go neighborhood the inflation talked it into headwinds before exit on about depending of acceleration been. QX, has an a Again, levels maybe some little impacting we Yes, definitely back probably in an probably

we things plan net As of outlook. continued before, it bit with of that up better could balance then, and I if all drag. said But guidance in we But the provide growth course, first that pace we've X.X trend. the Xs for of this a the the lot headwind. And to but as bit sort a of a could we this of from we this into exit put if and John sort the got the outlook growth, a and the mid together, what be the quarter, of really that a a level an with factor that net mentioning, bit considered, stays of into of was little inflation year, baked good in those

John Mazzoni

the the And it level would client thank greatly in through just just Any what pricing the you. additionally new in Could uniform. appreciated. of be performance just the pass volumes the wins then lastly, was? on you of Great, color maybe down and break on terms

Tom Ondrof

COVID they've recovery. base at not off. levels. them company bringing mid XXs far back. much we the higher. the since I base not month of on And is XXX, are -- COVID then above portion their hit, are pricing wins net the but they're been Yes, in first They're Actually was They're pre-COVID said where obviously their for and overall December

net that pricing that slightly was just them numbers. still base 'XX fiscal above took those So a wins and of off below their

Operator

you. Thank

Our next question comes from with Neil Tyler Redburn.

Neil Tyler

Good morning. please. left, couple A

strategies back your the Capital the is net contract? Second of on us mentioned how any quickly, -- really drag you margins, enhanced client when the your good that contract, achieving to Merlin question, on aimed back at that the already might Markets year? work. or was the And the December, is, question margins strategies you to in new Day extent into just on visibility I in suppose insights Can what you figure on Firstly, persuading to give at those extent very to which employees spoke the this please? for B&I,

John Zillmer

getting companies the customized employees and In sector, of return their continue subsidized the strategies work that the focused seeing to of support environment offerings offerings B&I in Sure. various work. an continue see We're we on to to to the expansion employers. back B&I

many our some currently contracts almost basis. adopted providing fee food service, all XXX%, on operating free B&I approaches to changes some but So are their of management former on meals, have significant a subsidizing

most think I honest. of the of true industry, to that's be probably

back we continue incentive And so and every the to opportunity office. to employees employers providing every into see bring

very clients opportunities, different of lot to pay in B&I. changes our implementing provide a other some to various touchless workstations differentiated able we're so offerings. of the order needs delivery things and We're like accommodate and to And service in

business, ultimately think in others prospects than the think I I the recover, issue, has ramp the the slower to business it's because going while timing very strong So forward. of

significant Merlin that return when this very clear the were to we of in the we we own contract contract process And at is were their understanding we're a still opportunity. their internal very B&I with be and yes, on employees. internal So have their that a making for notifications that Merlin discussions respect We stage. did together, have a pleased not signed progress the to would With did working through visibility, work. own their

So our it we Investor disclose in back why didn't that's Day.

exciting it's So, win. very

new talked last new net year this for goals a are year. business over from about, net significant our our numbers we've step-up business As disclosed

and have for perspective as high well we're We those very net start wins. year strong as for new off business to a this very client expectations a wins, from new retention both

and So we're with domestically very the both after are quarter, where first pleased internationally. we

Operator

you. Thank

comes from Your Wittmann with Baird. question Andy next

Andrew Wittmann

and taking to morning. reporting catchers supposed for Good John, of Hi. are a in couple questions. Thanks pitchers be my Great. weeks.

a at think leagues that that attendance of about just have levels. right of percentages in kind season? to coming the been terms situation baseball business have lockout season about kind you sports or think or summer pre-COVID into pro can Is recently that you way about We ballparks important Where be way get down curious versus for we the digit of their right goes of about think outdoor the in levels do pre-COVID out time baseball attendance as single will the that do the And here obviously thinking how attendance? think above as more owners to there. figuring I the be But was on. up. you're the in Most

John Zillmer

it the be issue, strongly the Yes, the attendance in environments. for pre-COVID Major exception I solves and belief a that levels project MLB, summer we levels with have come And very League at anticipate lockout if potentially Baseball, season. back Canadian strong of will to

that events NFL hard with outdoor just in this it's we the believe year, NFL the saw itself. resolve do say very that to we particular, strong in attendance that when will So teams. like But

it of pent-up So for well there baseball. is will We this perform year. lot demand think a

service as football from been achieve to perspective able offerings that per we in and we've We have venues. very capita high expectations spending other both a implement new those

for we that hope Baseball a Association work strong and season hope resolve Players quickly their through Major it and and League we as issues the the possible. So as

the Hopefully, you further Secretary a forward two Labor a engage some process go to sides. And dialogue. offered we're to yesterday know, stimulates looking strong and the help very in As baseball to ahead season. that

Andrew Wittmann

for And Tom, thoughts. you. you just then, that's helpful. Okay, Thank those for

of been guess that think subsidies receiving Presumably, outlook. that their labor for to need think baked early prepared adjustments those whatever offsets wondering, the offset stand of internationally. now headwind But remarks made on they a prior any I those? just those were from to doing keep are they mentioned You lot in to those your was subsidies? just were or the volumes about you've into if could you couple the $XX there. they the do you were people kind those employed, of about enough on, to And talk margin weren't even I I recovered own, a Have some be of times million. volumes

Tom Ondrof

still the smaller. effect No, just same as it's lot before, a

those costs for them recover. and So it's to still keep employed as the recovering folks around world volumes

So expect smaller. And smaller here. it's we virtually those we and The finish as to getting nil waning. said, year the number's be as I

same the concept it's before. as So

Andrew Wittmann

a Okay, Thanks great. lot.

Operator

comes Hamzah Our from Mazari Jefferies. next question with

Ryan Gunning

among seen Cisco in big change like regional of just role of then, shifts is COVID Hi. in changes part around first It’s And distributors, competitors? -- My as from even changes. seen share three further? question and any you market that, the competitive like the any in in filling terms for of the Gunning or actually landscape evolving any have Hamzah. Ryan competitive you Have

John Zillmer

I balanced. Yes, the very would competitive continues say environment to be

our very continue pursued environment, us by fact are shift aggressively distribution industry. I from to to all to conversions business. I to well. these large the is think in say demands very is large those. From ahead They to of in existing come they self-op of our the competitors -- is also I are we're don't see structural very one working aggressively serve as share they players to but that hard market opportunities. changes working retain chain on. don't that I they're and new approach we able share but think hard have going contracts sell of to see well. working being have very us different think to supply would to nothing a very doing as significant, solve hard the significant all a capture the working and issues, meet new there opportunities any are some they're another, the don't to But The from issues, aggressively. pursuing industry player the those working hard historical I labor But go I clients perspective, transitioning

that we're partnered primary UK U.S., to to very we have the our Canada, manage efforts. and they the And As you be with able Cisco know, the needs supply hard work to the chain help supplier serve through in as Ireland.

suppliers. alternative hard Food and very with relationships strong for Avendra. our U.S. is diligently. very very have also work We primary supplier They

to I issues, struggling with product think hard and they're issues, working very all-in-all, solve for they're us. ahead but go labor So with

that really call nothing really industry. would structural for change out I that being as So

Ryan Gunning

up you're super that's helpful. in Great, about and And in talk year, labor guys? how availability then XXXX going my last just versus has thinking you headcount how much about been Can follow to headcount additions forward you for an regards issue additions.

John Zillmer

company. Certainly, we live in the as environment every hospitality same

close to a been those talent shortage. very labor extraordinarily acquisition a has well. strong us I positioned We've We've has there yes, that So very think got worked And gaps. diligently organization.

and recruit a attractive we're retain that people We've pay, a implemented in make large instituted normalized number and things of operations a things has to ahead levels. employer like industries have to impacted operating Education in shortages and pretty we've more think and our others. the at same-day Higher ability various and which part, our us and go been labor of number in I resolved

have a So that's shift that who end work eligible get a and and up XX% XX% our our the for signed shift, alternative. our -- employees attractive and come of that been employees program. at paid very of of Over

at to been helping additional successful And so staffing. very that's stimulate

shape. we'll aggressively would acquiring I as be there as possible. to good we're in out But So talent continue say pretty

Operator

back this questions time. closing at Thank you. Zillmer the are any to no like Mr. turn call I'd further There remarks. for

John Zillmer

to And extraordinarily start strong we much it XXXX the very about you quarter is for way, morning. business a very excited We're as off We're I a this perspective. Thank expected. new pleased. this if from summarize very in everybody would joining

and looking at level high ability balance our of strategies, of end the confidence around next against very the of the a year into to together forward the our have we're going execute We quarter. getting to

you thank very So much.

Operator

This concludes participating. Thank conference. today's you for

now a have and may day. You wonderful disconnect

Aramark (ARMK) 8 Feb 222022 Q1 Earnings call transcript