Aramark

Good morning and welcome to Aramark's third quarter 2022 earnings results conference call. My name is Livia and I'll be your operator for today's call. At this time, I would like to inform you that this conference is being recorded for your broadcast and that all participants are on 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 Felice Cassell, Vice President of Investor Relations and Corporate Affairs. Ms. Cassell, please proceed.

Thank you and welcome to Aramark's third quarter fiscal 2022 earnings conference call and webcast. Hope all of you are doing well. This morning we will be hearing from our Chief Executive Officer, John Zilmer, as well as our Chief Financial Officer, Tom Ondra. As a reminder, our notice regarding forward-looking statements is included in our press release this morning which can be found on our website. During this call, we will be making comments that are forward-looking. Actual results may differ materially from those expressed or implied as a result of various risks, uncertainties, and important factors, including those discussed in the risk factors, MD&A, and other sections of our annual report on Form 10-K and our other SEC filings. Additionally, we will be discussing certain non-GAAP financial measures. A reconciliation of these items to US GAAP can be found in this morning's press release as well as on our website. So with that, I will now turn the call over to John.

Thanks, Felice, and thanks to all of you for joining us. As you know, over the past couple of years, we've been focused on several actions to transform the company, including reigniting a hospitality culture, and instilling a growth mindset, all while navigating through major macroeconomic challenges. This morning, I will review our progress in those areas, all of which have led to strong business performance in the quarter. I'll also provide an update on the planned spinoff of Aramark Uniform Services, which is intended to be tax-free to Aramark and its stockholders. Against the tough backdrop, I couldn't be more pleased with the team's delivery of the early stages of our strategic growth plan, which continues to drive momentum across our organization and create long-term value for Aramark shareholders. Our results in the third quarter reflected an acceleration of new business growth and effective cost management across the business. And we have reached a significant milestone with revenue now surpassing pre-COVID fiscal 19 levels across all segments. Business and industry, which had been slower in its return, demonstrated continued progress over the course of the quarter and we believe is well poised for ongoing recovery. Net new business through the first three quarters has already surpassed last year's record-breaking full-year number, and we expect to capitalize on a robust sales pipeline through the remainder of the year, positioning us well to achieve our raised net new business target this fiscal year and carrying that momentum into next year. While global inflation trends remain elevated, we are operating with a heightened focus to reduce the impact on the business. As we have previously discussed, we believe that we have extensive resources to efficiently manage this inflationary environment, including menu reengineering, labor optimization, and technology deployment, among others. Revenue in the quarter also included 5% growth from pricing compared to the prior year as we work closely with clients to mitigate costs and navigate through this inflationary period. Our supply chain team is providing real-time insights for effective client pricing strategies tailored to specific clients, sectors, and geographies. Each of the three business segments continue to gain momentum, both on the top and bottom line, reflecting the hard work our teams have put into driving the business forward. Within U.S. food and facilities, organic revenue grew by 45% year over year, with all lines of business contributing. Education performed strongly through the end of the academic year, with our teams currently preparing for the new school season in both collegiate hospitality and student nutrition, are newly branded higher education and K-12 businesses. We have begun implementing enhanced pricing strategies for upcoming board plans and on-campus retail outlets in higher education. Sports, leisure, and corrections significantly improved compared to the prior year led by strong attendance levels. Sports and entertainment drove increased per capita spending led by Major League Baseball, as well as benefited from the return of a more robust concert schedule at our client venues. Our destinations portfolio experienced greater guest activity, particularly in the national parks, and corrections once again performed above pre-COVID levels due to a strong portfolio of new business wins. Business and industry, now branded as the workplace experience group, continued to show gradual progress as return to office levels remained specific to client culture and geography. In speaking with clients, we remain optimistic for even greater in-person interactions in the fall. Clients are already more active with employee engagement events, including social gatherings, networking opportunities, and wellness sessions, a testament to the continued value and importance of in-person engagement. Facilities and other drove success for ongoing demand in core business offerings, with an added focus on new engineering solutions and client project services. We're advancing innovation and adding capabilities, including robotics, as an example. Healthcare Plus exhibited growth led by increased client activity related to elective surgeries and clinical care. The team has successfully renewed several significant marquee accounts and established new offerings, including in ambulatory surgical centers. Additionally, we've made great progress and have created industry excitement by introducing a new healthcare model focused on patient post-care in partnership with patient engagement advisors. International grew organic revenue 49% year over year. This performance was led by new business wins and increased event activity, particularly in sports and entertainment within Europe, as well as improvement in BNI across the countries we serve. The international team continued to drive consistent net growth that was broad-based in both geography and size, particularly in Chile, Germany, Canada, and the UK, from healthcare to education to BNI. Uniform's performance surpassed pre-COVID levels for a second consecutive quarter as momentum builds towards its debut as an independent publicly traded company. Organic revenue grew 11%, driven by rental revenue growth, as well as strength in adjacency services. and the team is beginning to execute on the many value-creating opportunities available to the business. Since our uniform spin announcement last quarter, we've made progress in the operational separation and have added leaders with extensive public company experience to complement the deep industry expertise of the team already in place. We're on track to complete the transaction in the second half of fiscal 23, and we will continue to provide updates as appropriate. I would now like to spend a moment sharing some initiatives taking place at Aramark that speak volumes about the character of our team and the special culture we've been able to create across the company. It's no secret that people are the cornerstone of everything we do. Building an inclusive, accessible and equitable workplace where all employees can thrive and grow their careers is essential to Aramark's success. With that, I am proud to have signed the CEO letter on disability inclusion, and I am even more proud that Aramark was again named one of the best places to work for disability inclusion by the 2022 Disability Equality Index. Moreover, our vision for the future focuses on positively impacting people and the planet as we serve our client partners, employees, shareholders, and other stakeholders. Our progress in this effort continues as we just committed to significantly reduce greenhouse gas emissions associated with the food we serve in the U.S. by 25% by 2030, in conjunction with our World Resource Institute's Cool Food Pledge. We also plan to significantly expand the availability of plant-based, lower carbon footprint meals across our portfolio, offering healthier, more client-friendly solutions. I'd now like to turn the call over to Tom for a detailed financial review of the business.