Aramark

Good morning, and welcome to Aramark's second quarter fiscal 2024 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 this conference is being recorded for free broadcast and that all participants 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 Felice Cassell, Senior Vice President, Investor Relations and Corporate Development. Ms. Cassell, please proceed.

Thank you and welcome to Aramark's second quarter fiscal 2024 earnings conference call and webcast. This morning, we will be hearing from our Chief Executive Officer, John Zillmer, as well as our Chief Financial Officer, Jim Tarangelo. 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 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'll now turn the call over to John.

Good morning, everyone. We had another great quarter of results driven by our commitment to growth across the company. Aramark hit record total company revenue for any second quarter in our history, as well as record second quarter profit in international. The vast majority of our profitability improvement in the quarter came from strategies we've taken to drive performance while also benefiting from some inflation tailwind. Once again, substantial base business growth, pricing, and net new business contributed to organic revenue growth, which was up 9.4% in the second quarter compared to the prior year. We continue to experience consistently strong retention rates along with sizable new business potential. Organic revenue in the U.S. segment increased by 7% in the second quarter versus last year, led by three areas of the business. First, we've seen continued momentum in collegiate hospitality due to enhanced culinary partnerships and new business wins, as well as innovation leading to increased participation. Sports and entertainment had another great quarter with impressive per capita spending rates and higher attendance levels, especially during the NFL season, as well from our growing presence in the NCAA. We expanded our grab and grow micro markets and self-checkout offerings and launched additional local restaurant partnerships, which continue to resonate with fans. We'd also like to congratulate the South Carolina Gamecocks, the Iowa Hawkeyes, and the Purdue Boilermakers for their achievements in reaching their respective NCAA basketball championship games, all Aramark clients. And lastly, workplace experience gained momentum across all regions as the quarter progressed, led by new business coming on board, increased employee participation rates, and additional catering activity. The U.S. segment continues to deliver new business wins. Most recently, we were very excited to add Oracle Park, the home of the San Francisco Giants, to our baseball portfolio. I was at the stadium for opening day and experienced firsthand the enthusiasm of our Aramark team, proudly serving fans with new, innovative culinary creations combined with iconic fan favorites. Other new client additions include the University of New Mexico denison university and Clark university and collegiate hospitality, as well as Dublin city schools and student nutrition, to name a few. Corrections also continue to expand the portfolio taking great pride in the success of our into work program as a second chance employer, a program that is now in over 300 of our locations. In the international segment, every country and region within the Aramark portfolio saw organic revenue growth in the second quarter, led by mining services in Latin America, increased business dining volume in the UK, and continued strength in education across Canada, resulting in a year-over-year increase of 16%. Our Aramark Korea team served fans at a pair of Major League Baseball opening day games for the National League West rivals, the San Diego Padres and the LA Dodgers, who played in Seoul towards the end of the quarter, leading to new opportunities in sports. New business has been strong and international, which most recently included expanding our presence with Merlin Entertainment in the UK, offering additional BNI services to Continental AG in Germany, and building upon our remote camp capabilities in Canada, adding Wood Fiber LNG and Leadcore Group as clients. The international team has been awarded numerous new wins, collectively providing us the ability to build scale in the countries we serve. In the second quarter, we hosted our first International Innovation Summit in Santiago, Chile, which included participation from our country leaders, global clients, and technology partners, with approximately 700 attendees. We used our time together to explore food and facility service models of the future, focused on innovation around customer experience, safety, sustainability, and artificial intelligence. Now let's turn to global supply chain. Our overall objective continues to be focused on consistently growing and leveraging our managed services global supply chain and GPO network spend of $19 billion and providing quality products, services, and analytical insights to our clients. International expansion is an area of focus on our strategy with several of our multinational clients, offering us the opportunity to broaden our procurement services on a global scale. As I previously mentioned, we saw some continued improvement on the inflation side, which helped product costs in the second quarter. Jim will be providing additional detail on the benefits we're experiencing. Our AI work in global supply chain is creating additional efficiencies with enhanced data harmonization and analytics for our operators and clients. particularly in sourcing optimization and reporting. As an example, we're leveraging these capabilities to share insights with our clients in further understanding their community impact with local, regional, diverse, and sustainable spend to achieve their ESG goals. Finally, we continue to strengthen our balance sheet and our inactive discussion is to sell the remaining portion of our ownership stake in the San Antonio Spurs NBA franchise. We expect to sell the remaining interest prior to the end of the fiscal year, and we will provide additional detail on a potential transaction soon. I'll now turn the call over to Jim.