Worldwide leader in the food-service industry, with strong positions in Europe, Japan, and the U.S.; Relatively stable and predictable revenues and cash flow, because of established brands, long-term contracts, and high renewal rates; Generally good free cash flow generation, owing to low capital requirements; and Very diverse customer base. Limited price flexibility, given low barriers to entry and strong competition; Materially deteriorating operating performance in the U.K. over the past two years, although stabilizing recently; Exposure to food price fluctuations; and Moderate financial leverage policy. The ratings on U.K.-based Compass Group PLC reflect its leading position in the food-service market, its low capital intensity and low capital requirements, and its relatively stable cash flows. These positive characteristics are offset partially
