Aramark (NYSE:ARMK) Q4 2022 Earnings Call Transcript

Thomas Ondrof: That’s a lot to unpack. Good questions of all of them. Let me start with the margin. As John just talked about the ramp, and we’ve had some serious acceleration of net growth, obviously, from year Zero in ’19 into 20 to this year. If you look at the guidance, ’23 is going to be north of 800. But that’s we’re sort of hitting cruising speed to a degree and getting to that 4.5% to 5% annualized net growth. So the first half of the year to your question is going to be where I have more of the startup costs that are new or incremental to the prior year and then that will wane as the year goes on. And certainly in a ’24, ’25 is we’re healing cruising speed and staying at cruising speed. to John’s point, we’re just but a lapping prior year startup costs and those won’t become as much of a factor over those next couple of years. So I think the pace of it is going to be more so in the first half than the second half, if you’re just looking at ’23.

Neil Tyler: Okay, thanks.

Thomas Ondrof: In terms of pie size fortunately, we are benefiting right now from both taking share self-ops, that has continued to be a primary source for us a little bit higher than the historical norm. And then the regional players that, of course, the other big players in certain markets. But the pie size has also increased a bit here over the last couple years. And so, we’re benefiting in an industry from both phenomena. And again, as I said, we continue, we don’t feel as though we need the outsourcing, learned to continue to stay at those mid single digit rates that we reached this year, and are expecting into ’23. So we’re just very pleased with again, to have it be in a position to be able to capture this opportunity based on the investments we made throughout the pandemic, and the results that our teams are showing.

And if all you had a question about facilities, it hasn’t particularly been cross selling opportunities, they’ve been standalone beachhead opportunities, and we do like that, because getting into an account, no matter with either service, food or facilities is a good, good starting point for us and then ultimately can build to there and that cross sell opportunity could be an opportunity.

John Zillmer: Yes, and I would just add that the facilities wins have been brought based across multiple industries, multiple geographies, and both standalone and existing customers. So it’s a very significant year for them. And it’s a business, we operate in a couple of different forms. Obviously, we’ve got the standalone facilities business, but we also serve facilities, customers in the healthcare space managed by healthcare. So it’s a great segment for one for us, the one that will continue to focus on growing and their wins this year had been both self authoring versions as well as existing account conversion. So they’re really nice year for facilities as a business unit.

Neil Tyler: Fantastic.

Operator: Thank you. One moment for next question in queue. Our next question in queue coming from the line of Andrew Wittmann with Baird. Your line is open.