Continental Europe

In Continental Europe the organic revenue growth rate has continued to improve to 5.4%.

Organic revenue growth has been driven by increased levels of new business wins and continued strong like for like revenue growth across the whole geography. Significant contract wins and renewals in the year have included extending our relationship with Continental and a new food and support services contract with Pfizer in Germany; in Italy, a new foodservice contract with Indesit Company and extension of the major Education sector contract with Turin Schools. Elsewhere in Europe, Vestel City, Europe’s largest industrial complex, is one of the largest foodservice contracts ever awarded in Turkey; we have also won contracts with one of the biggest hospitals in Hungary, the Petz Aladár Hospital; a new Nokia factory in Romania and some 120 new schools across Spain.

In France, organic revenue growth has moved forward significantly to 4%, reflecting a real turnaround in new business wins. A focus on like for like revenue growth and overhead efficiencies has continued to help advance margins.

Germany continues to lead the Group in operational efficiency. In particular, this year we have seen a reduction in the labour cost of 40 basis points as a percentage of revenue.

The ongoing strength of the Offshore business in the Nordic region, together with new business from support services, have driven organic revenue growth of 15%. This has converted to strong margin growth through the successful restructuring of the region.

Whilst margins are still modest, our business in Italy has delivered a good improvement in performance this year. The business has rebranded under the Compass name and adopted our core sector brands, bringing benefits for how we go to market in Italy and with our international clients. Going forward, the focus will be on cost reduction to bring margins more into line with the rest of the Group.

The Spanish business is dominated by Education and Healthcare. We have seen excellent organic revenue growth of 10% overall, reflecting a good balance of net new business and like for like revenue growth.

Overall, operating profit in Continental Europe was £197 million (2007: £172 million on a constant currency basis), an increase of 15%. We have added a further 60 basis points of margin improvement to the 100 basis points improvement in 2007, delivering an overall margin of 6.5%.