Continental Europe

Managing the flexible cost base and further efficiency gains have resulted in a robust performance

Revenue in Continental Europe totalled £3.4 billion (2008: £3.0 billion), with organic revenue 1.1% lower than last year. However, management of the flexible cost base and further efficiency gains resulted in a robust operating profit performance of £232 million, an increase of 4% on a constant currency basis, and margin improvement of 30 basis points to 6.8%.

Across the geography, we have seen a consistent and encouraging rate of new contract wins. For example, we have extended our relationship with Shell and now provide a wide variety of services across many countries. In Continental Europe, this now includes Germany, Austria, Switzerland and Italy amongst others.

In Germany, we have successfully integrated the recent acquisitions of Plural, a support services specialist, and LPS, and we are already seeing the benefits of new business opportunities through cross-selling. The Education sector has developed significantly this year with our largest ever contract win for public schools in Offenberg, Baden-Wuerttemberg, as well as other exciting new wins in both the public and private sectors.

The Nordic region, where high levels of organic growth have been maintained through the year, has seen strong new business wins in both food and multi services, including AstraZeneca, Sweco and Volvo in Sweden and Statoil in Norway.

The turnaround plan in Italy continues to deliver good results, with solid margin improvement. Following recent wins in support services, such as the large contract with Trenitalia (Italian Railways), we are seeing encouraging signs regarding the cross-selling potential. Our Education business is continuing to generate good levels of new business and like for like growth, with contract wins across the country (including Rome and Turin).

The Spanish business has also performed extremely well and had a particularly strong year in Healthcare, driven by new business gains, with both public and private hospitals (for example, Pius Hospital de Valls) as well as in the senior living market. The management team has simplified the structure to increase efficiency and has improved purchasing and logistics processes, providing a solid base for future growth.