Aramark (ARMK) Earnings Call Transcript & Summary

Hello, everyone, and welcome to Aramark's Analyst Day. We are so excited to have you, whether it's those on our video webcast or those of us who are with us in person in Philadelphia. So our agenda, which for those of you here and also on the webcast, is focused on our growth acceleration that is currently underway. At the end -- remember, at the end of all the presenters, we will have a fireside Q&A where we will make sure to answer all your questions. I'm going to read all of -- no, I'm kidding, our forward-looking statement, and then let's begin our time together. [Presentation]

Good morning, everybody. My name is John Zillmer. For those of you who haven't met me or for those who may be on the webcast, it's exciting to be together. We're very excited to host you here in our home at 24:00. The video you just watched and debuted our Executive Leadership Conference, which was held about 2 weeks ago, in Florida, where we had about 150 leaders from Aramark come together for the first time in over 2 years as a group. It's an organization of our senior-most people. It was a terrific experience. It was really one of those cultural acceleration events that we have used historically as a way to both recognize our people as well as to create new dynamic leadership going forward. The energy and the passion was abundant. The video really captures the sentiment of the organization as we look to the many growth opportunities ahead facing us. Our foundation of leadership has been established. The transformation that we've been underway -- that's been underway is really all about these 3 building blocks: leadership, culture and growth orientation. And that foundation of experienced leadership has undergone a few changes over the course of the last couple of years, and we were able to initiate and continue to focus on that transformation of leadership, that transformation of culture throughout the COVID environment. So despite the fact that the organization was constrained in many ways in terms of the operations of the business, we were still able to focus on making these changes that were necessary to really drive the organization. And what was most important during that entire time period was shifting the growth orientation of the company, creating a growth mindset within the organization. And we did that in a number of different ways, and you'll hear about that throughout the presentations today. We strongly believe that these 3 building blocks lead us to a position of sustainable growth, which I believe is fundamental to the future of the organization, creates the dynamic that allows us to grow both top line and grow earnings sustainably over a long period of time and ultimately leads to the margin progression that we all know is evident in the business. We are committed as a leadership team to creating sustainable value creation for our shareholders, for our employees, for our customers and for ourselves as employees of the company. The journey that we've been on over the last couple of years was somewhat unexpected when I rejoined the organization in October of 2019. But thankfully, we were able to navigate the COVID-19 environment while still remaining committed to the leadership and cultural transformation. We didn't stop doing the things that we needed to do that we knew were right for the business. We reestablished a growth mindset with an emphasis on our people and the culture. And 2021 was a year of stabilization where we reopened businesses at various rates based on the needs of our customers and based on the economic conditions. And during that time period, we achieved record net new business results, which we're extraordinarily excited about, that growth transformation, that growth cultural change, that growth orientation mindset led us to those new business results, which were truly extraordinary, and our teams did a fantastic job. 2022 is a year of transition, a year with a very robust pipeline of opportunities, we believe continued accelerated growth and significant momentum. And 2023 and beyond, we'll continue to build on that momentum with strong, sustainable, profitable growth. Obviously, the current environmental trends, the macro trends create numerous opportunities. You've talked about all of these things in, I'm sure, other opportunities or other meetings. The growing importance of innovation and technology has never been more evident to us and to the customers that we serve. Supply chain complexity, labor cost issues, food and labor inflation and the need to really engage in appropriate ESG practices. It's all created an environment of increased complexity of operating. The COVID environment has caused us to need to adapt to the business models that we operate, increased demand for safety and hygiene, operational complexity again and protocols and clients focusing on their core operations, all of these things. The increased complexity leads to an increased demand for outsourcing. You saw that translated in the numbers we disclosed in our earnings, where more than 50% of the new sales opportunities were first-time outsourcers. We are, I think, uniquely poised to deliver against this environment. We've got a client and consumer focus second-to-none. We've got world-class scale and capabilities, a leadership team better than any in the industry. And we've got an innovation pipeline that's extraordinarily robust, some of which you were able to see last night in the tour here in the building. Most importantly, we have an organization that's committed to growth, that really believes that this is the way that we build the organization for the future to create opportunities not only for our shareholders but for the employees who make this company go. We operate in attractive addressable markets across a broad range of geographies. This is data that you probably have already seen before. But we think this marketplace is about -- in total about $1 trillion in size. And in the geographies where we operate, about $540 billion, more than enough runway for us to continue to grow for a very long sustained period. About $215 billion in food, about $285 billion in facilities and $40 billion in the uniform segment. And the most significant issue for us is 85% of that addressable market is either self-op or smaller competitors. We don't have to go to war with our larger competitors in order for us to win. We will compete, and we'll aggressively pursue all the opportunities that are facing us, whether it's against one of the big players or the little or self-op, but there's plenty of opportunity for all companies to succeed in this marketplace, and we think we're uniquely positioned against it. All -- this opportunity exists across all of our service offerings and all the geographies. We have opportunities both in food, facilities and uniforms, but we also -- and it also spreads across the world. We have opportunities in international. They are very significant, $35 billion in Europe, $90 billion in rest of world. We've got a significantly growing business in the Far East, in South America. And in the United States, we've got $180 billion worth of opportunity in food alone and another $105 billion in international on -- I'm sorry, in facilities management. So as we look forward, our goals are aligned and focused on the multiple opportunities that we have in front of us. I'm excited that we're going to be joined on stage today by leaders across the organization as we provide insight on what we expect the next few years to look like through 2025. It's an extremely exciting time at Aramark. We're all very excited to be part of this organization, to lead the organization. And we believe that together, we thrive. That is -- this isn't just a catchphrase, this is the way we operate. This is what we believe. We are rooted in service, and we're driving growth. And those 4 buckets in front of you are absolutely the way we run the company and the way we think about it. Our people make the difference and they embody the hospitality culture. It's what causes customers to select us. We don't compete on the basis of price. We compete on the basis of capability on our people, on relationships, on customization and innovation. So our people truly do make the difference. We've created this winning sales-minded culture. We believe that we have the best team in the world, and we'll continue to win at significantly higher rates than we have historically. We do embrace the entrepreneurial spirit. Gone are the days when we were dictating from corporate what had to be done in the field. Our field managers run this business. They make the decisions to serve the customers, day in and day out. They have the flexibility and the capability and the tools and the resources to create customized solutions. We believe that, that innovation and that entrepreneurship leads to our success. And we also believe in contributing to the greater good. We want to do the right things for people and planet, and you'll hear more about that from Ash Hanson today as we talk about our ESG initiatives and the future of the organization and what that means for us. So I'm going to hand this off to Tom. He's got all the really important stuff to talk about today. So he's going to provide a detailed review of our financial framework and the financial goals that we wanted to share with you this morning.

Well, thanks, John, and good morning, everyone. We really appreciate you making the effort to get here and be with us today. Well, let me take you back 23 months to John and us first earnings call together, in January 20, and remind you of the task that was at hand. We were setting out to reestablish a profitable growth culture, as John just mentioned, where everybody sells; rebuild the field-level resources to create the ownership and improve account retention; review, reduce, reallocate above-unit overheads, so we could ensure we are fit for purpose for the business. It's obvious at this point I ran out of words beginning with letter R. So we move to unleashing the supply chain to drive quality and create savings for clients. And we were setting out to improve our free cash flow so that we could reduce leverage and maximize our growth opportunities as we move forward. Then the pandemic hit. So we had to step back. We had to regroup in the immediate term, but so proud of our teams around the world. I mean, did a phenomenal job very quickly in April, May of last year, of getting down to every account, renegotiating, you guys all heard the stories, and it was just a phenomenal effort. And it was an effort that was born of what John just talked about, with creating an entrepreneurial spirit and putting the control in the hands of the units. There's no way we could have managed through that pandemic from the center. It had to be done account-by-account in partnership with our clients. And our teams just rose to the occasion. They managed the immediate impact of the pandemic, but we also remained focused on making the changes and the investments to create long-term value. I'm not going to go through this but you can see a lot of the work that's been done over the last 2 years, it would have been very easy to push all that off to the right and pause and wait, but we wouldn't have started to show the momentum that we're starting to show now. And so the foundation set, and we started to see the results. But where do we go from here? By fiscal '25, we target to be a $20 billion-plus revenue company, delivering 7% plus margins. Our goals at the midpoint compared to pre-pandemic results represent a 25% increase in revenue, a 35% increase in AOI and adjusted EPS up 55%. And that's easily said, but how do we get there? Well, to be driven by 2 fundamental factors: underlying performance and the COVID recovery. First, underlying performance. It will be delivered by the building blocks that we have put in place over the past 2 years. We expect organic growth to be roughly 5% to 7%, made up of 4% to 5% net new business. And let me remind you that we posted 3.1% this past year and are targeting 3.5% to 4% in fiscal '22, and 1% to 2% from a combination of pricing and same-store sales growth. Note that this framework assumes inflation, will return to normalized historic levels over time. Of course, if inflation remain at current levels for a prolonged period of time, we would expect growth to be a little higher, driven by additional pricing pass-through. And we expect to grow AOI a bit faster than revenue to deliver margin progression, through supply chain initiatives and GPO growth, leveraging above-unit overhead and continuing to identify new efficiencies and in-unit innovation and productivity. We're excited to have many of our business leaders here today to walk you through those details. Chris, Bart, Jack on net new business; Alison on pricing and same-store sales; Autumn on our supply chain opportunities; and Eduardo on in-unit productivity. And of course, Kim will tackle all of the above for uniforms. The second fundamental factor to delivering on our FY '25 goals is the COVID recovery. Our fiscal '22 outlook assumes $1.6 billion to $1.9 billion of pre-COVID revenues that will not yet be fully recovered by year-end or what we call the COVID Index. We anticipate that white collar B&I globally will represent about 50% or just over $800 million of that index. When these last remaining revenue streams return, they will contribute at a higher incremental margin. While the precise pace and timing of the recovery is uncertain, we do believe it will virtually all recover. But even absent a full recovery in B&I or the other revenue streams, we are seeing encouraging signs of potential offsets, including greater on-site participation rates with restricted movements at a lot of facilities. Clients offering subsidized or free meals to employees; and higher per cap spending with the elimination of cash at many sports and leisure venues. Now let me try to put it all together. First, with a walk of the revenue from fiscal '21 to '25. In fiscal '21, we finished the year at approximately $12 billion in revenue. In fiscal '22, our outlook for organic growth is between 23% and 25%, with the next level acquisition adding roughly another 2%. So at the end of fiscal '22, we foresee revenue 25% to 29% higher or just over $15 billion. From there, as we mentioned, we expect net growth of 4% to 5% per year, cumulatively adding approximately 12% to 15% compared to '21. Price and volume of 1% to 2% per year or approximately 3% to 5% in total. And finally, the return of most, if not all, the remaining COVID-impacted revenues. This results in fiscal '25 revenues of $20 billion plus or nearly 70% higher than fiscal '21 and roughly 25% higher than our pre-COVID revenue of $16.2 billion in fiscal '19. As we move to our margin opportunity, I want to pause and provide some insight into our fundamentals of our business. On the left side of the screen, you can see the pre-COVID, our units generated, on average, about 11% unit margin. This was, of course, higher in uniforms at the market center level and a bit lower in the food and facility side. Our above-unit overhead support costs were about 4%, resulting in a total company AOI margin of 6.7%. Underlying account growth will ultimately deliver attractive returns as we leverage the supply chain and overhead costs. But in the near term, a new account can be margin dilutive, as you can see in the middle of the screen. In year 1, startup costs and other operating efficiencies such as overstaffing or food waste will weigh on margins. Over time, those inefficiencies are managed out of the operation. Generally, new business becomes accretive to the company by year 3, depending on the size and type of contract. The recent change in the magnitude of new wins, going from roughly 0 to 3.1% net new in fiscal '21, has an impact on our near-term margins that will be absorbed with consistent net growth performance. In addition to the right side of the screen, retained accounts can come with some margin compression due to investment -- new investment or change in terms and then rebuilds again over time. Consistent, let me emphasize the word consistent, net new business performance is the key to generating margin progression, as we will see on our next slide in the margin block. Over the course of fiscal '21, our performance reflected ongoing improvement throughout the year with a full year resulting in 2.4% AOI margin. Our fiscal '22 outlook expects AOI margin in the range of 5% to 5.5% with the second half reaching 6% to 6.5%. From there, the result of consistent net new business performance, we just reviewed is expected to drive additional 60 to 90 basis points. Efficiencies and productivity, again, from supply chain initiatives, leveraging overhead spend and productivity from investments, including ABS and uniforms, events and refreshments and in-unit automation like [indiscernible] and facilities are expected to result in an additional 40 to 50 basis points. And finally, the 15% to 20% incremental margin from the COVID Index revenue stream recovery will drive an additional 70 to 110 basis points. This all creates a path to an AOI margin in the range of 7% to 7.5% by fiscal '25. So let me wrap up by again saying that the foundation is set. Our fiscal '25 goals reflect significant growth over pre-COVID results and are built on a sustainable underlying growth framework. As a result of actions taken over the past 2 years, including changing the leadership, changing the culture and changing the focus of the organization. John and I are excited for you to hear from many of the members of the team today, but we're even more excited about the opportunities ahead for Aramark. Now let me introduce the leaders of our food and facilities businesses, for the U.S., Mr. Marc Bruno, and for International, Carl Mittleman.

Okay. Good morning. Thank you, John. Thank you, Tom. Carl and I are excited to be here today as the 2 gentlemen that gets to run our food and facilities business across the globe. And for those of you who know us or maybe don't know us -- a lot of people like to say that Carl and I have a lot in common, right? So for example, we both went to the same college. I got a couple of years on him, but we both graduated from the same college. And we also both were summer interns with Aramark and joined the company post college and have spent our entire careers here. So 25 years plus, maybe I got a couple of years on you on that.

Just a few, just a few. But I think one of the things we have in common, you can probably see it is we love food. And we can actually share wardrobe sometimes as well. But nothing better than having a passion for what you do each and every day.

Absolutely. And I think, on a serious note, we also have in common, our belief that we both or I or you, I have the best shot...

Well, we'll prove that...

That's right. We have the opportunity to lead a business that is varied, incredibly growing and run and made up with a group of passionate folks at all levels of the organization, and every day is just an incredible day for us. The other thing we have in common is we both know -- we've seen a lot in the company's history. We've got to experience a lot working in all our businesses internationally, domestically. So we know and we've seen a lot. But we do agree, and we do share in common that we believe this is the best time in company history.

Absolutely, Marc. We're fully aligned, and I certainly couldn't agree more about what our future does hold for us. We definitely have the right people. We have the right model and the right approach, the right culture in place to achieve our goals. Maybe it would be great if you share with the group a little bit about our Global Food and Facilities business, take a deep dive into the U.S. and then I'll come back up and talk about international.

That would be perfect. Thank you, Carl. So let's talk a little bit about our global food and facilities business. As you can see on the screen here, we operate across the globe in 19 countries with over 200,000 employees at all levels across the globe. And it's -- essentially, we think about the business in really 5 primary sectors. Our education business at over 1,500 colleges, universities and K-12 schools. We have our health care business. Over 650 facilities in both traditional health care, senior living. Our facilities business, over 1 billion square feet that we manage across the globe. Our Sports & Entertainment business, where we serve over 50 pro teams across the globe, 17 national and state parks, and we're widely recognized as the global events leader, as we've been called upon for years and years to execute high-profile events called upon by the IOC and National Olympic Committees, Formula One, you name it. And so we have a long history in that, which we're very proud of. And finally, our B&I sector where we operate in over 5,000 business and industry locations as well as offshore and remote client locations. So when you add it all up, it's a big part of the company that Carl and I, as we said, enjoy leading each and every day. We take a click down and look at the U.S. food and facilities business, right? So you have a perspective here that it's a little over 60% of the company revenue here in the United States. And we -- essentially, those 5 sectors that we operate in, you can see here, it's through 9 distinct lines of businesses: so in our education space, our higher education and K-12 business; the sports, leisure, corrections business, those 3 lines of businesses; B&I through traditional business dining or workplace experience group as well as our refreshment services business; the facilities line of business and, of course, health care. So those 9 distinct business units have things that are very unique to them, but also have some things in common. And those things that John and Tom talked about already, right, a passion for people, our clients, hospitality culture that remains throughout each one of those lines of business has growth opportunities in front of them, regardless of the industry vertical that they're in. And they've got operating structures that we've put in place now that are something that we were, I think, in really good need of and now we're starting to bear some great fruit. So talking about the operating infrastructure. Let me talk about this team. John mentioned it earlier, we have the best team, I think, in the industry, but also that we've had in a long, long time. These 9 presidents and CEOs that run each one of those businesses in the United States are incredible leaders. They've got deep, deep, deep experience in not only the managed services world but for the first time in a long time, each 1 of these 9 individuals is a deep, deep expert in the vertical that they serve, right? You're going to hear from Jack and Bart and Alison today. These are typical examples of individuals that have spent their career. Bart, 30 years in health care. Alison, over 20 years in sports and entertainment, right? Jack, over 20 years in higher education. Clients know them. They know the clients. And so for the first time, we've got a leadership team aligned against the really businesses that they know and love their entire career. And that's something that is really, really special. They're also really focused on growth, and we love that. So when we look at growth, Tom talked a little bit about it for the company. We have a very similar story in terms of how the U.S. is progressing against growth. And you see on the right, our annualized net new business was actually flat on average for the past 5 years, not this past year. But the historical average was we had some good years, some bad years in aggregate for the United States on the food and facility side, and we needed to change that, and we have. So you see this past year, we dramatically turned the ship into delivering a net new performance that was record for us in the United States. And we can see a very clear path on how we will continue to do that for the next several years, raising it even more. So we're excited about it. We did it through a lot of hard work but we made some key strategic decisions that have helped us significantly, right? The first thing we did, John mentioned this earlier, the lines of business owned growth; the presidents, their teams, they own the relationships. And there's nothing really that we were doing from a center or a company perspective that would help them not deliver on what the expectations are for the clients. So they've done a wonderful job of saying, "We've got this, and we're going to deliver for what each line of business and the clients in those industries need." The second thing we did was we put resources against all the different opportunities, not just the big ones, not little ones, and the performance we had this past year, we talked about -- I said it was record-breaking, which it was, but it also was from a portfolio of wins that we haven't seen in a long time. And that is one of the prouder things that I've got of the year, that it was small, medium and larger businesses. You aggregate it up, it just helps distinguish us in the industry, but also creates a great base of new business wins, and we expect that to continue. One of the main things we did was we invested and we did not shy away from investment during the pandemic as difficult as it was, was to make sure that the resources were there for the business units, that each President and growth leader, we added more feet on the street. We added technology to help us target and be far more effective. We added supporting roles to make sure that we could deliver on all the activity that we were involved in. And this, I think, will continue to compound itself so that we can continue to deliver these great results. And we talked about everybody sells this growth mindset up and down the organization. It's clearly evident. We've got great wind in our sales as we approach the market. So we got some great times ahead of us. So we sit at a great place here for the United States. I think that the future looks very bright. The growth engine is working, and I think it's going to get even better. The pandemic allowed us to actually strengthen the relationships we have with clients. We were very forthright. We made tough decisions with them. And they appreciated it and relied on us to do the right thing for their constituents, for their environments. We talked openly about the challenges at hand. And we strengthened the relationships during this time, whether it was approaching through our EverSafe platform and making their environments much safer, but also just making sure that we had both a short-term focus on what was at hand, but a long-term focus to make sure that we could work together and see through it, regardless of what each of the different businesses were facing. We talked about the growth, this will continue to develop. This notion of delivering innovative solutions, I think you saw, as John mentioned, some of the things last night. We've got a robust pipeline of things that we will continue to deliver. And I love this last piece that is really helping the U.S., this notion of investing in strategic capabilities that we haven't had in the past. So examples would be next level. John mentioned that, that puts us in a business in a very strong way with incredible growth opportunities ahead of it. You saw the -- potentially saw the announcement this week of our collaboration with Stephen Starr and STARR Restaurants. It's a great example of us being able to bring innovation into a new way and delivering that through our operations to clients and consumers. There's a lot more of that ahead. So I'm very excited about where the U.S. sits today. I think we're at a pivotal moment. We've got wind in our sales, given our results this past year, and we got a really bright future ahead of us. I'm excited to get started. And really, as we march through the next several years, I'm most fired up about what Tom has outlined is our vision and our role in helping to drive that. I know we can achieve it. It's not easy work. But I feel great, better than I've ever felt about our ability to go deliver on that. So that we can become the most valued partner in the industry. Obviously, the most admired company, but really being the fastest-growing player in the industry. So we're very bullish on the U.S. I think you'll hear that from some of the team members you'll hear today. And with that, I think maybe, Carl, you want to take a dive into the international. Thank you.

Thanks, Marc. I joined the international group in February of 2020. And you might think some interesting timing for a new opportunity like that. As I think back over the last nearly 20 months, I see some silver linings from the pandemic. And one of the key silver lining for me was that I was forced because of the pandemic to learn this business, what I would call, the hard way. The easy way would be racking up frequent flyer miles, traveling around to all of our countries and visiting folks, shaking hands and kissing babies, but I couldn't do that given what we were facing in the world. So I was forced to listen, to build relationships, and most importantly, to learn from our people, from our teams and from our clients. And that made me a better leader, and it gave me a better understanding of the opportunities in international. It allowed me to build a very strong rapport and trust with both our teams and our customers and our clients around the world. But I got to tell you, it has been absolutely amazing to get back on the road, and I'm starting to rack up those miles. I was in the Middle East last week visiting our team in the Gulf of Arabia. And there's one word that comes to mind when you're out there talking to folks that live through this pandemic, that are dealing with the unique changes that we face each and every day, and that word is rewarding. Rewarding in the hard work and the sacrifice that our teams around the world put forth to ensure that our customers and our clients and our employees were cared for during this really difficult time. So I have found that I do have this incredibly great job within the company. And it's my honor to share with you some of the insights about international, our approach to operations and how we're going to achieve our growth targets going forward. International operates at nearly 3,000 client locations across 18 countries that we divide in 5 regions: Northern and Continental Europe, Asia, Canada and Latin America. What makes my job the best is that we get to provide hospitality services in some of the world's most unique places. As Marc mentioned, F1 races in Barcelona; supporting miners and providing hospitality services a mile below the earth surface in Chile; serving the Queen of England or the world leaders at the most recent NATO Summit in Brussels; or just like I saw last week, providing accommodation services to oil rigs and floating barges off the coast of the Gulf in Arabia. And most recently, we had the privilege, the honor, to extend our 50-plus year tradition of serving Olympic Games through our partner -- our joint venture partner, AIM Services in Japan, where we were pleased to service the world's best athletes for the Tokyo 2020 Olympic Games. While International has the opportunity to deliver services and vertical sectors that are very similar to Marc's business, there are no 2 countries where we provide all of Aramark services. We're not generalist. We're actually very specialized in specific countries in those sectors we serve. But when you think about the opportunity to leverage the capabilities of this broad company and you think about where we aren't operating in countries, we see a terrific growth opportunity. That opportunity is in geographic scale, and it's in service expansion. We have this really strong foundation in place. That's something that I was able to grasp early on in this role. But I have found that we have the opportunity to have a really targeted geographic approach, diversify the services we provide and grow on top of that solid foundation. When I came in the role -- as we were dealing with the pandemic, we were all working through Teams. We were dealing in the day, in the moment. And as we started to recognize this need that we had to open up lines of communication, we needed to be sharing knowledge, we needed to collaborate more. And so we created these informal work streams just to ensure that we were addressing the in-the-moment COVID issues. And quickly, we felt, we saw, we observed this opportunity for collaboration within the international sector. And you might think about the health and safety experts in China connecting with our leadership team in Chile to help them understand what was coming their way and how they were adapting and addressing the situation at hand. Or away-from-work solutions that were being developed in Canada shared with our teams in Europe so that we could provide customized solutions to our clients but do so in the moment. And this work, as we saw this opportunity, this benefit of collaboration led to us creating the International Work Council, which has become our approach to operations. This is where we can bring functional and operational leadership together from around the world. And we focus on 3 things: collaboration, innovation and acceleration time to market. The IWC has become the foundation of our approach to the business. We learn from each other. We share best practices with each other. And we provide ultimately customized solutions to meet the needs of our customers and clients. But we also keep a very open conduit to our U.S. partners. So Marc's team and our teams are working hand-in-hand to make sure that we're able to provide the very best, back and forth, around the world. As we look at our approach to growth, our strategy is very clear. We're going to leverage our strong geographic presence, and we will add or expand services in the countries we currently serve. We're going to be able to support that expansion with the capabilities of this great company. As I mentioned, each country has that definition. They understand their commitments, and they understand what they can do to help us capture the opportunity in front of us. For example, when we think about how we can add scale geographically, we can look at the offshore space, where we have a very strong presence in the U.K. Continental Shelf, but we think about how can we grow in the Gulf of Arabia or in the Gulf of Mexico? How can we expand our presence in the senior living or remote services markets in Canada to build off our market-leading position in higher education and health care? How can we grow vertically? For example, in China, where we are the leader, providing facility management in the health care space with over 300 hospitals across the region, but we have a very small share of food services, which are typically in-house or locally provided? The opportunity to grow under the Aramark umbrella where we have a presence in a hospital is what we see as rich and opportunistic. We know we can grow without planting new flags, and that makes our growth very efficient. Our framework for growth is based on 4 imperatives that end up driving, what we call, our growth agenda; in other words, the what and the how. The what -- the agenda -- I'm sorry, the what in terms of our imperatives are very clear. We're going to grow within the countries we serve. We're going to drive and sustain retention at 96%, 97%. We're going to find opportunities to expand into other service sectors within those countries. We're going to drive the base business, as Tom alluded to earlier, and drive those same-store sales through the work of our IWC, innovation and collaboration. And we will selectively review M&A opportunities that come their way. The how is our growth agenda, 5 parallel work streams, work paths that support our countries, that help them to have the resources and the capabilities they need to ensure growth for the long term. I couldn't be more thrilled with the work of our teams around the world. This last year delivered incredibly strong net new sales and financial results for our organization, and we did so in a very difficult environment. But we're in very early innings, and we see a tremendous opportunity in front of us. With this clearly defined strategy, with a collaborative approach to the business and in alignment within our sector, we know that international will be able to deliver on our growth and profitability targets over the next 3 years, and we have set our reach for remarkable to be a $5 billion sector by 2025. Marc, if you join me back up here on the stage, I think it's important for us to bring together this global opportunity. And as you've learned, we've spent a lot of time together in the company. And we've seen a lot over those past 25 years. But I can assure you, I see no more exciting time than the present.

Yes, you're right, Carl. I think, look, we've got the people, we've got the right strategy, we've got people with a passion for this business, people who believe in our future. And we've got a lot of incredible things that the pandemic afforded us to really make sure that we focus and put in place. But most importantly, we've got a leadership team that really understands what we're trying to do, and they feel great about it. We all feel great about it. So we're excited about what we've got ahead of us. And I think you'll hear that through the rest of the conversations today.

Yes. And Marc, the difference is real. This company is reinvigorated, and it's more powerful than anything I've ever experienced in my career with the company. And I think we've got a very bright future ahead.

Absolutely.

So to take us through more of the growth discussion, it's my honor to introduce Chris Garside to you, who heads up our sales and business development for the international sector, and he'll begin the discussion with you around the growth chapter. Thanks, everybody.

Thank you.

Well, thanks, Carl, and hello, and I look forward to taking you through some of the growth agenda as we progress through the day, but good morning to everybody. I'm here to introduce the growth section, covering new business, retention and base business drivers. As you may be aware, I joined the team in May after a quick change in team shirt. I couldn't be more excited about being with Aramark. I'm absolutely delighted to be here. And what I can confidently share with you is that there has been a step change in our approach to growth. And what I'd like to talk to you about is, what we're doing to achieve this, what we're doing differently and why it's set to continue. Having said that, what does help is having shared values that put our clients and our people at the center of our growth story. It also helps that there is a very strong desire and a focus from the team to grow our net new business and to win. Besides, it's far more fun to grow and to win. My observations so far: we have a very strong culinary heritage, although some great facilities management as well. So I, too, like my food, and I treated through some terrific food last night. So we continue to -- the strong heritage that this business has gives us a terrific platform for growth. There is a continued push for first-time outsourcing. We're seeing this across all sectors. We have a strong pipeline of opportunities. The market is there to be had, and we have good momentum. That's why I'm excited about being here, and let me talk to you about how we're going to do this. We need to embed, continue to embed this growth mindset into the organization. John and the team have set the cultural tone. The culture has returned to one of disciplined profitable growth. We're removing complexity, simplifying processes, investing where it's appropriate, and introducing consistent methods and tools to help our teams. Our plan is to grow our pipeline and drive continued improvement in close rates. We've made growth about understanding our clients and consumer needs and responding, particularly in a post-COVID world as Carl and Marc have just talked about. Like I've said, we've got a strong culinary heritage. We need to build on that. Our commitment to people and planet is what we have to evidence to our clients, their employees and our own people. Digital innovation has accelerated as we have adopted new technology, like preorder and cashless. However, we still have to deliver on service. Our people make the difference, and we still have to hire the smile and train the skill. On to resourcing and training. We've aligned our sales values, our sales resources where the appropriate -- where the opportunities exist. And we've added more resource where it's appropriate. We've rolled out consistent method of training and development, and we've revised our compensation packages to retain and attract the very best talent. With M&A, there are and will be opportunities. I'm sure we'll turn down more than we pursue. What is important is that when we do pursue M&A, we have a good reason to buy, we buy capability, we buy quality, we buy aligned values, and we do our due diligence. But what's really important to our clients? Listening and understanding what our clients' requirements are. Developing great client relationships is the key to understanding their critical business issues. Price moves off the agenda when you understand what your clients need and you can add value to what we intend to do. So enhancing the employee and customer experience. The customer journey is becoming ever more important to help our clients attract and retain the best talent. We're being thoughtful about sustainability and ESG. We're investing in digitization. Customized solutions, respecting sector, clients and country differences; working with suppliers and looking for innovation and best practices Carl's just taken you through the IWC approach. Price. Whilst it's important, it's just part of the equation. What is critically important is the client relationships and adding value wherever we are. We win business by listening to and understanding our clients, developing long-term relationships based on great execution and by creating customized solutions for our existing and future clients. On those key drivers of net new. So to wrap up, client retention and great execution is where it starts. We remain flexible to changing client requirements. We adapt our economic models where necessary, and we continue to invest in digitalization and people. We commit to our ESG goals connecting with what's important to our clients and consumers, and we remain focused on the opportunities ahead of us. I'd now like to hand over to Jack, who will bring to life the sales process. Thank you.

Good morning. My job today is to give you sort of a peak behind the curtain of how we approach new account selling, especially in the higher education marketplace. But if you'll indulge me for just a second, there's an audience in the room that's not in the room. I'm sure there's a number of the higher education teammates out there. I want to, in this most important public forum, say thanks to all of you. No matter how much tragedy or adversity hit our world, you never lost focus on taking care of each other, taking care of our clients, taking care of our customers. And you're amazing. Resilience, toughness, flexibility, it's the team I'm part of and I'm very happy to be part of it. So let's talk about the selling process, which is really around kind of predicting human behavior, which is a bit of a challenge. The journey that we've been on, I joined -- rejoined the organization about 20 months ago. And we really started off with the basics. I was struck by the approach that Carl said, you sort of had to -- you're forced to learn this again from the basics. I also started with my team as a Brady Bunch panel on a computer. So we really started with the fundamentals, the foundational elements. The things that you see in front of you, some of these are pretty easy. Anybody here can figure out exactly how many colleges and universities are in the U.S. All you got to do is buy a subscription to the higher education directory. Some of these aren't so easy, configuring the service portfolios that are appropriate for a campus, looking at how we're approaching B2B marketing, how are we telling our story. All of these things require constant attention. We don't think they're the ways that you differentiate but there must-haves. And we also revisited how that affects the way we lead and the way we succeed, so territory and goal alignment. What kind of training and development are we giving the folks that are on our team and are actually representing us in the field. Compensation incentives -- for example, incentives, we reintroduced, what we call, our shared sales incentive program. So when a new account is signed, there is a pool of funds that are available to bonus, if you will, all those who are involved, whether they were an operator or a functional leader, whoever that might be. That strong symbol that we are a team selling organization has been very well received, and it's been very motivating for our organization. So once you move beyond the fundamentals, I think it's helpful to understand sort of the nature of the sale that we are in. So I want to do a little contrast for you. Much of the traditional sales training materials, much of the sales things that you think about are really transactional. Think retail, some B2B selling as well, but they tend to be a single seller, a single buyer, relatively small dollar amounts. It's more of a need benefit kind of approach. If you understand the problem that this particular customer is trying to solve. All that you do is create a need -- a solution for that. You present them with a need benefit and they make a decision. That's not really the kind of sales process that we're engaged in. We're engaged in a much longer cycle strategic sale. As you know, these hospitality contracts for higher education tend to have very large dollar volumes. The buying team is complex, many representatives. The deals tend to be complex. They have virtually infinite numbers of solutions that they might consider in terms of how they can figure a service portfolio to service their particular needs. So they become very conceptual, and they become very relationship-driven. It changes the way we lead and the way we succeed. And I think the best way to explain this to you -- sorry, Lynn, we got to use the story again. I want to tell you a story about a horse, and the horse's name, Sham. Sham ran the Kentucky Derby in 1973. Sham had kind of a tough day when they were Sham in through the starting gate. Cut himself, was very nervous. But when the gate opened, Sham was magical. Finished the race in 1:59.08, which was about as much close as you could measure the timing in '73. The first time a horse finished the race in under 2 minutes. As a matter of fact, it's only happened twice in the entire history of the Kentucky Derby. Sham would have won every single Kentucky Derby ever run up to today. The second one was there was a horse that ran in 2001 and just under 2. And you're probably guessing, 1973, Secretariat ran just ahead of Sham. So by winning that race Secretariat cemented his position as 1 of the greatest horses to ever live. And Sham cemented his reputation as an answer to a Trivia Question. The point is this, in the major account selling game, second place pays nothing. Second place pays nothing. And our challenge, and it's a tough one, is, how do we find that extra 3% to 5% that takes our second place finishes and makes them first place finishes. Because just a few of them make a tremendous difference in our trajectory. So I wanted to lay that out as sort of a foundational piece here. Now we know that our buying organization is complex, I mentioned it a little bit earlier. The first thing I'd tell you here is people buy for their reasons and not for yours. And they buy because they want to feel a certain way. Beyond what you see on the screen around the number of buying influences we may have in a university, we also have the added dynamic, we call chooser and a user. University administration may choose us as a hospitality provider, we have a daily user or customer that we need to deal with and attract to create a hospitality experience. Now we call this, buying process, and you heard described it couple of times as everybody sells. Think of velcro selling. A lot of little connections to make a strong bond between us and a potential customer to create a deep understanding between us and a potential customer. So brand positioning is important. Market reputation is important, but it's not a thing that's going to carry us. We have to have on-the-ground teams that have a deep understanding of our customers' organization and the client and the customers that we're serving. So there's some implications here. We not only have to look at activity, we have to be judges of the quality of that activity. We use the words high, wide and deep. Deep means a relationship that's moving the process forward. We don't want to be professional visitors, if you will. And we need to be brutally honest. We call it [indiscernible], about the quality of the interactions we're having and our depth of understanding around the client organization. So as we think about how we sell, oftentimes, -- by the way, if you ask an organization, what's your selling process? You're going to get something that looks like the left-hand side of the screen, "Hey, we qualify prospects. We initiate contact there's some relationship development here. There's some formal process around this." And this is a very useful construct. It helps us organize our work. It helps us be predictive about our outcomes, but there are a couple of problems with this. Number one, it presents itself as a snapshot when in fact, this is a continuous process. We are continually in the selling process. Our customers don't buy us once. They buy us every day. So this is a continuous process. The second thing is, the customers don't really care how you sell. They care how they buy. And that's the piece that's on the other side of the screen. Within a client organization, there's some need to change that someone recognizes and then they work to build consensus. Then they go through an evaluation process once there's a consensus, "Hey, we do need to change." Selection process and initiate service -- and by the way, this is also a continuous process. So what's true in both of these is that the better -- if we do a great job qualifying prospects, gathering information, every time we do a great job at one step, it makes the next step easier. But here's the problem on the buying side: our view of that process -- how do we support you from going need to change to consensus, that view is always obstructed for us. So that's the challenge to bring that into a clear view. So you can almost feel it in the organization. When these processes are in sync, it feels right. It feels right for us, it feels right for the customers. When they're not in sync, I'll hear things like, "Gosh, maybe we should drop an unsolicited proposal on them." And I read that as, "Oh, we don't think they have understood their need to change or they haven't reached consensus yet, how can we push that forward." Or sometimes hear, "Boy, we need to bring Marc or John in. We need to slow this process down so that they get to know us better." Which I read is, "Hey, they're way down the line in their buying process, and we weren't involved in that first part." so that kind of [indiscernible] dictates the actions that we take against an account. I am very proud of what we achieved this year. As you've all heard, we had a record year in terms of new accounts. It's been very exciting. One of the marketplaces that we've identified as particularly important to us is the HBCU market, which is historically black colleges and universities. There's about 100 of these institutions in the U.S. They're remarkable in their focus on student success, the way they want to influence the communities that they're part of and how their influence is, frankly growing in the higher education space but also in our country. We added 5 of these accounts this year, and I didn't even realize, but when Marc pointed out to me, he says, you know you really -- you proposed 5 and you landed 5. So it was a fantastic story. Our teams did a great job of understanding how do we create a hospitality ecosystem that supports the institution's need to attract and retain a student. They call it perseverance to graduation. I have a -- I would introduce her, but I wouldn't do it justice. I want you to meet one of our newest clients and a new friend of mine Akua. And so let's roll the video, and we can go from there. [Presentation]

Akua. I hope you're watching out there. We are more excited about this partnership than you can imagine. We're excited to be on the journey with you. As excited as Akua was about this facilities that they've opened, she actually undersold it. We had a chance last week to have an east region meeting there, and they allowed us to actually use the student unit space prior to its official opening, and it's incredible. They're on a trajectory that's going to be amazing. So the short version here is in higher education, we have relearned how to win, and we don't plan to give up that feeling anytime soon. There are some things that we've done through the course of the past 2 years, we think, -- we call it changing our center of gravity. We have lowered our center of gravity to our field, to our regions, to the folks that connect most directly with our customers. It gives us the agility. It gives us the knowledge. So we've adjusted organizational structures. We've changed processes. We've added enablers, some of the things that Marc talked about earlier, and we've changed our words. We've changed our storytelling. So what we end up with is an engaged and motivated team. And we are excited about the great balance of new business that we brought on board this year and look forward to continuing this movement going forward. So with that said, on the new business side -- by the way, there is a similar story that all of my colleagues could tell here. In every case, as we talk about things, every one of my colleagues has paid attention to the fundamentals. They have a deep understanding of the market, and frankly, it's nuances, which is the key to creating winning edge, kind of a solution set of one, match to an individual client, and this culture of everybody sells. It's pervasive in the organization. So it's the story across the board. So with that, let me turn the stage over to my friend, Bart, who's going to talk a little bit about retention processes.

Good morning, everybody. Jack, absolutely amazing what you and your team have done to drive those new business record-breaking results. Jack and his team is playing offense. I'm here to talk to you about retention, and that is keeping all the clients that we currently enjoy. Consider that defense. So when you actually bring together that offense and that defense, and as Tom said earlier, that is one of the most important metrics for us and that is that positive net new as an organization. You've got to retain before you can grow. So I want to share with you about retention and that is appreciating and enjoying the current clients we currently have in our portfolios. Retention does not happen by accident. I can tell you that. There's a lot of strategy, there's a lot of effort that goes into it. But we're blessed that we have an amazing playbook, an action plan that helps us actually go to market across the whole company on how to retain our business. I'm not going to go through it in full detail today. I want to give you kind of tip of the iceberg of what's in that playbook, kind of, snippets. First is deep client understanding. You've heard that a couple of times today. You got to know the organization that you're going to partner with and understand their mission, vision and values. What are they trying to solve for? What's the purpose of them as an organization? And we have to know that, we have to live that, and we have the tools. We have our global client survey. We have our voice of the customer. So we really do a good job of understanding that client and what they're trying to achieve. Then it's actually pairing up senior leadership of the client we serve with our senior leadership. And we're not just talking about having a drive-by relationship. It's got to be deep and meaningful. It's understanding the individual what they're trying to solve for in their position. What is their dream fulfillment in doing their job. It's understanding their children, their life aspirations and really understanding. Because we truly believe clients do not fire people they care for. So you have to have that relationship, classic high, wide and deep. You have to have the right team on the ground. That's pretty obvious. You have to have the right talent and the right committed team. And so we work with our talent acquisition, our HR, our operations to make sure that we do have that right team on the ground. We recruit, we retain, we train, we nurture, we recognize. Because once you have that frontline management team working with the client, magic happens. So having that right team. Of course, you have to have operational excellence. It's the blocking and tackling. How are we doing at that account? It's not how we think we're doing at that account. It's how our clients feel how we're doing in terms of performance. And then using third-party metrics, benchmark industry information to actually see how we're doing in terms of bringing value to that organization. So with that, how are we doing financially? What is our financial performance? We need to be providing value, transparent communication, providing a true significant impact on budgets that we sign up for. We have to be a good financial partner. And last one here, I'm going to share with you is that proactive innovation. You saw downstairs. We've got this amazing toy shop of all kinds of innovation. Our clients don't know that. It's up to us. It's our responsibility to bringing that to them. We want to actually solve clients problems before they even know it's a problem. And we've got the toolbox to do it. So once again, it's relentless communication and building those really meaningful relationships. As Chris said earlier, retention really is a mindset. It's a mindset. And the mindset is, we approach all of our customers, as they're going to be clients for life. Our words, our behaviors, our actions are going to be respectful to actually have clients for life. And so when we sign a new piece of business, we don't wait 1 year out before the expiration to start our retention. We start day 1. When we re-sign a new piece of business, we don't wait. We start day 1, because I'll tell you the honest truth. When you lose a client, a partner here at Aramark, it's painful. We take it personal. We are not going to lose clients. We're going to do everything we can to make sure these clients see the value and true partnership. It's interesting. We got to use all of our knowledge and skills to understand where we are in the evolution of a partnership. And what I say that is when we start in our partnerships, the pain is very high. They bring us in because we're providing solutions. We start with the initial price. We do a phenomenal job of actually bringing solutions, their pain goes down over time. We have appropriate escalators in our contracts, our price goes up. So we need to make sure that we know that intersection of the perceived price and the perceived pain and do something to make that partnership reenergized, bring that freshness to it. So we have to really understand exactly what's going on in these partnerships. I've also learned that we can't be shy. We can't keep all the great successes we have in the vault. We have to be able to go to our clients and go to the top of mountain and say, look at what we're doing. We're providing value to this partnership, and we're proud of it. So I want to share with you just quickly in the health care arena, which I am passionate about. And as Marc said earlier, yes, I've been in health care for 34 years, and that's by design because I love the hospital health care arena. So since I've been here at Aramark Healthcare, we've had so many tremendous retentions. And I want to showcase one with you right now. It's absolutely amazing what we have Houston Methodist Health System in Houston, Texas. It's a very large health system, 8 hospitals bring across the Texas market, very internationally known. Well endowed. Great, great health system. I'm proud to let you know that we just re-signed with them, 8 hospitals, 4 separate service lines, and it's a 15-year deal. Talk about vote of confidence. Talk about our clients saying, yes, that you are providing value, and we want to continue to be your partner for the next 15 years. Extraordinary. They ask why? Why did they do that? Well, the playbook works. If you have the right relationships, with the right team on the ground, with the right proactive innovation and driving the right patient experience scores, magic happens. We were able to get that 15-year new agreement. Patient experience. I don't know if you know what that means, but that is really the essence of what we're trying to bring in this organization. So I stand before the health care team and say, our purpose is to be patient-centric, to drive these patient experiences. It's to be a care for the caregivers. What can we do to help our nurses actually have a higher value and better satisfaction going to work? Nurse turnover, nurse burnout is real. So we are a partner and our clients caring for those caregivers. How can we empower our frontline managers and our frontline associates to make these magic moment happen where you have a frontline associate connect with the patient where the patient actually appreciates the human connection and makes their stay better. This is what we're striving for across Aramark Healthcare. And we have a video that captures the essence and the sentiment of what we're trying to do with this culture. [Presentation]

Our people and our culture are a differentiator that helps us retain. We take care of the patients. We take care of those caregivers. We take care of our teammates, and our clients will take care of us. So bottom line, how are we doing on retention? We definitely are improving as an organization. We're improving USA. We're improving internationally, and we're improving in the uniforms. Our 5-year average in retention is 94%. I am thrilled to let you know last year, fiscal '21, we averaged -- we were 95.5% retention rate. It's not good enough. We have our playbook. We have our plan. And our goal is to be at 97%. We have this client-for-life, so it could actually exceed 97%. But we have the expectation. We have the resources. We have our playbook. We have our people. Now it's time to deliver. So thank you. I love now -- I'd like to bring up a friend and colleague of mine, the President and CEO of Sports Entertainment, who will be talking to you about the base business growth, Alison Birdwell. Come on up.

Thanks very much, Bart. Thank you. Good morning. So I'm here today to talk to you about our base business and how we drive that. And when you think about base business, it's easy to assume it's kind of in the bank, right? It's there. We have it. And I think we've decided that's a very dangerous mindset to take and nothing changes if nothing changes. And so in order to drive that, we have to look at our base business very carefully and very differently. In Sports & Entertainment, we take 3 separate approaches to our building the base business: first is pricing and velocity; second is throughput and speed of service; and third is quality and local. And as we look at those 3 things, we have to stand back and decide how we're going to implement concepts, how we're going to change some of the things we do day-to-day and make sure it's the right fit so that we get it right the first time, we can pilot it and then we can bring it to scale. So the first part of how we approach that is using our left brain or data science. And I'm not talking about just business intelligence that you may have, data you've collected or sales info or things like that. I'm talking about taking all of those things and putting it together and then truly doing advanced analytics to fully understand every metric that influences our business. And by that, I mean everything from sales, ratios of our sales and revenue, labor costs, shift lengths, all kinds of things, all of the data that we have access to, how do we synthesize that to have an output of innovation and concepts that bring what we know to life in a meaningful way to our fans, guests and clients. So once we have the data, we take that and we use it to create our design concepts. So during the pandemic, we have seen things come out of the pandemic that have changed our industry. When you think about cashless and tax exclusivity, those are 2 of the key things that have happened in the sports and entertainment industry. It's an industry standard pretty much at this time. Everybody is doing it. What are we gaining from that? The cashless piece of our business really forced adoption. And before the pandemic, I don't think we could have really made that happen to the extent that we have been able to do today. And what that does for us is really allowed to open the door more to the speed of service and throughput propositions and allows us to place tech to help us with industry and market challenges such as labor, training and how we approach that fan experience for a more seamless experience. The tax exclusive piece really allows us to have more control over pricing, and really how we parley our pricing, our price marks, how we offer value pricing versus premium pricing. So those 2 things, while everybody is doing them, it's how we leverage those differently to really achieve our goals for our base business. We have 2 tools that we're using in our data science team right now to make sure that we have the ability to prepare ourselves for the future. The first one is a recommendation engine, which we have recently implemented, and we're piloting right now and we've got into our first round of implementation. And what we're doing is taking all of that information you see, the velocity consumer demand, all of the industry and kind of external factors and putting those together with what we know specifically about our accounts, our individual locations point of sale, individual staffing guides, all of those things, putting that in to come up with a plan for where we need to serve what the right time, the right place, at the right price. This information from our data science team who have been working with us, and we've had our data science team in place for just over a decade now. So we have a very robust bank of information and also access to external factors that we use to put that together. So this is a very valuable tool that we're already seeing the benefits of as we come out of COVID. Second tool that we're using is our venue optimizer all. And this tool specifically really relates to how we're staffing and managing the labor piece of our business. It starts off with understanding alcohol to food mix. And then it talks about -- or doesn't talk about, but brings in the staffing factor. And if you think about when we reopened our business off of COVID, let's say, in Major League Baseball, back last April, we had constraints how many fans could be in the building. We can have 4,000 people at Fenway Park as guests. What do you open? And of course, our clients all want to open in a way that welcomes their fans back the best way possible. And so the inclination is to say, open up the building. The fans will have access to everything they need. And from our standpoint, when we want to make sure that we're staffed accurately. We have supply chain shortages and concerns, and we obviously need to manage our business through this. This venue optimizer tool was created to help our teams individually at every location, put in their attendance, their type of event, time of day, opponent, all of those things and shares with them the most optimal way of opening the building based on those factors to maximize the fan experience, to maximize throughput and to realize the efficiencies of labor and cost of sales. And we have used this for the better part of the year now and have had amazing results. Not only have we had amazing results that have benefited us and our fans but our clients are incredibly comfortable with this tool because they've seen the credibility of it, as they use it with us and say, "We want to open 5 stands. We opened 3 and it worked, and it worked really, really well." We had to staff the building less ourselves. Our fans got everything they wanted. So this is a vetted process that we are now scaling to use in our business on a much larger scale, not just in sports, but across our entire portfolio. So some results of this, and really, we've piloted this in all of our venues, but we've also taken our left brain and our right brain and reconceptualized our business as we come out of COVID and move forward into the future in general. And one of those locations that we've done that and piloted these things is a PPG Paints Arena. And during the COVID closure time, we completed a large-scale renovation at this venue. And already, since our reopening where we had a partial reopening for last hockey season and then a full reopening this year, we're seeing that our new stands have led to 16% per cap lift, and that's exclusive of any pricing changes we've made, exclusive of any tax exclusive and exclusive of cashless. So really, it's proven to us that this model works, and we can now scale it across our business. Let's talk about frictionless service styles real quick. And by that, I mean not the traditional cashier. You walk up to a location, there's not that barrier between you and what you want to get in order to go back and enjoy the event or whatever you're there to see. So when we think about frictionless, we're trying to get the core signature items to our fans faster. And by that, I mean the Fenway Frank, the nachos, the popcorn, the soda, the basics in a ballpark that you just want to go get. It's not experience really other than if you're buying them from a loud vendor in the stands or something like that. You just want to get those things and get back to your seat. Secondly, we want to move those beverage-only transactions from a line. So you want another beer, there's nothing more annoying than walking up and seeing there's 15 people in front of you waiting for pizza, whatever it is. So pulling those things out into a separate area to make sure that not only can you get those 2 things easily, but the experience of doing so just adds to the overall experience while you're at the event. So our Fan Favorites Express is one incarnation of this. And this really has taught us that we can do -- give more than we've given in the past. This particular location is also in Pittsburg. It's netted us a 36% decrease in labor, and it's added 66% more transactions per point of sale than other locations. And what this is, as you're walking in here and it's really taken that barrier down, you're selecting things yourself. It's like a grab-and-go, convenience-store-type environment, and then you will leave and you can see you saw some Mashgin technology last night over in our cafe space, you pay that way or it would be completely frictionless where it's -- and you also saw down in our tech innovation lab last night where you're just walking out and the sale is recorded. And we have about 20 of those concepts in our overall business right now, and that number is growing. So think about the experience you walk in, you shop and you leave. And we still understand that service is crucial in the experience. This doesn't eliminate staff. People are still crucial to making sure the fan experience goes smoothly. If there's confusion, if there's a certain item someone is looking for and just meeting and greeting the fan as they come in and out of the store. So we're not eliminating the service factors, we're enhancing the overall experience and speeding it up at the same time. The drink market, I know there's a lot of small white script on the screen, so don't worry about that because I'll tell you what it says if you can't see it. But the drink market is really taking like a built-in bar or a built-in portable location and opening it up. Once again, we're talking about removing barriers, opening up the experience. And in this scenario, while we look at product and pricing in our data science capabilities and often try and streamline menus, a, to meet supply chain challenges; b, to increase speed of service. In this scenario, we're actually adding variety. And think about when you go into a scenario like this, you're walking in here, and there's -- the opportunity is to offer many more types and styles of beer, for example; different sodas; alternative beverages to soda and more healthful options in a way that the consumer can shop for them, and they're not waiting for someone to kind of dig through the ice, while I got this, this and this. And so the actual perception of variety is not just a perception, it's a reality. But the speed of service is not only not compromised, it's improved. And when we look at the stats that have gone along with this, also, in Pittsburg, we've seen 134 more transactions per point of sale versus a built-in bar. We've seen 115% of sales per point of sale versus a built-in bar. And we've seen 203% of sales per headcount versus prior year. So opening things up, making them more inviting and providing that frictionless checkout has only improved the entire experience as well as added efficiencies to our operation. Let's talk a little bit about local and quality. And by that, I mean, proprietary brands that we have created alongside perhaps some regional or national brands to really provide a mix of premium perception and execution. And when you go to a stadium, it's nice -- or I think it's nice anyway. I go to a lot of stadiums and sometimes you have to wonder where you are because it's the same hot dog, it's the same beer, it's the same kind of transactional experience. And by having these local and quality elements in our plan, we're able to showcase the Stephen Starr recent transaction and partnership that we've created. It is a prime example of how we can leverage local, right here in Philadelphia, and hopefully, expand beyond that. But also creating these brands. We have Tenders, Love, and Chicken, for example, that emulates a brand that you would have nationally. And through packaging, menu, quality of menu items, even uniforms, the whole experience. You can then control price, and you can make it a value price experience. The rival is not only regional and national brands, but also stops us having to pay those third-party or national brand commissions or royalties and things like that. So it's also an efficient way of retaining our margins as well. And one of the areas that we've really done this well, and this was our pilot, and we've done it in about 6 locations, and we're continuing to scale is, what we call, our Hall of Phase. Think about a taste of the arena or a taste of the stadium in one place. So you're at a game, you may be with your family and your wife, your husband wants something completely different than you want to eat or drink. In this scenario, you can get them all them in one place. It's really the best of all of the signature items in the building. And we have 2 different types of payment mechanisms here. You can either do mobile or kiosk ordering, so that there's still that frictionless element, but they come together in a way that you can choose how you want. You can either order it from your seat, go get it; you can get up there and look through the menu and decide how you want to receive that, but everything happens in 1 place. And it's very, very efficient because not only are you streamlining your staffing needs but you are also giving that experience and satisfaction and that value add. And right here, in Pittsburg, we have seen some amazing results. We opened this Hall of Phase about a year ago when we had limited attendance and now have been able to reap the full benefits of it as we've opened this NHL season. We've seen a 19% increase in per cap compared to the prior stands that were here before. We've seen a 17% in average check compared to the prior stand. And we've seen an 8% in transactions per POS increase compared to the prior stand. So this is a tested true way of delivering quality experience, speed of service and everything that I've just talked about all in 1 place. And we're really, really proud of how this has come together. Our job now is to scale these across our business, and we have been doing quite a few things to prepare for that since the pandemic. And I'd like to show you a video of -- we've done some additional work at Empower Field in Denver, Colorado, the home of the Broncos and one of our great partners who have allowed us to really take all of these ideas and scale them in an NFL environment. So if we could roll the video, I can show you. [Presentation]

So you may not know, but the NFL lives and dies by that voice of the fan score. And everyone wants to be #1, and everyone wants to write into their contracts, that you will get them in that top 5. And obviously, there are only 5 spots there, but that is a really impactful and meaningful metric to us to understand the success of what we've been able to do. We're currently implementing these things in, I would say, the majority of our sports venues at this point, in some way, shape or form, and we're really, really excited about the future. We know it's going to work, and we know how we can affect change. So thank you very much for your time today.

Hello, everyone. We're going to use this time to just take a 15-minute break. So we'll all be together and reconvene at 10:50 Eastern time, obviously, for those on the webcast. Thank you. [Break]

So we're going to shift gears now and talk a little bit about the Aramark Uniform Services business. I'm delighted to introduce myself to all of you today for those who I did not get a chance to meet last night. My name is Kim Scott, and I'm the new President and CEO of the Aramark Uniform Services business. Today, literally marks Day 60 for me. So I'm thrilled to be celebrating that day with all of you. And I thought before we get started, talking about the strategy of the business and the massive opportunity that I see here -- that we all see here, I thought it would make sense to share just a little bit about my background so that you can understand why I'm here and why this makes sense for me to lead this amazing business and this great team. I've spent many years in my early days in industrial manufacturing, so I grew up in GE and U.S. Steel. So the manufacturing and supply chain aspects of this business correlate very well with my background. But I also spent more than a decade at a company called Brambles Limited, leading the CHEP North America business, which is an equipment pooling business, also a recurring revenue rental model that leases pallets into the consumer goods supply chain, flows those pallets through the retail supply chain, and for the most part, any product that you might purchase for your home at a retailer, whether that be Tide detergent, whether that be diapers, whether that be macaroni and cheese, it probably moves on a pallet. And so I had the opportunity to run a very complex logistics and supply chain organization that was focused on what we call pooling, which is very similar to the rental model for uniforms. So the goal here is to spend those assets as fast as you can. Asset utilization is the name of the game and also losses and leakage matters, very similar to loss and ruin in our uniform rental model. So believe it or not, there is a very high correlation between that pallet pooling business and what we do here in Uniform. So it's really a great fit with a lot of levers that are very correlated. So I'm excited to bring that experience to bear. I also spent time in the waste management industry, so think route-based obviously, and also with a company called Rubicon Global, which is very sustainably oriented models that are sustainably friendly that are supporting the circular economy are also very important to me. The CHEP pooling model supports the circular economy. The Rubicon Global business model is focused on diverting waste from landfills. And I'm thrilled to now be a part of the business that is also focused on reuse and rental model. So there is a great sustainability story inside this business. That is personally very important to me. So I'm thrilled to be a part again, of a company that is very focused on ESG and sustainability. In a little while, you'll get to hear from Ash Hanson, who leads that part of our business, and she has some great things to share with you about what's happening in our company in that regard. Most recently though, before joining Aramark Uniform Services, I was the COO of Terminix. So you guys are probably familiar with Terminix, the pest control company. It's a great and wonderful company, full of amazing distributed workforce team members. So route-based team members, providing pest control services to millions of customers, businesses and homes, and I have a very strong heart for that frontline team. So the idea of coming here now to Aramark Uniform Services and having an even larger distributed workforce team, a team that is working really hard to do a great job for our customers, doing work that is hard, that is tough, but it's sometimes not appreciated is incredibly important to me. And that's where I find my purpose and my passion. I have a heart for the frontline team, and I've already fallen in love with this frontline team. So my experiences are incredibly correlated. This is an amazing business. And today, I'm going to take you through our story and share more about what we see about the future for the uniforms business, which is very bright and incredibly exciting. All right. So I thought I'd calibrate us to start with. Let's just get some facts on the table. I think most of you guys are very familiar with what we bring to the table in terms of our contribution to Aramark as a whole. But just to calibrate, FY '21 revenues, we were at about $2.4 billion. We service about 400,000 customers 17,000-ish employee strong as I mentioned, that love for the workforce is an important factor in my decision to join the company are these 17,000 great associates that we have out in the network serving our customers. We're operating in the U.S. and Canada. We actually operate under 2 brands. So we have the Canadian linen brand in Canada that came to us when we acquired AmeriPride. And then we also, of course, operate under the Aramark brand. We have 3,400 routes roughly. So route-based business is definitely the name of the game for us, thinking about route efficiency and density and we have more than 350 locations across the network. So lots of touch points, lots of plant activity and lots of operations happening across the U.S. and Canada. We are more than a uniform rental services business. We do see great value in the adjacencies. You saw some of that, for those of you who were able to attend last night's reception in our booth, you would have seen that we're also offering other services to really leverage our base and grow that base and provide more value for our customers. So we offer our traditional core business, which is the rental of uniforms, which you can see outside on the mannequin here just outside of the room. We offer managed restroom services, first aid and -- first aid and safety services, floor care and mats. So think about floor mats as you enter the door of a building or you exit the door of a building or you moving into a restroom inside a restaurant. You might see those floor mats, industrial floor mats, we offer those. And then we also offer towel services. So you think about a restaurant who is using lots of bar towels in their everyday activity, we also provide that as a recurring service to our customers. So this mix of adjacencies is a fantastic way to leverage the base. So we love our core business, our rental business, but the opportunity to cross-sell to these customers and to provide these additional services and to really own the back room or the locker room or the back store is very, very important and it drives great value for our business to be able to expand into these adjacencies. I thought I'd also share given today is Day 60, my first impression. So I've had the opportunity to go pretty deep. And I've immersed myself in this business over the last 60 days. So if you could go somewhere, if there were employees to find, I made every effort to get into those offices and those buildings and those plants and those DCs to spend time with our people. So I have hit the ground running and loved every minute of it. And the first thing that I can tell you is it's exactly what I thought it would be, which is an amazing business with tremendous potential. So while I'm proud of the team and I'm proud of all that they've delivered and accomplished, I can already see a pathway to deliver more value to find incremental value and to unlock value. The team is performing great in many areas, but I do see opportunity to do more, and we'll talk about that in a moment. We have amazing customers. I have had the chance already to visit great customers, and I've enjoyed those interactions and I can tell that there is a very strong relationship between our frontline team and the employees that we're serving. It is very impressive to see, and it's going to be very valuable as we work to cross-sell and to expand and cross-sell into that base. We also have a great leadership team. And I will tell you, oftentimes, when you come in to lead a new business, you wonder what you'll find on the other side. And I am pleased to tell you that I am delighted with the management team that we have inside this company. There are years and years of experience in the industry. I recognize that I'm not coming from the textile or uniform industry, and I'm really pleased to say we have amazing experts that know our industry incredibly well. So while I know the model, and I understand the model incredibly well, I am thrilled to have great support and resources on my team that know this industry and love this industry. Hopefully, you all had the chance to meet some of my team members last night who were here. But in the room with us, we have Art Wake, who is our President, who runs our U.S. business. We have Rob Marlotte here, who is the leader of our strategy and pricing. And I'm sure you guys know in a recurring revenue model, pricing is really important and can be very, very critical to the success of your business as you work to grow your base and create value and expand pricing, and Rob leads that for us. And then we also have Ryan Flaherty here with us today, who leads our sales and growth across Canada and the U.S. So if you guys would just get a quick wave. They're back here together. I encourage you during lunch if you didn't have the opportunity to meet my team members that are here to please take a moment to speak with them. They have great insights to share about our business, and I am very proud to have them on my team. I'd like to talk now briefly about the frontline though, because I love you guys, but the frontline is where it all gets done in this business model. So understanding those thousands of teammates who do the hard work every day. I have had a chance already, they were my favorite days so far, to do ride-alongs with our route sales representatives. So to be in the truck with our teammates who are picking up laundry, who are dropping off uniforms and who were then consolidating those dirty garments and bringing them back to our plant to be washed and then return back to our customers. It is not easy work. Our teammates do amazing work, and it is a very hard job and it can be a thankless job, and I'm grateful to them for all that they do. And I believe that they represent the brand of this company. I'm sure there are many others who have come before us and who will come after us who can figure out how to wash clothes and put them on hangers and load them in a truck. The key to our company's success is those frontline team members loving every moment of their time at Aramark, engaging with our customers, understanding that they are impacting millions of people who are starting their work job each day in these uniforms that we are providing to them, recognizing how critically important it is that we are helping decide how each of those individual people feel when they start their day. And I like to think about it this way, we all -- at least most of us thought about what we wanted to wear to work today. So you guys got up this morning and you thought about what jacket you wanted to wear or what trousers or pants or shoes you were going to wear. There are thousands of people who are using our product and services who did not get to make that choice today. So they are wearing the uniforms that have been dictated to them by their employer, and we have a role to play in making sure that's an amazing experience, making sure they feel great. They feel good about who they are and what they do and that they can bring their best self to work that day. We have a role to play. That is a huge responsibility. And being with our team members on the frontline and watching them load people's uniforms into the locker. Someone is going to show up in a few minutes, and they are going to take that uniform out, and they're going to wear that all day long. And we have a massive role to play in how that experience feels for thousands of people across our nation today. Right now, in this moment, that is happening. So I think it is incredibly important that our team is proud of that, that they feel good about what they do and they know that they are serving a higher purpose, which is impacting thousands of people's lives that day. Not to mention the brands that those people represent and the companies who are trying to present themselves to their customers and their consumers and I'm proud of what I saw. When I did the ride-alongs with our route service team members, and I listen to how passionate they are about what they do and about taking great care of our customers, it was a great moment. I'm telling you those were the best days that I've had so far in this company. And I know if our team is thriving, if we're taking care of that frontline, this business is going to go like crazy. And I can see the opportunity. And when you think about cross-selling and you think about all these adjacencies that we've been sharing with you all, the opportunity to connect with that customer and to continue to offer more services is extremely powerful and accretive for our company. I know prior to my arrival we've talked a lot about investments as well that we've made in the company. Many of you asked me questions about that last night. We had some of this depicted in our booth for you guys last night. But we have made some great amazing investments in this company, including increasing our headcount in our sales force and also including the decision to move to a new CRM that we've referred to as ABS. I can tell you that I am incredibly pleased that those decisions were made. So I've had a chance to evaluate those decisions, to understand those investments and to understand what those investments will do and can do for us, and they were absolutely the right decisions to make. I consider an amazing gift to show up and that we're already more than 70% implemented on a brand new CRM, which is no easy task by the way, and that we have already put ourselves headcount in place and that we are ramping those amazing people up and helping them get to full productivity. So I'm pleased about that. I can tell you, though, after 60 days, I can already see more opportunity. So I knew there was opportunity. I did my research before I made the choice to join here, and I was excited about the strategy and the things that I could read about and learn about that were in place. But now that I've been here for a couple of months, it is incredibly clear to me that there is even more that we can do to make this business great. There's an opportunity for a more strategic lens around marketing for thinking more about how we see the funnel and the front end of our business related to leads. We have this amazing sales team in place, but being smarter about how we support them through lead gen. Digital marketing is going to be a tremendous opportunity for this business that we have barely scratched the surface on, and also thinking really, really, really surgically about route density and driving efficiencies across our supply chain. So there is tremendous opportunity in this business, and we're going to go about the business of harvesting that. There is also tremendous opportunity in the market itself. So as I talk about these great opportunities to grow, John referenced this in his presentation earlier this morning, but we are in a $40 billion sector. And as I will show you in a moment or as I already showed you, actually, we have about $2.5 billion of a $40 billion sector. So when you think about the opportunity to capture share and to grow this business, it's ripe for the taking and we are simply delighted to see this opportunity. Our assessment reveals that we have about 6% of that share. There are 2 other -- 2 large other players in the market, as you are very aware, I'm sure. But you can see the rest of that opportunity is incredibly fragmented. Local players, self-serve players, a tremendous opportunity to capture that share. So yes, as some of my colleagues before have said, we'll compete head-to-head with the big players in the market as well, but there is plenty of space for everyone to take advantage of this $40 billion market opportunity, and we're going to be focused on doing that. If you followed our numbers at all, and I'm sure many of you have, you would know this is a really healthy business also. Great margins. Good cash flows. So there are some very, very incredible dynamics that are happening inside the P&L of this business. The thing that I really love the most about the model is the recurring revenue. So recurring revenue models can be beautiful if you are doing a great job of taking care of your customer. If you drive retention and you have the opportunity then to create loyalty and cross-sell, you can really leverage this space in amazing ways. Our team did a great job with retention over the last year, and I know that we can do more. So there's massive opportunity there as well. So I'm going to take us back a little to 2019 and talk about some of the things that we've been doing to focus on growth. And then also some of the opportunities that we're keenly aware of and focused on making sure that we manage effectively across this business. I've already mentioned that we made material investments in the sales force headcount and I'm thrilled about that. We have those team members in place now, and we're working on making sure we ramp those team members up. We've already spoken about the ABS as we refer to it, our CRM, and we're really thrilled about what the enablement that, that is going to bring us. I'm going to show a video shortly that really brings that to life for you all so that you can see what we aim to achieve and what we're enabling through the implementation of this CRM. I mentioned already that we have seen increased customer satisfaction scores already. So the team has done an amazing job engaging with our customers, creating loyalty, ensuring that they're having a great experience. We are seeing that in our customer satisfaction scores, and that is correlating to higher retention. So we had a good year related to retention, and we're continuing to see those trends in this year as well. So we will continue to focus on retention initiatives, protecting that base so that we can grow that base. Previously, you've heard John and Tom also talk about our desire to grow our share in first aid and restroom services. And the team continues to focus on that. We made great strides last year, and we're continuing to drive growth in that part of our business in the coming years. Challenges that we face, things we're working hard to make sure that we mitigate or overcome the pace of base revenue recovery. We've mentioned before that we have a mix that contains linens that is highly dependent on the restaurant industry, particularly in Canada. So we're very focused on making sure that we have strong performance and recovery in those areas, also managing inflation. So supply chain costs and labor costs, the pressures that the entire world is facing right now. Our team is hyper-focused and laser-focused around making sure that we mitigate those challenges that we have strategies and plans in place, and I'm very pleased with the work that we're doing in both of those areas. And then lastly, as I mentioned, the sales force team that we have put in place, I admire that we ramped this team up in the middle of COVID. That is not an easy thing to do. So we added this headcount and then we faced headwinds selling against an environment that included a pandemic. And the team has done an amazing job ramping up their productivity and there is more opportunity to continue to increase the productivity of that team, but they did an awesome job during a very challenging environment, bringing the sales headcount on to our team and getting them ramped up. So I'd like to show also just a little time line because it's very important to understand that this is a strategy that has been unfolding for some period. And it's a great strategy, and I'm very pleased with the foundation that it gives us to really launch and propel growth from. So back in 2018, we acquired a company called AmeriPride, which I'm sure many of you recall and are familiar with. I am really, really pleased to say that we did an amazing job integrating this business, and we found great talent. We got great scale and density. We got amazing customer-first orientation. This team is hyper focused on creating a great customer experience. And we also got the courage to launch our new CRM platform, thanks to our AmeriPride partners that we brought into our family. So they were already operating on this amazing CRM. They were doing a great job managing it and managing their customer relationship and growing their customer with this great one source in place for data and for the truth to understand how we're serving the customer and how we can cross-sell the customer. So they were the catalyst for us to launch the CRM across our entire portfolio. We have already moved more than 70% of our revenue onto this new platform. And I applaud the team for doing that in the middle of a COVID environment, which is a very challenging time to go through a systems transition the way that we have, and they have done a seamless and awesome job. We've already talked about adding the headcount, just to put some data around it for our sales force. That was a 35% increase in sales force personnel on our team. So it is a material investment, and I think it's really sobering when you see just the increase in headcount and the commitment that the company has for growing the business to make an investment such as this. The CRM, I'm going to show you a video in just a minute to talk about what that does for us, how it enables us. You should think about this platform not as the silver bullet. You should think of this platform as the enabler for many things that we want to do across this business. It is one place to house all of our data and information about our customers to see the movement of our routes so that we can understand how efficient we're being to allow us to have very ease of doing business activities with our customers, and you'll see all of that reflected in the video in a moment. But the way I think about all of these investments are they have been creating -- prior to my arrival, the team has been creating the foundation for step change in growth. And we are putting all the building blocks in place, and those building blocks are now in place. So our focus going forward now is going to be to leverage all of these investments to drive step change growth in this business, not a do better strategy, now let's do a little more than we did last year. Let's think very strategically about how we start closing the gap and how we start driving step change growth inside this business. So that is going to be our focus. So now I'd like to show you the video, just so you can get a feel for how the CRM works and what we're doing with it. [Presentation]

So hopefully, that gives you a flavor of the many things that this tool is going to enable for us. And this is not just about the CRM, this is about digital scanning inside our plants when we're bringing merchandise back. This is about thinking about cross-selling strategies and how we're going to enable the frontline. So this is an amazing tool that helps us with the strategy. I think it's also just really important to be so candid with you all about how much paper is inside this organization. So while you look at this and some of this may seem really basic and you're thinking, well, of course, you should be able to sign a contract on your handheld or on your cell phone, there is a tremendous or there was a tremendous amount of paper activity happening inside this organization. When I was able to do the ride-alongs with our route sales representatives, I rode with one of our RSRs who was still on the old process. And I rode with one who is now on our new CRM, and it was pretty shocking to watch him with his manila folder of papers in the truck at every stop, sorting through that paper, trying to find the right invoice for the customer and then fumbling through that at the customer's desk as we were providing the service, multiple signatures, literally been watching the customer take that paper and put it in her filing cabinet, so then she could later pull it back out when the invoice came and she could verify that service happened. So it was incredibly old school, if I can say it that way. And so then riding with our next RSR and seeing the digital capabilities and watching the efficiency and we had just rolled it out. So I also got to hear our customers' reaction to it, and they were elated many, and almost all were elated to know that it was now going to be digital, and they no longer have to keep up with that paper. So it was already creating the seamless interaction. And we were already getting a reaction from the customers that this was incredibly powerful, much easier to do business with. And if you think about the opportunity our field team has to cross-sell, I would much rather that they're having that conversation instead of spending time fumbling through papers to get a signature to show that a work order has been completed. So it really gives our guys a better position from which to engage with the customer in a more valuable and a more strategic way. So we are incredibly excited about this tool. So moving forward, now that we have this tool in place, now that we have our sales team in place, and we have a great strategy that is unfolding, what are we going to be focused on to really bring value to really unlock value inside this business. More than the do better strategy, more than just continuous improvement year-over-year, how are we going to find step change growth and really accelerate inside this business. It's going to start with a hyper focus on organic growth. So in the coming months, I'm going to be spending a tremendous amount of energy building out the strategic growth plan. So really thinking about how we're going to market, how we're selling our products and services and how we're targeting our customers and building out a very robust strategic growth plan. That growth plan will also include a view around digital marketing, which is a huge opportunity that's untapped for us as well. More sophisticated customer retention strategies. I'm super proud of the team. They have done a great job engaging our customers, touching our customers, creating a good experience, but we can also be more strategic about how we build our customer engagement strategies and how we think about creating value in every step of the journey with our customers. So we're going to be putting work around the customer experience and adding incremental value. Base revenue recovery will always be our focus until we're 100% back to par and where we want to be related to our base and the impacts of the pandemic. So the team will remain focused on that. And those adjacencies that we've been talking about are incredibly accretive. There's massive opportunity to really focus on the mix of our top line revenue and make sure that we capture some of those very accretive adjacency opportunities. We are going to deliver on the investments. So we've talked about that a good bit, as have Tom and John before my arrival, and we are committed to making sure that we parlay those investments into creating great value, and we are already seeing the results of some of that work. Margin expansion will always be a focus as well. I will give you my view around margin expansion. It starts with growth. So the best way to build a good and healthy company is to grow that company exponentially versus cutting costs and eventually cutting bones. So we do what we need to do, obviously, to deliver our results and our commitments, but the best and most healthy way to grow this business is through organic growth and through increasing retention with our customer base, and that's what we'll be focused on. However, there are levers that will help us improve margin beyond just growth. And some of those include things like route density, getting very smart about how we grow and where we grow. So rather than growing wherever the opportunity is available, thinking very clearly about how to fill in our routes and how to create density. So when you think about one of our route sales representatives, serving our customers, think about the Aramark truck. He's driving on his route, and he is passing by opportunities as he's driving on that route, opportunities for him to find new customers and to serve those customers along the route. So think about us creating an environment where a sales team member -- that army of sales team members that we now have in place are maybe figuratively, maybe not literally, but they're following behind that route and they are filling in cells on that route to make that route more productive and to make every stop more valuable to us. So eliminating empty miles, eliminating drive time and selling along the route to create density. We're going to be putting a lot of rigor behind this concept and really thinking through how to bring to life route density through selling in the right places. We'll also focus on route efficiency. We'll make sure and we are doing this, making sure they're driving the best possible route on the route that they have today. But the key to this business is density and filling in those routes and making every stop more valuable. I've already spoken about revenue mix management. So we'll continue to focus on that mix and those adjacencies and getting that right. And pricing matters. Obviously, in a recurring revenue model, we're going to remain hyper-focused on the right pricing being very surgical, understanding the segmentation of our customer base, understanding where value is being created and driving price through that base in smart and accurate ways. And then lastly, the whole theme here is we're modernizing this business. We are really bringing this business forward using technology as an enabler for us, but also thinking about strategies around digital marketing and other things going to help bring this business forward and find places to drive step change. So lastly, in closing, I want to reiterate how incredibly excited I am to be here. This is a great business. Not only is it full of great people and great frontline team members that love our customers and love Aramark and love what they do. The opportunity here is tremendous. When I see the latent value that is tied up inside this business and the opportunity to unlock that value, it is one of the most exciting things that I have seen in my career. We've got a great team. We've put the foundation in place. The building blocks are already there. We've already laid them. The CRM is there. The sales team is in place. We have great leadership that knows this industry like the back of their hand. The opportunity before us is just incredibly tremendous. So I could not be more delighted and more excited to be a part of this journey. Base recovery will always be a focus until we've got that behind us, and we're very close to having that behind us. Delivering the value on the investments we've already made. The team is very diligently focused on making that happen, and we're already seeing the results start to unfold. And then building out the strategic growth plan. In the short term, that's going to be my key focus in the coming months is really building out that strategic plan, really understanding the true potential that we can unlock here and starting to get a feel for time lines and how we can put these strategies in place to drive step change growth. That's our short-term focus. But in the long term, we're going to be up here talking about more aspirational goals, more longer-term growth strategies for this business that really giving a view of what we can execute against and unlock inside this market. And we will also be hyper focused on expanding the profit margins, again, with growth as our first lever in order to do that, but also thinking about how to really drive this route density that is paramount to this business model and also thinking about the front-end supply chain opportunities to drive more efficient inventory management, merchandise management, supply chain strategy. So those are things that we'll be building out over the long term. But in closing, I will tell you, thank you for being here. Thank you for following this business. I think you're going to be incredibly excited about what you see in the coming months and years around what we can do inside Uniform Services. So it's an honor to be here and delighted to be a part of this great business. Next, I'd like to turn you over to Ash Hanson. Ash is our Chief Sustainability and Diversity Officer. And as I mentioned, this is a topic that is near and dear to my heart. And I'm proud to be a part of Aramark and a company that is incredibly focused on doing the right things as it relates to diversity and sustainability. So I'm pleased to introduce Ash to you now.

Thank you, Kim, and hello, everyone. I am so excited to have the opportunity to share a little bit about Aramark's environmental, sustainability and governance -- social and governance commitments with you today. I'm excited that I get to be the steward of this work, but truly, this is work that's integrated throughout our operations, which we'll see a little bit as I talk through the strategy. So our goal at Aramark is to ensure that we're empowering people to prosper in a healthy planet for generations to come because we know that's integral to us creating long-term sustainable growth for the company, right? And yes, it's important to us in terms of our own values, it's central to our vision, it's central to our purpose. But it's also important to a multitude of our stakeholders. Whether we're talking about our current employees or we're talking about employees that we wish to attract into the operations, whether we're talking about clients or our end-user customers as we think about our partners in the community and the partners in our supply chain, and as all of you know, certainly to our shareholders. So this is important to a multitude of our stakeholders. And the way we approach our work around ESG is through Be Well. Do Well., which is our sustainability plan. Our sustainability plan is completely integrated with our operations, and we have 2 hero goals as it were that informs everything we do through our Be Well. Do Well. strategy. The first is about enabling equity and well-being of people. People are at the center of our strategy, and we're talking about people not just within the 4 walls of our company, our employees, but also our clients and customers. Those we serve every day, the people and the communities around us as well as the people in our supply chain. When it comes to planet, our goal is to reduce our impact on the environment. And how do we do that? We do that by reducing our greenhouse gas emissions. Now you may be aware that back in January of this year, we made a commitment to reducing our greenhouse gas emissions by 15% by 2025 from a 2019 baseline. What we've done, though, since then is actually expanded that commitment. So as some of you may know, recently, we committed to setting a science-based target that is aligned with SBTi's new net-zero framework, which will expand how we think about greenhouse gas emissions and our impact on the environment. Now how we do that is through 4 specific areas within our operations. So the first is sourcing responsibly. We know that we have significant purchasing power as an organization, and we use that to source responsibly. So whether it's in alignment with our animal welfare policies or our no deforestation commitments, for example. The second area of focus then is about operating efficiently. So you just heard Kim talk about route density and route efficiency, which is a way to reduce our fuel use within our fleet. That's an example. How we think about water and energy use within our locations is another example. The third area of focus is food waste. So we know food waste is one of the leading causes of greenhouse gas emissions across the globe, and we know that we have an opportunity to think about food waste at all stages of food production and consumption. So whether you're thinking about smart production or you're thinking about post-consumer waste, we really do think about food waste end-to-end. And the final piece that we think through is packaging waste, an example of which is our commitment to reduce single-use plastics across our operations globally. So I mentioned that all of our sustainability commitments are completely aligned with business objectives. I want to take a minute perhaps, for those of you who are able to join us last night, hopefully, you saw a lot of that in action, right? So whether it was our diversity, equity and inclusion efforts showing up in terms of the chef spotlight and the diverse culinarians we were able to showcase through that effort or the work that you saw perhaps in our innovation lab around Oscar and smart recycling technology or the incredible products that our uniform teams have developed in terms of using -- reusing materials in terms of their products. So we really do think about it as areas that are integrated within the operations. And I wanted to take a little pause to talk about governance. I think it's really important. It's great, we have an incredible strategy. I love that it's completely integrated with everything we do in the operations. But ultimately, there is also this issue around sustainability around -- accountability around sustainability. And so I want to take a minute to talk about our governance model for the work. Our ESG strategy is overseen by the nominating committee, Governance and Corporate Responsibility Committee of the Board. And it's led by the ESG steering committee, which includes many members of John's senior team, both on the operations side and the functional side. The job of the ESG steer co is to make sure that we are thinking about setting a vision for the organization, making sure that we're driving accountability across all of our functional areas of responsibility and operating areas of responsibility and making sure that we're measuring and communicating to all of our stakeholders, our progress against our commitments against ESG. Reporting to that steer co then is the Aramark ESG operating committee, which consists of a global cross-functional team of subject matter experts. And the task of the opco is to make sure that we're thinking about implementation across our Be Well. Do Well. plan. Now what is really spectacular about this governance model is not just that it exists. But what it helps us do is make sure that we are not only holding ourselves accountable in terms of moving the needle against our commitments, but also that we're catching emerging risks well ahead of time, and we're taking advantage of emerging opportunities. So in 2021, we partnered with BSR. For those of you who are familiar with the ESG space, BSR, the business for social responsibility, is a very significant member of the sustainability community. We partnered with BSR to help us go through a materiality process. So given the impact of pandemic on the market and just in terms of clean business practice, in terms of continuing to ensure that you're focusing on things that matter the most to continue to do materiality assessments to make sure that you're focusing on the right things is really important as you all know. So in 2021, we completed a materiality assessment. And I'm sorry, for those of you who are in the room this is a little bit of an eye chart to read, but it's in the materials that you have access to. And I want to talk to a couple of things that kind of emerged in terms of learnings from this exercise. One, this I'm really pleased to report is we absolutely are focusing on the things that matter. So in terms of input to the materiality map, BSR spoke to employees within the organization, they spoke to clients, they spoke to NGOS, they spoke to people in our supply chain, they spoke to industry groups. They really did get a full 360 view of our business and what emerged is that there is really good consistency in terms of what matters to the external stakeholder population and what we consider as being critical to business growth, so that was good. And the second piece of it, of course, was that we were thrilled that was aligned with all of the things we're focusing on through our current Be well. Do well strategy. Our learnings from this exercise will continue to inform any further evolutions that we have of the strategy. So one of the things that you'll notice on that map emerges as a hypercritical item is diversity, equity and inclusion and so I want to take a minute to maybe do a little bit of a deep dive on diversity equity and inclusion. This is an area that's culturally very central to who we are as a company. It shows up in everything we do. Again, I hope for those of you who had a chance to experience our products and services last night that you saw that come to life and it's an area that we receive a lot of accolades in the market, but I wanted to maybe show you a little bit of how we approach the work. So we think about diversity, equity and inclusion through 3 areas of focus. The first is around our workforce, which is all about ensuring that our workforce is diverse and reflects the communities and markets in which we serve, right? So when we're thinking about attracting, hiring, developing and retaining talent, that we are really thinking about it with a lens of diversity. We have incredible Board diversity in this company. Over half of the members of the management team reporting to John are women and we want to think about that diversity at every leadership level in the pipeline. The second area of focus then is workplace, which is all about culture. So you can have this amazing diverse workforce, but unless you have a culture of inclusion where that workforce can thrive, you really don't realize the full potential of the talent. So continuing to think about how we're building a culture of inclusion is critical to us and we do that through a multitude of ways. An example of which would be the kind of training we provide to managers and our field teams to ensure that they're building inclusive team cultures within the teams that they lead and manage. The work of our employee resource groups, we have 11 employee resource groups across this company and they've been impactful for decades, but it was particularly powerful to see them in action during the pandemic. They've grown tremendously over the last few years. In fact, just in the past 12 months, we've had almost a 25% growth in our employee resource groups and the employee resource groups also provide programming to our teams in the field, which is incredible. And the third piece of focus for us is marketplace, which is all about ensuring that our products and services are culturally relevant, making sure that we're thinking about our impact on local communities, whether it's through philanthropy and what we do in terms of our giving efforts or also through voluntarism. So despite the conditions of the pandemic over the past 12 months, we reached about 0.25 million community residents with our work in community services. And then the other critical piece within the marketplace umbrella is our supply diversity programs. So you may know that we have a commitment within the U.S. operations to increase our purchasing with minority-owned businesses and small businesses to 25% of our purchasing by 2025. But what's been really interesting to watch our supply chain team do this past couple of years is really expand beyond just purchasing from small businesses and minority-owned businesses to focusing on mentoring and developing them. So in multiple markets that are critical to us, we've been able to launch development programs where we're working with small businesses that we've identified and providing them opportunities to grow. And that's not just of course about the growth of that particular business, it has significant community impact, which is really important to us. So we're excited about the progress we're making. One of the commitments that we have is to ensure that we are increasing our disclosures and transparency around this work. So you'll see that some of the work that we're doing, we're tracking through specific key performance indicators that we will monitor, measure and report against. Towards the end of January of '22, you'll see us release our 2021 impact report and a lot of the progress we've been able to make over the last few years against our ESG goals will be reported in that impact report. Also critical to note is the fact that we're going to use this impact report as an opportunity to showcase our goals against mapping them to frameworks that are much more familiar to the marketplace. So things like for those of you who are aware of the Alphabet soup of Sustainability, SASB, TCFD and GRI are on the road map and you'll see them as we start mapping out our goals against them, and all 3 of those will show up in our impact report for 2021. So we're proud of the progress we're making in terms of ESG. We're proud of the impact we're having on people and planet. But what I'm particularly thrilled and excited about is the emerging conversations that we're starting to have with our clients as they set ESG goals, where we can act as an enabler for them to achieve their ESG goals. So we see this conversation expanding in the marketplace as we go along here. So thank you again for your time today. I'm excited to bring up on stage at Autumn Bayles, who is our Senior Vice President of Global Supply Chain. Autumn is an incredible partner in the ESG work, especially when it comes to responsible sourcing. So Autumn, I pass it on to you.

Thank you so much, Ash. So as Ash said, my name is Autumn Bayles, I'm the Senior Vice President of Global Supply Chain and I'm really happy to be here with you today to talk about some of the focus areas and priorities that we have as the global supply chain team. Let me start out by the center of supply chain's universe, our spend. See, we have $15.5 billion of spend under our current management, $5 billion plus of that is coming from our managed services business, and the other $10 billion is coming from our GPO or our group purchasing organization businesses that we have built or acquired over the past several years. So before I get into how we're going to grow and leverage that spend, let me address the obvious question, which is all of those headlines. So I know you've heard them, you've seen them, supply chain pressures, disruptions, delays and inflation. Supply chain has never been more popular, that's how I like to think about it. You've got to do what you got to do. So we certainly have gotten a lot of attention lately. But the good news is Aramark, while we're certainly not immune to these pressures. We have been able to manage through them better than most and there's a couple of reasons why. Number one, we've got a deep great bench of supplier partners and when one supplier is having a problem, we can usually turn to another one and say, "Hey, can you help us out here?" The second one is we've been very proactive with our contingency planning. So you think of some of those early lessons from the pandemic. I mean who remembers no toilet paper, no PPE shows how supply chain principles work in action. Demand goes up, supply those down, all of a sudden you can't find things. So we knew that when business started to really ramp back there were going to be problems and so we swung into action, working with our supplier partners and said, listen tell me what you think your problems are areas you're going to be. Share with us how things are going as you're ramping back up your inventories. And we did some more advanced planning, some more advanced forecasting, what we call hyper communications. We have never talked to each other so much as we had over these past several months. And the same thing with our field and culinary partners. So as suppliers were feeding us information over where problems were going to be occurring, we're talking with our culinary team, what can we substitute? What can we engineer on our menus? And then of course working with our LOB partners, our lines of businesses as well. You heard Alison referenced the supply chain issues. I think Alison has learned more about chicken tenders than she probably ever cared to know. But it was really important to get that communication out there. Hey, listen, if we're going to have a problem here, what can we put on the menu instead? We want our clients and our consumers to have the things that they want to eat on their plate. So that proactive planning really helped us go through some choppy waters and they're not over yet. So we're continuing to work together to get that done. And then, of course, Aramark's scale certainly helps us out. So suppliers expressing concerns over limited inventories, who are they going to give these inventories to? We let them know that should be Aramark, that should be us. As a big customer, we expect to be prioritized accordingly. And I really do want to take a moment to shout out to all these supplier partners, who have really walked side-by-side with us, our line of business partners and our culinary partners to really help get us through some choppy waters with minimal impact, so I want to thank them. So now that I have talked about the disruptions, let's talk about inflation. Another area we're actively management. You have all seen this chart. We're seeing some numbers that we haven't seen in quite some time. So how are we going about managing inflation? So supply chain, our team acts as the front line of defense. As people supplier partners share with us price increases, they would like to pass on, we are the first-line of defense to say, listen, needs to be lower, needs to be later. Can't take it. Can we do something else? Can we swap around or make transitions to mitigate this inflation? So we do the best we can to mitigate what's coming our way. We also have contract pricing and positions in the market with our suppliers. So that helps smooth out some of the price increases that are coming our way because you can't change our prices while they're under contract. And then of course, there's the menu reengineering that I mentioned earlier that we're using with the disruptions work well with inflation as well. Something is a little higher than we would like, what else can we use to make sure that we mitigate some of this inflation. And then of course, we're going to do what everybody else is doing too. So we make sure that we supply our business partners with client friendly charts, graphs, pictures, so that we can take price and pass on price as well, just like people are trying to pass on price to us. So that's how we're managing through inflation. So now that I've taken care of those headlines. Let me get back to the strategic priorities of the global supply chain team. So there's 4 that I would like to share with you today. Number one, how do we grow our spend? We love spend, supply chain just love spend, the more I hear about growth from my colleagues, I just eat it up because that's really what we want because we can leverage that to get better economics with suppliers. Two -- and I'm going to get into a little more detail on these in the subsequent slides. Two, enhancing contract value. So once we have the spend, are we optimizing it in our contracts and our programs. Three, supply chain sits on a treasure trove of data and we want to make sure that we're looking at that data the right way and generating the right insights as our business continues to grow and evolve. And last but not least, pursuing innovation, not only what we do as a team, but what we're providing to our business partners in terms of the products and services they need as they evolve and innovate themselves. So let me get into a little more detail behind each of those 4 priorities. Number one, let's talk about spend growth. As I said, we love spend growth and you heard from my colleagues this morning, how we're going to grow our business on the managed services side, and Kim talked about the uniform side as well. Let me touch on the other piece of spend growth. Our GPO partners. So the Avendra group umbrella that Aramark has, has a number of GPOs in them. These are leading, well-known group purchasing organizations in the marketplace. You can see from the chart on the left, have a great track record of historical spend growth. And you can see in the middle that many of our GPOs have already eclipsed their pre-pandemic spend. So in terms of recovery, doing quite nicely. The red bar at the bottom is our Avendra hospitality GPO. So this is where business travel expected to recover at the end of 2022. We're looking forward to getting that spend back up to that level as well and we're well positioned. If you look at our partners here, Avendra, IPS, HPSI, Quasep, they're all #1 or #2 in their space. So these are well positioned in the market. So let me talk about their growth prospects. So if you look at the top bar, this is the market categories that we're currently playing in, hospitality, K-12, senior living and so on. This is a $46 billion market. And our current penetration is about 20%. So there is a lot of runway there for us to grow in the categories that we're already playing in. And we can grow, both by our own organic growth, converting self op accounts or in competitive bidding processes as well. Then if you look at the bottom bar, $150 billion spend opportunity market there and these are in categories that are adjacent to the ones that we're currently playing in. So we think there are value propositions that would be attractive to clients in these categories because they're adjacent to where we already are successful. So a lot of room for growth. And of course, we will always look at opportunistic M&A as well. If there's an acquisition that would make sense, we certainly would look at that to grow our spend in this area. So that's about the spend growth side. Now once we have the growth, how are we going to drive contract value. So the most obvious one is making sure we understand where that spend is, making sure we're combining it the right way and then optimizing it with suppliers. Suppliers love growth and they love volume. If we can demonstrate the most optimal mix of that, we will get the best economics. So we want to make sure we're doing that. The second is we will transition suppliers are interested in growth and if they make it worth our while, we will consider transitions. It's a nice way for us to get accretive value. And then last but not least, we want to make sure that our contracts have built in volume tiers. That way it automatically gives us better economics as our spend grows. So a very important tenet for us. There's another way that we can amplify our contract value as well and that's through compliance. So we want to make sure we have these great programs in place that we're using them and there's a couple of ways that we look at this. Number one is we look at ourselves internally as supply chain. As the business evolves, new services are emerging. Clients want different things. Do our contracts and our programs cover these areas, these incremental areas. So we're always looking at broadening our productivity and making sure our contracts are comprehensive of these new areas. Two, yes, we want to make it easy for our front-line to work with us. We are rolling out a new technology. We call it Market Pro. This is a field ordering system that makes it easy for our field partners to see the programs that are available to them and to make choices based on what's available to them. And then last but not least, we do have one little extra to do because of the pandemic, and that is I talked about some of the flexibility, some of the backup suppliers and contracts that we're using to get through the disruptions. We will be looking to pull those back once things start to settle down. So that's another way to make sure that we're not leaking value by just leaving that go. All right. Now let me turn to our third priority. As I said, supply chain sits on a treasure trove of really rich data about our spend. We want to make sure that we continue to mine this data and get the best business insights out of it. So the first one would be making sure that we're aware of all of our spend and how the business is changing that spend model and working with suppliers accordingly? Are we getting the best economics where we should be or have things changed in such a way and we're missing an opportunity? We want to know about that. Two, you heard about the growth that we're planning as a company. We want to make sure that our platforms can scale with that growth. And then third and probably most importantly, clients are looking for different business models and they want different value propositions and we want to make sure that our data platform can handle these different scenarios that clients are asking for. So really important for us on the technology and the investment in those platforms. Now let me touch on innovation. So you heard from some of my colleagues earlier, all the great innovation that's happening at the company. We want to make sure that we are ahead of that game and providing the right services and products and the innovation that consumers are looking for and we have a couple of opportunities within ourselves. So this first one is internal to supply chain, looking at our cross-channel selling opportunities. So between our GPOs and our managed services business, we have the ability to share information and cross-sell. So GPO clients who have enjoyed our purchasing capabilities may be interested in managed services, and we want to harvest those opportunities. We have clients coming to us now. And the pandemic seems to have bubbled up more interest in these areas because clients are looking for value to catch them up from what they lost during the pandemic, where we might have a partner that has a system at several locations. Some of them are managed services and some of them want to remain self operated. We can address that with a GPO solution. So we have ways to partner and cross-sell within our own organization. Second, you heard a few of my colleagues talk about proprietary brands. This is a great opportunity for us, either consumer-facing brands in some of our specialty areas or even back in our own kitchens, there's probably some value that can be gained from proprietary brands. We also want to look at freight management. You've seen and heard, freight costs are up, a lot of opportunity here to further optimize. How can we partner, what our manufacturer partners are doing with some of our distributor partners? How can we share and collaborate better information to make our freight more efficient and more economical? And then last but certainly not least, those of you who are here with us have enjoyed some of our culinary creations and some of our innovation, very big partnership between supply chain and culinary around making sure that the things consumers want to eat, those on trend things that we have programs and contracts for. We always want to make sure we're ahead of that curve and making sure we're getting the right economics for the trends that people want to eat. So let me thank you for your time and attention today. I hope that gives you a little bit of insight behind supply chain's priorities and I'd like to pass things along here to my colleague, Eduardo, and thank you so much.

[indiscernible] say last but not least, when you introduced me. All right. So thank you everyone for your attention. It's not only great to be here, but actually quite challenging because keeping your attention after, how long, 3.5 hours presentation is quite hard. Fortunately, this is before lunch. Otherwise will be really, really difficult. But anyway, I'll do my best to talk a little bit about in unit cost management, what that means to Aramark and what are we doing, particularly on the field to support the strategy of the company. Let me start saying at Aramark, as we have seen during the presentation, we the leaders, share one vision to become the most reliable partner and trusted employer. And we are also all aligned on driving growth and developing business opportunities. So now that we have this great vision and alignment on it, let me talk a little bit about the execution piece and how our operating teams are actually working and focusing not only on growth, but on profitable growth. Of course, growing in a profitable way, it means bringing new solutions to our customers, bringing innovation to them. But in our business, at the same time, it is about getting back to the basics and we do this across the industries, working across the industries and driving efficiencies on product, on labor and on direct expenses. At the same time, of course, we elevate the experience of our consumers every day. So let me walk you through each one of these pillars and tell you a little bit what are we doing again on the field across the world. So if we talk about product as Autumn just said, higher inflation worldwide is really leading to continued focus on pricing. That's true. But at the same time, driving efficiencies in our businesses, in uniforms, in facility, in food, it is a must. So let me give you a couple of examples on the food piece on what are we doing there. So very connected and linked to what Autumn just said. I'm happy to see what are we doing in the ground and it is how consistent with that. So the teams in the ground, the menu planning teams and the chefs are working really close to build more efficient menus. But not only that, they are also working on a wider range of options to provide our operators more opportunities and alternatives to share with our customers. So then they can deal with cost fluctuations in a better way, while taking care of quality and the consumer experience at the same time. We also centralize planning and purchasing where makes sense, of course and we call it menu engineering. This is basically taking advantage of scale, but more importantly, it is about delivering in our promises in a consistent way to our customers. So we provide great experiences to our consumers every day. This actually happened at our client sites, thanks to our chefs and our teams on a daily basis. As I hope you experienced or some of you experienced yesterday at our reception or today early in the morning. We are also centralizing purchasing and planning. We are doing that to get the benefit of scale, of course. But at the same time we are working, as I said, on balancing correctly [indiscernible], again, balance of sourcing centralized and building these local solutions. And while we are dealing with our cost and managing our cost efficiently on a daily basis, we are also exploring new opportunities, new options. For instance, bringing technology to the facility business or implementing new solutions like CPUs, central production units that are working really good in some pieces of our business. K-12 in Spain, in international space or within the mining sector actually down in South America. So that's the balance we're trying to pursue. The effort and the purpose of all of this, it is basically from reduced waste, as Ash mentioned, to reduce also the labor dependency, boosting our communities and in the end expanding market opportunities. In our mind, this is all about building trust and the right partnership with our customers. So if we move to labor as we also heard during this presentation, the increasing cost and difficulties on recruiting, it's a challenge we are experiencing across the world. So we are building more flexible models, so we can respond to those new demands from the market, from the labor market and from our consumers as well. We are working also on leveraging the self services solutions as well as prebaked solutions. So we continue reducing staff turnover, absenteeism and control our cost. And one thing that we are paying a lot of attention, it is the retention piece because, of course, working on the right environment, working environment you will reduce turnover, you will reduce absenteeism, but more importantly you will retain your talent. And to John's point, at the beginning, leaders and talent people really drives here our hospitality culture under right partnership with our customers again. So that is basically a significant piece of our focus. As you know, people make the difference in our business. Last but not least, in terms of the direct expenses. Every time you fine-tuning on some of your process you get some opportunities, you find some opportunities. So maximizing capacity, centralizing purchasing definitely allow us to really manage in a better way our direct expenses. But we are also getting benefits from the labor piece and the labor efforts we are doing actually. Because every time, again, you reduce staff turnover, but also you build maybe a more efficient shift to our people that is actually more attractive for them. Then you see the benefits on items like uniforms, on transportation and so on and so forth. And finally, something that Ash also referred, it is very important to develop local solutions and to develop our communities. Because by the way, it is an increasing demand from our consumers and customers around the globe and by doing that and by balancing that with the power of centralized purchasing, then we really can find a way to give our customers the best we have. So that is basically the way we are working today. It is good to see how the strategy actually connect with very empowered people and we are executing on the field across the world on all these issues, items. So in closing, we are growing and we will continue to focus on profitable growth. We do this because we truly believe it enables us to give our people more opportunities to bring innovation to our customers and to build the right solutions to the evolving needs of our clients. That's the kind of partnership we want to develop with our teams and with our customers and that's the way to become the most reliable partner and the most trusted employee. So thank you so much.

All right. Homestretch. John and I are just going to finish up here. I'll do a little housekeeping on capital allocation priorities. So on the back of the revenue and AOI targets we laid out earlier this morning, we expect to generate roughly $2.5 billion in free cash flow over the next 4 years. We're targeting average about 50% to 55% of AOI conversion right over that time compared to a historical high of the mid-40%. And as a reminder, we expect seasonality of cash flow to return in fiscal '22 and then carry on truly on the back of the leisure and education markets as they return in full force. That said, our capital allocation priorities will remain consistent. First, we'll look to invest in growth opportunities and retention efforts through the use of CapEx at unit locations. We'll continue to opportunistically look at M&A opportunities, tuck-in M&A opportunities like next level or deals that might build route density and the Uniforms & Refreshment Services businesses. We'll look to repay debt and delever as I mentioned before to between 3 and 3.5x being our target. We remain committed to the quarterly dividend and certainly, we'll look for other shareholder return opportunities as leverage decreases. While we've proven the ability to operate with leverage ratios above 4x in the past and certainly managed cash flows quite well during the pandemic, we are committed to move into our targeted range of 3.0 to 3.5x by fiscal '25, if not sooner. With our capital structure, we have no significant maturities until 2025. We've got 85% fixed debt, so pretty good shape there and our modified secured debt covenant waiver secured during the pandemic or the onset of the pandemic really runs through the beginning of Q3 of this fiscal year. And again with no significant maturities until 2025, but we will always be evaluating what makes sense strategically and economically as we look through our opportunities to delever and we believe we have opportunities to do that as well as refinance. So thanks again for everybody being here today. We really appreciate it. And now let me pass it back over to John to finish this up.

Thanks, Tom. So I want to say thank you first of all to all of our team members, who were here to present today and to all the Aramark employees -- all the employees of the company who've really worked very hard for us to achieve the results that we've been able to achieve. It truly is a team effort. We run this company together and we're excited. We like working with each other. We love the company and so thank you all very much. I believe the foundation is set to achieve our FY 2025 goals. We've got the right foundation in place. We've got the right people. We've got the right resources in place. The cultural transformation has taken place. The organizational changes have taken place and as a group of people, we are absolutely rooted in service to do great things for our communities, for our partners, our clients and for our employees. We -- I believe we have a clear vision, a clear strategy and a clear purpose and we've already begun to see the results translate into record note levels of net new business with an expectation that this is really truly just the beginning of the future of this organization. Last evening for anybody who was here, Joe Neubauer, our former Chairman came and joined us for a period of time and talked about how excited he is for the future of this organization and how the company has really returned to its roots of hospitality, but also to the foundation and growth orientation. And Joe has been a terrific mentor of mine for a lot of years. It's great to hear him talk about the future of the company and his belief in it. He's still a significant investor in this organization and would be here today if he could have been, he's Chairman of the Barnes Foundation here in Philadelphia and needed to be there for a Board meeting today. So you stopped by last night, it was really pleasant to have him here. Joe and I have lunch every couple of months and he is an inspiration to all of us. He's really -- to this organization, he represents not only the past, but the present and the future values of the organization. This company has not changed its values, its mission, its purpose. We've talked about new nomenclature. We've changed the way the grids look or the charts look. We maybe changed a few words around, but at its true foundation this is an organization that cares about people and we do the right things. We deliver on our commitments and we're prepared to deliver on our commitments. We believe in these goals that we're setting out for 2025, and we're excited about the future. So we are going to have a fireside chat. I don't see any fire. Maybe we can get some flames going in the background here. But I'd like to invite Tom, Marc, Karl and Kim up to the stage, and I think they're going to bring us some chairs so that we can sit on.

Okay. We will open the floor for questions.

Toni Kaplan from Morgan Stanley. I was hoping you could frame the growth aspirations that you've laid out. Are you thinking about industry growth as being elevated through 2025 because of outsourcing or large providers having an opportunity to outperform the industry as well over that period? Or is this really more of an Aramark specific aspiration of the increased new business profile, et cetera?

Yes. I think we will be the beneficiary of an expanding market as outsourcing continues. So we see the size of the marketplace expanding, or I should say the size of the outsourcing market expanding and we're seeing that in both traditional and nontraditional business opportunities. But we're really talking about it in the context of what we believe will happen that -- what we can achieve as opposed to overall industry growth. If the industry grows more rapidly due to higher rates of inflation or whatever, we would expect our growth rates to go along with that. But this is really all about what we believe we can achieve in terms of the future growth. And we have as you saw on Tom's chart, we are stepping up the level of expected growth in 2022 and 2023 and beyond. We are becoming a much more efficient sales engine and the results of last year were terrific, but we have an expectation that we'll continue to improve on that performance. So we improved win rates and as our salespeople will truly become 100% productive in the markets that they serve. We see continued acceleration of that growth. Thanks, Toni.

This is Stephen Grambling from Goldman Sachs. On the margin targets, it looks like you have them by 2025 -- fiscal 2025, getting back kind of above where they previously peaked. I'm wondering if you could actually provide a little more detail on that target by segment? And are there any segments that you think will grow faster, slower within that target?

Tom, do you want to go ahead and address that or I can.

You can start now and I'll chip in.

You take it. This is the first time we've been together because we haven't done an earnings call together yet. So...

Yes. I think you'll see an acceleration across the businesses. I think everybody will have improved margin performance over that time period. I think our expectation is that in this model, AUS' margin will probably go up faster, given what we expect to be an acceleration of the benefits that Kim will be delivering over the course of the next couple of years as the ABS implementation really takes effect as the route density initiatives take effect. So I think we'll see an acceleration on the Uniform side, but our expectation is that all the businesses will improve and a significant source of that benefit will be coming from the return of the volume from pre-COVID activities, but also those enhanced supply chain opportunities that we've been talking about, the improved economics and just the overall growth of the enterprise. So our expectation is for margin expansion across all the businesses, both domestically and internationally.

And maybe an unrelated follow-up. What are your latest thoughts on the recovery in B&I? And how are you planning the business accordingly?

Marc will take that.

Sure. I can take that. In the U.S. domestically, the B&I business is the laggard as it relates to COVID recovery, and we expect that to continue. However, we've been optimistic about the recovery rate. It's starting to pick up. We have essentially kind of the East Coast businesses reopening. The West Coast is trailing, but there's a lot of activity around the January time frame where businesses will reopen. So our expectation is that certainly, when you look at the B&I space, there's going to continue to be a longer road to recovery ahead of us. However, we've been, as I said, a little bit optimistic about the fact that businesses are reopening ours, for example, reopened here at our headquarters here in October. And the return to work is being met with variable schedules to some degree. But we're seeing a more rapid uptick in people actually coming back to work and the benefits they're seeing as a result of that. Employers taking different stances as it relates to attracting folks back, and we've actually become really a lynchpin in that and talking to them about the value of hospitality in that equation. And so overall, we -- while we know there's a longer road to recovery, it's starting to tick up a little bit more faster than we expected. So that's -- it's good news.

Andrew Steinerman, JPMorgan. Tom, I think this one is for you. It's about the definition of client retention, the number that's 95.5% going to 97%. I have 3 checks. I just want to make sure that's based on revenues, not volumes of contracts. That's question number one. Question number 2 is I want to make sure that's before base business growth. So this number can only go up to 100%, and you're going to get 97% of 100%. And then three, the way I conceptualize you get it to 97%, which maybe the pace of it, just seems like super high number. I think it's kind of a reasonable number. I just wanted to see if you like this logic, is because only a portion of your business is up for renewal every year. Like if you have average of 5 year contracts, only 20% of your business is up every year. So you would only have to do with 85% of that 20% to get to 97% each year? Am I thinking about it correctly?

Yes and yes on the first 2. The last one is probably for over a year. Yes, the math gets very -- to your point, it gets quite complicated. The broad answer is yes, 97% besides parts clients for life, which we would aspire to much more than 97%. 97% is a tremendous result given that you have closures that you guys experienced in any given year, there's just no longer food service there. As well as, to be honest, you just -- sometimes you just don't mess up.

Is 97% the goal for all 3 businesses?

I would think that it would be. I don't want to speak for the guys, but overall yes.

It's Harry Martin from Bernstein here. I have got a initial question for Tom, and then I think a wider question for John as well. On the leverage target, 3 to 3.5x, I think if I take the $2.5 billion of free cash flow and then also grow the EBITDA denominator as well in line with the guidance. You can get -- you get quite quickly below 3 to 3.5x. So am I right in saying that those 2 targets are not separable basically? And then sort of what is your sort of realistic expectations for how quickly that deleverage can happen? And then the sort of the related follow-up is just on the sort of cash generation in the business. I'm interested to hear your thoughts, John, on how the teams are sort of incentivized to prioritize a good return on capital and sort of disciplined capital use as well as going after record net new business wins?

Yes. You're good at math. You do get below 3. And that's why I said it we're sooner. It really is dependent, as you guys would know, on the level of growth opportunities and where the CapEx, how we spend it, if we're able to stay at 3.5% or less. That gets us down quicker. It's a bit more because we're building for some long-term opportunities that could slow it down. It's the infill acquisition -- or tuck-in, sorry, Scott, tuck-in acquisitions that may or may not arise that we'll do those opportunistically. And then the dividend. So those 3 components balanced then also creates that shareholder return opportunity. So it will either be sooner or some of those things will come up, and that's what we're managing.

Yes. And -- but we do -- we are very disciplined about capital management. It's a core capability of the organization. I think a great example of that was really the way the company managed through the COVID environment and maintained an extraordinary focus on cash flow management. The team is incented on returns as part of their overall compensation for their annual bonuses. So it's a key component of that. So we're focused on both net new growth, which was a significant component this year, which was a driver of those results. That was one of the changes we made to really foster that culture of growth and that orientation and they're incented on earnings and returns as well. So it is a key component. This is a really disciplined company. It's actually a pretty disciplined marketplace. If you think about the utilization of capital historically in this industry, it's been pretty consistent with very few outlier years based on some extraordinary activity, either a big acquisition or an opportunity like Yosemite, for example, when it came to market. So the team -- there's a lot of discipline and a lot of process built into the evaluation of new proposals and new bids. Even if somebody wanted to sell something with a low return, the process wouldn't let them do it. So it's -- we're very comfortable with the process we have in place and the way people think about it.

Shlomo Rosenbaum from Stifel. Just quick. I guess this first one is for Tom, but I guess also you John, just -- I'm just trying to get to $20 billion of revenue starting off over here. And it seems like even if you go to the high end of that kind of 5% to 7% organic, you still got to do over $1 billion in acquisition revenue. And I was wondering if you can talk a little bit about what might be in the pipeline, how secure you feel in being able to do that in order to be able to achieve these targets? Or should I think about overachieving on the organic side? I mean, how should I be thinking about it to get to that target?

Well, let's take that one-off line with this, Shlomo, because the math should work. Actually, the math in there without any M&A, gets you well above 20, but sort of 20-ish as a midpoint. So we can certainly walk you through that.

Okay. I will take it off. And the second thing I just wanted to ask is maybe just playing a little devil's advocate, what if the B&I just doesn't return the way that you're expecting. There seems to be one of the most significant margin drivers is the return of some of those B&I revenue. What other levers do you have to be able to kind of achieve that kind of 7% to 7.5% operating margin?

I don't know if you guys want to take that?

Yes. So it's a good question. I think that there's a couple of things that we think about. First of all, regardless of what the number would end up being in terms of the recovery and what the business will look like or companies will look like in terms of how they staff their headquarters and whatnot. Within the B&I sector, we have a mix of blue collar, gray collar, white collar facilities, right? And a bunch of our business is more of the manufacturing gray collar, which is, quite frankly, operating very well. So in that regard, it's not like a 100% of our business is white collar facilities that you typically think of as being highly impacted. So the base in and of itself has been performing well and quite frankly, is overperforming where it used to be based on what's going on in manufacturing. I think as you target into or laser in on the white collar aspect, it's true that nobody has an exact crystal ball as to what that's going to look like a year or 2, 5 years from now. But as I mentioned before, we're seeing a little bit of benefit in terms of the actual notion of returning to work. And it's probably tracking a little bit more quickly than we thought it would. I'll tell you, Shlomo, that at the end of the day, employers are thinking about their hospitality services differently than they were before. And Carl -- the international front is experiencing the same thing. So regardless, I think, of what the end game is in terms of the static number of heads that are going to be in a corporate facility in a white collar environment, we're going to see a different way to serve those consumers. And we're actually seeing the economics change in a way that we think to be very favorable. I'll give you an example. There are many, many companies now that are using food service as a benefit to employees, and our contracts are changing as a result, where our volume is actually going up and they're providing food as a benefit in doing it in a freeway. So I think regardless of what the final number will be in any time frame you pick, the model is changing enough with how clients view the foodservice as a benefit. They also are looking at our -- the economics of our contractual relationship differently. And in -- when you take those into account, and you take the base coming out of the gray and blue collar, we believe that the business dining environment will be healthy. And regardless again of what that final number would be, but we're optimistic that there is a road map there that one day, we will see ourselves beyond what the '19 levels were.

Yes. And I would add that in all the conversations that I typically have with other CEOs through trade associations or CEO groups and the like, people are really focused on getting their employees to return to work and that they recognize there may be a period of time where they offer a hybrid solution, but then ultimately, they see a much more focused return-to-work strategy, particularly as the market uncertainty from a health perspective is eliminated. So we don't think the B&I business is permanently compromised in any way. We think, as Marc said, that the business will recover. It may look a little bit different. We may have a slightly different service offering, but ultimately, either enhanced participation or other services will replace what's lost in terms of employment in locations. So we think the business will be just fine.

This is Ashish Sabadra from RBC Capital Market. I'll just ask a 2-part question on Uniform services. So Kim, you talked about a step change in growth. How quickly can we see that? And then once we see that, how do you think about a more normalized long-term growth, excluding the base recovery? Should -- can it grow faster than the company average of 5 to 7? And then maybe just on the second part question on the margin front as well. I think, John, you mentioned the margins for AUS obviously, are going to be higher than the company average. But as you think about, there was a lot of investments that have already gone in, do you foresee more investment, which could put some margin pressure near term, but drive a significantly longer margin longer term? And how do we think about normalized margins in the business over the longer term? So...

So I'll start with your question around growth for Uniforms. We need more time to build out this strategic growth plan. Our growth objectives are baked into the numbers that you heard from Tom based on all that we know today. So what I've shared with you today is there may be more opportunity to leverage some things around strategic marketing, digital marketing, focusing our sales force around route density sales. Those are things that are yet to be quantified. So we'll be back when we know more about whether that is incremental opportunity or that opportunity is going to support the current numbers that are baked into Tom's guidance that he gave you through '25. So I'd say stay tuned on that. And when we have a chance to evaluate some of this incremental opportunity, we will be back. There are some challenging not achievable, but challenging targets already baked in for Uniforms into the '25 guidance that Tom has given. So I need some more time to come back and tell you whether or not we can drive some real incremental growth beyond what you already see baked into those '25 targets.

Any comments on the margin trend?

Yes. So the margin will travel along with the growth. As I said before, expanding margins for us in the Uniforms business, and this is true for most businesses, is really about driving that step change in growth so that you can leverage those fixed assets and get that revenue flow through. So the faster that we can identify incremental opportunities for growth, the faster that we're going to see that margin expansion. We are obviously counting on margin expansion tied to our new CRM platform and tied through the growth that we'll get from our new sales force. So we have baked some of that into the 25 guidance that you just heard from Tom. But I think there are more opportunities to look at things around route density and driving efficiency of routes and also asset utilization and leveraging the opportunity to use this modernized approach to merchandise management that we talked a little bit about in the video. So we'll continue to focus on expanding the margins. And I believe in the coming months and years, we will talk with you more about margin expansion opportunities beyond the '25 targets that Tom has baked in here.

Yes. I would just add that given the fact that Kim has been on the ground for 60 days, we're very encouraged by her insights and by her leadership already in the organization. We have very high expectations for it. I think she has very high expectations of herself and the team. And I think you'll find that we'll be very transparent going forward as we learn more, as she learns more and gets more comfortable with what our expectations should be and what she believes can happen in the business. So we're very excited to have Kim on the team.

Excited to be here. Thank you.

Somehow this just turned into a budget review. She's sitting there going...

Don't make me commit for my boss is here.

We'll never be satisfied until we're #1. Let me just say that.

We have an e-mail submission from Jaafar Mestari at BNP Paribas. On the what versus the how, it's obvious that the company has the right assets, brands, tools, et cetera. How do you measure and how do you incentivize the teams to make sure these tools are used more?

I think we have, over the course of the last couple of years really changed the incentive structure of the company in a way to really focus the team on those 3 areas we talked about, first and foremost, being growth. And because we are successful selling as a team concept I think everybody in this room, whether it's Jack or any of the other people selling business, Bart, they consistently use every tool in the tool belt, every tool in the shed, if you will. It's not unusual in the sales process for Ash Hanson to be spending a significant amount of time in the sales proposal process relating to the ESG initiatives that are being undertaken as part of that proposal process. So I think our people are very adequately incented to use the resources of the organization. And we all -- this really is a team selling concept. And there isn't a day that goes by where you're walking through the halls of this building where you don't run into a lawyer saying, hey, what about that sales opportunity. At year-end last year, Lauren Harrington's team was a key component of us getting contracts to closure towards the end of the year, so we could achieve those record new business numbers and record net new. So everybody is incented to do the right thing. And frankly, they love working together and doing it to get the job done. So I think we've structured incentives appropriately. And I'm not sure that we need to make any more additional changes. Everybody wants to catch an early train.

Or the lunch.

Yes, lunches. Lunch first.

Okay. So I'm intrigued by the TAMs you put out. Obviously, you haven't had TAMs out since the last IPO. The $40 billion of TAM for Uniform struck out to me, I've tried to do that work myself. I find it very difficult to come up with a TAM for Uniform. I measure the U.S. market for Uniform Rental and Facility Services to be about $15 billion out to us market. $15 billion is still plenty, right, but you guys are saying it's $40 billion? I also noticed that about 25% of that $40 billion was labeled self-op. I wanted to know what you guys meant by self-op? Do you mean all companies that purchase uniforms, all companies that purchase uniforms that launder it for their employees? Is this a North America number? Because this is what Uniform and Aramark addresses today? Or is this including geographies that you're not in right now? And is there a number in there for first aid, which I've never been able to come up with the market size since it's only sort of a dominant player.

Yes. I'll take that for you. And also, I'm going to ask Felise and Scott to follow-up with the bottoms-up build of this because we spent a good amount of time on this market sizing. And again, everyone has their own view of the market, but we can take you through our math of how we built this up to the $40 billion. So it does include, obviously, the recurring revenue rental model. So Uniform rentals is in that number. Direct sale is in that number. So a customer who does not want to participate in the rental program, but they would like to purchase uniforms from us, we have a direct sale business. And also in that number is the adjacencies. So the match services that we offer, the [ Bartow ] services that we offer, as well as managed restrooms and first aid. So there are quite a few components inside the $40 billion, and I'll have Felise and team follow up with you after and just show you our build of how we quantified the $40 billion. But I believe we have some more things inside our market size analysis and perhaps what you're using their to get to your numbers.

Do you think you go past North America for that?

No, it's Canada and the U.S. inside that number.

You don't have a lot of interest to go past North America?

We don't. As you can see, there's massive opportunity in the U.S. and Canada alone. So we're going to really concert all of our efforts around the U.S. and Canadian market, where we play today, and we think there's plenty of space there to grow. Absolutely.

Yes. You may be aware as well that we do have a Uniform business in Japan. That's part of our joint venture relationship with Mitsui. And it's something we don't consolidate. It's a good-sized business, but it really is not included in our growth projections. We account for the earnings in Uniform Services adds to the margin. It's a few million dollars a year. But we don't plan to expand outside the boundaries in North America in terms of our intentional strategy. But we do have that little business in Japan, just so you're aware.

This is Stephen Grambling again. I was wondering if you could -- this is more of a modeling question, but what are the assumptions around free cash flow conversion and thinking about working capital given the supply chain initiatives within your targets through fiscal '25 as well as maybe the tax rate, I think that you still have an NOL out there?

Yes. On the -- on the conversion rates, we've showed it up as a percentage of AOI just keeping that as a sort of steady base through it. So the historical high in '19 was, I think, just a shade over 45%, or rounded to 45% conversion of AOI. We -- in that $2.5 billion, we'll average and targeted average between 50% and 55% conversion of AOI. Again, including roughly 3.5% on CapEx flow between the years and the working capital being the difference. As we move back into growth, it's going to be -- we're a slight working capital user in that environment, but I don't think it's anything substantial. And credit to the teams through the pandemic, there's been, I think, a lot of new learnings and a lot of focus on working capital and keeping those practices in place as we go forward will be beneficial. And I think is part of the reason we're going to be able to move that conversion rate up a bit against the history.

Andy Wittmann from Baird. My question was on your margin targets of 25% and probably Tom directed at you. You obviously bucketed the 3 things here of net growth. COVID index recovery, which is higher incremental margins, given that you're already at those and just get the leverage out of those sites. But then around 50 basis points from supply chain productivity things. I guess if you could give us a little bit more detail on the line of sight that you have in those. Everything else here seems like it's just growth gives leverage. These are ones that have identifiable cost synergies and things that are attached to them. So I was wondering if you could just give us a little bit more detail on the line of sight that you have into that cost bucket?

Yes. I'll start because one of the big ones is the above-unit overhead leverage. So it's sort of everything beyond a unit manager up through John, and how we do leverage that and continuing to look at some additional efficiencies. But Autumn, I think you -- sorry to put you on the spot, but you may want to come up and help with the supply chain a little bit. So that's a big component as we continue to build that leverage, and we'll continue to look at sharper and better ways. We keep calling it fit for purpose above unit to have the right people in the right spots at the right levels of the organization. And we think there's some continued efficiency to be had there over the next couple of years. But the other big one is this benefit from supply chain. I mean it's not just the growth you get because you spend a little bit more, but it's this constant renegotiation of deals, second generation, third generation, as John always says the deal is never done, right? So as we have more spend, I hate to use the cliche, but it's 1 plus 1 equals 3. And that's part of that ever-growing leverage we're going to get off the supply chain, plus we're building in compliance. But if you want to add in their Autumn.

I think Tom started out with the right concept here is that acceleration continues with each dollar of spend, it's not worth the same as the last dollar spend, it's worth more because we're going to consolidate that spend and optimize it.

As you go back, really, you enhance the deal for all the base spend plus the new spend. So it just -- it cycles up really quickly. It's fantastic leverage.

Right. You had the growth tiers to it as well, which we try to automatically build in and you get -- you don't have to do any work to get the pop.

And compliance, like working capital, compliance is another key component for the past 23 months that everybody up until the supply chain getting a little wobbly, there was a laser focus on compliance because through the pandemic because it was an opportunity with spends down to keep some of that product cost down. And so it was very sharp. I was bugging you about it all the time.

That's right. Tom is very interested in competing.

So that's another big driver.

And it's a big focus of ours too. And as I said, you heard in my presentation it goes two ways. One is making sure we are providing the programs around the spend. And then once we have the programs to make sure we're using them. So there's 2 heads to it.

Toni Kaplan from Morgan Stanley again. A number of the new wins last year were driven by self-op conversion. Can you just talk about if there was some sort of driver, maybe it was post-COVID or something else that really led to organizations wanting to switch to using a vendor that were historically self-op. And when you think about the composition of new business going forward, is self-op conversion the biggest driver of new wins in the target? If you could sort of break that up.

Sure. It's a good question. Look, I think as we looked -- conversations with self-op providers are ongoing. It's not something that happened as a result. We have -- to Bart's point earlier, we have conversations with clients over years. And what the pandemic did was ask -- force them to ask themselves what businesses do we want to be in? What is important? And they found themselves whether it's the pandemic, whether it's supply chain issues, whether it's personnel issues, they see an outsourced provider typically being able to solve those far better than they can individually. And so the conversations that have been going on accelerated to the point where we're seeing more of a prevalence toward outsourcing moving forward. Some of it was triggered pretty quickly and immediately. Some of it, I think, will continue to be enhanced dialogue as we move forward. I think it will always be a component of the mix of what we sell. There is -- as you saw through all of our presentations today, there is a lot of self-op conversion opportunity across the globe and Uniforms, et cetera. So that will always be a big chunk of how we get new sales. But converting to that, I think we're going to have a lot of opportunity to continue to ramp up our kind of head-to-head competitive new business wins. And so we see that being a huge part of the mix moving forward.

Hi, everyone. This is...

Sorry, can I correct. Sorry, not correct, but add one thing. I just want to be clear, though, that -- because I've heard this a lot last night, too, about people are feeling like -- or I'm getting the sense that our growth rates are dependent on first-time outsourcing. And that is not true. What it's dependent on is consistent, as we've seen for the last 10, 20, 30 years in this industry, continued mix of first-time outsourcing conversion of regionals and some head-to-head competition. This blip is great, and it may continue for who knows how long and long may it live, but it's not necessary. It's a nice to have. And so we are very confident in these growth rates, in the strength of this industry and the runway we have, as John showed in his slides, to grow mid-single digits, even if the first time outsourcing sort of reverts to norm. So I just want to be really clear about that.

It's great. Great. Just another one from on the line from Vicki Stern of Barclays. The presentation of base business growth outlined a number of exciting opportunities to drive like-for-like growth, which are in the process of being rolled out. What are some assumptions I can make an underlying annual growth -- organic growth for the base business. And theoretically, why are we not being more aspirational in that area?

1% to 2%?

Yes.

Including pricing. But it is -- as Alison laid out, it's phenomenally exciting what can happen when you take your base and you really look at what else you can do with it because it's there to be had, improving the experience, improving all. She highlighted a lot of things within sports entertainment, but I think any of Carl or Marc's groups could stand up here and talk about what they're doing to drive same-store sales. And -- but that's another offset. And to your question, is that base business could also help alleviate some other things. I mean, of course, this plan isn't going to come together exactly the way it's laid out. There will be pluses and minuses, as always. And we do think, to the question that this is potentially an upside. But overall, that's what we've factored in.

Tom, maybe I can just add on that. I think what we want to make sure that our teams are thinking about is the focus on innovation, concept development as ways to grow that base business and not a reliance just on price. Price is the lever to mitigate your increasing cost in the business, whether it's inflationary or labor. Labor costs that are growing, but that you can drive the base through that innovation that Alison was sharing and use price as a way to ensure the costs are continuing going forward.

Follow-up from Shlomo Rosenbaum of Stifel. So a little bit of a specific question around the next level acquisition. It seems really interesting. And could you talk a little bit about the growth that you're expecting from that business through that 2025 time frame. There's like one other competitor out there that it seems like there's opportunity to grow to be similar, maybe you can just fill in a little bit around that and what you're expecting specifically from that business. I know you don't like to get too detailed or granular, but maybe you can just give us some broad strokes about how to think about that business? And are there other acquisition opportunities that are like that, that are -- that kind of interesting growth potential?

Yes, I'll just start with that. The actual number is we're expecting good things out of them. It's not something necessarily that I'd want to disclose within that overall $20 billion target. But we expect good growth. We're really excited about that marketplace, but I'll let Marc talk about.

Yes, it was a great opportunity to find a business that is parallel and adjacent to our health care business. That's a specific niche in that skilled nursing facility realm that really is highly, highly self-op other than this one competitor you mentioned that has a presence in it. And this management team and company found a way to distinguish themselves as being highly receptive by self-op conversions and existing clients in that marketplace. So we had a familiarity with the business and a very good familiarity with the management team. And so in conversations with them, we realized this is a perfect opportunity to find a high-growth industry with a high-growth company that fits very well within our overall health care strategy, particularly around growth. So we do see continued runway for this business. It's small, but mighty. And we -- it will be big and mighty 1 day.

Looks like there are no further questions. No further questions on the line as well. Spoke too soon.

This is Steven Majocha from Neuberger Berman. What are the factors that need to be weighed, I guess, when considering the Uniform business being part of Aramark versus structured independently longer term?

Yes. I guess what I would say is that the Aramark Board and the leadership team are always evaluating what the appropriate strategy is for the business, the way to optimize value for the shareholders. And what we've talked about over the last couple of years is the fact that we really think that there's a lot of improvement that we can bake into the business and that ultimately, our shareholders will be -- will receive greater value regardless of what approach we take, if we work to improve the business. And I think the addition of Kim and the continued growth of her leadership team is an indication that we are very much focused on improving the business and creating a context that it could operate in -- or creating an environment where it could operate in any context, whether as a part of Aramark or as an independent entity at some point in the future. The Board has not made any kind of decision with respect to what the long term should be. I know there's a lot of interest, and we get questions all the time about should you spin it? Should you [ RMT ] it? Should you go do something else with it? Right now, I think our best strategy is to work to improve it and to deliver on value for our shareholders as a result of what we know is latent in that business. There's a lot of improvement latent in that business. And I'd rather get paid a much higher multiple in the future on that value creation than taking some kind of action on a precipitous basis just to make a change. So at this stage, we're very much focused on creating the best management team in the Uniform industry, and I think we're quickly going to get there.

Okay. I think this may be our last one, then you can have lunch.

[indiscernible] Putnam Investments. A question on your margins. Your guidance shows that the new business obviously could have an outsized impact on your margins, especially in the first year. And now since the focus is on your business, how should we think about this margin recovery in the near years? Should we expect it to be slower in the beginning? And as you onboard the business, margins will build up faster? Or how do you think about it?

Yes, I think there will certainly be a ramp because we're coming from a flatfooted start, as Marc showed, with zero growth the last 5 years and certainly the last couple of years. And as we start to build the net growth benefit that margin will catch up and the maturity of contracts signed this past year will sort of lap those new accounts over the next couple of years. So there is a build. I think that's evident in the guidance for '22, in that 5% to 5.5% range and then ramping from there. Again, I can't emphasize enough with the consistent net growth, which is what we're really striving for. We've got to do this year in and year out. We can have a good year and a bad year. Marc again alluded to that being part of the issue in the past. It's got to be a consistent net growth.

Terrific. Well, I would like to thank all of you for being here, and thank you to everybody who's participated via webcast as well. We really appreciate both your partnership and your thought leadership and your commitment to the organization. We're very excited about the future of this enterprise. I hope that came across in the presentations and in our plans for the future of the organization. So thank you very much for being here. Appreciate it. Thank you.