RMK Aramark March 2006 Presentation

8/9/2019 RMK Aramark March 2006 Presentation

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Managed Services,Managed Better


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ARAMARK: An Outsourced Services Leader

Leading provider of food, facilitiesand uniform services to Business,Education, Healthcare, Governmentand Sports & Entertainment clients

Mid-teens average annual EPSgrowth since 2001 IPO with strongcash flow

240,000 employees in 19 countries

Broad and deep managementownership that fostersentrepreneurial culture Food & Support 86%

Uniform & CareerApparel 14%

2005 Sales: $11.0 bill ion


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Cafs, Executive

Dining Rooms

Catering

Retail and C-Stores

Conference CenterManagement

RefreshmentServices

Concessions

Event Planning

On-site Restaurants

Lodging

Uniform Rental / Lease

Nationwide Service

National AccountPrograms

Clean Rooms

WearGuard & Crest Brands

Direct Sale Offerings

Managed & NationalAccount Programs

QSR / Healthcare

Leader

Galls Brand

Public Safety

Catalog Business

Services Provided

Uniform ServicesFood & Support Services

Energy Management

Groundskeeping

Laundry & Linen Services

Plant Operations

Central Transportation

Building Commissioning

Clinical Equipment Services

Environmental Services


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Total Sales

Net Income Diluted Earnings Per

Share

Cash Flow* Dividend

Cash Returned toShareholders

Additional RepurchaseAuthorization

Up 8% to $11.0B

Up 10% to $288M

Up 13% to $1.53

Up 18% to $612M Up 27% to $0.28**

$215M***

$200M

* From operating activities.** On an annualized basis (2006 vs. 2005).*** Open market share repurchases and cash dividends.

Fiscal Year 2005 Highlights


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Entrepreneurial Culture Through Ownership

Employee ownershipreaches deep into theorganization

Over 19,000 employeeowners direct andthrough benefit plans

Critical advantage for aservices company

Management& Employees

34%

Public Investors66%

Current Economic Ownership*

*As of 12/31/05.


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Drivers of Outsourcing

Client focus on core business

Customer (end-user) satisfaction is criticalto client

Improved effectiveness often important toclients success

Client cost reduction

About 40% of New ARAMARK Business in 2004-2005Came From Previously Self-Operated Clients


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International 24%

2005 Sales: $9.4 Billion Sector Analysis*

Worldwide Food & Support Services

Significant Diversification Across Business Sectors

Business

* Estimated. Education

Healthcare

Sports &Entertainment

U.S. 76%


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Spain

2005 Sales: $2.3 bi ll ion

International Food & Support Services

Belgium

Korea

Other

2005 Sales Including Minority JVs*:$3.4 bill ion

ChileU.K.

CanadaGermany

MajorityOwnedSubs

Japan

* Includes $2.3 billion of international sales as reported plus $1.1 billion of sales fromminority-owned JVs.

** Increased ownership to 90% in February 2005.

Ireland**


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On-site service provider

Contract with client (Business, College, Hospital)

Service directly affects customer (Employee,Student, Patient, Fan)

Embedded in the client organization mid 90%retention

Focus to improve outcomes important to client Cost efficiencies through common practices and

purchasing volume

Business Model


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Customer knowledge

Understand preferences through research and operationalexperience

Tailor service offerings to increase customer satisfaction

Broad, retail-oriented food service offerings

Improved environment through facilities management Improve economics to client through:

Increased customer spend and participation

Higher quality / efficiency to support clients mission

Standardized operation and volume to drive cost efficiencies

How We Add Value

Value is More Than Just Low Cost


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Additional penetration into self-operated clients

Healthcare, Education are underpenetrated

Higher usage at existing clients

Improved service offerings attract more customers

from on-site population Additional services

Cross-selling food and facilities services

International expansion Grow from current 19 country base

Growth Opportunities


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Higher Usage at Existing Clients Higher Education

Convenience Solutions

Same store sales up 16%

eCommerce and POS Solutions

Check average up 27%

Lifestyle Meal Plan Marketing andCustomer Loyalty Programs

Voluntary Plan enrollment up 15%

Earn Points

Product Mix and Marketing

Programs:Driving Higher Margin BaseBusiness Growth through.

Note: Percentages represent year-over-year increases in the account


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2000 2001 2002 2003 2004 2005

Higher Usage at Existing Clients Sports & Entertainment

Per Capita SpendingAt Fenway Park

14% CAGR Yawkee Way

Concourse,Rt Field Restaurant


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ClinicalTechnology

Facilities

Food 4%

11%

10%

1%

Additional Services Healthcare

We Provide Food, Facilities and CTS ForOnly 4% of Our Healthcare Clients

1,000 Healthcare Facilities 2004 - 2005 New Business

New service to

existing clientNew multipleservice to newclient

New singleservice to newclient


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International Expansion

Achieve Top 3 presence incountries representing80%+ of worlds GDP

Accelerate organic growth

build B&I, diversify intoHealthcare, Education andS&E

Make selective acquisitions

Focus on the end consumer

Europe HealthcareOpportunity: $43B

Strategy

Europe EducationOpportunity: $22B

Self-OpPotential

Self-OpPotential

Source: Gira


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ARAMARK: Uniform & Career Apparel

Rental: Uniform Services

Direct Marketing: WearGuard/Crest and Galls

A leading U.S. provider with approximately $1.6 billion in sales in fiscal 2005

WearGuard/

Crest

GallsUniform

Services

Sourcing, Manufacturing, Distribution

Workwear, Image Apparel

Mass Personalization / Design

Managed Account Programs

Quick Service RestaurantLeader

Healthcare

Uniform Rental / Lease/Direct Purchase

Dust Control

Clean Room

Nationwide Network

Public Safety

Equipment / Supplies

Apparel

Accessories

Managed Account Programs


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Broad line of rental and direct sale career apparel

covering nearly all job categories

A nationwide network of uniform rental servicefacilities covering 90% of the top 200 markets

Broad, direct distribution through catalog, outboundtelemarketing, sales force and internet

Best-in-class global uniform manufacturing /sourcing to reduce costs and control quality

Business Model


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Important component of employer branding

Particularly service companies

Significant customizing capability

Consistent employee image

Increased employee satisfaction

Improved employee protection

How We Add Value


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Penetration of non-user population

26 million potential first-time users

Currently about 50% of new sales

Ancillary sales to existing customers

Cross-sell allied, sanitation products

Nationwide clients

Ability to standardize products, services and cost

Growth Opportunities


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Organic sales growth

Margin improvement

Cash flow

Acquisition strategy

Operating & Financial Discipline


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Long-Term Financial Objectives

Top-line organic growth: 6-8%

Key Focus: Mission One

Operating income growth: 8-12%

Key Focus: product mix, labor management

EPS Growth: 12-14%

Key Focus: optimal capital structure


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Product costs

Supply chain driven

Production discipline andoperational efficiency

Product mix and marketingprograms

Uniform sourcing andmanufacturing initiatives

Labor and related costs

Labor management tools

Technology driven initiatives Medical costs

Workers compensation

Costs as % of total

Labor

ProductOther

Drivers of Margin Expansion


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0

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200

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500

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700

2001 2002 2003 2004 2005

0.0

0.5

1.0

1.5

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3.0

2003 2004 2005

CAPEX DA

Strong Cash Flow Dynamics

Net Capex Trends as a % of Sales

Significant cash sales component

30%+ of total Scale drives attractive vendor terms

Cash Flow from Operating Activit ies*

%

Low inventory requirements

Food approximately 2-3% of sales Facilities inventory is negligible

Working Capital Dynamics

* From continuing operations.

$ Million


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Acquisition Strategy

Disciplined and Return-Focused Target: 15% after-tax IRR EPS accretive in 1-2 years

Strategies Strengthen existing services and client portfolio

Fine Host, Harrison, CTS

Add or strengthen key services ServiceMaster

Expand International reach AIM Services (Japan); Campbell Catering (Ireland);Restauracion Colectiva & Rescot (Spain); CentralRestaurantes (Chile); Catering Alliance (UK); BrightChina Service Industries, Golden Collar (China)


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History of Solid Performance

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' 85 ' 86 ' 87 ' 88 ' 89 ' 90 ' 91 ' 92 ' 93 ' 94 ' 95 ' 96 ' 97 ' 98 ' 99 ' 00 ' 01 ' 02 ' 03 ' 04 ' 05

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Sales - billions

Reflects actual amounts originally reported in Form 10K Annual Reports. Not restated for discontinued operations (Educational Resources businesssold in FY 2003). Fiscal 2003 includes insurance proceeds of $19.7 million net of tax and income from discontinued operations of $35.7 million.Effective beginning FY 2002 goodwill is no longer amortized.1985 is a 9 month period. 1986, 1992, 1997, 2003 are 53 week years.

Net Income - millions

Sales

NetIncome


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Managed Services,Managed Better


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Fiscal Year Ended

October 3, 2003 October 1, 2004 September 30, 2005

Reconciliation of net purchases of property and equipment and client contract investments:

Purchases of property and equipment and client contract investments (298,606)$ (308,763)$ (315,560)$

Disposals of property and equipment 28,183 20,503 21,581

Net purchases of property and equipment and client contract investments (270,423)$ (288,260)$ (293,979)$

ARAMARK Corporation Consolidated Sales 9,447,815$ 10,192,240$ 10,963,360$

Net purchases of property and equipment and client contract investments

as a percentage of sales 2.9% 2.8% 2.7%

(In Thousands)

Net capital expenditures, expressed as a percentage of sales, is a metric utilized by management to review cash flow dynamics, which long term investors may find useful.

ARAMARK CORPORATION AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP MEASURES

NET CAPITAL EXPENDITURES AS A PERCENTAGE OF SALES

(Unaudited)

Reconciliation of Non-GAAP Measures

Net Capital Expenditures as a Percentage of Sales

RMK Aramark March 2006 Presentation

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