2. Special Note about Forward-Looking Statements
This presentation includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect our current
views as to future events and financial performance with respect to our operations. These statements can be identified by the fact that they do not relate
strictly to historical or current facts. They use words such as “aim,” “anticipate,” “are confident,” “estimate,” “expect,” “will be,” “will continue,” “will likely
result,” “project,” “intend,” “plan,” “believe” and other words and terms of similar meaning in conjunction with a discussion of future operating or financial
performance. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied
in the forward-looking statements.
Factors that might cause such a difference include: unfavorable economic conditions; ramifications of any future terrorist attacks or increased security
alert levels; increased operating costs, including labor-related and energy costs; shortages of qualified personnel or increases in labor costs; costs and
possible effects of further unionization of our workforce; currency risks and other risks associated with international markets; risks associated with
acquisitions, including acquisition integration issues and costs; our ability to integrate and derive the expected benefits from our recent acquisitions;
competition; decline in attendance at client facilities; unpredictability of sales and expenses due to contract terms and terminations; the impact of natural
disasters on our sales and operating results; the risk that clients may become insolvent; the contract intensive nature of our business, which may lead to
client disputes; high leverage; claims relating to the provision of food services; costs of compliance with governmental regulations and government
investigations; liability associated with noncompliance with governmental regulations, including regulations pertaining to food services, the environment,
the Federal school lunch program, Federal and state employment and wage and hour laws and import and export controls and customs laws; dram shop
compliance and litigation; inability to retain current clients and renew existing client contracts; determination by customers to reduce their outsourcing
and use of preferred vendors; seasonality; and other risks that are set forth in the “Risk Factors” sections of ARAMARK’s SEC filings.
For further information regarding risks and uncertainties associated with ARAMARK's business, please refer to the quot;Management's Discussion and Analysis
of Results of Operations and Financial Conditionquot; and quot;Risk Factors” and other sections of ARAMARK's SEC filings, including, but not limited to, our annual
report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained by contacting ARAMARK's investor relations department via its
web site www.aramark.com.
Forward-looking statements speak only as of the date made. We undertake no obligation to update any forward-looking statements to reflect the events
or circumstances arising after the date as of which they are made. As a result of these risks and uncertainties, readers are cautioned not to place undue
reliance on the forward-looking statements included herein or that may be made elsewhere from time to time by, or on behalf of, us.
Important Disclosure
In this presentation, we mention certain financial measures that are considered non-GAAP. Generally, a non-GAAP financial measure is a numerical measure of a
company’s performance, financial position, or cash flows that either excludes or includes items different than those prepared or presented in accordance with
generally accepted accounting principles. We have prepared disclosures and reconciliations of non-GAAP financial measures that were used in this presentation and
may be used periodically by management when discussing the Company's financial results with investors and analysts, which are available on our website
www.aramark.com.
2
3. ARAMARK: An Outsourced Services Leader
Leading provider of food, facilities 2005 Sales: $11.0 billion
and uniform services to Business,
Education, Healthcare, Government
Uniform & Career
and Sports & Entertainment clients Apparel 14%
Mid-teens average annual EPS
growth since 2001 IPO with strong
cash flow
240,000 employees in 19 countries
Broad and deep management
ownership that fosters
Food & Support 86%
entrepreneurial culture
3
4. Services Provided
Food & Support Services Uniform Services
Cafés, Executive Energy Management Uniform Rental / Lease
Dining Rooms
Groundskeeping Nationwide Service
Catering
Laundry & Linen Services National Account
Retail and C-Stores Programs
Plant Operations
Conference Center Clean Rooms
Central Transportation
Management
WearGuard & Crest Brands
Building Commissioning
Refreshment
Direct Sale Offerings
Services Clinical Equipment Services
Managed & National
Concessions Environmental Services
Account Programs
Event Planning
QSR / Healthcare
On-site Restaurants Leader
Lodging Galls Brand
Public Safety
Catalog Business
4
5. Fiscal Year 2005 Highlights
Total Sales Up 8% to $11.0B
Net Income Up 10% to $288M
Diluted Earnings Per Up 13% to $1.53
Share
Cash Flow* Up 18% to $612M
Dividend Up 27% to $0.28**
Cash Returned to $215M***
Shareholders
$200M
Additional Repurchase
Authorization
* From operating activities.
** On an annualized basis (2006 vs. 2005).
*** Open market share repurchases and cash dividends.
5
6. Entrepreneurial Culture Through Ownership
Current Economic Ownership*
Employee ownership
reaches deep into the Management
& Employees
organization
34%
Over 19,000 employee
owners – direct and
through benefit plans
Critical advantage for a
services company
Public Investors
66%
*As of 12/31/05.
6
7. Drivers of Outsourcing
Client focus on core business
“Customer” (end-user) satisfaction is critical
to client
Improved effectiveness often important to
client’s success
Client cost reduction
About 40% of New ARAMARK Business in 2004-2005
Came From Previously Self-Operated Clients
7
8. Worldwide Food & Support Services
2005 Sales: $9.4 Billion Sector Analysis*
Sports &
International 24% Entertainment Business
Healthcare
U.S. 76%
Education
* Estimated.
Significant Diversification Across Business Sectors
8
9. International Food & Support Services
2005 Sales: $2.3 billion 2005 Sales Including Minority JV’s*:
$3.4 billion
Belgium Other
Korea
Spain
U.K. Japan
Chile Majority
Owned
Subs
Ireland**
Canada
Germany
* Includes $2.3 billion of international sales as reported plus $1.1 billion of sales from
minority-owned JV’s.
** Increased ownership to 90% in February 2005.
9
10. Business Model
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
10
11. How We Add Value
Customer knowledge
– Understand preferences through research and operational
experience
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 client’s mission
– Standardized operation and volume to drive cost efficiencies
Value is More Than Just Low Cost
11
12. Growth Opportunities
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
12
13. Penetration into Self-Op Clients – Healthcare
Opportunity: $36B
Self-Op Conversion Strategy
Enterprise sales force ARAMARK
Other Share
Thought leadership platform Share
Client intimacy
Non-
Differentiation Strategy Target
Self-op
Comprehensive portfolio with Potential
Self-Op
best-in-class delivery Untapped $24BPotential
Consumer
Patient centered platform Spend
Enabling environments
Source Data: NRA;AHA
13
14. Higher Usage at Existing Clients –
Higher Education
Product Mix and Marketing
Programs:
Driving Higher Margin Base
Business Growth through….
Earn Points
Convenience Solutions
Same store sales up 16%
eCommerce and POS Solutions
Check average up 27%
Lifestyle Meal Plan Marketing and
Customer Loyalty Programs
Voluntary Plan enrollment up 15%
Note: Percentages represent year-over-year increases in the account
14
15. Higher Usage at Existing Clients –
Sports & Entertainment
Per Capita Spending Concourse,
Rt Field Restaurant
At Fenway Park
14% CAGR Yawkee Way
2000 2001 2002 2003 2004 2005
15
16. Additional Services – Healthcare
1,000 Healthcare Facilities 2004 - 2005 New Business
Facilities New single
service to new
11% client
New service to
Food existing client
New multiple
4% 10% service to new
client
1%
Clinical
Technology
We Provide Food, Facilities and CTS For
Only 4% of Our Healthcare Clients
16
17. International Expansion
Strategy Europe Healthcare
Opportunity: $43B
Achieve Top 3 presence in
countries representing
80%+ of world’s GDP
Self-Op
Accelerate organic growth – Potential
build B&I, diversify into
Healthcare, Education and Europe Education
Opportunity: $22B
S&E
Make selective acquisitions
Focus on the end consumer Self-Op
Potential
Source: Gira
17
18. ARAMARK: Uniform & Career Apparel
A leading U.S. provider with approximately $1.6 billion in sales in fiscal 2005
Rental: Uniform Services
Direct Marketing: WearGuard/Crest and Galls
WearGuard/
Uniform Galls
Services Crest
Uniform Rental / Lease/ Workwear, Image Apparel Public Safety
Direct Purchase Mass Personalization / Design Equipment / Supplies
Dust Control Managed Account Programs Apparel
Clean Room Quick Service Restaurant Accessories
Nationwide Network Leader Managed Account Programs
Healthcare
Sourcing, Manufacturing, Distribution
18
19. Business Model
Broad line of rental and direct sale career apparel
covering nearly all job categories
A nationwide network of uniform rental service
facilities covering 90% of the top 200 markets
Broad, direct distribution through catalog, outbound
telemarketing, sales force and internet
Best-in-class global uniform manufacturing /
sourcing to reduce costs and control quality
19
20. How We Add Value
Important component of employer branding
– Particularly service companies
– Significant customizing capability
Consistent employee image
Increased employee satisfaction
Improved employee protection
20
21. Growth Opportunities
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
21
22. Transforming the Uniform Business
Sales Excellence Margin Expansion
Shift to a sales driven Merchandise
organization
Plant and operations
– 30% increase in headcount
Delivery and distribution
– 20% increase in productivity
Labor
– Focus on hiring, on-
boarding, training, retention
Business processes
– Improved sales tools
– Sales as a career path
22
25. Drivers of Margin Expansion
Product costs
– Supply chain driven
– Production discipline and
Costs as % of total
operational efficiency
– Product mix and marketing
programs
– Uniform sourcing and Other
Product
manufacturing initiatives
Labor
Labor and related costs
– Labor management tools
– Technology driven initiatives
– Medical costs
– Workers’ compensation
25
26. Strong Cash Flow Dynamics
Working Capital Dynamics
Significant cash sales component Low inventory requirements
– 30%+ of total – Food approximately 2-3% of sales
Scale drives attractive vendor terms – Facilities inventory is negligible
Net Capex Trends as a % of Sales Cash Flow from Operating Activities*
CAPEX DA
% $ Million
700
3.0
600
2.5
500
2.0
400
1.5
300
1.0
200
0.5 100
0.0 0
2003 2004 2005 2001 2002 2003 2004 2005
* From continuing operations.
26
27. 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); Central
Restaurantes (Chile); Catering Alliance (UK); Bright
China Service Industries, Golden Collar (China)
27
28. History of Solid Performance
Sales - billions Net Income - millions
$12
$300
Sales
$10 Net
$250
Income
$8
$200
$6
$150
$4 $100
$2 $50
$0 $0
'85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05
Reflects actual amounts originally reported in Form 10K Annual Reports. Not restated for discontinued operations (Educational Resources business
sold 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.
28
30. Reconciliation of Non-GAAP Measures –
Net Capital Expenditures as a Percentage of Sales
ARAMARK CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
NET CAPITAL EXPENDITURES AS A PERCENTAGE OF SALES
(Unaudited)
(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.
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%
30
