Aramark (NYSE:ARMK) Q4 2019 Earnings Conference Call - Final Transcript
Nov 19, 2019 • 08:30 am ET
John J. Zillmer
that we have a lot of talented people working for the company who are committed to doing the right thing for our clients, customers and fellow employees.
I do believe there is ample opportunity to reinvigorate our field leaders with a sharper focus on hospitality and customer service. This translates into empowering our frontline to serve our clients' ever-changing needs by providing differentiated and customized experiences while realizing sizable benefits from organizational scale. Recognizing how important it is to effectively manage this balance, one of my first priorities was to appoint a highly respected leader in global supply chain and group purchasing. I'm very pleased that John OroBono has returned to Aramark after decades of prior service with the company. John is an industry expert who has deep experience and strong relationships with our field teams, suppliers, distributors, and client partners complementing the impressive team we already have in place. Together, we will partner closely with our senior frontline leaders to evolve our supply chain strategy, advancing the Company's growth, productivity and product quality initiatives. I commend the organization for tripling our procurement scale, growing the portfolio and driving free cash flow to both strengthen the balance sheet and enhance financial flexibility.
The Board, the leadership team, and I firmly believe that is -- that now is the time to pursue a more accelerated revenue growth strategy while appropriately balancing other important financial drivers of the business. I'm confident that we can achieve our objectives while holistically serving our clients' needs and inspiring and empowering our frontline associates. Where appropriate, we will deliberately increase resources and customize clients and field solutions, expand and reinforce our sales capabilities and talent as well as pursue select mergers and acquisitions activity, all of which will fuel our client retention and new business revenue opportunities.
I would now like to turn the call over to Steve for a review of our financial results. Following Steve's remarks, I'll provide my key takeaways, before having the opportunity to take your questions. Steve?
Thanks, John. And on behalf of the entire organization, welcome back to Aramark. We're excited to have you here and look forward to pursuing the opportunities ahead together.
As 2019 concludes, we're encouraged by the overall operational performance across the business, that's going to serve as a solid platform for the future. Key takeaways from the fourth quarter compared to the prior year included legacy business revenue up 3% with growth across all of our reportable segments, good operational performance and synergy capture across the company, that was offset by significantly higher incentive compensation for employees throughout the organization, resulting in a 2% decline in adjusted operating income on a constant currency basis.
Adjusted EPS was up 1% versus the prior year on a constant currency basis, again impacted by higher incentive compensation, while also benefiting from lower interest expense. By year-end, we had reduced net debt by $593 million versus the prior year and improved our leverage ratio to 3.86 times. This was