The Food Travel Experts Interim Results 2020 www.foodtravelexperts.com
Presentation structure 1. Group highlights Simon Smith 2. Financial review Jonathan Davies 3. Business review Simon Smith 4. Q&A All SSP: The Food Travel Experts 2
Group highlights • Good first half performance prior to the impact of COVID-19 in Q2. • Strong net new space growth at 5.7%; in line like-for-like sales and further progress on our strategic initiatives • Material impact from COVID-19; pre-emptive management action taken to protect and hibernate the business • Sufficient additional liquidity created to deal with the “pessimistic scenario” • Restrictions on travel remain in place for now; SSP will contribute to building customer confidence to travel again • Poised to re-open units as demand starts to recover; systematic approach designed to drive participation & profitability • Simultaneously reducing cost and increasing flexibility • Leveraging market position and expertise in food travel retail; planning to emerge fitter, stronger business SSP: The Food Travel Experts 3
Financial Review Interim Results 2020 Jonathan Davies, CFO SSP: The Food Travel Experts
Group Financial Overview IAS 17 Change (%) H1 2020 H1 2020 H1 2019 Constant Reported £m IFRS 16 IAS 17 IAS 17 Currency FX Rates Revenue 1,214.6 1,214.6 1,261.6 (2.7)% (3.7)% LFL Sales Growth (8.4)% (8.4)% 2.0% n/a n/a Operating (Loss) / Profit * (5.8) 1.3 62.5 (97.6)% (97.9)% (Loss) / Profit Before Tax * (32.4) (10.7) 54.2 n/a n/a (Loss) / Earnings Per Share (p) * (7.5)p (4.0)p 6.7p n/a n/a Net Debt (1,934.2) (457.7) (433.4) n/a (5.6)% *Excludes, in both years, the amortisation of intangible assets created at acquisition of the SSP business by EQT in 2006. In 2020 only, excludes the additional non-cash interest from debt modifications under IFRS9. In 2019 only, excludes the revaluation of the final consideration to acquire an additional 16% of TFS. SSP: The Food Travel Experts 5
Covid 19 impacting Operating Margin in H1 IAS 17 YOY bps H1 2020 H1 2020 H1 2019 Change IFRS 16 IAS 17 IAS 17 Reported FX Rates £m Revenue 1,214.6 1,214.6 1,261.6 Gross Profit 856.2 856.2 892.2 (20) 70.5% 70.5% 70.7% % Sales Labour Costs 387.8 387.8 385.1 (150) 31.9% 31.9% 30.5% % Sales Concession Fees 112.9 254.2 248.6 (10) 9.3% 20.9% 19.7% % Sales Overheads 158.0 158.0 143.2 13.0% 13.0% 11.3% (170) % Sales Depreciation & Amortisation * 203.3 54.9 52.8 (30) 16.7% 4.5% 4.2% % Sales Operating (Loss)/Profit * (5.8) 1.3 62.5 (490) (0.5)% 0.1% 5.0% Operating Margin (%) *Excludes amortisation of intangible assets created at acquisition of the SSP business by EQT in 2006. SSP: The Food Travel Experts 6
Net loss of £-18m for H1 (IAS 17 basis) H1 2020 H1 2020 H1 2019 IAS 17 Change £m IFRS 16 IAS 17 IAS 17 (%) Operating (Loss) / Profit * (5.8) 1.3 62.5 (97.9)% Net Financing Cost* (26.8) (12.4) (10.4) Share of Associates 0.2 0.4 2.1 (Loss) / Profit Before Tax * (32.4) (10.7) 54.2 (119.7)% Tax * 2.3 0.8 (12.0) Non-Controlling Interests (3.4) (7.9) (11.0) Net (Loss) / Profit * (33.5) (17.8) 31.2 (157.1)% (Loss) / Earnings per share (p)* -7.5p -4.0p 6.7p (159.7)% *Excludes, in both years, the amortisation of intangible assets created at acquisition of the SSP business by EQT in 2006. In 2020 only, excludes the additional non-cash interest from debt modifications under IFRS9. In 2019 only, excludes the revaluation of the final consideration to acquire an additional 16% of TFS. SSP: The Food Travel Experts 7
LFL Sales down -18.5% in Q2 2.0% 1.2% (1.8)% 0.9% (47.4)% (18.5)% (8.4)% 0.0% LFL Sales Increase/(Decrease (%YOY ) -10.0% -20.0% -30.0% -40.0% Sales down over 90% as at the very end of March -50.0% FY19 Q1 Jan Feb Mar Q2 H1 Q2 Note: Same store like-for-like sales growth at constant currency SSP: The Food Travel Experts 8
Covid 19 impacting Operating Profit by c.£65m in Q2 Sales Operating Profit* 1400 70 £-1m £66m £-4m £-2m £1,362m £-60m £-10m £-135m 60 1350 50 1300 40 £m £m 1250 30 £1,215m 1200 20 1150 10 £1m 1100 0 H1 Forecast Jan Feb March H1 Actual H1 Forecast Jan Feb March H1 Actual (Pre Covid) (Pre Covid) *Underlying Operating profit on IAS 17 basis SSP: The Food Travel Experts 9
H1 Revenue down -2.7% Net Contract Total Change at Constant Currency LFL Sales Gains/(Losses) Revenue UK (5.2)% 2.1% (3.1)% Continental Europe (10.7)% 7.5% (3.2)% North America (6.5)% 10.5% 4.0% Rest of World (12.3)% 3.0% (9.3)% Group (8.4)% 5.7% (2.7)% SSP: The Food Travel Experts 10
Operating Profit at broadly break-even in H1 (IAS 17 basis) Operating Profit/(Loss) * IAS 17 Change (%) H1 2020 H1 2020 H1 2019 Constant Reported £m IFRS 16 IAS 17 IAS 17 Currency FX Rates UK ** 23.1 23.8 39.1 (39.0)% (39.1)% Continental Europe (23.8) (20.1) 17.7 (211.7)% (213.6)% North America 7.4 7.8 9.5 (17.3)% (17.9)% Rest of World 6.3 8.6 15.9 (48.5)% (45.9)% Non-attributable (18.8) (18.8) (19.7) +3.6% +4.6% Group (5.8) 1.3 62.5 (97.6)% (97.9)% * Operating profit is underlying, at actual currency ** UK includes Republic of Ireland SSP: The Food Travel Experts 11
Free Cash outflow of £177m H1 2020 H1 2019 £m IAS 17 IAS 17 Operating Profit * 1.3 62.5 Depreciation & Amortisation 54.9 52.8 Working Capital (45.1) (36.3) Capital Expenditure (119.5) (108.2) Net Tax (20.1) (18.7) Acquisitions (26.9) (3.4) Other (12.4) (18.5) Operating Cash Flow (167.8) (69.8) Net Financing Costs (9.1) (6.1) Free Cash Outflow (176.9) (75.9) Note: Depreciation, Amortisation and Net Financing costs stated as IAS17 figures *Excludes, in both years, the amortisation of intangible assets created at acquisition of the SSP business by EQT in 2006. SSP: The Food Travel Experts 12
Net Debt of £458m (IAS 17 basis), after equity raise of £209m H1 2020 Leverage £m (Net Debt/ EBITDA) Net Debt at 1 Oct 2019 (IAS 17 basis) (483.4) 1.5x Free Cash Flow (176.9) Impact of foreign exchange rates (3.1) Other (3.5) Net Debt at 31 March 2020 (IAS 17 basis), pre New Equity (666.9) 2.5x New Equity (net of fees) 209.2 Net Debt at 31 March 2020 (IAS 17 basis) (457.7) 1.7x IFRS 16 Lease Liability (1,476.5) Net Debt at 31 March (IFRS 16 basis)* (1,934.2) 3.5x *IFRS 16 Leverage calculated based on estimated last 12 month IFRS 16 adjusted EBITDA SSP: The Food Travel Experts 13
March Pessimistic Scenario: Impact of Covid 19 on H2 sales and profit Sales EBITDA 1800 300 £-350m £1,650m £-1,400m to £-420m £230m 1600 H2 estimated 200 profit drop- 1400 through 25-30% 1200 100 H2 EBITDA loss 1000 £m £m £-120m to £-190m 0 800 600 -100 H2 sales down c.80 – 85% YoY 400 £250m -200 200 0 -300 H2 Forecast H2 Esimated Covid impact H2 Forecast H2 Forecast H2 Esimated Covid impact H2 Forecast (Pre Covid) (Including Covid Impact) (Pre Covid) (Including Covid Impact) Note: H2 estimate based on assumptions per March 25 th trading update SSP: The Food Travel Experts 14
Pessimistic Scenario: H2 cash usage Estimated H2 Cash Outflows Actions taken to protect liquidity £m • Rapid reduction of operating costs • Negotiations of rent concessions H2 EBITDA Loss (120 - 190) • Access to government support Working Capital (180 - 200) schemes Other Net Outflows (40 - 50) • Waiver of loan amortisation (£32m) Total (340 – 440) • Share buy back suspended Estimated Monthly Cash Burn • No interim dividend £m • Capex reduction to £10-15m Q4: Jul - Sep (25 - 30) SSP: The Food Travel Experts 15
Balance sheet and liquidity significantly strengthened £m Cash at end of March 2020 (pre Equity Raise) 172 Undrawn RCF 32 March Equity Raise 209 Available liquidity at end of March 2020 413 New Sources of Funding: Bank of England CCFF 300 Other Local Facilities 37 Total Available Cash/Liquidity 750 Estimated H2 Cash Usage (340 – 440) Implied Cash/Liquidity at end of Sept 2020 310 - 410 SSP: The Food Travel Experts 16
Business Review Interim Results 2020 Simon Smith, CEO SSP: The Food Travel Experts
Four phases to our response to COVID - 19 Business Sustainable Hibernation Recovery Protection growth • Health & Safety • Health & Safety • Health & Safety • Health & Safety • Unit closures • Re- open units • Accelerate growth • Cost reduction • Staff furloughed • Re-engineer unit costs • Leverage cost base • Capex reduction • Flexible or no rent • Reduce overhead • Embed sustainability • New liquidity A fitter, stronger SSP… delivering for all stakeholders 18
Business Hibernation Decisive management action; taken early protection Key Priorities Action Taken • New Protocols • More communication Health and Safety • Office based colleagues working remotely • Agreed flexible, or no rental with landlords • Closed units; hibernation protocols Business Protection • Staff furloughed; Board/Senior management salary reduction • Discretionary spend & capex reduced to minimum; projects deferred • Share buyback suspended and final dividend deferred Liquidity • £550m new liquidity created via placing and loans • Accessed job protection schemes • Increased internal communication and support People and Community • Donations to local communities and health services SSP: The Food Travel Experts 19
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