The Food Travel Experts Preliminary Results 2019 www.foodtravelexperts.com
Presentation structure 1. Group highlights Simon Smith 2. Financial review Jonathan Davies 3. Business review Simon Smith 4. Q&A All 2 SSP: The Food Travel Experts
Group highlights • Good full year performance • Significant expansion across our geographies and entry into new countries • Total sales growth including acquisitions 7.8% at CC, 9.0% at actual FX • Net new space growth strong at 5.6%; like-for-like sales up 1.9% • Strong operating profit up 12.1% at CC, 13.3% at actual FX, margin growth of 30bps • EPS 29.1p, up 15.9% • Final dividend 11.8p, up 15.7% YOY • Up to £100m share buyback announced • Strong pipeline for 2020 and the medium-term * At constant currency 3 SSP: The Food Travel Experts
Financial review Preliminary Results 2019 Jonathan Davies, CFO SSP: The Food Travel Experts
Group financial overview Change (%) Constant Reported £m 2019 2018 Currency FX Rates Revenue 2,794.6 2,564.9 7.8% 9.0% LFL Sales Growth 1.9% 2.8% n/a n/a Operating Profit * 12.1% 13.3% 221.1 195.2 Profit Before Tax * 10.2% 203.2 184.4 n/a Earnings Per Share (p) * 15.9% 29.1 25.1 n/a Net Debt (483.4) (334.7) n/a *Excludes amortisation of intangible assets created at acquisition of the SSP business by EQT in 2006, the revaluation of the final consideration to acquire an additional 16% of TFS and the additional non-cash interest from debt modifications under IFRS9. 5 SSP: The Food Travel Experts
2019 LFL sales growth 3.0% 2.5% 2.0 % LFL Sales Growth (%YOY ) 1.9 % 2.0% 1.5% 1.0% 0.5% 0.0% Q1 Q2 H1 Q3 Q4 H2 FY19 Note: Same store like-for-like sales growth at constant currency 6 SSP: The Food Travel Experts
Revenue growth of 7.8% at constant currency Net Contract Change at Constant Currency LFL Sales Total Revenue Gains/(Losses) 2.4% 2.9% 5.3% UK (0.2)% 6.6% 6.4% Continental Europe* North America 3.5% 13.0% 16.5% 4.5% 0.0% 4.5% Rest of World Group 1.9% 5.6% 7.5% 0.3% Stockheim Acquisition 7.8% Reported Growth *Excluding acquisition impact 7 SSP: The Food Travel Experts
Operating profit growth of 12.1% Operating Profit* Change (%) Constant Reported FX £m 2019 2018 Currency Rates UK** 101.8 89.5 13.7% 13.7% Continental Europe 79.3 79.5 0.6% (0.3)% North America 41.9 27.7 44.9% 51.3% Rest of World 35.9 35.7 (2.3)% 0.6% Non-attributable (37.8) (37.2) (1.9)% (1.6)% Group 221.1 195.2 12.1% 13.3% * Operating profit is underlying, at actual currency, and excludes amortisation of intangible assets created at acquisition of the SSP business by EQT in 2006 ** UK includes Republic of Ireland 8 SSP: The Food Travel Experts
Reported operating margin up by 30 bps YOY bps Change £m 2019 2018 Constant Currency Reported FX Rates Revenue 2,794.6 2,564.9 Gross Profit 1,987.9 1,801.4 % Sales 71.1% 70.2% 80 90 Labour Costs (809.3) (736.3) % Sales (29.0)% (28.7)% (20) (30) Concession Fees (551.8) (489.6) % Sales (19.7)% (19.1)% (60) (60) Overheads (300.4) (282.6) % Sales 30 30 (10.7)% (11.0)% Depreciation & Amortisation (105.3) (97.7) % Sales (3.8)% (3.8)% - - Operating Profit* 221.1 195.2 Operating Margin (%) 7.9% 7.6% 30 30 *Excludes amortisation of intangible assets created at acquisition of the SSP business by EQT in 2006. 9 SSP: The Food Travel Experts
Net profit up 11.1% £m 2019 2018 Change (%) Operating Profit * 221.1 195.2 13.3% Net Financing Cost* (22.0) (15.6) Share of Associates 4.1 4.8 Profit Before Tax * 203.2 184.4 10.2% Tax * (45.1) (40.5) Non-Controlling Interests (26.6) (25.5) Net Profit * 131.5 118.4 11.1% Earnings Per Share (p)* 29.1p 25.1p 15.9% Dividend Per Share (p) 11.8p 10.2p 15.7% *Excludes amortisation of intangible assets created at acquisition of the SSP business by EQT in 2006, the revaluation of the final consideration to acquire an additional 16% of TFS and the additional non-cash interest from debt modifications under IFRS9. 10 SSP: The Food Travel Experts
Operating cash generation of £67.9m £m 2019 2018 Operating Profit * 221.1 195.2 Depreciation & Amortisation 105.3 97.7 Working Capital 3.7 12.8 Capital Expenditure (185.0) (144.2) Net Tax (37.1) (37.2) Acquisitions (25.8) (19.0) Other (14.3) (15.1) Operating Cash Flow 67.9 90.2 Net Financing Costs (17.4) (13.6) Free Cash Inflow 50.5 76.6 *Excludes amortisation of intangible assets created at acquisition of the SSP business by EQT in 2006 11 SSP: The Food Travel Experts
Net debt of £483.4m Leverage £m (Net Debt/EBITDA) Opening Net Debt (1 October 2018) (334.7) 1.1x Free Cash Flow 50.5 Dividend (200.8) Impact of Foreign Exchange Rates (0.6) Other 2.2 Closing Net Debt (30 September 2019) (483.4) 1.5x 12 SSP: The Food Travel Experts
Uses of cash and balance sheet efficiency Organic Investment M&A Significant structural growth Review of potential M&A opportunities around opportunities the world Balance sheet efficiency Target leverage: c. 1.5x - 2.0x Dividend Return to shareholders Pay-out ratio maintained at 40% up to £100m proposed via a share buyback 13 SSP: The Food Travel Experts
IFRS 16 • Applies from 1 October 2019 – impacts the way assets, liabilities and the income statement are presented going forward • No impact on the economics, cash flow or how we run the business • SSP continues to pay variable concession fees (i.e. % of sales) • Minimum Annual Guarantee is capitalised • Brings both an asset and liability onto the balance sheet (c.£1.6 billion) • Operating profit expected to increase by c.£10m, PBT expected to be c.£25m lower* • Effective for 2019/20 interim results – we will continue to report pre and post the impact of IFRS 16 in the near term *Indicative impact versus current IAS 17 based on existing portfolio of leases 14 SSP: The Food Travel Experts
Financial summary • Robust LFL sales growth of 1.9% • Net contract gains strong at 5.6% • Strategic programmes delivering strong operating margin growth up 30bps • Operating profit up 12.1% at constant currency, 13.3% actual FX rates • EPS up 15.9% • Free cash flow of £50.5m • Full year dividend per share of 11.8p and announcement of up to £100m share buyback 15 SSP: The Food Travel Experts
Business Review Preliminary Results 2019 Simon Smith, CEO SSP: The Food Travel Experts
Delivering across all our stakeholder groups…. Customers Clients Brand Partners Investors Colleagues Underpinned by our corporate governance framework and a commitment to our environmental and social responsibilities 17 SSP: The Food Travel Experts
Delivering long term sustainable value for shareholders Selective M&A Focus on returns Organic growth Cost efficiencies Track record £22bn market & growing Multiple levers Disciplined capital allocation More space dedicated to F&B Balance sheet efficiency Disciplined ROI Culturally embedded Market leading positions Returns to shareholders Strategic fit Technology & Automation International scale, local expertise Strong and sustainable growth in earnings, cash flow and returns to shareholders 18 SSP: The Food Travel Experts
Increased weighting to higher growth regions and channels 2014 Sales 2019 Sales UK and • Strong market positions in UK & CE C Europe 83% 67% NA and Rest of World • Regional mix shift to faster growing 33% markets 17% • NA and ROW 33% of total group sales 2014 Channel Split 2019 Channel Split 7% 5% • Air now almost 2/3 of the business 31% 41% Other Rail Air 64% 52% 19 SSP: The Food Travel Experts
Early actions…. Drive profitable LFL Launched programmes to respond to changing needs of customers Faster value creating growth in ROW Appointed new CEO. New resource into business development team Capitalise on NA growth opportunity; Additional support and strengthened commercial teams drive commercial excellence Greater operational efficiency Systematic reviews. Faster roll-out of best practice Accelerated programmes focused on operational efficiencies and Automation and Technology improving customer journey Selective M&A Jamie's and proposed Red Rock acquisitions Corporate, Social and Environmental Created CSR executive team. Clear focus. Accelerating actions Responsibilities 20 SSP: The Food Travel Experts
Five successful value creation levers Optimise our offer to benefit from the positive trends in our markets and drive profitable LFL 1 Grow profitable new space 2 Optimise gross margin and leverage scale benefits 3 Run an efficient and effective business 4 Optimise investment using best practice and shared resource 5 21 SSP: The Food Travel Experts
Optimising our offer…driving profitable LFL 1 Areas of Focus • Favourable market trends Improve ranges • Ongoing passenger growth Optimise price and promotion • Sharper focus on profitable LFL Upselling • Using data to highlight opportunities • Changing consumer preferences Maximise use of space • Technology presenting new opportunities Focus on category as well as brand performance 22 SSP: The Food Travel Experts
Aligning our offer to changing customer needs 1 Premiumisation Technology Changing Customer Profile Speed and self selection Customers trading up Greater diversity of diets 23 SSP: The Food Travel Experts
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