The Food Travel Experts www.foodtravelexperts.com
Presentation structure 1. Group highlights Kate Swann 2. Financial review Jonathan Davies 3. Business review Kate Swann 4. Q&A All SSP: The Food Travel Experts 2
Group highlights • Good first half performance with operating profit up 29.0% at actual exchange rates, 32.6% at constant currency • Like for Like sales up 2.8%, net new space growth strong at 7.1% • Total sales growth including acquisitions 11.9%* • Strong operating margin growth of 50bps, excluding the acquisition impact of India • Strategic initiatives, delivering further growth and efficiency • EPS 5.6p, up 33.3% • Interim dividend 4.8p, up 50.0% YOY • Medium term pipeline encouraging * At constant currency SSP: The Food Travel Experts 3
Financial review Interim Results 2018 Jonathan Davies, CFO SSP: The Food Travel Experts
Group financial overview Change (%) Constant Reported H1 2018 H1 2017 £m Currency FX Rates Revenue 1,177.8 1,072.5 11.9% 9.8% LFL Sales Growth 2.8% 2.9% n/a n/a Operating Profit * 55.2 42.8 32.6% 29.0% Profit Before Tax * 48.7 34.7 n/a 40.3% Earnings per share (p)* 5.6 4.2 n/a 33.3% Net Debt (290.1) (378.8) n/a 23.4% *Excludes amortisation of intangible assets created at acquisition of the SSP business by EQT in 2006 and the revaluation of the final consideration to acquire an additional 16% of TFS. SSP: The Food Travel Experts 5
H1 2018 LFL sales growth 2.8% 4.5% 4.0% 3.3% 3.5% LFL Sales Growth (%YOY ) 3.1% 3.0% 2.9% 2.8% 3.0% 2.7% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% H1 H2 FY17 Q1 Q2 H1 FY17 H1 FY18 Note: Same store like-for-like sales growth at constant currency SSP: The Food Travel Experts 6
Revenue growth of 11.9% at constant currency Net Contract Total Change at Constant Currency LFL Sales Gains/(Losses) Revenue UK 0.7% 0.5% 1.2% Continental Europe 2.2% 2.9% 5.1% North America 3.1% 31.1% 34.2% Rest of World (inc India) 10.3% 9.5% 19.8% Group 2.8% 7.1% 9.9% Acquisition Impact India 1.4% Stockheim 0.6% Reported Growth 11.9% SSP: The Food Travel Experts 7
Operating profit growth of 32.6% at constant currency Operating Profit * Change (%) Constant Reported FX £m H1 2018 H1 2017 Currency Rates UK ** 33.4 29.7 12.5% 12.5% Continental Europe 21.8 20.2 9.0% 7.9% North America 6.4 5.6 20.0% 14.3% Rest of World 13.6 4.8 202.1% 183.3% Non-attributable (20.0) (17.5) (14.3)% (14.3)% Group 55.2 42.8 32.6% 29.0% * Operating profit is underlying, at actual currency ** UK includes Republic of Ireland SSP: The Food Travel Experts 8
Operating profit margin up by 70 bps (50bps ex acquisition impact of TFS) YOY bps Change Constant Reported FX £m H1 2018 H1 2017 Currency Rates Revenue 1,177.8 1,072.5 Gross Profit 821.5 738.8 100 90 69.8% 68.9% % Sales Labour Costs 356.7 327.5 30.3% 30.5% 30 30 % Sales Concession Fees 222.3 195.5 (70) (70) % Sales 18.9% 18.2% Overheads 139.6 129.0 11.9% 12.0% 10 20 % Sales Depreciation & Amortisation * 47.7 44.1 0 0 4.1% 4.1% % Sales Operating Profit * 55.2 42.8 70 70 4.7% 4.0% Operating Margin (%) *Excludes amortisation of intangible assets created at acquisition of the SSP business in 2006 and the revaluation of the final consideration to acquire an additional 16% of TFS. SSP: The Food Travel Experts 9
Net profit up 35.9% £m H1 2018 H1 2017 Change (%) Operating Profit * 55.2 42.8 29.0% Net Financing Cost* (6.7) (8.8) Share of Associates 0.2 0.7 Profit Before Tax * 48.7 34.7 40.3% Tax * (10.7) (7.6) Non-Controlling Interests (11.1) (7.3) Net Profit * 26.9 19.8 35.9% Earnings per share (p)* 5.6p 4.2p 33.3% Dividend per share (p) 4.8p 3.2p 50.0% *Excludes amortisation of intangible assets created at acquisition of the SSP business in 2006 and the revaluation of the final consideration to acquire an additional 16% of TFS. SSP: The Food Travel Experts 10
Free cash outflow of £6.5m £m H1 2018 H1 2017 Operating Profit * 55.2 42.8 Depreciation & Amortisation * 47.7 44.1 Working Capital (0.5) (19.6) Capital Expenditure (61.5) (61.4) Net Tax (17.6) (14.4) Acquisitions (18.8) (35.0) Other (4.5) (1.6) Operating Cash Flow * (0.0) (45.1) Net Financing Costs (6.1) (7.9) Other (0.4) - Free Cash Outflow * (6.5) (53.0) *Excludes amortisation of intangible assets created at acquisition of the SSP business in 2006 and the revaluation of the final consideration to acquire an additional 16% of TFS. SSP: The Food Travel Experts 11
Net debt of £290.1m H1 2018 H1 2017 Leverage Leverage £m (Net £m (Net Debt/EBITDA) Debt/EBITDA) Opening Net Debt (1 October) (262.2) 1.0x (317.4) 1.6x Free Cash Flow (6.5) (53.0) Dividend (23.5) (13.8) Impact of foreign exchange rates 2.3 6.1 Other (0.2) (0.7) Closing Net Debt (31 March) (290.1) 1.1x (378.8) 1.7x SSP: The Food Travel Experts 12
Financial summary • Robust LFL sales growth of 2.8% • Net contract gains strong at 7.1 % • Acquisitions add a further 2.0% • Strategic programme delivering strong operating margin growth up 50bps excluding the acquisition impact of India • Operating profit up 32.6 % at constant currency • EPS up 33.3% • Interim dividend per share of 4.8p, up 50.0% SSP: The Food Travel Experts 13
Business Review Interim Results 2018 Kate Swann, CEO SSP: The Food Travel Experts
SSP business fundamentals • Multiple structural market growth drivers • Market leader in attractive channels and regions • Strong business platform combining international scale and local expertise • 5 key levers to drive growth and efficiency • Sales growth, margin expansion and strong cash generation SSP: The Food Travel Experts 15
Regional update progress since IPO • Strong revenue growth since IPO, up 36% • More balanced business, better geographic diversification • Fast growth in North America and ROW, now c30% of the Group • Air sector now 62% of SSP • Further opportunities to grow SSP: The Food Travel Experts 16
Our focus remains on five key levers to deliver value Optimise our offer to benefit from the positive trends in our markets 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 SSP: The Food Travel Experts 17
Optimising our offer 1 Areas of Focus • LFL growth of 2.8% in line with plan Improve ranges • Geographic diversification helps Optimise price and promotion mitigate specific country issues • Underlying medium term positive trends Upselling in travel market remain • Strategic initiatives continue to deliver Maximise use of space well Focus on category as well as brand performance SSP: The Food Travel Experts 18
Optimising our offer: Premiumisation with our brand partners • Premiumisation meets customer demands and drives ATV • Travel is a unique sector for many of our partners • Trial of new “Starbucks Deli” range e.g. artisan sourdough sandwiches and filled croissants not available on high street • Trial of new premium – range in Jamie’s Deli, e.g. premium pizza • Bespoke premium dishes in Tai Hing e.g. Angus steak stir fried noodles • Further opportunities across other categories and brand partners SSP: The Food Travel Experts 19
Optimising our offer: Self-order screens 2 1 • High quality speed of service critical in travel Main menu QUICK ORDER OUR MOST environment POPULAR MEALS SEASONAL OFFERS BURGERS • Self-order kiosks being trialled in selected QSR units WHOPPER MEAL CHICKEN BREAKFAST CHICKEN ROYALE • Located at front of the unit to encourage MEAL VEGGIE, WRAPS DRINKS AND SALAD participation YOUR ORDER YOUR ORDER IS EMPTY • Kiosks driving service improvements and ATV growth 3 4 Main menu Main menu Added to your order Choose your Choose your meal EXTRA WATER FOR YOUR JOURNEY? • Screens guide the customer through menu quickly, meal Customize and Customize and change quantity change quantity and to optimise add on sales ADD ONION RINGS ADD CHICKEN NUGGETS Add extras Add extras Review your Review your YES PLEASE ADD CHICKEN STRIPS ADD DESSERT order and pay order and pay CARD ONLY CARD ONLY • Technology being developed with plan to trial in NO THANKS Review order Main menu and pay other formats BACK CANCEL BACK CANCEL YOUR ORDER YOUR ORDER Total £X.XX View full order Total £X.XX View full order 5 4 SSP: The Food Travel Experts 20
Grow profitable new space 2 • Very strong performance, 7.1% net gains Areas of Focus • Successful growth in existing sites, new New units within existing sites sites and new markets • New contracts/openings will materially Existing markets, new sites differ from year to year • Impact on P&L in first year varies based on type and timing of openings New markets • Disciplined approach to new business High renewal rate • Renewal rate in line with plan SSP: The Food Travel Experts 21
Growing the business – progress since IPO Sales Asia Pac • Significant progress since the IPO to develop internationally 280% • Asia Pac and North America have seen high levels of unit and site growth • Expansion into new countries (e.g. India, Philippines) 2014 2018 North America • Brands portfolio has increased 154% • Investment in Asia and US management • Future growth opportunity continues 2014 2018 SSP: The Food Travel Experts 22
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