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 • Strong performance with operating profit up 34.2% at actual exchange rates, 27.0% at constant currency • Like for Like sales up 3.1%, net new space growth strong at 6.0% • Total sales growth including India 11.7%* • Strong underlying operating margin growth of 50bps, 80bps including India • Strategic initiatives, delivering further growth and efficiency • EPS 20.3p, up 31.0% • Strong cash generation ‒ Higher capex £115m ‒ Full year dividend 8.1p up 50%, payout ratio 40% ‒ Special dividend of c.£100m proposed • Indian acquisition, encouraging performance • Contract wins underpinning medium term pipeline *At constant currency SSP: The Food Travel Experts 3
Financial review Annual Results 2017 Jonathan Davies, CFO 22nd November 2017 SSP: The Food Travel Experts
Group financial overview Change (%) Constant Reported 2017 2016 £m Currency FX Rates Revenue 2,379.1 1,990.3 11.7% 19.5% LFL Sales Growth 3.1% 3.0% n/a n/a Operating Profit * 162.9 121.4 27.0% 34.2% Profit Before Tax * 148.7 107.5 n/a 38.3% Earnings per share (p) * 20.3 15.5 n/a 31.0% Net Debt (262.2) (317.4) n/a 17.4% *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
2017 LFL sales growth 4.0% 3.5% 3.3% 2.9% LFL Sales Growth (%YOY ) 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% Q1 Q2 H1 Q3 Q4 H2 FY17 Note: Same store like-for-like sales growth at constant currency SSP: The Food Travel Experts 6
Revenue growth of 11.7% Net Contract Change at Constant Currency LFL Sales Total Revenue Gains/(Losses) UK 2.1% 2.7% 4.8% Continental Europe 2.7% 0.4% 3.1% North America 4.9% 22.9% 27.8% Rest of World (excl India) 7.4% 18.1% 25.5% Group (excl India) 3.1% 6.0% 9.1% Leap Year (0.3)% Group (incl Leap Year) 8.8% India 2.9% Reported Growth 11.7% SSP: The Food Travel Experts 7
Operating profit growth of 27.0% Operating Profit* Change (%) Constant Reported FX £m 2017 2016 Currency Rates UK** 82.1 66.4 23.2% 23.6% Continental Europe 77.8 60.1 18.6% 29.5% North America 14.3 12.5 0.8% 14.4% Rest of World (excl India) 8.3 8.6 11.8% (3.5)% Non-attributable (32.5) (26.2) (24.0)% (24.0)% Group (excl India) 150.0 121.4 17.5% 23.6% India 12.9 - n/a n/a Group 162.9 121.4 27.0% 34.2% * Operating profit is underlying, at actual currency ** UK includes Republic of Ireland SSP: The Food Travel Experts 8
Operating profit margin (excl India) up by 50bps YOY bps Change £m 2017 2016 Constant Currency Reported FX Rates Revenue 2,313.9 1,990.3 Gross Profit 1,602.0 1,353.8 % Sales 69.2 % 68.0 % 90 120 Labour Costs (677.4) (581.6) % Sales 29.3 % 29.2 % 20 (10) Concession Fees (423.2) (349.6) % Sales 18.3 % 17.6 % (60) (70) Overheads (259.0) (222.4) % Sales 11.2 % 11.2 % 0 0 Depreciation & Amortisation (92.5) (78.8) % Sales 4.0 % 4.0 % 0 0 Operating Profit (excl India)* 150.0 121.4 Operating Margin (%) 6.5 % 6.1% 50 40 India 12.9 n/a n/a n/a Operating Margin (%) 19.7 % 162.9 121.4 Operating Profit* 6.8 % 6.1 % 80 70 *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 9
Acquisition of 49% stake in TFS • In October 2016 SSP announced the acquisition of a 49% JV with Fully consolidated (10 months) Travel Food Services, completed in December 2016 £m Reported FX rates Revenue 65.2 • SSP currently owns 33%, the remaining 16% is to be acquired in Operating profit 12.9 2018 % 19.7% Net finance charges (0.2) • SSP has management and operational control Tax (4.0) % (31.6)% • TFS is fully consolidated in the SSP figures Profit After Tax 8.7 Minorities* (6.8) • Significant new opening programme underway % (78.7)% Net income 1.9 • Encouraging start and good contract pipeline *SSP’s share of the fully consolidated revenue and profit was 11% (December 2016 – February 2017) and 26% (March - September 2017). On a fully consolidated basis the minority interest was 82.9% of TFS’ PAT in H1 17 and 77.2% in H2 17. SSP: The Food Travel Experts 10
Net profit up 31.3% £m 2017 2016 Change (%) Operating Profit * 162.9 121.4 34.2% Net Financing Cost* (17.6) (15.2) Share of Associates 3.4 1.3 Profit Before Tax * 148.7 107.5 38.3% Tax * (33.8) (24.2) Non-Controlling Interests (18.4) (9.8) Net Profit * 96.5 73.5 31.3% Earnings per share (p)* 20.3p 15.5p 31.0% Dividend per share (p) 8.1p 5.4p 50.0% *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 11
Free cash generation of £ 89 m £m 2017 2016 Operating Profit * 162.9 121.4 Depreciation & Amortisation* 95.5 78.8 Working Capital 18.3 3.8 Capital Expenditure (115.0) (95.9) Net Tax (33.3) (20.0) Sale of/(Investment in) Associates 7.3 (4.7) Acquisition of TFS, adjusted for net debt acquired (35.0) - Other 2.8 (5.1) Operating Cash Flow * 103.5 78.3 Net Financing Costs (14.5) (13.3) Free Cash Inflow * 89.0 65.0 *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 12
Net debt of £262m Leverage £m (Net Debt/EBITDA) Opening Net Debt (1 October 2016) (317.4) 1.6x Free Cash Flow 89.0 Dividend (29.0) Impact of foreign exchange rates (3.4) Other (1.4) Closing Net Debt (30 September 2017) (262.2) 1.0x SSP: The Food Travel Experts 13
Uses of cash and balance sheet efficiency M&A Organic Investment Review of potential M&A Significant structural growth opportunities opportunities around the world Balance sheet efficiency Medium term leverage: c1.5x - 2.0x Dividend Return to shareholders Pay-out ratio increased to 40% c. £100m proposed via a special dividend SSP: The Food Travel Experts 14
Financial summary • Robust LFL sales growth of 3.1% • Net contract gains (excl India) stronger at 6.0% • Strategic programmes delivering strong operating margin growth (excl India) up 50bps • India adding 2.9% to revenue and an additional 30bps to operating margin • Operating profit up 27.0% • EPS up 31.0% • Strong Free Cash Flow of £89m • Full year dividend per share of 8.1p and c. £100m special dividend proposed SSP: The Food Travel Experts 15
Business review Annual Results 2017 Kate Swann, CEO 22nd November 2017 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 17
UK update Revenue • 33%* of SSP revenue, strong presence in rail and air 800 780 • Air continues to grow strongly, rail softer 760 740 720 • Further good profit performance 700 680 660 • Strategic initiatives delivering well 640 2013 2014 2015 2016 2017 • Planning well advanced for cost pressures going forward Operating profit 90 • Focus on 80 70 ‒ Strategic initiatives 60 50 ‒ High renewal rate 40 30 ‒ Further brand development 20 ‒ Selective new business 10 0 2013 2014 2015 2016 2017 * SSP revenue by region %s is calculated, adjusting for the impact of annualised India sales Note: All figures in constant currency SSP: The Food Travel Experts 18
Continental Europe update Revenue • 38%* of SSP revenue, strong presence in rail and air 820 800 780 • Improved performance 760 740 720 • Management changes to reflect changing market and 700 680 business needs 660 640 2013 2014 2015 2016 2017 • Focus on Operating profit ‒ Cost efficiency and flexibility of labour 80 ‒ High renewal rate 70 ‒ Selective new business 60 50 ‒ Mobilisation of new contracts, particularly in France, 40 Germany and Norway 30 20 10 0 2013 2014 2015 2016 2017 * SSP revenue by region %s is calculated, adjusting for the impact of annualised India sales Note: All figures in constant currency SSP: The Food Travel Experts 19
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