[PPT] - Interim Results 2020 www.foodtravelexperts.com Presentation PowerPoint Presentation

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www.foodtravelexperts.com

The Food Travel Experts

Interim Results 2020

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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

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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

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Financial Review

SSP: The Food Travel Experts

Jonathan Davies, CFO

Interim Results 2020

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Group Financial Overview

SSP: The Food Travel Experts

IAS 17 Change (%) £m H1 2020 IFRS 16 H1 2020 IAS 17 H1 2019 IAS 17 Constant Currency Reported 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)%

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*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.

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Covid 19 impacting Operating Margin in H1

SSP: The Food Travel Experts

H1 2020 IFRS 16 H1 2020 IAS 17 H1 2019 IAS 17 IAS 17 YOY bps Change £m Reported FX Rates

Revenue

1,214.6 1,214.6 1,261.6

Gross Profit

% Sales

856.2

70.5%

856.2

70.5%

892.2

70.7%

(20)

Labour Costs

% Sales

387.8

31.9%

387.8

31.9%

385.1

30.5%

(150)

Concession Fees

% Sales

112.9

9.3%

254.2

20.9%

248.6

19.7%

(10)

Overheads

% Sales

158.0

13.0%

158.0

13.0%

143.2

11.3%

(170)

Depreciation & Amortisation*

% Sales

203.3

16.7%

54.9

4.5%

52.8

4.2%

(30)

Operating (Loss)/Profit*

Operating Margin (%)

(5.8)

(0.5)%

1.3

0.1%

62.5

5.0%

(490)

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*Excludes amortisation of intangible assets created at acquisition of the SSP business by EQT in 2006.

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Net loss of £-18m for H1 (IAS 17 basis)

SSP: The Food Travel Experts

£m H1 2020 IFRS 16 H1 2020 IAS 17 H1 2019 IAS 17 IAS 17 Change (%) 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)%

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*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.

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LFL Sales down -18.5% in Q2

SSP: The Food Travel Experts

50.0%
40.0%
30.0%
20.0%
10.0%

0.0% FY19 Q1 Jan Feb Mar Q2 H1

Note: Same store like-for-like sales growth at constant currency

LFL Sales Increase/(Decrease (%YOY)

Q2

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2.0% 1.2% 0.9% (1.8)% (47.4)% (8.4)% (18.5)% Sales down over 90% as at the very end of March

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SSP: The Food Travel Experts

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Covid 19 impacting Operating Profit by c.£65m in Q2

Operating Profit* Sales

*Underlying Operating profit on IAS 17 basis

£1,215m £-135m £1,362m £-2m £-10m £m £m £-1m £1m

1100 1150 1200 1250 1300 1350 1400 H1 Forecast (Pre Covid) Jan Feb March H1 Actual 10 20 30 40 50 60 70 H1 Forecast (Pre Covid) Jan Feb March H1 Actual

£-60m £66m £-4m

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H1 Revenue down -2.7%

SSP: The Food Travel Experts

Change at Constant Currency LFL Sales Net Contract Gains/(Losses) Total 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)%

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Operating Profit at broadly break-even in H1 (IAS 17 basis)

SSP: The Food Travel Experts

Operating Profit/(Loss)* IAS 17 Change (%) £m H1 2020 IFRS 16 H1 2020 IAS 17 H1 2019 IAS 17 Constant Currency Reported 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

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Free Cash outflow of £177m

SSP: The Food Travel Experts

£m H1 2020 IAS 17 H1 2019 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)

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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.

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Net Debt of £458m (IAS 17 basis), after equity raise of £209m

SSP: The Food Travel Experts

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H1 2020 £m Leverage (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

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SSP: The Food Travel Experts

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March Pessimistic Scenario: Impact of Covid 19 on H2 sales and profit

Note: H2 estimate based on assumptions per March 25th trading update

EBITDA Sales

£m

200 400 600 800 1000 1200 1400 1600 1800 H2 Forecast (Pre Covid) H2 Esimated Covid impact H2 Forecast (Including Covid Impact)

300
200
100

100 200 300 H2 Forecast (Pre Covid) H2 Esimated Covid impact H2 Forecast (Including Covid Impact)

£m £250m £1,650m £-1,400m H2 sales down c.80 – 85% YoY £230m £-350m to £-420m H2 EBITDA loss £-120m to £-190m H2 estimated profit drop- through 25-30%

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SSP: The Food Travel Experts

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Pessimistic Scenario: H2 cash usage

£m H2 EBITDA Loss (120 - 190) Working Capital (180 - 200) Other Net Outflows (40 - 50) Total (340 – 440)

Actions taken to protect liquidity

Rapid reduction of operating costs
Negotiations of rent concessions
Access to government support

schemes

Waiver of loan amortisation (£32m)
Share buy back suspended
No interim dividend
Capex reduction to £10-15m

Estimated H2 Cash Outflows

£m Q4: Jul - Sep (25 - 30)

Estimated Monthly Cash Burn

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SSP: The Food Travel Experts

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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

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Business Review

SSP: The Food Travel Experts

Simon Smith, CEO

Interim Results 2020

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Four phases to our response to COVID - 19

Business Protection Recovery Hibernation Sustainable growth

Health & Safety
Cost reduction
Capex reduction
New liquidity
Health & Safety
Unit closures
Staff furloughed
Flexible or no rent
Health & Safety
Re- open units
Re-engineer unit costs
Reduce overhead
Health & Safety
Accelerate growth
Leverage cost base
Embed sustainability

A fitter, stronger SSP… delivering for all stakeholders

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Decisive management action; taken early

SSP: The Food Travel Experts

Key Priorities Action Taken Health and Safety Business Protection Liquidity People and Community

New Protocols
More communication
Office based colleagues working remotely
Agreed flexible, or no rental with landlords
Closed units; hibernation protocols
Staff furloughed; Board/Senior management salary reduction
Discretionary spend & capex reduced to minimum; projects deferred
Share buyback suspended and final dividend deferred
£550m new liquidity created via placing and loans
Accessed job protection schemes
Increased internal communication and support
Donations to local communities and health services

Business protection Hibernation

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Supporting communities during the crisis

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Our Communities

UK: Millie’s Cookies donated 100,000 freshly baked

cookies to NHS workers; M&S stores serving hospitals; donations to local food banks

Spain: Surplus food and disposable gloves donated to

the Red Cross and NGOs

DACH: food donated to the Red Cross for vulnerable

people

France: 2,000 facemasks donated to hospitals and

partnership with Restos du Coeur to make and distribute meals to those in need

Sweden: food and equipment donations to ambulance

crews; sweet treats donated to hospital staff

North America: local food bank donations
India: Over one million meals made and distributed to

those most in need

Hibernation

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Regional review

SSP: The Food Travel Experts

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UK Rest of the World North America Continental Europe

66% Rail; 30% Air
Almost total shut down of operations; M&S in hospitals only
Rail travel gradual increase in passengers; air still shut
Opening programme focussed on rail and retail
Aiming for c. 50 units open by the autumn
100% Air; of which 80% domestic
Largely closed; Government restrictions easing
State by state approach
Preparing to open; driven by domestic air
Aiming for c. 50 units open by end of summer
60% Air; 30% Rail
Countries at different stages of lockdown
Germany most advanced, Spain slower easing of restrictions
Re-openings focussed on rail
Aiming for c. 200 to 300 units open by the autumn
90% Air; 10% Rail
Countries at different stages of lockdown
China/Asia most advanced, Middle East slower
Unit reopening commencing in China
Aiming for c. 100 - 150 units open by the autumn

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Case study: China

SSP: The Food Travel Experts

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Significant reduction in operated flights from January to

February – from c. 17,000 to c. 4,000 per day

By end May: 10,000 daily flights operating, with recovery

led by domestic travel

SSP operate 8 airports across China, 5 primarily domestic;

45% of SSP China revenues

Lockdown easing for now; 14-day quarantine between

Beijing and majority of provinces has been relaxed

Discussions under-way to open some borders between

provinces/ Hong Kong

Further unit openings planned over the summer

China flight trends: Jan-May Overview

Source: Airsavvi, 29 May 2020 DOMESTIC INTERNATIONAL

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Immediate priorities in the recovery phase

SSP: The Food Travel Experts

Key Priorities Key Actions Health and Safety Unit re-openings with new unit economics Overheads People and Communities

Additional protocols
Social distancing in units and offices
Increased communication to colleagues and customers
Systematic approach; driven by consumer needs
New unit economics; MGRs, lower variable rents; profitable at lower sales levels
Protect hibernated units in partnership with our landlords
Keep our teams informed, engaged and supported
Provide for and support our communities
Re-align with demand
Simplify structure and processes
Reduce overhead

Recovery

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SSP – The Food Travel Experts

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Re-opening programme: Test – Learn - Adapt

Customer research informing offer
Range adapted around key items
High wastage, non-essentials

removed

Use of technology
PPE
Perspex screens installed
Till podia hand sanitizer
Customer communications
Increased signage
Planogorams aligned to needs
Queue spacing
Cashless payments
Breakeven at lower level of sales
Re-negotiated rent/franchise fees
Flexible labour/optimised hours
Overheads reduced

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Customer offer Health & Safety Social distancing Unit economics Recovery

Fjola, Oslo station Burger King, Xian Airport Heberer, Frankfurt Airport

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Building competitive advantages for the longer term

SSP: The Food Travel Experts

Key Priorities Key Actions Strong customer offer Value creating market growth

pportunities

Strong unit economics; lower flexible cost base Strong environmental and sustainability credentials

Aligned to changing customer preferences and needs
Accelerate technology to enhance customer experience and safety
Prioritise pipeline and seek out value creating new opportunities
Restarting investment in high-growth markets
Potential for selective M&A
Ongoing simplification
Ability to scale up and down
Accelerate roll out of IT, technology and automation as enablers
Embed sustainability programme into each area of the business
KPIs, targets and measurements
Board oversight

Sustainable growth

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Market position; international scale, local expertise; value creating business model; delivering for all stakeholders

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Significant growth opportunities: Openings and new wins in H1

SSP: The Food Travel Experts

H1 Wins H1 Openings

Cincinnati Airport Station Food acquisition Copenhagen Airport Mykonos Airport Dublin Airport Phoenix Airport

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Providence Airport Kuala Lumpur Airport

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Summary and outlook

Strong first half pre-COVID
COVID has had a significant impact; management action taken early to protect and hibernate the business
Financial liquidity secured; plan allows us to manage the “pessimistic scenario”
Poised to re-open units and support the rebuilding of customer confidence to travel as demand recovers
Systematic opening program designed to maximize the opportunity and drive profitability
Reducing cost; making the cost base more flexible; profit at lower level of sales
Many future growth opportunities
Delivering for all our stakeholders

SSP: The Food Travel Experts

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SSP – The Food Travel Experts – Fitter, Stronger Business

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Q&A

SSP: The Food Travel Experts

Interim Results 2020

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Disclaimer

Certain statements in the presentation may constitute “forward-looking statements”. These statements reflect the Company’s current beliefs and expectations and are based on numerous assumptions regarding the Company’s present and future business strategies and the environment the Company and members of its group will operate in and are subject to risks and uncertainties that may cause actual results, performance or achievements to differ materially. Forward-looking statements involve inherent known and unknown risks, uncertainties and contingencies because they relate to events and depend on circumstances that may or may not occur in the future and may cause the actual results, performance or achievements of the Company to be materially different from those expressed

r implied by such forward looking statements.

Many of these risks and uncertainties relate to factors that are beyond the Company’s ability to control or estimate precisely, such as future market conditions, currency fluctuations, the behaviour of other market participants, the actions of regulators and other factors such as the Company’s ability to continue to obtain financing to meet its liquidity needs, changes in the political, social and regulatory framework in which the Group operates or in economic or technological trends or conditions. As a result, you are cautioned not to place undue reliance on such forward-looking statements. Additionally, forward-looking statements regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Forward-looking statements speak

nly as of their date and the Company, any other member of the Group, its parent undertakings, the subsidiary undertakings of such

parent undertakings, and any of such person’s respective directors, officers, employees, agents, affiliates or advisers expressly disclaim any obligation to supplement, amend, update or revise any of the forward-looking statements made herein, except where it would be required to do so under applicable law or regulatory obligations. It is up to the recipient of this presentation to make its own assessment as to the validity of such forward-looking statements and assumptions. Nothing in this presentation shall exclude any liability under applicable laws that cannot be excluded in accordance with such laws.

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