[PPT] - Preliminary Results 2019 www.foodtravelexperts.com Presentation PowerPoint Presentation

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www.foodtravelexperts.com

The Food Travel Experts

Preliminary Results 2019

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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 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

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* At constant currency

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Financial review

SSP: The Food Travel Experts

Jonathan Davies, CFO

Preliminary Results 2019

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Group financial overview

SSP: The Food Travel Experts

Change (%) £m 2019 2018 Constant Currency Reported 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* 221.1 195.2

12.1% 13.3%

Profit Before Tax* 203.2 184.4 n/a

10.2%

Earnings Per Share (p) * 29.1 25.1 n/a

15.9%

Net Debt (483.4) (334.7) n/a

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*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.

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2019 LFL sales growth

SSP: The Food Travel Experts

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% Q1 Q2 H1 Q3 Q4 H2

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

2.0% 1.9%

LFL Sales Growth (%YOY)

FY19

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Revenue growth of 7.8% at constant currency

SSP: The Food Travel Experts

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

2.4% 2.9% 5.3%

Continental Europe*

(0.2)% 6.6% 6.4%

North America

3.5% 13.0% 16.5%

Rest of World

4.5% 0.0% 4.5%

Group

1.9% 5.6% 7.5%

Stockheim Acquisition

0.3%

Reported Growth

7.8%

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*Excluding acquisition impact

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Operating profit growth of 12.1%

SSP: The Food Travel Experts

Operating Profit* Change (%) £m 2019 2018 Constant Currency Reported FX 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

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Reported operating margin up by 30 bps

SSP: The Food Travel Experts

YOY bps Change £m 2019 2018 Constant Currency Reported FX Rates Revenue 2,794.6 2,564.9 Gross Profit % Sales 1,987.9 71.1% 1,801.4 70.2%

80 90

Labour Costs % Sales (809.3) (29.0)% (736.3) (28.7)%

(20) (30)

Concession Fees % Sales (551.8) (19.7)% (489.6) (19.1)%

(60) (60)

Overheads % Sales (300.4) (10.7)% (282.6) (11.0)%

30 30

Depreciation & Amortisation % Sales (105.3) (3.8)% (97.7) (3.8)%

Operating Profit*

Operating Margin (%) 221.1 7.9% 195.2 7.6%

30 30

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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 profit up 11.1%

SSP: The Food Travel Experts

£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%

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*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.

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Operating cash generation of £67.9m

SSP: The Food Travel Experts

£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

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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 debt of £483.4m

SSP: The Food Travel Experts

£m Leverage (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

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Uses of cash and balance sheet efficiency

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Organic Investment

Significant structural growth

pportunities around

the world

M&A

Review of potential M&A

pportunities

Return to shareholders

up to £100m proposed via a share buyback

Dividend

Pay-out ratio maintained at 40%

Balance sheet efficiency

Target leverage:

c. 1.5x - 2.0x

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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

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*Indicative impact versus current IAS 17 based on existing portfolio of leases

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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

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SLIDE 16

Business Review

SSP: The Food Travel Experts

Simon Smith, CEO

Preliminary Results 2019

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Underpinned by our corporate governance framework and a commitment to our environmental and social responsibilities

Delivering across all our stakeholder groups….

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Customers Clients Investors Colleagues Brand Partners

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Delivering long term sustainable value for shareholders

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Strong and sustainable growth in earnings, cash flow and returns to shareholders

£22bn market & growing More space dedicated to F&B Market leading positions International scale, local expertise Multiple levers Culturally embedded Technology & Automation Track record Disciplined ROI Strategic fit Disciplined capital allocation Balance sheet efficiency Returns to shareholders

Cost efficiencies Organic growth Focus on returns Selective M&A

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Increased weighting to higher growth regions and channels

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Strong market positions in UK & CE
Regional mix shift to faster growing

markets

NA and ROW 33% of total group sales
Air now almost 2/3 of the business

2014 Sales 2019 Sales

NA and Rest of World UK and C Europe

2014 Channel Split 2019 Channel Split

Air Rail Other

83% 17% 41% 7% 52% 67% 33% 5% 31% 64%

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Early actions….

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Drive profitable LFL Faster value creating growth in ROW Capitalise on NA growth opportunity; drive commercial excellence Automation and Technology Greater operational efficiency



Selective M&A

Launched programmes to respond to changing needs of customers Appointed new CEO. New resource into business development team Additional support and strengthened commercial teams Systematic reviews. Faster roll-out of best practice Accelerated programmes focused on operational efficiencies and improving customer journey Jamie's and proposed Red Rock acquisitions

Corporate, Social and Environmental Responsibilities

Created CSR executive team. Clear focus. Accelerating actions

     

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Five successful value creation levers

SSP: The Food Travel Experts

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Optimise our offer to benefit from the positive trends in our markets and drive profitable LFL Grow profitable new space Optimise gross margin and leverage scale benefits Run an efficient and effective business Optimise investment using best practice and shared resource

2 3 4 5

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Optimising our offer…driving profitable LFL

Favourable market trends
Ongoing passenger growth
Sharper focus on profitable LFL
Using data to highlight opportunities
Changing consumer preferences
Technology presenting new opportunities

SSP: The Food Travel Experts

Areas of Focus

Improve ranges Optimise price and promotion Upselling Maximise use of space Focus on category as well as brand performance 1

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Aligning our offer to changing customer needs

Changing Customer Profile

Greater diversity of diets

Premiumisation

Customers trading up

Technology

Speed and self selection

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1

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Mobile ordering driving sales and reducing costs

Mobile ordering pilot in UK bars

⁻ Scan QR code to order from table ⁻ Serve more customers, more quickly ⁻ Labour more efficiently deployed

Increased volume and sales value
Customers trading up
Continuing testing and roll-out across UK estate
Pilots running in NA and other markets

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1

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Grow profitable new space

Significant new space growth delivered
Consistently high renewal rate
Opportunities in existing and new markets

SSP: The Food Travel Experts

Areas of Focus

New units within existing sites Existing markets, new sites New markets High renewal rate 2

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Expanding our footprint has been a key driver of value in the last 3 years

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Acceleration in net gains
c.£350m annualised sales over last 3

years

Opportunities differ from year to

year; timing of capex varies

Disciplined approach to new business
Long term contracts; consistent

delivery

Pipeline encouraging

3.3% 3.7% 3.0% 3.1% 2.8% 1.9% 0.7% 0.6% 1.7% 6.0% 5.1% 5.6%

2.9% 1.6% 0.3%

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0%

2014 2015 2016* 2017* 2018 2019

YoY Sales growth LfL Net Gains Acquisitions

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*LFL excludes impact of Leap Year

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Growing profitable new space: the North American

pportunity

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Significant progress to date
Considerable scope for future growth:
c.£6bn market and growing; SSP < 10% share
Present in only 27 of the top 80 airports
More new space being created
More space allocated to F&B
Clients driving more competition
Strong pipeline of new contract wins

SSP Rest of Market N America Market Share

SSP N America Revenue

c.£6bn

N America Market Share

£0m £200m £400m £600m 2014 2015 2016 2017 2018 2019 <10%

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Strong progress globally on new contract wins including:

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Contract Wins at H1 Contract Wins since H1 SSP presence Key:

New York

5 units 7 units

St Petersburg

4 units

Oakland

8 units

Vancouver

7 units

Salt Lake City

6 units

Alicante

6 units

Brussels

4 units

Paris

12 units

Helsinki

4 units

Athens

4 units

Mumbai

3 units

UK

4 units 6 units

Singapore

2 units 3 units

Bermuda

3 units

Delhi

9 units

Seville

4 units

Brisbane

5 units

Ottawa

10 units

Salvador

7 units

Indianapolis

5 units

San Jose

10 units

Shenzhen

6 units

Stuttgart

8 units

Bangalore

5 units

Kuala Lumpur

2 units

Bodo

4 units

Stockholm

2 units

Melbourne

6 units

Ubon

2 units

Brazil Bahrain Malaysia

New Markets

Bermuda Dallas

3 units

Hongqiao

5 units

Perth

10 units

Miami

3 units

Seattle

3 units

Providence

11 units

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Further progress optimising gross margin

Significant driver of value
Continued increase in food inflation
Further opportunities

SSP: The Food Travel Experts

Areas of Focus

Procurement disciplines Simplify and standardise recipes Reduce waste and losses 3

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Driving commercial excellence

Focus on sales driving and gross margin

management across:

Range
Price
Space
Communications & Display
Operations
Approach:
Dedicated team
Data analytics
Market segmentation; consumer profile review
Menu/range/pricing benchmarked
Operational benchmarking

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Range

Price Space Communications & Display Operations

3

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Encouraging progress on operating efficiency

Ongoing significant labour inflation
Continuation of roll out of labour tools
Better forecasting and scheduling
Technology delivering cost reduction

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Areas of Focus

Service optimisation Improve forecasting and scheduling Employ technology to improve efficiency Improve reporting and accountability

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Automated kitchen equipment driving performance

Increased range of new equipment available
Greater consistency of food production
Lower cost
Energy savings

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Auto Burger cooker Pizza Dough Press Sushi Machine Scrambled egg machine

4

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Summary and outlook

Strong financial performance in 2019, despite external headwinds; EPS up 16%, £100m share

buyback

New financial year started in line with expectations
Significant opportunity for growth
Clear priorities set out and initial actions delivered
Strong pipeline of new openings, building a significant base for the medium term
Continued focus on delivering long term value for our shareholders

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Q&A

SSP: The Food Travel Experts

Preliminary Results 2019

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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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