[PPT] - The Food Travel Experts Annual Results 2018 PowerPoint Presentation

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www.foodtravelexperts.com

The Food Travel Experts Annual Results 2018

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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

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Group highlights

SSP: The Food Travel Experts

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* At constant currency ** On an underlying basis

Strong performance with operating profit up 19.8% at actual exchange rates, 22.7% at constant currency
Like for Like sales up 2.8%, net new space growth strong at 5.1%
Total sales growth up 9.5%*
Strong underlying operating margin growth of 70 bps
Strategic initiatives, delivering further growth and efficiency
EPS 25.1p, up 23.6%**
Strong cash generation

‒ Higher capex £144.2m ‒ Full year dividend 10.2p up 25.9%, payout ratio maintained at 40% ‒ Special dividend of c. £150m proposed

Medium term pipeline encouraging

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Financial review

SSP: The Food Travel Experts

Jonathan Davies, CFO

21 November 2018

Annual Results 2018

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Group financial overview

SSP: The Food Travel Experts

Change (%) £m 2018 2017 Constant Currency Reported FX Rates Revenue 2,564.9 2,379.1 9.5% 7.8% LFL Sales Growth 2.8% 3.1% n/a n/a Operating Profit* 195.2 162.9 22.7% 19.8% Profit Before Tax* 184.4 148.7 n/a 24.0% Earnings per share (p) * 25.1 20.3 n/a 23.6% Net Debt (334.7) (262.2) n/a

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*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.

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2018 LFL sales growth

SSP: The Food Travel Experts

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% Q1 Q2 H1 Q3 Q4 H2

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

2.8% 2.7%

LFL Sales Growth (%YOY)

FY18

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Revenue growth of 9.5%

SSP: The Food Travel Experts

Change at Constant Currency LFL Sales Net Contract Gains/(Losses) Total Revenue UK 0.8% 0.5% 1.3% Continental Europe* 1.4% 2.8% 4.2% North America 4.2% 18.9% 23.1% Rest of World* 10.1% 7.0% 17.1% Group 2.8% 5.1% 7.9% Acquisition Impact: Stockheim 1.0% India 0.6% Reported Growth 9.5%

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*Excluding acquisition impact

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Operating profit growth of 19.8%

SSP: The Food Travel Experts

Operating Profit* Change (%) £m 2018 2017 Constant Currency Reported FX Rates UK** 89.5 82.1 9.0% 9.0% Continental Europe 79.5 77.8 3.9% 2.2% North America 27.7 14.3 102.8% 93.7% Rest of World 35.7 21.2 77.0% 68.4% Non-attributable (37.2) (32.5) (14.5)% (14.5)% Group 195.2 162.9 22.7% 19.8%

* Operating profit is underlying, at actual currency ** UK includes Republic of Ireland

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Reported Operating Margin up by 80 bps … and up 70 bps excluding TFS acquisition impact

SSP: The Food Travel Experts

YOY bps Change £m 2018 2017* Constant Currency Reported FX Rates Revenue 2,564.9 2,379.1 Gross Profit % Sales 1,801.4 70.2% 1,652.1 69.4% 90 80 Labour Costs % Sales (736.3) (28.7%) (687.2) 28.9% 20 20 Concession Fees % Sales (489.6) (19.1)% (438.0) 18.4% (70) (70) Overheads % Sales (282.6) (11.0)% (268.5) 11.3% 20 30 Depreciation & Amortisation % Sales (97.7) (3.8%) (95.5) 4.0% 20 20 Operating Profit** Operating Margin (%) 195.2 7.6% 162.9 6.8% 80 80

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*2017 comparative figures including 10 months of TFS. **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.

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Net profit up 22.7%

SSP: The Food Travel Experts

£m 2018 2017 Change (%) Operating Profit* 195.2 162.9 22.7% Net Financing Cost* (15.6) (17.6) Share of Associates 4.8 3.4 Profit Before Tax* 184.4 148.7 24.0% Tax* (40.5) (33.8) Non-Controlling Interests (25.5) (18.4) Net Profit* 118.4 96.5 22.7% Earnings per share (p)* 25.1p 20.3p 23.6% Dividend per share (p) 10.2p 8.1p 25.9%

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*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.

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Operating cash generation of £90.2m

SSP: The Food Travel Experts

£m 2018 2017 Operating Profit* 195.2 162.9 Depreciation & Amortisation* 97.7 95.5 Working Capital 12.8 18.3 Capital Expenditure (144.2) (115.0) Net Tax (37.2) (33.3) Disposal of associate

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Acquisitions (19.0) (35.0) Other (15.1) 2.8 Operating Cash Flow* 90.2 103.5 Net Financing Costs (11.6) (14.5) Free Cash Inflow* 78.6 89.0

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*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.

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Net debt of £334.7m

SSP: The Food Travel Experts

£m Leverage (Net Debt/EBITDA) Opening Net Debt (1 October 2017) (262.2) 1.0x Free Cash Flow 78.6 Dividend (145.8) Impact of foreign exchange rates (1.0) Other (4.3) Closing Net Debt (30 September 2018) (334.7) 1.1x

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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

c. £150m proposed via a special dividend

Dividend

Pay-out ratio maintained at 40%

Balance sheet efficiency

Medium term leverage: c. 1.5x - 2.0x

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Financial summary

Robust LFL sales growth of 2.8%
Net contract gains stronger at 5.1%
Strategic programmes delivering strong operating margin growth up 70bps
Operating profit up 22.7% at constant currency, 19.8% actual
EPS up 23.6%
Strong free cash flow of £78.6m
Full year dividend per share of 10.2p and c. £150m special dividend proposed

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Business Review

SSP: The Food Travel Experts

Kate Swann, CEO

21 November 2018

Annual Results 2018

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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

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Regional progress update

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Added c£700m revenue since IPO
CAGR since IPO, c. 9%
More balanced business, better

geographic diversification

All divisions growing revenue
Fastest growth in North America and

ROW, now c. 1/3 of group revenue

Encouraging new business pipeline

underpinning future revenue growth

Note: All figures in constant currency

500 1,000 1,500 2,000 2,500 3,000 2014 2018 UK Continental Europe North America Rest of World

High growth markets now 31%

Revenue (£bn)

High growth markets 16%

£2,565m £1,827m

UK - 40% Continental Europe - 44%

North America – 9% RoW – 7%

UK - 31% Continental Europe - 38%

North America – 17% RoW – 14%

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Channel progress update

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Strong PAX growth in air
Air sector now 64% of SSP
Geographic growth will continue to drive

air mix

Rail growth, but at slower rate than air
Growth forecasts in travel remain

encouraging

Note: All figures in constant currency

500 1,000 1,500 2,000 2,500 3,000 2014 2018 Air Rail Other £2,565m £1,827m

Air - 52% Air - 64% Rail - 41% Other – 7% Rail - 31% Other - 5%

Revenue (£bn)

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Our focus remains on five key levers to deliver value

SSP: The Food Travel Experts

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Optimise our offer to benefit from the positive trends in our markets 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

LFL growth of 2.8%
Geographic diversification helps mitigate

specific country issues

Underlying positive trends in travel market
Strategic initiatives delivering well

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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Optimising our offer: Self-order screens

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Self-order trial at Burger King restaurants
Labour productivity improvements
Customer usage of kiosks increasing, now

up to 40%

Initial results show around 9% increase in

transactions in units with kiosks

Testing applicability across our QSR estate

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Optimising our offer: Coffee machines

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4 types of coffee machine – various brands available:
Automatic
Semi automatic
Barista
Self service
SSP traditionally used barista machines in the UK regardless of

format

Trialled all 4 types of machine
Measured coffee sales and coffee penetration by unit
Clear plan to use barista and semi-automatic machines (and self

service where relevant)

Roll-out now planned

Barista Semi-automatic Self serve

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Grow profitable new space

Very strong performance, 5.1% net gains
Successful growth in existing sites, new sites

and new markets

Impact on P&L in first year varies
Disciplined approach to new business
Renewal rate in line with plan
Strong pipeline for FY19, timing difficult to be

certain about

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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Strong progress on new contract wins

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Strong progress on new contract wins

Helsinki

3 units

New York

3 units 7 units

Phoenix

9 units

Moscow

9 units

Barcelona

7 units

Portland

1 unit

San Francisco

4 units 1 unit

Mumbai

5 units

Taipei

3 units

Paris

22 units 8 units

Bhubaneswar

7 units

Lucknow

8 units

Guwahati

8 units

Goa

14 units 24 units

H1 Contract Wins H2 Contract Wins SSP presence Key:

Las Palmas

10 units

Netherlands

29 units

Bahrain

17 units

Brussels

12 units

Beijing

6 units

Hong Kong

3 units

Greece

6 units

Kolkata 3 units Pune

2 units

Rio

6 units

Sao Paulo

6 units

Germany

22 units

Seattle

3 units

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New opening: Cebu Airport, Philippines

First contract win in the Philippines
Growing airport with 11m PAX annually
JV partnership formed with client and local operator
Selected for combination of local and international

expertise

In July, we opened 9 units in newly built T2
Bonchon, Burger King, Coffee Bean and Tea Leaf,

Camden food co, Ritazza, The Cabin Bar, Asian Kitchen, Nippon Ramen

T1 renovation commencing shortly with c. 15 further

units to open in 2019

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The Cabin Bar Nippon Ramen Asian Kitchen Ritazza

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New Contract Win: Brazil

First units in South America
Growing airports with c. 40m PAX (Sao Paulo) and
c. 16m PAX (Rio) in 2017
Won 6 units in Sao Paulo and 6 units in Rio de Janeiro
JV with local partner
SSP selected for international expertise and strong mix
f brands
Brand line up to include: Upper Crust, Ritazza, Mi

Casa, Factory Bar & Grill, Camden food co, O’Leary’s and Jamie’s

Operations expected to commence mid 2019

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Brand portfolio continues to develop

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SSP has strong and growing portfolio of over

500 brands

Further developing our big international

brands – first ever M&S Airside concept

Continue to develop concepts with high

profile chefs

Further develop our own brands, e.g. Urban

Express, a new retail offering in the UK

Franchising our own brands for use

internationally, e.g. Millie’s Cookies

Bespoke concept: Hermanos Torres, Barcelona

Own brand: Urban Express, London Bridge

Franchising Millie’s Cookies M&S Food To Go

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Further progress optimising gross margin

Gross margin improved by 90 bps
Some increase in food inflation
Key initiatives continue to deliver good results
Good progress on simplification and

standardisation

SSP: The Food Travel Experts

Areas of Focus

Procurement disciplines Simplify and standardise recipes Reduce waste and losses 3

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Loss prevention analytics centralised and
utsourced for pilot countries
Significant improvement in analytic capability
200% increase in cases investigated and
c. 25% higher resolution rate
Driving improved focus on waste and loss

management

Further roll-out planned

Optimising Gross Margin: Case Study - data analytics

40% 26%

Before After

60% 74%

c. 1000 cases

No action taken Action taken

c. 3,500 cases

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Encouraging progress on operating efficiency

Labour costs 20 bps improvement
Other costs 20 bps improvement
Continued rising costs in some countries
Service optimisation; a major focus in parallel

with forecasting and scheduling

Further automation and technology being

tested

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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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Optimising Efficiency: Case Study – equipment specification review

Lifetime cost of equipment calculated
Dedicated resource to deliver savings
New equipment identified to reduce energy

consumption across the Group

Two examples:
Synergy Grill – two-thirds less energy used
Under-counter Refrigeration – 50% less energy

used

Short term payback

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Summary and outlook

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Strong full year financial performance, CC revenue up 9.5%, profit up 22.7% , EPS up 23.6%
Robust cash flow, FY dividend 10.2p, up 25.9% and c. £150m special dividend
Significant progress since IPO:
40 % increase in revenue to over £2.6bn, margin up 280 bps to 7.6%
over £380m cash returns from paid and proposed ordinary and special dividends
Large and growing market, geographically diversified towards high growth channels and geographies
Embedded management processes driving strategic initiatives
Experienced senior management team and continuity
Encouraging start to the year, strong pipeline underpinning growth
Continued focus on delivering value for our shareholders

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Q&A

SSP: The Food Travel Experts

Annual Results 2018

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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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