Ssp Group Plc · LSE:SSPG
Ssp — H1 2020 Earnings Presentation
29 slides from Ssp's earnings presentation, Jun 3, 2020
Slide 1: Interim Results 2020
The Food Travel Experts Interim Results 2020 www.foodtravelexperts.com
Slide 2: Presentation structure
Presentation structure 1. Group highlights Simon Smith 2. Financial review Jonathan Davies 3. Business review Simon Smith 4. Q&A All 2 SSP: The Food Travel Experts
Slide 3: Group highlights
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
Slide 4: Financial Review
Financial Review Interim Results 2020 Jonathan Davies, CFO SSP: The Food Travel Experts
Slide 5: Group Financial Overview
Group Financial Overview IAS 17 Change (%) H1 2020 H1 2020 H1 2019 Constant Reported £m IFRS 16 IAS 17 IAS 17 Currency 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 T
Slide 6: Covid impacting Operating Margin in H1
Covid 19 impacting Operating Margin in H1 IAS 17 YOY bps H1 2020 H1 2020 H1 2019 Change IFRS 16 IAS 17 IAS 17 £m Reported FX Rates Revenue 1,214.6 1,214.6 1,261.6 Gross Profit 856.2 856.2 892.2 % Sales 70.5% 70.5% 70.7% (20) Labour Costs 387.8 387.8 385.1 % Sales 31.9% 31.9% 30.5% (150) Concession F
Slide 7: Net loss of £-18m for H1 (IAS 17 basis)
Net loss of £-18m for H1 (IAS 17 basis) H1 2020 H1 2020 H1 2019 IAS 17 Change £m IFRS 16 IAS 17 IAS 17 (%) 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 (
Slide 8: LFL Sales down -18.5% in Q2
LFL Sales down -18.5% in Q2 2.0% 1.2% 0.9% (1.8)% (47.4)% (18.5)% (8.4)% 0.0% LFL Sales Increase/(Decrease (%YOY) -10.0% -20.0% -30.0% -40.0% Sales down over 90% as at the very -50.0% end of March FY19 Q1 Jan Feb Mar Q2 H1 Q2 Note: Same store like-for-like sales growth at constant currency 8 SSP: Th
Slide 9: Covid impacting Operating Profit by c.£65m in Q2
Covid 19 impacting Operating Profit by c.£65m in Q2 Sales Operating Profit* 1400 70 £66m £-1m £-4m £1,362m £-2m £-10m £-60m £-135m 60 1350 50 1300 40 £m £m 1250 £1,215m 30 1200 20 1150 10 £1m 1100 0 H1 Forecast Jan Feb March H1 Actual H1 Forecast Jan Feb March H1 Actual (Pre Covid) (Pre Covid) *Unde
Slide 10: H1 Revenue down -2.7%
H1 Revenue down -2.7% Net Contract Total Change at Constant Currency LFL Sales Gains/(Losses) 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)% 10 SSP: The Food Travel Experts
Slide 11: Operating Profit at broadly break-even in H1
Operating Profit at broadly break-even in H1 (IAS 17 basis) Operating Profit/(Loss)* IAS 17 Change (%) H1 2020 H1 2020 H1 2019 Constant Reported £m IFRS 16 IAS 17 IAS 17 Currency 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.
Slide 12: Free Cash outflow of £177m
Free Cash outflow of £177m H1 2020 H1 2019 £m IAS 17 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 Fi
Slide 13: Net Debt of £458m after equity raise of £209m
Net Debt of £458m (IAS 17 basis), after equity raise of £209m H1 2020 Leverage £m (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
Slide 14: March Pessimistic Scenario: Impact of Covid on H2 sales and profit
March Pessimistic Scenario: Impact of Covid 19 on H2 sales and profit Sales EBITDA 1800 300 £1,650m £-1,400m £-350m £230m to £-420m 1600 H2 estimated 200 profit drop- 1400 through 25-30% 1200 100 H2 EBITDA loss £m 1000 £m £-120m to £-190m 0 800 600 -100 H2 sales down 400 c.80 – 85% YoY £250m -200 20
Slide 15: Pessimistic Scenario: H2 cash usage
Pessimistic Scenario: H2 cash usage Estimated H2 Cash Outflows Actions taken to protect liquidity £m • Rapid reduction of operating costs H2 EBITDA Loss (120 - 190) • Negotiations of rent concessions Working Capital (180 - 200) • Access to government support schemes Other Net Outflows (40 - 50) • Wa
Slide 16: Balance sheet and liquidity significantly strengthened
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
Slide 17: Business Review
Business Review Interim Results 2020 Simon Smith, CEO SSP: The Food Travel Experts
Slide 18: Four phases to our response to COVID-19
Four phases to our response to COVID - 19 Business Sustainable Hibernation Recovery Protection growth • Health & Safety • Health & Safety • Health & Safety • Health & Safety • Cost reduction • Unit closures • Re- open units • Accelerate growth • Staff furloughed • Re-engineer unit costs • Leverage c
Slide 19: Decisive management action; taken early
Business Hibernation Decisive management action; taken early protection Key Priorities Action Taken • New Protocols Health and Safety • More communication • Office based colleagues working remotely • Agreed flexible, or no rental with landlords Business Protection • Closed units; hibernation protoco
Slide 20: Supporting communities during the crisis
Hibernation Supporting communities during the crisis 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 don
Slide 21: Regional review
Regional review UK Continental Europe • 66% Rail; 30% Air • 60% Air; 30% Rail • Almost total shut down of operations; M&S in hospitals only • Countries at different stages of lockdown • Rail travel gradual increase in passengers; air still shut • Germany most advanced, Spain slower easing of restric
Slide 22: Case study: China
Case study: China Overview China flight trends: Jan-May DOMESTIC • 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 prima
Slide 23: Immediate priorities in the recovery phase
Recovery Immediate priorities in the recovery phase Key Priorities Key Actions • Additional protocols Health and Safety • Social distancing in units and offices • Increased communication to colleagues and customers • Systematic approach; driven by consumer needs Unit re-openings with new • New unit
Slide 24: Re-opening programme: Test – Learn - Adapt
Recovery Re-opening programme: Test – Learn - Adapt Customer offer Health & Safety • Customer research informing offer • PPE • Range adapted around key items • Perspex screens installed • High wastage, non-essentials • Till podia hand sanitizer removed • Customer communications • Use of technology H
Slide 25: Building competitive advantages for the longer term
Sustainable growth Building competitive advantages for the longer term Key Priorities Key Actions • Aligned to changing customer preferences and needs Strong customer offer • Accelerate technology to enhance customer experience and safety • Prioritise pipeline and seek out value creating new opportu
Slide 26: Significant growth opportunities: Openings and new wins in H1
Significant growth opportunities: Openings and new wins in H1 H1 Openings H1 Wins Station Food acquisition Copenhagen Airport Dublin Airport Cincinnati Airport Mykonos Airport Phoenix Airport Kuala Lumpur Airport Providence Airport SSP: The Food Travel Experts 26
Slide 27: Summary and outlook
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 custo
Slide 28: Q&A Interim Results 2020
Q&A Interim Results 2020 SSP: The Food Travel Experts
Slide 29: Disclaimer
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