Ssp Group Plc · LSE:SSPG
Ssp — H1 2022 Earnings Presentation
29 slides from Ssp's earnings presentation, May 24, 2022
Slide 1: Interim Results 2022
Interim Results 2022 Patrick Coveney, CEO Jonathan Davies, Deputy CEO and Group CFO 24 May 2022
Slide 2: Agenda
Agenda Highlights Patrick Coveney Financial and business review Jonathan Davies Observations and early priorities Patrick Coveney Q&A
Slide 3: Highlights
Highlights • Strong first half performance; agile response to volatility in demand • Rapid recovery in demand for travel; revenue 83% of 2019 in the first six weeks of H2; c.2,200 units open • Higher than average retention rates reflecting strength of client relationships • Significant new business
Slide 4: Financial and business review
Financial and business review Jonathan Davies, Deputy CEO and Group CFO
Slide 5: Financial highlights
Financial highlights Revenue Revenue (% of 2019 levels) EBITDA £803m 64% £15m LY: £257m LY: 20% LY: £(110)m Operating loss Free cashflow Net debt £(36)m £(31)m £(340)m LY: £(161)m LY: £(141)m LY: £(840)m Note: All figures on an underlying basis and pre IFRS 16.
Slide 6: H1 underlying operating loss of £36m (pre IFRS 16 basis)
H1 underlying operating loss of £36m (pre IFRS 16 basis) IFRS 16 Pre IFRS 16 £m basis basis Revenue 803.2 803.2 Gross Profit 577.1 577.1 % sales 71.8% 71.8% Labour Costs (275.4) (275.4) % sales (34.3)% (34.3)% Concession Fees (101.5) (165.3) % sales (12.6)% (20.6)% Overheads (115.1) (121.7) % sales
Slide 7: Underlying Net Loss £67m (pre IFRS 16 basis)
Underlying Net Loss £67m (pre IFRS 16 basis) IFRS 16 Pre IFRS 16 £m basis basis Operating Loss* (52.6) (36.4) Net Financing Cost* (36.6) (20.8) Share of Associates 1.9 1.9 Loss Before Tax* (87.3) (55.3) Tax* (4.3) (2.7) Non-Controlling Interests* (6.3) (9.2) Net Loss* (97.9) (67.2) Loss per share (p
Slide 8: Non-underlying items (IFRS 16 basis)
Non-underlying items (IFRS 16 basis) £m P&L impact Asset impairments (2.1) IFRS 16 Covid rent waivers 19.3 Gain on derecognition of leases 61.5 Other (0.1) Operating Profit 78.6 Net Financing Income 6.4 Profit Before Tax 85.0
Slide 9: Revenue (% of 2019 levels)
Revenue (% of 2019 levels) H2 to H2 LY: H1: date: 38% 64% 83% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Apr May Jun July Aug Sep Oct Nov Dec Jan Feb Mar H2 to date* 2021 2022 *H2 to date relates to the period 1 April – 15 May 2022
Slide 10: Revenue progression by region & expectations for H2
Revenue progression by region & expectations for H2 (% of 2019 levels) H1 H2 to date* C. Europe 70% 88% Group H2 N. America 74% 84% 100% expectations: UK & ROI 60% 82% c.80-85% C. Europe Rest of World 43% 69% N. America 80% Group 64% 83% UK Rest of World 60% 40% 20% 0% Apr May Jun Jul Aug Sep Oct No
Slide 11: EBITDA positive in H1
EBITDA positive in H1 Variance Cost Saving £m H1 2022 H1 2019 (vs. 2019) vs 2019 % Revenue 803.2 1,261.6 (458.4) Labour Gross Profit 577.1 892.2 (315.1) % Sales 71.8% 70.7% 1.1% 28% Labour Costs (275.4) (385.1) 109.7 % Sales (34.3)% (30.5)% (3.8)% Concession Fees Concession Fees (165.3) (248.6) 83.3
Slide 12: Aligning unit openings with recovery in sales
Aligning unit openings with recovery in sales 90% 81% 80% Units open % of 2019 70% 60% 50% 39% 40% Sales % of 2019 30% 20% 10% 0% Apr May Jun July Aug Sep Oct Nov Dec Jan Feb Mar Apr May to date* *May to date is the period 1 May – 15 May 2022
Slide 13: Profit impact of lower sales vs. 2019 and FY expectations
Profit impact of lower sales vs. 2019 and FY expectations Revenue Operating profit/(loss) 2022 full year revenue and £m £m margin expectations range 1,400 80 1,262 (459) EBITDA 62 (98) Sales 1,200 60 22% drop margin through on 1,000 sales impact 803 40 c.£2.0bn c.5% 800 20 600 (36) - 400 200 (20) c.
Slide 14: Cash flow and net debt
Cash flow and net debt £m Underlying free cash outflow £(31)m (5) (1) (340) (16) (42) 2 (308) 15 15 Opening Net EBITDA Working capital Capex Tax Net financing Other cash Non cash debt Closing debt costs items movements Net debt Note: All numbers shown on a pre-IFRS16 basis
Slide 15: Over £600m liquidity available at the end of March
Over £600m liquidity available at the end of March £m 31 Mar 22 Cash 446 Undrawn facilities: RCF 150 Other local facilities 11 Available liquidity 607 Note: the Bank of England CCFF loan of £300m was repaid in February 2022
Slide 16: Performance drivers
Performance drivers LFL sales growth Business development Efficient conversion • Passenger recovery & unit revenue • Structural growth in travel • Gross margin optimization growth opportunity; penetration/SPH • Contract renewals & extensions • Labour and overhead efficiency • Range, menus and price
Slide 17: A reminder: our Base Case scenario for passenger recovery
LFL sales growth A reminder: our Base Case scenario for passenger recovery Source: SSP Group plc Investor Presentation March 2021
Slide 18: Good progress on contract renewals
Business development Good progress on contract renewals Arlanda Airport Dublin Airport • Retention of 21 units, maintaining our footprint • Continued to mobilise the contract, due to complete • Mix of bespoke F&B concepts and local hero brands, by end 2023 and new format convenience units • 27 new u
Slide 19: Additional new business wins secured
Business development Additional new business wins secured Belgium rail Chicago Midway airport Bangalore airport Guadeloupe airport • Acquisition of a small • 3 new outlets won in • 9 units across both • New market entry 'grab and go' business prime airside locations terminals with 9 units • Total of
Slide 20: Secured net gains of c.£500m
Business development Secured net gains of c.£500m 1 Annualised sales Units yet to open c.£500m (% of annualised sales) 18% UK Cumulative net gains1 of c.£500m when pipeline mobilises by 2025 Rest of • c.£150m from units opened pre- Units yet to 21% World c.£300m covid, but which have yet to trade fo
Slide 21: Financial capacity of £425m - £475m to invest
Balance sheet Financial capacity of £425m - £475m to invest Uses of cash and balance sheet efficiency Significant further opportunities Organic Investment M&A • Sizeable new space opportunity over Significant structural growth Review of potential M&A medium-term opportunities around the world opport
Slide 22: Mitigating inflationary pressures
Efficient conversion Mitigating inflationary pressures Mitigating actions Higher energy • Menu re-engineering prices • Range simplification Rises in • Fixing and extending contracts Commodity Significant shipping price Inflationary • More frequent price benchmarking inflationary costs increases pres
Slide 23: Sustainability - our progress
Re-investment Sustainability - our progress Supporting and protecting our Serving our customers Protecting our environment colleagues and communities responsibly 10% more colleagues completed Expanding to 30+ wellness brands; Committed to Net Zero by 2040; annual colleague engagement survey includin
Slide 24: Observations and early priorities
Observations and early priorities Patrick Coveney, Group CEO
Slide 25: A strong foundation on which to build
A strong foundation on which to build 1 Strong businesses in 2 3 Experienced leadership Operational excellence growing markets and ‘can do’ culture 4 Longstanding client 5 Broad range of brands 6 Strong balance sheet relationships £425m - £475m headroom to invest
Slide 26: Early priorities
Early priorities 1 Support business through recovery phase 2 Maximise competitive opportunities 3 Evolve proposition to post covid consumer 4 Accelerate use of automation, digital, technology 5 Embedding sustainability into how we do business
Slide 27: Summary
Summary • Strong revenue momentum; rebound led by leisure travel • Tight financial and operating efficiency enabled business to deliver positive EBITDA • High levels of contract retention and new business wins underpinned by trusted client relationships • Ability to take advantage of significant and
Slide 28: SSP Bor
SZ? SSP Bor
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