Ssp Group Plc · LSE:SSPG
Ssp — FY2023 Earnings Presentation
35 slides from Ssp's earnings presentation, Dec 5, 2023
Slide 1: Preliminary Results 2023
Preliminary Results 2023 Patrick Coveney, Group CEO Jonathan Davies, Group Deputy CEO and CFO 5 December 2023 1 1
Slide 2: Agenda
Preliminary Results 2023 | Dec 2023 Agenda Introduction Patrick Coveney Financial review Jonathan Davies Business review Patrick Coveney Q&A 2 2 Haven Food | Oslo Airport
Slide 3: Moving to sustainable growth and returns
Preliminary Results 2023 | Dec 2023 Moving to sustainable growth and returns Early 2020 Spring 2022 From now Sustainable Business Hibernation Recovery & rebuild growth & protection returns Revenue EBITDA EPS • Re-open the estate £m £m 3,010 280 7.1p • Re-build the economic model 2023 • Reset and enh
Slide 4: Financial review
Preliminary Results 2023 | Dec 2023 Financial review Jonathan Davies Group Deputy CEO and CFO 4 44 La Tramoia | Barcelona Airport
Slide 5: Financial highlights
Preliminary Results 2023 | Dec 2023 Financial highlights REVENUE EBITDA OPERATING PROFIT £3,010m £280m £164m +38% vs FY22 +£138m vs FY22 +£134m vs FY22 EPS NET DEBT:EBITDA DIVIDEND 7.1p 1.4x 2.5p vs HY22: +71% vs HY22: +71% vs HY22: +71% +11.6p vs FY22 0.7x better vs FY22 35% payout ratio Note: All
Slide 6: Underlying Operating Profit £205m (IFRS 16 basis)
Preliminary Results 2023 | Dec 2023 Underlying Operating Profit £205m (IFRS 16 basis) IFRS 16 basis Pre-IFRS 16 basis Change Change FY 2022 FY 2023 (Actual FY 2022 FY 2023 (Actual £m FX rates) FX rates) Revenue 2,185 3,010 38% 2,185 3,010 38% EBITDA1 313 516 65% 142 280 97% % sales 14.3% 17.1% 2.8%
Slide 7: Underlying performance ahead of 'planning scenarios' set out last year
Preliminary Results 2023 | Dec 2023 Underlying performance ahead of ‘planning scenarios’ set out last year 'Planning scenario’ 20231 2023 Results FX Dec 2022 May 2023 Actual FX Adjusted Sales (£m) 2,900-3,000 c.3,000 3,010 3,0572 EBITDA (£m) 250-280 c.280 280 2892 % sales 8.6-9.3% c.9.3% 9.3% 9.5% E
Slide 8: H2 Group revenue at 110% of 2019 levels
Preliminary Results 2023 | Dec 2023 H2 Group revenue at 110% of 2019 levels By driver By region Volume vs 2019: 93% Total 96% Air 8% 110% 2023 H1 2023 H2 85% Rail 14% (5)% 100% North America 127% 123% Continental Europe 109% 110% (7)% UK & ROI 85% 98% APAC & EEME 104% 114% Group 104% 110% 2019 Volum
Slide 9: H2 Revenue performance driven by volume recovery in Air
Preliminary Results 2023 | Dec 2023 H2 Revenue performance driven by volume recovery in Air % of 2022 Revenue Group Air Rail 8% 126% 6% 122% 8% (5)% 8% (3)% 115% 15% 1% 1% 8% 11% 5% 100% 100% 100% 2022 Volume Price Net FX 2023 2022 Volume Price Net FX 2023 2022 Volume Price Net FX 2023 Gains gains g
Slide 10: H2 sales growth at 25% YoY
H2 sales growth at 25% YoY 2023 H2 First 8 wks of 2024 YoY % growth LFL Net Contract Gains1 Revenue Revenue (constant currency) (constant currency) North America 24% 14% 38% 33% Continental Europe 13% 4% 17% 14% UK & ROI 14% 2% 16% 22% APAC & EEME 44% 10% 54% 29% Group 19% 6% 25% 22% 10 1. H2 net ga
Slide 11: FY YoY EBITDA growth driven by N. America and APAC & EEME
Preliminary Results 2023 | Dec 2023 FY YoY EBITDA growth driven by N. America and APAC & EEME YOY Growth % EBITDA % of sales Underlying EBITDA (Pre-IFRS 16) £m Constant Currency Actual YoY % pts change North America 92 80% 13.7% 2.5% Continental Europe 78 30% 6.8% (0.2)% UK & ROI 73 88% 9.4% 3.1% AP
Slide 12: Operating costs tightly managed despite ongoing inflation
Preliminary Results 2023 | Dec 2023 Operating costs tightly managed despite ongoing inflation £m FY 2023 vs. FY 2022 Revenue 3,009.7 824.3 Gross Profit 2,173.1 597.9 % Sales 72.2% 0.1% Labour Costs (918.4) (231.7) % Sales (30.5)% 0.9% Concession Fees (627.2) (173.1) % Sales (20.8)% 0.0% Overheads (3
Slide 13: Underlying Net Profit £56m (pre-IFRS 16 basis)
Preliminary Results 2023 | Dec 2023 Underlying Net Profit £56m (pre-IFRS 16 basis) Pre-IFRS 16 basis £m FY 2023 FY 2022 YoY Operating Profit 163.7 30.3 133.4 Net Financing Cost (33.5) (43.6) 10.1 Share of Associates 7.2 6.6 0.6 Profit/(Loss) Before Tax 137.4 (6.7) 144.1 Tax (31.2) (4.6) (26.6) Minor
Slide 14: Increased minority interest charge reflecting strong profit growth
Preliminary Results 2023 | Dec 2023 Increased minority interest charge reflecting strong profit growth in N. America & India where we operate with JV partners EBITDA MI JV £m 2019 2023 % change 2019 2023 % change participation1 North America 73 92 26% 13 23 70% c.25% Continental Europe 115 78 (32)%
Slide 15: Cash usage £125m, with leverage reducing to 1.4x
Preliminary Results 2023 | Dec 2023 Cash usage £125m, with leverage reducing to 1.4x £m Underlying free cash outflow £125m 1.4x Minority Net debt/ Interests EBITDA Net & other financing 2.1x costs 392 Net debt/ FX & EBITDA Tax Non-cash debt Exceptionals movements 297 EBITDA Acquisitions Capex Workin
Slide 16: Future pipeline of secured net gains of c.£450m of annualised sales by 2027
Preliminary Results 2023 | Dec 2023 Future pipeline of secured net gains of c.£450m of annualised sales by 2027 Expected net gains in 2024 of c.5% Two-thirds of secured net gains in already fully secured N.America and APAC & EEME Forecast annualised sales from net gains £m 6% Secured UK 250 Expected
Slide 17: Near term COVID catch up investment; long term investment model unchanged
Preliminary Results 2023 | Dec 2023 We have some near term COVID catch up investment; our long term investment and returns model remains unchanged Renewals and maintenance Secured pipeline Expected growth not yet secured Covid catch up Capex (£m) 300 250 New unit Investment growth capex generating h
Slide 18: 2024 Planning Assumptions – strong expected performance
2024 Planning Assumptions – strong expected performance FY 2023 FY 2024 Drivers Actuals Planning Assumptions1,2,3 • Like-for-like c.6-10% Revenue £3.0bn c.£3.4-3.5bn • Net gains of c.5% • Acquisition of Midfield Concessions adding c.2% • Operating leverage EBITDA £280m c.£345-375m • Efficiencies off
Slide 19: Clear capital allocation strategy
Preliminary Results 2023 | Dec 2023 Clear capital allocation strategy Uses of cash and balance sheet efficiency Clear priorities to generate returns • Prioritising organic growth; renewals and net gains & infill M&A Organic growth Infill M&A Renewals and net gains Required returns > WACC 3-4 year pa
Slide 20: Business review
Preliminary Results 2023 | Dec 2023 Business review Patrick Coveney Group CEO 2020 20 Sweet Maple | San Francisco International Airport
Slide 21: Delivering on our strategic priorities
Preliminary Results 2023 | Dec 2023 Delivering on our strategic priorities Priorities Progress % EBITDA1 (N.A and APAC & EEME) • Increasing focus on air channel Pivoting to high growth markets • Accelerating growth; North America & Asia Pac • Growing selectively in UK, Europe & EEME 43% 53% 2022 202
Slide 22: Accelerating growth: North America and APAC and EEME
Preliminary Results 2023 | Dec 2023 Accelerating growth: North America and APAC and EEME Leveraging partner expertise to deliver high revenue growth, sustainable margin growth and returns North America APAC & EEME • LFL sales up 33% • Rapid financial recovery • Driving improvements in gross margin &
Slide 23: India – a significant opportunity for further growth and returns
Preliminary Results 2023 | Dec 2023 India – a significant opportunity for further growth and returns Rapid growth achieved since market A quarter of our APAC and EEME entry A significant business for SSP secured pipeline India sales progression (£m) 2nd 150 Largest market by unit 100 numbers 50 >60%
Slide 24: Steady growth and performance: UK & ROI and C.Europe
Preliminary Results 2023 | Dec 2023 Steady growth and performance: UK & ROI and C.Europe 100% owned businesses delivering good growth accompanied by rising margin over medium-term Continental Europe UK and Ireland • Significant contract retentions in Nordics and Spain • Revitalised propositions for
Slide 25: Enhanced customer proposition, brands and formats
Preliminary Results 2023 | Dec 2023 Enhanced customer proposition, brands and formats Strengthening brand partnerships… Innovating formats 300+ Brand partners Casual dining: Convenience: North America Nordics …and growing our own brands Lounges: Food Court: Kuala Lumpa Helsinki Progressively rising
Slide 26: Delivering operational efficiencies while driving customer experience
Preliminary Results 2023 | Dec 2023 Delivering operational efficiencies - while driving customer experience and like-for-like growth Digitising our customer proposition Menu optimisation Kitchen standardisation and automation Pre-Covid: 12 items During Covid: 4 items Post Covid: 8 items • Simplified
Slide 27: Building a sustainable business
Enhance capability Preliminary Results 2023 | Dec 2023 Building a sustainable business PRODUCT PLANET PEOPLE • Exceeded 2025 target for 30% own • SBTi-verified 2040 net zero target • 80% engagement score in Gallup brand meals to be plant-based colleague engagement survey • 42% reduction in absolute
Slide 28: A significant level of business development
Preliminary Results 2023 | Dec 2023 A significant level of business development Rapid unit mobilisation Growing new unit pipeline Case Study: Malaysia c.£450m annualised sales secured (yet to open) 1 to 30 units in 12 months Hong Kong USA UK Spain HK Airport Portland Airport St Pancras station Menor
Slide 29: From 2025, we enter a new phase of sustainable growth and returns
Preliminary Results 2023 | Dec 2023 From 2025, we enter a new phase of sustainable growth and returns Medium-term financial framework 1 • Pivoting to high growth markets with structural tailwinds Stronger sales • Stronger like-for-like growth growth • Net gains average c.3-5% p.a. 2 Sustainable • Op
Slide 30: Summary
Preliminary Results 2023 | Dec 2023 Summary • A year of strong financial, operational and strategic progress • Enhanced core capabilities across customer proposition, people, sustainability and digital • Expect strong performance in FY24; significant pipeline underpinning growth • Strategy expected
Slide 31: Q&A
Preliminary Results 2023 | Dec 2023 Q&A Tai Cheong Bakery | Singapore Changi Airport
Slide 32: 2024 Technical Guidance
2024 Technical Guidance On a pre-IFRS 16 basis 2024 expectation: Depreciation: c.4.0% of sales Net finance costs: A marginal increase on FY 2023 Effective tax rate: Similar level to FY 2023 Minority interests: In line with profit growth in businesses with JV partners; currently estimate year-on-year
Slide 33: FY2023 sales growth
FY2023 sales growth 2023 YoY % growth LFL Revenue Net Contract Gains (constant currency) North America 32.7% 12.0% 44.7% Continental Europe 26.4% 4.0% 30.4% UK & ROI 23.2% 2.4% 25.6% APAC & EEME 68.4% 14.3% 82.7% Group 31.5% 6.4% 37.9% 33
Slide 34: FY2023 currency contribution
FY2023 currency contribution 19% 25% 22% 8% 8% 1% 15% 4% 9% 1% 23% 9% 9% 5% Revenue EBITDA Operating 3% profit 9% 12% 10% 17% 20% 5% 30% 9% 27% Pound sterling US dollar Euro Nordic currencies Indian Rupee Egyptian Pound Canadian Dollar Other currencies 34
Slide 35: 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