Ssp Group Plc · LSE:SSPG
Ssp — Investor Presentation (March 2021)
33 slides from Ssp's investor presentation, March 2021
Slide 1: SSP Group Investor Presentation
SSP Group Investor Presentation March 2021 www.foodtravelexperts.com
Slide 2: Important Notice
Important Notice CONFIDENTIAL DOCUMENT THIS DOCUMENT AND ITS CONTENTS ARE CONFIDENTIAL AND ARE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM CANADA, SOUTH AFRICA, AUSTRALIA, JAPAN, OR (SAVE IN CONNECTION WITH A PRESENTATION TO QUALIFIED
Slide 3: Important Notice (Continued)
Important Notice (Continued) No representation or warranty, express or implied, is made or given by or on behalf of the Company, Barclays, Goldman Sachs, HSBC, J.P. Morgan, BNPP, BofA, Mediobanca, Mizuho or MUFG or any of their respective parent or subsidiary undertakings or affiliates, directors, o
Slide 4: Agenda
Agenda 1. Overview p5 2. SSP’s Financial and Operational Track Record p6 3. Positioning for the Next Phase: Strengthening the Balance Sheet p13 4. Looking Forward: Our Strategy for the Recovery and Beyond p22 4 SSP: The Food Travel Experts
Slide 5: Overview
Overview Decisive action to Recovery of travel A successful protect the sector in the business with a Structurally Holistic balance business and medium-term; strong track record attractive market sheet solution position for timing remains pre-COVID recovery uncertain Under the reasonable worst case
Slide 6: SSP's Financial and Operational Track Record
SSP’s Financial and Operational Track Record
Slide 7: Strong track record of growth and operational improvement
Strong track record of growth and operational improvement SSP’s History from IPO to FY 2019 At IPO / FY14 FY 2019 Change Revenue: £1,827m £2,795m +53% Significant revenue growth # units: c.2,000 c.2,800 +c.40% Expansion in high growth markets – % of revenue 16.6% 32.8% +16ppts North America and RoW
Slide 8: Acceleration of new business growth and a cash generative business model pre-COVID
Acceleration of new business growth and a cash generative business model pre-COVID Delivering 5-6% New Space Growth Cash Generative Business Model Funding Capex Constant Currency Revenue Growth Operating Cash Generation (Actual Currency) £279m £254m £253m 2.9% £174m £26m 1.6% £157m 0.3% £159m £19m 6
Slide 9: COVID-19 has had a significant impact on sales and PAX
COVID-19 has had a significant impact on sales and PAX Sales vs. FY2019 Number of Units Trading (at period end) c. 2,800 (14%) 1,180 837 827 628 (79%) (78%) (81%) 282 (93%) Q2 FY2020 Q3 FY2020 Q4 FY2020 Q1 FY2021 Latest Week FY 2019 Apr 20 (peak) Q3 FY2020 Q4 FY2020 Q1 FY2021 Latest Week (7 Mar 2021
Slide 10: Rapid and decisive action to protect people, liquidity and the business
Rapid and decisive action to protect people, liquidity and the business Liquidity Actions Cost and Business Protection Actions Quickly created £750m liquidity by April 2020 Temporary unit closures to downsize business to PAX Rents renegotiated, MGRs waived, overheads reduced, £219m raised th
Slide 11: Significant cost reduction with cash usage minimised
Significant cost reduction with cash usage minimised and maintained despite low and fluctuating level of sales Operating Cost Reduction Programme Cash Usage H2 FY2020 Operating Costs reduced by £584m YoY (66%) • Relentless focus on cash usage maintained • Contained H2 FY2020 cash usage to c.£195m wi
Slide 12: Q1 FY2021 trading and near-term outlook
Q1 FY2021 trading and near-term outlook Passenger demand has remained low - sales growth vs. 2019: Q1 FY2021: (78)% January & February 2021: (82)% First week March 2021: (81)% H1 FY2021 estimate: c.(80)% Underlying Operating Profit conversion in Q1 of c.22% on the lost sales… ahead of th
Slide 13: Positioning for the Next Phase: Strengthening the Balance Sheet
Positioning for the Next Phase: Strengthening the Balance Sheet
Slide 14: Timing of recovery remains highly uncertain, accelerating need to strengthen balance sheet
Timing of recovery of travel sector remains highly uncertain… accelerating need to strengthen balance sheet • Timing of recovery slower than expectations in December 2020 • New COVID spikes and new variants identified • Further lockdowns in early 2021 globally… in particular, across Europe • Extensi
Slide 15: A holistic solution to protect the business and strengthen the balance sheet
A holistic solution to protect the business and strengthen the balance sheet • 12 for 25 Rights Issue Rights Issue of c.£475 • General meeting on 6 April million (gross) • Expected to close on 22 April • £373m term loans and £150m RCF maturing in July 2022 extended to Jan 2024 Extension of bank faci
Slide 16: Rationale for the Rights Issue
Rationale for the Rights Issue 1 Cover liquidity requirements under a reasonable worst case scenario 2 Facilitate extensions to bank facilities and secure covenant waivers 3 Reduce leverage and increase capacity for investment as the pandemic recedes 16 SSP: The Food Travel Experts
Slide 17: Reasonable Worst Case Scenario assumes slow recovery of travel sector
Reasonable Worst Case Scenario assumes slow recovery of travel 1 sector Reasonable Worst Case (“RWC”) Assumptions PAX Assumptions (vs. 2019) 100% No recovery in H2 FY 2021 RWC Air RWC Rail 90% Air PAX 17% vs. 2019 Rail PAX 18% vs. 2019 80% 70% Further disrupted winter in 2022 (Air PAX 41% vs
Slide 18: Rights issue of c.£475m will cover liquidity requirements for the Reasonable Worst Case
1 Rights issue of c.£475m will cover the liquidity requirements for the Reasonable Worst Case scenario 300 Sufficient cash to cover liquidity requirements 475 under the £m Reasonable Worst Case scenario 125- 150 138 150 420 270- 295- 283 308 295 320 Liquidity Modelled Cash Modelled Liquidity Rights
Slide 19: Extension of bank facilities and covenant waivers
2 Extension of bank facilities and covenant waivers, conditional on a c.£475m Rights Issue Current Post-Rights Issue £373m term loans £373m term loans Bank Facilities Maturity July 2022 Maturity January 2024 £150m RCF £150m RCF US Private Size £322m maturing 2025-31 Size £322m maturing 2
Slide 20: The Base Case assumes a faster recovery
3 The Base Case assumes a faster recovery Base Case Assumptions PAX Assumptions (vs. 2019) • Expectation of a much faster recovery in PAX vs. RWC, allowing for 100% Base Case Total PAX more rapid re-opening • Strengthened balance sheet enabling re-investment as we re-open 90% and look to expand the
Slide 21: Our Base Case scenario and future investment opportunity
3 Our Base Case scenario and future investment opportunity Our Base Case Scenario Financial Capacity to Invest in the Recovery Base Case scenario includes capex to renew contracts LFL revenue expected to recover to 2019 levels by FY2024 and build pipeline of new contracts Full-year effect of contrac
Slide 22: Looking Forward: Our Strategy for the Recovery and Beyond
Looking Forward: Our Strategy for the Recovery and Beyond
Slide 23: Our forward agenda
Our forward agenda Maintain focus on cash Reopen estate & Expand footprint Mobilise existing and operations through drive profitable and position for pipeline COVID period growth market shake-out Strong position in structurally attractive market Structural and competitive strengths Well-positioned f
Slide 24: The travel sector is a structurally attractive market in which SSP holds a strong position
The travel sector is a structurally attractive market in which SSP holds a strong position Pre-COVID a Large and Growing Market SSP SSP hashas #1#1 oror #2#2Positions Position ininKey Key Geographies Geographies Market #1 #2 Historical global Air PAX CAGR of 6.7% (2009-2019) Rail PAX lower but m
Slide 25: SSP is well placed to benefit from the recovery of the travel sector
SSP is well placed to benefit from the recovery of the travel sector Air PAX for SSP Around 60% of SSP’s business is driven by Domestic PAX expected to broadly travel UK and European Rail: c.30% of Group sales (mainly domestic) recover to 2019 levels North America Air: c.80% domestic by FY2024
Slide 26: SSP's structural and competitive strengths
SSP’s structural and competitive strengths Leading Market Food Travel Expertise Long-term Client Local Insight and Experienced Colleague Positions Relationships International Scale Base Long-term structural Deep understanding Collaborative client Extensive knowledge Highly experienced growth drivers
Slide 27: Proven strategy to deliver long-term sustainable growth
Proven strategy to deliver long-term sustainable growth LFL Growth Efficient Conversion Learnings from the Crisis Optimise portfolio as we re-open Optimise rent deals Innovation in customer proposition Focused & flexible range Operational flexibility Drive participation & spend Labour and overhead c
Slide 28: Learnings from the crisis: Streamlined menus
Learnings from the crisis will strengthen our position in the recovery Case study: Streamlined menus (1) Before After 28 SSP: The Food Travel Experts
Slide 29: Learnings from the crisis: Digital technology
Learnings from the crisis will strengthen our position in the recovery Case study: Digital technology (2) Customer Order/Pay Customer Benefits Models Aligned with customer preferences 1. Order at Table Social distancing Speed of service; reduced 2. Virtual Kiosks wait times Thailand 3. Physica
Slide 30: Significant opportunities to expand our footprint
Significant opportunities to expand our footprint • Secure high renewal Units Won But Not Yet Open rates Extend • Refurb and refresh Nürnberg + Kristiansand to drive profitability Manchester Contracts • Potential for 1 unit Darmstadt Dortmund 2 units 1 unit Copenhagen Edmonton 3 units 7 units Bergen
Slide 31: Concluding remarks
Concluding remarks The travel sector remains challenging… with restrictions in place across most of our markets We continue to see cash outflows… despite extensive action to protect liquidity Whilst confident in the long-term outlook and opportunities in our markets, the timing of recovery is
Slide 32: Q&A
Q&A 5) Asp
Slide 33: Appendix: Terms and timeline
Appendix: Terms and timeline Cover liquidity requirements under a reasonable worst case scenario Fully underwritten Facilitate extensions to bank facilities and secure covenant waivers c.£475m Rights Issue Reduce leverage and increase capacity for investment as the pandemic recedes 12 for 25