The Food Travel Experts
Total Page:16
File Type:pdf, Size:1020Kb
The Food Travel Experts www.foodtravelexperts.com Presentation structure 1. Group highlights Kate Swann 2. Financial review Jonathan Davies 3. Business review Kate Swann 4. Q&A All 2 SSP: The Food Travel Experts Group highlights • Good first half performance with operating profit up 29.0% at actual exchange rates, 32.6% at constant currency • Like for Like sales up 2.8%, net new space growth strong at 7.1% • Total sales growth including acquisitions 11.9%* • Strong operating margin growth of 50bps, excluding the acquisition impact of India • Strategic initiatives, delivering further growth and efficiency • EPS 5.6p, up 33.3% • Interim dividend 4.8p, up 50.0% YOY • Medium term pipeline encouraging * At constant currency 3 SSP: The Food Travel Experts Financial review Interim Results 2018 Jonathan Davies, CFO SSP: The Food Travel Experts Group financial overview Change (%) Constant Reported £m H1 2018 H1 2017 Currency FX Rates Revenue 1,177.8 1,072.5 11.9% 9.8% LFL Sales Growth 2.8% 2.9% n/a n/a Operating Profit* 55.2 42.8 32.6% 29.0% Profit Before Tax* 48.7 34.7 n/a 40.3% Earnings per share (p)* 5.6 4.2 n/a 33.3% Net Debt (290.1) (378.8) n/a 23.4% *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. 5 SSP: The Food Travel Experts H1 2018 LFL sales growth 2.8% 4.5% 4.0% ) 3.5% 3.3% 3.1% 2.9% 3.0% 3.0% 2.7% 2.8% 2.5% 2.0% 1.5% LFL Sales Growth (%YOY Growth Sales LFL 1.0% 0.5% 0.0% H1 H2 FY17 Q1 Q2 H1 FY17 H1 FY18 Note: Same store like-for-like sales growth at constant currency 6 SSP: The Food Travel Experts Revenue growth of 11.9% at constant currency Net Contract Total Change at Constant Currency LFL Sales Gains/(Losses) Revenue UK 0.7% 0.5% 1.2% Continental Europe 2.2% 2.9% 5.1% North America 3.1% 31.1% 34.2% Rest of World (inc India) 10.3% 9.5% 19.8% Group 2.8% 7.1% 9.9% Acquisition Impact India 1.4% Stockheim 0.6% Reported Growth 11.9% 7 SSP: The Food Travel Experts Operating profit growth of 32.6% at constant currency Operating Profit* Change (%) Constant Reported FX £m H1 2018 H1 2017 Currency Rates UK** 33.4 29.7 12.5% 12.5% Continental Europe 21.8 20.2 9.0% 7.9% North America 6.4 5.6 20.0% 14.3% Rest of World 13.6 4.8 202.1% 183.3% Non-attributable (20.0) (17.5) (14.3)% (14.3)% Group 55.2 42.8 32.6% 29.0% * Operating profit is underlying, at actual currency ** UK includes Republic of Ireland 8 SSP: The Food Travel Experts Operating profit margin up by 70 bps (50bps ex acquisition impact of TFS) YOY bps Change Constant Reported FX £m H1 2018 H1 2017 Currency Rates Revenue 1,177.8 1,072.5 Gross Profit 821.5 738.8 % Sales 69.8% 68.9% 100 90 Labour Costs 356.7 327.5 % Sales 30.3% 30.5% 30 30 Concession Fees 222.3 195.5 % Sales 18.9% 18.2% (70) (70) Overheads 139.6 129.0 % Sales 11.9% 12.0% 10 20 Depreciation & Amortisation* 47.7 44.1 % Sales 4.1% 4.1% 0 0 Operating Profit* 55.2 42.8 Operating Margin (%) 4.7% 4.0% 70 70 *Excludes amortisation of intangible assets created at acquisition of the SSP business in 2006 and the revaluation of the final consideration to acquire an additional 16% of TFS. 9 SSP: The Food Travel Experts Net profit up 35.9% £m H1 2018 H1 2017 Change (%) Operating Profit* 55.2 42.8 29.0% Net Financing Cost* (6.7) (8.8) Share of Associates 0.2 0.7 Profit Before Tax* 48.7 34.7 40.3% Tax* (10.7) (7.6) Non-Controlling Interests (11.1) (7.3) Net Profit* 26.9 19.8 35.9% Earnings per share (p)* 5.6p 4.2p 33.3% Dividend per share (p) 4.8p 3.2p 50.0% *Excludes amortisation of intangible assets created at acquisition of the SSP business in 2006 and the revaluation of the final consideration to acquire an additional 16% of TFS. 10 SSP: The Food Travel Experts Free cash outflow of £6.5m £m H1 2018 H1 2017 Operating Profit* 55.2 42.8 Depreciation & Amortisation* 47.7 44.1 Working Capital (0.5) (19.6) Capital Expenditure (61.5) (61.4) Net Tax (17.6) (14.4) Acquisitions (18.8) (35.0) Other (4.5) (1.6) Operating Cash Flow* (0.0) (45.1) Net Financing Costs (6.1) (7.9) Other (0.4) - Free Cash Outflow* (6.5) (53.0) *Excludes amortisation of intangible assets created at acquisition of the SSP business in 2006 and the revaluation of the final consideration to acquire an additional 16% of TFS. 11 SSP: The Food Travel Experts Net debt of £290.1m H1 2018 H1 2017 Leverage Leverage £m (Net £m (Net Debt/EBITDA) Debt/EBITDA) Opening Net Debt (1 October) (262.2) 1.0x (317.4) 1.6x Free Cash Flow (6.5) (53.0) Dividend (23.5) (13.8) Impact of foreign exchange rates 2.3 6.1 Other (0.2) (0.7) Closing Net Debt (31 March) (290.1) 1.1x (378.8) 1.7x 12 SSP: The Food Travel Experts Financial summary • Robust LFL sales growth of 2.8% • Net contract gains strong at 7.1 % • Acquisitions add a further 2.0% • Strategic programme delivering strong operating margin growth up 50bps excluding the acquisition impact of India • Operating profit up 32.6 % at constant currency • EPS up 33.3% • Interim dividend per share of 4.8p, up 50.0% 13 SSP: The Food Travel Experts Business Review Interim Results 2018 Kate Swann, CEO SSP: The Food Travel Experts 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 15 SSP: The Food Travel Experts Regional update progress since IPO • Strong revenue growth since IPO, up 36% • More balanced business, better geographic diversification • Fast growth in North America and ROW, now c30% of the Group • Air sector now 62% of SSP • Further opportunities to grow 16 SSP: The Food Travel Experts Our focus remains on five key levers to deliver value 1 Optimise our offer to benefit from the positive trends in our markets 2 Grow profitable new space 3 Optimise gross margin and leverage scale benefits 4 Run an efficient and effective business 5 Optimise investment using best practice and shared resource 17 SSP: The Food Travel Experts 1 Optimising our offer Areas of Focus • LFL growth of 2.8% in line with plan Improve ranges • Geographic diversification helps mitigate specific country issues Optimise price and promotion • Underlying medium term positive trends Upselling in travel market remain • Strategic initiatives continue to deliver Maximise use of space well Focus on category as well as brand performance 18 SSP: The Food Travel Experts Optimising our offer: Premiumisation with our brand partners • Premiumisation meets customer demands and drives ATV • Travel is a unique sector for many of our partners • Trial of new “Starbucks Deli” range e.g. artisan sourdough sandwiches and filled croissants not available on high street • Trial of new premium – range in Jamie’s Deli, e.g. premium pizza • Bespoke premium dishes in Tai Hing e.g. Angus steak stir fried noodles • Further opportunities across other categories and brand partners 19 SSP: The Food Travel Experts Optimising our offer: Self-order screens 1 2 Main menu • High quality speed of service critical in travel QUICK ORDER OUR MOST environment POPULAR MEALS SEASONAL OFFERS BURGERS • Self-order kiosks being trialled in selected QSR units WHOPPER MEAL CHICKEN BREAKFAST CHICKEN ROYALE • Located at front of the unit to encourage MEAL VEGGIE, WRAPS DRINKS participation AND SALAD YOUR ORDER YOUR ORDER IS EMPTY 3 • Main menu 4 Kiosks driving service improvements and ATV growth Main menu Added to your order Choose your Choose your meal EXTRA WATER FOR YOUR JOURNEY? meal Customize and • Customize and Screens guide the customer through menu quickly, change quantity change quantity ADD ONION RINGS ADD CHICKEN NUGGETS and to optimise add on sales Add extras Add extras Review your Review your ADD CHICKEN STRIPS ADD DESSERT YES PLEASE order and pay order and pay CARD ONLY CARD ONLY NO THANKS Review order • Technology being developed with plan to trial in Main menu and pay BACK CANCEL other formats BACK CANCEL YOUR ORDER YOUR ORDER Total £X.XX View full order Total £X.XX View full order 5 4 20 SSP: The Food Travel Experts 2 Grow profitable new space • Very strong performance, 7.1% net gains Areas of Focus • Successful growth in existing sites, new New units within existing sites sites and new markets • New contracts/openings will materially Existing markets, new sites differ from year to year • Impact on P&L in first year varies based on type and timing of openings New markets • Disciplined approach to new business • Renewal rate in line with plan High renewal rate 21 SSP: The Food Travel Experts Growing the business – progress since IPO Sales Asia Pac • Significant progress since the IPO to develop internationally 280% • Asia Pac and North America have seen high levels of unit and site growth • Expansion into new countries (e.g.