Preliminary Results Presentation 2016

www.foodtravelexperts.com

TheFoodTravelExperts

SSPGroupplc

SSP:TheFoodTravelExperts

29November2016

AnnualResults2016

Presentationstructure

1. Grouphighlights KateSwann

2. Financialreview JonathanDavies

3. Businessreview KateSwann

4. Q&A


Grouphighlights

• Strongfullyearperformancewithoperatingprofitup24.6%atactualexchangerates,18.2%atconstantcurrency

• Like-for-Likesalesup3.0%

• Netnewspacegrowthat1.7%

• Strongoperatingmargingrowthof70bps

• Strategicinitiativesdeliveringfurthergrowthandefficiency

• EPS15.5p,up26%

• Fullyeardividend5.4p,up26%

• Contractwinsandmediumtermpipelineencouraging

• Ongoinginvestmentinthebusinessanditsmanygrowthopportunities


Financialreview


JonathanDavies,CFO

AnnualResults2016

Groupfinancialoverview


Change(%)

£m 2016 2015 ConstantCurrency

ReportedFXRates

Revenue 1,990.3 1,832.9 5.0% 8.6%

LFLSalesGrowth 3.0% 3.7% n/a n/a

OperatingProfit* 121.4 97.4 18.2% 24.6%

ProfitBeforeTax* 107.5 82.0 n/a 31.1%

Earnings pershare(p)* 15.5 12.3 n/a 26.0%

NetDebt (317.4) (319.8) n/a 0.8%

*UnderlyingexcludingamortisationofintangibleassetscreatedatacquisitionofSSPGroupbyEQTin2006

2016LFLsalesgrowth


0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

Q1 Q2 H1 Q3 Q4 H2

Note:Samestorelike-for-likesalesgrowthatconstantcurrency

3.3%2.9%

LFLS

alesGrowth(%

YOY)

FY16

Revenuegrowthof5%


ChangeatConstantCurrency LFLSales NetContractGains/(Losses) TotalRevenue

UK 3.1% (0.5%) 2.6%

Continental Europe 2.8% (1.7%) 1.1%

NorthAmerica 7.5% 13.1% 20.6%

RestofWorld (2.1%) 14.1% 12.0%

Group(ex.LeapYear) 3.0% 1.7% 4.7%

LeapYear n/a n/a 0.3%

ReportedGrowth 5.0%

Operatingprofitgrowthof18.2%


OperatingProfit* Change(%)


ReportedFXRates

UK 66.4 52.7 25.8% 26.0%

Continental Europe 60.1 53.5 3.9% 12.3%

NorthAmerica 12.5 3.5 231.4% 257.1%

RestofWorld 8.6 14.6 (44.5%) (41.1%)

Non-attributable (26.2) (26.9) 2.6% 2.6%

Group 121.4 97.4 18.2% 24.6%

*Operatingprofitisunderlying,atactualcurrency

UKincludesRepublicofIreland

Operatingprofitmarginupby70bps


YOYbpsChange


ReportedFXRates

Revenue 1,990.3 1,832.9

GrossProfit%Sales

1,353.868.0%

1,228.667.0% 70 100

Labour Costs%Sales

581.629.2%

541.729.6% 30 40

Concession Fees%Sales

349.617.6%

311.617.0% (50) (60)

Overheads%Sales

222.411.2%

205.011.2% 10 -

Depreciation&Amortisation%Sales

78.84.0%

72.94.0% 10 -

OperatingProfitOperating Margin(%)

121.46.1%

97.45.3% 70 80

Note:UnderlyingexcludingamortisationofintangibleassetscreatedatacquisitionofSSPGroupbyEQTin2006

Netprofitup26.3%


£m 2016 2015 Change (%)

OperatingProfit* 121.4 97.4 24.6%

NetFinancing Cost (15.2) (17.0)

ShareofAssociates 1.3 1.6

ProfitBeforeTax* 107.5 82.0 31.1%

Tax (24.2) (16.9)

Non-ControllingInterests (9.8) (6.9)

NetProfit* 73.5 58.2 26.3%

Earningspershare(p)* 15.5 12.3 26.0%

Dividendpershare(p) 5.4 4.3 25.6%

*UnderlyingexcludesamortisationofintangibleassetscreatedatacquisitionofSSPGroupbyEQTin2006

Freecashflowof£65m


£m 2016 2015

OperatingProfit* 121.4 97.4

Depreciation&Amortisation 78.8 72.9

WorkingCapital 3.8 5.3

CapitalExpenditure (95.9) (80.7)

NetTax (20.0) (17.3)

InvestmentinJV (4.7) -

Other (5.1) (6.8)

OperatingCashFlow* 78.3 70.8

NetFinancingCosts (13.3) (16.1)

FreeCashFlow* 65.0 54.7

*Underlying

Netdebtof£317m


£m Leverage(Net Debt/EBITDA)

OpeningNetDebt(1October2015) (319.8) 1.9x

FreeCashFlow 65.0

Dividend (22.3)

Impactofforeignexchangerates (39.1)

Other (1.2)

ClosingNetDebt(30September2016) (317.4) 1.6x

Acquisitionof49%stakeinTFS

• SSPcreatinga49%JVwithTravelFoodServices

• Initiallyacquiring33%,then16%YE2018

• Netconsiderationc£58m,c10.5x2017EV/EBITDA

• SSPwillhavemanagementandoperationalcontrol

• SSPwillfullyconsolidateTFS

• SSPwillgrossupTFS’JVs,noeffectoneconomicinterestornetincome


AllfiguresbasedonanexchangerateofIndianRupeestoSterlingof81.9.

TFSYearended31March£m

Proportionatelyconsolidated

Fullyconsolidatedproforma

2016 2017estimate

2017estimate

Revenue 41.7 56.9 69.6

EBITDA%Sales

8.320%

11.320%

13.820%

Depreciation%Sales

(2.8)5%

(3.5)5%

Restructuring (0.5) (0.5)

EBIT 8.0 9.8

(2.7)34%

(3.3)34%

Minorities (3.6)67%

(4.8)73%

Netincome 1.7 1.7

Tax

Financialsummary

• RobustLFLsalesgrowthof3.0%

• Netcontractgainsstrongerat1.7%

• Strategicprogrammes deliveringstrongoperatingmargingrowth(up70bps)

• Operatingprofitup18%

• EPSup26%

• Finaldividendpershareof2.9p,bringingfullyearto5.4p


Businessreview


KateSwann,CEO

AnnualResults2016

SSPbusinessfundamentals

• Multiplestructuralmarketgrowthdrivers

• Marketleaderinattractivechannelsandregions

• Strongbusinessplatformcombininginternationalscaleandlocalexpertise

• 5keyleverstodrivegrowthandefficiency

• Salesgrowth,marginexpansionandstrongcashgeneration


UKupdate

• 39%ofSSPrevenue

• Strongpresenceinrailandair

• 2.9%salesgrowthand25.8%operatingprofitgrowth

• Respondedwelltomoreuncertainmarket

• Strategicinitiativesdelivering

• Focuson‒ Strategicinitiatives– globaltestbed‒ Highrenewalrate– successfulyear‒ Furtherbranddevelopment‒ Selectivenewbusiness


Revenue

010203040506070

2012 2013 2014 2015 2016

£m

640660680700720740760

2012 2013 2014 2015 2016

£m

Operatingprofit

Note:Allfiguresinconstantcurrency

0

10

20

30

40

50

60

2012 2013 2014 2015 2016

£m

660680700720740760780

2012 2013 2014 2015 2016

£m

ContinentalEuropeupdate

• 39%ofSSPrevenue

• Strongpresenceinrailandair

• Solidperformancegivenexternalfactors

• 1.4%salesgrowthand3.9%operatingprofitgrowth

• Regionaldifferencescontinuedthroughoutyear

• Focuson‒ Efficiencyandflexibilityinchallengingmarkets‒ Highrenewalrate– successfulyear‒ Selectivenewbusiness‒ Mobilisationofnewcontracts


Revenue

Operatingprofit


(5)

0

5

10

15

2012 2013 2014 2015 2016

£m

050

100150200250300

2012 2013 2014 2015 2016

£m

NorthAmericaupdate


Revenue

Operatingprofit

• 13%ofSSPrevenue

• 21%salesgrowthand231%operatingprofitgrowth

• Exclusivelyairchannel

• Opportunitytogrowshare

• Focuson‒ Profitablenewbusiness‒ Mobilisingnewcontractsquicklyandefficiently‒ Investingininfrastructureandpeopletosupportgrowth

‒ Generatingefficienciesasbusinessgrows


0

5

10

15

20

2012 2013 2014 2015 2016

£m

0

50

100

150

200

2012 2013 2014 2015 2016

£m

RestofWorldupdate

• 9%ofSSPrevenue

• Focusedonairchannel,initialtrialsinrail

• 12.3%salesgrowthandprofitinlinewithexpectations

• Regionaldifferences‒ Externalfactorsimpactinge.g.Egypt,China‒ Continuedstronglike-for-likegrowthelsewhere

• Focuson‒ Profitablenewbusinessdevelopment‒ Selectivegeographicexpansion‒ Infrastructureandpeopletosupportgrowth


Revenue

Operatingprofit


Ourfocusremainsonfivekeyleverstodelivervalue


1 Optimiseouroffertobenefitfromthepositivetrendsinourmarkets

Growprofitablenewspace

Optimisegrossmarginandleveragescalebenefits

Runanefficientandeffectivebusiness

Optimiseinvestmentusingbestpracticeandsharedresource

2

3

4

5

Optimisingouroffer

• LFLgrowthof3.0%

• Regionalvariationinperformance

• Geographicdiversification

• Underlyingpositivetrendsintravelchannels

• Strategicinitiativesdeliveringwell


AreasofFocus

Improveranges

Optimisepriceandpromotion

Upselling

Maximiseuseofspace

Focusoncategoryaswellasbrandperformance

1

Optimisingouroffer:CaseStudy– Ritazza premiumisation

• Researchindicatedopportunity

• Breakfast,muffins,salads,paninis/baguettes

• Newpremiumrangebranded‘FineFoods’

• Trialsdelivereddoubledigitfoodsalesuplift

• RolloutDecember/January


Optimisingouroffer:CaseStudy– Millie’sCookies

• Millie’s– strongbrandamongstkids/teenagers

• Developedonlineofferin2014

• Introducedhomebakedproductthisyear‒ 3bestsellingvarieties‒ Frozenforconvenience

• Distributionextended


Growprofitablenewspace

• Strongperformance,1.7%netgains

• NewbusinessfocusedinUSA,AsiaPacific

• Successfulgrowthinexistingsites,newsitesandnewmarkets

• Encouragingpipeline

• Disciplinedapproachtonewbusiness

• Renewalrateinlinewithplan


AreasofFocus

Newunitswithinexistingsites

Existingmarkets,newsites

Newmarkets

Highrenewalrate

2

Newopenings:HongKong,WestHall


• SSPAsiahasbeenpresentinHKIAsince1998

• HKIApax 68million

• 28units,22brands,2lounges

• Wonanadditional6unitsinWestHall

• NewbrandsincludeBaikohkhen,SchoolFood,YungKee,OldTownWhiteCoffeeandStreetFood

NewSpace:India– newcountryforSSP• InlinewithstrategyoutlinedatIPO

• AttractivemarketwithsubstantialPAXgrowth

• Materialinfrastructuregrowth

• Jointventure- combinesSSP’sinternationalexpertiseandTFS’localknowledge

• TFSwellestablishedbusiness

• 170outletsmainlyinairports

• Goodportfolioofbrandsandmanagementteam

• Strongplatformforgrowth


Goodprogressoncontractwinsincluding:


Hangzhou2unitsEvenes

2unitsTorp6units

Helsinki4units

SSPpresence

Vancouver5units

DonMueang20units

Bergen3units

Newark3units

Frankfurt9units

Dusseldorf8units

SanFrancisco2units

Portland1unit

AbuDhabi10units

Shanghai2units

Paris–Chatelet3units

Sanya4units

Minneapolis3units

Phuket9units

Brandportfoliocontinuestodevelop

• BrandsdriveLFLsales,newbusinessandrenewals

• Developingourportfoliogloballywithinternationalandlocalbrands

• Furtherdevelopmentofownbrandsandbespokeconcepts

• Workingwithmorehighprofilechefsandlocalheroes


Furtherprogressoptimisinggrossmargin

• Grossmarginimprovedby70bps

• Keyinitiativesmakinggoodprogress

• Procurementdisciplinesandreciperationalisation progressingwell,butplentymoretodo

• Goodprogressonwasteandlossmanagement,furtherinvestmentthisyear


AreasofFocus

Procurementdisciplines

Simplifyandstandardiserecipes

Reducewasteandlosses

3

Grossmargins– Improvingtheservingprocessondraughtbeers


• DraughtbeersimportanttoSSPglobally

• Trialofsmartstock-takingforbeerssoldontapat3USairports

• Providesreal-timeinventoryandwastereports

• Helpsquantifythegapbetween‘poured’and‘sold’beer

• Successfultrialresults

• Rolloutto24moreairportsintheUSandnowtriallinginUK

Beersbrandslisted

Testunitname

Beerbrandlisted

xxxxxxxx

xxxxxxxx

xxxx

xxxx

Encouragingprogressonoperatingefficiency

• Totallabour costs30bpsimprovement

• Overheads10bpsimprovement

• Opportunitytoimproveserviceandefficiency

• Systemsdevelopments– forecastingandscheduling

• Technologytoimproveefficiency

• Multi-yearprogramme


4

AreasofFocus

Serviceoptimisation

Improveforecastingandscheduling

Employtechnologytoimproveefficiency

Improvereportingandaccountability

Operatingefficiencycasestudy– improvingforecastingandscheduling


• Improvedsalesforecastingandlabourscheduling

• Successful pilotinUKfor‘BetterServicePlanning’

• Newsystem/toollaunchedto50unitsacrosstheestate

• Encouragingresultswithlabourandsalesbeingmorecloselyrelated,drivingbetterserviceandefficiency

• Rolloutto350+UKunitsearly2017

• EarlyworkoninternationalpilotcommencesSpring2017

..andManagerscanthenclearlyseewhentoschedulehours

Man hrsper time

slot

3hr time slot

5am-8am 8am-11am 11am-2pm 2pm-5pm 5pm-8pm 8pm-11pm

Too many hours scheduled

Not enough hours scheduled

= Target # of man hours = # of man hours scheduled

Daily sales forecasting algorithm

Expected in-day

demand pattern

Man hours, by task type

Newanalyticsaccuratelydefinethetargethourstouse…

Optimisinginvestmenttodrivereturnsusingbestpracticeandsharedresources

• Differentsystemsandprocessesdevelopedhistoricallyindifferentregions

• Clearsharedserviceopportunityinback-of-housefinance

• Initialanalysissuggestedoutsourcingbestoption

• Tenderprocesscompletedandvendorselected

• 2sharedservicecentresnowoperating

• InitialtrialrunforUKinJanuary

• UK,GermanyandUScomplete,SwedenandNorwayinprogress


5

Summaryandoutlook• Strongfullyearfinancialperformance,profitup18%

• LFLsalesinlinewithplan

• Netnewopeningsaheadoforiginalplan

• On-goinggoodprogressonmarginandefficiency

• EPS15.5p,up26%

• Fullyeardividendof5.4p,up26%

• Pipelineencouraging

• Focusondeliveringvalueforourshareholders


Q&A


Annualresults2016

DisclaimerCertainstatementsinthepresentationmayconstitute“forward-lookingstatements”.ThesestatementsreflecttheCompany’scurrentbeliefsandexpectationsandarebasedonnumerousassumptionsregardingtheCompany’spresentandfuturebusinessstrategies andtheenvironmenttheCompanywilloperateinandaresubjecttorisksanduncertaintiesthatmaycauseactualresults,performanceorachievementstodiffermaterially.Forward-lookingstatementsinvolveinherentknownandunknownrisks,uncertaintiesandcontingenciesbecausetheyrelatetoeventsanddependoncircumstancesthatmayormaynotoccurinthefutureandmaycause theactualresults,performanceorachievementsoftheCompanytobemateriallydifferentfromthoseexpressedorimpliedbysuchforwardlookingstatements.

ManyoftheserisksanduncertaintiesrelatetofactorsthatarebeyondtheCompany’sabilitytocontrolorestimateprecisely,suchasfuturemarketconditions,currencyfluctuations,thebehaviour ofothermarketparticipants,theactionsofregulatorsandotherfactorssuchastheCompany’sabilitytocontinuetoobtainfinancingtomeetitsliquidityneeds,changesinthepolitical,socialandregulatoryframeworkinwhichtheGroupoperatesorineconomicortechnologicaltrendsorconditions.Asaresult,youarecautionednottoplaceunduerelianceonsuchforward-lookingstatements.Additionally,forward-lookingstatementsregardingpasttrendsoractivitiesshouldnotbetakenasarepresentationthatsuchtrendsoractivitieswillcontinueinthefuture.Forward-lookingstatementsspeakonlyasoftheirdateandtheCompany,anyothermemberoftheGroup,itsparentundertakings,thesubsidiaryundertakingsof suchparentundertakings,andanyofsuchperson’srespectivedirectors,officers,employees,agents,affiliatesoradvisersexpresslydisclaimanyobligationtosupplement,amend,updateorreviseanyoftheforward-lookingstatementsmadeherein,exceptwhereitwouldberequiredtodosounderapplicablelaworregulatoryobligations.Itisuptotherecipientofthispresentationtomakeitsownassessmentastothevalidityofsuchforward-lookingstatementsandassumptions.Nothinginthispresentationshallexcludeanyliabilityunderapplicablelawsthatcannotbeexcludedinaccordancewithsuchlaws.


Documents

Preliminary Results Presentation 2016