SSP Group (SSPG) Trading Update summary

Financial performance and trading highlights

• Q4 revenue grew 15% year-on-year, with 6% like-for-like growth, 5% from net gains, and 4% from acquisitions.

• Full-year revenue reached £3.5bn, up 17% year-on-year, with operating profit expected at £210-220m, a 30% increase, and operating margin at 6%, a 50bps rise.

• H2 operating profit expected to rise from GBP 40m in H1 to GBP 170-180m in H2, with over 30% year-on-year profit growth and 100bps margin improvement.

• EPS for the year anticipated at approximately 10p, aided by modest tax and interest benefits.

• Net debt projected at £610-630m, leverage at 1.8× net debt/EBITDA, within the target range of 1.5-2.0x.

Regional performance and strategic actions

• North America, UK, and APAC & EEME delivered strong revenue and margin growth, with recent acquisitions fully integrated and no further M&A planned for FY 2025.

• UK market reset led to 12% sales growth in Q3 and Q4, with 9% like-for-like, and strong profit and margin conversion, supported by air sector demand and reduced rail disruption.

• APAC & EEME saw 30% sales growth in Q4, driven by Australia, Hong Kong, and Egypt, with effective integration of the ARE acquisition.

• Continental Europe underperformed due to lower-than-expected demand during the Paris Olympics, contract timing, industrial action, and ongoing losses in the German motorway business; leadership changes and cost actions are underway.

• Satya Menard was appointed CEO of Continental Europe to drive profitability improvements, with immediate focus on cost reductions and operational optimization.

Outlook and capital allocation

• FY 2025 focus is on optimizing value from existing investments, with lower CapEx and no new M&A expected.

• CapEx for FY 2025 will be below GBP 280m, with a significant portion already contracted; further reductions possible.

• Leverage expected to reduce further, with potential for future shareholder returns considered once at the lower end of the target range.

• No material restructuring or exceptional costs anticipated in Europe.

• Currency headwinds are expected to negatively impact revenue, EBITDA, and operating profit by up to 5.7% in FY24 and 4.5% in FY25 if current rates persist.