Ssp Group Stock

Okay. Are we right to get started? Yes.

Okay. Good morning, everyone, and thank you for joining us here today, either in person or on our live webcast. I'm Patrick Coveney, the Group CEO of SSP, and I'm joined by Geert Verellen, our Group CFO today. In a minute, I will briefly summarize the progress that we've made in the first half. Geert will then cover the financials before I return to provide you with more detail on our delivery against 'Focus 26' and our outlook for the remainder of FY '26.

We said in December that we had to do more as a team to strengthen operational performance and to create value for shareholders. We shared our 'Focus 26' plan to drive sustainable improvements in profitability, cash generation and returns on capital, structured against the 5 pillars that you see on this slide. To be clear, there is more that we can and will do, but we're seeing the benefits of that focus coming through in what we would characterize as a resilient first half performance with tangible progress against each element of the strategy.

Sales for the first half have been where we planned them to be as we delivered like-for-like sales growth of 5% for the group in quarter 1 and critically sustained it in quarter 2. Delivering a stronger, more profitable and more focused Continental European business is paramount. With the actions that we've already delivered and with more in flight there already, we're on track to deliver the planned increase in operating margin from 2.2% to over 3% for this year. And we are also setting out today the future direction for our European Rail business following our wide-ranging review in that region with the implementation of that plan now getting underway. We recognize the critical role of productivity and cost efficiency in delivering 'Focus 26' and we've embedded the corporate overhead reduction plan that we shared last year to deliver annualized savings of GBP 30 million. Importantly, and I stress this, we are also now delivering a targeted structural reduction in our minority interest charge across the group.

Shareholders rightly expect strong conversion of sales and efficiencies into returns. And for the full year, we are working on stepping up the return on capital employed metric beyond last year's 18.7% level, and we're on track to do so with a meaningful improvement of 70 basis points year-on-year in the 12 months to the end of March. Our program of activity to drive stronger profit to cash conversion is progressing well, notwithstanding some planned one-off outflows that we had in the first half. We're running SSP more and more as a cash-first business.

And based on current market conditions, we are well set to deliver on our pre-dividend, pre-buyback, free cash flow target of over GBP 100 million for the year. Let me now hand you over to Geert to talk through the numbers of the first half in more detail.

Thank you, Patrick, and good morning, everyone. I will start with the key highlights of this past year. And as in prior years, we present the metrics before any impact of IFRS 16. We grew revenues by 6% to GBP 1.8 billion and increased underlying operating profit by 18%, with operating margin expanding by 30 basis points. This, in combination with higher income from associates and lower minorities resulted in earnings per share of 1.1p, whereas in prior year, we posted a loss.

Better operating profit and lower capital expenditures were partially offset by the usual seasonal impacts and planned one-off outflows that Patrick referenced. This all resulted in free cash flow before dividends and share buyback a bit lower than last year. Leverage expressed as net debt over EBITDA was 2.2x, the same as last year at this time.

Consistent with our dividend policy, strong despite the impact of the Middle East towards the end of the half year. Later on in the presentation, Patrick will put this all in perspective of our group performance. Net contract gains added 2% to sales growth, again, as we prioritized investment in our Asia Pac and EEME and North America regions. As in prior year, I would like to point to the negative 1% that you see in the column other on this slide. This represents the impact of the exit of our German motorway services business and the deconsolidation of our joint venture with Adani Airport Holdings in India.

On the far right of the slide, you also see the like-for-like sales for the group as a whole have been solid at 3% in the first 6 weeks of the second half. This next slide shows how like-for-like sales evolved during the first 6 months of FY '26 by region and into the start of this half. Sequential improvements are clearly visible in the U.K. and North American regions as well as stable sales growth in Continental Europe. The impact of the Middle East crisis is also visible with a drop to 8% like-for-like in quarter 2 in the Asia Pac and EEME regions, as I said, mostly as a result of the last weeks of the half year.

In the first 6 weeks since April 1, though, while we have seen stable sales trends across the majority of the group, passenger numbers in the key hubs across Asia Pacific and into Eastern Europe have contracted, leading to a 4% decline in like-for-like sales in the region. And Patrick will come back to set out the components of this and how we are thinking about this later on. In this half year, we generated positive EPS versus a loss last year. You have heard us say before that we are focused on creating value down every line of the income statement. And looking at how we build EBIT over time will only tell you part of the value creation story.

This slide visualizes this clearly as it shows the different building blocks of EPS all through the income statement. It shows that improving EBIT is important, but the improving results coming from associates as well as a decrease in the profits that we share with minorities, i.e., keeping more for the SSP shareholders are as important. We expect this minority share to continue to trend downward as a result of structural changes to our operations in North America as well as due to the fact that growth in our Indian business is increasingly coming through the associates line.

Later in the presentation, Patrick will double-click on this when he reviews the North America region. Underlying operating profit grew by 18% to GBP 50 million, with an increase in the underlying operating margin by 30 basis points at constant exchange rates.

In Continental Europe, we're particularly encouraged by the significant 32% reduction in operating losses to GBP 9 million. Operating margin in this region improved by 70 basis points. And the plan we put in place in this region and that we extensively commented on during the prelims is the driving force behind this improvement. Patrick and I are fully supportive of the great work that Satya and his team are doing there. The current momentum and focus that we have as a leadership team gives me confidence that we will end the year with an underlying operating profit margin in that region in excess of 3%.

In the U.K. and Ireland region, the business continues its momentum and is making strong progress in its 'Focus 26' initiatives. We continue to benefit from the strong concepts we operate there as well as the success of the M&S refreshes we did over the last years. In fact, in the half, the strong performance of the business is actually masked by the impact of positive one-off elements in the first half of 2025. Underlying operating profit decreased to GBP 22 million as a result of these in addition to a higher depreciation charge.

In the APAC and EEME region, we continue to benefit from profitable sales growth in Australia and Egypt, although this was partially offset by the effect of deconsolidating some of our units in India that I already referenced.

As a reminder, upon this consolidation, SSP's share in the results of these units is reported in the associates line in the income statement and continues to contribute to the earnings per share number. Towards the end of the second quarter, the Middle East conflict put pressure on the profit momentum of this part of the region. Our group earnings per share flipped from a loss last year of 0.4p to a profit of 1.1p in this year. As you can see on the slide, this is mainly due to the higher underlying operating profit, higher income from associates and lower minorities and also lower financing costs, reflecting the results of our refinancing transactions last year. As you will have seen, our reported operating profit was GBP 62.6 million, reflecting approximately GBP 11 million of non-underlying items on a pre-IFRS 16 basis.

Approximately GBP 6 million of these were cash in the half year. As flagged at the prelims, these exceptionals are much lower than what we experienced in the prior year. These exceptional charges can be broadly bucketed as follows. The first bucket is related to the renegotiation of our contracts at one of the biggest railway stations in Paris. This is a major stepping stone for us on our way to structurally better margins in our French rail business. The charges considered exceptional here are the bulk of the impairments of GBP 2.7 million, the one-off site exit costs of GBP 11.3 million and part of what is in the GBP 2 million restructuring bucket in total relating to that railway station.

I would also like to point to the GBP 6.7 million exceptional credit that you see on this slide, and that is labeled IFRS 16. And that is the result of the derecognition of certain liabilities as part of this railway station agreement in France as well as some residual elements related to the exit from the Italian market that we announced last year. The remainder of the non-underlying items is related to the continued classification as Software-as-a-Service IT investment that can no longer be capitalized as an asset, and we continue to call them out as non-underlying expenses in our P&L.

For the remainder of the year, we expect to continue to incur some non-underlying costs, albeit at a lower rate than in prior year. Components driving that will be the planned consolidation of the 2 corporate offices and resulting restructuring expense in France and the continued investment in Software-as-a-Service programs in IT. Our expected cash exceptionals related to all of this are already included within our full year guidance.

The next slide shows the sources and uses of cash and how they impact our balance sheet. As anticipated, net debt increases at the half year, reflective of the seasonality of our business. Leverage at the half year stands at 2.2x net debt over EBITDA, and that is the same level that we had last year. Free cash outflow before dividends and buyback amounted to GBP 176 million compared to an outflow of GBP 117 million in the prior year.

Lower CapEx, lower tax payments were offset by higher financing costs and the timing of minority interest cash outflows. You also see the impact of the share buyback that we started in this half year. By the end of the half year, we had a cash outflow of approximately GBP 43 million incurred so far with regard to the buyback. The working capital outflow of GBP 124 million in the first half of this year that you see on the slide is mainly due to the usual seasonality plus some one-off planned outflows. These include less usage of supply chain financing than at the year-end and the settlement of payments to M&S that were delayed at the year-end as a result of M&S cyber incident last year.

Other factors include the temporary buildup of a receivable in our start-up services aggregation platform in India. We expect to recover this by the end of the year. Our Indian business also had to invest in rent deposits as it won an important tender in Delhi's newest airport, Noida.

Lastly, the gradual exit from our motorway -- motor services business in Germany has a negative impact on working capital as well. As a reminder, we expect to complete this exit by the end of this calendar year. In short, the seasonal nature of our business, combined with the above elements, masks the great progress that we are making when it comes to cash generation and more specifically, what we are doing to make the organization focus more on the importance of cash.

On the next slide, I wanted to share with you some more insights on this. At the prelims, you remember that we flagged significant cash generation opportunities and more specifically in working capital. Since then, we have made progress in instilling in what should become an intuitive cash culture across the regions. We've introduced cash flow and working capital metrics to be looked at during monthly reviews. We have created a framework to create visibility on the drivers of free cash flow. And most importantly, we have introduced free cash flow as an incentive measure for management teams across the group this year. We have started to improve the capability or cash literacy in the organization. The U.K. team, for example, has rolled out a cash is king training course to sensitize team members about cash and clarify how they can impact cash generation.

In the group finance team, we now support the regional dashboards and ensure adequate target setting and performance management is kept in place. We've also clarified the opportunity we can go after. We have developed a dashboard tool that has helped teams to identify where the potential lies and where we should focus. And given the fact that our group is very diverse, those opportunities are not everywhere the same. The focus on top line growth and return on invested capital is now complemented with a strong focus on cash generation. So what are some of these areas that we're now zooming in on?

As we've shared with you before, a lot of the opportunity lies in core working capital management, like in the purchase-to-pay cycle, in challenging payment frequency, challenging the existence of prepayments and renegotiating payment terms. As you can imagine, this is a project of many tens of small initiatives that when they all come together, will have a meaningful impact on cash generation. With regard to receivables, we found opportunities in how we bill and collect supplier and marketing income and we're shortening the time between collection and income recognition is now key.

Our team in France has stronger processes for purchase income, cash collection, driving an improvement of GBP 7 million from prior year. Our U.S. team is making a lot of progress in catching up on-time collection of JV capital contributions. And in Thailand, for example, our team is working hard to convert cash deposits, a common practice in the country into bank guarantees. And they plan to convert approximately GBP 2 million of those deposits into guarantees and hence, cash back to us by the end of the year.

So while we're working hard to embed all of these cash opportunities, we continue to use supply chain financing initiatives where it makes sense. As a reminder, this form of financing comes at a cost lower than our revolving credit facility. At the half year, we had borrowed approximately GBP 145 million under this program, down from GBP 154 million at the year-end.

So the progress we are seeing gives me the confidence that we will generate a working capital inflow for the year as a whole and assuming a stable operating environment through H2, be able to generate the GBP 100 million of the free cash flow before dividends and share buyback we set out at the start of the year. CapEx for the half year was GBP 93 million and consistent with our planning assumptions for the year. We plan to end the year with less than GBP 200 million in CapEx. We're now returning to more normalized levels at approximately 5% of sales and still supporting a healthy combination of renewals, new contracts as well as technology investments.

We continue to challenge our teams on the strategic requirement of certain capital investments, their ability to contribute to EBIT in the short term and ROIC Return on Invested Capital in the long term. We continue to refine the way we look at capital allocation and especially what are the most relevant measures to help the regional teams prioritize investment between the ample opportunities we see in our markets across the world.

Our capital allocation priorities are unchanged. First is our aim to maintain a sustainable balance sheet. This business operates best through cycles with leverage somewhere between 1.5 and 2 turns. And of course, considering seasonal fluctuations in a business like ours like you see here at the half. Second is to continue to fund profitable organic growth.

We are firmly focused on generating improving returns out of the existing assets we have and locations and are not planning for M&A at this time. Organic growth, most particularly in markets and airports where we already have a strong presence, creates the best platform from which we can improve our cash conversion. We continue to target a dividend payout ratio of between 30% and 40%, and we see returning cash to shareholders via a buyback as an important element of our financial model.

Our share buyback program launched last October continues. And up to last week or early this week, we had used about 57 million to purchase about 4% of our outstanding share capital, which is approximately 32 million shares. In summary, I'm happy with the results of the first half of the year. Sales growth is good and strongly supported by like-for-like sales. And while cash is top of mind, let us not forget that it is the optimization of all levers available to us that will increase our cash conversion. First of all, we need to be maniacally focused on the operational excellence because that is the biggest and driving -- and best driving way for cash generation. Add to that working capital management, sensible capital investments, managing our relations with associates and minorities and all other cash enablers.

There's more work to do, but the momentum is there. And with that, I will turn it back to Patrick.

Okay. Thanks, Geert, for setting out the first half numbers, but also for your strong leadership, what's in what's now doesn't feel like this, I'm sure, but a year into your SSP journey. I wanted to turn now to how we're delivering the 'Focus 26' initiatives across the Group's 4 regions in a little more detail. However, before doing that, let me just simply state this. We're controlling what we can control, which is a great many things actually, and delivering the 'Focus 26' plan that we set out for you in December.

So let's start with North America. In North America, we've made strong progress against our plan on all fronts. Looking back for a second, in my first 3 years at SSP, our strategy there was centered on profitably, but rapidly building out our share by growing the number of airports in which we trade. And we stepped up our airport presence from just over 30 airports at the start of 2022 to approximately 60 today. Our focus now is on more balanced growth by sustainably stepping up like-for-like sales in our expanded estate, extending the number of restaurants across our current airport footprint and more selectively adding new airports to our network.

We strengthened our like-for-like sales trajectory through the half with a particularly strong finish to quarter 2, which we've sustained into quarter 3. To do this, we're making improvements across our customer propositions, including refreshing our range of grab-and-go sandwich options and a strong reset of bakery propositions across the estate and continued concept innovation everywhere. The North America team has also been at the forefront of our group-wide focus on raising operating standards with a dedicated operational excellence team who are setting operating standards across the network and the deployment of a program internally branded as Ready Set Go for shift leaders to better embed operational routines at the start of every shift.

These airport and unit level efficiency efforts have been allied with a reset of overheads in America, and we've reduced our noncustomer-facing roles in the region by 11% year-on-year. Bringing all of this together, we delivered a strong uplift in both sales and EBIT. However, and I mentioned this right at the start, it's also worth highlighting that more of this benefit is accruing to SSP shareholders because we've also reduced our minority interest charge in America by 40% in the half. There are 3 reasons for this reduction.

First, there is a changing federal, state and city regulation environment now, which allow for a lower level of minority interest business participation in new tenders.

Second, with us now having a much broader and deeper set of airport coverage with stronger relationships than ever before, we can selectively grow out incremental units in existing airports with more targeted and typically lower levels of partner participation in doing that.

And thirdly, we've sharpened up our cost allocation framework and ways of working with our equity partners everywhere. Importantly, we see each of these 3 trends as sustainable going forward, which will facilitate a stronger conversion of EBIT to net income for our shareholders. If I turn now to the U.K. and Ireland, we've traded well right through the half, particularly in the air channel, but also with M&S performing strongly across all channels. The ongoing refresh program that we have with our M&S units, combined with the brand's quality and familiarity has driven double-digit like-for-like sales across this format.

In the air channel, our bar concept innovation is starting to drive performance. A good example would be The Reserve, our new premium bar in Dublin, which is already trading strongly. And we're also making improvements across our range of regional airport propositions more broadly. For example, in Belfast and Leeds Bradford Airports, we're currently opening 7 and 9 units, respectively, on long-term contracts, where we're operating in each case, the majority of the F&B offer in both airports that's driving not only customer experience, but also enabling efficiencies and economies of scale for both us and our clients.

These renewals are translating into higher sales and stronger customer propositions. Our reputation tool that you've heard me describe before, drawing on 12,000 pieces of discrete customer feedback in the U.K. per month now scores us at 4.6 out of 5, reflecting our improvements in availability, in speed of service and overall food traveler experience. Alongside this work on proposition, our team is focused on the everyday disciplines of daily delivery, including putting in place dedicated new format teams across our London estate who are raising operating standards by format and the deployment of our workforce management system, which has been built in partnership with our technology team, which is driving efficiencies in opening hours and matching our labor schedule to unit level demand in 15-minute increments.

The momentum in our U.K. and Ireland business is strong. But as Geert outlined earlier, it isn't fully reflected in the reported EBIT progression half year on half year due to the prior one-off credits that he referenced in the first half. But overall, we expect a strong year for the U.K. Our Asian and Middle Eastern businesses delivered the group's strongest sales performance with like-for-like growth of 9%, underlying the long-term structural attractiveness of our businesses in these regions. This growth was achieved notwithstanding the recent conflict in the Gulf, which I'll come back to shortly.

Across the region overall, returns from investments continue to build, namely from the ARE acquisition in Australia and the TG acquisition in Indonesia, which are tracking ahead of business case and contributing progressively more to regional profitability. Lounges remain an expansion opportunity for us in the region. And last month, we opened our first Travel Club Lounge in Bangkok. And in India, our EATS aggregation system, which we've now rolled across our TFS lounges, but also other third-party lounges in India through the first half is now capturing a greater share of the margin that's available to the industry from credit card and loyalty users.

Underpinning all of this is an ongoing focus on cost efficiency with initiatives ranging from a regional supplier consolidation program to an accelerated rollout of digital sales points. Now building profitability in Continental Europe is essential. We're taking the actions required, resetting the cost base, exiting countries, channels, stations and units that we cannot fix and changing leadership where needed. We've got under the bonnet and taken structural actions, not just short-term fixes to permanently reset the economics of the region.

Our Continental European CEO, Satya Menard, spoke to you in December about fixing the large contract at one of our major train stations in France, enabling us to halve the losses from this year-on-year and setting us on course to reach at least breakeven performance in that station in '28.

But we've not stopped there. In the half, we've now addressed 2 further significant loss-making contracts in France. These had similar fixes actually to the December example, resetting baseline rents, closing units which were underperforming and couldn't be fixed. Tackling historically high mags and changing out unprofitable concepts or brands. Combined, the restructuring of these contracts will save in excess of GBP 3 million in this fiscal year. Further progress against the cost elements of our plan include the consolidation of our 2 French corporate offices into one that Geert referenced earlier, the implementation of our workforce management labor optimization tool that we developed in the U.K., but we're now deploying into France and Germany and the continued exit from the final units in the German motorway service channel.

As you know, of course, one of the most profitable ways to drive margin is through driving like-for-like sales. And central to that is the rollout of our point concept in Germany and the building of like-for-like performance as our recently renewed estate continues to mature in the Nordics. So -- there's lots locked into our plan to deliver the second half. Momentum is building, and our actions leave us on track to exceed 3% operating margin in the year. So while we had a plan to further strengthen returns from our European air business, the medium-term prospects for our European rail business in its current form were unacceptably low. So in December, we started a rigorous assessment of all potential value-driving options that were open to us for this part of our business.

Since then, we have tested every option against strict criteria covering feasibility, execution risk and the cash costs and benefits of any prospective changes. On that basis, we ruled out the value destructive options, including all options that would have been available to us for a complete or immediate full channel exit. Simply put, the cash costs of such an exit would have been prohibitive. Instead, we concluded that at its core, the European Rail business could deliver on our returns hurdle, but it needed surgery and the current footprints need a significant reset. So in consultation with our employee bodies, we are now negotiating to exit approximately 1/3 of the units in our estate, the units where the economics are structurally challenged, while retaining the core where scale works, typically at larger, higher density stations.

For the units not exited, we propose implementing site level turnaround plans with defined milestones. If those aren't delivered, these units will be reclassified for exit. Taken together, the benefits will start to be delivered through FY '27 as our actions gather momentum. So what will this business look like post delivery? We've chosen to reset our footprint in European Rail and the outcome will be a smaller, more profitable, higher returning and less capital-consuming business. To be specific, the 1/3 of the estate that we plan to exit represents approximately 110 units and the average sales density for our remaining estate will rise by 25% as we narrow our focus to larger stations where we can achieve scale and to higher returning formats such as QSR, bakery and retail.

Planning ahead, we would expect that the capital expenditure to be deployed into this channel will be approximately half the previous level but lower levels of anticipated renewals and a restrictive approach to capital allocation generally. In combination, these proposed actions will drive returns from the inadequate levels we had since COVID to a level at which our business in this channel is operating at or above our cost of capital. The planned actions are now being embedded into a broader program of enhanced operational intensity for the region and when implemented fully, will enable our Continental European business to build medium-term margins beyond the previously indicated 5% level.

So turning now to outlook. Before I move to a specific discussion on the elements of our outlook for the second half, let me take a minute just to delve a little deeper into the specific impacts on our business of the conflict in the Middle East. First of all, let's recognize there is a war going on, and we have 2,350 colleagues in the directly impacted region. I'd like to thank our leadership and our teams in Abu Dhabi, Saudi Arabia, Egypt and Cyprus for their immense efforts to keep our people, our clients and our units safe through this difficult time. But given the ongoing situation, what's happening in the region is clearly front and center for all of you as well. So it's worth going into the details of what we've seen so far.

At the end of February, as the conflict broke out, we saw a sharp drop in passenger numbers in the directly impacted Gulf markets, but also a meaningful portion of that demand was redirected through other hubs, particularly into the Eastern Mediterranean and the Asia Pacific regions, where we saw strong like-for-like growth sustained, up 14% in both cases.

As we moved into April and early May, the Gulf markets themselves, which represent approximately 2% of group sales, have traded and continue to trade, in fact, at approximately 60% of prior year levels. However, we have now also seen a drop in flights into the surrounding Eastern Mediterranean and Asian regions, which cumulatively represent about 14% of group sales, impacting connecting volumes across the network as well as a reduction in local traffic in many of these airports. So these parts of our business have gone from trading at a 14% like-for-like in half 1 to being essentially flat in half 2 to date.

Clearly, this would be below what we expected it to be at the start of the year. Visibility about what happens in these regions as we go forward through the second half remains limited and uncertain, which is why we're focusing on what we can control through profit protection plans for the second half in the directly affected regions as well as accelerating our 'Focus 26' actions more widely across the group. But fortunately and critically, our diversified portfolio and flexible operating model are giving us at a group level a high level of resilience through this period.

The key point here is that the scale of the rest of the portfolio. Across just over 80% of the business, mainly in North America, U.K. and Continental Europe, aggregate passenger numbers and spend levels are so far largely unaffected, and our 'Focus 26' delivery is strong. And as I hope we've made clear in the preceding slides, we've got confidence in the delivery in those markets because we've got multiple levers in play, commercially, operationally and on cost to keep up momentum and profit conversion where demand remains robust.

Turning now then to the outlook for the group as a whole. As we set out in our release this morning, based on the current operating environment, our expectations for FY '26 earnings per share sit within the range of current market expectations. That's between 13.6p and 14.8p and would represent strong growth on the FY '25 earnings per share level of 11.9p. On the same basis, we continue to expect to improve free cash flow pre-dividend and pre-buyback to deliver the greater than GBP 100 million free cash flow target that we have for FY '26 as we strategically manage our capital allocation and we also expect further progress on the Group's return on capital employed, building on last year's level of 18.7%.

Clearly, if the operating environment were to deteriorate for any reason, such as a resumption of large-scale military conflict in the Gulf, a substantial decline in the availability of aviation fuel or a marked softening of consumer travel sentiment, that would represent a change versus the assumptions that underpin our outlook, and we'd need to revisit where we sit accordingly for those things to happen.

A final point, just for completeness on Travel Food Services, TFS, our business in India. Following the successful IPO in India last July, we continue to consider options to realize value for SSP shareholders, working with our partner to plan to meet the required market requirements for free float over time. The timing here will remain disciplined and market-led with a clear focus on building a balanced forward-looking partnership with K Hospitality while also creating value for SSP shareholders. So clearly, right now, we're operating in an uncertain macro period, but the fundamentals of our business are strong.

Notwithstanding the direct and indirect consequences of the recent Gulf War, which we tried to set out today, we are controlling what we can control, delivering 'Focus 26' and moving SSP forward. Looking ahead, we operate in structurally growing food travel markets with leading share positions in attractive air and leisure segments and with very high levels of contract retention.

Our focus on F&B and our operating capability differentiates us. It is built on deep expertise in complex food travel environments, long relationships with clients and a well-invested platform. Shareholder capital is being deployed strategically and with discipline. And finally, with cash generation now pivoting and growing through this year, after a period of high investment, we have the flexibility to balance our growth with consistent value delivery for shareholders.

Each of the levers that we're pulling at the moment strengthen the foundations of SSP and builds an even stronger platform for future shareholder returns. So thank you for listening to us. I'm just going to sit down and then here and I will take questions from the room and from the call. Sam, are you walking around with the microphones?

Yes.

Can we bring down towards the front? Let's -- yes, let's start with Tim and then James.

It's Tim Ramskill from Bank of America. I have 3 questions, please. The first is just around the kind of working capital dynamics. I guess, firstly, just to confirm, if you can, the scale of what you think the inflow will be for 2026 and then maybe also a sense of the scale of the more medium-term opportunity. Again, just another confirmation around the U.K., where, as mentioned, there were some one-off costs, some one-off nonrepeat items, I should say, from the prior year. Is that all in H1? Or is there anything else in H2? And then I guess, just thinking more broadly about the impact of the current disruption and the Middle East, et cetera.

I guess some of the more retail-focused players would often reference the importance of the source destination or the destinations people are heading to as a driver. Does that have any relevance to you guys at all? Or does it matter if there's a switch, say, more to European travel from other destinations?

I'll do the working capital. Do you want to start with that?

No, you go.

Yes, thank you for that question.

On the working capital, I think if you think about the guidance, the guidance is GBP 100 million free cash flow before dividends and share buyback. And obviously, we have a whole bunch of buckets that will contribute to that. We haven't broken out how we see the source of funding coming from working capital, but it will be a change from last year. So I'll leave it at that. The reason why we do that is because we are really doing fundamental work in improving the cash flow generation and getting the teams up to speed on their understanding of how they need to do this.

I'm very confident that we'll see a different profile by the end of the year from what we've seen last year, but we're not breaking that out at this time. It contributes. It's part of the GBP 100 million, and we're sticking to the GBP 100 million for the year.

Yes. I mean let me pick up the other items. So I don't want to make a big deal about this. But if you looked at last year's results, Tim, on the U.K., you'll see that in the regional overviews, we characterized in the results some operational disruption and some nonrecurring benefits.

And we basically demonstrated that they netted against each other such that the regional performance in each case was reflective of underlying trading. But there were timing differences to that. And so in the U.K., essentially, let me put it this way, almost all of those one-off benefits happened in the first half and almost all of the operational disruption, the largest of which was the impact of -- on our business of the M&S cyber incident happened in the second half.

And so if you net those out, they broadly balanced each other. And so what you'll see here is that we're a little bit behind the reported numbers in the first half. We'll be well ahead of the reported numbers in all likelihood in the second. And the net will be, as I indicated, pretty decent year-on-year performance on all fronts, economic metrics for the U.K. as we anticipate for the full year. On your point on disruption, you can get into kind of greater or lesser details on that. Our general experience is that when people are going on holiday, it doesn't tend to make a huge difference where they're going on holiday too, right?

So if someone is taking a holiday in the Balearics versus, say, Cyprus or the Greek Islands because it's a little bit nearer and they feel a little bit more confident going there, we don't see meaningful differences in the spend in airport before they go. That would be the kind of summary point here. I mean the main -- like I can't stress this enough actually.

The main evidence that sits behind the outlook that we're giving today is our experience of trading the business right now, right? What has happened in the last 6 weeks? How has that played out differently by region? What's that meaning for the shape of our economic model? And how do we then reflect that and roll that forward, recognizing that we there will be big summer upticks in travel. But we're we are not seeing meaningful differences in aggregate level in consumer behavior in the U.K., in North America or in Continental Europe as we roll forward. Is that, of course, subject possibly to change? Yes, but we're not seeing it at the moment, and that's the basis of the guidance that we've given. Jamie Rollo, do you go next?

Jamie Rollo from Morgan Stanley. Also 3 questions, please. Just continuing on, first of all, on current trading, obviously, pretty good figures in those 3 regions in the last 6 weeks or so. To what extent has the M&S cyber incident last year boosted that 11%? If you can give us like an underlying type number, that would be helpful. Ditto dwell times going up in the U.S. with the TSA delays.

So what would that 3% number be if you were to maybe strip out those 2 factors? And are you saying we should expect that 3% to continue for the rest of the year when you talk about consensus expectations? Secondly, just on the European restructuring. If my math is right, you're exiting about GBP 70 million of rail given that slide on the increase in the average unit turnover. So below sort of 20% your European rail revenue. Just easy question really, what's the margin impact of that? It looks to be quite small given it's not a big number. And if you give us a feeling for what 2027 margins might be because you talk about exceptional costs offsetting some of that exit. So is it a modest step-up between 3% and 5%?

And then finally, could you just explain why the North America noncontrolling interest are down 40%. It just looks like you've allocated a load of group cost against your partners because I can't believe it's the other factors you mentioned on the changing structures. And why your dividends from or sort of paid to those partners up so much in the first half on the cash flow statement, please?

Yes. I'll tell you, this is like a proper intellectual exercise responding to each of those questions, Jamie.

But let me have a crack at it and Geert to jump in.

Yes. So let me take current trading first. And you had -- I mean, 2 core questions, U.K., U.S., right? So third week of April is when -- between the third and fourth week of April in FY '25 is when the M&S cyber impact happened. So of the 6 weeks of current trading, about half was pre the comparator of cyber and about half was post, right?

You also have the effect of the timing of Easter, which would have been less favorable for us in '26 than it would have been in '25. What we've gone from is an 8% like-for-like in the first half to 11% in the U.K. in the first 6 weeks of the year. Adjusting for all of that, it's in terms of trying to do -- by the way, we're going to have -- we're going to be comping against this M&S effect for most of the rest of the year in some form, right? But I think it would be fair to say it wouldn't be -- the like-for-like comparison wouldn't quite be 11%, but it will be up from the 8% if you adjust for Easter. So it's judgmental a bit, but somewhere between 9% and 10%, Jamie, is probably -- the big point is in across the air channel and across the M&S units, whether you do it kind of 2-year like-for-like or the year-on-year movement, we just have very, very good momentum on like-for-like performance in the U.K., but -- but we will have some kind of quite quirky comps as we roll through the rest of the year because of the disruptive effect in the M&S part of our business there.

In North America, we did have for 2 or 3 weeks in March, we did get a net benefit from the huge dwell times in American airports because of the TSA understaffing and people turning up in airports earlier. It wasn't universal, but the net effect of it would have been positive. And our March like-for-like performance in the context of the 6 months that we've had in the first half was much stronger than the other 5. Hopefully, as we then transitioned into "a more normal period in April", we've been able to sustain the like-for-like above the level we would have had in October through February, although not quite as peaky as we would have had in the month of March. Now as we look into the rest of the year, it's appropriate for us to be very cautious, which hopefully, we've been on the disruptive elements of the Gulf War. But 2 things are -- 3 things are worth noting about America. One is we're about to have -- we're about to kick off what is going to be the biggest sport event in history in terms of travel, which is the Football World Cup in America, 48 teams, 7 weeks of competition all across North America.

And we have a business that there or a travel environment that has very little international travel and very little exposure to the rest of the world beyond that, which is domestically trading quite well. So we would be disappointed if we didn't have quite good like-for-like dynamics in America through the rest of the year because of the momentum we're carrying at the moment and some of the anticipated planning for things like the impact of the Football World Cup and related stuff in America through the summer.

But you want to be careful saying too much about what might or might not happen in America in the current environment, but they are the things that we know. The -- your top line maths on Continental Europe -- sorry, how does that all feed through to around the guidance for the year? In the end, we've gone with a pretty simple view, which is we expect to -- the best planning assumption is a maintenance of the current like-for-like trajectory, which is the 3%. In very simple terms, if you're trying to bridge that to the 5%, 1 point is the impact of the Gulf being -- the Gulf states itself being a little over half the historic level, right? So the kind of 60% that we gave. 1 point is related disruption in the related regions that are most exposed to that. And then the 3 is the 80% of our business, which is not directly impacted continuing to trade broadly as it is. That's how you feed into the top-down way into the 3%.

On the Continental European Rail review. Over time, you're about right, actually in terms of the sales impact. We won't do all of those unit closures in 1 year because we'll choose to optimize them around when renewals might naturally happen and manage for cash in terms of how we do that. But size-wise, that's about the right proportion that you've characterized. I think the bit that as we look at it is the losses on those units we're planning to close are greater than you might have planned in the kind of top-down summary that you've done. And we're clear as we plan for this is there will be some exit costs associated with doing that.

But if you take them over the 2 to 3 years in which we put this through, where we've worked very hard to make this plan essentially self-funding. So the business improvement we get with the reset that we're doing funds any of the costs associated with getting it done over a 2- to 3-year period as we look forward. And we do end up with subject to us aligning stakeholders as we anticipate we will, with a material improvement in the underlying economics on all metrics apart from revenue of the rail business, which would contribute to a raising of the medium-term number of 5% because obviously, on the other side of that, we've got the performance improvement plan we've got for air.

So it will take us a couple of years to roll that through by between '27 and '28, but we think we've got clarity on where we're taking the business, and we think this is a good answer for the contribution that the Continental European business in aggregate will play into the group. And the piece that I think is -- has been really front of Geert and I on this as we've worked this through with both our team and with the Alvarez and Marsal team who are helping us is we wanted to be really clear that we could also take down the capital requirements of this channel for our business such that the capital envelope that we're deploying to drive future growth and returns can go to more attractive structural places than European rail. And so that's an important part when we said that the capital requirements of this business will have relative to what we have historically put into it.

So last piece on North America noncontrolling interest. In the half itself, -- it would also be worth noting that there is a mix effect in terms of the airports that are up and down year-on-year. And let me see if I can explain that in the simplest possible way. So you heard me mention that 60 airports in North America, 13 or 14 of those are in Canada. So we're dealing with about 45, 46 airports in the U.S. The size of the joint venture participation across those airports can be as low as 5% to as high as 50% and depending on the underlying performance of those airports, you will -- that feeds through to different levels of sharing of profit with partners and therefore, different levels of size of minority interest charge.

Some of the 40% half year-on-half year improvement on that is reflective of the mix impact of airports that have done better or worse. The simplest way to describe that is the airports that are most weighted towards domestic have done best across America and the ones that are most weighted towards international have done relatively less well, reflecting that international passengers as part of overall passengers in America have moved from something like 13% of total passengers to about 10%.

And as you see that flow through, that impacts different airports differently. But we see a very clear path to take the percentage of our profits that are shared with partners from about 30% of North America, which is about 35% of the U.S., down by at least 5 and maybe more percentage points over a number of years.

And the contribution of that as you roll that through our numbers is actually -- is quite material. And all of that is not us saying that we won't work with partners where that makes sense. We absolutely will. This is a partnership-driven business in all sorts of ways across the group, including in America. But for some of the -- for the 3 particular reasons that I mentioned, the structure of that is going to evolve. We are in control of how we do that in our business, but what we're doing is not out of whack with what you're seeing some of the other large concessionaires do.

Your last point on how this feeds into cash, that's simply to do with timing of payments year-on-year, and I wouldn't read a lot into that. It's -- the net of all of that is reflected in the cash guidance that Geert summarized earlier. I'm going to make a serious attempt to be briefer in future questions.

Luka Trnovsek from Berenberg. So just 2 for me. So on the first one, I wanted to ask about the Continental European CapEx reduction. So you mentioned it is going to fall by 50%.

And I was curious, does the Continental European CapEx, is that proportional to revenue? So would Continental European CapEx be proportional to so 1/3 of Continental European total CapEx would be rail? And then just on the second bit, I was curious if there is a seasonality to your Gulf and Eastern Mediterranean sales profile. So you told us how much it is as a percentage of full year, but I was curious if that's different between H1 and H2.

Yes. I mean 2 very quick points on Continental European CapEx. So the -- while we're taking -- we're planning to take out about 1/3 of our units. They are much lower selling units than the remaining estate. So the sales adjustment as per my question to Jamie and the response to Jamie is about right as he's characterized it, right? The critical thing is that the core of what we will be doing is centering our rail business about a retrenched current estate rather than looking per se to grow that -- to grow the estate as quickly as we might have done in the past.

Now -- and that has consequences in terms of the amount of capital that it will require in the next 3 to 5 years, which we think, as I say, is about half what we would previously have spent on that channel. I think more broadly, though, we've done a ton of work together with our executive committee and teams across the world in being informed by bottom-up data and being more top-down in terms of how we allocate capital. And we think, first of all, the right -- it's not the perfect metric, and I happily can see that. But the right proxy for the amount of capital to put into this business is about 5% of sales, right?

However, that does not mean we're going to spend 5% of sales across every region. As we plan going forward, we have some regions where we think we might spend 2.5% to 3%. We have others where we might spend up nearly 10%. And that's reflective of how we think the business will evolve. But the CapEx envelope we're planning for is about 5% of group sales. it would be very, very odd if Europe wasn't towards the lower end of the range I just described, taken in aggregate, given all the things that you've heard us say about the region.

Last point on seasonality, simple, it's not material. It doesn't quite have the same seasonal profile as, say, Europe does because it's so swelteringly hot in some of these markets through the summer, but it's not as seasonal a business as some of the parts. So I would take the average numbers we've given and say they're about right for the second half. Yes.

Anna, if you can go next?

It's Anna Barnfather from Panmure Liberum. Two questions, please. Could you split out U.K. performance between air and rail? And I wondered if there was any learnings from the European rail review that would be relevant to enhancing your U.K. rail business?

And then the second question, just sort of longer-term strategic. You mentioned lounges has been a growth opportunity in some areas. I just wondered if you could just explain how the economics differ and how meaningful you think that could be longer term?

Okay. So without giving you actual numbers, our air channel is growing faster than our rail channel in the U.K.

The effect is not as pronounced as you might think because of the very strong performance of the M&S stores, which represent comfortably more than half of our total rail sales today. And so -- but even with that very strong M&S performance, our air channel is growing faster than our rail channel in the U.K. Now in terms of learnings from Europe to the U.K., there are some, but I wouldn't overdo it, right? There are -- when you cut through it, there are 2 features of our U.K. rail business that are markedly different in every sense to any other rail environment in which we operate in. One is that we have 60% of our units on landlord tenant-protected leases. And the second is we have the M&S engine that is driving phenomenal like-for-like performance and customer capture and is a brilliant fit for the travel channel.

And so those 2 features bluntly transform the economics of the channel relative to what we would see in other rail markets in Europe, which is why we're actually -- we're in a very fortunate position in terms of those 2 features and protecting both of those things are very important to us. I mean on long-term strategy, we try to do it in 2 sentences. One of the really attractive features of the markets in which we operate is unusually actually is that the highest growth markets tend also to be the highest margin ones. And so by -- they do come with executional complexity, and they can come with more geopolitical risk.

But the opportunity actually to drive our business faster through TFS in India to reset the business as the Gulf reopens, to continue to accelerate what we're doing in Indonesia and Malaysia, they are all very margin-enhancing opportunities, but they require a skillful configuration of local partners, operating conditions and so forth to be able to get after it. But you can expect kind of top-down capital allocation that we will want to drive those channels harder.

It's Manjari Dhar, RBC. I also had 2 questions, if I may. My first question is, I just wondered if you could give some color on how you see the actual demand outlook for summer travel maybe in context of some airline capacity cuts that we've seen? And then my second was just a follow-up on European rail. I just -- maybe you mentioned it and I missed it, but I just wondered if we could get some color on sort of the time line of the closures.

Yes. I think you'll see us -- we have a number of stakeholders that we have -- the second question first. We've got a number of stakeholders that we need to align, starting with a very active dialogue that we are currently having with appropriate at this stage in the process, but necessary alignment with our works councils in terms of how we go forward to actually build that into a specific plan.

Our current view is that the plan will be delivered over -- through '27 and '28. And that rushing to do it faster would actually potentially crystallize much greater restructuring costs and cash costs than doing it at natural transition points through that period. This isn't something we're kicking into the long grass. We are going to do it through those 2 years, but it probably is best to think about it as a 2-year plan with the full effects of that then being in the third year, which would be FY '29 in terms of improvement.

But that is subject to engagement and alignment with our kind of almost internal stakeholders are our colleagues work council, but obviously, it then involves working with clients as well. The reason we highlighted the 3 rent deals that have changed in France in the presentation is to say there are elements of this plan that we're getting on with already, including the client engagement and the resetting of units and rents.

I mean the demand outlook question is we see it playing out a little differently region on region. But if we were to take the -- whatever it is, the 82% of our state that -- which sits in Europe, the U.K. and America, even if you add up all of the announced currently announced flight schedule changes for the summer, it's de minimis in terms of what it actually means to the scale back and you're talking 1% to 2% of that sort of order, and assuming that you don't get upticks in yield and the remaining flights and things like that. So we think based on what we know today, that's manageable.

And we've had to construct Manjari, an outlook consistent with what we know today and what we can plan for today. But we do also recognize that we're giving that outlook in a more uncertain environment than before. And -- but we kind of have to try and call it somewhere, but that's what we're doing at the moment.

It's Harry Gowers from JPMorgan. A couple of questions as well. The first one, sorry to labor the point, but just a follow-up on the U.K.

It does -- it feels like U.K. air volumes have maybe generally been a bit softer post the Middle East conflict. So that kind of underlying acceleration that you talked about into the first 6 weeks. Is that purely the investment in the estate and potentially just M&S performance more than anything else? And in Europe, there was a little deceleration in the first 6 weeks as well from a like-for-like perspective. So just anything to call out there versus the half 1 or Q2?

And then a final one, just on TFS. I presume you're in very deep discussions with your partners at the moment, which you won't reveal the outcome, but just keen to hear if you have any updated views on at all just in terms of how you view kind of that balance between crystallizing value, but also retaining a decent control and consolidating that business in the P&L.

Okay. You two okay for me to take both of those? I feel too much talking. But the -- and just to try to go to your core question, we have good M&S performance overall, although it's much, much more weighted towards the rail channel than air because of the materiality of the individual units.

So we're happy with our M&S performance in air, but I wouldn't want you to take away from that statement that the strong -- the strength of our overall rail -- air business has actually been driven just by M&S because it isn't. The thing to remember with our air estate is both in terms of sales, but in particular, in terms of the margin and profitability that we earn, it's very weighted towards regional airports rather than the very big airports.

And they're direct -- so if you're in Newcastle, Leeds, Bradford, John Lennon, Belfast, Bristol, I don't think there's a single route to the Gulf from the airports I've just mentioned there. If I got that wrong, it's only at the margin. So we haven't seen a material falloff. It's just the reality, we haven't. I can't pretend that we don't have a level of questioning around what will happen in the summer. But if it is -- if we are going to see that impact flow through, we haven't seen it yet. And when you talk to many of the airport owners and commercial teams across Europe, they largely talk about the, they're planning for and anticipating and I think you might have seen some of this even in the Ryanair comments yesterday, a kind of late surge in bookings, but they're largely talking about substitution effects.

In other words, there isn't currently a planning assumption in the aviation space that you see a large -- a big uptick in staycations this summer.

That's not what -- but you may definitely see a switch from one airport to another. And hence, my comments to Tim earlier, which is that doesn't meaningfully impact spend in airports as we see it. So your point on TFS, we -- there's sort of 3 considerations here, and I really have nothing new to say. I might only be saying what I said last year, which is, one, by no later than July 2028, TFS requires a free float to 25%. It currently has 13.8%.

Number two, as we look at how the TFS business would be best set up to prosper, grow and deliver value for all of its shareholders going forward, we think having a -- this is the punchline, a genuinely and sustainably balanced partnership between SSP and K Hospitality is very important. And if you run with that thought, that gives you a sense for where the equity would be likely to come from when it's placed and what that means for your third question, which is what might that mean for the ability of SSP to consolidate or not a post meeting free float requirements volume. So that's what we said last December, and our view on that hasn't changed. And -- but we have to wait. We have to be disciplined about it. We just wait for market conditions to come right, but we have some time.

Leo Carrington from Citi.

I just want to take a couple of follow-ups on Continental Europe, but focusing on the Airports business. Is there any update you can give us in terms of how that part of the business is progressing, how some of the initiatives like the digital investments and so on are going? And then in terms of the comment you made about lowering capital requirements in Continental Europe, is that comment really pointed at rail? Or is there more of a focus in the airports business as well going forward?

I -- let me do the CapEx one first. So I think in terms of our capital allocation, you need to think about 2 comments that we've made earlier in the conversation.

Number one is we're going group-wide roughly ballpark for 5% of sales. That's a good benchmark for us in terms of the overall package that we have available in our total -- in our cash allocation. That comes down to roughly for next year about GBP 200 million.

If you then look at the constituent parts, because of the plan that we're going through with Continental European Rail, we said Continental European Rail will be less. That does not mean that, that part of Continental Europe that they would have had, we're just going to deduct from the GBP 200 million. So we believe that all around the world, we have in all our regions, ample opportunities for good, solid investment cases that we are now -- that we're continually trading off. The fact that we're reprioritizing some CapEx away from Continental European Rail frees up that CapEx within the envelope of the 5% to be used elsewhere in the world.

That could be in Continental European air. That could be in the U.K., that could be in the U.S., et cetera. Everything is back on the table, and that's how Patrick and I, together with the Executive Committee, reallocate some of that capital and just prioritize it based on the merits of each market, of each subregion and of each channel.

Yes. I mean I think Leo, we if I was trying to imagine a continuum of where capital will go, not very much into rail in Europe.

I think air in Europe would probably get less as a channel than air in other places, but still there are some parts of it that we really like. And then you begin to feed through to some of the regions where we have kind of higher return and long-term growth as we look forward. So that would be how I describe it.

Tim Barrett from Deutsche Numis. Just one on -- another one on Europe, sorry, but not to be blunt, you're talking about 110 units, 70 of turnover. Have you said what the -- can you quantify the losses that those -- that piece of the business is currently making? And then totally different topic on India. We haven't really talked about the outlook there. But the other week, there was quite an important moment when the Prime Minister talked about more work from home and less travel. Have you seen any kind of impact in the numbers?

Yes. Two things. I mean, I have to be careful about how far we go given the stakeholders we have to manage in Europe. But I think it would be fair to say that the losses within the units that we plan to close and the stations in which they sit would be material and the removal of that has a material impact on the economics alongside some other things of the rail channel in Europe and taking in aggregate, all of those things will have a material positive impact when delivered on the overall performance of Europe, right? And so that's really all we can say in terms of specificity.

On India, one of the consequences of having a publicly listed business in India is that the ability of our willingness of myself and Geert to jump into specific guidance around India 10 days out from them doing their full year results is quite limited. Although what I would say is if we were sitting on materially different information in terms of outlook, then that clearly would require some -- us to say something about it. So I'm going to let Varun and Vikas go through the details of the outlook for India when they do the results in at the very end of this month. What I would say is that our outlook assumes at the group level, assumes a certain Indian performance, and we haven't called it out as a big point of difference.

And so you can kind of conclude what you want from that, I'm afraid.

But you are right to highlight the unusual comments of the Indian Prime Minister, principally designed to reduce the level of spend on overseas currency and dollars in particular. And there's a whole suite of things that he spoke about, including travel.

I think we're going to -- listen, thank you for all the questions. Thanks for being with us today, and we look forward speaking to all of you soon. Thank you.

[ :id="-1" name="Operator" />

This presentation has now ended.

Okay. So we'll get going. Good morning, everybody, and thank you for joining us here at Nomura in London and on our live webcast this morning. I'm Patrick Coveney. I'm the group CEO of SSP. And I'm joined this morning by Geert Verellen, our new CFO; and by Satya Menard, who joined us in October of last year as the CEO of our Continental European region.

Our Board's Senior Independent Director, Carolyn Bradley, is also with us this morning. In a moment, Geert will take you through the 2025 financials, and I'll then set out the operational, commercial and strategic drivers of that performance and importantly, our focus 2026 actions. During that review, Satya will join me to set out our specific plan to build and accelerate returns from our European business. We'll then together share our outlook. And here, Satya and I will finish by taking questions both from the room and on the webcast. So let me start by briefly sharing my perspective on the year. I set out to ensure that FY '25 would be a year of execution against the specific performance priorities that we outlined a year ago. We and I specifically didn't nail all of them. However, that's not to say that we didn't progress.

Revenues were up 8%, operating profit up 13%, margin accretive by 30 basis points and EPS rose by 25% to 12.5p, all of those metrics on a constant currency basis. And our reset teams drove strong trading performance in 3 of our 4 regions. Importantly, we pivoted to positive free cash flow, delivering GBP 80 million of cash pre-dividend with leverage now at the lower end of our guided range. That put us in a position to initiate a GBP 100 million share buyback in October.

We've tightened our capital expenditure, and we've built returns on recent investments. And as a result, our return on capital employed metric rose by 100 basis points to 18.7%. We created and delivered a GBP 30 million corporate and regional overhead reduction plan that we actioned rapidly in the second half. However, we didn't deliver to plan in Continental Europe, and I'm frustrated and disappointed about that. But we have now reset and embedded our team under Satya's leadership, changed our model and cleared up our balance sheet consistent with these actions.

We have granular plans that underpin an increase in operating margin from the 2.1% that we delivered in '25 to at least 3% in '26 and towards our 5% medium target. 2026 has started positively. Like-for-like sales growth across the group for the first 2 months of the new year tracked at about 4%. And the combination of this early trading momentum and the improvements being actioned across the business give us the confidence to nudge up our EPS guidance.

But let me be clear on my view of where the business is today. We're not satisfied with where we are. There's more that we can do to deliver profits, cash flows and returns, the returns, profits and cash flows that SSP is capable of, and 2026 is about showing that. Of course, there are market challenges and uncertainties ahead, but we're focused on the opportunities that are within our control, and there are a great many of those, and we're executing against them and at pace.

More broadly, and let me be crystal clear here, we're focused on surfacing and delivering whatever actions are necessary to drive shareholder value from here. So with that, let me spend a moment on our priorities for FY '26. This summer, as a Board, we broadened the scope of our financial and strategic planning to identify, debate and embed sustainable value-driving actions. This process assessed a number of areas, further cost reduction opportunities, improved cash flow conversion opportunities, portfolio optimization, our strategy and related shareholding for India, options to accelerate returns on capital and the level and timing of share buybacks and other options. As a result of this work, our actions for the year include an operational plan that we internally call Focus 26 to drive profit, cash and returns.

We will drive profitable organic growth with strong market and contract retention, deepening our positions in high-growth, high-return food travel markets. We will execute our recovery plan for Continental Europe, permanently building the margins and returns in these businesses. We will embed the GBP 30 million corporate and regional overhead savings that we delivered this summer and action further cost efficiencies. We will build returns on the recent investments that we've made and tighten our FY '26 capital investment to no more than GBP 200 million in the year. And we will strengthen free cash flow to over GBP 100 million through both profit growth and disciplined capital allocation.

We're executing against this plan. And as I said already, we're off to a good start. We now expect to deliver earnings per share towards the upper end of the expectations we set in October. We expect to deliver free cash flow of more than GBP 100 million and to build returns on capital employed towards 20%. However, as we focus on driving additional shareholder value, this operational plan will be complemented by 2 further initiatives. First, a wide-ranging review of our Continental European Rail business; and second, a Board review of options to realize value for SSP shareholders in line with delivery of the TFS free float requirements. I will come back to both of these initiatives in more detail later in the presentation.

But for now, let me hand over to Geert to take you through the FY '25 financials.

Thank you, Patrick, and good morning, everyone. I'm Geert Verellen. I joined SSP earlier this year and took over as CFO in June. I'm delighted to be here and share with you our results for FY '25. As usual, I will start with the key highlights of this past year. And as you know, in prior years also, we present our metrics before the impact of IFRS 16.

We grew revenues by 8% to GBP 3.6 billion and increased our underlying operating profit by 13%, with operating margin expanding by 30 basis points. This, in combination with higher income from associates and lower minorities, resulted in an increase of earnings per share of 25%. Better operating profit, lower capital expenditure and stronger working capital resulted in free cash flow pre-dividend of GBP 80 million compared to a substantial outflow last year.

This led to a reduction in net debt-to-EBITDA to 1.6x, and that leverage level facilitated the start of our share buyback program, which we launched on the day of our trading update in early October and has been running since then. Consistent with our dividend policy, we proposed a full year dividend of 4.2p per share, which is an increase of about 20% versus last year.

Now let us get into some of the details, and let's start with sales. Full year sales growth was 8%, as you can see on the slide, including 4% like-for-like growth, supported by strong performances in the U.K. and our Asia Pac and EMEA regions. Net contract gains added 4% to sales growth again as we prioritized investment in our Asia Pac and EMEA and North America regions. The negative 2% you see in the column other to the right of the slide represents the impact of the exit of our German Motorway Services business and the transfer of our Mumbai Lounge business into a new JV.

To the right on the slide, you also see that we've had a good start to the new fiscal and financial year FY '26, with all regions in positive revenue growth and the group posting 6% total growth in the first 8 weeks since October 1. In those first 8 weeks, we've also seen the group post like-for-like growth of 4%. And this revenue growth is supported by solid like-for-like growth in all regions, including in America, which has recovered from negative like-for-likes in the second half of last year to 2% positive despite the recent shutdowns in the U.S. This is all very encouraging to us, and Patrick will explain the drivers of this later on.

We delivered underlying operating profit growth of 13% to GBP 223 million. This increase was supported by good growth in all regions with an increase in the underlying operating margin by 30 basis points at constant exchange rates. In Continental Europe, underlying operating profit growth increased, but margins fell short of our own expectations. Patrick already alluded to that. Driving margin in the Continental European region is a key focus for me, and I'm working closely with Satya to improve performance. Satya will go through the detail on performance and his plans in a moment.

Turning to the U.K. and the Ireland region. Underlying operating profit improved despite the disruption caused by the M&S cyber incident earlier this year. In the APAC and EMEA region, we benefited from profitable growth in Australia, Malaysia and Egypt, although this was partially offset by the effect of the transfer of some of our business and our units in India into JVs. Excluding the impact of this transfer, margin in the region would have been unchanged.

As a reminder, upon deconsolidation or transfer into JVs, SSP's share in the benefits or in the profit of these units is reported in associates and continues to contribute to the earnings per share metric. Our group earnings per share increased 19% at actual exchange rates compared to last year. As you can see on this slide, this is mainly due to higher underlying operating profit, higher income from associates and lower minorities, partially offset by higher finance costs that are mainly the result of last year, including a foreign exchange benefit.

As you can also see on this slide, our effective tax rate for the year is in line with prior year and at approximately 19.4%, reflective of the recognition of deferred tax assets in the U.S. as our business strengthens further there. Looking forward, we would expect the underlying effective tax rate for the group to gradually return to 22%, 23%.

You heard me say earlier that in FY '25, we saw a smaller part of our profits be attributed to minorities. And this table shows the components of the minority interest. In relation to the FY '25 underlying operating profit of GBP 223 million that I mentioned earlier, we have reflected a minority share of GBP 60 million, down from last year. Over time, we expect this share to go down further, both as a result of structural changes to our operations in North America as well as due to the fact that growth in our Indian business is increasingly coming from JVs and as a result, is presented in the associates line.

As you will have seen, our reported operating profit was roughly GBP 86 million, reflecting about GBP 183 million of non-underlying items. Approximately GBP 40 million of those non-underlying were cash in the year. Impairment charges of GBP 117 million are primarily related to our business in France and Germany, which were contracts entered mostly pre-COVID. Satya will share with you his views and plan on this in a bit.

We're not satisfied with this performance, as we've mentioned earlier, and we have to reflect the structural challenges that we face in these markets in the carrying value of the assets we carry on our balance sheet with -- in these markets. We've also fully reflected the consequences of our exit from Italy. The GBP 33 million that you see on the slide relates to the application of new accounting regulations and our investments -- or with regard to our investments in IT that we already raised in the half year.

In short, technical guidance requires companies to no longer capitalize IT assets related to the configuration of cloud-based software solutions. And instead of keeping them as assets on the balance sheet, these investments now have to be expensed. So just to be clear, we're not writing off these investments as bad investments. We're merely in line with the accounting guidance, classifying them in a different way and have to run them through the income statement now.

The restructuring cost of GBP 12 million that you see here relates to the overhead reduction program that we actioned in the second half of the year, and Patrick will get back to that later on. Site and contract exit costs of GBP 14 million relate primarily to our exit from Italy and the continued unwind of our operations in the German Motorway business.

Let's turn to cash flow now and how this impacted our net debt and leverage. Net debt decreased from GBP 574 million at the beginning of the year -- sorry, net debt decreased to GBP 574 million, which represents 1.6x net debt over EBITDA, which is a reduction from the 1.7x that we had at the beginning of the year. Free cash flow before dividends amounted to GBP 80 million, approximately GBP 280 million better than in the previous year, reflecting an increase in EBITDA as well as the positive impact of working capital initiatives like supply chain financing and lower capital expenditures.

While we're obviously encouraged to see this improvement, there's plenty of opportunity for us to go after. This brings me to a couple of reflections that I wanted to share with you, my take on SSP, if you will, since I started. First of all, I believe that we compete in a great industry with tremendous potential for growth and in markets and channels that are weighted to long-term positive travel trends. We're exposed to a great number of markets, each with their own state of maturity, their own spending power, exciting regional strategies and tailored business models.

Most importantly, I also believe that we have a results-driven team that is passionate about food and about the customer. Since the start of my induction, I've listened to many shareholders about what you see as imperative for us as a company. And here's what I heard. You want to see us grow profits faster than sales, increase the returns of the assets we already have and generate meaningfully higher cash flow with healthy cash returns to shareholders. Those messages have been received loud and clear.

As an organization now, we have to pivot from a growth phase into a returns first and cash-focused phase and mentality. And we're doing that, and let me give you a couple of ideas of how we're doing that. So first of all, I see an opportunity to streamline our finance processes to bring more insights and simplify the flow of information. That's number one. Also, performance management in an organization starts with a clear and transparent way of engaging with each other at every level of the organization. And Patrick and I are working hard to instill that mentality at all levels and in all parts of the organization.

Second, while I do believe that we have a robust methodology to assess capital investments, I'm challenging us to prioritize more and be more selective. The mere fact that a business case hurdles does not guarantee automatic approval. We're linking up the strategic choices made in capital allocation to the individual discussions on discrete business cases. Questions like, does this contribute to EBIT and margin fast enough? And importantly, why would we invest in this case instead of the next one that also hurdles are now all linked up in the same conversation with the regions.

In other words, Patrick and I are being more selective. My philosophy is that in business, everything is a choice, one just needs to be comfortable with the consequences of the choices made. Another area of opportunity that I see is an increased focus on cash generation. The importance of cash needs to be reinforced throughout the organization. That is why we have identified a number of focus areas that will drive that message and must result in better cash generation.

And let's look at these in a little more detail. The first and most important element here is flawless execution at store and restaurant level, disciplined operating standards, waste and loss management, menu and recipe reengineering, et cetera. Many years working in retail and at Walmart, in particular, taught me that without focus on how you operate in the field every day, every time of day, nothing else matters. We've identified several opportunities that are included in our plans for FY '26, and Patrick and I are on this every week and every month with our regional and market leadership.

The second area is working capital, I already mentioned it. We see an opportunity to optimize the timing of our rent payments, switching from cash deposits to bank guarantees, reviewing the timing of payments to and from our suppliers, just to name a couple of examples.

In FY '25, we already saw the positive impact of supply chain financing already, which in turn resulted in lower borrowing costs. We have also started a global benchmarking exercise to uncover further working capital benefits. For FY '26, we see a further decrease in CapEx to no more than GBP 200 million as total spend, a significant decrease from prior years. Beyond the absolute spend levels, we're also being more selective, and we're creating more competition and more tension in the process, with more competition for that capital. We're also challenging our build and construction teams to review specifications, and ensuring we can get more for less.

The fourth area in optimizing the way we go -- is the way we go to market with our partners and in short, making sure we manage closely the profit and hence, the cash coming back to SSP shareholders. Lastly, we're focusing our teams on cash by bringing it front and center into the monthly regional performance reviews, and we're also increasing accountability for the leadership teams when it comes to cash generation.

Turning now to CapEx in more detail. In FY '25, we further decreased our capital investments to GBP 212 million. The biggest part of that FY '25 CapEx went to a still elevated level of contract renewals and maintenance CapEx, followed by growth and expansion CapEx and lastly, technology. For FY '26, we expect to spend no more than GBP 200 million. Roughly 50% of that number will go to renewal, rebrand maintenance CapEx with roughly 1/3 going towards supporting the 2% net gains that we have on the slide.

Going forward, based on current planning, return objectives and what I just said about making choices, we expect CapEx to be in and around GBP 200 million. Before I hand it back to Patrick, let me summarize how we see our capital allocation policies or priorities. First is our aim to maintain a sustainable balance sheet. This business operates best through cycles with leverage somewhere between 1.5x and 2x net debt over EBITDA and of course, considering seasonal fluctuations in a business like ours.

Second is to continue to fund profitable organic growth. You heard us say that we're not in the market for M&A at this time, and we're firmly focused on generating improving the returns out of the existing assets and locations. Organic growth, most particularly in markets and airports where we already have a strong presence, creates the best platform for us from which we can improve our cash conversion. We continue to target a dividend payout ratio of between 30% and 40%. And you've already seen that for FY '25, we post a 20% increase in our dividend to 4.2p this morning.

Lastly, we're in the market now with a share buyback program of GBP 100 million. And up to last week, we had executed approximately GBP 13 million and repurchased slightly more than 8 million shares so far.

To conclude, I'm both resolved and excited about the year ahead. We've got a good model. We've got great teams, and we've put together a plan that is based on focus and making choices. We're delivering that plan. And the first weeks of the new year look promising, and it feels like we're off to a great start.

So with that, I'll turn it back to Patrick.

Thanks, Geert. This is my third full year as CEO of SSP, and it's been a very different one. In '23 and '24, we expanded our business rapidly, prioritizing building our presence, our capability and our relationships in higher growth and higher returning air channel markets across the world, defending long-held market positions and renewing and extending profitable contracts throughout strongly building our client, our customer and our culinary propositions.

But while these investments created a strong platform, we were not converting that platform into value for shareholders. So in December last year, we tightened our business agenda to build profitability and returns on this platform, and we actioned the 5 priorities that are on this slide. So a year later, how have we done? My answer is partial delivery. We have driven sustainable growth across the world. We have progressed our profit recovery plan in Continental Europe, but I must acknowledge that at a 2.1% margin level and with the scale of the necessary balance sheet reset that Geert just described, it leaves us short of the expectations that we had at the start of the year.

We rapidly actioned a GBP 30 million overhead savings program in the second half, and we built returns on the recent investments while also tightening levels of new capital expenditure in the year. And taken together, these initiatives strengthened our operating and free cash flows and enabled us to initiate the GBP 100 million share buyback program in October, which was an aspiration we had when we gave the presentation this time last year.

Finally, we set out to highlight the value of our investment in India through the successful IPO of TFS on the 14th of July and its subsequent strong momentum, both in trading terms and as a listed business. So to dig into our progress against this plan, I'm now going to describe the operational, financial and strategic progress in our 4 regions.

Let's start with America. We're building a great business there. However, after a period of significant contract wins and complementary M&A activity to gain access to multiple new airports, indeed stepping up from 37 airports 3 years ago to almost 60 today.

This year, we focused on extending our restaurant footprint within the airports that we now serve. Particular examples include materially stepping up our presence in JFK at Terminals 5 and 6 and at Denver Airport, these being 2 of the busiest airports in the country. From March of this year, as parts of the U.S. airport network experienced lower passenger numbers, we focused firmly on driving initiatives to sustainably step up our like-for-like sales with initiatives such as Sunday trading effectiveness, whereby senior management have reset their personal weekly schedules to be present more often in airports during this peak trading day, menu optimization, technology and ordering systems and more consistent merchandising across the business.

Encouragingly, we are now seeing the impact of these initiatives with a marked step-up in October and November like-for-like sales growth relative to quarter 4, in other words, moving from minus 2% to plus 2% as we transitioned into this quarter despite lower passenger numbers during the recent government shutdown.

Throughout, we've had a concurrent focus on efficiency and productivity from menu optimization to improve already SSP leading levels of gross profit to automated kitchen equipment to reduce staffing levels to more consistent use of technology and automation to drive down cost and waste. So in 2025, we delivered top line growth in America of 8% at constant rates as well as building operating profit margin to just over 11% there this year, by far the strongest level of margin ever delivered by the SSP North American business.

As you know, we had work to do to put our home market in the U.K. on to a strong path. Simply put, our U.K. business was in a poor place 3 years ago. In response, we completely reset our team, our culture and our client store and customer propositions. We have found a sustainable sweet spot to deliver better propositions for customers and clients, while at the same time, sustainably improving our financial performance. Our teams have relished this new approach. What do I mean by a sustainable sweet spot? Strengthening our M&S estate is a big part of it. This year, we refurbished a further 15% of our M&S retail estate with these programs generating strong double-digit sales uplift each time we do them.

This trading momentum there enabled us to work our way through the disruption caused by the M&S cyberattack in half 2. And more broadly, we stepped up our propositions and built market share in the U.K. regional air channel with renewals, extensions and wins in Newcastle, in Birmingham, in Liverpool, in Belfast, in London City, if you'd allow me to characterize that as a regional airport and in Bournemouth, all on long tenures.

Importantly, Kari and the U.K. team have also gone hard after overhead improvement and cost efficiency through the creation and deployment of our best in SSP workforce management scheduling tool, through detailed work on menu optimization, especially in our own brand estate and through the full participation in the overhead reduction program that I'll describe in a few minutes. These efficiency programs helped us deliver a good step-up in profit and operating margin to 8.4% alongside the strong like-for-like sales, and we're continuing to build on that.

In Asia and the Middle East, regions that have some of the fastest-growing airport infrastructure in the world, we're investing to build scale within our chosen markets to enhance returns on our now maturing level of recent investment. With our acquisition of ARE in Australia in the spring of 2024, we tripled the size of our business there and became the clear market leader.

The Australian portfolio has come together very well with our integration on track in all areas. Indeed, we're not only integrating the 2 businesses effectively, but we're exciting customers, and we drove like-for-like growth in the year of 11%. In Indonesia, we're building scale and profitability, fully in line with our acquisition case. And in Malaysia, which we entered organically in late 2022, we have doubled the number of units in 2 years and now have a business there that is already nicely profitable.

In India, our second largest market in the region in sales terms and where we hold a 50% -- just over 50% share in the now listed Travel Food Services, we're driving profitable like-for-like growth. We had an important contract win there in September at the eighth busiest airport in India, Cochin. And we're now also scaling up new operations in TFS' largest joint venture airports in Delhi, Noida and Navi Mumbai.

We also continue to strengthen our regional lounge proposition with an important milestone being the deployment of our own lounge aggregation technology system, what we call Eats, across our Indian lounges in July. This program allows us to capture a materially greater share of margin from credit card and loyalty card lounge users there.

The margin profile of our Asia and Middle Eastern business has remained strong as we've continued to expand. So to be clear, the change in year-on-year margin that you see on this slide entirely reflects the deconsolidation effects in India that Geert described earlier, with profit moving from the EBIT line to the associates line.

So moving now to our fourth region, Continental Europe. Building profitability from the unacceptably low levels in this region is of utmost priority to us. So I've invited Satya Menard, the CEO of Continental Europe since October of last year to join us today to give a deeper analysis of the region, to explain what we've achieved to date and to describe our plans to accelerate progress from here. If you allow me, Satya is an experienced F&B operator, a strong leader, deeply knowledgeable in several of these specific markets and also a great colleague.

Satya, over to you.

Thank you, Patrick. Good morning. As Patrick said, I joined 13 months ago to lead Continental Europe, and I have a long track record in Food, Hospitality and Catering. Before joining SSP, I had 3 years at JDE, is the world leader in coffee. And before that, I spent more than 20 years at Sodexo, also a global leader in catering services.

Let me start by giving you a quick overview of the SSP business in Continental Europe, which includes 15 countries across the 5 blue clusters on the left on the slide. Next to each cluster, you can see the channels where we operate, light blue for Rail, green for Air and brown for Motorway Services. Air, which is SSP forte represents 2/3 of the region revenue and delivers mid-single-digit EBIT margin. Rail and Motorways make up the remaining 1/3 with margins well below acceptable levels. Patrick was fully transparent about the challenges before I joined. I was, and I am still very motivated by the opportunity, but the issues proved deeper and more structural.

Continental Europe is a very contrasted region. Spain, Norway and many countries already contribute well. Others are improving. But clearly, France and Germany remain very challenging. Even if it is 2 different stories, they share too many loss-making units, several structurally unprofitable contracts and flawed processes. This is particularly true in Rail, which unlike any other country accounts for more than half of their revenue.

This morning, I will share with you how the swift actions that we've taken in '25, complemented by actions which are already in flight for '26, firmly position us to deliver at least 3% of EBIT margin and over 5% over the medium term. Let me start by sharing with you the turnaround that started in '25, and it is built on 5 pillars.

From my long experience in low-margin, decentralized concession models, 2 fundamentals must be in place to create sustainable value and good returns. And they are the first 2 pillars of this plan. First, you need a contract structure that enables you to generate the returns from your investments. And second, you need a very strong leadership close to your operations. Well, both we are missing in France and in Germany.

On contracts, each country had too many legacy agreements with uneconomic rent structures. So we have engaged into a proactive renegotiation campaign either to fix the performance or to exit. Out of the top 20 loss-making units in France, 15 have already been renegotiated. And for Germany, the number is 14. This will generate over GBP 4 million of positive EBIT impact over the next 2 years, and the work continues for the rest of the contracts.

Each of those 2 countries also had one so structurally negative contract that fixing it was an absolute priority of the turnaround plan. In France, I'm talking about the contract of a major train station in which we entered in 2018. We are just finalizing now a restructuring, which will enable us to halve our losses in '26 and reach breakeven in '28. This negotiation alone will improve our EBIT by more than GBP 3 million in 2026.

In Germany, as Patrick already said in the past, by far, the most negative contract is the one with Tank & Rast in the motorway channel. And it is here the fourth pillar of our plan. The correct decision to exit was taken before I arrived in '24, but the execution proved slow, especially at the beginning of '25. We managed to accelerate it just before the summer. And now by the end of last month, just this month of November, we had already exited 87 of the 115 sites included in this contract. Let me come back to the list of the pillars by order.

The second pillar is on leadership. Except in Spain, significant renewal was required, and I acted quickly to refresh senior teams in early '25. Yet in France, the situation demanded urgent and deep action. Early Spring, I stepped in as Interim CEO, replaced 4 of the top 6 leaders and engaged Alvarez & Marsal to design a detailed recovery plan. I'm happy to share with you today that we now have a new highly engaged MD that started 6 weeks ago and who is now supported by a much stronger team.

The third pillar is about cost. We, of course, acted quickly on the biggest costs, which are in our units. I'm talking about labor and COGS. But we also took actions to reduce structural overhead costs. This had a limited impact in '25, but will deliver over GBP 5 million of savings in 2026. As shown by the size of the green slice in the pie on the right, most of the actions had a limited impact in 2025 EBIT, but it will at -- sorry, it will accelerate in '26, and there is a further upside also thereafter. So while the issues prove too entrenched to achieve 3% EBIT in 2025, we are now clearly firmly positioned to deliver at least 3% in 2026.

Let's look ahead now and let me take you through the additional actions that we are adding in '26, and they are built on the same 5 pillars. About contracts that enable us to drive returns, well, the negotiations will be concluded by the end of H1 2026 with margins benefit that will weigh into H2 of '26 and will continue in '27.

Regarding the second item on leadership and structure, I would say that after a necessary high turnover in '25, '26 will be about stabilizing the team's continuous improvement and strengthening our client relationships. But we have many new initiatives to continue to further optimize our structure and they are already in motion. Probably the most significant change will be the merger of 2 HQs in France, and this initiative was just launched last week. Again, it will have a limited impact this year, but it will generate more than GBP 1 million of extra savings as of 2027.

Cost discipline. It will continue -- we will continue to tighten our control in units, our improvement of our processes and in our tools with a special focus, of course, in France and Germany. In France alone, Operational optimization will deliver over 200 basis points of EBIT margin improvement over the next 3 to 4 years.

Regarding the MSA exit in Germany, the final units will be transferred by the end of 2026. But interestingly, we have kept the most profitable units for the end. So we will manage to divide the losses in '26 by 5 or we will have just over GBP 1 million of losses this year compared to GBP 5 million last year.

Sales growth is our last pillar, and it will gain traction in '26 as we need to adapt to a more cautious economic environment. So we are enhancing digital engagement, accelerating promotions and value-led pricing in order to drive like-for-like growth. We also plan to rebrand 400 German rail convenience stores as our Point brand, and this will enable us to have stronger conversion and increase the basket size.

Overall, as we add positive impact of '26 initiatives to the full year impact of the initiatives that we have already executed in '25, we can really be confident that we will reach at least 3% of EBIT margin in '26. Let me show you the financial impact of this plan on a graph. On the left part of this chart, you can see the impact of the actions taken -- sorry, in 2025 and also underway in 2026 that I've just described. And you see how they take us to at least 3% of EBIT margin this year.

Each step is shown between the 2 first brown bars on the left. You can recognize the initiatives that I mentioned like renegotiating our contracts, controlling our cost or exiting the MSA. But the improvement of our EBIT does not stop there. Many of the initiatives launched in '25 and in '26 build further margin improvement and momentum into '27 and beyond. And we will continue to add new actions and new levers in '27, in '28 and beyond.

Contract optimization and negotiations will remain a core engine of value creation by generating stronger returns, both on renewals and on new wins. Optimizing unit cost and efficiencies is a multiyear journey. Labor cost, COGS and operating processes will continue to drive structural improvements. A growing factor will be our ability to capture more spend from a value-conscious European traveler, including in environments where impulse conversion remain a significant upside.

So to conclude, if I look back on my first year, 3 points are very clear to me. First, I'm very pleased to be leading this region. It has strong fundamentals, and I'm excited to lead the unleashing of its potential. The issues were more severe than expected, but we now have a clear plan, the right leadership, and we have the full group support, including Patrick and Geert here. Finally, execution is well underway and will position us to deliver 3% of EBIT in 2026 at least and over 5% in the medium term thereafter.

Thank you. Handing back to you, Patrick.

Okay. Our third priority in building returns was driving efficiencies across our cost base. We flagged at the half year our concerns about the macro and geopolitical environment and the risks that are created to travel levels across the world. We were right to be concerned, and we saw that play out in a reduction in our like-for-like growth levels from 5% in half 1 to 3% in half 2 with quarter 4 at 2%.

So cost efficiency needs to play a stronger role in underpinning SSP's profit growth in this more uncertain and volatile external backdrop. So in 2025, alongside our embedded programs of operating cost reduction, what we refer to as our value creation plans that focus on optimizing labor costs and reducing our cost of goods to drive up gross profit, we implemented 2 important incremental initiatives.

First, in the second half of the year, we rapidly delivered a project to simplify and scale back support costs across the group. This effort streamlined our corporate and regional offices by removing more than 300 roles across our corporate and regional support teams. We've delivered GBP 30 million in annualized savings, of which GBP 5 million was delivered in FY '25 with the balance fully locked in for delivery this year.

Second, we are tackling above-market rents at market, channel, airport and station level. Our philosophy is that every contract is a relationship, a commercial partnership that must work economically for both parties. As you know, I have more than 2 decades of direct experience of building and leading contracts, relationships and partnerships of this type. Satya has taken you through some examples of what we have done already or are now doing with clients in Europe.

But across the rest of the group, this mindset has led to our exit from subscale businesses in Italy and Bermuda. But in addition, we have reset, renegotiated and in some cases, scaled up actually contracts to deliver improved returns in the stations and airports that you see on this slide. Notable examples include Copenhagen, the Full Netherlands rail network, Keflavik in Iceland our ongoing reset in Jeddah. Throughout, we're doing this on a front-footed, client-facing and at times creative manner and collaboratively where possible. But we're doing this firmly, and we're embedding this mindset and this approach in how we work with clients from here.

Moving then to our fourth priority, accelerating the return on our recent investments and generating more cash. A key part of accelerating returns has been delivering returns from the 5 acquisitions that we made in 2023 and 2024, which between them now generate annualized revenues of over GBP 225 million and have added 113 new units to our group. Relative to the individual acquisition cases, we're pleased to report that for each of them, the revenue, synergies, profit and most importantly, on the returns line, we're at or above where we expected to be. And indeed, across the 5, all are strongly profitable now, and we expect to deliver a combined IRR of approximately 20% on these investments.

To drive our teams to build returns on our capital base, last year, we introduced return on capital employed as a key performance indicator for the first time at SSP. The measure adjusts both the numerator and the denominator for joint venture and minority interests. On this basis, our return on capital employed in FY '25 rose to 18.7% from the 17.7% that we reported last year.

Importantly, the results in FY '25 adds back to the denominator, the impairments and asset write-offs that Geert spoke about earlier, in fact, bringing the return on capital employed back to 18.7% from something on the face of the P&L would have been above 20%. We will deliver further progression on this return on capital employed metric through strengthening operational performance, driving higher returns on our 2025 investments, the working capital improvements that Geert referenced earlier and through further tightening capital investment in 2026.

Now let me just finish by talking about how this plan comes together in a plan to deliver value for shareholders and in our outlook for 2026. I set out at the beginning of this presentation a focused operational agenda to deliver profit, cash and returns. It's imperative that our executive team and the wider business have incentives that align fully with these objectives. So from this year, we're updating our annual bonus plan. Our plan sharpens the focus on financial delivery with performance being assessed on 3 metrics: operating profit, net of minority interest and associates, earnings per share and with a newly introduced component of free cash flow.

In addition, for FY '26, 100% of the reward for executive directors will be determined by financial delivery. This annual bonus plan will complement the long-term incentive plan we introduced last year that was based on earnings per share, return on capital employed and TSR. The targets are stretching. And for reference, our Executive Directors will actually receive no bonus for financial performance in FY '25, reflecting the targets that were set for us by the Board last year.

We announced last month that Mike Clasper has decided to step down as our chair following next year's AGM, a year earlier than planned. During the period of transition from here, the Board has formed the Focus 26 review committee, which will provide appropriate oversight, support and challenge through this period. Ultimately, though, these plans will be delivered by the 50,000 colleagues that work for SSP across the world. And our executive team have worked extensively to fully align our regional, our functional and our in-market teams behind this plan. We're confident that these actions will ensure delivery of the plan. And as we said earlier, we're off to a good start.

Our Board are committed to pursuing all initiatives that can create value for our shareholders. With support from our external advisers, we have considered and explored a wide set of such options. But for now, let me return to the 2 additional levers that I set out at the beginning of this presentation. The first is a review of our Continental European Rail business.

As Satya set out earlier, we are not delivering adequate returns on our Rail business in Continental Europe. There are a range of drivers for this, including the slow post-COVID recovery in passenger numbers, changing passenger profiles, a marked increase in F&B space and competition across the rail network and reduced consumer spending levels in several of these markets.

As Satya set out, we have an operational plan to build margin in Europe to 5%, but that's not enough. And we actually need to do more to build the margin levels across our European business beyond the 5% level that we set out earlier. So given the level of issues in this channel and the necessity to assess all options objectively and at pace, we've appointed an external adviser, Alvarez & Marsal, to support us in the review of this part of our business.

The review has a wide-ranging scope of potential options, and we'll provide you with an update on the progress of this review no later than at our interim results in May. The second lever is the consideration of options to fulfill the TFS free float obligation. In July, we successfully listed our Indian subsidiary, Travel Food Services, on the Indian Stock Exchange.

We own 50% of TFS and since listing, the equity value of TFS has increased by approximately 20%. At the point of IPO, our partners and co-promoters, K Hospitality, sold down 13.8% of their shareholding. Indian listing rules require a minimum free float of 25% within 3 years of listing. We believe in the potential of India's food travel market, the strength of TFS' market position and economic model and importantly, in the value of having a strong and balanced ongoing partnership between SSP and K Hospitality.

So as we look forward and in partnership with K Hospitality, the Board will explore options to realize value for SSP shareholders in line with the delivery of the TFS free float requirement. To finish then, I am crystal clear on the locked-in structural growth features of SSP, the potential for us to build stronger returns from here and the pivot to cash generation that we've made in our economic model. But I recognize too that there is more that we must do this year to deliver the profits, the cash flows and the returns that SSP is capable of.

Our shareholders have been patient, but that patience is not infinite. I hope that you sense this urgency in us, too. We're fully focused on delivery with the right team, and we're executing against it at pace. FY '26 has started well. So bringing this together, let me be specific then on our FY '26 guidance. That guidance is for earnings per share at the upper end of the guidance range of 12.9 to 13.9 that we gave in October. And this guidance excludes the positive impact of the in-flight buyback program.

We're guiding for an increase in free cash flow to more than GBP 100 million, and we're expecting to further build our return on capital employed towards the 20% level from the 18.7% that we delivered in FY '25. So thank you for listening to us.

And with that, here, Satya and I will be delighted to take your questions.

Some of you got there and the mics -- Yes. Let's start with Fintan, at the very front here.

Fintan Ryan here from Goodbody. Three questions from me, please. Firstly, could you give us the strong like-for-like performance year-to-date, can you break that down in terms of what's volume, what's pricing? And in particular, the U.K. performance, it seems to be continuing an exceptional growth, exceptional incremental growth on '25. So just to understand what are the key drivers behind that?

Secondly, could you give us a sense of what you're building in for assumptions around Food and Bev and sort of labor cost inflation for FY '26. So I don't know if there's any sort of major differences between the regions.

And finally, so I don't want to -- I appreciate the ongoing review of the Continental European Rail business. But could you give a sense of what we should be factoring in for maybe exceptional costs and cash costs at this point in time for FY '26. I appreciate all the moving parts around the European operations.

Thanks, Fintan. Let me deal with the first 2 here and then send that to you. So let me caveat all of this, Fintan, by saying without being too cliched, one swallow doesn't make a summer here, right? And so 2 good months don't yet make a full year, but you still prefer to have them, right. And so we've gone from -- on a like-for-like basis, we've gone from 2% in Q4 at the group level to 4% in October and November.

All 4 of our regions have progressed like-for-like in the year. The 2 most notable improvements are North America and Asia Pacific and the Middle East. But you asked a question about the U.K. The U.K. had the strongest performance of the mature markets in -- through the summer. And again, that stepped up. And so our like-for-like performance in the U.K. and these 2 are 7%. There are not many consumer businesses in the U.K. that like-for-like performance of 7% at the moment.

Most of that change is volume. There is some price recovery and inflation recovery, but the elevated level of cost of goods inflation that we would have seen in some of the early years of my tenure in SSP has moderated to more normal levels now. And we did see, as everyone knows, a kind of something of a structural reset in labor rates in many markets post-COVID. And again, the progression from there is more modest. So I think you can assume that most of that is volume as you go through that with a necessary level of more modest inflation recovery in that.

As we look forward, we're not seeing meaningfully different levels of inflation between markets. And we have kind of market-by-market plans on price recovery to deal with that and all the initiatives that we have in flight in terms of management of labor costs as well. So -- and so if I just maybe just give one thought, which would be on the minds of some of you here. Our planning assumptions for labor rates in the U.K. were entirely consistent with the budget announcements in relation to the national living wage, and that's what we've been planning for as we set out from the start of the year. So we're working -- we'll work to recover that with our existing plan.

Geert, do you might want to just talk about the European restructuring?

Yes. Here's what I would say to that is last year, so FY '25's exceptional charge was exceptionally high, as you saw and we've fully disclosed the reasons why. As we think through FY '26 and as we renegotiate contracts, that's normal part of what we see in our industry is if you renegotiate contracts, there may be a one-off cost associated with that.

We'll have to flush that through as we renegotiate these deals. What I can say today is that there's -- by no means will we be at the level that we had last year for the first reason or the most important reason is that most of those exceptions were impairments related to a complete reset of the balance sheet in the areas that are under close scrutiny for us. So I think going forward, you'll probably see a more normalized level of renegotiating contracts that will lead to a level of one-off that is more, I would say, akin to what you've seen in the past, but not FY '25. So we'll communicate those to you as we flush those contracts through and as we negotiate them.

And just to be clear, the cash guidance -- free cash guidance includes the cash contribution from any exceptionals?

At this point, we're not including any exceptionals in that. We'll flush that through as we go through every single contract that we're renegotiating.

Manjari Dhar, RBC. Just 2 questions from me, please. First question is on North America. You've seen some good margin gains there over the last few years. I was just wondering if you can give some color on what you think the sort of right level of margin for that business could be in the medium term?

And then secondly, on -- just on working capital, I think you gave some color on potential opportunities in your presentation. I was just wondering what -- how should we be thinking about working capital this year in context of quite a good inflow in fiscal '25?

Geert, do you want to start with the second question, and I'll come back in North America?

Yes, sure. On the working capital, you saw that I referenced that we had a good inflow in FY '25. What I would like to say to that is that for FY '26, what we're looking at is I would say, more structural improvements in working capital that are really going to the core of what our working capital is composed of, inventory levels that are reflective of standard operating procedures that are again meticulously followed.

Number two, a solid review of our payment frequency and payment timing. As you can imagine, in a business like ours, our rent is an extremely important part of our P&L, as you can see in the income statement. And we're going to do a thorough review of the opportunities that we have in terms of rent payments. Structures are very different country by country. The last element is a review of our accounts payable terms. So looking at our payment terms.

So while I do not believe that the inflow from working capital is going to be as important as we had in FY '25, there's still plenty of opportunity for us to go after. Just as a reminder, the working capital element of free cash flow is only one part of the free cash flow target that we set for ourselves. I think the efforts in cash generation are equally split between making sure that our EBITDA is higher than what we had in FY '25, and that speaks to the minding the details of our business every day, every time a day in every unit. Second is lower capital. Third would be lower exceptionals than what we had in FY '25. And fourth would be a stronger focus on cash and therefore, improvements coming from working capital.

Manjari, let me just pick up your question on North America. So if you take the last 3 or 4 years, we've had a very nice balance of good sales progression and good margin progression in America. I think we've reached a level of maturity in terms of the kind of the scale of the step-up that we've had in margins in America. I would expect us, and we are planning for modest ongoing margin progression in America on the back of the sort of operating leverage effects of the extra scale that we've got in the business.

But if we can continue in 11% plus EBIT margin in this kind of business, I think that would actually be quite strong. And what you've really seen us highlight is pushing very hard to put through a set of initiatives to reestablish good like-for-like sales momentum in America. That will help cash profit materially, and it also creates the operating leverage effect on margin, too. So that's what we'll be working on. But I think we're at a kind of mature-ish level of margin in America in contrast to some other parts of the group that you heard us talk about earlier.

It's Harry Gowers from JPMorgan. First question, just on Europe. I mean, obviously, you won't have an answer yet. But in your mind, what are the kind of realistic range of options with the strategic review for the European Rail business? And then second question, just on APAC. The margins, I think from memory are quite a lot higher than they were historically. And there's obviously been a few moving parts on acquisitions and the deconsolidation. So what's the run rate for margins from here? Can they grow from that? I think it was 13% on the slides?

And then just going back on the -- or third question, just going back on the working capital. I mean are you -- have you entered into some kind of supply chain financing or factoring facility during the year? Is that one of the components? And then maybe just some more details on that, the size of the facility and ongoing benefit from that in particular going forward?

Do you want to finish off the working capital topic and I'll do the other 2.

Yes. As we said in the presentation, and I think we also mentioned it during the trading update, we entered into a supply chain finance facility throughout the year. I actually think to a certain extent, it already existed at the beginning of the year, but we didn't use it that much. We still have more benefit to go or we still have room in that facility for the rest of the year, but not as much as what we used in FY '25. Hence, my statement on the working capital inflow is likely going to be lower than the boost that we got in FY '25, but it will be based on a more structural review, benchmarking exercise and focusing on all 3 levers, inventory, receivables and payables at the same time.

Let me, let me just make a couple of points about the context of the review and then you can maybe give some sense of the answer. I mean the first thing I answer, Harry, is the context of this is really important, right, which is we now have an operating plan that's underpinned by specific actions of the benefit of which we can already see, which gets us to the 3% in '26 and has us on track to get to the 5% in the medium term, right? And that's the core baseline against which everything I'm going to say should be viewed, right? And that's the core of what Satya and the team have built and are delivering against.

When you do a stand back from that, assuming and the full delivery of that, we still end up -- what we end up with as a business as you roll forward is a business where essentially our air channel in Europe is broadly in line with the economics we get in the air channel in other regions, and we're pulled back to 5% by a lower level of margin from rail in these markets, right? That's the kind of macro picture of what happens when you do it.

And so what Satya and I with Mark Rainbow is in the room, who's our Strategy Director, have decided to do is that's not good enough. And let's have a look at all of the levers that could be open to us to do better than that in European rail because anything that we do in that would be additive to the plan to get to the 5% margin.

Now I think you have to let us do the work, right, and getting into too much speculation around what might or might not happen in it is probably unhelpful. But I do want to make one comment, right, which is the nature of this kind of business, unlike many others, is it doesn't lend itself to easy divestment options of things, right? And so a lot of the focus on this work is incremental improvements that we can do, recognizing that there may be things around the edges that we'll look at in terms of ownership and participation in markets. But do you want to add anything else?

No, I think that's exactly in line with what we've been doing. So there are many options on the table. We are partially exiting some parts of some contracts on businesses, renegotiating contract structures and continue to improve our operations and our ability to drive sales. So all the options are on the table to help us push further and to go further than the current plan that takes us to 5%. But as Patrick said, we want to go further.

Yes. And let me take your -- Harry, your point on Asia Pacific margins. So start with a high-level point. These margins in aggregate are higher -- sorry, these markets in aggregate are high margin, right? So India, Malaysia, Indonesia, Egypt, the structure of how the different lines of the P&L give you structurally higher margins than you get in mature markets when you roll everything through. The most material of those is India, right? But it's got -- it's more and more stand-alone because of its listed status. And as Geert explained and I added to the -- we are seeing a recut of what's in EBIT versus what's in associates and what that means for minorities for TFS on a stand-alone basis. And Varon and Vikas and the team are updating the Indian market on that all the time, consistent with a very exciting and locked-in progression of net income in India.

So you will see the reported EBIT line for Asia Pacific move around a little bit because of the evolution of the India business on a stand-alone basis. But there's nothing to worry about in that because the business is actually is really, really strong. It's just -- it's a kind of categorization issue, if I could describe it. That leaves you with 2 things then. The profile of and growth rate of some of these very high-margin businesses, Egypt, Indonesia, which we've recently entered and the strengthening Malaysia business. And so all of that is additive to margin.

But the second thing, which I'm probably most encouraged about is in the most mature market that we trade in that part of the world, which is Australia, the performance on everything has been really, really good, including margin progression. But it's not a business that has a sort of prospective 15%, 20% margin in it because of the way in which the economic model plays out there. So you should take from that, that we're -- we made a strategic pivot 3 years ago to move away from China and towards Southeast Asia to scale in the market, several which I've referenced, and we're pretty pleased with how it's going, but we've got to stay on it.

Yes. Anna, do you want to go next? Sorry, Tim, you've got the microphone, so you jump.

Tim Barrett from Deutsche Numis. Two things, please. The first one, I just wanted to push you a bit on TFS and your language there. Can you help us understand when the IPO was launched, what was plan A to get to 25% free float? Was it K Hospitality only? And I guess also, any scenario where you wouldn't sell a single share within the next 2, 2.5 years? And then second question, sorry, boring but topical U.K. business rates, getting a lot of questions on that. How do they work? Are they wrapped into airport and rail contracts? Or is there some exposure that you could update us on?

Yes. We've already done -- let's deal with the latter first because it's a simpler answer. So our team have looked at this hard in the context of the size of our estate and the rent thresholds for the different units that we've got. Simple answer is no impact to net, right? The TFS, I'm going to be very disciplined in the answer that I give here, Tim, because what we've said in the statement is what we want to say. Now let me roll back to this -- basically this day a year ago, right? The way in which IPOs happen in India is they have this somewhat unusual process where you publish a draft red herring prospectus a long time out from delivering -- getting to an IPO.

And the doing of that is a public document unlike in other markets, right? And of course, at the point at which you're doing that, you don't have certainty on loads of things, right, including whether an IPO will happen, at what level and so forth. But you do have a very positive intent to want to do it. As we went into that process, we went into that with a continuation of a strong intent that we had, previous regime to me who made this investment, we had made a brilliant investment, which is working extremely well in India over a period of years, and we didn't want to give up on that, right?

We wanted to have this strong partnership in which we had control and which we could benefit from the growth and returns that the Indian business was building year after year, month after month. The way that manifested itself was a desire for us to say we are going to hold our ownership and control position in SSP -- in TFS as we go forward. And that's what we did.

We then executed that the whole way through by actually buying 1% incremental share so that we could continue to be in control and that, that would give us the ability also to consolidate the benefits and growth of the business. And that's the 1% stake that we bought just before the IPO. The agreement that we have entitles us to require that the incremental equity to get to the free float does not come from us, right? That's the agreement that we have.

What we're saying today is that we will review how we will execute that, consistent with the points that I've made, but also recognizing that there is a free float requirement of 25%, and there is a time period in which that has to happen. And we've given particular prominence to this for reasons that you can think about. And that bluntly is all that we're going to say about it today. So can we go to Anna next?

Anna Barnfather from Panmure Liberum. Three questions, please. First one, just on France and Germany Rail. I wondered if you could tell me what the sort of average length of the contracts remaining and where you are on the renewal cycle or maybe that's not relevant because you're renegotiating them all anyway.

Secondly, you mentioned sort of rebranding convenience retail. And I would just be interested in your thoughts more widely about the opportunities or not generally for convenience retail. And then the last question is, I think when you were talking about minority interest, you mentioned that North America minority interest were going to decline because of changes in structure. And I just wondered if you could expand on that or maybe I've misunderstood.

Yes. Let me very quickly deal with a small part of 2 and 3, and then I'm going to let Satya, you do most of it. So Satya is going to talk about convenience retail in Europe. Just to note what we said earlier, which is we have a really strong retail business, a large portion of which is playing to convenience in the U.K. The biggest part of that is M&S. It's complemented about what we're doing with these 40 or so Cafe local stores that we have in Regional Rail. There -- that part of our business is trading very well, and it's very complementary to what we do in the U.K.

On minority interest, as you look forward, cutting through it, I know there's 2 effects. The size of the minority interest charge going forward from India will reduce. And the size of the minority interest charge in America will, in relative to profitability, will also reduce somewhat. And that's largely a feature of how we anticipate new contracts being put in place and the relative size of the joint venture participation in those new contracts as we renew things and build them in. So they will be the 2 effects.

But Satya, do you want to talk about both?

Yes. So first, on the contract length in France and in Germany, I would say just quickly 2 things. First of all, the size of the contract varies a lot. It can be multiple units or multiple restaurants in one given transaction or as it as one single unit and the length goes from 5 to 10 years. So there's a broad variety of contract situations. But as you said, anyway, we'll renegotiate sometimes before the end of the term. So the end of the contract is not necessarily as important as it could have been in the past, I would say.

Regarding the rebranding convenience, for sure, it's a very interesting opportunity because we see the share of Food and Beverage within the Convenience space increasing and there's an interesting opportunity. And definitely, it's an opportunity in Rail as well. And that's why we are -- we have negotiated this rebranding of those 40 units in Germany, and we will use it as an experiment to be able to see how we can capture the sales.

I'm going to go to Luka first, Eric, then I will come to you.

Luka from Berenberg. So I just wanted to ask 2 questions, if I can. So on North America, you in the past mentioned that you saw some headwinds from cross-border Canadian and international passengers. So I just wanted to ask if you expect those to remain in FY '26 or if that's expected to improve? And then just number 2, so on current trading, I was wondering what the exit rate was and if there was any big difference from the rate you reported. And if you saw an acceleration over the 8-week period.

Yes, I'll try and deal with them very quickly. On the second, I mean, the like-for-like at the group level was -- went from plus 2% to plus 4%. I think your question might well have been on America, where we went from minus 2% to plus 2%, inclusive of the effects of North America including Canada. On North America, I mean, we don't have a crystal ball for all the things that may or may not happen in America and all the public policy pronouncements that might or might not happen and what that might mean for travel.

We were pretty encouraged, though, by the fact that the core domestic travel within the U.S. was pretty robust regardless of all of the noise that we saw through the year. We definitely did get impacted in the second half by international travel into America and by transborder travel from Canada into America. I'm sitting next to a Canadian here, if I could say. I mean, I think the 2 things that we observe as it relates to '26 numbers, though are, one, there is some evidence of it normalizing. And secondly, it will make for -- we'll be comping against last year's numbers as we transition into the second half as well. And both of those, I think, would be grounds for encouragement in terms of how we see like-for-like in America.

But do you want to add anything?

No, I think that's factually true.

Okay. Eric. You may have to explain who you are to people here.

So Eric Wolff, Gumshoe Capital. I just had one question. Is your strategic review limited to the restructuring of the Europe Rail business and the TFS stake and options there? Are you also exploring a broader way of options to create shareholder value than what you've already announced today?

Yes. Well, let me try to deal with that as comprehensively and clearly as I can. The statement and our presentation very deliberately flagged the fact that over the course of the last 4, 5 months, our Board embraced, considered and explored a wide variety of options around how we could build value for shareholders. And we remain open to things that can build value for shareholders. That is our job, right?

But we've got to take a point-in-time assessment for where we are, and we've landed in the plan that we've shared today with the specific elements that we've shared today. Now I'm well aware and many of the people in the room are well aware that there has been speculation floated around whether or not this business is open to approaches of different kinds that could result in change of ownership.

And I'll just make 2 points here. One, you'd expect me to say and one I'm going to go a bit further than you might expect me to say. So the point I'd expect to say is our Board is very conscious of its responsibilities in this regard. We have a base plan that we think has a value attached to it. And anything that is a plan that challenges that, we would, of course, have to consider, right? And I said that to you before.

The second thing very specifically, though, is -- and we wouldn't normally be drawn on this is we are not in possession of any approach, just not, right? So it's a hypothetical discussion because -- and I'm happy to confirm that we're not.

And then the last thing I would say here is that as part of the option set that we described in the statement and that I went through earlier here, you can assume that our Board has educated itself on what the appetite might or might not be for an alternative strategy and what that might or might not mean for the value that's available to us. And so having done all of that, we've landed on the plan that we've shared today. And this is specifically what we are doing. If stuff unfolds as we go forward, you can take it that we'll be responsible custodians of shareholders' money, and we'll act accordingly.

Can we get a microphone for Greg here? I think just given the time, we're going to finish with Greg's question, okay?

As always, Greg Johnson at Shore Capital. Just a couple of questions. Firstly, I might not be able to sort of split it out, but what is the carrying value of European rail now post write-downs? And secondly, just thinking of the sort of the more turbulent macro backdrop, certainly what we've seen in the U.S., how is the tendering environment holding up? Any signs of sort of easing on price there?

Yes. Let me deal with the second question, and I'll naturally defer to the man on my left to think about the first. The tendering environment in -- is your question specifically on America there, Greg? Or is it more broadly?

Globally, generally, but certainly thinking about the U.S. in particular.

Okay. Well, let me do quickly globally. So one of the things that we expected that but we've also learned here is that the level of tendering, particularly around renewals, has eased off a lot relative to what we would have seen in '22, '23 and '24, right? And so -- and that's because you had this catch-up period coming out of COVID, where you weren't just doing the kind of 1 in 10-year renewal, you're also doing the renewals that didn't happen in '20 and '21. And so that led to this elevated level of renewal activity, which also led to the elevated level of capital deployment for us and for other people in the industry.

And so you've really seen a normalization here. So the GBP 200 million capital number that Geert and I have spoken about or the GBP 212 million this year is reflective of an industry that's normalizing in terms of renewal levels around this sort of level, right, just to say that.

Now second thing is I would characterize is that as a general trend across the world, and there are pockets of difference, no question, tenders are coming out where the length of contract is longer. And the more capital you choose to put into America, the more that effect actually goes up as you weight it across our overall contract set because contract lengths are even longer there, right? And so that's what we're thinking about when we see renewal opportunities or what we would call net gains opportunities, those 2 things.

I think the -- you'll find it's a cliche to say every market is different, but some markets place a much greater premium on pure commercial rent offers than others. In general, America places less of a focus on pure rent offers and more on other things. And a consequence of that is you end up with a sort of average level of rent in America in the mid- to high teens versus a rest of the SSP estate, which would be in the mid-20s. And so that's a point of difference.

Yes. Here's what I would say to that, Greg. The short answer is we do not split that by segment or by channel, that value. But I think -- and this is where you're heading with this question is that as part of the impairment review and as part of the non-underlying items that we talked about this morning, obviously, our full business in France and Germany and in Continental Europe was part of that review. And so today, with the base plans that we have, we believe that -- and that Satya has highlighted, we believe that whatever we have on the balance sheet is supportive of those strategies and actually reflective of the value that we can realize for those assets. Yes, I think that's what I would say.

Good. Listen, I'm conscious we've gone on longer than usual. We deliberately chose because of the interest in understanding what was happening in Europe to give ourselves a little bit more time to run through that today. But thank you, everyone, for bearing with us. And here, Satya and I are around for any follow-up questions that you might have. But thank you very much.

This presentation has now ended.

Ladies and gentlemen, welcome to the SSP Q4 Trading Update. My name is Sandra, and I will be the operator for your call this morning. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast.

I will now hand over to Patrick Coveney, CEO. Please go ahead, sir.

Thank you, Sandra, and good morning, everyone. I'm Patrick Coveney, the Group CEO of SSP. Thank you for joining us this morning as we're going to run through the highlights from the fourth quarter trading statements that we've just released. And I'm joined on the call by Geert Verellen, our Group CFO. And together, we're going to take questions after I share these highlights.

There are 3 key messages for today. Number one, a resilient Q4, underpinning full year earnings per share delivery in line with market expectations. The last quarter of the financial year has demonstrated our resilience and delivery in an unsettled macro environment, with constant currency sales growth of 4% and 2% like-for-like. Against this backdrop, we are on track to deliver earnings for the full year at 11.5p at actual exchange rate, a year-on-year increase of 15%, which is in the middle of our previously announced planning range and in line with market expectations.

Two, a GBP 100 million buyback announced and launched today. With leverage now expected to be at the lower end of our 1.5x to 2x target range and given clarity on our investment plans and confidence in our outlook for FY '26, we are today announcing a share buyback of GBP 100 million. This is where we have planned to be, and represents a clear compelling use of surplus capital, all the more so given our current share price.

Three, a plan to deliver FY '26 earnings per share within the range of market expectations. While the FY '25 results demonstrate some evidence of the work we have underway to drive enhanced performance, profitability and returns on capital across the group, we recognize that there is more still to be done, particularly in France and Germany, where returns are still unacceptably low, but where we are accelerating our actions to drive performance improvements into the new financial year.

So notwithstanding the uncertainty in the demand outlook across the travel market and the fact that, of course, we are only in week 2 of FY '26, the impact of these planned actions, particularly on cost reduction, mean we expect to deliver earnings per share for FY '26 within the current range of market expectations.

So turning to the first point then, resilient trading in quarter 4. Overall, group sales in quarter 4 rose by 4% year-on-year on a constant currency basis with like-for-like sales growth of 2%. Regionally, in North America, our sales grew by 4% in the quarter on a constant currency basis, reflecting significant net gains of 6% as we build out our presence there now to 56 airports.

In line with our reported results for Q3, we saw a like-for-like sales decline of 2% in the quarter due to a continuation in recent months of lower passenger numbers, especially for the international and transborder passengers across our network of airports.

In Continental Europe, our sales reduced by 3%. This decline was driven by the ongoing phased exit of our unprofitable motorway service units in Germany, with the complete exit from this channel to be substantially complete in half 1 of FY '26.

The consumer and rail channel environments in France and Germany continue to be difficult, contributing to a like-for-like sales growth of only 1% for the region as a whole. I'll come to describe our specific actions in this region shortly.

In the U.K. and Ireland, we had a strong fourth quarter, with sales growth and sales up by 7%, sustained by strong like-for-like sales, particularly in rail, despite the weeklong London underground strike at the beginning of September, which impacted our like-for-like sales in the region by approximately 0.5 percentage point.

And finally, in Asia Pacific and the Middle East, we were pleased to deliver a strong performance with sales up 12%. This was underpinned by excellent like-for-like sales in Australia and Malaysia. Our delivery there offset the lower-than-expected growth levels that we had in India and the Middle East during Q4 due to the temporary reductions in air capacity and air demand following the well-documented safety and geopolitical incidents in those regions earlier in the summer.

So that's trading for the quarter. I'd like to now briefly update you on where this leads us for the full year. Given the moderation in growth of passenger numbers in the second half of FY '25 that we've described, our like-for-like sales growth for the full year will be at the lower end of our guidance range of 4% to 5%. As a result, at constant FX rates, we expect to deliver full year operating profit of approximately GBP 230 million, up 11% year-on-year, but towards the lower end of the planned range that we set out last December, with a corresponding margin of approximately 6.2%.

Throughout FY '25, we've been working hard to pull all the levers that are within our control to drive stronger performance across the group. While we've made progress overall and we expect to see operating profit growth in each and all of our regions, we are not satisfied with where we are and continue to recognize the imperative to accelerate this with a particular focus on building profitability in France and Germany. We have tackled the challenges in those 2 markets head on, but we do not now expect the in-year profitability for the European region in 2025 to be at the level that we'd originally planned. This is due to a combination of the scale and timing of the changes and interventions required in France and Germany being greater than we had anticipated this time last year, but also by a deterioration in market and channel conditions in those 2 markets.

In all, we now expect our in-year operating profit in the Continental European region to be approximately 2% this year, up from 1.5% last year. But for the group as a whole, we expect this to be offset by strength across other regions.

Now clearly, there are still some moving parts before we close out the books and report our final numbers. But for now, we can say that reflecting a lower-than-expected interest charge and a lower effective tax rate, we expect to deliver earnings per share for the full year of approximately 11.5p at actual exchange rates, a 15% year-on-year increase in the middle of the planned range and in line with current market expectations. Furthermore, we anticipate that our full year group return on capital, by which I mean the measure we defined last year to capture the returns that accrue to SSP shareholders, will strengthen further from last year's results of 17.7%.

Turning now to the second message, our announced GBP 100 million buyback. As you'd have seen in the statement this morning, given our strong cash generation in the second half, driven by working capital initiatives and after disciplined capital investment in the year, we expect net debt to be below GBP 600 million, leaving leverage at approximately 1.6x net debt to EBITDA, which is towards the lower end of our 1.5 to 2x target range.

As a result, and given clarity on our investment plans and our confidence in profit growth and cash generation into FY '26, today, we are pleased to announce and launch a GBP 100 million share buyback in line with the capital allocation priorities and the expectations that we set when we spoke to you last December. This is an important milestone for us as a group and highlights our focus on generating better returns for our investors. There's more detail, of course, on the buyback in the separate release that we have published this morning.

So that brings me to message 3, our performance expectations as we head into the 2026 financial year. While there remains a level of uncertainty in the demand outlook across some of our travel markets, the actions we have taken to enhance operational delivery and tighten our cost base mean we currently expect to deliver earnings for FY '26 within the current range of market expectations on a constant currency basis of being between 12.9p and 13.9p. This progress is being underpinned by the full year effect of a substantial group-wide overhead cost reduction program that we alluded to in our half year results and that we actioned in the second half of FY '25.

Furthermore, as a result of the level and timing of the actions taken in France and Germany in FY '25 and with further initiatives now underway, we are planning for an operating profit margin in the Continental European region to exceed 3%. Working with our new leadership team there, we have a granular plan to build towards the 5% operating margin for the medium term that we set out last year.

In keeping with a tight performance and execution focus, we expect to drive cash conversion into FY '26, which here it is personally championed. And as part of that, we expect capital

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GBP 200 million. Importantly, this level of capital investment can still sustain a net gains level of approximately 2%.

We are a business that continues to deliver our strategy, strengthen our customer, client and brand partner relationships across the world and build out our talented teams. In that context, I'd like to thank our teams and partners for their continued work, support and skill in delivering this performance in the year, a year that has thrown up plenty of challenges.

However, for shareholders, we recognize that while we have made progress, there's still more that we can and must do to deliver the profitability, returns, cash flows and broader potential of SSP. We are in full execution mode to deliver this, and that remains our absolute priority into FY '26. Of course, we'll say more about all of this at our preliminary results on December 4.

So to recap then, we've had a resilient Q4, underpinning FY '25 earnings per share delivery in line with market expectations. We've announced GBP 100 million share buyback and launched it today. And we've set out a plan to deliver our FY '26 earnings per share level within the range of market expectations.

So for now, before I hand over for questions and answers, just a quick reminder to ask you to please keep your questions to 1 or 2 so that everyone gets a chance to contribute. Thank you for listening to these highlights, and I'll hand back to the operator who's going to moderate the questions.

[Operator Instructions] Our first question comes from Richard Taylor from Barclays.

Just one question for me, please. You alluded to lower interest and tax in the statement. Can you just talk through how you expect those gains to sustain into future years, if we should assume that? Or any other things to note on those points?

Yes. Thanks, Richard. Geert, do you want to jump in on that?

Yes. Richard, thanks for the question. I think there's a couple of things. The lower tax rate that we are able to bank this year will likely continue for a while. I think we'll give you more details in the prelims. The reason for the lower tax rate is because we are gradually adapting our accounting for the deferred tax assets in the U.S. As we get more granular and more optimistic about the continued future profit growth in the U.S., we are able to recognize those assets. That is one of the reasons, structural reasons, I would say, why that tax rate is lower.

The second, on the interest charge, we are actively working on -- I mean, number one, the overall interest rates are lower. That's number one. Number two is we have a bit of a positive impact of geographic mix within the interest charge. And the third point would be is that we are looking at different ways of funding our operations through other vehicles and the revolving credit facility that come at a lower cost as well. So there are some structural initiatives that are underpinning that lower than planned initially tax and interest charge. And here, just into...

How people should think about that as they look forward?

Yes. Good point. On the working capital side, you'll see that Patrick mentioned a couple of times that we're all over cash generation. One of those elements is to trade off or to look at different sources of funding. And obviously, as we get more granular and more effective at generating more cash, we'll obviously have to lean in less on our revolving credit facility. And as a result, that will reduce the overall volume of interest charge incurred, I would say.

The next question comes from Jamie Rollo from Morgan Stanley.

Two questions, please. First, could you please elaborate a bit more on Europe, specifically France and Germany? So why is it taking longer? You talked about the channel environment there. What exactly is going on? Could you even exit some of these countries like Italy? And what gives you confidence you can get the margins up to 3% in '26?

And the other question is, obviously, a good performance share price-wise by your Indian subsidiary, which makes the rest of SSP look extremely sort of -- extremely cheap. The buyback is obviously part of closing that gap. But I mean, I'm wondering sort of how focused you are on that sort of valuation discrepancy? What other action the company might be taking to close the value gap? Is the sort of publicized interest from activism part of that?

Jamie, thank you. Listen, let me take them in sequence. So I mean, I think I'd say 2 things about France and Germany, maybe 2 actually. Firstly, we are just very much on it in terms of fixing, sustainably and permanently, the drivers to improve performance in France and Germany, right? That's the first point. I'll describe what that means in a second.

Secondly, I think it would be fair to say, we have found the scale of the change that we needed to make in personnel, in process, in client engagements on rents, in performance opportunity to be greater than we anticipated we were going to before we started this change program with [ Satya ] and the team in France and Germany a year ago. So it has been greater.

I think the third thing to acknowledge, right, is in a business of many, many countries, the business environment in France and Germany, particularly in French and German rail, has been tougher through the year and has not got better through the year as we've been trading, and that has been a contributing factor as well.

So listen, we were disappointed not to get to the margin target for that region that we set out this time last year. We feel the interventions that we're making are improving the business. It's reflected modestly in the improvement in the year. And I think you will see that margin build as the interventions on team, the interventions on cost base, the interventions we've made with particular clients, particularly around rents and tackling loss-making stations or loss-making units structurally, and a series of operational metrics on labor planning, waste, loss, et cetera, take effect. So that's why we've confirmed that we expect the European region to deliver above 3% in '26 and that the medium-term guidance for operating performance of getting it to 5% is still intact.

What I would say, though, is the -- I used this expression back in May that there are no sacred cows, right? You mentioned Italy. We've actually -- we're close to exiting Italy. It's a small market, but it was a distraction to us, and we weren't getting good returns there. There's a series of stations where we're adopting a similar approach. And we will do everything that we need to do to build the returns of our business in Europe. There's a base operating plan that we have, and we're going to deliver against that. But we will also look at other things that can improve the margin structurally as we look forward in those 2 countries.

Your second question was around India. Listen, we were delighted to get the IPO of TFS away in the middle of July. It's less than 3 months trading. I mean the most important thing for it is that it's been a real success so far. Strong demand for the shares, the investment case really appreciated the stock building very well since the initial launch.

Yes, if you do that right now as a component of a sum of the parts valuation for SSP, it looks on balance. And so what we've got to do is to demonstrate the value of all of SSP to continue to trade India well. And over time, let's see the degree to which that valuation anomaly to use my words to what you said unwinds. And we'll kind of track all of our options in that respect.

The next question comes from Manjari Dhar from RBC.

I just had 2 as well, if I may. The first question is on some of the acquisitions you've made in recent years. I suppose a few of those getting close to that 3- to 4-year point after acquisition where you'd expect them to pay back. I wonder if you could give some color on sort of how paybacks, how returns are developing on those versus what you've achieved historically?

And then secondly, I just guess is -- just a sort of follow-up question on Jamie's question on Europe. I suppose how much flex is there in that 3% margin that you see you can achieve in fiscal '26 if the market environment, both in France and Germany, were to weaken further? I guess, how many -- do you have levers that you can pull if that did happen?

Yes. Manjari, I think we did touch on the acquisition topic back in -- back when we did our prelims in May -- or sorry, interims in May. So just let me be very specific. The acquisitions we've done have all traded at or above the investment case that we had for them, and we are really pleased with their performance in every respect, right? And by that, I mean there's 5 of them, right? There's the 3 acquisitions in America. And so in Atlanta, plus Midfield Concessions plus ECG in Canada. There's the acquisition in Australia, which was the market-leading business ARE there. And the final one was the acquisition in Indonesia. They are all trading well to plan, which was for -- if you remember, which was for an IRR of above 15%. And actually taken in aggregate, the current tracking of those investments is above 20% IRR. So they have delivered in line with the strategy and the financial case that we had for them.

The -- I prefer, frankly, to comment on the acquisitions that I'm accountable for and can speak to specifically versus what may or may not have been the performance of businesses that were acquired before COVID by SSP. Except to note, obviously, as we said in the TFS announcements in the summer, that the return to SSP shareholders and the original investment in Travel Food Services, given the IPO success of the business, has obviously been spectacular.

On Europe, we've done -- a lot of what we have done, both at the group level and within Europe, that forms part of the earnings per share guidance for FY '26 has been on cost. We've taken a pretty cautious view internally on the demand environment for FY '26. And so it's critical for us to underpin our earnings delivery everywhere through cost, through productivity, through operational delivery in all places. And so we're not anticipating an improvement in the macro environment in France and Germany, for instance. We're trading it as we're currently finding it.

Now we're also conscious that if we're going to give for the second year, a specific target in terms of margin for Continental Europe, namely 3%, then having not hit it in '25, we need to make sure that we have plans that give us sufficient contingency to make sure we hit it in FY '26. And that's sort of our mindset in terms of what we're doing, but also how we're guiding for what's going to happen in Europe this year.

The next question comes from Tim Barrett from DB Numis.

I had a question on each year, please. So on this year, just gone, if you take a step back, you report lots of KPIs, but the only one that's changed like-for-like wise from Q4 versus Q3 is APAC. And obviously, we heard about the Air India groundings. So can you quantify really what impact Air India had -- sorry, India, TFS had in the quarter? Which kind of leads me to next year. Is that sufficient if that's out of the numbers to get you to the 3%, which is the like-for-like in your growth algorithm?

And then lastly, you've obviously announced about a 7% retirement of equity today through the buyback. Should we put that into your number for next year? Or would that be overcooking it?

Yes. Geert, if I do India and you look up the earnings per share piece?

Yes. So Tim, I mean, I think the material difference versus Q3 in -- and by the way, an overall pretty strong region in terms of sales performance, which is our Asia Pacific and Middle Eastern business. It's continued to trade well. We found that the like-for-like performance of India specifically, was very soft post the really tragic Air India crash, which led to a very significant uptick in operational safety checks and airplane maintenance initiatives through the summer.

So we had a business that had long-term structure, very strong like-for-like growth. We've gone through a quarter or so of that coming right off because of the change in airplane capacity through the period. And fortunately, we're seeing those planes come back into flight now. And we're seeing a reversion towards the sort of historic growth levels we would have seen in that market, and that would have been part of the investment case for TFS and what Varun and Vikas and the team will talk to investors locally about as well. So I think that's the change.

There was a bit of a positive offset for us because as you saw in the statement in Australia and Malaysia, the like-for-like performance has been very, very strong through Q4. But India softened in the quarter in sales terms. And fortunately, it's coming back as we come into -- as we come into '26.

Geert, I'll let you pick up the earnings piece.

Yes. Tim, if I'm not mistaken, your question on EPS is how should you model or what would be the impact of the share buyback on EPS? The statement we made this morning is without taking into account that accretion. I mean, obviously, we believe that there's going to be some moderate accretion coming from that share buyback. But we didn't use that or model that into to make our statement this morning around where we would end versus the market consensus.

Is that your question?

That was exactly my question. Very clear.

The next question comes from Harry Gowers from JPMorgan.

First question is just on the U.S. I mean, we can -- I think everyone can probably see that the TSA data overall has inflected the past few months for U.S. air volumes. So I mean, why do you think your network or maybe your mix of airports is not kind of seeing an inflection in terms of positive or more positive like-for-likes in that market?

And then just going back on to Europe, I mean, it's maybe just not totally clear to me from the outside why the margins are lower than expected because the like-for-likes are subdued, but they obviously haven't materially weakened. So I mean, Patrick, is the exact issue like cost productivity or maybe loss-making units just remaining loss-making longer than expected? Maybe you could just -- sorry to go back on that, but elaborate that point a little bit more.

Yes. No problem. So U.S. first. So I mean, let me first say, I mean, I think Geert and I, we both feel, and the specific plans that we're working with George and [ Brian ], our U.S. team on, is that we can actually drive like-for-like harder in America, right? And so as we look at the specific trading plans that we put in place for the '26 budget around Sunday trading, around meal deal configuration, around specific staffing in individual airports, some of the activation initiatives and different initiatives, I think we -- there are some things within our control that we are working on to strengthen like-for-like performance, regardless of the macro environment in the U.S. and that you'd expect us to be doing that given the capital that we've got there, the team that we have there, the footprint that we have in airports and so forth.

However, when we adjust for the mix of airports that we have in terms of what -- and within those, the role that a combination of international passengers, generally, and transborder passengers specifically from Canada, play, we think we're trading in line with the market weighted for the airports and passenger mix that we've got. We're looking to improve it, as I say, the things that we're doing, but we don't believe we're out of line with what's been experienced by the direct competitive set we have in those airports or as a way in which passengers are actually behaving in them. So that's how I describe it.

I mean, on Europe, I mean to cut into -- if I just say maybe 2 things beyond what I've said already. So the first is European performance is a function of basically 4 markets, not just France and Germany, right? And so we haven't referenced Spain or the Nordics by -- specifically in the statement. But actually, we're pretty pleased with the performance in those 2 regions in terms of how they traded through the summer. Spain is a very high margin market for us, and the Nordics is a recovering market for us given the huge level of renewal activity that we've spoken about before in '23 and '24, and we're on a good path there.

I think the point that you'd say about like-for-like is not deteriorating in the quarter. We had anticipated they would have improved in our planning, right? And if you remember, last year, we had quite a lot of disruption when we didn't trade the Olympics well. And so we had expected that we would have come in to a period of softer comps and that you would have seen better like-for-like performance feeding through to better operational conversion and a somewhat better profitability in Q4 than we actually delivered. That didn't happen.

I've made the point earlier on this call that the scale of the change that we're putting through these businesses to fix them properly is very high, and that will feed through to the cost base, the operational performance, frankly, the configuration, culture performance ethic of the team, and a whole series of discrete profit improvement initiatives around rent negotiations, unit level performance, tackling specific loss-making units and stations, GP initiatives, menu, labor planning, many, many things that [ Satya ] has, is going after in a granular and sequenced way with an increasingly fresh and capable team. And Geert and I are supporting and driving that in all the engagements we have with them.

Self-evidently, based on what we've said, it's taking us longer than we thought it was going to this time last year, and that's unfortunate. But what we are doing is fixing it properly with all levers. And hence, the reaffirmation of both the in-year guidance level for '26 and the medium-term target of 5%.

And Patrick, maybe I could just follow up super quickly. I mean do you think the level of investment or kind of the cost of investment required to turn around the business is going to be higher than expected into '26 on OpEx or even CapEx or it's all in the plans?

Yes. I mean it's in the plan. We're not -- I mean we've taken the cash costs of the changes through '25. And actually, if anything, the real focus that Geert and I have on this is actually scaling back the capital investment into this region because it's just a lower returning region than the others. And so within the capital envelope that we both reported on in '25, the GBP 220 million, and that we're planning for '26, the GBP 200 million, you're seeing progressively lower levels of capital going into that region relative to the other regions because we just get a better return elsewhere. And so we get Europe to a stronger place. We're going to continue to think about incremental investment in that way.

The next question comes from Ryan Fintan from Goodbody.

Fintan Ryan here from Goodbody. Two questions from me, please. Firstly, I guess just following on from a lot of the sort of specific market questions you've been facing in the last few minutes. But bigger picture, back in May, you had set out your midterm guidance for 5% to 7% constant currency sales growth. Clearly, like-for-likes in Q4, just plus 2% and sort of more subdued sort of net new figure. But should we expect, at this point in time, would you be still aiming to deliver that 5% to 7% growth envelope constant currency for FY '26? Or just sort of -- or could you give us a sense of where you think that could track in the short term?

Yes. I mean I think, Fintan, we haven't changed the guidance. We're very early in '26, right, and we've given an integrated set of guidance around earnings per share without jumping in a sort of post-close trading statements to each of the constituent parts. We're going to do much more on that when we do our full year results in December.

If you wanted my judgment, I think we will be -- we're going to be more at the lower than the higher end of that range when we think about the combination of net gains and like-for-like growth. And -- but that's because we're choosing. We've got a mindset going into the year of being cautious on the kind of macro environment in which we're operating and making sure that we get the kind of operating cost and execution focus of what we think will be a somewhat tighter demand environment going forward than might previously been the case.

Great. And then, I guess, sort of a follow on from that. And I guess you alluded to some of the incremental cost actions you're taking, not just in Continental Europe, but would you -- could you hope to deliver margins above the 20 to 30 basis points incremental improvement in '26?

I mean I think I'd have to go back to my first answer, Fintan, which is, let us be a bit more specific in December about the components that sit behind the earnings per share guidance that we've given today. I mean what we have said today, just to put it in my words, right, is there are a lot of moving parts and there are a lot of uncertainties, but we have a plan that will find a way to deliver earnings per share in '26 in line with current market expectations. The exact constituent parts of that will evolve a little depending on external conditions in different ways, and we'll take everyone through that in a little more detail in December.

The next question comes from Anna Barnfather from Panmure Liberum.

Just got 2 questions. Firstly, just on the U.S. passenger volumes that obviously have been a little bit subdued, has that changed the pace of tendering new business in the market as people have reacted to that? And are you still sort of targeting moving up from the sort of 56 airports up towards 90? So that's the first question.

And then the second question, obviously, the GBP 100 million buyback is quite a statement on your confidence of future cash generation. I just wondered if there were specific metrics that guided you to settle on that amount? Is it holding that 1.6 net debt? Yes, just a bit of background on that.

Yes. Thanks, Anna. Let me do the U.S. question, and Geert, pick up the buyback one.

I mean the truth is, neither are nor I think the kind of industry posture towards America has changed very much in terms of investment profile or investment attractiveness based on that. There's a relatively recent -- about, I mean, 6, 8 months slowdown in like-for-likes.

The -- why is that? Firstly, we haven't got into regional-by-regional performance, but our profit performance in America is going to be very good when you see it, and our margin performance in America is going to be very good when you see it. So the returns that we're getting there are still really good.

Second point, you do -- when you get into the detail of this, you do have to look at the overall organic growth that we're getting, which is the combination of the net gains and like-for-like, in part because some of the net gains are actually in airports that we're already in, and there is some netting effect that goes between the 2 of them. So I actually would start with the growth in North America in total and then recognize that it's -- there's some judgment on how you parse that out between net gains and like-for-like.

Third thing I would say is that the space does continue to be available at very attractive rents, and we have a model that's been pretty successful in scaling our business over -- and in particular, over the last 3.5 years, which is the period that I've been here, which you've heard me say before is going from a little over 30 airports to 56 now. So we've really stepped the business on a lot. And we've done that importantly while improving the margin that the business earns over what the business was earning in the pre-COVID period in North America, and that's -- by which I mean a double-digit EBIT margin, right, and the higher -- obviously, much higher than that on an EBITDA basis.

And then I think the last thing in terms of emphasis that's probably worth me saying is that I don't think we're in a rush to jump up the number of airports per se towards the 90 that you've referenced. I think if you we're to ask Geert and I on the kind of big focus we have with our teams, it's -- we've got a lot of very interesting starting point positions in airports. So I think some of the big airports that we've entered in the last 18 months, Denver, Atlanta, Miami, Newark, where Philadelphia, which we weren't in before. I think there's a big opportunity as we look over the next 3 to 5 years to get a return on those initial investments in terms of scaling our business in those, rather than just thinking about adding airport after airport after airport from here. So -- and I think that's where you'll see some of the kind of net gains or incremental capital to be spent as we roll forward.

Maybe the second part?

Oh, sorry, you jump in...

So Anna, there are a couple of things I wanted to say on that GBP 100 million. Number one, I think the range that you've consistently heard us talk about that we're comfortable in on leverage is the 1.5 to 2 range, give or take a little bit of seasonal flux that you have within the year. Based on our plans, we're comfortably close to that range. That's number one.

Number two, when I think about sources of funding for that GBP 100 million buyback, there's a number of things that I see. On the horizon, I think what we're definitely looking at is an increase in EBITDA for next year. That's number one. Number two, we have lower capital spend for next year. So that in itself will free up some cash. And then the last part, not in the least, is the opportunity that we have to improve our working capital management, and that can be a substantial source of funding going forward as well. And then obviously, as a fourth lever, especially given that leverage range, we still have our revolving credit facility that we can have available to fund part of this as well.

So all of those together, and then also given the fact that we've done some sensitivity analysis on the, what I would call, the 2 most important sources of over or underspend on cash, which is EBITDA generation and capital -- CapEx, all of that work gives us the confidence that we can launch this GBP 100 million without being worried that we're going to blow the leverage out of the water here. So that's all in all, where the confidence comes from.

Is that an answer to your question?

Yes, that's great.

The last question for today's call comes from Greg Johnson from Shore Capital.

Just a couple of questions. Could you maybe touch on the U.K. performance, which looked pretty healthy in the quarter, especially with regard sort of reference to M&S and the impact of the cyber incident.

And secondly, just in terms of the sort of new openings over the last 12 months to 2 years, can you sort of talk about the performance of those units, especially against the sort of targets and how the market for the tender market for new contracts is shaping up globally?

Yes, Greg, thanks. I mean on the U.K., and I shall join your second question with your first there which is, undoubtedly, and you hear me say this. I think there are -- the longer I'm here, the clearer I am on the opportunity for us to frankly, continue to drive performance improvements everywhere across our business. And the last 2 weeks alone, in relation to the U.K., I spent a day with our operating team in Newcastle, a day with our operating team in the -- both Birmingham New Street and Birmingham International Airport to kind of really build next year's plan. But what I would say is the momentum we've got in the U.K. is very good, right? You see that in the 7% sales growth and the 6% like-for-like in Q4.

As you know very, very well, Greg, with your team, the -- we obviously had a sales slowdown in Q3 and through part of Q4 with our M&S business as they were working their way through the impacts of the cyber attack that they had earlier in the year. And our team have worked absolutely hand in glove with them because we have to reconcile all sorts of things with them, including both of us having essentially the same kind of half year, full year reporting date and needing to kind of cleanly cut one to the other. So it's a very important part of our business in the U.K., the scale and relationship we have with M&S. I think we've worked our way through that. And you're seeing those stores come back towards the type of performance that they were having pre-cyber, but clearly, it took a while through the period. And for our team to have had 7% growth in the U.K. while all that's going on has been pretty good.

I think more broadly, on the impact of renewals, we, as all of you on this call will know, we had a heavy period of investment in '23 and '24 as we had all of the -- many of the renewals that were deferred by COVID being sort of retendered, renegotiated, reset coming out, and then those units being built and invested in '23 and '24. So a huge focus for us has been getting those units towards business case in terms of performance. We track this very fully in all of the mechanisms that previously, Jonathan and I, and now, Geert and I have with the business and also in a formal post-investment review process. And so we are making good progress on that. There are some pockets across the world of further work on and mitigants that we need, in particular, from clients around rent where there are some things that we need to do. But the general picture is good across the world, and you see that in the improving margin performance overall for our business.

I think you will see that our business is going to normalize now at a lower level of new capital required, both in terms of the kind of renewal or net gain capital, but also because a lot of the post-COVID investment work that was needed in different parts of our business has already happened. And so that's going to put us to an inflection point in terms of the cash generation of the business. And that really is a huge part of what Geert was talking about in the kind of confidence that we've had to initiate the share buyback because we think the uses of capital that we will have are going to enable us to return more money directly to shareholders, while still sustaining a healthy level of like-for-like in net gains in the business but off a lower relative capital investment level that we going to have in '23 and '24.

Sorry, Greg, did that answer your question? I'm going to assume that it did.

Sandra, can you hear us there still?

Yes, we can hear you. I would say that this concludes the question-and-answer session. I would like to turn the conference back over to you for any closing remarks.

Yes. Listen, thank you for joining us. I mean just to recap the 3 themes from our message today as we see it. One was the resilient Q4, underpinning the FY '25 earnings per share delivery in line with expectations. Second was the announcement and launch of our GBP 100 million buyback. And then the third was the kind of forward-looking guidance for '26 to have earnings per share in line with current expectations.

So they are the 3 key messages. Geert and I will be back, talking to you on the 4th of December with our preliminary results. And thank you for joining us this morning. And if you have any follow-up questions, please come back to us or Sarah in particular, who's with us here today as well. So thank you.

Ladies and gentlemen, this concludes today's conference. Thank you for joining. You may now disconnect your lines. Goodbye.