SSP Group plc

Thank you and good morning everybody and thank you for joining us for our preliminary results presentation for the year end of the 30th September 2022. I'm Patrick Coveney, I'm the Group CEO and I'm here today with Jonathan Davies and Sarah John. This presentation builds on the preliminary results R&S that we released at 7am in London this morning. Turning now to the agenda for this morning. I will start by briefly touching on the highlights from the year. Jonathan will then talk through the detailed financial review and then I'll come back in to cover my impressions of SSP having been here now for eight months, the global travel industry context and our strategy to deliver growth and returns, and our financial planning assumptions and near-term outlook. We'll then conclude with a question and answer session for those of you on the call. Now to our results. The key message from these results is that SSP has both performed strongly, particularly in the second half of the year, and is set up to access structural growth opportunities for the global travel sector, thereby driving strong growth and returns. Jonathan will set out our financial performance for FY22, but let me point to the 127 million of EBITDA that we delivered in half to and the further strengthening of revenues in the first two months of FY23. Our business is in good shape to drive excellent growth and returns in the years ahead, and I will describe the context and strategy that underpins that assertion after Jonathan now explains our financial performance. Over to you, Jonathan. Thank you, Patrick.

Though we've seen a strong recovery in the second half and more importantly, we've seen a return to profit for the year. Looking at the financial highlights, full year sales were 2.18 billion, so slightly ahead of the guidance in our pre-close update in September. This represented a recovery to about 78% of 2019 sale levels. EBITDA was 142 million pre IFRS 16. Again, slightly better than the pre-closed. This compared with losses of £108 million last year. This left us with an operating profit of £30 million compared with a loss of £209 million last year. Generated cash of £52 million, helped by the ongoing recovery of sales across the period and after capital investment of about £150 million, leaving net debt at £297 million at the end of September. However, the next couple of slides, I'm going to run through the reported numbers and highlight the impact of IFRS 16 and the exceptional items. Thereafter, I'll focus on the three IFRS 16 numbers. Looking at the overall P&L, you can see that the impact of IFRS 16 is to increase EBITDA by around £170 million, mainly reflecting lower concession fees. This is offset by a higher depreciation charge, leaving operating profit broadly similar under both accounting treatments. Worth noting that the IFRS 16 concession fees don't include the benefit of short-term waivers of fixed rents of around 23 million, which have been treated as exceptional profits. I'll come back to that. Looking further down the P&L, the IFRS 16, the net financing cost was around 44 million, compared to 82 million under IFRS 16, which includes the unwind of the discount on the fixed lease liabilities. The minority share of profit was 24 million back to nearly 2019 levels, reflecting the more rapid return to profitability of the countries where we have joint ventures, including across North America, India, Thailand and the Middle East. This left a pre IFRS 16 underlying net loss of 35 million and a loss per share of four and a half pence. Now under IFRS 16 there was a 60 million exceptional operating profit. And as a result, the reported operating profit was 92 million. The exceptional profit included the benefit of 23 million of temporary minimum guarantee waivers. and the further £62 million from the de-recognition of lease liabilities as we've removed minimum guarantees. This was booked in the first half and included the impact of the new government legislation in Spain. In aggregate, our IFRS 16 lease liabilities have reduced material over the last couple of years from approximately £1.5 million to around £850 million. reflecting the successful renegotiation of many contracts during the pandemic, linking minimum guarantees to passenger numbers, so they now fall outside the scope of IFRS 16. This is commercially significant as, in the event of future volatility in sales, it gives us greater downside protection. We've also made asset impairments of around £18 million mainly relating to outlets which we've chosen to exit as a consequence of COVID. There's also an exceptional adjustment to financing costs of 9 million, simply reflecting an effective interest gain on IFRS 9 debt modifications booked in the year. Left the net loss at 10 million or 1.3 pence a share. So now I'm going to move on to the business performance and firstly have a look at sales. Sales recovered very strongly as soon as the COVID restrictions were lifted in the second quarter. We've had a very good summer with sales at 90% of 2019 levels in the second half. Since September, we've seen sales strengthen further, averaging 104% of 2019 levels in the first eight weeks of the new year. The pace of recovery has been pretty consistent across our major markets. The best indicator of the trend is to look at the run rate compared with early 2020. That is still, of course, pre-COVID. And this was at 97% over the first eight weeks, with North America, continental Europe, and the rest of the world all above or very close to 2020 levels. Of course, all well ahead of 2019 sales. The strongest performances in North America, assisted by buoyant domestic air travel, North America is at 109% of 2020 sales and 131% of 2019. But this also includes the benefit of new openings and the recent strengthening of the dollar. In the rest of the world, we've seen a particularly strong recovery over the summer and into the autumn, with continuing improvements in passenger numbers in Thailand, India and Australia, all led by domestic air travel. And this is despite the travel sector in China remaining largely closed, which of course has a knock-on effect to the rest of the Asian markets. In the UK, the recovery has been impacted by the rail strikes over the late summer and into the autumn. However, the UK air business continues to perform well and very much in line with the rest of Europe. Across all our regions, the strong recovery in air has been led by leisure travel suggesting a real pent-up demand for holidays, which has continued well into the autumn. And the shift in mix towards leisure passengers has also helped to drive sales growth ahead of passenger numbers. Leisure travellers typically have longer dwell times and therefore spend more than business travellers or commuters. So turning to profit, overall EBITDA margin for the year recovered to 6.5%. in line with our previous guidance and reflecting the strong recovery in sales. Looking down the P&L, gross profit margin improved by 40 basis points in the second half compared with the first half, despite the increasing inflationary pressures in many food commodities. Gross margin were up by 1% versus pre-COVID levels over the year. This was a really strong performance given the backdrop of inflation and demonstrated the effectiveness of our ongoing programme of menu and range engineering, as well as our ability to mitigate inflation with pricing. Labour ratios were down to 30% in the second half, which was only 2% above 2019 levels, despite the lower volumes and the inflationary pressures on pay rates. This reflected our discipline management of labour levels through efficient scheduling, as well as opening and closing units or flexing opening hours. Of course, there was no further government furlough support in the second half. Concession fees, you can see, were only 1% above 2019 levels, despite the much lower sales, again reflecting all the work we've done on renegotiating minimum guarantees, as I described earlier. Turning to the cash flow, we generated underlying free cash flow of 52 million in the year, helped by the positive EBITDA and the inflow of working capital of 117 million. This has mainly been driven by the recovery in sales over the year, which have moved from around 50% of pre-COVID levels last September to around 95% this September, and that has rebuilt our negative working capital back towards more normal levels. And we've also benefited from our success in maintaining similar levels of deferred payments. We estimate that the value of these deferred payments, mainly rents, is currently in the region of 120 million. We'd expect no more than two thirds of these to unwind during the coming financial year. Indeed, as we've said previously. stepped up our capital programme in the second half to £100 million, leaving overall investment of £149 million for the full year, which was in line with our guidance at the interims. Looking to 2023, we expect capital investment to increase to nearer £250 million. So at the higher end of our previous guidance, this reflects the growing pipeline of secured contracts, which Patrick will cover later, but also our greater confidence in the timing of the build programme this year. Cash interest was 41 million and the cash tax was a very small outflow and this left net debt very slightly lower at 297 million once the non-cash adjustments and FX movements had been eliminated. Looking at the overall liquidity on our balance sheet, You can see that we had cash of nearly 550 million at the year end, which added to our undrawn committed facilities of 150 million, gave us access to liquidity of over 700 million. Excluding the non-cash accounting adjustments to our reported net debt, left our leverage, as it would be calculated for financing purposes, at two times net debt to EBITDA, so back within our historical target range. There are a couple of points worth throwing out here. You can see that our term debt is split broadly 50-50 between floating bank rate debt and fixed coupon debt, that is US private placement notes. And the cash balances are reasonably well matched with our floating rate debt facilities, therefore act as a natural hedge against any movements in interest rates. It's also worth pointing out that we hold these cash deposits in multiple currencies, broadly matched to our gross net exposure, which means that they provide a natural hedge against the impact of any FX movements on our leverage. Looking at our capital allocation strategy, our priorities for the use of cash remain unchanged. Our first priority is capital investment for organic growth, given our ability to deliver high returns on investment in new contracts and renewals. typically with discounted paybacks of three to four years. We continue to exercise the same disciplines around investment appraisal, and very importantly, we've got a long track record of delivering returns in line with or ahead of our target hurdle rates. Our second priority is for M&A, and we believe that opportunities will arise in the near term, mainly as a consequence of the financial pressures on some of our competitors and the smaller players in the markets. We'll actively pursue infill acquisitions, but as ever with the disciplined approach that we've demonstrated historically. Based on our current expectations, which we'll set out later, we would anticipate reinstating the ordinary dividend for 2023. We still believe that medium term leverage range of between one and a half and two times net debt to EBITDA will be appropriate for the business. and we would expect to return any surplus cash to shareholders either through a share buyback or special dividend as we did prior to COVID. This has been a very effective financial model for a number of years. The next chart, looking at our track record from the IPO in 2014 to 2019, see that our capital investment rose from around 70 to 80 million in 2014-15, up to around £200 million by 2019. All of this investment was internally funded from operating cash flow, which had risen from around £160 million to around £280 million across this period. Importantly, we would of course have been able to sustain a higher level of growth from new business had the opportunities presented themselves. In fact, we elected to return surplus cash to shareholders through special dividends in 2018 and 19, and indeed were planning for a share buyback in 2020 prior to COVID. All of course, whilst maintaining leverage within that target range. The cash generative nature of our business is very much at the heart of our financial model, and it's all underpinned by delivering high returns on each individual project. There's no reason why this model shouldn't work in exactly the same way in the future once we've delivered further, especially as the market becomes arguably more challenging for our competitors and we strengthen our own competitive position. Now let me pass back to Patrick to cover the business review and strategy.

Thank you, Jonathan. For those of you listening to this by way of recording, I'm now on slide 16. In this review, I will cover three areas. One, my impressions of SSP and our priorities going forward. Two, the travel industry context and our strategy within it. And three, our financial planning assumptions for future performance and our current outlook. Since joining SSP in late March, I dived into the business, visiting 20 of our 35 countries, some multiple times. You see, I needed to dig deeper beyond the corporate office perspective to understand the essence of SSP. In doing so, I've engaged with our teams, our clients, our brand partners, our suppliers, and with multiple local joint venture partners. Throughout, I've felt welcomed. I'm very conscious and I've learned that we're a winning business with in-market teams who skillfully restarted our business post the COVID shutdown and are now building share growth and returns in each of our geographies. I've learned that we're a global business extending way beyond our roots in the UK. And also I'm learning to understand the wide network of stakeholders and relationships that we pull together to enable delivery of brilliant food and beverage solutions to travellers. From these engagements, I formed and tested with our board and with our executive committee a clear view on our foundations and priorities. My impressions of SSP are positive, but of course, we have improvement opportunities as well. We have strong foundations on which to build. We've got deep positions in large, fragmented and growing markets. Our skills teams combine relevant local expertise with central group process and capability. In particular, our teams did an awesome job of reopening our outlets and our wider estate as the travel market bounced back post COVID. We operate with five distinct concepts, sit down restaurants, bars, quick service restaurants, coffee shops, and food focused convenience stores. And we deploy these concepts expertly, but selectively through the air and rail channels across the world. Our strong partnerships with brands, clients, and local joint venture partners have, if anything, being strengthened through the challenges of COVID. And we have a track record of winning new business, profitable new business against a rigorous investment review process. And all of this is integrated into an economic model which drives our growth and returns and is deeply, deeply embedded both formally and informally across our business. Our priorities then as I see them are firstly, to remobilize as effectively as we can using the competitive opportunities that are emerging through COVID to strengthen further our in-market positions. We've got significant potential for accelerated but targeted growth in some of our geographies, and I'll come back to say more on this later. We can do more to strengthen our customer proposition and in particular to drive like-for-like revenue growth. In a challenging macro environment context, we need to do all of this with a revitalized efficiency program and by carefully managing our cash and leverage. We need to build on some capabilities to drive growth, returns, and resilience. And lastly, we've got scope to leverage our scale and scope across the world more effectively. Let me transition now from these impressions to some actual data. Critically, you see here, SSP operates and competes in a structurally growing travel market. Here are a set of recent third-party estimates on the traveler recovery and forecast growth rates for traveler numbers out to 2030. You can see that there is a pronounced build back everywhere. At some point through 2024, passenger numbers are expected to return to pre-COVID levels. Geographically, the strongest growth in the air channel is expected to be in North America and parts of Asia. And you can also see, importantly, a steady build back in the rail channel, as well as the growth that you're seeing in air. This growth is underpinned by a set of tailwinds that we highlight on the right of this slide. A long-term trend of rising incomes in emerging markets, and that correlates with travel. A huge level of investment that I've seen and discussed firsthand with clients now whilst traveling around the world. And this investment is building out the quality and the quantity of the travel infrastructure. There's a shift in this infrastructure from retail to more space dedicated to onsite traveler experiences, especially food and beverage. And you're seeing a relatively stronger growth profile for low cost carriers, which typically offer fewer onboard food solutions. And all of this is happening in a fragmented travel food and beverage market where we are the second largest global player, but with a share of only 10%. Clearly at the moment, consumers and businesses are facing multiple headwinds. However, and this is important, we believe that our markets are fundamentally more resilient to the pressures on consumer spending than many other consumer sectors. Why? Well, the post-COVID recovery in travel is being principally driven by leisure missions, which underpin 75% of our revenues. And we anticipate that the profile of these leisure travellers will leave them less impacted to these pressures than the wider population. We've recently commissioned some research into the behaviours, the spending patterns and the food and beverage expectations of leisure travellers, which demonstrate this resilience. These travellers are affluent, with 70 to 80% of flights now being taken by people earning above median income. Looking ahead, travel is the number one priority for spend of discretionary income with a pent up demand for holidays still very much there. And importantly for our business, food and drink experiences are an important part of the overall travel journey. 50% of travelers buy and consume food and beverage before flying and 45% of travelers buy food to bring on the plane with them. And the macro data supports this. Air passengers are recovering strongly in nearly all of our markets and are now back at over 85% of pre-COVID levels in every region except Asia, which is still held back by China. And critically, spend per passenger is up on 2019. Standing back from this data, while of course we cannot be immune to macro headwinds and to potential external events, no consumer-facing business can be. But what we're learning is that our business model is more resilient to the current macro headwinds and to the current narrative than many appreciate, both in terms of likely traveler behavior and our operational flexibility to meet that traveler behavior. On slide 21, we highlight three macro headwinds and how we are mitigating each of them. In aggregate, these pressures are most pronounced in Europe and particularly in the UK. but we have had a labour availability and rate challenge in North America, albeit it now does seem to be easing as we transition into the winter. I'm not going to go into each of these elements, but to pull out several examples. With regard to the economic slowdown, SSP is geographically diversified, with more than 70% of our business now sitting outside the UK. Our cost base, and in particular our rentals, are now largely variable. On the super normal levels of inflation that we're all experiencing and seeing in food, we have procurement scale and expertise. And every week through the trade calls that Jonathan and I host with our regional CEOs and with their teams, we track against inflationary pressures and ensure and manage against the mitigation of these impacts fully in cash terms through pricing initiatives and other menu design initiatives. We're also conscious though that some consumers are under real pressure here. And we're building a range of offers at different price points, including entry-level value, to ensure that we can find a way to have our proposition insofar as we can be on the side of our consumers. On labour and energy, we're restructuring the way we work to reduce our reliance on labour through the use of digital solutions. But importantly, and versus other in the sector, our energy costs are low. representing only 1% to 2% of sales. So without being complacent, we feel comfortable in the ability of our business model to mitigate these impacts. SSP has a deeply embedded economic model, which underpins our performance and has helped us to deliver a track record, which Jonathan outlined earlier, of shareholder value creation prior to COVID-19. Hopefully you will see and have seen in our results today that as volumes have come back, which of course were most pronounced in the second half of FY22, this model is enabling us to deliver strong results, strong profits, strong cash flows. Turning now to our strategic priorities. Here's how we think about the drivers of longer term growth and returns. It's a combination of a targeted geographic focus where we are choosing to compete and enhanced capability and operational efficiency, how we are competing. Starting now with geographic focus. SSP is on a very important journey from our largest market being in the UK to our largest market being in North America. Our US business has a brilliant track record with a revenue compound growth rate of 26% and building returns in each year across the five years pre-COVID. We have a locally tailored strategy, delivering formats and brands that create a sense of place and a sense of localness at each airport, and a strong, well-regarded US leadership team. Importantly, we build very long-term relationships with clients. These are typically local or state government owned. And we also build relationships with joint venture partners many of whom are airport disadvantaged business enterprise, which is a prerequisite for operating many airport contracts in North America. As you can see on this map, though, we are under-penetrated. Today, we are only in 30 of the 80 largest airports in North America, with a market share of approximately 10%. So we have a significant ability to grow shares strongly from here, and we've got a four-fold plan to do that. Firstly, we're gonna increase our share in the existing 30 airports, large airports in which we operate. We're then going to steadily, and we're doing this, further penetrate the 50 of the 80 top airports that we're not currently in. We built a flexible model that enables us to deliver good returns across smaller airports. Those are airports which typically have between one and two million passengers per year. And we're gonna add to these three initiatives by value creating in-fill M&A in North America, but done with the discipline and the returns focus that Jonathan highlighted earlier. Our strategy will also build significant presence and scale in selected Asia-Pacific markets. We have an exciting footprint already with building momentum. You can see from the chart that we've got a broad set of businesses in these markets, but our real jewel is India. We are now approaching as many outlets in India as we have in North America. We've got close to 300 outlets in India now and a fabulous joint venture partner in TFS. Across Asia Pacific, the breadth of our concepts, including access to international brands, is particularly important. And we complement that capability with local joint venture partners in almost all of these markets. to provide us with deep on-the-ground know-how and relationships. You can see from the middle of the table, we are expecting significant growth across this region, particularly in India, with increasing numbers of travelers, an increased demand for food and beverage, and more use of air travel, with a forecast for more than a doubling in the number of Indian citizens that will use air travel between 2019 and 2013. Our new business agenda is tightly aligned with these geographic priorities. And as you can see from the middle pie chart, two thirds of our new contract pipeline is located in North America and rest of the world, with the rest of the world principally being Asia Pacific. As we continue to build on that pipeline, in the second half, we added a further 50 million to take the total anticipated net gains, that's gains made in revenue since 2019 to approximately 550 million of annualized sales by 2025. And as you can see on the left-hand pie chart, about 325 million of that will come from units that we have yet to open. On the chart on the right, you can see the expected phasing of net gains in revenue terms by year through to 2025. So, as I said earlier, our group is on a journey a journey that is materially shifting our portfolio to higher growth channels and geographies. You can see on this slide how the pipeline will contribute to a pretty marked shift in the mix of our business over the decades since our IPO. We're moving from a business that was about half heir to one that's more than two thirds heir. And we're moving from a business where North America and rest of world represented 16% of our business to almost 40% of our business in 2025. In truth, and this is important, as we build more and more momentum behind our strategy, pursuing further organic business wins and selected infill M&A, we would hope that the relative share of North America and the rest of the world will actually be greater than 40% in and beyond 2025. Moving now briefly to some of the detail behind this pipeline. You can see across the top some examples of our success in North American airports, in Dallas, in Houston and in Santa Rosa. We've also had further success in Australia and in India. For example, in India, in Goa, where we've had a retail tender win at Mopa International Airport. Finally, to note, our entry into Iceland, which was also announced this morning, and which will become our 36th geographic market where we have now secured two major restaurant spaces. In terms then of contract renewals, again, we've had good success in North America, particularly in Toronto, Seattle, and Phoenix. In Norway, where we've retained 11 units across four airports and gained an additional six units, all with our point convenience store brand. And in the UK, where we're doing a very nice job working through renewals across multiple airports and where we've retained six units at Terminal 1 in Manchester and secured our Marks & Spencer franchise business across several terminals in London Heathrow. Turning now to how we compete, the executional elements of our strategy. As we move on from COVID, we have diagnosed a significant opportunity, dare I say an imperative. to fully get after driving the performance of our large bars and big restaurants across the world. Getting our big outlets really firing to trade harder, especially from a like-for-like perspective. We've developed a full set of performance levers and tailored them by format, by brand and by region. We're also deepening our insights into consumer behavior and engaging with our clients on the implications of these insights for the formats and brands that we develop together. Leveraging these perspectives, we've created new formats and brands, such as the co-hop bar concept in Thailand, a premium bar concept in the UK called Juniper, which you'd see most visibly and most successfully in Gatwick, and Soul & Grain, a health and sustainability-focused coffee format. Importantly, we also need to refresh and revitalize and recharge some of our original UK brands, such as Uppercrust and Retaxa. And we started this journey and introduced new ranges with an encouraging customer response. Embracing digital is an essential part of our strategy, and we're well advanced in this area. There are two key business benefits to our digital strategy. First, digital ordering improves the customer experience. When we do it well, the average ticket per customer goes up and we're now rolling out these digital solutions rapidly. The second key benefit to the strategy is that it allows us to drive the efficiency and structural productivity of our units. And you can see that in the case study on the next slide. Here's a case example of a couple of units that I've come to know well, Vine and Ballard Brew Hall, both in Seattle-Tacoma International Airport, where we've rolled out order of tables. Customer take-up is high. Approximately two-thirds of customers are now using Order Table to place their outlets. And because these customers have more time to browse and consider their orders, we've seen an increase in how much they're spending as well. And critically, Order Table has also allowed us to operate these two units with fewer people, servers in this case, which in a world of labour challenges on both rate and availability, is important to our business and economic model. What Adam and Peter, who lead our team in Seattle Tacoma, and Princess, the lead server in Vine, are achieving with digital is very encouraging in so many respects. SSP has been on an extraordinary people journey through COVID. I have nothing but admiration for our teams and how they have worked and how they have led for the past three years. We've gone from having 39,000 colleagues in 2019 down to 20,000 at the height of COVID, and now back up to 35,000. In that context, the capability that we're building in attraction, retention, inclusion, engagement, skill building, and safety have been very encouraging. While doing all of this, we have improved engagement levels as measured by the aggregate positivity score in our comprehensive annual colleague survey for 2022. by 1.5 percentage points to 76%. Last year, we launched our new sustainability strategy, setting clear and measurable targets. We have already made significant progress against it, for example, in increasing our plant-based menu offerings and eliminating unnecessary single-use plastic from about 80% of our brand packaging. We've now fully mapped our carbon footprint a massive piece of work that we've undertaken and are developing the roadmap to achieve net zero emissions by 2040. This matters to me personally. It is in this area that I want SSP to take a leadership position. With the greatest share of our emissions coming from the food and beverages we serve, we have a real opportunity to get ahead in the development of climate smart food, which is the right thing to do and will make us more competitive in client tenders, will appeal to the climate-conscious consumer, and will positively reinforce SSP's employment brand. In January, we will publish our inaugural sustainability report, which evidences our commitments in this area. As we emerge from COVID-19, we need to revitalise our multi-year programme of efficiency initiatives to support profit conversion. This slide shows some of the initiatives we already have in train, many of which I've already spoken about this morning. An example again is commercial deep dives. Here we take our strongest contributing outlets and look at each of the performance levers available to them to step on profitability. In the US, we batched this program Phoenix 2.0, but we have similar programs across the UK, Spain, the Nordics and Australia, all coordinated and shaped by a tight but experienced central value creation plan team. In an uncertain and challenging environment, this rigorous focus on profit conversion and embedding it into our weekly, monthly, and annual performance management routines is a central part of our model. So now I wanted to pull what all of this means together into a set of financial planning assumptions for SSP. We do this conscious of the fact that a lot has changed in our industry and that our business and ourselves operate in an uncertain environment. So notwithstanding these understandable caveats, let's start with our judgments on future revenues. We're assuming that passengers recover to between 85 and 90 percent of pre-COVID levels by 2023 and increase by a further five percentage points in 2024. As I described earlier, this is based on a fairly full recovery in air and leisure travel and a slower recovery in rail and business travel. On top of this, there's the impact of accumulated inflation since 2019, and very importantly, the higher level of superinflation this year, as we assume that we increase pricing by an additional 5% to offset the cash impact of supernormal cost inflation on the P&L. If we then add in the benefits of the net new contracts that we discussed earlier, you can see that sales should be in the region of 2.9 to 3 billion for 2023 and 3.2 to 3.4 billion for 24. At the bottom of the chart, you can see our high level assumptions and profitability, which are essentially that EBITDA margin on the like for like business should be back to approximately 11.5% by 2024. In other words, back to broadly 2019 levels. By 2023, the like-for-like business should be at an EBITDA margin of approximately 9.5%, which is consistent with our previous guidance on the rebuilding of margins as sales strengthen. You can also see that we're assuming the net contract gains deliver an approximate 7% to 8% EBITDA margin contribution over this time period, reflecting the phasing of openings and the pre-opening and ramp-up costs that we typically incur. So, our current planning assumptions then are as follows. Sales of 2.9 to 3 billion this year, assuming a recovery in passengers to 85% to 90% at 2019 levels, and EBITDA in the region of 250 to 280 million. Looking a year further out, we're assuming a passenger recovery to 90 to 95%, and with a further improvement in margin and EBITDA of between 325 and 375 million for FY24. This assumes the sales contribution of 350 to 400 million from net new business, which comes from the already secured pipeline. Clearly, we would hope to be able to win net new business on top of this, However, I should also stress that the timing of new contract openings always carries some uncertainty, and we're assuming that contact retention remains at historic levels. Of course, we face high levels of macro uncertainty, both in the different paces of recovery from COVID in the travel sector in different parts of the world, and from the broader geopolitical and macroeconomic environment, both in terms of the impact on the travel sector and the inflationary and consumer spend pressures that we are currently seeing. But based on what we know today, these outcomes represent our best planning associates. So to finish, we're seeing a strong rebound in travel and our economic model is working well as that happens. We've seen, we've got off to a good start to FY23 with good revenue momentum in the early parts of the year. We are dealing with the cost headwinds And we're anticipating a further recovery in sales and profitability in 23 and 24. By 2024, we expect to be above pre-COVID levels of revenue and EBITDA. We're confident to accelerate the mobilization of our pipeline, investing 250 million of CapEx in 2023 to build that out. We have high levels of available liquidity. And our balance sheet is strengthening. As Jonathan said earlier, our net debt is now below 300 million and our net debt to EBITDA is already at approximately two times. We anticipate a resumption of ordinary dividend payments starting in respect of this financial year. And as we look further forward, we're well-placed to deliver strong and sustainable growth and returns. On a personal level, And before opening the call up to questions and answers, let me say that I'm sorry we couldn't be with you in person for this presentation today. That's because for medical reasons, following a recent surgery that I had, thankfully a successful one, I'm unable to travel to the UK for another couple of weeks. So now I'm going to hand back to the operator to moderate the questions and answers.