SSP Group plc (SSPG) Earnings Call Transcript & Summary

Good morning, everybody, and thank you for joining us in the room and on our live webcast this morning. I'm Patrick Coveney. I'm the Group CEO of SSP, and I'm joined by Jonathan Davies, our Deputy CEO and CFO. Before we take you through the detail of our full year performance for FY '24, I wanted to start with some reflections on where the business sits today. I've been CEO of SSP for 2.5 years now. What's clear to me is both that SSP is a strong business and that we have more to do to reflect that strength in our profitability and returns. While the pace of transition from COVID recovery to a business with demonstrably strong returns has been fast, it hasn't been fast enough. And there are 2 key reasons for this. First, as we emerged from COVID, we chose to take advantage of the immediate competitive opportunities. We had to build a bigger and a better platform for long-term growth and returns. By this, I mean renewing, winning and opening new contracts and also making 4 important infill acquisitions. Out of that, we've strengthened our market-leading positions in the most attractive and high-growth food travel markets in the world. And we have lengthened the remaining contract tenure in our estate from 4 years to 6 years. At the same time, we've improved our customer propositions, and we've strengthened our client and customer relationships. While the early performance of these investments is encouraging, we have more to do to build out the returns that we require on these investments. Second, the profitability in parts of our Continental European region has fallen short of our expectations, while we've done a nice job in retaining and extending almost 40% of our European contract base in the last 2 years in addition to mobilizing new business. But the operating disruption caused by this activity, together with a number of additional headwinds during the year, some macroeconomic, some structural, some temporary and some executional, have negatively impacted profitability in the region. Importantly, though, both of these reasons are short term, and both of these reasons are fixable. In a moment, I will take you through the specific actions we have in place to improve profitability in Continental Europe and to deliver faster returns on the total level of investments we've made across the whole group. Our confidence in delivering these actions is demonstrated in clear earnings per share guidance for FY '25 and granular performance expectations for our medium-term financial framework. Consistent with these plans, we are proposing today changes to our incentive schemes to better align management targets with shareholder returns. All of this, I'll talk about in more detail. But before I hand over to Jonathan to take you through the FY '24 financials, I wanted to touch on 3 things. First, our focus on FY '24 operating performance, particularly in half 2, has flowed through to cash. We've ended the year with net debt at GBP 593 million and leverage levels at 1.7x, a little better than our initial expectations. Two, 3 of our 4 regions, North America, Asia and the Middle East and the U.K., delivered strong growth and strong operating profit progression, particularly in the second half. And the third area for me to highlight today is our clear agenda for FY '25, which you can see on the right-hand side of this slide. This is where our whole team's focus is, and we've got a clear set of actions to deliver on this agenda. I'll come back in a few minutes to this and our focus in FY '25 in more detail. But for now, I'm going to hand over to Jonathan to take you through the FY '24 results.

Thank you, Patrick, and good morning, everyone. So we've had a good second half, led by strong sales growth and the recovery in operating margin. And this left full year sales at GBP 3.4 billion, up 17% year-on-year on a constant currency basis. Underlying operating profit was up by 32% to GBP 206 million. And EPS was, as expected, at 10p, up 41% year-on-year including, as we indicated in October, some one-off benefits in tax and interest. Net debt was down to GBP 593 million at the end of September, so better than our expectations in October. And that left leverage at 1.7x compared with 2.1x at the end of the first half, so back within our target range. And we're proposing to pay a full year dividend of 3.5p per share, representing a payout ratio of 35%. So briefly looking at the results under IFRS 16. Operating profit was GBP 247 million for the year, GBP 40 million higher than the pre-IFRS 16 result. The main difference here as ever is that under IFRS accounting, it's the treatment of our leases where the minimum guaranteed rents are capitalized and, therefore, no longer included in the rent line. The effect is to increase EBITDA by GBP 277 million, but correspondingly increased depreciation by GBP 236 million. And the reported operating profit also includes an exceptional charge of GBP 41 million, principally comprising impairment charges of GBP 33 million. Now turning to our underlying performance. Our overall results were in line with expectations. And if we compare to the planning assumptions that we set out this time last year and which we gave on a constant currency basis, sales were at the top end of the range at GBP 3.5 billion. EBITDA was bang in the middle of the range at GBP 359 million, and operating profit at GBP 218 million was just below the midpoint of that range. Now turning to sales and current trading. Like-for-like sales have remained robust and very steady at around 6% during the second half. And over the first 8 weeks of the new financial year, they've remained at a very similar level, with like-for-likes running at 5%. And we continue to see good sales growth across all our regions. So firstly, looking at the like-for-likes. Asia and Middle East was the standout performer in the year, with like-for-like at 17%. And it's still -- it was still in the mid-teens during the second half. The region benefited from strong passenger growth in a number of markets, including India, Egypt, Thailand and Australia. The like-for-like performance in the U.K. was very encouraging at 11% for the full year, and we're still running at 9% in the second half. This was driven by good passenger growth in the air sector, particularly over the summer, and the steady recovery in rail passengers helped by the more limited impact of strikes compared to the previous year. In North America, like-for-like was 6% for the year, 5% in the second half. This was a good performance given that it was against pretty tough comparatives. However, worth noting that passenger numbers were a little softer in the second half in the U.S., where a number of the major airlines have been operating reduced schedules largely due to the well-publicized Boeing issues. Like-for-like sales in Continental Europe were 6%, and that was despite the impacts on our rail business of the strikes and the weaker trading over the Paris Olympics, as well as the soft trading in our German motorway service business. Looking at the net gains of 4%. These reflected the further mobile mobilization of the contract pipeline that we've talked about in the past, notably in North America, where this constituted a further 8% to sales growth. We also saw a decent contribution from acquisitions in the year of 4%, principally again from North America at 12%, and this reflected the Midfield Concessions deal from the previous summer as well as the 2 smaller acquisitions in the first half at Atlanta and in Canada. And we also saw a 9% contribution to sales in Asia and the Middle East, which came from the ARE acquisition in Australia in May. Finally, over the first 8 weeks of the new financial year, overall sales growth has remained strong at 13%, and that includes the 5% I just referred to earlier in terms of like-for-like sales. So turning to profit. Operating profit increased by 32% year-on-year, with group operating margin up 70 basis points. Looking at the regions, we saw a very strong result in North America, with operating profit up 52% and with a 170-basis-point improvement in operating margin, which is well ahead of the pre-COVID level. In Asia and the Middle East, profit also grew strongly, up 32%, driven by the strong sales growth I've just covered as well as, of course, a contribution from the ARE acquisition in the second half. In the U.K., we delivered profit growth of 26% year-on-year and the margin enhancement of 70 basis points. Now this reflected a very much better second half having seen margin actually down a little in the first half. But of course, that was largely due to the scale of the renewal program in the first half. However, against this backdrop, the performance of Continental Europe was disappointing, with operating profit down 46% and the margin halving to 1.6%. Now the macroeconomic backdrop for all of our Continental European operations was difficult, with weaker consumer spending, particularly in Northern Europe, and passenger numbers in the rail sector still well below pre-COVID levels. And all of this was exacerbated by a number of significant but largely temporary trading challenges. So let me just go through those. Firstly, we saw the intermittent strike action in France and Germany and the impact of the lower volumes during the Paris Olympics, which hit our rail operations and drove up labor costs. Secondly, the sheer scale of the renewal program, particularly in the Nordic countries, put short-term pressure on the P&L due to the disruption and preopening costs that those carried. And thirdly, we continue to see poor trading in our German motorway service business, which, of course, we will exit over the next 12 months or so. So in the round, we were able to mitigate many of these temporary headwinds through client compensation and, in some cases, the use of government support. But that doesn't take away from the fact that these results were, frankly, below our expectation. Patrick will cover our profit improvement plans for Continental Europe in more detail later, as he said. Now let me turn to the overall group P&L. As I've already said, operating margin was up 70 basis points on a constant currency basis. So if we look down the key lines, gross margin improved by 60 basis points. This was another strong performance, albeit helped by the easing of some of the inflationary pressures we've been seeing in many food commodities. However, once again, I feel this demonstrates our ability to mitigate inflation through pricing action as well as the effectiveness of our programs to work on menu and range engineering. Labor ratios were 60 basis points better than last year, and that's despite the inflationary pressures on pay rates. However, again, here we were helped by the strength of the like-for-like sales in many regions and the deployment of digital order and payment technology. And finally, concession fees, you can see, were 70 basis points higher year-on-year, but this, of course, included the impact of this particularly high level of contract renewals, most notably in the Continental European region, as I've described earlier. So if we look further down the P&L, net profit of around GBP 80 million was driven by the strong second half performance, where we delivered net income of GBP 88 million following the small net loss of GBP 8 million in the first half. And this reflects the increasing second half weighting of the business. And this is due to the higher dependence on air and leisure travel. And frankly, we expect the first half-second half split to be very similar as we look into 2025. Interest costs were broadly flat year-on-year, but in underlying terms, they increased slightly due to the higher average level of net debt, this arising from the acquisitions as well as the high level of CapEx and higher interest rates. However, these upward pressures were offset by a onetime GBP 6 million gain on money market deposits in India. The tax charge of GBP 35 million represents an ETR of 19.5%, which benefited from the recognition of a deferred tax asset in the U.S., which, of course, is a direct consequence of the increasing profitability of our business in the States. And looking forward, we anticipate a return to a more normal ETR of around 22% to 23%. The lower contribution that you can see here from our associates was largely due to start-up costs in our new joint venture with Aéroports de Paris, Extime, which commenced operation in early 2024. And just to remind you, this joint venture will ultimately run nearly all of the food and beverage across both of the main Paris airports, ultimately running over 100 outlets. Now let me give you just a little bit more detail on the minority interest figure given that we have a number of moving parts within the JV arrangements. So first of all, North America, you can see the minority interest charge rose at a slightly lower level than the overall operating profit in the region, reflecting the relatively stronger year-on-year performance in our airports with lower joint venture shares, and the good performance in Canada, where we own the business 100%. And this was very much in line with what we actually saw in the first half. In Asia and the Middle East, the minority interest charge was flat because the operating profit growth principally came from the wholly owned businesses, including, of course, a good contribution from the acquisition of ARE in Australia. Now the Indian numbers do require a little bit of explanation. Firstly, the minority interest increased due to the one-off money market gain that I've just covered. And secondly, TFS, our joint venture, has entered into a new joint venture with Adani Airports who own, amongst other airports, Mumbai, where they've been both our client and our joint venture partner for several years. So this new joint venture, established last June specifically for the Mumbai operations, has enabled us to secure a long-term extension of our very successful business in Mumbai, including our lounge business. And looking forward and importantly, it gives us access to the growing portfolio of airports in the Adani estate. And in fact, we're already running food and beverage outlets in 6 further Adani-owned airports as well as Mumbai. Now under this new structure, our shareholding in Mumbai has reduced from 44% to 25% and, therefore, will no longer be consolidated. And the effect of this on our 2025 numbers will be to reduce reported sales by something like GBP 40 million and operating profit by GBP 12 million, with a corresponding posttax reduction of minority interest of around GBP 7 million and an increasing associates line of GBP 2 million or GBP 3 million. So that, of course, should grow over time as we bring new business into this joint venture. Important to say, we have put some more detail here in the appendix to this presentation for clarity. But overall, we anticipate the net impact on earnings per share being minimal. So now finishing with the cash flow. We've used GBP 233 million of cash in the year, which was after the investment of GBP 280 million in capital projects and a further GBP 139 million on acquisitions. It's worth noting that SSP's share of CapEx, net of contributions from partners and controlled joint ventures and associates, was GBP 267 million. And again, we've included more detail on that in an appendix to these slides. We saw a working capital outflow of GBP 20 million in the year. And that reflects the normal generation of cash with increasing sales and, therefore, increasing negative working capital, but this was more than offset in the year by the unwind of the remaining deferred payments from the COVID period amounting to around GBP 40 million. Net financing costs were GBP 36 million in the period, and this left net debt at GBP 593 million and leverage at 1.7x as I described earlier. Now looking forward, given the anticipated seasonality of our CapEx and working capital cycle over the year and, therefore, the planned usage of cash in the first half, we would expect leverage to be slightly higher than this by the half year before reversing again in the second half and returning towards the lower end of our target range by the end of 2025. And with that, I'm going to pass over to Patrick to take you through the strategic highlights and the outlook.

Thanks, Jonathan. At the start of this meeting, I talked about the work that we have done to strengthen and to expand our business with the objective of delivering great propositions for customers and clients and also sustainable returns for investors. We compete in structurally growing food travel markets, and we've prioritized building our presence and capability in the higher-growth and higher-returning geographic air channel markets while, of course, defending our existing market position by renewing and extending as the travel world reopened post COVID. All of this work has created a strong platform, but the benefits of this now need to be better reflected in how we build earnings and cash flows from here. In a moment, I'll take you through our plans to deliver this step-up in performance. But before doing this, let me take a moment to explain the why, where and how we have invested over the course of the last 2 years. About 60% of the GBP 690 million invested has been into the base state, where we've extended our existing contract base. The higher-than-usual level of contract renewals, described previously as catch-up, is a reflection of the fact that many renewals were put on hold in the aftermath of COVID. It also, though, includes necessary investments we've made in our store and customer propositions in certain markets, notably the U.K. And the final piece of this base investment has been in technology. Cumulatively, this has meant that over the last 2 years, approximately 1/3 of our total estate and almost 40% of our Continental European estate has been renewed and extended. And in doing so, we've lengthened average remaining contract term from 4 years to 6 years. The second 40%, though, of our total investment has been allocated to growing the business, winning and mobilizing new contracts deliberately weighted to North America, to India, to Asia and the Middle East. Within this expansion investment, we spent approximately GBP 180 million on acquisitions to build our position and market share in North America and Asia. The integration of these businesses has proceeded in line with our expectations. Each of these new contract and M&A investments has been put through our well-established investment review process, with projected returns expected to be in line with our historical returns profile. As I said earlier, much of this GBP 690 million of investment is yet to fully mature. Driving the profitability of this and delivering the expected return on this is a priority for us this year. In addition to growth investment, though, we have fundamentally strengthened our proposition, our customer offers and enhanced our client relationships. And we've made strong progress in each of these areas in FY '24. In the year, we've added more than 20 new clients and entered 2 new geographic markets: Saudi Arabia and New Zealand. We've done this while materially strengthening our propositions to and relationships with customers. Indeed, our customer rating, as measured by our Reputation tool now, which is based on monthly feedback from approximately 15,000 different customers, has improved to 4.4 out of 5 and from 4.2 out of 5 in FY '23 and 3.8 out of 5 in FY '22. And we've also strengthened our sustainability credentials, both in short-term delivery and in the longer term, about which we've added more detail in the appendix to this presentation and which we will highlight in our third sustainability report, which we're going to publish later this month. I'll now turn to our 4 regional divisions and highlight how we are driving growth and returns in each case. Starting with North America. With a strengthening competitive position there and experienced and highly capable team and momentum on all fronts in the large and growing North American market, our strategy is to build our market share to more than 20% in the medium term. To date, we've done this organically through like-for-like and new unit growth opportunities, complemented by thoughtful infill M&A. While we're pausing new M&A activity this year, our recent experience of the 3 acquisitions that we made is very positive, with returns building in line with our plans. We now have a presence in 53 of the top 200 airports in North America, up from 37 2 years ago or at the end of FY '22, reflecting a combination of this business development momentum and M&A. This has delivered top line growth in FY '24 of 26% at constant currency rates as well as building operating profit margin, which is at nearly 10% this year. Key to this North American performance has been a concurrent focus on efficiency and productivity while we grow, from menu optimization to drive gross profit, to automated kitchen equipment to reduce staffing needs, to consistent use of technology to drive down costs and waste. North America will continue to be a great growth driver for this group, delivering high revenue growth and sustainable margin growth and returns. Similar to North America but from a very different starting point, we are planning to more than double the size of SSP in Asia and the Middle East over the medium term. These regions have some of the fastest-growing airport infrastructure and food travel markets in the world, and we're investing both to build further scale in our existing geographic footprint and to very selectively enter attractive new markets to secure on long-term growth and returns. India, in particular, is a strategically important market for us. Here, we operate with our joint venture partner, TFS. This year, as Jonathan has described, we've combined strong like-for-like growth with an expansion of our partnerships in India, notably with TFS' new joint venture with Adani Airports. This partnership not only extends the tenure of our highly profitable operations in Mumbai but also gives us access to 6 new airports across India. Through TFS, though, we are also building industry-leading lounge propositions. And we're positioned to capture more regional lounge opportunities outside of India into markets such as Malaysia and Hong Kong, where we have already opened multiple new lounges this year. As a group, we're consistent in focusing our expansion investments in markets where we see the greatest long-term growth and return dynamics. This has meant an expansion of our business into Saudi Arabia this year as well as a trebling of the size of our Australian business through our acquisition of ARE, and the integration of that into our strong-performing original SSP Australia business is going well. Critically, the margin profile of our Asia and Middle Eastern businesses has remained strong as we've continued to expand SSP in the region through FY '24. The U.K. is our heartland. As many of you know, a key priority for me personally has been to improve the performance of our home market in every sense. What I mean by that is both delivering better propositions for customers and clients and improving our financial performance. We set 4 key priorities: first, resetting the team under the leadership of Kari Daniels; second, rebuilding the quality of our customer propositions and store state across the U.K.; third, developing a stronger and more exciting for customer business in the air channel; and fourth, deepening and developing existing and new client relationships with both operators and with brand partners. We've delivered substantial progress on all of these fronts, which has translated into the strong performance that we delivered in FY '24, most particularly, as Jonathan said earlier, evident in the second half performance. Our actions to refresh and innovate our own as well as our franchise brands is contributing to strong like-for-like sales uplift. Some examples of this include the resetting and rebranding of 21 further formerly SSP Pumpkin stores to Café Locals, the continued rollout of premium bar concepts across multiple U.K. airports and the refurbishment of a further 18 M&S stores, all of this done in FY '24. Allied to this, we've seen a strong uplift in customer satisfaction, customers visiting our stores through Reputation, up to 4.6 out of 5 from 4.5 out of 5 last year and only 3.3 out of 5 in '21. The work we have done on our proposition and concepts has been done in tune with what customers and clients are looking for in food travel. These actions have driven progressively better like-for-like sales, strong retentions and further net gains. Importantly, the team are also driving now a focused efficiency program, which delivered a good step-up in profit and margin in the second half of '24, and we will continue to build on that through '25 and beyond. The work we've done in the U.K. gives us a strong playbook for further proposition and efficiency development in the U.K. but also across the group, starting in Continental Europe. Our Continental European businesses are an important part of our group. We have a long-established presence across the Scandinavian countries, in France, in Germany, in Belgium, in Switzerland, in Austria and Spain, with strong market share positions in all of these markets. As I've made very clear though, our FY '24 performance in Continental Europe was both disappointing and behind our expectations. We can and will do better here. While parts of the business, notably Spain, traded well, we experienced a combination of headwinds and performance challenges across many of our Northern European markets. On a market-wide level, but most particularly in Germany, a weaker macroeconomic environment, compounded by elevated levels of industrial action and labor cost challenges, which run actually across all of Northern Europe, impacted negatively our business. The slower post-COVID recovery in the rail sector compared to air, which accounts for about 1/3 of our sales in the region, has left passenger levels below pre-COVID levels. Additionally, our regional performance continues to be negatively impacted by our loss-making motorway service station business in Germany, for which we have now contractually agreed a phased exit completing in '26. We've also delivered, though, a significant number of new unit openings. The scale of the contract renewal program, predominantly in the Nordics, is unprecedented and resulted in a drag on performance. As ever with mobilization, we experienced disruption in preopening costs, with performance being reflective of the fact that these units are yet to fully mature. However, to be candid, we've had executional issues in the region, too. We suffered from this in the summer, where performance in France was behind our expectations during the Paris Olympics. Like many, we plan for a step-up in demand through July and August, and what we saw actually was the reverse of this. And having increased our staffing levels in advance of the Games, we were unable to take out costs quickly enough. The combination then of these structural, channel mix, renewal timing and executional factors resulted in an operating profit performance of GBP 18 million this year compared to GBP 36 million last year. And as I said, we will do better. So what are we doing? We're on with it in recovering European performance. We have changed the leadership model, appointing a new regional CEO, Satya Menard, who joined us in September, and he is leading and driving the plan, which consists of 5 elements. First, acting to drive returns from our recent renewals program weighted towards the Nordic region. We've been forensically assessing individual unit performance, identifying any underperforming units and taking action to address them. Second, simplifying the organization structure and removing duplication. This has resulted in greater transparency and accountability and is also reducing cost. Third, driving better operational performance, excluding menu optimization and procurement disciplines, labor productivity through an acceleration of workforce management tools and lower overhead. Fourth, tightly managing the exit from our German motorway service station business ahead of the final exit in '26. We're closing about half of our 60 units this year, the most loss-making ones in fact, and we're mitigating the expected in-year losses across the remainder of the estate. And finally, driving like-for-like sales through revised propositions, combined with the use of digital to build our top line in the region, especially in the under-pressure rail channel. Our confidence in this program means that, today, we're setting a near-term regional operating margin target that builds on the 1.6% that we delivered in FY '24 to approximately 3% in FY '25 and approximately 5% in the medium term, with further progression planned thereafter. Now turning to the outlook for both the current financial year and into the medium term. Importantly, we're moving to a new phase in FY '25, one that builds returns and profitability on the heightened level of recent investment. We've tightened our business agenda to enable this. So let me just highlight a few elements now. We're pushing all of our recently renewed and newly opened units towards maturity and taking action to progress any pockets of underperformance. And as I've just talked through, we have a clear recovery plan in place and underway for Continental Europe. On cost efficiency, we've got a focus on optimizing menus, automating kitchens, resetting food supply chains, revisiting franchise fees in certain circumstance and enhancing labor scheduling across the group. We have tightened our levels of new capital expenditure with a more normalized pace of new business development planned and no anticipated new M&A. This will strengthen operating cash flows and free cash flows in the year. And finally, we're maintaining our core priority of driving sustainable growth through like-for-like enhancements with profitable organic growth and contract extension. Looking specifically then at our planning assumptions for FY '25. Importantly, we build our expectations from the bottom up across our regions and functions, taking into account both headwinds and tailwinds as all of our planned -- as well as all of our planned in-year actions. In FY '25, we're planning for group sales at constant currency to be in the region of GBP 3.7 billion to GBP 3.8 billion, with the growth coming from a 4% to 5% uplift in like-for-like sales, approximately 4% further from net gains and a contribution of 2% to 3% from our recently integrated infill acquisitions. We also expect a drag of approximately 2% from the accounting impact of the new Indian joint venture with Adani Airports and the phased exit from our German motorway service station business. With the actions we're taking to drive profitability and returns, we're planning for a group operating profit margin uplift and an operating profit outcome for the year in the range of GBP 230 million to GBP 260 million at constant currency. This year-on-year operating profit change is net of the impact of the new Indian joint venture with Adani Airports. We're also setting out today an EPS planning assumption in the range of 11p to 13p at current rates, a strong year-on-year improvement. This planning assumption factors in all of our actions on operating profit and elements of our technical guidance, which are included in the appendix to this presentation. Turning now to our near-term capital allocation priorities, which will focus on the areas that will drive the greatest return while ensuring we maintain an efficient balance sheet, one that has net debt-to-EBITDA between 1.5 and 2x. Our priority is capital investment for organic growth, given our ability to deliver high returns on investment. This year, we're planning for lower year-on-year value-creating CapEx investment in the region of GBP 230 million to GBP 240 million, and we don't anticipate further M&A activity in FY '25. Let me say though that we're not stepping away from growth opportunities. But in the short term, we're pausing M&A as we focus on delivering value from the elevated level of CapEx and M&A activity in FY '24. As Jonathan has already mentioned, we're proposing to pay a full year dividend at a payout ratio of 35%, in line with our target range of between 30% and 40%. And furthermore, we expect a material step-up in cash flow performance this year and are focused on creating the conditions to return capital to shareholders in the near term while maintaining leverage in our target range. In this set of results, we're introducing return on capital employed as a key performance indicator for the first time. We're doing this to highlight our in-year returns on our capital base. Importantly, the measure we're introducing, which is set out in our results, adjusts both the numerator and the denominator for joint venture and minority interest effects. In other words, it's a true measure of the return on capital for our investors. In FY '24, our return on capital employed was 17.7%, rising from 17% in the prior year. We will progressively build our return on capital employed from this starting point, delivered through strengthening annual profit performance, driving higher returns on our recent investments and anticipating somewhat lower levels of capital intensity going forward. So FY 2025 in a way is a year in which we're going to pause for breath somewhat, build returns on all of our recent investments and address the specific challenges that I've outlined already. But looking to the medium term, we're today updating our financial framework to give more granular guidance on our medium-term performance. We expect to achieve annual sales growth of 5% to 7%, comprising like-for-like sales growth of approximately 3% and net gains of between 2% and 4%, with both skewed towards North America, Asia and the Middle East. In terms of profitability, we expect to deliver sustainable operating profit margin enhancement of an average of between 20 and 30 basis points per year post FY '25 as we benefit from operating leverage, greater use of technology and automation and our wide-ranging efficiency program. Minority interests are expected to grow in line with the operating profit in the countries with joint venture partnerships. Through the medium term, capital investment should be at somewhat lower levels than recent years, with contract renewal and maintenance CapEx to be an average of 4% of group sales and expansionary CapEx driven by net gains. Aligned to this financial framework, we expect to see growth in operating cash flow with enhanced cash conversion. And we will continue to pay an ordinary dividend, with a target payout ratio of between 30% and 40%. The output then of this framework is twofold. We expect to deliver sustainable double-digit earnings per share growth for the medium term, and our model targets both deleveraging and significant shareholder return. It's been important to us as an executive team and to our Board to more explicitly and directly align executive remuneration to these medium-term financial objectives. Recognizing that SSP is in a different phase now than it was when we introduced the Restricted Share Plan in 2021, earlier this year, we felt it was the right time to reintroduce a performance-based long-term incentive plan. So having consulted already with shareholders, the proposed new scheme will align executive remuneration with earnings per share, return on capital employed and total shareholder return outcomes. So a very quick summary from me before we wrap up for questions. We've delivered a good FY '24 performance in line with our planning assumptions and with 3 of our 4 regions having performed well, and we have a clear set of actions to recover profitability in Continental Europe. Today, we've set clear financial expectations for FY '25, including at the earnings per share level. And importantly, we've seen a positive start to trading in the new year. Finally, we're updating our medium-term financial framework and aligning our remuneration policy with a focus on delivering outcomes aligned to shareholders' expectations. With that, Jonathan and I will take questions now. Greg, we'll start with you there.

Greg Johnson, Shore Capital. A couple of questions, please. So firstly, interested in the introduction of the return on capital metric as part of the KPI assessment. Obviously, it was sort of a north of 17% last year. Where can you see that settling over the medium to longer term? Maybe sort of put that in color with where that has been historically and if there's any sort of regional variations. And secondly, on sort of current trading, that sort of 5% like-for-like is lapping what we think will be pretty strong or recovered comps and similar to the second half. Do you think that is a sign of what the business can sort of generate going forward, given sort of the investments in formats and products and efficiencies, et cetera?

Yes. Let me just kind of give a kind of point almost on -- how do I put it, the philosophy of why we're introducing return on capital employed, and I'll let Jonathan talk about it in a bit more detail then. I joined a business that is very, very good at individual capital allocation decisions. And Jonathan and his team over, frankly, decades, have built a way of assessing individual prospective capital projects through a process you've heard me talk about before, which is our Group Investment Committee. Somewhat surprisingly though, we didn't aggregate all that together into a single external measure on return on capital employed in the year, and I thought we needed to do that. And in particular, we needed to do that in a way that netted out the different impacts of our different ownership structures in different parts of the world and gave a sort of a single integrating measure of what the return on capital for SSP shareholders is in the year. And that's why we're introducing it. And not only we're introducing it, we're actually incentivizing ourselves against improving it. And I think the starting point for me is -- actually, this is pretty decent, 17.7%, but we expect to be able to progress it from here. Now Greg, we're not actually going to jump in and be drawn on an explicit target as to how high it could be, except to say we think we can make it better. And we're going to push on with that in '25 with all of the initiatives that I described earlier. But Jonathan, I don't know, do you want to say a little bit more about that, in particular, how to think about -- how history informs this?

Sure. Yes. So I mean if you were to look back to the pre-COVID period, our return on capital employed would have been, for the preceding couple of years, a little north of 20%. But it's worth remembering that the business has changed a fair amount since then. A couple of factors are quite important. One is, clearly, the rail sector isn't as big as it was back then. And as you might imagine, the rail sector historically had, had lower levels of capital investment. Part of that is due to the landlord and tenant protection in the U.K. rail estate, which is a big part of the rail business. And that would have generated quite high returns on capital employed compared to other bits of the business. And that's now somewhat smaller proportionately and clearly hasn't fully recovered. I think the other point is that in that period, we also saw some quite big new contract wins in North America, some of which had a very slow phasing of the capital investment. So there are a number of reasons why I don't think you can jump straight back to those sort of levels. I think if you process the medium-term guidance that Patrick has just spoken about, you would probably see over the medium term returns on capital employed heading back towards something in the region of 20%. But again, we've been careful not to set out today an explicit target, albeit worth saying that in due course, you will see the spread of target that will be part of the remuneration targets that Patrick referred to as well.

Do you want to talk maybe just on current trading and sustainability of the 5% like-for-like?

Yes. So I think there are a number of swings and roundabouts. So I think we've basically said that we think something like 4% to 5% is the range of like-for-like for the coming year. We're trading very slightly ahead of that. I think the comparatives are relatively flat if I look at the previous year, with one exception, which is that we saw more strike action in the first half, which impacted the rail business. So in a sense, the comps are slightly easier in the first half than the second half. Hence, an expectation that we might see like-for-likes 1 percentage point lower in the second half. I think the only additional point I'd make is that, particularly in the U.K. where we see high labor costs in the second half thanks to the recent budget, I do expect that probably to flow through into pricing at some level in common with the rest of the industry, which might again just help flatten out the sort of H1, H2 trajectory. But we think that's a reasonable expectation based on what we're seeing today.

Tim, I might jump to you next.

Tim Barrett from Deutsche. Just firstly staying with the U.K. Given the budget, do you think you can keep the good momentum in EBIT margin going this year? And I suppose most obviously, what is the NI impact? Secondly, on Europe, if we're being blunt, your targets are to double EBIT this year. How much of that comes from Germany -- German losses going and Nordics not being disrupted? And then the last small point, TFS accounting changes are quite noisy. But is there any cash impact on that?

Perfect. Let me take the first 2, and Jonathan, I'll leave you talk about the TFS accounting changes.

Yes.

On the -- you've referenced U.K. and Europe. I might just broaden this out slightly. We -- you've heard us and indeed sort of a kind of SSP narrative over the last little while has been to kind of aggregate the U.K. and Europe in kind of one bundle of, how do I put it, problem children. And what you should take from these results is that we still have problems that we need to fix in Europe, and we still have the potential to make the U.K. better. But actually, we're in very different places. And some of you may remember when I started 2.5 years ago that I was, in the eyes of some internal and external observers of SSP, quite critical of our U.K. business. That was grounded, by the way, in my previous experience as a supplier to SSP as well as my knowledge of some of the brand partners and client partners and how they thought about SSP in the U.K. And to be blunt, it was also grounded in my experience as a customer of traveling around the U.K. rail network and U.K. airports. I just didn't think our business was in a good place in the U.K. in terms of how we serve customers when I joined. I feel very differently about where our U.K. business is today. The work that the team we've put in place, I mentioned Kari by name earlier, but frankly, I could have also pointed to the fact that we have a new COO, a new HR Director, a new Property Director, that we transitioned in a Finance Lead from another region into the business. We have completely reset our U.K. team. We have done a -- we've started in a very obvious place, which is, let's make our business better for customers, and it is. And you can see the reason that I somewhat irritate my team by insisting on us talking publicly about Reputation scores is that is the standard way in which we measure how customers think about their experience in our stores. And we also spotted that there was a very significant growth opportunity for us in U.K. air, particularly in bars and casual dining, where the competitive dynamics were such and the consumer demand was such that actually we could really step into that space, and we have through our net gains. So the outcome of all of that is that you are seeing a very strong step-up in financial performance in the U.K. that's most evident in the second half. We're not at the finish line at all. We can keep cracking on from here, and we will. And I would expect us to continue to strengthen the performance of the U.K. And that is a good thing. It's a huge contributor to shareholder return, but it's also where we have to showcase SSP at its best. It's our home and heartland market as you heard me say earlier. I don't want to do too much of a read across in terms of the specific initiatives from the U.K. to Europe. But some of those principles will be part of what we're doing, getting the team right, getting the proposition right, doing some of this heavy lifting in terms of channel mix and exiting from the loss-making German business. I mean obviously, 1.5% or 1.6% return on sales is totally unacceptable for us as a business. We have a very clear line of sight as to how we build that to approximately 3% this year, and we know we need to do that. But of course, that's not victory either, right? We need to push on from there, but we did want to frame the size of that. And if I just frame it in one last way, getting to 5% from 1.5% of the current sales level of our business generates GBP 40 million of incremental EBIT for -- which flows through at something like 4p of earnings, right? So it's a big prize getting this done, and it's got an appropriate level of attention in terms of how we're doing that. Tim, the -- there's all sorts of moving parts in Europe between pace of getting value from renewals and speed of exit. We got to do each of the 5 things that I mentioned well, and that's what we're going to do. So Jon, do you want to pick up TFS?

Just perhaps pick up the numbers for you briefly, Tim. So -- and I think your point in the U.K. was about labor cost, and it's worth just commenting on that briefly. We think the impact compared to our original expectations is something in the region of GBP 3 million to GBP 4 million in the second half in the U.K., nearer GBP 10 million in the full year from the increase in the national minimum wage and the change in employer NI contributions. And the reason that might seem relatively modest compared to many businesses is the fact that clearly, number one, the U.K. isn't that big a part of our business in aggregate. But importantly, because of the seasonal usage of labor, quite a lot of our labor don't actually hit even the lower NI thresholds compared to many sort of high-street businesses. We're saying that, again, I mean we would anticipate, given that these are industry-wide phenomena, we will have to move pricing to generally mitigate the impact, and the rest of the hospitality industry is going to be doing the same. And it's -- as I say, it's built into our planning assumptions. In terms of Continental Europe, again, to your point, the overall impact of the renewals program is something in -- year-on-year potentially is something in the region of GBP 5 million to GBP 10 million, with that weighted towards the Nordics, just to give you a sort of flavor of the impact that we might see from that as we look into next year. In terms of TFS, the -- just to sort of reiterate the points I made before. And again, there is a slide at the back of the deck, you can see. Again, stress this is good news. We've managed to secure a very profitable and successful part of the business with a long-term contract. And that means that we will also have access to further business through the Adani joint venture as we mentioned. And we anticipate that -- as part of the Indian government privatization program within its airports, we anticipate more and more airports, particularly smaller ones going into the private sector, and Adani clearly will be a player in that. The accounting is the accounting, I'm afraid. We will no longer consolidate that. And that will, therefore, as we've set out, I won't go through the numbers again, impact the reported P&L, but important to note that it's now coming -- the profit delivery will now come through the associates line, albeit it is complicated because there are some management service fees because we continue to operate this, which will flow into the headline profit. Did that cover your questions on TFS?

Yes, very much. About the cash, any cash implications in India?

So it will also mean -- sorry, thank you. It will also mean that we no longer consolidate some of the cash that sits within that particular business unit within the joint venture. But that is what you've seen in the normal course of events.

Jamie.

Jamie Rollo from Morgan Stanley. Three questions, please. First, just sticking with margins. Obviously, very good margins in rest of world -- sorry, wrong acronym. But that 15% looks like it's come off a bit. Are you confident of staying in that sort of mid-teens range? And also in North America, can it push on from sort of 10% now? Secondly, on cash returns, it sounds like this is sort of a year-end potential given the sort of seasonality of leverage. But do you have authority from shareholders already? Or do you need to seek that or wish to seek that at the AGM in advance? And then just a general strategic comment on your view on the sort of catering versus retail offer. A couple of your competitors, obviously, Duty Free but also Smiths pushing more into your area with that master concessionaire model. Is that -- I mean are you seeing any change in the competitive environment? Is that a sort of an angle you want to go after, that combined offer?

Yes. Let me try and push through that. So I mean starting with your point on margins, we're focusing on trying to push margins forward at the group level, and there would be initiatives everywhere to try to do that. I think the starting point in our Asian, Middle Eastern businesses is the return levels are pretty good. And you've seen that flatten out a little bit, Jamie, '24 on '23 at a very high level. The way we think about that is we go to each individual market and we're focused on trying to progress margins in each of them, right, and end up with a sort of business mix effect because you have different margin structures across different parts of those markets. I think the -- a good answer in that region, because there will be some accounting margin effect to what Jonathan has just described in India, would be keeping it at that sort of mid-teens level. North America is on a very, very good path in terms of progressing profitability and EBIT margin. And we would -- we want to see that to continue to move forward from a healthy base. And then you've got different kinds of dynamics in other parts. I mean, clearly, we need a massive margin reset in Europe from starting point of 1.5% or 1.6%. I mean you've heard me talk about that already. And I think the path we're on in this -- that you see in the second half in the U.K. is quite encouraging in terms of where we're moving in margins. If I just move to cash return. I think you kind of -- apart from this sort of decision rights point, you've sort of identified where our perspective is, right? But let me just be very, very direct on that. I probably would like for us to have been able to have announced a share buyback today. But I think we have to be cognizant of the leverage range that we've given and recognize, as Jonathan outlined a couple of times in the presentation, this first half-second half dynamic issue. So I think we need to -- we feel very good about where we think leverage will be at the full year, but we do need to trade the first half and -- with this first half-second half split and see where that sits us. And I don't think anyone would thank us for going early on that and then suddenly having -- being towards the higher end of that 1.5 to 2x range in the first half. So the sentiments you should take from what we've said and what we've written is we would like to get to a place to be able to do that, but it's a nudge too early. That's how I would describe it. And then the third point on strategic comment, I mean I want to be just quick here. We like the part of the market we're in. We think hospitality and F&B is frankly a better place to be than retail and travel locations. We are investing quite a bit to be relevant in the grab-and-go portion of food. And so you see that with -- most visibly in the U.K., with our M&S store estate. But you'll also see it with things like Point with some partnering we do, frankly, with WH Smith in some markets. And I think you'll see us continue to be relevant and maybe even more relevant at that intersection of convenience food retailing with F&B. Where you won't see us touching is luxury retail and duty free. It's just a different thing, different capability. And others, I think, sometimes talk about wanting to have fully integrated and hybrid offers. And what they really mean is they want to be an F&B because it's a more attractive part of the business than convenience retailing or duty free, which I think it is. And so we're kind of happy where we are, and we want to deliver for customers and clients well in the space that we're in. Fintan?

Fintan Ryan here from Goodbody. Two questions for me, please, although both on sort of related areas. For FY '25, can you give us a sense of what you're expecting for inflation at the aggregate level for both food and raw materials and also labor, so notwithstanding the U.K. -- recent U.K. budget? And then secondly, within the midterm 20 to 30 basis points margin improvement, so I get some of the moving parts of the regional level, but at the group level, what should we think about contribution from gross margins, labor costs and concession fees within that sort of the next 3 to 4 years?

Jonathan, will you pick up both of those?

Yes, fine. So first of all, in terms of inflation, our expectations are for generally easing food cost inflation pretty much around the group actually. So generally in the region of sort of 3% thereabouts certainly in our planning assumptions. However, in aggregate, we're still assuming that labor inflation is going to be in the region of sort of 5% to 6%, and that's built into our expectations. For the reasons I just mentioned in response to Tim about the U.K., so I won't drain that again. But clearly, the national minimum wage is going up in the second half by, I think, 6.7% here. The other region to call out is North America, where we continue to see high levels of average hourly rate inflation and, to some degree still, supply-side shortages in terms of labor and hospitality industry generally as well as challenges from unionization. That's the other real area of pressure. So that really covers -- but that is all essentially built into our planning assumptions. And ever -- as ever, we are looking to mitigate that cost inflation where appropriate through efficiency programs and through pricing. In terms of the 20 to 30 basis bps -- basis points of long-term margin accretion, we're not giving guidance precisely on where that will come from. But as ever, I think you'd expect to see some contribution from the efficiency programs across all of the P&L, but predictably with a focus on gross margin, which is what you see. If you look to long-run history pre-COVID, that's where a lot of our margin expansion came from. And of course, what we're doing is planning really to have sufficient efficiency initiatives to mitigate and beat the long-running increase in it. So we are inherently assuming that there is a sort of 20 to 30 basis points increase in rent, which again is very much in line with the long, long-run historical trend. But of course, we will also benefit from operating leverage, principally on the labor line. So if you've got, let's say, 3% like-for-like, which is our sort of medium-term planning assumption, that should deliver something like a 20 basis points improvement in the margin. So in a sense, I think we've just got to make sure that the operating efficiencies more than offset any pressures on the rent, which again is very much as we run the business for many years.

Harry.

It's Harry Gowers from JPMorgan. Just one question, if I can. It's on Europe, so good to see the detail in terms of improving the performance. And getting to 5% margin would obviously be significantly higher than the figure just reported, but that is still lower than historical levels, which I think was 8% or 9%. So I guess is Europe structurally impaired versus history? Just anything in terms of the moving parts over time, not just the one-offs from the last 12 months.

Yes. I mean I'd hesitate to use the language of structurally impaired. But Europe is different than before. And the -- we pointed to the fact that we're exiting motorway service stations, which was a part of Europe before. We've also -- I think it would be fair to assume that the sort of baseline level of rail and air performance has reset, and we're in the normal now. They may move up or down from our different ways up from here. So -- and as you've heard us talk about before, there are some different features of rental dynamics, in particular, in Scandinavia. I think the important thing, though, is we can move the margin performance forward a hell of away from where we are today. We'll do that in '25 on '24, and we will keep going. We're not setting some kind of ceiling at 5%. But also, we want to have a sort of level of realism about the speed at which we're going to progress it. So fast this year and steadily progressing in the medium term after that. I think the frame of reference, Harry, is -- and Jonathan may correct me, it's about 7%, by the way, as opposed to the 8% that you perhaps referenced.

Yes, 7.5% is basically where we were in 2019. So the gap isn't that quite as big. And again, worth remembering that the business has changed a lot since 2019. And therefore, as Patrick said, I don't think we set any of the '19 numbers an absolute target. We're clearly trading ahead of those in a couple of the regions. I mean that's life.

And what we're trying to find the balance on here is, what are some of the really effective practices and capabilities of SSP that would have been evident in '19 delivery in some markets, and can we replicate those? But also, we will be mad as a consumer business to start to force fit consumers into behavior of 6 years ago. So we have to figure out where food travel is actually happening and make sure that we're relevant against that. So yes. Ali.

Ali Naqvi from HSBC. Just on the medium to like-for-like assumptions, that 3%, is that all volume or all price? Or how are you thinking about that? And then could we just talk about working capital and cash generation over this period? How -- is that starting to normalize now, where you should expect positive working capital inflows over the course of the next couple of years? And then finally, Patrick, are you seeing any opportunity cost of not doing M&A or taking your foot off the gas there? And at what point would you think about reentering the market there?

Yes. Okay. Try to jump in. I think it would be fair to assume that the medium-term guidance assumes a more historically normal level of inflation, in other words, much lower, right? So if you were to run with 3%, 4% inflation, then the like-for-like would be higher, right? And so that's probably the best way of describing it. I mean I think our philosophy in this medium-term guidance is we want to give people a baseline around how to think about how the business progresses, right? And we could have an assumption on each of the individual lines and a debate around is it too high or too low. We think in net terms, what we do is a further reset in the earnings per share trajectory of the business in '25 and '24 and then an ability to sustainably deliver double-digit earnings per share growth after that, right? On your point on cash, the business should become more cash generative partly because I think the run rate capital -- CapEx level is lower than what you've seen in the last 2 years because of this more normalized level of renewal activity, point one. And secondly, the kind of completion of the unwind of some of these COVID effects around rental accruals means that we should revert to being a modestly negative working capital business as we grow. And those 2 things should be helpful to the operating cash flow and free cash flow of the business and the deleveraging of the business and some of the points I referenced in Jamie's question to me about capital return earlier. On your last question on strategy, listen, this is the dynamic growing market. There's tons of opportunities out there for organic and inorganic growth. They'll still be there in a year's time and 2 years' time and 3 years' time, given the level of infrastructure investment that's been put into particularly the air channel, in particular in the markets that we've highlighted. I think in terms of the -- what we need to do in '25, a tighter focus on getting the returns on this elevated level of recent investment, be it CapEx or M&A, and really nailing that in '25 makes a lot of sense. But that does -- but don't interpret that as a change in how we think about strategy or how we think we'll create value over time. There is -- nor do we see any material opportunity costs as you put it to that level of focus in '25.

It's Manjari Dhar, RBC. I just had 3 questions, if I may. My first question is on North America. I think in the slides, you stated it was 15% constant currency growth in the first 8 weeks. I wondered if you could give some color on what you're seeing in terms of customer behavior and like-for-like trends. So I appreciate we've had a few weather impacts, so excluding that. And then secondly, on the extension of the average contract length, I wondered if you could just give some color on -- are you guys -- are you seeing that being extended because you're going into markets where the average contract length tends to be longer? Or are you securing longer contracts with -- on renewal in existing or more mature markets as well? And then maybe just a quick one on CapEx. Jonathan, I wondered if you could remind us of how much CapEx for this year includes some of sort of that deferred maintenance spend from COVID and how far through we are with that.

So just those questions then, yes? Okay. North America quickly. The different component drivers of sales in America have been quite volatile over the course of the last 8, 10, 12 weeks. And you've actually parsed out some of them already, right, which is the U.S. had very significant weather impacts in Florida, and Florida plays a big part in the U.S. air network. So we saw quite big movements and like-for-like, frankly, day on day and week on week. Secondly, as Jonathan referenced in the presentation, the impact of the strike action and the supply delays of Boeing does feed into, in the near term, to airline capacity and seat capacity. And so that has an impact on TSA numbers going through airports and so forth. So when we look at the different constituent parts of how we're growing in America, between this elevated level of net gains and this big new airport acquisition program that we're under, the integration of M&A and like-for-like, the net of that feels quite good for us in terms of growth. But we do observe quite marked movements for different factors if you look at it on a very, very short-term basis is how I would describe it. But the important thing is that the aggregate momentum of those things is building a bigger and bigger business, where we have more and more space into which to step as our biggest traditional competitor sees a number of their very, very large airport units come up for tender, some of which has already happened and some of which is impending, and that space for us to step into. I mean on extensions, I think it's yes to both of your hypothesis actually. Firstly, the regional mix of how we're growing and, in particular, where we're putting our net gain activity is weighted towards markets that have longer-term contracts. No question. I could bring us back to North America again and talking about that, but the same will be true in Saudi. The same would be true in some of the Southeast Asian markets that we've referenced. But I think it's also true that everywhere in the air channel, there is a momentum to increase contract length, right? Some of that, by the way, is a function of some of the negotiations that Jonathan referenced in the presentation, actually, which is where you have more challenged economics, part of the solution to that is not to have to refresh the capital every 3, 4 years, right? And actually, the airport sector increasingly gets that. And I think if you -- you'll have all of your own sources on this anyway, but there is an upward momentum in length of contracts that's evident in every market. And our businesses with our business mix, we -- you see an even kind of stronger progression for us in that respect. Jon, pick up either of those but then also talk about CapEx.

Yes. Sure. I mean just one point to add really. Agree with everything Patrick said, of course. But clearly, the sheer scale of the renewals program over the last couple of years has given us a little bit more remaining contract term just because even if we weren't actually, as Patrick has described, extending those contracts on average, that in itself secures a little bit of extra term. But it's a combination of factors. In terms of the CapEx, straightforward. Pretty much in line with what we've said to you before, there is still the very tail end of that sort of COVID catch-up investment in this coming year. And we think that's probably somewhere in the region of GBP 15 million to GBP 20 million of the overall program that we've talked about, the GBP 230 million to GBP 240 million of guidance. But that is then it's -- and I think we're back into the normal course of business when it comes to capital investment.

James.

James Rowland Clark from Barclays. I've got 2 questions, please. First is on like-for-likes of 5% in the current trading versus 6% in Q4. Can you give any regional color on the strengths, weaknesses, slowdowns, speed ups there? And then also cost -- so price versus volume for that 5%? And secondly, on your outlook guidance on like-for-likes, it looks to be a little bit higher than expectations. So is that volume or price driven?

Jonathan, do you want both of them?

So if you look at the current trading, in broad terms, holding up very well in the U.K., helped actually by a continued good performance from the Marks & Spencer Simply Food franchise and very consistent actually with what they're seeing in the high street. It's remained reasonably healthy, as you'd expect in Asia and the Middle East. It is a little bit softer in the round in North America but also in parts of Continental Europe. But clearly, the fact that it's only running at 5% compared to 6% says that none of those are massive shifts, and Patrick's commented on some of the volatility that we have seen in North America. In terms of cost -- price versus volume, I mean, not much change, really, as I say. I think we'd entered the period of, to some degree, stability around cost inflation compared to what we've seen over the last couple of years and, therefore, had to reflect in pricing, which we've talked about at great length. And clearly, in the U.K., as we look to the rest of the year, I think that debate will probably surface again as people confront the increases in the national minimum wage and the changes in the NI regime. But I mean that probably covers it quite frankly. I don't think we're looking at any great change.

I mean it's probably ever so slightly less price in Q1 than would have been the case in Q4 as we begin to lap the price increases we put through in the previous year. So volume, I suspect, is pretty similar, to be honest with you, James.

Yes, definitely.

Yes. I mean I think the -- it's very difficult to have a market comparison for the kind of business that we are with the geographic mix that we have. So the best answer I can give is the point that we made as we set out the planning assumptions for FY '25, which is we build this in detail bottom-up, market by market, channel by channel and typically unit by unit. And so we're very conscious of the need to make sure that our outcomes reflect how we've guided. And I think we feel right now that the 4% to 5% guidance for the full year on like-for-like is about right. Good. Listen, I think we might -- we'll finish up there. Thank you for staying with us. We had a lot to cover today. And we're very happy to follow up both with you individually and with your clients as need be over the next few days and weeks. But thank you for being with us this morning. And if I don't get a chance to do this to everyone, I wish you, for a couple of weeks' time, Happy Christmas. Speak soon.

Thank you.

This presentation has now ended.