Risk Reward Update

Research evidence excerpt

Risk Reward Update

UpdateM

RiskRisk RewardReward– SSP Group- SSPPLC Group(SSPG.L) PLC (SSPG.L)

Attractive risk-reward skew but questions remain around execution

PRICE TARGET 230p EQUAL-WEIGHT THESIS

Our price target is based on 16x FY26e P/E, a 20% premium to travel retail peer Avolta, ▪SSP is a good play on the structural

reflecting SSP's superior catering business model vs retail. growth in travel and eating out, and growth

of travel catering vs retail. 236p ▪North America and ROW are both highConsensus Price Target Distribution 160.00p 320.00p margin, generating strong contract wins and MS PT

expanded from 35% to 58% of group EBITSource: Refinitiv, Morgan Stanley Research Mean Morgan Stanley Estimates

FY19-25, with Europe and UK margins still

behind.

▪The company focused too much on

RISK REWARD CHART contract wins and M&A post pandemic to

the detriment of FCF/ROCE, and saw a weak

performance in Continental Europe last year

GBp (EBIT margin of 2.2% vs 7.6% pre-Covid).

410p410p(+110.80%)410p(+110.80%)(+110.80%) ▪Management is now focused on execution,

400 efficiencies, FCF and ROCE, including

possibly selling some of its TFS stake.

However, questions remain around

300 execution in Europe.

▪11x 2027e P/E well below 22x historical

230p230p(+18.25%)230p(+18.25%)(+18.25%) average.

200 195p195p195p

Consensus Rating Distribution

130p130p(-33.16%)130p(-33.16%)(-33.16%) 60% Overweight

27% Equal-weight

0 13% Underweight

JUL '25 JAN '26 JUL '26 JUL '27 MS Rating

Key: Historical Stock Performance Current Stock Price Price Target Source: Refinitiv, Morgan Stanley Research

Source: Refinitiv, Morgan Stanley Research

BULL CASE 410p BASE CASE 230p BEAR CASE 130p

20x FY27e bull case EPS (disc by 2 years) 16x 2026e EPS, 20% premium vs travel 7x EV/EBITDA on bear case FY26e EBITDA