Slide 1: Preliminary Results
Preliminary Results 03 December 2024 For the 52-week period ended 28 September 2024 The Ty Mawr, Cardiff
Slide 2: Agenda
Agenda Key Financial Operational 1 Headlines 2 Performance 3 Progress Justin Platt Hayleigh Lupino Justin Platt CEO CFO CEO Summary Q&A 4 Justin Platt & Outlook 5 CEO 2
Slide 3: A New Chapter as a Leading Pure Play Hospitality Business
A New Chapter as a Leading Pure Play Hospitality Business Strong Trading Performance Significant Margin ahead of Market Expansion LFL Revenue +4.8% EBITDA margin +190bps Robust Free Cash Flow Excellent Operational Generation Progress £44m Recurring FCF Reputation score up to 800 Strategic value driv
Slide 4: Financial Performance
Financial Performance Hayleigh Lupino, CFO The The Bluebell, Red Kite,Malvern Caerphilly
Slide 5: LFLs up vs. FY2023, Consistently Outperforming the Market
LFLs up vs. FY2023, Consistently Outperforming the Market +8.2% +4.8% +6.6% +3.6% +3.8% +1.7% FY2024 Q1 FY2024 Q2 FY2024 Q3 FY2024 Q4 FY2024 Oct-Dec 23 Jan-Mar 24 Mar-Jun 24 Jun - Sep 24 Market 1 Marston's Market 1 Marston's 1. CGA Peach tracker. Note: LFL data is weighted to account for the number
Slide 6: Strong Earnings and Operating Profit Growth, with Significant Margin Improvement
Strong Earnings and Operating Profit Growth, with Significant Margin Improvement FY2024 FY2023 Comments Revenue £899m £872m +3.0% growth, LFLs +4.8% growth EBITDA £193m £170m +13.0% growth EBITDA margin 21.4% 19.5% +190bps Pub operating profit £147m £125m +17.9% pub profit growth Pub operating profi
Slide 7: Improved Margins to Deliver Further Cash Upside
Improved Margins to Deliver Further Cash Upside 18.0 % Operating Margin % - FY2023 vs FY2024 17.0 % 0.2 % 0.4 % 0.1 % 16.4 % 0.8 % (0.6)% 16.0 % 1.2 % 15.0 % 14.3 % 14.0 % 13.0 % 12.0 % FY23 FY2023 Energy & Business Head Office Pub Other Guest FY24 FY2024 Property Simplification Restructure Labour A
Slide 8: £44m of FCF Driven by Improving Operating Cash Flow
£44m of FCF Driven by Improving Operating Cash Flow £m FY2024 FY2023 Comments Operating cash flow 194 120 Excluding CMBC dividend Net interest (104) (93) Including fees and costs Capex (46) (65) FY2025 c.£60m Recurring free cash flow1 44 (38) CMBC dividend 14 21 Disposals 252 51 FY2024 £206m CMBC di
Slide 9: Derisked and Stable Debt Profile
Derisked and Stable Debt Profile • Significantly derisked and stable debt profile with no material refinancing requirement for at least 10 years • Net debt1 reduced to £884m, achieving target ahead of FY2026 schedule • Cash positive in FY2024, reduced reliance on bank facility Net Debt1 reduced 27%
Slide 10: Financing
Financing • £200 million amendment and extension to financing facility to the end of July 2026 – Finance potential for 1 year extension to July 2027 Facility • £60 million is hedged, £60 million fixed at 3.45% to 2029 • £560 million long-term securitisation debt to 2035 Securitisation • £120 million
Slide 11: Strategic Disposals and Stable NAV
Strategic Disposals and Stable NAV • £47 million disposal proceeds, £4 million exchanged, completed post-period end Property • High quality 83% effective freehold pub estate, £2.1bn asset value Net Asset • NAV of £1.03 per share (FY2023: £1.01 per share) Value • Movement in NAV driven by sales perfo
Slide 12: Improved Execution of the Operating Model will Offset Impact of Budget Measures
Improved Execution of the Operating Model will Offset Impact of Budget Measures REITERATING COMMITMENT TO OUR STATED CAPITAL MARKETS DAY TARGETS • Additional employment costs reflect NI threshold changes and higher percentage increase to NLW and NMW • This impact will be offset in FY2025, and beyond
Slide 13: Opportunity for Significant, Organic NAV Increase over Medium-term
Opportunity for Significant, Organic NAV Increase over Medium-term Illustrative NAV uplift over medium-term £1.48 per share • Opportunity for organic debt-to-equity transfer +£0.23 over the coming years +£0.22 • Securitisation amortisation of c. £139 million to £1.03 per share FY2027 will drive c.58
Slide 14: Summary and Outlook
Summary and Outlook • Encouraging start to FY2025 with like-for-like sales in the first six weeks +3.9% vs. last year Trading • Christmas bookings tracking ahead of last year, with high levels of reservations • Autumn Budget placing additional pressure on costs, but overall package of measures is Co
Slide 15: Operational Progress
Operational Progress Justin Platt, CEO The Bluebell, Malvern The Acorn, Accrington
Slide 16: The UK Pub Market Offers Significant Value Opportunity
The UK Pub Market Offers Significant Value Opportunity The UK Pub Sector Growing At 3% CAGR Local Pubs Market Is Buoyant UK PUBS & BARS MARKET TOTAL REVENUE1 LFL REVENUE GROWTH – OCT 2024 MAT2 4.0% +£4.2 £32.6 +3% 3.0% £28.4 BILLION CAGR BILLION PUBS RESTAURANTS BILLION -2.8% BARS 2023 2028 Marston'
Slide 17: Driving Growth with a focus on 5 Key Value Drivers
Driving Growth with a focus on 5 Key Value Drivers To create VISIONa high margin, highly cash generative local pub PURPOSE company based on differentiated formats and a brand portfolio that is naturally balanced to appeal across a range of consumer segments KEY VALUE DRIVERS METRICS 1 Execute a Mark
Slide 18: Early Success in Executing a Market Leading Operating Model
Early Success in Executing a Market Leading Operating Model Revenue Growth Ahead of Market Launching Demand Driving Events MONTHLY LFL GROWTH VS. MARKET1 SEP DEC MAR JUN SEP 2023 2023 2024 2024 2024 Market • LFL sales ahead of market in FY2024 • Calendar of events with compelling reasons to visit •
Slide 19: Early Success in Executing a Market Leading Operating Model
Early Success in Executing a Market Leading Operating Model Good progress reducing costs to drive margin improvements MARGIN COST INITIATIVES IMPACT • Labour productivity - right people, right time LABOUR +0.5% • Overhead reductions - Head Office reorganisation FOOD + • Menu simplification & managin
Slide 20: Early Success in Executing a Market Leading Operating Model
Early Success in Executing a Market Leading Operating Model Delivering industry leading guest satisfaction MARSTON’S REPUTATION SCORE1 SEPT 2024 800 MARCH 2024 787 SEPT 2023 766 • Simplified and loved food menus • Excellent service through locally-led teams • Guest obsessed with focus on consistency
Slide 21: Promising Outlook for FY2025
Promising Outlook for FY2025 Demand Driving Event Programme New Format Launches • ‘Always On’ Nationally Curated Event Plan • 2 Room Pub is key format launch priority for FY2025 • Q1 Cheers to Heroes & Marston’s Magical Christmas • Designed to drive appeal with Family Diners AND Pub Regulars • Q2-Q4
Slide 22: Summary and Outlook
Summary and Outlook Strong Financial Good Early Progress & Operational against 5 Key Value Performance Drivers Reaffirming Targets Reliable Delivery of set at Recurring Free Capital Markets Day Cash Flow Very well placed to win in a growing market 22
Slide 23: Q&A
Q&A The Bluebell, Malvern The Ladygrove, Didcot
Slide 24: Appendices
Appendices The Bluebell, Malvern The Sun, Halesowen
Slide 25: Safely and Sustainably Operating the Business
Safely and Sustainably Operating the Business Significant progress with our ESG agenda in FY 2024 FY2024 HIGHLIGHTS • Reduced food waste by 32% - on track for 50% by 2030 PRODUCT Fallow Field, Telford • Supporting charities to eradicate food poverty • Increased electric vehicle chargers - 445 across
Slide 26: Statutory P&L summary
Statutory P&L summary £m FY2024 FY2023 Comments Revenue £899m £872m +3.0% growth Operating profit* £152m £90m +68.2% growth Return to statutory profit, swap Profit/(loss) before tax* £14m £(31)m movements Earnings/(loss) per share (p)* 2.8p (3.0)p Share of profit after tax, and (Loss)/income from as
Slide 27: High quality pub estate
High quality pub estate Pubs Lodges Total Number Value (£m) Number Value (£m) Value (£m) Securitised 845 1,130 7 16 1,146 Non-securitised Unsecured freehold 138 250 5 13 263 Freehold – property lease 127 328 10 29 357 Total Freehold 1,110 1,708 22 58 1,766 Leasehold 229 270 8 13 283 Total 1,339 1,97
Slide 28: IFRS 16 versus IAS 17 profit comparison
IFRS 16 versus IAS 17 profit comparison FY2024 FY2024 FY2023 FY2023 £m IFRS 16 IAS 17 IFRS 16 IAS 17 Revenue 898.6 898.6 872.3 872.3 Operating Expenses (751.4) (761.1) (747.5) (757.5) Operating profit 147.2 137.5 124.8 114.8 Net finance costs (105.1) (91.3) (99.2) (85.4) Profit before tax 42.1 46.2
Slide 29: IFRS 16 versus IAS 17 analysis
IFRS 16 versus IAS 17 analysis £m 2024 2023 Depreciation: Non-IFRS 16 33.3 33.7 Depreciation: IFRS 16 12.0 11.8 Total Depreciation 45.3 45.5 Interest: Non-IFRS 16 91.3 85.4 Interest: IFRS 16 13.8 13.8 Total Interest 105.1 99.2 IAS 17 net rent charge 21.7 21.8 29
Slide 30: Securitised debt profile
Securitised debt profile Principal outstanding Step-up Tranche Type Final maturity date at 28 September 2024 date A2 Fixed/floating £99.5m July 2019 2027 A3 Fixed/floating £200.0m April 2027 2032 A4 Floating £107.8m October 2012 2031 B Fixed/floating £155.0m July 2019 2035 Total £562.3m 30
Slide 31: Debt profile
Debt profile Max Securitised Debt Service 100 £81.1m 80 Debt Service 60 A3 Step Up Principal £m 40 20 Interest 0 '24 '25 '26 '27 '28 '29 '30 '31 '32 '33 '34 '35 Financial Year (£m) FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 FY2030 FY2031 FY2032 FY2033 FY2034 FY2035 Principal 41.5 43.9 46.3 48.8 51.5
Slide 32: Estate analysis by operating model
Estate analysis by operating model Operating No. of Revenue EBITDA Profit Pubs (£m) (£m) (£m) 2024 2023 2024 2023 2024 2023 2024 2023 Managed and Partnership 1,182 1,184 870.5 835.9 177.4 149.6 133.2 105.2 Tenanted and Leased 157 230 28.1 36.4 15.1 20.7 14.0 19.6 Total 1,339 1,414 898.6 872.3 192.5