Slide 1: Interim Presentation 11th March 2016
wetherspoon ,-_=———— Sn eee ee SS SS a SH & ™ di ae rr | | a) SA “ Z The Not rth Western, pie Bu St. Station J 2 Zi eae ——— INTERIM PRESENTATION 11TH MARCH 2016 John Hutson — CEO. Ben Whitley — FD —
Slide 2: Financial Summary
Financial Summary H1 H1 2016 2015 Var% 2015 2014 20132 2012 2011 2010 2009 2008 2007 20062 Revenue 790.3 744.4 +6.2% 1,513.9 1,409.3 1,280.9 1,197.1 1,072.0 996.3 955.1 907.5 888.5 847.5 (£m) Like-for-like sales +2.9% +4.5% +3.3% +5.5% +5.8% +3.2% +2.1% +0.1% +1.2% -1.1% +5.6% +2.0% Profit before ta
Slide 3: Average Weekly Sales Per Pub (including VAT)
Average Weekly Sales Per Pub (including VAT) £000 40 38.4 37.4 37.0 38 36.0 36 34.0 34 32.3 31.1 32 30.3 30.1 30.1 29.9 29.0 30 28 26 24 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 H1 H1 2015 2016 2
Slide 4: Underlying Earnings Per Share (pence)
Underlying Earnings Per Share (pence)* pence 48.0 47.0 50.0 44.7 45.0 41.3 40.0 35.3 34.9 32.6 35.0 27.1 27.6 30.0 24.0 22.9 25.0 19.1 20.0 15.0 10.0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 H1 H1 2015 2016 *Underlying earnings per share are before exceptional items and exclude gains/losses
Slide 5: Like-for-like Performance
Like-for-like Performance H1 H1 % 2016 2015 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Bar +2.9 +1.5 +1.2 +2.7 +3.8 +2.8 +1.7 -0.8 +2.5 -4.3 +3.3 +2.2 Food +2.9 +10.5 +7.3 +12.0 +10.9 +4.8 +4.2 +0.1 -0.4 +7.9 +12.6 +3.6 Machines -2.9 +1.1 -2.8 -3.1 +0.4 -2.8 -3.9 +12.1 -7.5 -5.8 +2.7 -1.4 Hot
Slide 6: 10 Year Operating Profit
10 Year Operating Profit H1 H1 £m 2016 2015 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Turnover 790.3 744.4 1,513.9 1,409.3 1,280.9 1,197.1 1,072.0 996.3 955.1 907.5 888.5 847.5 Pub profit (pre repairs) 134.8 140.2 285.4 284.4 259.0 245.4 226.8 218.5 208.4 199.5 203.2 195.3 Repairs (26.1) (26
Slide 7: Cost Increases
Cost Increases • Bar and food (modest) • Hourly paid staff rates: +5% (October 2014) • Hourly paid staff rates: +8% (August 2015) • Depreciation: +9% • Utilities (modest) The Posset Cup, Portishead, Somerset 6
Slide 8: Allocation of Resources
Allocation of Resources Dividend £15m FH reversions & investment £15m properties £24m Buybacks £22m £25m Capex £5m £10m £5m £13m £15m £33m £8m £23m £7m £76m £15m £8m £10m £26m £10m £13m £17m £2m £16m £78m £154m £151m £12m £14m £121m £10m £113m £94m £82m £81m £75m £61m £60m £49m £38m 2006 2007 2008 2
Slide 9: Capital Expenditure
Capital Expenditure £m H1 H1 2016 2015 2015 2014 2013 2012 2011 2010 2009 2008 New Openings: Acquisition and development costs: Current year 25.8 46.1 76.5 64.5 40.4 57.2 74.0 45.2 32.0 31.0 Future year 16.9 13.5 30.5 33.2 12.8 10.4 9.0 12.5 5.8 17.6 Freehold reversions and 15.5 12.8 21.6 23.6 7.7 7
Slide 10: Movement in Net Borrowings
Movement in Net Borrowings H1 H1 £m 2016 2015 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Opening Net borrowings 601.1 556.6 556.6 474.2 462.6 437.7 388.4 390.0 442.3 436.8 355.6 334.1 Free cash flow (55.7) (44.9) (109.8) (92.9) (65.3) (91.5) (78.8) (71.3) (99.5) (71.4) (52.4) (69.7) Disposal
Slide 11: 10 Year Debt Overview
10 Year Debt Overview H1 H1 2016 2015 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Net debt/EBITDA 3.49 3.38 3.37 3.21 2.88 2.96 2.98 2.70 2.74 3.24 3.21 2.80 Interest cover (times) 3.12 3.13 2.73 3.11 2.66 2.68 2.73 3.08 2.43 2.71 3.13 3.31 Interest cover pre exceptional (times) 3.09 3.13 3.29
Slide 12: Property Update
Property Update H1 H1 2016 2015 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Trading pubs at start of FY 951 927 927 886 860 823 775 731 694 671 657 655 Freehold pubs opened 5 11 24 31 14 18 34 15 13 13 11 2 Leasehold pubs opened - 1 6 15 15 22 16 32 26 10 7 7 Closures/disposals (2) (3) (6) (5)
Slide 13: wetherspoon
wetherspoon
Slide 14: “It’s a People Thing”
“It’s a People Thing” • More than 35,000 employees at the end of period • Created over 14,500 jobs since the start of the credit crunch • Dedicated employee website & e-learning suite • Catering Academy – 772 employees have graduated with 349 employees currently going through the programme • Staff r
Slide 15: Changing Sales Mix over Last 16 Years
Changing Sales Mix over Last 16 Years 100% 4% 4% 3% 6% 5% 90% 18% 24% 80% 29% 31% 37% 70% Other 60% Machines 50% Food 40% 76% Bar 71% 66% 64% 30% 59% 20% 10% 0% 2000 2004 2008 2012 H1 2016 14
Slide 16: Peach BrandTrack: Britain’s favourite big brand
Peach BrandTrack: Britain’s favourite big brand If the following brands were available in the same location, which would be your first choice to eat at? (ranked by % of adults choosing each brand) (out of a list of 18 – the top 6 ) Oct-15 Apr-15 Oct-14 Apr-14 Oct-13 Apr-13 Oct-12 May-12 JD Wetherspo
Slide 17: Successes and achievements
Successes and achievements • 296 pubs are in the 2016 CAMRA Good Beer Guide • Raised £0.9m in the last 6 months and over £11.9m during the 14-year partnership with CLIC Sargent, a charity caring for children with cancer providing support for families at home and in hospital from the day of diagnosis
Slide 18: Taxation
Taxation H1 H1 FY 2016 2015 2015 £m £m £m VAT 153.1 144.8 294.4 Alcohol duty* 83.3 75.2 161.4 PAYE and NIC 46.9 40.7 84.8 Business rates 24.7 24.0 48.7 Corporation tax 10.6 7.8 15.3 Corporation tax credit (historic capital allowances) - (2.0) (2.0) Machine duty 5.6 5.7 11.2 Climate change levies 3.1
Slide 19: Current Trading and Outlook
Current Trading and Outlook • LFL sales for the six weeks to 6th March +3.7% • H2 sales comparisons slightly easier • Wage increases in April • Aiming for a reasonable outcome for the year 19
Slide 20: Questions
Questions The Mossy Well, Muswell Hill, London 20
Slide 21: Appendix
Harpsfield Hall, Hatfield, Hertfordshire Appendix
Slide 22: Appendices
Appendices • A 10 year overview • B 10 year capital trends • C 10 year financial trends • D1 ROC/CROCCE/ROE calculations • D2 ROC/CROCCE/ROE calculations • E Cash flow • F Summary of exceptional items • G Swap maturity profile 22
Slide 23: 10 Year Overview
Appendix A 10 Year Overview Number of pubs £ millions Turnover 1000 1,600 950 1,400 900 850 1,200 800 1,000 1,514 951 936 954 927 1,409 750 886 1,281 860 1,197 823 800 700 1,072 775 955 996 731 848 889 908 650 694 600 744 790 657 671 600 400 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 H1 H1 20
Slide 24: 10 Year Capital Trends
Appendix B 10 Year Capital Trends H1 H1 2016 2015 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Average Size (sq.ft.) – 5,059 4,080 4,321 3,585 3,643 3,325 3,572 3,781 3,359 3,618 3,855 3,637 Openings Number of openings 5 12 30 46 29 40 50 47 39 23 18 9 % which are freehold 100 92 80 67 48 45 68
Slide 25: 10 Year Financial Trends
Appendix C 10 Year Financial Trends H1 H1 2016 2015 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Sales per pub (£000) 832 801 1,620 1,562 1,476 1,401 1,360 1,335 1,344 1,333 1,354 1,283 EBITDA per pub (£000) (1) 92.8 99.0 200.9 204.5 200.9 194.9 198.7 205.8 212.9 211.6 219.0 205.6 Number of pub
Slide 26: ROC/CROCCE/ROE
Appendix D1 ROC/CROCCE/ROE H1 H1 FY 2016 2015 2015 £000 £000 £000 Shareholders equity per accounts 236,850 219,622 222,893 Deferred tax balances 66,318 73,498 69,777 Interest rate swaps valuations 48,493 56,796 39,973 Impairment balances 49,858 39,071 49,769 Net book value of revalued assets (6,897)
Slide 27: ROC/CROCCE/ROE
Appendix D2 ROC/CROCCE/ROE 12 months to 12 months to FY January 2016 January 2015 2015 £000 £000 £000 EBITDA (cash return) (e) 179,475 176,859 178,482 Depreciation and amortisation (f) (69,476) (61,911) (66,668) EBIT (g) 109,999 114,948 111,814 Interest (33,644) (35,917) (34,016) Profit before tax 7
Slide 28: Cash Flow
Appendix E Cash Flow H1 H1 FY 2016 2015 2015 £000 £000 £000 Free Cash Flow 55,700 44,877 109,778 Proceeds on Disposal 3,005 3 723 Investment in new pubs (42,696) (59,656) (106,974) Freehold reversions & investment properties (15,518) (12,763) (21,612) Dividends (9,543) (9,761) (14,591) Share Buy Bac
Slide 29: Summary of Exceptional Items
Appendix F Summary of Exceptional Items H1 2016 H1 2015 FY 2015 £000 £000 £000 Operating exceptional items Inventory valuation – – 5,231 Restructuring costs – – 782 – – 6,013 Exceptional property losses Onerous lease provision (847) – 1,858 Property impairment 89 – 11,195 Disposal programme 124 – –
Slide 30: Swap Maturity Profile
Appendix G Swap Maturity Profile Swap Value From To Weighted Average % £400m 12 Nov 2014 31 Jul 2016 3.5% £400m 31 Jul 2016 31 Jul 2018 2.2% £400m 31 July 2018 31 July 2021 3.7% £150m 31 July 2021 31 July 2023 3.8% 30