Slide 1: Preliminary Results 13 September 2019
wetherspoon me Dp The Silver Penny, Dublin PRELIMINARY RESULTS 13 SEPTEMBER 2019 John Hutson — CEO Ben Whitley — FD
Slide 2: Financial Summary
Financial Summary 2019 2018 Var% 20172 2016 2015 2014 2013 20122 2011 2010 Revenue 1,818.8 1,693.8 +7.4% 1,660.8 1,595.2 1,513.9 1,409.3 1,280.9 1,197.1 1,072.0 996.3 (£m) Like-for-like sales +6.8% +5.0% +4.0% +3.4% +3.3% +5.5% +5.8% +3.2% +2.1% +0.1% Profit before tax and property gains and losses
Slide 3: Average Weekly Sales Per Pub
Average Weekly Sales Per Pub (including VAT) £000 48.0 48 46 44.4 44 41.7 42 39.0 40 37.4 38 36.0 36 34.0 34 32.3 31.1 32 30.1 30 28 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2
Slide 4: Underlying Earnings Per Share (pence)
Underlying Earnings Per Share (pence)* pence 76.5 80.0 70.2 75.0 66.6 70.0 65.0 60.0 55.0 48.0 47.6 50.0 44.7 43.8 41.3 45.0 40.0 34.9 35.3 35.0 30.0 25.0 20.0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 *Underlying earnings per share are before exceptional items and exclude gains/losses on pr
Slide 5: Like-for-like Performance
Like-for-like Performance % 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 Bar +5.8 +5.1 +3.1 +3.3 +1.2 +2.7 +3.8 +2.8 +1.7 -0.8 Food +8.3 +5.1 +5.7 +3.5 +7.3 +12.0 +10.9 +4.8 +4.2 +0.1 Fruit/slot +10.3 +2.9 -1.2 -2.2 -2.8 -3.1 +0.4 -2.8 -3.9 +12.1 machines Hotel +3.9 +2.3 +9.9 +9.7 +24.2 +6.3 –
Slide 6: 10 Year Operating Profit
10 Year Operating Profit £m 2019 2018 20171 2016 2015 2014 2013 20121 2011 2010 Turnover 1,818.8 1,693.8 1,660.8 1,595.2 1,513.9 1,409.3 1,280.9 1,197.1 1,072.0 996.3 Pub profit (pre repairs) 349.7 338.6 330.6 288.3 285.4 284.4 259.0 245.4 226.8 218.5 Repairs (76.9) (71.3) (66.2) (54.9) (53.4) (59.4
Slide 7: 2019 Cost Increases
2019 Cost Increases • Wages: +£71.4m (+12.9%) • Interest: +£7.1m (+25.5%) • Repairs: +£5.6m (+7.9%) • Utilities +£5.5m (+10.6%) • Depreciation: +£2.5m (+3.2%) The Captain Alexander, Liverpool 6
Slide 8: Allocation of Resources
Allocation of Resources Dividend £13m £15m Freehold reversions and investment properties £24m £15m £13m Share buybacks £14m £22m £16m £89m £13m Capex on new and £25m £5m £36m existing pubs £5m £13m £15m £8m £52m £33m £23m £77m £54m £28m £15m £8m £26m £5m £154m £151m £121m £113m £115m £94m £99m £89m
Slide 9: Cash Capital Expenditure
Cash Capital Expenditure £m 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 New Openings: Acquisition and development costs: Current year 19.8 32.0 27.2 38.6 76.5 64.5 40.4 57.2 74.0 45.2 Future year 7.5 14.4 13.1 16.6 30.5 33.2 12.8 10.4 9.0 12.5 Freehold reversions and investment 77.2 16.3 88.6
Slide 10: Movement in Net Debt
Movement in Net Debt £m 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 Opening Net debt 726.2 696.3 650.8 601.1 556.6 474.2 462.6 437.7 388.4 390.0 Free cash flow (97.0) (93.4) (107.9) (90.5) (109.8) (92.9) (65.3) (91.5) (78.8) (71.3) Disposal of fixed assets (9.3) (4.7) (19.6) (22.5) (0.7) (0.5)
Slide 11: Property Update
Property Update 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 Trading pubs at start of FY 883 895 926 951 927 886 860 823 775 731 Freehold pubs opened 4 6 9 10 24 31 14 18 34 15 Leasehold pubs opened 1 – 1 6 6 15 15 22 16 32 Closures/disposals (9) (18) (41) (41) (6) (5) (3) (3) (2) (3) Total tra
Slide 12: IFRS 16 – impact
IFRS 16 – impact Profit and loss impact £m EBITDA £58 Depreciation £(50) Operating profit £8 Interest £(22) Profit before tax £(14) Tax £2 Profit after tax £(12) Balance sheet impact £m Right-of-use assets £618 Net lease liabilities £(617) Other £1 Based on leases in place at the year end 11
Slide 13: “It’s a People Thing”
“It’s a People Thing” • Around 42,000 employees of which nearly 13,000 are shareholders • Manager retention: 2019 2013 2008 Pub Manager 12 yr 2 mth 9 yr 8 mths 7 yr 1 mth Kitchen Manager 8 yr 1 mths 6 yr 5 mths 4 yr 7 mths • Recognised as one of ‘Britain’s Top Employers’ in a Guardian publication fo
Slide 14: Changing Sales Mix since 2000
Changing Sales Mix since 2000 100% 6% 5% 4% 4% 3% 90% 18% (£4.2k)* 25% 29% 33% 36% 80% (£6.9k)* (£8.7k)* (£17.3k)* (£11.1k)* 70% 60% Hotel/Other 50% Machines Food 40% 76% Bar (£17.2k)* 70% 66% (£19.7k)* 63% 60% (£19.8k)* 30% (£21.4k)* (£28.8k)* 20% 10% 0% 2000 2005 2009 2013 2019 *Average sales per
Slide 15: Achievements
Achievements Company Total Average • 99% of pubs Cask Marque approved Premises Rating Aldi 630 4.99 Waitrose 355 4.98 • Raised £1.6m in the last 12 months and over J D Wetherspoon plc 799 4.97 £17.6m during the 16-year partnership with McDonald’s Sainsbury’s 1,168 982 4.96 4.95 CLIC Sargent Pret A M
Slide 16: Out to Lunch
Out to Lunch • Top rank on Out to Lunch Restaurant Company Score Stars League Table on the food and service Top 5; offered to children JD Wetherspoon 70/100 4 Stars Ikea 69/100 4 Stars Harvester 64/100 3.5 Stars • 4 out of maximum 5 stars awarded Wahaca 63/100 3.5 Stars Leon 59/100 3.5 Stars • Top m
Slide 17: Taxation
Taxation 2019 2018 2017 2016 2015 2014 2013 2012 £m £m £m £m £m £m £m £m VAT 357.9 332.8 323.4 311.7 294.4 275.1 253.0 241.2 Alcohol duty* 174.4 175.9 167.2 164.4 161.4 157.0 144.4 136.8 PAYE and NIC 121.4 109.2 96.2 95.1 84.8 78.4 70.2 67.1 Business rates 57.3 55.6 53.0 50.2 48.7 44.9 46.4 43.9 Cor
Slide 18: Current Trading and Outlook
Current Trading and Outlook • LFL sales for the six weeks to 8th September +5.9% • A reasonable start to the financial year • We anticipate a reasonable outcome for the year, subject to the future sales performance. 17
Slide 19: Questions
wetherspoon Questions FESTIVAL ALES AVAILABLE ON THE WETHERSPOON APP THE WORLD'S BIGGEST AL-A Re ESTIVALS Een | Dw ee @
Slide 20: Appendices
wetherspoon wetherspoon pREMIUM CIDE (3) Appendices
Slide 21: Appendices
Appendices • A 10 year overview • B 10 year financial trends • C 10 year debt overview • D1 ROC/CROCCE/ROE calculations • D2 ROC/CROCCE/ROE calculations • E1 Summary of exceptional items • E2 Pub disposal programme • F1 CGA Brand Track: brand for sit down meal • F2 CGA Brand Track: branded drinking
Slide 22: 10 Year Overview
Appendix A 10 Year Overview Number of pubs £ millions Turnover 1000 1,800 950 1,600 900 850 1,400 800 1,819 951 1,200 1,694 927 926 1,595 1,661 750 886 895 883 879 1,514 860 1,409 823 1,000 700 775 1,281 1,197 996 1,072 650 800 600 600 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 2011 2012
Slide 23: 10 Year Financial Trends
Appendix B 10 Year Financial Trends 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 Sales per pub (£000) (1) 2,075 1,921 1,807 1,694 1,620 1,562 1,476 1,401 1,360 1,335 EBITDA per pub (£000) (2) 253.3 248.0 229.0 209.2 200.9 204.5 200.9 194.9 198.7 205.8 Number of pubs 879 883 895 926 951 927 886
Slide 24: 10 Year Debt Overview
Appendix C 10 Year Debt Overview 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 Net debt/EBITDA 3.36 3.39 3.39 3.47 3.37 3.21 2.88 2.96 2.98 2.70 (EBITDAR - Reinvestment)/Fixed charge 2.26 2.25 2.21 2.14 1.97 1.79 1.88 1.75 1.74 2.01 Interest cover (times) 3.17 4.19 3.72 2.92 2.73 3.11 2.66 2.68
Slide 25: ROC/CROCCE/ROE
Appendix D1 ROC/CROCCE/ROE 2019 2018 £000 £000 Shareholders equity per accounts 316,812 286,562 Deferred tax balances 31,073 34,881 Interest rate swaps valuations 49,072 24,109 Impairment balances 19,675 20,329 Net book value of revalued assets (5,334) (5,753) Adjusted shareholders equity (a) 411,29
Slide 26: ROC/CROCCE/ROE
Appendix D2 ROC/CROCCE/ROE 2019 2018 £000 £000 EBITDA (cash return) (e) 219,327 214,496 Depreciation and amortisation (f) (81,811) (79,305) EBIT (g) 137,516 135,191 Interest (35,057) (27,942) Profit before tax 102,459 107,249 Current tax (h) (22,484) (23,701) Profit after cash tax (i) 79,975 83,548
Slide 27: Summary of Exceptional Items
Appendix E1 Summary of Exceptional Items 2019 2018 £000 £000 Exceptional property losses Disposal programme (see next slide) 4,108 13,221 Other property losses Impairment of property, plant and equipment 2,252 3,588 Impairment of other assets 52 – Onerous lease 628 1,442 7,040 18,251 Exceptional tax
Slide 28: Summary of pub disposal programme
Appendix E2 Summary of pub disposal programme The company has offered several of its sites for sale. At the year end, 8 (2018: 19) sites had been sold, including sites which were closed in the previous year, two were classified as held for sale. 2019 2018 £000 £000 Disposal programme Loss on disposa
Slide 29: CGA BrandTrack: preferred brand to eat out
Appendix F1 CGA BrandTrack: JDW consistently succeed in being voted preferred brand to eat out at Q: If the following brands were available in the same location, which would be your first choice to eat at? 1. 2. 3. 4. 4. 14% 10% 8% 7% 7% Source: CGA BrandTrack, Oct 2018 28
Slide 30: CGA BrandTrack: branded drinking occasions
Appendix F2 CGA BrandTrack: Standout choice for branded drinking occasions 1. 2. 3. 4. 5. 44% 18% 15% 14% 13% Percentage of GB drinking population drinking at brand in past 6 months Source: CGA BrandTrack, Feb 2019 29
Slide 31: CGA BrandTrack: eating brands
Appendix F3 CGA BrandTrack: JDW is the 4th most used eating brand in GB, holding its own against quick serve outlets 1. 2. 3. 4. 5. 60% 53% 49% 43% 39% Percentage of GB population eaten at brand in past 6 months Source: CGA BrandTrack, Apr 2019 30
Slide 32: Swap Maturity Profile
Appendix G Swap Maturity Profile Swap Value From To Weighted Average % £770m 02 July 2018 29 Jul 2021 2.42% £770m 30 July 2021 30 July 2023 1.61% £770m 31 July 2023 30 July 2026 1.10% £770m 31 July 2026 30 June 2028 1.33% £770m 01 July 2028 29 March 2029 1.32% 31
Slide 33: wetherspoon
wetherspoon 32