Slide 1: Preliminary Results 14 September 2018
wetherspoon ~ The Castle Hotel, Ruthin PRELIMINARY RESULTS 14 SEPTEMBER 2018
Slide 2: Financial Summary
Financial Summary Var% 2018 20172 Var% (Exc wk53) 2016 2015 2014 2013 20122 2011 2010 2009 Revenue 1,693.8 1,660.8 +2.0% +4.2% 1,595.2 1,513.9 1,409.3 1,280.9 1,197.1 1,072.0 996.3 955.1 (£m) Like-for-like sales +5.0% +4.0% +3.4% +3.3% +5.5% +5.8% +3.2% +2.1% +0.1% +1.2% Profit before tax 107.2 102.
Slide 3: Average Weekly Sales Per Pub
Average Weekly Sales Per Pub (including VAT) £000 46 44.4 44 41.7 42 39.0 40 37.4 38 36.0 36 34.0 34 32.3 31.1 32 29.9 30.1 30 28 26 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2
Slide 4: Underlying Earnings Per Share (pence)
Underlying Earnings Per Share (pence)* pence 76.5 80.0 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 32.6 35.0 30.0 25.0 20.0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 *Underlying earnings per share are before exceptional items and exclude gains/losses on pr
Slide 5: Like-for-like Performance
Like-for-like Performance % 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 Bar +5.1 +3.1 +3.3 +1.2 +2.7 +3.8 +2.8 +1.7 -0.8 +2.5 Food +5.1 +5.7 +3.5 +7.3 +12.0 +10.9 +4.8 +4.2 +0.1 -0.4 Machines +2.9 -1.2 -2.2 -2.8 -3.1 +0.4 -2.8 -3.9 +12.1 -7.5 Hotels +2.3 +9.9 +9.7 +24.2 +6.3 – – – – – LFL sale
Slide 6: 10 Year Operating Profit
10 Year Operating Profit £m 2018 20171 2016 2015 2014 2013 20121 2011 2010 2009 Turnover 1,693.8 1,660.8 1,595.2 1,513.9 1,409.3 1,280.9 1,197.1 1,072.0 996.3 955.1 Pub profit (pre repairs) 338.6 330.6 288.3 285.4 284.4 259.0 245.4 226.8 218.5 208.4 Repairs (71.3) (66.2) (54.9) (53.4) (59.4) (48.0)
Slide 7: 2018 Cost Increases
2018 Cost Increases* • Wages: +7.5% (+£34.8m) • Depreciation: +9% (+£7m) • Repairs: +10% (+£6m) • Business rates +5% (+£3m) The William Adams, Gorleston on Sea *2017 year numbers have been adjusted for 53 weeks. 6
Slide 8: Allocation of Resources
Allocation of Resources £13m Dividend £15m £24m £15m Freehold reversions and investment properties £14m £13m £22m £16m Share buybacks £89m £25m £5m £36m £5m £13m Capex on new and £15m existing pubs £8m £52m £33m £23m £54m £28m £15m £8m £26m £154m £151m £121m £113m £115m £10m £94m £99m £89m £82m £49m
Slide 9: Cash Capital Expenditure
Cash Capital Expenditure £m 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 New Openings: Acquisition and development costs: Current year 32.0 27.2 38.6 76.5 64.5 40.4 57.2 74.0 45.2 32.0 Future year 14.4 13.1 16.6 30.5 33.2 12.8 10.4 9.0 12.5 5.8 Freehold reversions and investment 16.3 88.6 36.1
Slide 10: Movement in Net Debt
Movement in Net Debt £m 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 Opening Net debt 696.3 650.8 601.1 556.6 474.2 462.6 437.7 388.4 390.0 442.3 Free cash flow (93.4) (107.9) (90.5) (109.8) (92.9) (65.3) (91.5) (78.8) (71.3) (99.5) Disposal of fixed assets (4.7) (19.6) (22.5) (0.7) (0.5) (0.6)
Slide 11: 10 Year Debt Overview
10 Year Debt Overview 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 Net debt/EBITDA 3.39 3.39 3.47 3.37 3.21 2.88 2.96 2.98 2.70 2.74 (EBITDAR - Reinvestment)/Fixed charge 2.25 2.21 2.14 1.97 1.79 1.88 1.75 1.74 2.01 2.14 Interest cover (times) 4.19 3.72 2.92 2.73 3.11 2.66 2.68 2.73 3.08 2.43 I
Slide 12: Property Update
Property Update 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 Trading pubs at start of FY 895 926 951 927 886 860 823 775 731 694 Freehold pubs opened 6 9 10 24 31 14 18 34 15 13 Leasehold pubs opened – 1 6 6 15 15 22 16 32 26 Closures/disposals (18) (41) (41) (6) (5) (3) (3) (2) (3) (2) Total t
Slide 13: It's a People Thing
“It’s a People Thing” • 40,000 employees • Manager retention: 2018 2013 2008 Pub Manager 12 yr 0 mth 9 yr 8 mths 7 yr 1 mth Kitchen Manager 8 yr 6 mths 6 yr 5 mths 4 yr 7 mths • Recognised as one of ‘Britain’s Top Employers’ in a Guardian publication for 15 consecutive years • Around 11,000 employee
Slide 14: Changing Sales Mix since 2000
Changing Sales Mix since 2000 100% 6% 5% 4% 4% 3% 90% 18% (£4.2k)* 25% 29% 80% (£6.9k)* 33% 35% (£8.7k)* (£11.1k)* (£15.7k)* 70% 60% Hotel/Other 50% Machines Food 40% 76% Bar (£17.2k)* 70% 66% (£19.7k)* 63% 61% (£19.8k)* 30% (£21.4k)* (£27.0k)* 20% 10% 0% 2000 2005 2009 2013 2018 *Average sales per
Slide 15: Achievements
Achievements Company Total Average • 99% of pubs Cask Marque approved Premises Rating Aldi 638 4.99 • Raised £1.7m in the last 12 months and over TGI Fridays J D Wetherspoon plc 54 806 4.98 4.97 £16.1m during the 16-year partnership with Waitrose 361 4.97 CLIC Sargent Pret a Manger 336 4.97 McDonald
Slide 16: Taxation
Taxation 2018 2017 2016 2015 2014 2013 2012 2011 £m £m £m £m £m £m £m £m VAT 332.8 323.4 311.7 294.4 275.1 253.0 241.2 204.8 Alcohol duty* 175.9 167.2 164.4 161.4 157.0 144.4 136.8 120.2 PAYE and NIC 109.2 96.2 95.1 84.8 78.4 70.2 67.1 65.2 Business rates 55.6 53.0 50.2 48.7 44.9 46.4 43.9 39.8 Corp
Slide 17: Brexit press quotes
DO THEY NOT UNDERSTAND OR ARE THEY TRYING TO MISLEAD DELI FINANCIAL TIM “Clegg warns ‘hard « Brexit’ willleadto le 7 . The director of Resolution NOT TRUE) | Resolution Foundation } Foundation, Torsten Bell, said: Under a no deal Brexit scenario ... tariffs on clothing, footwear, beverages and tobac
Slide 18: The Sunday Times
- ee THE SUNDAY TIMES wetherspoon *“Sainsbury’s boss David Tyler warns a ‘no deal’ Brexit would raise the cost of shopping” ce IF UK DOESN’T ADOPT EU GLOBAL TRADE DEALS” As a member of the EU, the UK currently benefits from zero or low rate tariffs on various imports from trade deals that the EU has
Slide 19: Current Trading and Outlook
Current Trading and Outlook • LFL sales for the six weeks to 9th September +5.5% • A reasonable start to the financial year • Taxes, labour and interest costs significantly higher than last year • Estimate LFL sales of about 4% required to match last year’s record profits 18
Slide 20: Questions
Questions The Barrel Vault, St Pancras... Opening October 2018
Slide 21: Appendices
wetherspoon Appendices
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 • 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 23: 10 Year Overview
Appendix A 10 Year Overview Number of pubs £ millions Turnover 1000 1,800 950 1,600 900 850 1,400 800 1,200 1,694 927 951 1,661 926 1,595 750 886 895 883 1,514 860 1,409 823 1,000 700 1,281 775 1,197 731 1,072 800 955 996 650 600 600 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 2010 2011 2
Slide 24: 10 Year Capital Trends
Appendix B 10 Year Capital Trends 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 Average Size (ft2) – Openings 5,201 4,379 4,264 4,321 3,585 3,643 3,325 3,572 3,781 3,359 Number of openings 6 10 16 30 46 29 40 50 47 39 % which are freehold 100 90 63 80 67 48 45 68 32 33 Freehold average cost (£k)
Slide 25: 10 Year Financial Trends
Appendix C 10 Year Financial Trends 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 Sales per pub (£000) (1) 1,921 1,807 1,694 1,620 1,562 1,476 1,401 1,360 1,335 1,344 EBITDA per pub (£000) (2) 248.0 229.0 209.2 200.9 204.5 200.9 194.9 198.7 205.8 212.9 Number of pubs 883 895 926 951 927 886 860
Slide 26: ROC/CROCCE/ROE
Appendix D1 ROC/CROCCE/ROE 2018 2017 £000 £000 Shareholders equity per accounts 286,562 258,432 Deferred tax balances 34,881 33,510 Interest rate swaps valuations 24,109 38,896 Impairment balances 20,329 28,268 Net book value of revalued assets (5,753) (6,278) Adjusted shareholders equity (a) 360,12
Slide 27: ROC/CROCCE/ROE
Appendix D2 ROC/CROCCE/ROE 2018 2017 £000 £000 EBITDA (cash return) (e) 214,496 205,184 Depreciation and amortisation (f) (79,305) (73,869) EBIT (g) 135,191 131,315 Interest (27,942) (28,485) Profit before tax 107,249 102,830 Current tax (h) (23,701) (24,591) Profit after cash tax (i) 83,548 78,239
Slide 28: Summary of Exceptional Items
Appendix E1 Summary of Exceptional Items 2018 2017 £000 £000 Exceptional property losses Disposal programme (see next slide) 13,221 24,785 Other property losses Impairment of property, plant and equipment 3,588 1,664 Impairment of other assets – 39 Onerous lease reversal – (696) Onerous lease provis
Slide 29: 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, 19 (2017: 45) sites had been sold, including sites which were closed in the previous year, one were classified as held for sale and an additional six (2017: three) sites have been cl
Slide 30: CGA BrandTrack: most used brand for sit down meals
Appendix F1 CGA BrandTrack: JDW is by far the most used brand for sit down meals Q: Which of the following brands have you eaten at in the past 6 months? 1. 2. 3. 4. 5. 37% 22% 20% 19% 18% Percentage of GB population eating at brand in past 6 months Source: CGA BrandTrack, Apr 2018 29
Slide 31: CGA BrandTrack: branded drinking occasions
Appendix F2 CGA BrandTrack: Standout choice for branded drinking occasions 1. 3. 4. 6. 8. 9. 12. 42% 13% 13% 11% 7% 7% 5% Percentage of GB drinking population drinking at brand in past 6 months Source: CGA BrandTrack, Jul 2018 30
Slide 32: CGA BrandTrack: eating brand vs quick serve
Appendix F3 CGA BrandTrack: JDW is the 5th most used eating brand in GB, holding its own against quick serve outlets 1. 2. 3. 4. 5. 60% 50% 46% 39% 37% Percentage of GB population eaten at brand in past 6 months Source: CGA BrandTrack, Apr 2018 31
Slide 33: CGA BrandTrack: breakfast visits
Appendix F4 CGA BrandTrack: 4th most visited for breakfast % of Breakfast users who have eaten at a brand for Breakfast 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% McDonald’s Greggs Costa JD Wetherspoon Starbucks Caffè Nero Subway Burger King Pret a Manger KFC 15% of all consumers who have eaten out at
Slide 34: Swap Maturity Profile
Appendix G Swap Maturity Profile Swap Value From To Weighted Average % £600m 31 Oct 2016 30 Jul 2018 1.68% £695m 31 Jul 2018 29 Jul 2021 2.53% £695m 30 July 2021 30 July 2023 1.64% £695m 31 July 2023 30 July 2026 1.07% £95m 31 July 2026 30 July 2028 1.41% 33