Slide 1: Annual General Meeting
Annual General Meeting 28 January 2011
Slide 2: Marston's today
Marston’s today Marston’s today 1. National pub operator • Marston’s Inns and Taverns – 485 managed pubs • Marston’s Pub Company – 1,663 tenanted/leased pubs • Situated across England and Wales • 98% freehold estate (by value)* 2. National Brewer – Marston’s Beer Company • Ale brewer; market leading
Slide 3: Financial snapshot
Financial snapshot 2010 2009 % Change Revenue £650.7m £645.1m +0.9% Operating Margin 22.9% 22.8% +0.1% Operating Profit £148.7m £147.4m +0.9% Profit before tax1 £73.5m £70.3m +4.6% Final Dividend 3.7p 3.7p - 2010 2009 Operating cashflow £189.3m £147.3m Pre-investment FCF £116.7m £70.0m Net capex* (£
Slide 4: Clear divisional strategies
Clear divisional strategies STRATEGY KEY COMPONENTS OBJECTIVES • ‘F-Plan’ • New-build investment Exploit and develop • Sustainable growth • Innovative agreements competitive advantage • Greater control of retail offer • Lower gearing ratios in pubs and brewing • Increased ROC sectors • ‘Localness’ •
Slide 5: 'F-Plan' drives transformation
‘F-Plan’ drives transformation ‘F-Plan’: Food, Families, Females, Forty/Fifty somethings 2005 2010 28% Food sales mix: trends, strategy, development 40% 14m Meals served: 70% of visits are food-led 24m £11k AWT per pub: investment, churn £15k £5.70 Spend per head on food: value increased £6.06 62% F
Slide 6: Managed - new build investment
Managed - new build investment Illustrative pro-forma Actual New-builds ‘Pro-forma’ 2010 2011-2015 Number of pubs 490 120 610 AWT (£k per week) 15 25 17 Food sales mix 40% 60% 45% EBITDA (£m) 85 40 125 ROC c.9% c.15% c.11% 1. Visibility and control of plans • 2011: 20 sites under contract, 2 open an
Slide 7: Tenanted - innovative agreements
Tenanted Heading (Arial Black 22pt) - innovative Heading agreements (Arial Black 22pt) Long-term Retail Agreement Disposals Total leases Estate No. of pubs 1,000 600 64 1,664 % of estate 60 36 4 100 Divisional £71m £8m - £79m profit % of profit 90 10 - 100 YOY EBIT % +1 -24 -4 -4 STABILITY OPPORTUNI
Slide 8: Retail Agreement: target
Retail Heading Heading (Arial Black 22pt) Agreement: target (Arial – 600 Black pubs 22pt) 1. Target EBITDA uplift - £10k per pub (20% EBITDA ROC) p.a. Cumulative 2010 2011 2012 2013 2014 Retail Agreements* 100 300 500 600 600 Target profit uplift £m* 1.0 1.5 3.5 5.3 6.0 2. Key objectives • Increased
Slide 9: Brewing - 'Localness' adds value
Brewing - ‘Localness’ adds value 1. ‘Localness’ • Provenance, tradition, heritage, authenticity 2. Signals of ‘Localness’ • Brewing, distribution, marketing 3. Competition • Regional brewers, micro brewers 4. Marston’s competitive advantage • Genuinely local • National distribution, cost-efficient •
Slide 10: Market leader in premium cask, bottled ale
Market leader in premium cask, bottled ale Premium Cask Ale 2005-2010 Marston’s Premium cask ale market share % vs. total ale market Bottled Ale 2005-2010 Marston’s market share % Total bottled ale market *source: BBPA market tracker 10 Growth prospects, attractive consumer profile and margins Prese
Slide 11: Summary
Summary 1. Clear strategy to exploit and develop competitive advantage • ‘F-Plan’, new-build investment • Innovative agreements, greater control of retail offer • ‘Localness’, Premium Ale 2. Clear financial objectives • 2010 results demonstrate strategy is being well-executed 3. Current trading • En
Slide 12: www.marstons.co.uk
www.marstons.co.uk