Fuller, Smith & Turner P.l.c. Class A · LSE:FSTA
Fuller, Smith & Turner P.l.c. Class A — FY2015 Earnings Presentation
39 slides from Fuller, Smith & Turner P.l.c. Class A's earnings presentation, Mar 28, 2015
Slide 1: Fuller, Smith & Turner PLC Final Results for the 52 weeks ended 28 March 2015
FULLER, SMITH & TURNER PLC Final Results for the 52 weeks ended 28 March 2015
Slide 2: Michael Turner, Chairman
Michael Turner Chairman
Slide 3: Agenda
Agenda • Overview • Financial Results • Strategy and Operations • Prospects
Slide 4: Highlights
Highlights Strong performance, investing in core business Growth on prior year (%) Managed LFL sales 6.3% 8.3% Revenue £321.5m 12% £288.0m 6% Adjusted profit* £36.4m 7% £34.1m 10% 51.51p 10% Adjusted EPS* 46.94p 11% Total annual dividend 16.60p 10% 15.10p 10% £57.5m CapEx# CapEx# £39.4m NetDebt Net
Slide 5: James Douglas, Finance Director
James Douglas Finance Director
Slide 6: Group Performance
Group Performance 2015 2014 £m £m Revenue 321.5 288.0 +12% Operating costs* (279.2) (248.1) +13% Operating profit* 42.3 39.9 +6% Net finance costs* (5.9) (5.8) +2% Adjusted profit before tax* 36.4 34.1 +7% Depreciation & amortisation 16.4 14.6 +12% EBITDA* 58.7 54.5 +8% * Excluding exceptional items
Slide 7: Exceptional Items
Exceptional Items 2015 2014 £m £m Profit on sale of properties 0.8 1.9 Pension curtailment gain 1.2 - Acquisition costs (1.2) (1.1) Asset impairments & reversals - (0.5) Onerous lease provisions & releases (0.3) 0.9 Pension scheme finance costs (0.8) (0.6) Reorganisation costs - (1.2) Total exceptio
Slide 8: Group Performance
Group Performance Share of Five Year History Operating Profit +46% +51% 51.51p 16.60p +32% 19% 36.4 35.27p 27% 54% 11.00p 27.5 Managed Pubs & Hotels Tenanted Inns The Fuller's Beer Company Adjusted Profit £m Adjusted EPS Full Year Dividend 2010 2015 Share of operating profit above excludes exception
Slide 9: Managed Pubs and Hotels
Managed Pubs and Hotels 2015 2014 LFL sales +6.3% +8.3% Revenue £213.8m £186.0m +15% Operating costs* £188.8m £163.5m +15% Operating profit* £25.0m £22.5m +11% Operating margin 11.7% 12.1% Depreciation & amortisation £11.5m £10.0m +15% EBITDA* £36.5m £32.5m +12% * Excluding exceptional items
Slide 10: Margin Evolution
Margin Evolution Managed Pubs and Hotels margin down 0.4% on last year FY2014 2014/15 2015/16 Impact of some new deals; premium Further progress expected Gross profit % strategy helping wet and food margins Continued to improve efficiency but Cuts in NI for under 21s will Payroll % used this to fund
Slide 11: Tenanted Inns
Tenanted Inns 2015 2014 LFL profits +5% +2% Average EBITDA per pub +5% +1% Number of pubs at year end 203 207 Revenue £31.4m £31.3m Level Operating costs* £18.8m £19.0m -1% Operating profit* £12.6m £12.3m +2% Operating margin 40.1% 39.3% Depreciation £1.6m £1.6m level EBITDA* £14.2m £13.9m +2% * Exc
Slide 12: The Fuller's Beer Company
The Fuller’s Beer Company 2015 2014 Total beer & cider volumes +4% +1% Revenue £122.9m £115.8m +6% Operating costs* £114.2m £107.3m +6% Operating profit* £8.7m £8.5m +2% Operating margin 7.1% 7.3% Depreciation £3.3m £3.0m +10% EBITDA* £12.0m £11.5m +4% * Excluding exceptional items
Slide 13: Borrowing Capacity
Borrowing Capacity March March • New bank facilities signed 2015 2014 August 2014 £m £m 200 • £180m committed across 39.0 five banks until August 2019 Available 160 committed five 33.5 • Freedom to add further year facilities funding for acquisitions Bank debt 120 • 79% of period end gross 140.0 bor
Slide 14: Generation and Use of Cash
Generation and Use of Cash 2015 2014 £m £m EBITDA 58.7 54.5 Working capital / other adjustments 2.5 4.9 Interest (5.2) (5.3) Tax (8.3) (8.0) Cash available for discretionary spend 47.7 46.1 Capex on existing estate and brewery (23.0) (16.4) Company acquisitions (6.7) (2.5) Pub acquisitions* (20.6) (
Slide 15: Annual Capital Expenditure
Annual Capital Expenditure 80 76 Corporate 70 acquisitions 60 58 Pub development costs 50 Pub acquisitions 39 £m 40 35 31 Fuller's Inns 30 20 The Fuller's Beer 12 Company 10 0 2011 2012 2013 2014 2015 2016E Capital expenditure for all years includes pub acquisition costs paid in the period, which fr
Slide 16: Simon Emeny, Chief Executive
Simon Emeny Chief Executive
Slide 17: Successfully Delivering on Strategy
Successfully Delivering on Strategy Distinctive Pub & Targeted Acquisitions Premium Brand Hotel Experience & Developments Portfolio • Excellent LFL sales • Majority investment • Launch of Oliver’s in The Stable Island – a new • Tenanted like for like golden cask ale profits up 5% – best • Acquisitio
Slide 18: Managed Pubs and Hotels Trading
Managed Pubs and Hotels Trading LFL Growth Rates • Excellent LFL sales, 9% consistently ahead of Peach Tracker 8% 7.8% 7.3% • Food continues to perform 7% 6.3% strongly 6% 5.6% • Record investment in redevelopments 5% • Increased focus on service 4% and training – key driver of 3% growth 2.0% 2% • W
Slide 19: People
People Engaging with our teams to deliver outstanding service • Interactive, mobile-friendly recruitment website — game changer in the battle for talent – 17,000 new applicants – 1,700 new joiners • Increased investment in training with 12,000 days of pub staff training • Structured career paths wit
Slide 20: Food
Food Delicious dishes, freshly made from local ingredients by skilled chefs • LFL sales up 7.8% • Work with suppliers to create innovative dishes using seasonal ingredients • Improved food marketing both in-pub, via digital channels and social media • Training programmes for kitchen team members at
Slide 21: Redevelopment Programme
Redevelopment Programme Investing in our core business • Record level of investment in • Two design awards for recent our estate is a key driver for investments at the Restaurant & growth Bar design awards • More than £18m capital • 108 weeks of pub closures for expenditure in the year refurbishment
Slide 22: New Additions
New Additions Growing our core business • The Harp, Covent Garden • The Three Guineas, Reading • The Cromwell Arms, Romsey • The Windmill, Portishead • London’s Pride, Heathrow The Cromwell Arms, Romsey Terminal 2 • The Bull Hotel, Bridport
Slide 23: Riverside Pubs
Riverside Pubs Creating icons for the future • nal One Over the Ait, Kew Bridge • Opened in November 2014 • Wrap-around balcony and outside space overlooking The Thames • 2,800 sq ft offering 160 internal and 140 external covers The Blue Boat, Fulham Reach • Opened in March 2015 • South facing terra
Slide 24: Digital Marketing
Digital Marketing Expanding our digital footprint • Increased on-line engagement with customers • More 360o managed pub tours on Google than any other company • Establishing a comprehensive client database – 925 unique marketing emails to almost two million recipients – 70% opening rate on welcome e
Slide 25: A Cathedral to Cider and Pizza
Style - Characterful, unique - Natural surroundings - Informal, communal benches - Candlelight Customer appeal Ethos - All ages, young - Strong community A Cathedral to old links - Wanting premium - Local, fresh produce to Cider and social experience - Energetic, Pizza - Mixed - families, passionate
Slide 26: The Stable
The Stable Craft product offering under a characterful & distinctive brand • Purchased majority share in June 2014 for £3.6m, with six sites operating across the south west • Put and call option for the staged purchase of the remaining stake in future years • Excellent showcase for Cornish Orchards
Slide 27: Openings and Pipeline
Openings and Pipeline Building the brand for the future Acquired six sites Bridport Newquay Weymouth Bristol Bath Poole Southampton Cardiff Exeter Falmouth Plymouth Bath Winchester Whitechapel Cheltenham (relocated) June August April May July Sept 2014 2014 2015 2015 2015 2015 H2 FY16 FY17 Plymouth
Slide 28: Tenanted Inns
Tenanted Inns Tenanted estate over five years • LFL profits up 5% following No of pubs EBITDA per pub £'000 increased investment in repairs 69 260 70 • Average EBITDA per pub is up 66 66 5% and increased 19% over 240 65 60 five years 220 58 60 • Strongest performance in over 200 55 a decade driven b
Slide 29: Partnering with Our Tenants
Partnering with Our Tenants • Sector leading service agreement now covers 80% of our estate • Collaborative approach to build successful, sustainable businesses • New subsidised online training platform, assisting tenants to train their staff at low cost The Wych Elm, Kingston-Upon-Thames • Premium
Slide 30: The Fuller's Beer Company
The Fuller’s Beer Company • A good year showing growth in all trade channels • Launch of Oliver’s Island, our new golden cask ale, complements our existing range • Successful integration of Sierra Nevada • Capacity increased at Cornish Orchards • Westside Drinks making inroads to new markets, includ
Slide 31: A New Golden Cask Ale
A New Golden Cask Ale Oliver’s Island is a crisp, thirst quenching beer inspired by a local landmark
Slide 32: Made of London
Made of London Best Print Media and Overall Grand Prix Prize Winner at the inaugural Beer Marketing Awards 2015 In the words of advertising legend Sir John Hegarty, "This was a campaign that was all about craft.” But he wasn’t talking about the much-debated use of the word in relation to beer; he wa
Slide 33: Frontier Craft Lager
Frontier Craft Lager Everyone’s festival favourite
Slide 34: Outstanding Product Portfolio
Outstanding Product Portfolio The right brands for the right venues • Sierra Nevada – fully integrated and distribution more than doubled • Cornish Orchards – new listings in supermarkets and gains in the on trade • Good year for Veltins, provides another authentic brand in our premium portfolio
Slide 35: Summary
Summary • A strong performance from the Group – Adjusted PBT up 7% to £36.4m – Adjusted EPS up 10% to 51.51p • Growth led by Managed Pubs and Hotels, in the underlying business and new developments • Outstanding performance from our Tenanted division • A year of good progress for The Fuller’s Beer C
Slide 36: Current Trading and Prospects
Current Trading and Prospects • Continuing good progress – Managed LFL sales up 5.5% for nine weeks – Tenanted LFL profits up 2% for nine weeks – Total beer & cider volumes down 2% for nine weeks • Exciting new developments – King’s Head, Earl’s Court Village acquired in April 2015 – New riverside p
Slide 37: #TWEETAT12
#TWEETAT12
Slide 38: Appendix – Fuller's Inns
Appendix – Fuller’s Inns March 2014 Acquired/ developed Disposed Transfers March 2015 Managed Pubs and Hotels 177 8 - 3 188 Tenanted Inns 207 1 (2) (3) 203 Total Pubs 384 9 (2) - 391 The Stable - 7 - - 7 TOTAL 384 16 (2) - 398 60% of our Managed pubs and 29% of our Tenanted pubs are inside M25 Manag
Slide 39: Appendix – Reconciliation to Statutory Profit
Appendix – Reconciliation to Statutory Profit 2015 2014 £m £m Adjusted profit 36.4 34.1 +7% Exceptional items (0.3) (0.6) Profit before tax 36.1 33.5 +8% Tax on adjusted profit (7.9) (7.9) Level Exceptional tax 0.1 3.5 Profit after tax 28.3 29.1 -3% Adjusted EPS 51.51p 46.94p +10% Basic EPS 51.15p 5
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