Fuller, Smith & Turner P.l.c. Class A · LSE:FSTA
Fuller, Smith & Turner P.l.c. Class A — FY2012 Earnings Presentation
55 slides from Fuller, Smith & Turner P.l.c. Class A's earnings presentation, Mar 31, 2012
Slide 1: Fuller, Smith and Turner PLC Preliminary Results
Fuller, Smith and Turner PLC Preliminary Results for the 52 weeks ended 31 March 2012
Slide 2: Michael Turner, Chairman
Michael Turner Chairman
Slide 3: Agenda
Agenda • Strategy and Corporate Progress • Financial Results • Operations • Prospects
Slide 4: Consistent Strategy
Consistent Strategy Fundamental objective to maximise shareholder returns by generating high quality, sustainable earnings • Long term focus • Culture of style not fashion • Passion for quality • Premium positioning • Pride in our brands • Continue to expand the business
Slide 5: Financial Highlights
Financial Highlights 52 weeks (2012) vs 53 weeks (2011) • Adjusted EPS up 7% to 39.82p • Revenue up 5% to £253.0m • Adjusted PBT up 3% to £30.3m • EBITDA up 3% to £47.8m • Final dividend up 8% to 7.60p – Total dividend up 7% to 12.65p • Net debt / EBITDA at 2.7x on a pro forma basis
Slide 6: Corporate Progress
Corporate Progress • 30 pub acquisitions completed since last year end • Managed Pubs and Hotels LFL sales up 4.2% • Tenanted Inns profits up 4% • Beer Company profits up 2% • All business segments in growth • Divisional Managing Directors in place Profit measures are operating profits excluding exc
Slide 7: Adjusted Profits
Adjusted Profits Five year growth of 37% 29.3 30.3 30 26.6 25 23.0 22.8 20 £m 15 10 5 +4% -1% +17% +10% +3% 0 2008 2009 2010 2011 2012 Adjusted profits are profits before tax excluding exceptional items 2011 was a 53 week period
Slide 8: Adjusted EPS
Adjusted EPS Five year growth of 44% 39.8 40 37.4 35 34.2 29.2 29.1 Pence per 40p share 30 25 20 15 10 5 +6% level +17% +9% +7% 0 2008 2009 2010 2011 2012 Excluding exceptional items 2011 was a 53 week period
Slide 9: Full Year Dividend
Full Year Dividend Five year growth of 39% 14 12.65 11.80 12 11.00 Pence per 40p share 9.70 9.85 10 8 6 4 2 +7% +2% +12% +7% +7% 0 2008 2009 2010 2011 2012
Slide 10: Beer Duty
Beer Duty Five year increase of 45% 54.5 55 51.9 Pence per pint of London Pride* 50 47.4 45 44.1 41.0 40 35 30 25 +9% +8% +7% +9% +5% 20 Mar 08 Apr 09 Mar 10 Mar 11 Mar 12 * Pence figures are for a 4.1% ABV beer and include the VAT paid on top of the duty rate
Slide 11: Total Taxes Paid
Total Taxes Paid 2012 As % of £m revenue Group revenue (VAT inclusive) for the year 303.6 Taxes paid for the year: Alcohol duty 44.6 VAT 32.2 PAYE and NIC 17.6 Corporation tax 8.7 Business rates 7.3 Stamp duty 2.2 Premise, TV and other licences 0.4 Fuel duty 0.3 Environmental levies 0.3 Total Tax 11
Slide 12: James Douglas, Finance Director
James Douglas Finance Director
Slide 13: Group Performance
Group Performance 2012 2011 52 weeks 53 weeks £m £m Revenue 253.0 241.9 +5% Operating costs* (218.1) (207.8) +5% Operating profit* 34.9 34.1 +2% Net finance costs* (4.6) (4.8) -4% Adjusted profit* 30.3 29.3 +3% Depreciation & amortisation 12.9 12.5 +3% EBITDA* 47.8 46.6 +3% * Excluding exceptional i
Slide 14: Managed Pubs and Hotels
Managed Pubs and Hotels Key Figures 2012 2011 52 weeks 53 weeks LFL sales +4.2% +3.9% Revenue £155.7m £147.2m +6% Operating costs* £137.4m £129.1m +6% Operating profit* £18.3m £18.1m +1% Operating margin 11.8% 12.3% Depreciation & amortisation £8.6m £8.5m +1% EBITDA* £26.9m £26.6m +1% * Excluding ex
Slide 15: Margin Evolution
Margin Evolution • Managed Pubs and Hotels margin down 0.5% on last year Managed Pubs and Hotels operating margin FY 2011 2011/12 2012/13 New scheduling Further progress expected Payroll % system during year Food improvements Food should continue to Gross Profit % offset impact of duty improve but w
Slide 16: Tenanted Inns
Tenanted Inns Key Figures 2012 2011 52 weeks 53 weeks LFL profits +2% -1% Revenue £27.5m £26.9m +2% Operating costs* £17.2m £17.0m +1% Operating profit* £10.3m £9.9m +4% Operating margin 37.5% 36.8% Depreciation £1.6m £1.6m Level EBITDA* £11.9m £11.5m +3% * Excluding exceptional items
Slide 17: The Fuller's Beer Company
The Fuller’s Beer Company Key Figures 2012 2011 52 weeks 53 weeks Total Beer volumes* +2% level Revenue £109.1m £104.1m +5% Operating costs £100.1m £95.3m +5% Operating profit £9.0m £8.8m +2% Operating margin 8.2% 8.5% Depreciation £2.7m £2.4m +13% EBITDA £11.7m £11.2m +4% * Total Beer volume growth
Slide 18: Exceptional Items
Exceptional Items 2012 2011 £m £m Profit on sale of properties 0.6 2.7 Asset impairments & reversals 2.0 (1.4) Pub acquisition costs expensed in period (2.6) - Abortive acquisition costs (0.4) - Onerous lease charges (0.9) - Insurance gain - 0.4 Mark to market of financial instruments (0.2) - Total
Slide 19: Generation and Use of Cash
Generation and Use of Cash 2012 2011 £m £m EBITDA 47.8 46.6 Share based payment 1.9 1.8 Working capital / other 3.9 (3.4) Pension (0.9) (0.4) Interest and refinancing costs (4.5) (4.6) Tax (8.7) (8.6) Cash available for discretionary spend 39.5 31.4 Capex on existing estate and brewery (17.1) (12.0)
Slide 20: Borrowing Capacity
Borrowing Capacity YE 2012 YE 2011 £m £m • Two new £30m facilities – Rabobank, August 2011 34.5 – Co-Operative Bank, March 2012 Available • Co-terminal in May 2015 Committed 34.5 Facilities with existing facilities Bank debt 114.7 • £150m committed across four banks 64.8 Other net • Freedom to add f
Slide 21: Annual Capital Expenditure
Annual Capital Expenditure 80 74.7 70 60 Development Costs 50 44.1 for New Pubs £m 40 New Committed Pubs 30 Fuller's Inns 24.2 22.5 18.5 20 12.0 Fuller's Beer Company and Central 10 0 2008 2009 2010 2011 2012 2013E 2012 excludes pub acquisition costs, principally stamp duty, of £2.6m. 2013E represen
Slide 22: Simon Emeny, Group Managing Director
Simon Emeny Group Managing Director
Slide 23: New Directors
New Directors Managing Director – The Fuller’s Beer Company Ian Bray • Joined us in December, previously European Marketing Director of Bunge SA • Extensive FMCG marketing background Managing Director – Fuller’s Inns Jonathon Swaine • Promoted in February, from position of Retail Operations Director
Slide 24: Our Retail Estate
Our Retail Estate Managed Pubs Tenanted Total and Hotels Inns 3 April 2011 162 196 358 Acquisitions 13 17 30 Disposals (1) (4) (5) 31 March 2012 174 209 383 • Of 30 additions since 3 April 2011, 24 are freehold and 6 are leasehold • 99 new bedrooms in pubs acquired in the year, plus another 35 added
Slide 25: Our Increased Estate
Our Increased Estate • Fuller’s existing estate • Acquisitions made in 2011/12
Slide 26: Acquisitions Strategy
Acquisitions Strategy Objectives Selection Criteria Further • Addition of high • Higher incomes Demographics • Professionals enhance turnover pubs quality of • Long term potential estate essential • Character & charm Property • Underlying quality • Timeless • Fuller’s London Increase heartland Londo
Slide 27: Pub Acquisitions
Pub Acquisitions • Acquisitions in the year are segmented as follows: London (11) South East (19) Managed pubs (5) Managed pubs (4) Managed Managed Development (2) Development (2) Tenanted pubs (4) Tenanted pubs (13)
Slide 28: Pub Acquisitions – London
Pub Acquisitions – London Managed (5) • Trading ahead of expectations • Four leases, one freehold • EBITDA conversion high, cask ale sales growing The Wellington, Waterloo • Investments underway, two completed H2 • Strong trading post investment The Cabbage Patch, Twickenham
Slide 29: Pub Acquisitions – Development Opportunities
Pub Acquisitions – Development Opportunities
Slide 30: Pub Acquisitions – London
Pub Acquisitions – London The Tokenhouse, Moorgate Development Opportunities (2) • Both leaseholds • The Parcel Yard on King’s Cross main concourse is the largest station pub in the country • The Tokenhouse in Moorgate has been remodelled to capitalise on the local market • Investment spend of £2.2m
Slide 31: Pub Acquisitions – London
Pub Acquisitions – London Tenanted (4) • Four freehold sites in great locations • Existing lessees in place The Seven Stars, Carey Street WC2 The Coach & Horses, Soho The Plough, East Sheen
Slide 32: Pub Acquisitions – South East
Pub Acquisitions – South East Managed (4) • Four excellent freehold sites in prosperous towns • Includes 23 bedrooms • Sites will respond well to Fuller’s branding • Investments planned FY 2013 The Boater, Bath Tenanted (13) • 13 freehold tied pubs with lessees in place • Trading in line with expect
Slide 33: Pub Acquisitions – South East
Pub Acquisitions – South East The Mayfly, Stockbridge The William Walker, Winchester The Old Thatch Tavern, Stratford-upon-Avon The Sir John Barleycorn, Cadnam
Slide 34: Pub Acquisitions – South East
Pub Acquisitions – South East Development Opportunities (2) • Acquisition cost of £2.8m, plus £3.5m investment spend • Opened March & April 2012 • Losses and pre-opening costs incurred in year • Trading ahead of investment plans • 49 bedrooms post development • Additional site in pipeline FY 2013 Th
Slide 35: Pub Acquisitions – South East
Pub Acquisitions – South East The White Swan Hotel, Stratford-upon-Avon
Slide 36: Refurbishment
Refurbishment Aim to create characterful individual pubs consistent with our premium food and drink offer • Large projects at 18 sites with a total spend of £4.2m in year • A number of transformational refurbishments to reposition offer • Targeted investments recognising potential of each site, incl
Slide 37: Managed Pubs and Hotels
Managed Pubs and Hotels LFL growth rates 7% 1% 28% Drinks +4.0% Food +4.5% Accommodation +7.4% 64% Drinks TOTAL +4.2% Food Accommodation Other • Food and Accommodation continue to lead growth • Investment in food team is driving quality and consistency • 28% increase in the number of rooms in the la
Slide 38: Investing in Digital
Investing in Digital Web • New microsites for each pub and hotel – launched 31 May • Smartphone & iPad friendly • Online table bookings • Enhanced room booking experience Offers & loyalty • Targeted offers in quiet months Social media • Integrated with our website • Site-led support
Slide 39: Tenanted Inns
Tenanted Inns
Slide 40: Tenanted Inns Strategy
Tenanted Inns Strategy Acquisitions & Disposals Operations We want Actions we to achieve… have taken... Estate – 209 pubs 17 quality acquisitions A common Highest ever approach across numbers of Tenants estate to: trained in year Raise standards, Mystery shopper 11 sold in quality and hence pr
Slide 41: Tenanted Inns
Tenanted Inns • 17 additions to estate in year • LFL profits +2% • Average EBITDA per pub +4% • 85% of Tenants surveyed would recommend Fuller’s to other publicans* Average EBITDA per pub £’000 65 60.2 60 57.5 57.8 56.6 55 50 45 -1.6% +2.2% +4.2% 40 2009 2010 2011 2012 The Leather Exchange, London B
Slide 42: The Fuller's Beer Company
The Fuller’s Beer Company L
Slide 43: Beer Volumes
The Fuller’s Beer Company Beer Volumes 2012 2011 52 weeks 52 weeks Own Beer ‘000 brls ‘000 brls Free On Trade 100.8 106.9 -6% Fuller’s Inns 41.4 40.3 +3% Off Trade 39.2 38.8 +1% Exports 36.0 29.5 +22% Total Own Beer 217.4 215.5 +1% Foreign Beer 114.3 110.8 +3% Total Beer 331.7 326.3 +2%
Slide 44: Exports
Exports • 116% volume growth over five years • 1 in 6 barrels exported • 10 million pints sold for export for the first time this year • Target to grow sales to emerging markets, our most recent being Brazil Exported volumes ’000 brls 40 36.0 29.5 30 25.4 22.4 20.2 20 10 0 2008 2009 2010 2011 2012
Slide 45: Investing for the Future
Investing for the Future • Brewing capacity: - New conditioning tanks now in use, providing 30,000 barrels of additional capacity for bottled and keg beers - Will support volume growth in Off Trade and Export markets - Further conditioning capacity can be added in future at a lower incremental cost
Slide 46: Marketing
Marketing • ‘Brewed in London’ poster campaign will speak to 20 million Londoners between now and September • 45% of core market will be reached four times every two weeks • Local campaigns with taxis, riverboats and brewery banner will reinforce the message to Londoners and visitors alike • Activit
Slide 47: Investing in our Range
Investing in our Range • Following success of cask product, Black Cab Stout has been launched in bottle form for Export and Off Trade Hope & Glory pump clip Wild River • Hope & Glory – delicious Diamond Jubilee beer made with barley from HRH Prince of Wales’ estate and Sovereign hops • Wild River –
Slide 48: Looking ahead to Summer 2012
Looking ahead to Summer 2012 Diamond Euro 2012 Olympics Jubilee football • Once in a lifetime • National • Impact over four opportunity Celebration weeks • London’s profile – • Impact over long • Favourable exports boost weekend impact for pubs • Will drive hotel • Particularly good and Off Trade bo
Slide 49: Summary
Summary • Transformational year which saw capital investment of £75m, including the addition of 30 pubs • Adjusted profits increased by 3% • Managed Pubs and Hotels profits up 1% with 4.2% LFL sales growth • Tenanted Inns profits up 4% • Own Beer volumes up 1% led by exports Volume growth and like f
Slide 50: Handover slide
Handover slide: SE to MJT
Slide 51: Prospects
Prospects • The year ended March 2012 was a very positive year for the Company • Capital investment of £75m in the year has laid strong foundations for growth FY 2013 and beyond • Extraordinary weather has produced an unrepresentative start to the year – Total Managed sales up 7.2% for 8 weeks – Man
Slide 52: Closing image
4+»- _ My favourite “=> Londoner. = ™ oNDO oN PRIDE ok . LONDON, Se ee——CO NE ESO s Brewed in London
Slide 53: Appendix
Appendix
Slide 54: Pubs Acquired – Managed Division
Pubs Acquired – year ended 31 March 2012 Managed Division • The Boater, Bath, BA2 4BQ • The Pavilion End, Moorgate, EC4M 9BR • The Cabbage Patch, Twickenham, TW1 3SZ • The Red Lion Hotel, Wendover, HP22 6DU • The Crown Inn, Bishop’s Waltham, SO32 1AF • The Tokenhouse (formerly Bluu), Moorgate, EC2R
Slide 55: Pubs Acquired – Tenanted Division
Pubs Acquired – year ended 31 March 2012 Tenanted Division • The Bear & Ragged Staff, • The Mayfly, Stockbridge SO20 6AZ Michelmarsh, SO51 0LB • The Old Plough, Stoke D’Abernon, • The Coach & Horses, Soho, KT11 3BN W1D 5DH • The Old Thatch Tavern, Stratford- • The Duke of York, Tunbridge Wells, upon
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