Fuller, Smith & Turner P.l.c. Class A · LSE:FSTA
Fuller, Smith & Turner P.l.c. Class A — H1 2010 Earnings Presentation
46 slides from Fuller, Smith & Turner P.l.c. Class A's earnings presentation, November 2009
Slide 1: Fuller, Smith and Turner PLC Half Year Results
Fuller, Smith and Turner PLC Half Year Results for the 26 weeks to 26 September 2009
Slide 2: Michael Turner, Chairman
Michael Turner Chairman
Slide 3: Agenda
Agenda Strategy Corporate Progress Key Financial Data Fuller’s Inns The Fuller’s Beer Company 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 • Continuing to expand the business
Slide 5: Financial Highlights
Financial Highlights • Revenue up 10% to £116.9m (2008: £106.4m#) • Adjusted* PBT up 18% to £14.1m (2008: £12.0m) • PBT up 26% to £15.1m (2008: £12.0m) • EBITDA* up 9% to £22.7m (2008: £20.9m) • Adjusted* EPS up 17% to 17.95p (2008: 15.29p) • Basic EPS up 46% to 19.21p (2008: 13.13p) • Increased int
Slide 6: Corporate Progress
Corporate Progress First Half • Managed Pubs and Hotels LFL sales up 2.8% • Managed Pubs and Hotels profits up 20% • Tenanted Inns LFL profits down 3% • Own Beer volumes up 3% • Fuller’s Beer Company profits up 15% • Net debt / EBITDA 2.4 times on a pro forma basis
Slide 7: Adjusted Half Year Profits
Adjusted Half Year Profits 16 14 12 14.1 £m 10 12.1 12.0 10.9 8 6 8.4 4 2 +5% +31% +11% -1% +18% 0 2005 2006 2007 2008 2009 Adjusted profits are profits before tax excluding exceptional items
Slide 8: Adjusted Half Year EPS
Adjusted Half Year EPS 20 18 16 17.95 14 15.18 15.29 Pence 12 13.42 per 40p 10 ‘A’ or ‘C’ 10.12 8 share 6 4 2 +7% +33% +13% +1% +17% 0 2005 2006 2007 2008 2009 2005 and 2006 adjusted for the five for two share split
Slide 9: Interim Dividend
Interim Dividend 5 4 4.50 Pence per 40p 3 3.00 ‘A’ or ‘C’ 2.80 2.85 2.59 share 2 2.25 1 +5% +15% +8% +2% +5% 0 2005 2006 2007 2008 2009 2005 and 2006 adjusted for the five for two share split
Slide 10: James Douglas, Finance Director
James Douglas Finance Director
Slide 11: Revised Segmental Reporting
Revised Segmental Reporting • Disclosure of additional information • Fuller’s Inns reported as Managed and Tenanted Split of last year’s results Managed Fuller’s Inns Pubs and Tenanted as previously Hotels Inns reported FY 2009 FY 2009 FY 2009 £m £m £m Revenue 124.0 26.0 150.0 Operating profit* 12.6
Slide 12: Segmental Split
Segmental Split H1 2009 H1 2008 Segment Revenue £m £m Managed Pubs and Hotels 71.6 63.7 +12% Tenanted Inns 13.3 13.1 +2% Fuller’s Beer Company 49.4 45.5 +9% Inter segment revenue (17.4) (15.9) +9% Revenue 116.9 106.4 +10% Segment Profits – excluding exceptional items Managed Pubs and Hotels 9.5 7.9
Slide 13: Statutory Profit Reconciliation
Statutory Profit Reconciliation H1 2009 H1 2008 £m £m Adjusted profit 14.1 12.0 +18% Profit on property disposals 1.0 - Statutory profit before tax 15.1 12.0 +26% Adjusted earnings per share 17.95p 15.29p +17% Basic earnings per share* 19.21p 13.13p +46% Effective tax rate on adjusted profits 29.1%
Slide 14: Generation and use of Cash
Generation and use of Cash H1 2009 H1 2008 £m £m EBITDA 22.7 20.9 Share based payment 1.3 0.8 Working capital / other 3.1 (0.3) Pension (0.6) (0.5) Interest (2.4) (3.0) Tax (2.7) (0.1) Capex excluding pub acquisitions (6.5) (6.2) Cash generated 14.9 11.6 Pub acquisitions (25.3) (0.7) Property dispos
Slide 15: Borrowings
Borrowings H1 2009 H1 2008 EBITDA* £22.7m £20.9m Gross borrowings £108.8m £96.7m Net debt £106.7m £90.1m Pro forma net debt / EBITDA* # 2.4x 2.2x Interest cover* 5.9x 4.8x * Excluding exceptional items # On a trailing 52 week basis pro forma for acquisitions
Slide 16: Debt
Debt • £10.0m of committed facilities were undrawn at half year • £10.0m of uncommitted overdraft unused at half year • Pro forma net debt / EBITDA ratio already back down to 2.4x having been 2.8x immediately following the pub acquisitions • Main facilities expire November 2010 • Anticipate the refi
Slide 17: Debt Repayment Profile
Debt Repayment Profile £m FY 2009/10 4.9 At 26 September 2009 41% (2008: 16%) of FY 2010/11 76.5 gross borrowings are 2023 6.0 at variable rates 2028 19.8 No due date 1.6 Composite cost of debt is 4.1% (2008: 6.2%) Gross borrowings September 2009 108.8
Slide 18: Analysis of Net Finance Costs
Analysis of Net Finance Costs H1 2009 H1 2008 Comment £m £m Interest receivable - (0.2) Bank borrowings 1.1 1.9 Debentures 1.1 1.1 Fixed rate Preference shares 0.1 0.1 Fixed rate Net interest on pension liabilities 0.5 0.2 Lease discount unwind 0.1 0.1 Notional rate Total net finance costs 2.9 3.2
Slide 19: Annual Capital Expenditure
Annual Capital Expenditure 50 40.0 New Pubs 40 30.6 Fuller’s Inns 30 24.2 £m 21.7 18.5 17.5 Fuller’s Beer 20 Company 10 and Central 0 2005 2006 2007 2008 2009 2010E
Slide 20: Simon Emeny, Managing Director Fuller's Inns
Simon Emeny Managing Director Fuller’s Inns
Slide 21: Fuller's Inns
Fuller’s Inns
Slide 22: Retail Split
Retail Split March Sept 2009 Transfers Additions Disposals 2009 Managed Pubs 156 - 7 (1) 162 and Hotels Tenanted Inns 203 - - - 203 359 - 7 (1) 365
Slide 23: Managed Pubs and Hotels
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Slide 24: Managed Pubs and Hotels Key Figures
Managed Pubs and Hotels Key Figures H1 2009 H1 2008 Revenue £71.6m £63.7m +12% LFL sales +2.8% +2.3% Operating profit* £9.5m £7.9m +20% EBITDA* £13.4m £11.7m +15% * Excluding exceptional items
Slide 25: Managed Pubs and Hotels
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Slide 26: Managed Pubs and Hotels Trading Patterns
Managed Pubs and Hotels Trading Patterns • 11 substantial pub acquisitions • LFL sales up 2.8% • Improved summer weather • Cask ale sales up 19% • Food represents 28% of revenue* (2008: 27%) • Accommodation sales 4% lower • Profits up 20% * Revenue adjusted to exclude sites where food is franchised
Slide 27: Central London Pub Acquisitions
Managed Pubs and Hotels Central London Pub Acquisitions • Ten iconic London pubs since February Covent Garden Hyde Park • Good summer and tourist trade Mayfair • Higher food sales than typical Fuller’s Pub Brook Green Highgate • Integration fully completed Westminster • Improved cellar standards Ted
Slide 28: Managed Pubs and Hotels Key Drivers
Managed Pubs and Hotels Key Drivers • Quality in everything we do • Outstanding drinks portfolio • Delicious food • Boutique accommodation • Exemplary service • Differentiated experience
Slide 29: Tenanted Inns
2 Tenanted Inns
Slide 30: Tenanted Inns Key Figures
Tenanted Inns Key Figures H1 2009 H1 2008 Revenue £13.3m £13.1m +2% Operating profit £5.0m £5.1m -2% LFL profits -3% -2% EBITDA £5.8m £5.8m level
Slide 31: Supporting our Tenants
Tenanted Inns Supporting our Tenants • Very few rent concessions • Support on – Cellar standards – Marketing activities – Training and Tenant development – Drinks portfolio – Quality initiatives • Continued investment in estate
Slide 32: Fuller's Inns Summary
Fuller’s Inns Summary • Comparable pubs continue to grow – LFL sales +2.8% • Acquisitions major source of Managed Pubs and Hotels growth • Acquisitions have summer bias • VAT reduction flatters LFL sales statistics • Tenanted performance continues to be sector leading • Differentiated experience is
Slide 33: John Roberts, The Fuller's Beer Company
John Roberts Managing Director The Fuller’s Beer Company
Slide 34: Key Drivers
Key Drivers • Broad portfolio of award-winning brands • Premium positioning • Total commitment to quality • High profile marketing support • Excellent service • Well-balanced business
Slide 35: The Fuller's Beer Company Key Figures
The Fuller’s Beer Company Key Figures H1 2009 H1 2008 Revenue £49.4m £45.5m +9% Operating profit £3.9m £3.4m +15% EBITDA £4.9m £4.4m +11%
Slide 36: Beer Volumes
The Fuller’s Beer Company Beer Volumes H1 2009 H1 2008 Own Beer ‘000 brls ‘000 brls Free On Trade 59.6 59.4 level Fuller’s Inns 19.9 18.4 +8% Off Trade 17.7 16.9 +5% Exports 12.3 11.5 +7% Total Own Beer 109.5 106.2 +3% Foreign Beer 55.4 54.8 +1% Total Beer 164.9 161.0 +2%
Slide 37: Comparison with UK Market
The Fuller’s Beer Company Comparison with UK Market H1 2009 H1 2009 Fuller’s UK UK Market Comparison Growth Growth* Total Beer +2% -3% +5% Total Ale +3% -2% +5% Off Trade Ale +5% +5% level Cask Ale +1% level +1% * Source: BBPA
Slide 38: London Pride
The Fuller’s Beer Company London Pride • The UK’s leading Premium Ale • Increased market share and popularity • Continued high profile advertising – “Whatever you do, take Pride” • Comprehensive promotions and sponsorship programme
Slide 39: Organic Honey Dew
The Fuller’s Beer Company Organic Honey Dew • The UK’s leading organic beer • Summer press and poster campaign • Extensive sampling programmes
Slide 40: Gales Seafarers Ale
The Fuller’s Beer Company Gales Seafarers Ale • Launched in March 2009 • Lower ABV of 3.6% • Broadens Gales brand portfolio • Supporting Seafarers UK charity
Slide 41: Win the Classic
WIN THE CLASSIC ENGLISH OUTFIT, FROM THE CLASSIC ENGLISH ALE. a Ss & ESS OFFICIAL BEER SAVILE ROW W1 CITY OF WESTMINSTER ESB) As coop As IT Gers 4
Slide 42: The Fuller's Beer Company Summary
The Fuller’s Beer Company Summary • Own Beer volumes 3% higher • Foreign Beer volumes up 1% • Increased market share • Greater marketing impact at lower cost – Increases in second half • Brand range strengthened • Costs contained while margins improved • Fuller’s Beer Company profits up 15%
Slide 43: The Fuller's Beer Company
— s— -; Cirireo ow ag A 8 The Fuller’s Beer Company 45 C 2 a ae DRINKAWARE.CO.UK RID CONGRATULATIONS ENGLAND. WHATEVER YOU DO, TAKE PRIDE.
Slide 44: Summary
Summary • An outstanding set of results • Good summer weather • Incremental earnings from acquisitions • Temporarily low borrowing costs • Pay freeze
Slide 45: Prospects
Prospects • Managed LFL sales up 2.9% – for 33 weeks • Second half likely to be tougher than the first • Tax increases inevitable • Interest rates forecast to rise • Increased investment in high quality estate • Strong brands • Strong financial position
Slide 46: Whatever you do, take Pride
# The fuller f voutL WHATEVER YOU DO, TAKE PRIDE.
Fuller, Smith & Turner — H1 2010 Earnings Presentation on 6ix