Slide 1: Interim Results 2016
INTERIM RESULTS 2016 Ralph Findlay, Chief Executive Officer Andrew Andrea, Chief Financial Officer
Slide 2: Ralph Findlay, Chief Executive Officer
Ralph Findlay Chief Executive Officer
Slide 3: Highlights
Marston’s PLC Interim Results 2016 3 HIGHLIGHTS 1. Good progress in H1 2016 • Strong revenue and profit growth • Growth in all trading segments • PBT growth of 12% • EPS and dividend cover up; leverage reduced • YTD performance in line with our expectations 2. Transformed pub estate delivering organ
Slide 4: Market Dynamics
Marston’s PLC Interim Results 2016 4 MARKET DYNAMICS 1. Sector supply • 2016 activity – market still buoyant • Anticipate demand for sites to cool in 2017 • Marston’s focus is on less competitive markets 2. Consumer outlook • Consumer still seeking affordable treats • Demand high quality, product, s
Slide 5: Improving Long-Term Returns
Marston’s PLC Interim Results 2016 5 IMPROVING LONG-TERM RETURNS New-builds Broad appeal Take control Accommodation Destination Broaden capital Target 85% Higher quality of P&P, Revere allocation franchised earnings Community Smooth income + managed Leased stream Enhance pub Increase Maximise Improv
Slide 6: Pub Segmentation
Marston’s PLC Interim Results 2016 6 PUB SEGMENTATION Operating No. of Average no. Average profit 2016 profit £m pubs of pubs per pub vs LY % Destination and Premium 34.8 403 400 +4 Taverns 24.2 828 844 +12 Leased 12.7 339 340 +3 Total 71.7 1,570 1,584 +10 2012 Profit Mix 2016 Profit Mix 17% 14% 36%
Slide 7: Leading Pub Innovation
Marston’s PLC Interim Results 2016 7 LEADING PUB INNOVATION Innovation and development key to maintaining competitive advantage
Slide 8: Customer Satisfaction
Marston’s PLC Interim Results 2016 8 CUSTOMER SATISFACTION InMoment Customer Satisfaction Hospitality Benchmark: Feb 2016 EPOS Digital Pub of the Future Hospitality Marston's InMoment Hospitality Benchmark February 2016 Our customers more satisfied relative to improving sector
Slide 9: Franchise Evolution
Marston’s PLC Interim Results 2016 9 FRANCHISE EVOLUTION No. of franchise pubs 50 taking >£10k pw. MAT 40 30 20 10 0 FY2012 FY2013 FY2014 FY2015 H12016 Evolution and leadership in pub franchise
Slide 10: Leased
Marston’s PLC Interim Results 2016 10 LEASED Quality • LFL profit growth +3% estate • £76k average EBITDA delivering • 2% rental growth growth • Licensee stability >90% Income • Bad debt <0.1% of turnover stability • Moderate capital investment reintroduced Sustainable income through quality estate
Slide 11: Pub Expansion
Marston’s PLC Interim Results 2016 11 PUB EXPANSION • 7 new-build sites completed to date this year Site pipeline • Good visibility on future site pipeline Build costs • No material changes to land and building costs • At least 20 new-build pub-restaurants per annum Future plans • Investment away fr
Slide 12: Destination and Premium Accommodation
Marston’s PLC Interim Results 2016 12 DESTINATION AND PREMIUM ACCOMMODATION Existing quality business continues to perform well • 850 rooms in 51 pubs • LFL sales up 12% in H1 2016 • Occupancy up 3% • RevPAR up 10% 2016 expansion plans on track • Three lodges opened in H1 • At least two further lodg
Slide 13: Premium
Marston’s PLC Interim Results 2016 13 PREMIUM Revere Country Pitcher & Piano Revere Town Centre • Independent feel • Branded • Independent feel • Great food – distinctive • Premium bars in a • Great food – distinctive menus mainstream market menus • Relaxed, informal ambience • High tempo, high ener
Slide 14: Slide 14
Slide 15: Brewing: Range of Growth Opportunities
Marston’s PLC Interim Results 2016 15 BREWING: RANGE OF GROWTH OPPORTUNITIES Innovation Collaboration Acquisition Hobgoblin Gold Shipyard IPA Thwaites King Star Craft Lager Kruzowice Wainwright Revisionist Range Warsteiner Lancaster Bomber Single Hop Range Kingstone Press Cider Driving Growth and Va
Slide 16: Brewing: Strong Brand Support
Marston’s PLC Interim Results 2016 16 BREWING: STRONG BRAND SUPPORT Local brand approach on a national scale
Slide 17: Clear Organic Expansion Plans
Marston’s PLC Interim Results 2016 17 CLEAR ORGANIC EXPANSION PLANS Destination At least 20 new-builds - mainly freehold Minimum of 5 lodges - leasehold Premium 2-3 new sites - leasehold Conversions from Destination Taverns Franchise development New-build Beer Innovation Collaboration Acquisition Br
Slide 18: Andrew Andrea, Chief Financial Officer
Andrew Andrea Chief Financial Officer
Slide 19: Financial Summary
Marston’s PLC Interim Results 2016 19 FINANCIAL SUMMARY +12% +12% +12% Growth in all trading segments +7% Cover up to 1.8x +6% (2015: 1.7x) 4% £429m £91m £71m £33m 4.7p 2.6p Revenue EBITDA Operating profit PBT EPS Dividend Strong H1 performance
Slide 20: Like-for-Like Performance
Marston’s PLC Interim Results 2016 20 LIKE-FOR-LIKE PERFORMANCE Destination and Premium Taverns +3.0% +3.0% Sales +2% vs market* +2% vs market* Growth Volume and mix Volume and mix drivers Margin +0.1% +0.1% *Peach Tracker MAT to March 2016 outside London Continued focus on volume driven LFL growth
Slide 21: Brewing
Marston’s PLC Interim Results 2016 21 BREWING +37% +22% +16% Volume Revenue Profit Strong organic and acquisition-led growth
Slide 22: Cost Guidance
Marston’s PLC Interim Results 2016 22 COST GUIDANCE 1. 2016 – no change to guidance • NLW implemented as previously guided • £0.5m non-cash pension interest charge 2. 2017 – similar cost profile • Food and drink – c.1-2% • Brewing raw materials – c.1% • Labour cost inflation c. 4% - NMW increase to
Slide 23: Cash Flow Summary
Marston’s PLC Interim Results 2016 23 CASH FLOW SUMMARY 2016 2015 £m £m Comments Operating cash flow 81 58 Improved EBITDA and working capital Net interest (38) (38) Pre-investment FCF 43 20 Organic capex (39) (34) Disposals 28 26 Dividend (26) (25) FCF pre new-build 6 (13) New-build capex (34) (36)
Slide 24: Financing Structure
Marston’s PLC Interim Results 2016 24 FINANCING STRUCTURE Bank and Total (excl. Property Total (inc. Securitised cash property) Leasing property) Visible, smooth Property amortising debt £287.5m bank leases 35-40 to 2035* facilities year term Debt £m 853 197 1,050 223 1,273 H1 2016 Debt: EBITDA 7.3x
Slide 25: Summary
Marston’s PLC Interim Results 2016 25 SUMMARY 1. Transformed pub business performing well 2. Increased market share and profit growth in Brewing 3. On track to meet full year expectations 4. Continue to deliver shareholder value • Dividend up 4.0% • Return on capital increased • Strengthening balanc
Slide 26: Appendices
Free parking
Slide 27: Segmental Profit
Marston’s PLC Interim Results 2016 27 SEGMENTAL PROFIT H1 2016 £m H1 2015 £m YOY % Turnover Destination & Premium 204.8 187.2 9.4% Taverns (inc AHFS) 107.1 104.4 2.6% Leased 24.2 25.1 (3.6)% Beer Division 92.6 67.8 36.6% Total 428.7 384.5 11.5% EBITDA Destination & Premium 42.9 39.5 8.6% Taverns (in
Slide 28: Pub Numbers
Marston’s PLC Interim Results 2016 28 PUB NUMBERS Destination and Taverns Leased Total Premium 2015 Closing 397 859 341 1,597 New-build additions 6 1 7 Disposals (32) (2) (34) H1 2016 Closing 403 828 339 1,570 2013 average numbers 339 1,379 390 2,108 2014 average numbers 357 1,082 348 1,787 2015 ave
Slide 29: Historical LFL
Marston’s PLC Interim Results 2016 29 HISTORICAL LFL Destination and Premium Taverns Total Food Wet Total 26 wks 30/03/13 0.0% 2.0% (2.0%) 0.0% 16 wks to 20/07/13 5.4% 6.3% 4.8% 0.0% 42 wks to 20/07/13 2.1% 3.7% 0.5% 0.0% 11 wks 05/10/13 2.2% 4.0% (0.7%) 0.0% 53 wks 05/10/13 2.2% 3.9% 0.2% 0.0% 15 w
Slide 30: Capex, Tax and Share Capital
Marston’s PLC Interim Results 2016 30 CAPEX, TAX AND SHARE CAPITAL Forecast 2016 New-build capex c.£70m Pub growth £25m Pub maintenance £25m Brewing and Group £20m Total c.£140m Disposals c.£60m Net capex c.£80m Tax rate 18.7% Average number of shares in 2016 574.4m Shares in issue at 2 April 2016 5
Slide 31: Securitised Debt Profile
Marston’s PLC Interim Results 2016 31 SECURITISED DEBT PROFILE Principal Final maturity Tranche Type outstanding at Step-up date date 2 April 2016 A1 Floating £88.8m July 2012 2020 A2 Fixed/Floating £214.0m July 2019 2027 A3 Fixed/Floating £200.0m April 2027 2032 A4 Floating £195.3m October 2012 203
Slide 32: Securitisation Profile
Marston’s PLC Interim Results 2016 32 SECURITISATION PROFILE FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 FY2030 FY2031 FY2032 FY2033 FY2034 FY2035 Principal £m 26.7 28.4 30.0 31.7 33.4 35.4 37.3 39.4 41.5 43.9 46.3 48.8 51.5 54.4 57.4 60.5 47.6 4
Slide 33: Crocce
Marston’s PLC Interim Results 2016 33 CROCCE FY2015 FY2014 FY2013* FY2012 FY2011 FY2010 FIXED ASSETS: Bal Depn Reval Adj Bal Depn Reval Adj Bal Depn Reval Adj Adj Adj Adj Goodwill 227.5 227.5 224.2 224.2 224.2 224.2 224.2 224.2 224.2 Other intangible assets 37.6 6.6 44.2 25.1 5.3 30.4 24.1 6.1 30.2
Slide 34: Notes
Marston’s PLC Interim Results 2016 34 NOTES
Slide 35: Notes
Marston’s PLC Interim Results 2016 35 NOTES
Slide 36: www.marstons.co.uk
www.marstons.co.uk