Slide 1: Interim Results 2020
Interim Results 2020 Ralph Findlay, Chief Executive Officer Andrew Andrea, Chief Financial Officer
Slide 2: Ralph Findlay, Chief Executive Officer
Ralph Findlay Chief Executive Officer
Slide 3: Introduction
3 Introduction • Material impact from COVID-19; clear recovery action plans • Liquidity secured for disruption beyond financial year end • Additional bank facilities in place • Agreement with bondholders on covenant waivers and amendments • Transformational value-accretive Beer Company transaction •
Slide 4: COVID-19: impact
4 COVID-19: impact • All pubs and 28 lodges* closed since 20 March • Loss of own pub revenues • Loss of drinks sales into national pub groups and independent free trade • Estimated revenue impact c£40m in March • Pre-COVID-19 revenues broadly in line with LY • Prioritise cash preservation • 93% of G
Slide 5: COVID-19: current position
5 COVID-19: current position • Working closely with UKH and BBPA • Government support critical • Furlough scheme reducing cash burn by c£2m per week • Business rates relief: c£2.5m per month saving • Deferral of indirect tax payments to 2021 • Business grants support to tenants and lessees • Working
Slide 6: COVID-19: re-opening plans
6 COVID-19: re-opening plans • Reopening date and plans now set out • Can reopen from 4th July; c85-90% of pubs will re-open • Reduced social distancing rules are critical to economic viability • Uncertainty over revenue and earnings post reopening • Priorities: safety of staff and guests, economic
Slide 7: Creation of Carlsberg Marston's Brewing Company ('CMBC')
7 Creation of Carlsberg Marston’s Brewing Company (‘CMBC’) • Shareholder approval granted 25 June, expected to complete Q3 2020 • Long term JV to create a best-in-class, brand-led UK brewer with increased scale, resources and distribution reach • Marston’s Brewing Business valued at up to £580m (13.
Slide 8: Creation of Carlsberg Marston's Brewing Company ('CMBC')
8 Creation of Carlsberg Marston’s Brewing Company (‘CMBC’) Recognises value of Marston’s Marston’s Brewing Business £m £m Brewing (Sep19) Built through value accretive acquisitions: Reported EBITDA 44 Ringwood 19 Less Refresh 14 BeerCo capex (17) Thwaites 25 Charles Wells 55 Central capex (3) Combin
Slide 9: Group strategy
9 Group strategy Clear Financial Raise the Bar Quality Pub Estate Strategy Guest focused people Balanced pub portfolio strategy Continued focus on debt reduction Operational excellence Premiumisation of offer Focus on high-returning Commercially dynamic growth capex Future dividends to be funded fro
Slide 10: Andrew Andrea, Chief Financial Officer
Andrew Andrea Chief Financial Officer
Slide 11: H1 2020 earnings
11 H1 2020 earnings 40 Principally reflecting storms and floods in £34m November 19 and February 20 Estimated £2m impact on £2m March trade £3m £9m £18m 0 H1 2019 Disposals Underlying IFRS 16 COVID-19 H1 2020 Significant earnings impact of COVID-19
Slide 12: Cash flow
12 Cash flow 2020 2019 £m £m Operating cash flow 58 67 Net interest (44) (44) Pre-investment FCF 14 23 Organic capex (43) (47) Disposals 64 29 Dividend (30) (30) FCF pre new-build and acquisitions 5 (25) New-build and acquisitions (2) (27) Net underlying cash flow 3 (52) Improved net cash flow refle
Slide 13: Debt structure
13 Debt structure 2020 2019 £m £m Securitised (amortisation profile to 2035) 728 761 Bank 314 321 Debt excluding property leasing 1,042 1,082 Property leasing (35-40 year financing) 337 336 Net borrowings pre IFRS 16 1,379 1,418 Lease obligations under IFRS 16 320 20 Net debt post IFRS 16 1,699 1,43
Slide 14: IFRS 16 impact
14 IFRS 16 impact • No impact on net cash flow • c.£10m switch between operating cash flow and financing to reflect reclassification of rent • Income statement • EBITDA up c£9m • Operating Profit up £4m • PBT down £3m • Balance sheet • Additional lease liabilities of £295m • Other net assets up £282
Slide 15: COVID-19 financing
15 COVID-19 financing • Banking arrangements • Agreed £70m of additional liquidity through increased bank facility • Agreement to amend covenants for September 2020 and March 2021 • New facility together with mitigating actions and Government support provide liquidity to meet financial obligations b
Slide 16: Evolution of bank facilities
16 Evolution of bank facilities Current Post JV completion £70m facility to November 2020 £280m facility to 2024 £360m facility to March 2024 £90-110m draw down post receipt £312m draw down at 5 June 2020 of proceeds £118m headroom £170-190m headroom c£10m monthly cash burn Significantly improved ba
Slide 17: High quality pub estate
17 High quality pub estate Pubs Lodges Total Number Value (£m) Number Value (£m) Value (£m) Securitised 950 1,223 7 14 1,237 Non-Securitised Unsecured Freehold 154 334 5 14 348 Freehold – Property Lease 113 380 7 19 399 Total Freehold 1,217 1,937 19 47 1,984 Leasehold (IFRS 16 Value) 154 270 11 19 2
Slide 18: Looking forward
18 Looking forward • Strengthened balance sheet from Beer Company transaction • Continued focus on debt reduction • Quality pub estate well placed for post COVID-19 environment • Sector supply contraction likely – ‘survival of the fittest’ • Over 90% of the estate with gardens • C.90% freehold estat
Slide 19: Summary
19 Summary • Significant impact from COVID-19 on pubs and Beer Company • Swift actions to protect liquidity • Clear plans in place for reopening; uncertainty on revenue and earnings profile • Creation of Carlsberg Marston’s Beer Company • Significantly improves balance sheet strength • Provides futu
Slide 20: Pitcher & Piano, Nottingham
Pitcher & Piano, Nottingham
Slide 21: Appendices
» APPENDICES MARSTONS
Slide 22: Financial Summary – Statutory basis
22 Financial Summary – Statutory basis 2020 2019 Revenue £510.5m £553.1m Operating profit £19.7m £63.2m PBT £(33.2)m £16.3m EPS (4.4) pence 2.2 pence
Slide 23: Pub numbers
23 Pub numbers Total 2019 closing 1,539 New-build additions/acquisitions - Transfers - Disposals (168) H1 2020 closing 1,371 2018 average numbers 1,557 2019 average numbers 1,541
Slide 24: Historical Total LFL
24 Historical Total LFL Destination Taverns Total and Premium 52 wks to 04/10/14 3.1% 2.1% 2.8% 52 wks to 03/10/15 1.8% 2.0% 1.9% 52 wks to 01/10/16 2.3% 2.7% 2.4% 26 wks to 01/04/17 1.1% 1.1% 1.1% 52 wks to 30/09/17 0.9% 1.6% 1.1% 26 wks to 31/03/18 (1.8%) 2.9% - 52 wks to 29/09/18 (1.2)% 3.8% 0.6%
Slide 25: Securitised debt profile
25 Securitised debt profile Principal Final maturity Tranche Type outstanding at Step-up date date 28 March 2020 A1 Floating £7.2m July 2012 2020 A2 Floating £214.0m July 2019 2027 A3 Fixed/Floating £200.0m April 2027 2032 A4 Floating £156.8m October 2012 2031 B Floating £155.0m July 2019 2035 Total
Slide 26: Securitisation profile
26 Securitisation profile Securitised Debt Service 90 Max £81.5m Debt Service 80 70 A3 step up 60 Principal 50 £m 40 Interest 30 20 10 0 '20 '21 '22 '23 '24 '25 '26 '27 '28 '29 '30 '31 '32 '33 '34 '35 Financial year FY2020 FY2021 FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 FY2030 FY2031
Slide 27: www.marstons.co.uk
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