Fuller, Smith & Turner P.l.c. Class A · LSE:FSTA
Fuller, Smith & Turner P.l.c. Class A — FY2020 Earnings Presentation
32 slides from Fuller, Smith & Turner P.l.c. Class A's earnings presentation, July 2020
Slide 1: Full Year Results for the 52 Weeks Ended 28 March 2020
FULL YEAR RESULTS FOR THE 52 WEEKS ENDED 28 MARCH 2020 The Bear of Burton, near Christchurch, Opened 12 March 2020
Slide 2: Agenda
AGENDA Coronavirus Impact Key Metrics Financial Review Strategy and Operations Review Outlook and Coronavirus Response Summary Full Year Results for the 52 weeks ended 28 March 2020 2
Slide 3: Where We Were – Year End Minus Three Weeks
WHERE WE WERE – YEAR END MINUS THREE WEEKS • Sale of the Fuller’s Beer Business to Asahi Europe Ltd completed for an enterprise value of £250m in April 2019 • Returned £69m to our shareholders • Voluntary contribution of £24m to the defined benefit pension scheme • Acquired Cotswold Inns & Hotels –
Slide 4: Coronavirus Impact
CORONAVIRUS IMPACT • Business was primed and ready to start the new financial year in a strong position • Pubs and hotels severely impacted from beginning of March – started closing pubs week commencing 16 March 2020, with full closure by 20 March 2020 • Estimated negative impact on our profit perfo
Slide 5: Coronavirus Financial Impact
CORONAVIRUS FINANCIAL IMPACT • All pubs and hotels shut on 20 March 2020 • Pay guaranteed for staff to the end of March • Limited benefit of government support in this financial year • Tenants’ rent cancelled from 15 March 2020 • Complete loss of revenue during closure with material reductions in li
Slide 6: Key Metrics
KEY METRICS A TRANSFORMATIONAL YEAR FOR A LONG-TERM BUSINESS REVENUE AND ADJUSTED PROFIT MANAGED LFL SALES OTHER INCOME BEFORE TAX STATUTORY EPS NET DEBT FY 2020 49 WEEKS TO 7 MARCH 2020 £333.0m £19.7m 305.86p £178.9m +2.3% +3% -40% +771% -£66.3m FY 2019 £324.7m £33.1m 35.12p £245.2m All figures abo
Slide 7: Group Performance
GROUP PERFORMANCE Post IFRS 16 Pre IFRS 16 YoY FY 2020 FY 2020 FY 2019 Growth £m £m £m Commentary Pre IFRS 16 Revenue and other income 333.0 333.0 324.7 +3% ▪ Coronavirus has had a significant impact on trading Operating costs* (307.1) (308.0) (284.7) +8% results in final three weeks Operating profi
Slide 8: The Sale of the Fuller's Beer Business
THE SALE OF THE FULLER’S BEER BUSINESS • Sale of the entire Fuller’s Beer Business to Asahi Europe Ltd (AEL) for an enterprise value of £250m, completed 27 April 2019 • Sale included all Fuller’s beers, cider and soft drinks production, The Griffin Brewery, Cornish Orchards, Dark Star, Nectar Import
Slide 9: Divisional Results
DIVISIONAL RESULTS 2020 2019 YoY Commentary £m £m Growth Managed ▪ ▪Coronavirus Operating profit has significantly [x] due to impacted trading impactresults of refurbishments in the final three weeks LFL sales growth# +2.3% +4.9% as very little and then no income, with little opportunity for cost mi
Slide 10: Strong Liquidity Position
STRONG LIQUIDITY POSITION • Net debt at 28 March 2020 of £178.9m pre IFRS 16 Available facilities and cash at year end includes part of the working capital outflow 28 March 30 March associated with closure of estate 2020 2019 • Bank facilities of £225m, £26m of debentures. Total £11.0m £251m £31.0m
Slide 11: Current Financial Position
CURRENT FINANCIAL POSITION • Actions taken to minimise cash outflows during estate closure: • Government support for business has been accessed, most notably through the Coronavirus Job Retention Scheme and Business Rates holiday for hospitality businesses • Undertaken proactive discussion with our
Slide 12: Strong Balance Sheet
STRONG BALANCE SHEET • Highly cash generative business, will recover working capital as sales volumes return 2020 Pre IFRS 16 £m • High quality asset base Property, plant & equipment 617.7 • 91% of Fuller’s pubs and hotels are freehold by book value Other non-current assets 40.4 • Property portfolio
Slide 13: Financial Summary
FINANCIAL SUMMARY • Strongest balance sheet in the industry underpinned by excellent, well invested freehold estate • Good Managed Pubs and Hotels like for like sales growth to week 49 against tough comparators • Cash available to ride out continued turbulence ahead • Revised covenants agreed with l
Slide 14: Strategy and Operations Review
STRATEGY AND OPERATIONS REVIEW The Ship at Langstone Refurbished October 2019
Slide 15: Where We Were – Year End Minus Three Weeks
WHERE WE WERE – YEAR END MINUS THREE WEEKS • Delivering the final elements of the Transitional Services Agreement with Asahi (completed in April 2020) • Ready to move into Pier House – our new freehold offices at Strand-on-the-Green • Opened The Windjammer at Royal Docks and The Bear of Burton, near
Slide 16: Managed Pubs and Hotels
MANAGED PUBS AND HOTELS Like for Like Performance • Good performance against strong comparatives with like for like sales rising 7 2.3% for 49 weeks and growth in all areas 6 5 • Completed 14 transformational refurbishments during the year 4 3 • Acquired The Trinity, a popular local venue adjacent t
Slide 17: Tenanted Inns
TENANTED INNS • Figures also impacted by closure of all sites for the last two weeks of the year – Like for like profit down 3% – Total revenue down 4% (to the end of February: down 2%) • Appointed Iain Rippon as Head of Operations in October 2019 – an experienced, high quality tenanted operator • T
Slide 18: People at Our Heart
PEOPLE AT OUR HEART • New learning journey ensuring development starts at day one and provides individual learning journeys, whatever the team member’s long-term ambition • Continued commitment to pastoral care and mental health with 144 trained Mental Health First Aiders • Fuse learning platform ha
Slide 19: Investing for the Future
INVESTING FOR THE FUTURE • Completed 14 major schemes including: • The Windjammer at Royal Docks • The Anglers in Teddington • The Bear of Burton near Christchurch • The Mayfly in Stockbridge • On site at The White Horse, exciting new build pub in an extensive residential scheme adjacent to the icon
Slide 20: Using Our Digital Footprint to Deliver Customer Communications
USING OUR DIGITAL FOOTPRINT TO DELIVER TIMELY AND RELEVANT CUSTOMER COMMUNICATIONS • Single customer view database allows a quick and easy way to get the right message to the right customer at the right time – 1.1 million contactable customers, up 94% from prior year – Targeted email campaigns deliv
Slide 21: Outlook
OUTLOOK Private dining room at The Mayfly, near Stockbridge, on the banks of the River Test.
Slide 22: Our Three Stage Plan
OUR THREE STAGE PLAN Stage One – to end of July 2020: Stage Two – August to October 2020: Stage Three – November to March 2021: A measured return to business Keep cash burn to a minimum Returning to normality – A gradual, phased reopening with 27 – Open remaining pubs, using learnings – Focus on cas
Slide 23: Summary
SUMMARY • It has been an unprecedented year of change – for Fuller’s, for the industry, for the planet • Robust performance from both our Managed and Tenanted divisions • Sale of The Stable ensures focus now firmly on premium pubs and hotels • An unwavering long term focus – underpinned by a predomi
Slide 24: Appendix: Reconciliation to Statutory Profit
APPENDIX: RECONCILIATION TO STATUTORY PROFIT Post IFRS16 Pre IFRS16 YoY 2020 2020 2019 Growth £m £m £m Pre IFRS 16 Adjusted profit (continuing operations) 18.0 19.7 33.1 -40% Separately disclosed items (14.8) (8.2) (10.1) Profit before tax (continuing) 3.2 11.5 23.0 -50% Tax on adjusted profit (6.2)
Slide 25: Appendix: Impact of IFRS 16 Accounting for Leases
APPENDIX: IMPACT OF IFRS 16 ACCOUNTING FOR LEASES ▪ Applied this year for first time Impact on 2020 ▪ Changes accounting for leases so that most leases are £m recognised as a right-of-use asset by the lessee Operating costs reduction 10.4 ▪ Operating lease expense is replaced by depreciation and a D
Slide 26: Appendix: Separately Disclosed Items
APPENDIX: SEPARATELY DISCLOSED ITEMS 2020 2019 £m £m Commentary Continuing operations: ▪ Profit on the sale of the Fuller’s Beer Business recognised of One-off IT and reorganisation costs (3.6) (7.5) £162.4m. £7.0m of costs Property related items (4.1) (1.8) associated with the sale were previously
Slide 27: Appendix: Prior Year Rebasing Post Sale of the Fuller's Beer Business
APPENDIX: PRIOR YEAR REBASING POST SALE OF THE FULLER’S BEER BUSINESS FY 2018/19 Group adjusted profit as previously reported £43.2m ▪ Divisional profit figure Beer division £6.8m ▪ Portion of central overheads previously Allocated overheads £3.3m allocated to the Beer division, not transferred to A
Slide 28: Appendix: A Focused Pubs and Hotels Business – Vision & Values
APPENDIX: A FOCUSED PUBS AND HOTELS BUSINESS VISION & VALUES We create exceptional experiences full of style and spirit – characterful pubs and hotels where everyone feels they belong… and where people leave happier than when they arrived Underpinned by our values: – Doing things the right way – Bei
Slide 29: Appendix: Strategy for Growth
APPENDIX: A FOCUSED PUBS AND HOTELS BUSINESS STRATEGY FOR GROWTH • Based around our culture, our values, and a dedication to delivering a memorable experience that ensures Every Customer Leaves Happy • Warm and engaging service from people with genuine passion, delivered by attracting and retaining
Slide 30: Appendix: Strategy in Action – Cotswold Inns & Hotels Acquisition
APPENDIX: STRATEGY IN ACTION COTSWOLD INNS & HOTELS ACQUISITION • A great example of our strategy in action – sites that fit with our expertise and geographical footprint • Enterprise value of £40m underpinned by seven superb freehold sites in the Cotswolds – paid from existing banking facilities •
Slide 31: Appendix: Reopening Action Plan
APPENDIX: REOPENING ACTION PLAN Operational plans: • Every site individually risk assessed to create detailed plans including seating, toilets, service operation, movement flow and additional changes such as barriers, sanitiser points and clear communication • Intensified cleaning regime – above and
Slide 32: Appendix: Fuller's Estate
APPENDIX: FULLER’S ESTATE 30 Mar Acquired 28 Mar Acquired/ 29 Jul Within 2019 /new Disposed Transfers 2020 (disposed) 2020 the M25 Managed Pubs & 204 10 (1) 3 216 (1) 215 58% Hotels Tenanted Inns 180 1 (1) (3) 177 – 177 28% Total Fuller’s 384 11 (2) – 393 (1) 392 44% The Stable 17 – (3) – 14 (14) -
Fuller, Smith & Turner P.L.C. — FY2020 Earnings Presentation on 6ix