Fuller, Smith & Turner P.l.c. Class A · LSE:FSTA
Fuller, Smith & Turner P.l.c. Class A — H1 2019 Earnings Presentation
25 slides from Fuller, Smith & Turner P.l.c. Class A's earnings presentation, Nov 23, 2018
Slide 1: Half Year Results for the 26 Weeks Ended 29 September 2018
HALF YEAR RESULTS FOR THE 26 WEEKS ENDED 29 SEPTEMBER 2018
Slide 2: Highlights: Increased Investment for the Long Term
HIGHLIGHTS 2 INCREASED INVESTMENT FOR THE LONG TERM MANAGED LFL SALES REVENUE ADJUSTED PROFIT ADJUSTED EPS INTERIM DIVIDEND H1 2019 £222.1m £23.6m 33.83p 7.80p +4.1% +6% -1% -1% +3% H1 2018 £209.3m £23.8m 34.22p 7.55p Half Year Results for the 26 weeks ended 29 September 2018
Slide 3: Fit for the Future
FIT FOR THE FUTURE 3 ▪ Investments have strengthened our strategic position to deliver a premium offer for our customers ▪ Acquisition of four We Are Bar sites and Bel & the Dragon to add further depth to our Managed Estate ▪ Creation of a Tenanted model fit for today’s entrepreneurial Tenant ▪ Acqu
Slide 4: Group Performance Headlines
4 GROUP PERFORMANCE HEADLINES H1 2019 H1 2018 YoY £m £m Growth Commentary Revenue 222.1 209.3 +6% ▪ Operating profit level due to Operating costs* (195.3) (182.6) +7% impact of refurbishments Operating profit* 26.8 26.7 +0% Net finance costs (3.2) (2.9) +10% ▪ Finance costs increased 10% due to 10%
Slide 5: Ten Years of Steady Growth
GROUP OVERVIEW 5 TEN YEARS OF STEADY GROWTH ADJUSTED PROFIT* ADJUSTED EPS INTERIM DIVIDEND 33.83p 7.80p +97%† £23.6m +121%† +174%† £18.1m 24.79p 5.80p £12.0m 15.29p 2.85p H1 H1 H1 H1 H1 H1 H1 H1 H1 2009 2014 2019 2009 2014 2019 2009 2014 2019 * Adjusted profits are before separately disclosed items
Slide 6: Managed Pubs and Hotels Headlines
MANAGED PUBS AND HOTELS 6 HEADLINES H1 2019 H1 2018 YoY £m £m Growth Commentary LFL sales growth +4.1% +3.6% ▪ Improved LFL performance Revenue 149.4 140.2 +7% versus a good prior period Operating costs* (130.9) (121.2) +8% ▪ Revenue growth over and Operating profit* 18.5 19.0 -3% above LFL driven b
Slide 7: Margin Evolution – Effects of H1 Closures
MANAGED PUBS AND HOTELS 7 MARGIN EVOLUTION – EFFECTS OF H1 CLOSURES H1 2018 H1 2019 H2 2019 ▪ 92 weeks of closures vs 29 in H1 ▪ 65 weeks of planned closures FY18 vs 56 in H2 FY18. Openings/Closures ▪ Impact from business rates and ▪ Effect ongoing in H2 NLW (including maintaining NLW / Business rat
Slide 8: Tenanted Inns Headlines
TENANTED INNS 8 HEADLINES H1 2019 H1 2018 YoY £m £m Growth Operating Profit Bridge LFL profit +4% +3% £6.7m Average EBITDA per pub +2% +7% Revenue 15.6 15.6 Level £6.5m £0.2m Operating costs* (9.1) (8.9) +2% Operating profit* 6.5 6.7 -3% £(0.2)m Operating margin 41.7% 42.9% £(0.2)m Depreciation and
Slide 9: The Fuller's Beer Company Headlines
THE FULLER’S BEER COMPANY 9 HEADLINES H1 2019 H1 2018 YoY £m £m Growth Commentary Total beer and cider volumes +0.2% ▪ A good first half driven by Nectar, Revenue 84.6 78.9 +7% Dark Star and strong margins from Operating costs* (80.9) (75.5) +7% own brands Operating profit* 3.7 3.4 +9% ▪ Operational
Slide 10: Front Loaded H1 Investment
INVESTING FOR THE LONG TERM 10 FRONT LOADED H1 INVESTMENT £62.3m ▪ New ERP £45.1m ▪ Corporate acquisitions ▪ Pub acquisitions ▪ New site development costs ▪ Managed Pubs and Hotels (existing £17.7m estate investment) ▪ Tenanted Inns (existing estate investment) ▪ The Fuller’s Beer Company H1 H1 FY 2
Slide 11: Sources and Uses of Cash
SOURCES AND USES OF CASH 11 £25.9m £223.1m £201.9m £16.5m £8.2m £3.4m £3.9m £4.2m £0.8m £3.5m £38.2m Net debt EBITDA Working Interest, Tax Other Property Dividends and Capex Acquisitions Net debt 31/3/18 capital and financing and separately disposals share 29/9/18 non cash pension disclosed transact
Slide 12: Strong Financial Position
STRONG FINANCIAL POSITION 12 ▪ Net debt at 29 September 2018 of £223.1m Borrowing Capacity ▪ Committed bank facilities increased by £20m in August to £260m ▪ £64.0 million available (including cash) ▪ Average cost of gross borrowings for 2019 of 2.8% (2018: 2.7%) £64.0m Available ▪ Strong financial
Slide 13: Strategy and Operations Review
Strategy and Operations Review 13 Half Year Results for the 26 weeks ended 29 September 2018
Slide 14: Managed Pubs and Hotels
MANAGED PUBS AND HOTELS 14 ▪ First-class pubs in great locations with the flexibility to meet our H1 2019 Revenue Split customers’ needs for a wide range of occasions ▪ Invested LFL sales rose 4.1%, with all parts of the business in growth ▪ Profit impacted by front loading investment programme – 92
Slide 15: Managed Pubs & Hotels: Investing for Our Customers
MANAGED PUBS & HOTELS: INVESTING FOR OUR CUSTOMERS 15 ▪ Acquired June 2018 ▪ Six premium country inns located around the Home Counties offering exceptional food and fine wine in a timeless, cosy atmosphere ▪ Adds 57 bedrooms to Fuller’s portfolio ▪ Significant synergies to come from integration into
Slide 16: Managed Pubs and Hotels – Appealing to New Consumer Trends
MANAGED PUBS AND HOTELS – APPEALING TO NEW CONSUMER TRENDS 16 ▪ Growth in demand for vegetarian and vegan dishes ▪ Doubled the number of vegetarian or vegan dishes in our repertoire ▪ Benefits from roll out of recipe and stock management system to ensure all allergen information is complete and read
Slide 17: Tenanted Inns
TENANTED INNS 17 ▪ 23 Tenants now on the new turnover agreement – on track to exceed target of 28 in the full year ▪ 40 Tenants now signed up to Fuller’s suppliers – with average basket savings of 10% for the Tenant ▪ Four pubs transferred from Managed estate ▪ Sold four pubs that no longer fit with
Slide 18: The Fuller's Beer Company – Investing for Our Customers
THE FULLER’S BEER COMPANY – INVESTING FOR OUR CUSTOMERS 18 ▪ Completed commissioning of our new 10 barrel pilot plant aimed at developing new innovative beers with the stamp of Fuller’s quality ▪ Destination Chiswick – completed new visitors centre at The Griffin Brewery, coupling a new shop with ou
Slide 19: The Fuller's Beer Company – Embracing Changing Consumer Demands
THE FULLER’S BEER COMPANY – EMBRACING CHANGING CONSUMER DEMANDS 19 ▪ Frontier rebranded in on and off trade ▪ Focus on London Pride ▪ Sponsored Women’s Hockey World Cup ▪ Official Beer Partner of Pride in London ▪ New London Pride mini keg ▪ Dark Star integrated into Fuller’s Beer Company and perfor
Slide 20: ERP Project
ERP PROJECT 20 ▪ Project Wyatt went live on 29 October 2018 – the culmination of a three year project to transform our IT systems ▪ Once in a generation investment – £2.7 million in the first half ▪ A transformational change, automating many of our internal reporting, manufacturing, supply chain and
Slide 21: Summary
SUMMARY 21 ▪ A period of significant investment to future-proof the business ▪ Managed Pubs and Hotels continue to attract new customers and delight existing ones through new sites and outstanding refurbishments ▪ New Tenanted model is proving very successful and roll-out will continue ▪ Fuller’s Be
Slide 22: Current Trading and Outlook
CURRENT TRADING AND OUTLOOK 22 ▪ Current trading ▪ Managed LFL sales up 4.4% for 33 weeks ▪ Tenanted LFL profits up 2% for 33 weeks ▪ Total beer & cider volumes up 0.5% for 33 weeks ▪ Front-loaded investment programme poised to deliver good returns ▪ Further six Tenants ready to sign up for turnover
Slide 23: Appendix – Reconciliation to Statutory Profit
APPENDIX – RECONCILIATION TO STATUTORY PROFIT 23 H1 2019 H1 2018 YoY £m £m Growth Adjusted profit 23.6 23.8 -1% Separately disclosed items (2.8) (0.2) Profit before tax 20.8 23.6 -12% Tax on adjusted profit (4.8) (4.9) Tax on separately disclosed items 0.5 - Profit after tax 16.5 18.7 -12% Adjusted
Slide 24: Appendix – Separately Disclosed Items
APPENDIX – SEPARATELY DISCLOSED ITEMS 24 H1 2019 H1 2018 £m £m Profit on disposal of properties 1.3 4.8 Acquisition costs (0.6) (0.1) Replacement of core IT systems (2.7) (1.5) Reorganisation costs (0.4) Asset impairments net of reversals - (2.9) Finance charge on net pension liabilities (0.4) (0.5)
Slide 25: Appendix – Fuller's Inns
APPENDIX – FULLER’S INNS 25 1 Apr Acquired Disposed Transfers 29 Sep Transfers 23 Nov Within 2018 2018 2018 the M25 Managed Pubs & 199 10 – (4) 205 (2) 203 61% Hotels Tenanted Inns 180 - (4) 4 180 2 182 27% Total Fuller’s 379 10 (4) – 385 - 385 45% The Stable 17 – – – 17 – 17 Total Group 396 10 (4)
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