Slide 1: The Rank Group Plc Preliminary Results 2002
The Rank G roup Plc Prelim inary Results 2002
Slide 2: Alun Cathcart, Chairman
A lun Cathcart Chairm an
Slide 3: Mike Smith, Chief Executive
M ike Sm ith ChiefExecutive
Slide 4: Group - Results
G roup -Results • EPS* up 21% to 19.9p • G am ing:strong again,up 13% • Hard Rock:disappointing • Deluxe:exceptionally good,up 20% • Fixed charge cover:up to 5x • Finaldividend:up 5% to 8.8p * before exceptionalitem s
Slide 5: Group - Progress
G roup -Progress • Developm entin allDivisions • G am ing:deregulation,facilities,product (now plus Blue Square) • Hard Rock:additionalcafes,brand extension • Deluxe:geographic reach,DVD, new technology,contractrenew als
Slide 6: Ian Dyson, Finance Director
Ian D yson Finance Director
Slide 7: Profit before exceptional items
Profit before exceptionalitem s £m 2002 2001 Turnover 1,464.6 1,366.9 O perating profit 219.6 209.7 A ssociates 3.3 2.7 Interest (22.6) (24.3) Profit before tax and exceptionals 200.3 188.1 Effective tax rate 30.3% 36.4% * Basic earnings per share 19.9p 16.5p* * restated forim pactofFRS 19
Slide 8: A good result ... on balance
A good result ...on balance ‘N on-trading’item s A cquisitions +£5m O ther +£2m Currency -£5m Interest -£6m LTIP -£4m G am ing D eluxe H ard Rock
Slide 9: Mecca Bingo UK
M ecca Bingo U K £m 2002 2001 % grow th M ecca Bingo UK 72.4 67.6 Spain 4.6 3.5 77.0 71.1 +8.3 G rosvenor Casinos UK 29.9 23.4 Belgium (0.2) 0.7 29.7 24.1 +23.2 RLM S 3.1 2.3 Rank Interactive G am ing (5.0) (1.8) 104.8 95.7 +9.5
Slide 10: Grosvenor Casinos UK
G rosvenor Casinos U K £m 2002 2001 % grow th Turnover London -upper 23.2 18.9 +22.8 London -other 55.5 51.9 +6.9 Provincial 83.3 69.8 +19.3 Hard Rock 1.3 - - 163.3 140.6 +16.1 O perating profit London -upper 6.0 3.0 +100.0 London -other 11.7 11.6 +1.0 Provinces 22.7 16.5 +37.6 Hard Rock (2.1) - - D
Slide 11: Grosvenor UK - Provincial
G rosvenor U K -Provincial 31 D ec 31 D ec % 2002 2001 grow th M em bership (000’s) 590 514 +14.8 A dm issions (000’s) 2,627 2,473 +6.2 H andle per head (£) 166 141 +17.7 Turnover (£m ) 83.3 69.8 +19.3 O perating profit (£m ) 22.7 16.5 +37.6
Slide 12: Grosvenor UK - relocations
G rosvenor U K -relocations Change in average w eekly figures* A dm issions 78% H andle per head 46% EBIT im provem ent £105,000 Capitalcost £20.9m Pre tax return on capital 26.1% * Average ofBirm ingham ,Blackpool,G reatYarm outh, New castle,Southam pton and Brighton
Slide 13: Hard Rock - Operating profit
H ard Rock -O perating profit £m 2002 2001 % grow th O w ned cafes 29.2 41.5 -29.6 Franchise and other incom e Cafes 6.2 7.5 -17.3 Hotels 3.8 2.3 +65.2 Territory deals 2.3 4.2 -45.2 A dvertising and prom otion (1.4) (1.7) +17.6 O verheads (12.5) (14.1) +11.3 Restructuring - (1.7) - O perating profit
Slide 14: Hard Rock - Like for like sales
H ard Rock -Like forlike sales Change 20% 15% 10% 5% Food and Beverage 0% Total -5% -10% M erchandise -15% -20% Jan Feb M ar A pr M ay Jun Jul A ug Sep O ct N ov D ec 2001 vs 2002
Slide 15: Deluxe
D eluxe £m 2002 2001 % grow th Turnover Film processing 367.5 341.5 +7.6 M edia services 336.7 293.1 +14.9 704.2 634.6 +11.0 O perating profit* Film processing 62.5 53.9 +16.0 M edia services 26.5 20.2 +31.2 89.0 74.1 +20.1 Associates and JVs 1.8 1.1 +63.6 90.8 75.2 +20.7 * before exceptionalitem s
Slide 16: Deluxe Film
D eluxe Film Turnover O perating profit Europe Europe £m North Am erica North Am erica 367 400 341 300 266 300 200 100 48 49 54 62 0 1999 2000 2001 2002
Slide 17: Deluxe Film - Contract status
D eluxe Film -Contractstatus Feet(billion) 2 41% 29% 22% 1 8% 0 2003 2004 2005 2006 2007 + Contractexpiry year * Percentages representproportion of 2002 contracted footage of4.2 billion feet
Slide 18: Deluxe Media Services
D eluxe M edia Services Turnover O perating profit* £m 2002 2001 2002 2001 Video duplication 178.9 212.1 18.1 23.6 D VD replication 55.7 12.6 2.3 (5.0) D istribution services 90.8 68.4 5.3 1.6 D igitalservices 11.3 - 0.8 - 336.7 293.1 26.5 20.2 * before exceptionalitem s
Slide 19: Deluxe - acquisitions
D eluxe -acquisitions • 2002 com m itm ent£74.8m ,spend £34.6m • Enhancing studio relationships – geographic reach – value added services • Strictfinancialreturn criteria
Slide 20: Deluxe - acquisitions
D eluxe -acquisitions ETS Ritek £m 50% 100% 80% A cquisition cost Cash 3.3 10.7 14.2 D eferred - 6.8 19.6 3.3 17.5 33.8 2002 EBITD A 2.1 4.0* 5.7 # Pre tax return on capital 64% 23% 17% * excludes benefitofnew m ajorstudio contractfrom 2003 # EBITDA for4 m onths follow ing acquisition
Slide 21: Group cash flow
G roup cash flow £m 2002 2001 O perating activities 242.3 233.4 D eluxe contract advances (135.0) 33.0 Capitalexpenditure (117.9) (103.3) Fixed asset disposals 21.0 15.2 O perating cash flow 10.4 178.3 D istributions from associates - 2.4 Interest,tax and dividends (146.9) (151.1) Free cash flow (13
Slide 22: Capital expenditure
Capitalexpenditure £m 2002 2001 2003 2002 Estim ate D epreciation G am ing 60.0 48.5 60 -70 40.2 H ard Rock 26.2 20.0 15 -20 16.4 D eluxe 30.4 33.5 20 -25 23.1 U S H olidays 1.3 1.3 - 0.8 117.9 103.3 95 -115 80.5
Slide 23: Acquisitions and investments
A cquisitions and investm ents A cquisitions 2002 2003 £m Com m itm ent Cash Investm ents Cash Cash G am ing 15.0 9.2 - 9.2 66.7* H ard Rock - - - - - D eluxe 66.3 26.1 8.5 34.6 17.2 Central& other - - 13.7 13.7 - 81.3 35.3 22.2 57.5 83.9 * includes Blue Square
Slide 24: Group capital structure
G roup capitalstructure 31 D ec 31 D ec £m 2002 2001 N et debt (399.1) (248.1) D eluxe contract advances receivable 236.4 114.8 Preference shares (226.6) (224.4) A verage rate on net debt 5.5% 7.1% Fixed charge cover 5.0x 4.6x G earing 53% 34%
Slide 25: Mike Smith, Chief Executive
M ike Sm ith ChiefExecutive
Slide 26: Deluxe - Results
D eluxe -Results • Film -record • Footage:cost • M edia -m uch im proved • Ritek
Slide 27: Deluxe - Growth & development
D eluxe - G row th & developm ent • Film :grow th dynam ics,geographic reach • M edia:video decline,DVD grow th • Added services! • Contractrenew als
Slide 28: Hard Rock - Results
H ard Rock -Results • A difficultyear! • Food and beverage:m erchandise • Costreductions
Slide 29: Hard Rock - Growth & development
H ard Rock - G row th & developm ent • Strength ofbrand • Low ercostcafes • Brand extensions • Hotels /G am ing
Slide 30: Gaming - Results
G am ing -Results • Bingo -a record • Casinos -a record • Adm issions:spend perhead • Product:facilities
Slide 31: Gaming - Growth & development
G am ing – G row th & developm ent • Positive environm ent • Deregulation initiatives • Duty change • Preparing forBudd • Hard Rock brand • e G am ing plus Blue Square
Slide 32: Conclusion
Conclusion • Stilldelivering the results • Developm entacross allbusinesses • Deregulation m oving closer...increasingly w ellpositioned to take advantage