Slide 1: Interim Presentation 10th March 2017
wetherspoon pono CU INTERIM PRESENTATION 10TH MARCH 2017 John Hutson — CEO Ben Whitley — FD
Slide 2: Financial Summary
Financial Summary H1 H1 2017 2016 Var% 2016 2015 2014 2013 20122 2011 2010 2009 2008 2007 Revenue 801.4 790.3 +1.4% 1,595.2 1,513.9 1,409.3 1,280.9 1,197.1 1,072.0 996.3 955.1 907.5 888.5 (£m) Like-for-like sales +3.3% +2.9% +3.4% +3.3% +5.5% +5.8% +3.2% +2.1% +0.1% +1.2% -1.1% +5.6% Profit before t
Slide 3: Average Weekly Total Sales Per Pub
Average Weekly Total Sales Per Pub (including VAT) £000 42 40.5 40 39.1 38.4 37.4 38 36.1 36 34.1 33.8 34 32.6 32.1 31.7 31.7 31.3 32 30 28 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 H1 H1 2016 2017 2
Slide 4: Underlying Earnings Per Share
Underlying Earnings Per Share (pence)* pence 50 48.0 47.6 44.7 43.8 45 41.3 40 34.9 35.3 32.6 33.3 35 30 27.1 27.6 25 19.1 20 15 10 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 H1 H1 2016 2017 *Including shares held in trust. Underlying earnings per share are before exceptional items and exclud
Slide 5: Like-for-like Performance
Like-for-like Performance H1 H1 % 2017 2016 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Bar +2.4 +2.9 +3.3 +1.2 +2.7 +3.8 +2.8 +1.7 -0.8 +2.5 -4.3 +3.3 Food +5.1 +2.9 +3.5 +7.3 +12.0 +10.9 +4.8 +4.2 +0.1 -0.4 +7.9 +12.6 Machines -2.1 -2.9 -2.2 -2.8 -3.1 +0.4 -2.8 -3.9 +12.1 -7.5 -5.8 +2.7 Hote
Slide 6: 10 Year Operating Profit
10 Year Operating Profit H1 H1 £m 2017 2016 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Turnover 801.4 790.3 1,595.2 1,513.9 1,409.3 1,280.9 1,197.1 1,072.0 996.3 955.1 907.5 888.5 Pub profit (pre repairs) 159.0 134.8 288.3 285.4 284.4 259.0 245.4 226.8 218.5 208.4 199.5 203.2 Repairs (29.2) (
Slide 7: Cost Increases
Cost Increases Year to date: • Bar and food (modest) • Repairs +12% • Depreciation +4% • Share plans +27.5% Upcoming costs: • National Living Wage (+4%) • Business rates (£7m) • Energy market reform levy (£4m) The Bell, Aylesbury • Apprenticeship Levy (£2m) • Excise Duty (£7m) 6
Slide 8: Allocation of Resources
Allocation of Resources Dividend £15m FH reversions & investment £24m £15m properties £14m Buybacks £22m £25m £5m £36m Capex £10m £5m £13m £15m £33m £8m £23m £9m £54m £76m £15m £8m £50m £26m £10m £17m £16m £154m £151m £12m £14m £121m £25m £10m £113m £94m £89m £82m £75m £61m £60m £49m £46m 2007 2008
Slide 9: Capital Expenditure
Capital Expenditure H1 H1 £m 2017 2016 2016 2015 2014 2013 2012 2011 2010 2009 2008 New Openings: Acquisition and development costs: Current year 12.4 25.8 38.6 76.5 64.5 40.4 57.2 74.0 45.2 32.0 31.0 Future year 5.6 16.9 16.6 30.5 33.2 12.8 10.4 9.0 12.5 5.8 17.6 Freehold reversions and 49.6 15.5 3
Slide 10: Movement in Net Borrowings
Movement in Net Borrowings H1 H1 £m 2017 2016 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Opening Net borrowings 650.8 601.1 601.1 556.6 474.2 462.6 437.7 388.4 390.0 442.3 436.8 355.6 Free cash flow (49.2) (55.7) (90.5) (109.8) (92.9) (65.3) (91.5) (78.8) (71.3) (99.5) (71.4) (52.4) Disposal
Slide 11: 10 Year Debt Overview
10 Year Debt Overview H1 H1 2017 2016 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Net debt/EBITDA 3.46 3.49 3.47 3.37 3.21 2.88 2.96 2.98 2.70 2.74 3.24 3.21 (EBITDAR - Reinvestment)/Fixed charge 2.24 1.98 2.14 1.97 1.79 1.88 1.75 1.74 2.01 2.14 2.05 2.04 Interest cover (times) 3.88 3.12 2.92
Slide 12: Property Update
Property Update H1 H1 2017 2016 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Trading pubs at start of FY 926 951 951 927 886 860 823 775 731 694 671 657 Freehold pubs opened 1 5 10 24 31 14 18 34 15 13 13 11 Leasehold pubs opened 1 – 6 6 15 15 22 16 32 26 10 7 Closures (22) (2) (41) (6) (5) (3)
Slide 13: Wetherspoon
wetherspoon
Slide 14: "It's a People Thing"
“It’s a People Thing” • More than 35,000 employees at the end of period • Dedicated employee website & e-learning suite • Catering Academy – 1,126 employees have graduated with 661 employees currently going through the programme • Staff retention at its highest ever level. Average length of service
Slide 15: Changing Sales Mix since 2000
Changing Sales Mix since 2000 100% 6% 5% 4% 4% 3% 90% 18% (£4.2k) 24% (£6.6k) 29% 31% 80% (£8.8k) (£10.0k) 35% (£13.6k) 70% 60% Other 50% Machines Food 40% 76% Bar (£17.2k) 71% (£19.8k) 66% 64% (£19.8k) 61% 30% (£20.8k) (£24.0k) 20% 10% 0% 2000 2004 2008 2012 HY 2017 14
Slide 16: Peach BrandTrack: Britain's favourite big brand
Peach BrandTrack: Britain’s favourite big brand If the following brands were available in the same location, which would be your first choice to eat at? (ranked by % of adults choosing each brand) (out of a list of 17 – the top 6 ) Oct-16 Apr-16 Oct-15 Apr-15 Oct-14 Apr-14 Oct-13 Apr-13 JD Wetherspo
Slide 17: Peach BrandTrack: Standout choice for branded drinking occasions
Peach BrandTrack: Standout choice for branded drinking occasions 1. 8. 9. 10. 15. 42% 9% 9% 8% 7% Percentage of GB drinking population drinking at brand in past 6 months Source: Peach BrandTrack, Jul 2016
Slide 18: Peach BrandTrack: 4th most visited for breakfast
Peach BrandTrack: 4th most visited for breakfast % of Breakfast users who have eaten at a brand for Breakfast 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% McDonald’s Costa Greggs JD Wetherspoon Starbucks Subway Caffè Nero Pret a Manger Toby Carvery Burger King 15% of all consumers who have eaten out at b
Slide 19: Further progress
Further progress • 262 pubs are in the 2017 CAMRA Good Beer Guide • 99% of our pubs are Cask Marque approved • Raised £0.9m in the last 6 months and over £13.5m during the 15-year partnership with CLIC Sargent, a charity caring for children with cancer providing support for families at home and in h
Slide 20: Taxation
Taxation H1 H1 FY 2017 2016 2016 £m £m £m VAT 156.5 153.1 311.7 Alcohol duty* 79.3 83.3 164.4 PAYE and NIC 45.1 46.9 95.1 Business rates 25.3 24.7 50.2 Corporation tax 8.3 10.6 19.9 Machine duty 5.0 5.6 11.0 Climate change levies 4.8 3.1 8.7 Stamp duty 3.0 1.1 2.6 Carbon tax 1.7 1.8 3.6 Landfill tax
Slide 21: Current Trading and Outlook
Current Trading and Outlook • LFL sales for the six weeks to 5th March +2.7% • Increased capital investment in existing pubs to around £60m • Additional costs: wages, business rates, apprenticeship levy, energy taxes, sugar tax, excise duty • Expect lower LFL sales in the next six months • Anticipat
Slide 22: Questions
Questions The George Hotel, Brecon 21
Slide 23: Appendix
wetherspoon Appendix
Slide 24: Appendices
Appendices • A 10 year overview • B 10 year capital trends • C 10 year financial trends • D1 ROC/CROCCE/ROE calculations • D2 ROC/CROCCE/ROE calculations • E Cash flow • F1 Summary of exceptional items • F2 Summary of Pub-Disposal Programme • G Swap maturity profile 23
Slide 25: 10 Year Overview
Appendix A 10 Year Overview 1000 Number of pubs £ millions 1,600 Turnover 950 1,400 900 1,200 850 800 1,000 1,595 951 954 1,514 927 926 1,409 750 886 906 1,281 860 800 1,197 823 1,072 700 775 889 955 996 908 731 600 790 801 650 671 694 600 400 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 H1 H1
Slide 26: 10 Year Capital Trends
Appendix B 10 Year Capital Trends H1 H1 2017 2016 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Average Size (sq.ft.) – 5,929 5,059 4,264 4,321 3,585 3,643 3,325 3,572 3,781 3,359 3,618 3,855 Openings Number of openings 2 5 16 30 46 29 40 50 47 39 23 18 % which are freehold 50 100 63 80 67 48 45
Slide 27: 10 Year Financial Trends
Appendix C 10 Year Financial Trends H1 H1 2017 2016 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Sales per pub (£000) 876 832 1,694 1,620 1,562 1,476 1,401 1,360 1,335 1,344 1,333 1,354 EBITDA per pub (£000) (1) 105.0 92.8 209.2 200.9 204.5 200.9 194.9 198.7 205.8 212.9 211.6 219.0 Number of pu
Slide 28: ROC/CROCCE/ROE
Appendix D1 ROC/CROCCE/ROE H1 H1 FY 2017 2016 2016 £000 £000 £000 Shareholders equity per accounts 224,978 236,850 207,448 Deferred tax balances 65,893 66,318 63,015 Interest rate swaps valuations 33,096 48,493 63,477 Impairment balances 35,222 49,858 43,054 Net book value of revalued assets (6,414)
Slide 29: ROC/CROCCE/ROE
Appendix D2 ROC/CROCCE/ROE 12 months to 12 months to FY January 2017 January 2016 2016 £000 £000 £000 EBITDA (cash return) (e) 200,952 179,475 187,274 Depreciation and amortisation (f) (73,477) (69,476) (72,212) EBIT (g) 127,475 109,999 115,062 Interest (31,458) (33,644) (34,452) Profit before tax 9
Slide 30: Cash Flow
Appendix E Cash Flow H1 H1 FY 2017 2016 2016 £000 £000 £000 Free Cash Flow 49,224 55,700 90,485 Proceeds on Disposal 8,798 3,005 22,520 Investment in new pubs (18,012) (42,696) (55,209) Freehold reversions & investment properties (49,582) (15,518) (36,083) Dividends (8,933) (9,543) (14,190) Share Bu
Slide 31: Summary of Exceptional Items
Appendix F Summary of Exceptional Items H1 H1 FY 2017 2016 2016 £000 £000 £000 Exceptional property losses Disposal programme (see next slide) 11,780 213 12,370 Other property losses Onerous lease reversal (208) (1,122) (949) Onerous lease provision 313 275 977 Impairment of property, plant and equi
Slide 32: Summary of Pub-Disposal Programme
Appendix F2 Summary of Pub-Disposal Programme The Company has offered a number of its sites for sale. During the half year end, 22 pubs had been sold, seven were classified as held for sale and an additional pub had been closed as part of the pub-disposal programme. H1 H1 FY 2017 2016 2016 £000 £000
Slide 33: Swap Maturity Profile
Appendix G Swap Maturity Profile Swap Value From To Weighted Average % £600m 31 Oct 2016 30 Jul 2018 1.7 £600m 31 Jul 2018 29 Jul 2021 2.7 £600m 30 Jul 2021 30 Jul 2023 1.7 £600m 31 Jul 2023 30 Jul 2026 1.0 32