Slide 1: JD Wetherspoon PLC Preliminary Results 2009
JD WETHERSPOON PLC Preliminary Results 2009 11 September 2009
Slide 2: Highlights – Year to 26 July 2009
Highlights – Year to 26 July 2009 Revenue £955.1m (2008: £907.5m) +5.2% Like-for-like sales +1.2% Operating profit before exceptional items £97.0m (2008: £90.5m) +7.2% Operating profit after exceptional items £75.1m (2008: £87.2m) -13.9% Operating margin before exceptional items 10.2% (2008: 10.0%)
Slide 3: Average Sales Per Pub Week
Average Sales Per Pub Week (including VAT) £000 31.0 30.3 30.1 29.9 30.0 29.0 29.0 28.0 28.2 28.0 26.4 27.0 26.0 24.7 25.0 24.0 23.0 22.0 21.0 20.0 2002 2003 2004 2005 2006 2007 2008 2009 Sales resilient despite tough market conditions and impact of new openings 3
Slide 4: Like-for-Like Sales/Profits
Like-for-Like Sales/Profits % 2009 2008 2007 2006 2005 Bar +2.5 -4.3 +3.3 +2.2 -1.4 Food -0.4 +7.9 +12.6 +3.6 +2.1 Machines -7.5 -5.8 +2.7 -1.4 -2.4 Total LFL sales +1.2 -1.1 +5.6 +2.0 -0.6 LFL profits -1.7 -6.6 +7.0 +5.9 -4.0 Strong bar sales. Food sales reflect tougher comparatives. 4
Slide 5: Operating Margin Excluding Exceptionals
Operating Margin Excluding Exceptionals y Gross margin maintained – Higher food costs – Better buying y Wages % lower – Minimum wage increase – Favourable sales mix – Lower staff turnover and improved scheduling y Operating costs – Higher utility rate – Utility consumption saving – Lower consumables
Slide 6: Operating Margin - Summary
Operating Margin - Summary 2009 2009 2008 2008 £000 % of £000 % of Sales Sales Turnover 955,119 - 907,500 - Pub operating profit 178,803 18.8 172,855 19.1 Head office costs (34,137) (3.6) (35,018) (3.9) Share Incentive Plan (2,569) (0.3) (2,319) (0.3) Depreciation (45,096) (4.7) (45,061) (5.0) Excep
Slide 7: Exceptional Items – Summary
Exceptional Items – Summary 2009 2008 £000 £000 Litigation 1,565 1,125 Redundancy - 906 Impairment 6,527 - Aborted Properties 1,954 980 Loss on asset disposal 2,450 264 Depreciation 9,424 - Total 21,920 3,275 7
Slide 8: Depreciation
Depreciation y Detailed review of fixed asset register y Some assets not depreciated in line with accounting policy y Exceptional charge relates to prior year impact y Current year impact c£800k y Reclassification of accumulated depreciation of £41.3m out of F & F and into short and long leasehold y
Slide 9: Allocation of Resources
Allocation of Resources £162m £130m £124m £92m Dividends £90m Buybacks £59m Capex 2004 2005 2006 2007 2008 2009 Focus on debt reduction 9
Slide 10: Capital Expenditure
Capital Expenditure 2009 openings £32.0m y Total £48.8m 2010 openings £5.8m re-investment £11.0m y Re-investment £11.0m £7.2m F & F (2008: £4.6m) £2.4m refurbishment (2008: £1.0m) £1.4m HO and IT (2008: £3.6m) £nil non smoking (2008: £3.1m) Continued investment in pubs 10
Slide 11: Movement in Net Borrowings
Movement in Net Borrowings y Free cash flow improved to £99.5m (2008: £71.4m) y Free cash flow per share increased 41.7% to 71.7p (2008: 50.6p) y Overall decrease in net borrowings of £51.4m during the year (2008: £5.8m increase) y Total net borrowings £388.2m (2008: £439.6m) y Net Debt to EBITDA of
Slide 12: Cash Flow
Cash Flow 2009 2008 £’000 £’000 Cash from operations 171,850 134,369 Interest and tax (55,354) (47,454) Investment in existing pubs (10,999) (12,323) Investment in own shares (SIP) (6,003) (3,181) Free cash flow 99,494 71,411 Dividends (10,439) (17,380) Disposal proceeds 495 793 Investments in new p
Slide 13: Debt Position
Debt Position 2009 2008 y Net debt/ EBITDA* 2.7 3.2 y Interest cover (times) 2.4 2.7 y Interest cover pre-exceptional (times)* 3.1 2.8 y Fixed charge cover (times) - statutory 1.5 1.6 - excluding depreciation 2.0 2.2 - statutory excluding exceptionals 1.7 1.7 - excluding depreciation and exceptional
Slide 14: Banking Facilities
Banking Facilities y UK Banking Facility £415m – Matures December 2010 – 10 participating lenders – £250m swap expiring in 2014 – £150m swap until Sept 2009 replaced by new swap until 2016 – Average interest cost of swaps is 5.5% after Sept 2009 y US Private Placement $140m - £87m – To be repaid in
Slide 15: Property
Property y 39 pubs opened during the year, compared to 23 last year y 13 of 39 openings were freehold. Property estate 42% freehold y Targeting similar number of openings in FY 2009/10 y Property prices and rent review settlements lower than historic trends Opportunities remain for profitable invest
Slide 16: ROC/CROCCE/ROE
ROC/CROCCE/ROE 2009 2008 y P&L return on capital 12.0%* 11.3%* y Crocce 11.2%* 11.3%* y P&L return on equity 20.6%* 20.2%* y Cash return on equity 13.5%* 14.2%* * Excludes exceptional items and fair value movement on financial derivatives Detailed calculations in appendix D Returns broadly unchanged
Slide 17: Trading Performance Summary
Trading Performance Summary y Bar sales +2.5% y Food sales flat (tougher comparatives) y Increased costs offset by process and efficiency improvements and favourable sales mix 17
Slide 18: Improvements In The Business
Improvements In The Business 18
Slide 19: New Pub Openings
New Pub Openings The Cordwainer, Northampton – opened 17th July 2009 19
Slide 20: New Pub Openings
New Pub Openings The Old Market Hall, Mexborough – opened 9th January 2009 20
Slide 21: New Pub Openings
New Pub Openings The Flying Boat, Dartford – 19th June 2009 21
Slide 22: 'Loo of the Year'
‘Loo of the Year’ • Corporate Provider National Award for toilet excellence • Loo of the Year winners in the pubs & wine bar category in England, Wales, Scotland and Northern Ireland 22
Slide 23: Developing Product Mix
Developing Product Mix Mach Ma Ma ch chi Food ines ine nes Food s 17% 21% Food 6% 7% 4% 29% Bar Bar Bar 76% 73% 67% 1997 2002 2009 (Sales £139m) (Sales £601m) (Sales £955m) Bar sales slightly higher this year 23
Slide 24: Real Ale & Wine
Real Ale & Wine • Uplift of 17% in traditional ales this year • The biggest real ale and wine festivals in the world – in April 2009, we sold 3.3m pints of real ale in 20 days • Over 650 pubs –96% of the estate - are Cask Marque accredited • JDW stocks over 600 guest ales over the year • 193 of our
Slide 25: People & Training
People & Training • Company employs over 20,000 people in full and part-time positions • We are recognised as one of ‘Britain’s Top Employers’ in a Guardian publication for 6 consecutive years • Comprehensive award winning employee training system • We offer an award winning national Diploma / Degre
Slide 26: Standards
Standards CQSMA Cleanliness, Quality, Service, Maintenance & Atmosphere y Mystery Visit Programme using both External & Internal Callers y Objective to monitor & maintain standards y Detailed reports to provide feedback to the pubs y 4,000 calls completed across the estate monthly y Scores contribut
Slide 27: JDW – Did You Know?
JDW – Did You Know? y Number 2 restaurant brand in the UK after McDonalds y Eat Out magazine winner of MenuMasters ‘best menu’ in the Children's category y Third equal biggest coffee seller in UK after Starbucks and Costa y World’s no. 1 seller of ‘Tierra’, Lavazza’s sustainable coffee from Rainfore
Slide 28: Current Trading and Outlook
Current Trading and Outlook y Record sales in 6 weeks to 6th September 2009: – Total sales +5.8% – LFL sales +1.2% y Cost outlook better than in recent years re: minumum wage and energy y Seek to maintain current improvements and seek to make further improvements where possible y Stronger comparativ
Slide 29: Appendices
Appendices A - 10-year financial graphs B - 10-year trends C - Capital trends D - ROC/CROCCE/ROE calculations 29
Slide 30: 10-Year Summary
Appendix A 10-Year Summary Number of Pubs 800 Average Sales Per Pub Week (including VAT) 731 694 700 655 657 671 £000 635 643 608 30.3 30.1 29.9 30 29.0 600 28.0 28.2 522 26.4 24.7 500 23.5 428 25 22.7 400 20 300 200 15 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2000 2001 2002 2003 2004 2005
Slide 31: JDW - Financial Trends
Appendix B JDW - Financial Trends 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Sales per pub (£000) 904 1,004 1,040 1,093 1,169 1,239 1,246 1,283 1,354 1,333 1,344 EBITDA per pub (£000) (1) 188.0 203.8 205.9 207.4 201.9 204.4 195.7 205.6 219.0 211.6 212.9 Number of pubs 327 428 522 608 635
Slide 32: Capital Trends
Appendix C Capital Trends 2001 2002 2003 2004 2005 2006 2007 2008 2009 Average size (sq.ft.) – openings 3,526 3,808 3,721 4,317 4,176 3,928 3,855 3,618 3,359 Number of openings 94 87 45 28 13 9 18 23 39 % which are freehold 75 53 56 43 54 22 61 57 33 Freehold average cost (£k) 506 597 511 640 873 62
Slide 33: ROC/CROCCE/ROE
Appendix D1 ROC/CROCCE/ROE 2009 2008 £000 £000 Profit after tax 25,299 35,535 Add: exceptional items 19,902 3,474 Underlying PAT (e) 45,201 39,009 Add: interest (f) 30,846 32,229 Profit pre-interest (g) 76,047 71,238 Deferred tax (credit) / charge (484) (94) Depreciation 45,096 45,062 Cash return (h
Slide 34: ROC/CROCCE/ROE
Appendix D2 ROC/CROCCE/ROE 2009 2008 £000 £000 Shareholders’ funds per balance sheet 167,693 180,547 Add: exceptional items 37,260 17,358 : hedging provision 35,996 856 (a) 240,949 198,761 Add: net debt (b) 390,024 442,324 Capital employed (c) 630,973 641,085 Add: deferred tax provision 77,633 79,23