Manchester · NYSE:MANU
Manchester — Manchester United — Investor Presentation (February 2018)
45 slides from Manchester's investor presentation, Feb 5, 2018
Slide 1: Investor Presentation
INVESTOR PRESENTATION
Slide 2: Important Disclosure
IMPORTANT DISCLOSURE • This presentation contains estimates and forward-looking statements made pursuant to the safe harbour provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on our current expectations and estimates with respect to current and
Slide 3: Investment Highlights
INVESTMENT HIGHLIGHTS Sports content is Football is #1 Sport Global popularity Own/control our ‘must have’ and PL is #1 League equivalent only remaining businesses growing MU is #1 Team to Olympics or which are all driven by World Cup our global brand 3
Slide 4: Content Is King
CONTENT IS KING CONTENT GENERATORS CONTENT BUYERS SPORTS TRADITIONAL VALUE SELL STUDIO EMERGING 4 Indicates Private Companies
Slide 5: Value of Sports Content Is Rising
VALUE OF SPORTS CONTENT IS RISING New deals command significant premium % CAGR over previous rights deal Tenor of new contract (yrs) 19.4% 12.2% 12.2% 10.3% 5.7% NFL MLB NBA Premier League Premier League (US Rights) (1) (Live UK Rights) 8 8 9 6 3 5 Source: National Football League, Premier League, M
Slide 6: Football Is the Most Popular Sport in the World
FOOTBALL IS THE MOST POPULAR SPORT IN THE WORLD Which of the following sports do you follow? 100% 79% 70% 53% 53% 23% Football Basketball Tennis Formula 1 Athletics / Track & field Golf 6 Source: Based on 2012 Kantar survey and answers based on the responses of 54,000 individuals in 39 countries
Slide 7: Premier League Is No.1 League - Truly Global
PREMIER LEAGUE IS NO.1 LEAGUE - TRULY GLOBAL 85% of the Premier League audiences are driven by international markets 15% 7% 24% 36% 64% FINAL 76% 85% 93% Domestic International 7 Source: Repucom 2016, Futures Sport & Entertainment 2016, Reuters
Slide 8: Most Successful Team in the Most Popular League
MOST SUCCESSFUL TEAM IN THE MOST POPULAR LEAGUE Premier League Club Trophies Won Year Broadcasting Value (since 1992 – 1st Season of the Premier League) (yearly values £ billion) - 2016/17 season 2.7 12 20 3 FA Cups English European 3 League Titles Cups 5 1.2 1.1 1.1 1 6 0.7 13 8 1 1 5 3 3 2 1 Chels
Slide 9: Largest Global Fan Base
LARGEST GLOBAL FAN BASE EUROPE N. AMERICA 90m ASIA 34m 325m S. AMERICA MIDDLE EAST/AFRICA 37m 173m 659 million Manchester United followers worldwide 9 Source: Kantar Sport 2012
Slide 10: The Most Watched Club
THE MOST WATCHED CLUB 9 of the ‘all-time top 10’ Premier League broadcasts feature Manchester United The Oscars Top Regular Season Finale Top match in 2017 match in 2017 2017 2016/17 32.9m 26.0m 16.5m 122.7m 10 Source: Futures Sport & Entertainment, Nielsen
Slide 11: 147M Connections on Social Media
147M CONNECTIONS ON SOCIAL MEDIA FACEBOOK TWITTER SINA WEIBO Over Over Over 73.7m 19.0m 9.2m followers followers* followers More followers than the NBA’s #MUFC most tweeted sports The No.1 Football Club on top 4 teams combined hashtag ever Sina Weibo MANUTD.COM INSTAGRAM LINE Over Over Over 35.8m 20
Slide 12: Our Business
OUR BUSINESS
Slide 13: Business Overview
BUSINESS OVERVIEW LIVE GAMES VENUE SPONSORSHIP RETAIL, MERCHANDISING, HIGHLIGHTS + OTHER APPAREL AND LICENSING BESPOKE CONTENT 13 OWNED/CONTROLLED
Slide 14: Multifaceted Business Model
MULTIFACETED BUSINESS MODEL 2006 2017 MATCHDAY £111 million - 19% CAGR 5.2% COMMERCIAL £47 million COMMERCIAL MATCHDAY 28% £276 million - 48% £71 million CAGR 17.4% 43% BROADCASTING BROADCASTING £194 million - 33% £47 million CAGR 14.2% 29% £165m Revenue £581m Revenue £40m EBITDA £200m EBITDA 14
Slide 15: Live Games
site. LIVE GAMES
Slide 16: Traditional Media
TRADITIONAL MEDIA Increasing consumer and advertiser appetite for premium live content Annual Broadcasting Contract Values Premier League Domestic Premier League International Champions League (1) £ million per annum £ million per annum € million per annum 1,712 1,257 1,006 1,038 (2) 1,059 865 719 6
Slide 17: Venue
t Recor Sse
Slide 18: Our Matchday Business
OUR MATCHDAY BUSINESS 75,669 2M >8,000 180,000 SEAT STADIUM ANNUAL ATTENDANCE EXECUTIVE CLUB SEATS MEMBERSHIPS 99% OCCUPANCY FOR PREMIER LEAGUE GAMES SINCE 1998/1999 Ticket Allocation (in ‘000s) Season Tickets 55 Executive Clubs (Suites & Box Seats) 8 Away Fans 3 Other (1) 4 Sub-total 70 Matchday VI
Slide 19: Commercial
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Slide 20: Commercial Growth
COMMERCIAL GROWTH £ million 1 9 . 3% 276 1 7= ’13-’ 268 CAGR 11 9 197 189 97 104 10 16 152 32 37 23 39 155 160 163 136 91 2013 2014 2015 2016 2017 Sponsorship Retail, Merchandising, Apparel & Product Licensing Mobile & Content 20
Slide 21: Sponsorship - No.1 Marketing Platform
SPONSORSHIP - NO.1 MARKETING PLATFORM We enable our partners to amplify the marketing & growth of their businesses Brand Affinity & Global Reach & Unique Access to Players & Marketing Support & Association with Success Media Visibility Aon Training Complex/ Global Activations Old Trafford 21
Slide 22: Segmentation Strategy
SEGMENTATION STRATEGY TOURS Annual Value of Shirt Sponsorship (£ million) REGIONALS GLOBALS 50 40 30 49.2 20 10 19.6 14.1 8.0 0 2000/06 2006/10 2010/14 2014/21 22
Slide 23: Retail, Merchandising, Apparel & Product Licensing
RETAIL, MERCHANDISING, APPAREL & PRODUCT LICENSING
Slide 24: Retail, Merchandising, Apparel & Product Licensing
RETAIL, MERCHANDISING, APPAREL & PRODUCT LICENSING adidas Owned/Controlled by Manchester United CO-BRANDED PRODUCTS IN-STORE ECOMMERCE MONO BRANDED LICENSING 24
Slide 25: Record Breaking Kit Deal with adidas
RECORD BREAKING KIT DEAL WITH ADIDAS £750 million minimum guarantee - 10 year contract expires 2025 £ million per year 75 * 70 ** 62 60 *** 54 30 30 25 12 Manchester United Barcelona Real Madrid Chelsea Bayern Munich Arsenal Tottenham Hotspur Liverpool Manchester City 2015/16 -2024/25 2016/17 -2025/
Slide 26: Highlights + Other Bespoke Content
HIGHLIGHTS + OTHER BESPOKE CONTENT
Slide 27: Our Digital Media Opportunity
OUR DIGITAL MEDIA OPPORTUNITY Bespoke Content Highlights Social Media Platforms New Digital Sponsorship Media Platform & Advertising Mobile Apps E-commerce 27
Slide 28: Costs
COSTS
Slide 29: Industry Update
INDUSTRY UPDATE UEFA Financial Fair Play (FFP) Aggregate European top division clubs Operating Profit (€ million) - Break-even requirement in force 2013/14 - Clubs should have no overdue payments FFP break-even rules come into effect Complemented by FAPL Financial Regulations 799 727 - Break-even te
Slide 30: Player Expenditure & Accounting
PLAYER EXPENDITURE & ACCOUNTING Last 15 years net player capital expenditure (£ million) • Blend of youth & experience 140 - Approximately one quarter of our first team members from academy 108 - Carried on the balance sheet at zero book value 77 140 97 100 95 45 • Recent acquisitions 79 - Summer 20
Slide 31: Total Wages
TOTAL WAGES £ million 45% 45% 50% 51% 50% 263 215 233 203 181 2013 2014 2015 2016 2017 Total Wages as % of Total Revenue 31
Slide 32: Adjusted EBITDA
ADJUSTED EBITDA £ million 34% 37% No European Football 30% 30% 29% 192 200 130 120 109 2013 2014 2015 2016 2017 Adjusted EBITDA margin 32 Note: Adjusted EBITDA is adjusted for profit on disposal of players’ registrations and exceptional operating expenses Note: 2015 was impacted from lack of Europea
Slide 33: Appendix
APPENDIX
Slide 34: High Revenue Visibility
HIGH REVENUE VISIBILITY Commercial • £750m kit deal with adidas contracted out to 2025 • $559m shirt deal with Chevrolet contracted out to 2021 • Training kit deal with Aon contracted out to 2021 • Typically deals are 3-5yrs (with no playing performance clauses) Broadcasting • FAPL (Domestic & Inter
Slide 35: Total Revenue
TOTAL REVENUE £ million 1 3.4% -’1 7 = R ’13 581 C A G No European 515 Football 433 395 276 363 268 189 152 197 194 102 136 140 108 109 108 91 107 111 2013 2014 2015 2016 2017 Matchday Broadcasting Commercial 35 Note: 2015 was impacted from lack of European football
Slide 36: The Importance of Commercial Revenues
THE IMPORTANCE OF COMMERCIAL REVENUES 2015/16 Commercial Revenue 2015/16 Adjusted EBITDA 52% 37% £268m £192m 32% 24% £99m £66m 15/16 Top 7 15/16 Top 7 Average excluding MU Average excluding MU Commercial Revenue as % of Total Revenue Adjusted EBITDA Margin 36 Source: Company filings, Swiss Ramble
Slide 37: Balance Sheet & Cash Flow Summary
BALANCE SHEET & CASH FLOW SUMMARY • Strong balance sheet with Key Balance Sheet Data & Leverage Statistics (£ million) ample liquidity - Undrawn RCF of £125 million YE 2014 YE 2015 YE 2016 YE 2017 (1) • New USD Senior Secured Notes of $425 million Cash & cash equivalents 66.4 155.8 229.2 290.3 - Mat
Slide 38: Reconciliation to Adjusted EBITDA
RECONCILIATION TO ADJUSTED EBITDA £‘000 2014 2015 2016 2017 Profit/(loss) for the period 23,835 (1,168) 36,371 39,177 Adjustments Net finance costs 27,412 35,215 20,017 24,277 Tax expense/(credit) 16,668 (2,821) 12,462 17,361 Depreciation 8,665 10,324 10,079 10,228 Amortization of players’ registrat
Slide 39: Manchester United Delivers: Brand Engagement
MANCHESTER UNITED DELIVERS: BRAND ENGAGEMENT Social Media Promotion - Facebook • Most successful Deadpool video for 20th Century Fox • Launch video 13.1 million views • 645k likes, 311k of which featured on the original post • 152k shares, most-shared post of all time • 78k comments, 35k of which fe
Slide 40: Manchester United Delivers: Brand Value
MANCHESTER UNITED DELIVERS: BRAND VALUE Concha y Toro named the World’s Most Admired Wine Brand • Study by Drinks International • Concha Y Toro achieved the No.1 ranking a year after signing the Partnership with Manchester United • Remained the World’s Admired Wine Brand for 3 consecutive years • Ma
Slide 41: Manchester United Delivers: Propensity to Buy
MANCHESTER UNITED DELIVERS: PROPENSITY TO BUY New Era - Partnership Launch • 30 million impressions from digital content surrounding launch • 17x increase in daily twitter followers following partnership launch • 210% increase in traffic on neweracap.co.uk during the 1st week of the partnership • Ev
Slide 42: Manchester United Summer Signings
MANCHESTER UNITED SUMMER SIGNINGS ZLATAN IBRAHIMOVIĆ VICTOR LINDELÖF ROMELU LUKAKU NEMANJA MATIĆ • Only player to have won 13 • Made 47 appearances in • Aged 24 and made his senior • 2012/13 Primiera Liga Player domestic titles in four different 2016/17 for Benfica who won professional debut for Bel
Slide 43: #POGBACK: Record Breaking
#POGBACK: RECORD BREAKING Revolutionary Transfer Social Media Campaign • Most retweeted MU tweet of all time • All-time top MU post on Instagram • Most read story ever on MU websites • All-time high Google searches for Pogba • Greater number of interactions than rival clubs’ most popular signing Pog
Slide 44: Jose Mourinho
JOSE MOURINHO • Appointed as Manager in May 2016 • Won 3 trophies in his first Season with Manchester United - 2 domestic and the Europa League’ • Won a trophy in every calendar year between 2003 and 2012 • 23 trophies, including: - Two Champions League titles - Three Premier League titles - Two Ser
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Manchester United — Investor Presentation (February 2018) on 6ix