Fuller, Smith & Turner P.l.c. Class A · LSE:FSTA
Fuller, Smith & Turner P.l.c. Class A — H1 2010 Earnings Presentation
41 slides from Fuller, Smith & Turner P.l.c. Class A's earnings presentation, September 2010
Slide 1: Half Year Results
Half Year Results Fuller, Smith and Turner PLC for the 26 weeks ended 25 September 2010
Slide 2: Michael Turner, Chairman
Michael Turner Chairman
Slide 3: Agenda
Agenda • Strategy and Corporate Progress • Financial Results • Operations • Prospects
Slide 4: Consistent Strategy
Consistent Strategy Fundamental objective to maximise shareholder returns by generating high quality, sustainable earnings • Long term focus • Culture of style not fashion • Passion for quality • Premium positioning • Pride in our brands • Continue to expand the business
Slide 5: Financial Highlights
Financial Highlights • Revenue up 4% to £121.5m (2009: £116.9m) • Adjusted* PBT up 11% to £15.7m (2009: £14.1m) • PBT up 11% to £16.8m (2009: £15.1m) • EBITDA* up 6% to £24.1m (2009: £22.7m) • Adjusted* EPS up 11% to 19.96p (2009: 17.95p) • Basic EPS up 23% to 23.70p (2009: 19.21p) • Increased inter
Slide 6: Corporate Progress
Corporate Progress First Half • Managed Pubs and Hotels LFL sales up 3.3% • Managed Pubs and Hotels profits up 8% • Tenanted Inns LFL profits up 1% • Total Beer volumes up 1% • Net debt / EBITDA reduced to 2.1 times* * On the basis of a pro forma EBITDA of £45.0m for the 52 weeks to 25 September 201
Slide 7: Adjusted Half Year Profits
Adjusted Half Year Profits 18 16 14 15.7 £m 12 14.1 10 12.1 12.0 8 10.9 6 4 2 +31% +11% -1% +18% +11% 0 2006 2007 2008 2009 2010 Adjusted profits are profits before tax excluding exceptional items
Slide 8: Adjusted Half Year EPS
Adjusted Half Year EPS 25 20 Pence 19.96 per 40p 15 17.95 ‘A’ or ‘C’ 15.18 15.29 10 13.42 share 5 +33% +13% +1% +17% +11% 0 2006 2007 2008 2009 2010 2006 adjusted for the five for two share split
Slide 9: Interim Dividend
Interim Dividend 5 4 4.75 Pence 1.50# per 40p 3 ‘A’ or ‘C’ 2.80 2.85 3.00 2 2.59 share 1 +15% +8% +2% +5%# +6% 0 2006* 2007 2008 2009 2010 # 2009 % increase ignores the 1.50p rebasing of the interim dividend * 2006 adjusted for the five for two share split
Slide 10: James Douglas, Finance Director
James Douglas Finance Director
Slide 11: Group Performance
Group Performance H1 2010 H1 2009 £m £m Revenue 121.5 116.9 +4% Operating costs* (103.4) (99.9) +4% Operating profit* 18.1 17.0 +6% Net finance costs (2.4) (2.9) -17% Adjusted profit* 15.7 14.1 +11% Depreciation 6.0 5.7 +5% EBITDA* 24.1 22.7 +6% The current financial year will be 53 weeks to 2 April
Slide 12: Managed Pubs and Hotels
Managed Pubs and Hotels Key Figures H1 2010 H1 2009 LFL sales +3.3% +2.8% Revenue £74.8m £71.6m +4% Operating costs £64.5m £62.1m +4% Operating profit* £10.3m £9.5m +8% Operating margin 13.8% 13.3% Depreciation £4.1m £3.9m EBITDA* £14.4m £13.4m +7% * Excluding exceptional items
Slide 13: Tenanted Inns
Tenanted Inns Key Figures H1 2010 H1 2009 LFL profits +1% -3% Revenue £13.5m £13.3m +2% Operating costs* £8.4m £8.3m +1% Operating profit* £5.1m £5.0m +2% Operating margin 37.8% 37.6% Depreciation £0.8m £0.8m EBITDA* £5.9m £5.8m +2% * Excluding exceptional items
Slide 14: Fuller's Beer Company
Fuller’s Beer Company Key Figures H1 2010 H1 2009 Total Beer volumes +1% +2% Revenue £51.3m £49.4m +4% Operating costs £47.2m £45.5m +4% Operating profit £4.1m £3.9m +5% Operating margin 8.0% 7.9% Depreciation £1.1m £1.0m EBITDA £5.2m £4.9m +6%
Slide 15: Statutory Profit Reconciliation
Statutory Profit Reconciliation H1 2010 H1 2009 £m £m Adjusted profit 15.7 14.1 +11% Exceptional items 1.1 1.0 Statutory profit before tax 16.8 15.7 +11% Adjusted earnings per share 19.96p 17.95p +11% Basic earnings per share* 23.70p 19.21p +23% Effective tax rate on adjusted 28.7% 29.1% profits * H
Slide 16: Generation and use of Cash
Generation and use of Cash H1 2010 H1 2009 £m £m EBITDA 24.1 22.7 Share based payment 1.1 1.3 Working capital / other 0.1 3.1 Pension (0.2) (0.6) Interest and refinancing costs (2.4) (2.4) Tax (3.6) (2.7) Capex excluding pub acquisitions (6.1) (6.5) Cash generated 13.0 14.9 Pub acquisitions - (25.3)
Slide 17: Borrowing Capacity
Borrowing Capacity • £100m non amortising bank facility for five years to May 2015 £m • Freedom to add further funding for 33.5 acquisitions • Net debt / EBITDA less than 2.1 93.6 • More than £33m committed unused facilities at end of H1 • Of new bank debt: Available Committed Facilities £40m fixed
Slide 18: Analysis of Net Finance Costs
Analysis of Net Finance Costs H1 2010 H1 2009 Comment £m £m Bank borrowings 1.0 1.1 £60m hedged Debentures 1.1 1.1 Fixed rate Preference shares 0.1 0.1 Fixed rate Borrowing costs* 2.2 2.3 Net interest on pension liabilities 0.1 0.5 AA bond rate Lease discount unwind 0.1 0.1 Notional rate Total net f
Slide 19: Annual Capital Expenditure
Annual Capital Expenditure 45 40.0 40 New Pubs 35 30.6 30 Fuller’s Inns 24.2 25 21.7 £m 20 18.5 Fuller’s Beer 15 12.0 Company 10 5 and Central 0 2006 2007 2008 2009 2010 2011E 2011E represents the current estimate of capital expenditure for the 53 weeks to 2 April 2011 and includes no allowance for
Slide 20: Simon Emeny, Group Managing Director
Simon Emeny Group Managing Director
Slide 21: Our Mission Statement
Our Mission Statement We aim to be the benchmark in retailing and brewing, delivering Quality, Service and Pride in everything we do
Slide 22: Fuller's Inns
Fuller’s Inns
Slide 23: Fuller's Inns: Our Strategy
Fuller’s Inns Our Strategy • To continue to improve our premium offer – Outstanding cask ale – Great wines – Delicious food – Exemplary customer service • Acquire more sites for Managed Pubs and Hotels – Prime locations and under developed opportunities • Regularly refresh pubs to attract the more d
Slide 24: Fuller's Inns: The London Factor
Fuller’s Inns The London Factor • The most resilient market place in the UK – Best growth prospects – Favourable demographics for pub operator • Most visited UK city both internationally and domestic • A premium city with a global attraction • Iconic events lined up for 2010 to 2020
Slide 25: Fuller's Inns
Fuller’s Inns March 2010 Disposals September 2010 Managed Pubs 163 - 163 and Hotels Tenanted Inns 203 (2) 201 366 (2) 364
Slide 26: Managed Pubs and Hotels: Trading Patterns
Managed Pubs and Hotels Trading Patterns • LFL sales up 3.3% – Wet + 2.3% – Food + 4.2% – Accommodation + 11.4% • Good early summer weather • Food represents 29% of revenue* (2009: 28%) • Rooms benefit from higher occupancy levels • H1 2009 acquisitions fully invested and trading well * Revenue adju
Slide 27: Tenanted Inns
Tenanted Inns
Slide 28: Tenanted Inns: Our Priorities
Tenanted Inns Our Priorities • Targeted investments • Initiatives targeted to – Improve customer experience – Improve Tenant profitability • Provision of support for – Cask ale – Master Cellarman – Wine – Wine Champions • RPI rent increases limited to 3% for 2010/11 • Like for like profits up 1% is
Slide 29: The Fuller's Beer Company
The Fuller’s Beer Company
Slide 30: Our Strategy and Our Goals
The Fuller’s Beer Company Our Strategy and Our Goals • London Pride to remain the UK’s leading premium cask ale • To have an unrivalled portfolio of beers with wide appeal • To have diversified routes to market – Allows us to exploit all opportunities for growth – Minimises risk • To own the premium
Slide 31: Comparison with UK Market
The Fuller’s Beer Company Comparison with UK Market H1 2010 H1 2010 Fuller’s UK UK Market Comparison Growth Growth* Total Beer -1% -3% +2% Total Ale -6% -8% +2% Off Trade Ale +8% -5% +13% Cask Ale -9% -7% -2% * Source: BBPA
Slide 32: Beer Volumes
The Fuller’s Beer Company Beer Volumes H1 2010 H1 2009 Own Beer ‘000 brls ‘000 brls Free On Trade 53.0 59.6 -11% Fuller’s Inns 19.6 19.9 -2% Off Trade 19.1 17.7 +8% Exports 15.4 12.3 +25% Total Own Beer 107.1 109.5 -2% Foreign Beer 59.0 55.4 +6% Total Beer 166.1 164.9 +1%
Slide 33: Our Routes to Markets are Evolving
The Fuller’s Beer Company Our Routes to Markets are Evolving H1 Own Beer Volumes ‘000 brls 4 year 120 growth rates 100 Export +73% 80 Off Trade +14% 60 Tied Trade +7% 40 Traditional Free Trade +3% 20 0 National Accounts -12% 2006 2007 2008 2009 2010
Slide 34: Our Export Growth
The Fuller’s Beer Company Our Export Growth H1 Exported Volumes ‘000 brls 18 16 Rest of the World 14 12 10 Rest of Europe 8 6 Northern Europe 4 2 USA / Canada 0 2006 2007 2008 2009 2010
Slide 35: Brands Portfolio
The Fuller’s Beer Company Brands Portfolio • Wide portfolio of premium brands • Appealing to broad range of customer tastes • New recruits and seasoned drinkers
Slide 36: London Pride: The UK's leading Premium Ale
• The UK’s leading Premium Ale • New advertising Autumn 2010 • Comprehensive promotions and sponsorship programme
Slide 37: Summary
Summary • A strong set of results – Good early summer weather has benefitted trade – Benefit from maturity of 2009 acquisitions and projects – Accommodation sales have risen strongly – Tenanted performance remains best in sector – Beer Co successfully adapting to changing markets – High profile Lond
Slide 38: Slide 38
Slide 39: Prospects
Prospects • Managed LFL sales up 3.5% – for 33 weeks • Second half likely to be tougher than the first • Reduced exposure to spending cuts in South of England • Ongoing investment in Estate sets the platform for growth • New London Pride ad campaign recruiting new drinkers • Strong brands and strong
Slide 40: Whatever You Do, Take Pride
A great example of British craftsmanship, and I'm about to make it disappear. WHATEVER YOU DO, TAKE PRIDE.
Slide 41: Whatever You Do, Take Pride
# The fuller f voutL WHATEVER YOU DO, TAKE PRIDE.
Fuller, Smith & Turner — H1 2010 Earnings Presentation on 6ix