Fuller, Smith & Turner P.l.c. Class A · LSE:FSTA
Fuller, Smith & Turner P.l.c. Class A — FY2010 Earnings Presentation
47 slides from Fuller, Smith & Turner P.l.c. Class A's earnings presentation, Mar 27, 2010
Slide 1: Preliminary Results
Preliminary Results Fuller, Smith and Turner PLC for the 52 weeks ended 27 March 2010
Slide 2: Michael Turner, Chairman
4 Michael Turner Chairman
Slide 3: Agenda
Agenda Financial Highlights Corporate Progress Strategy Key Financials Fuller’s Inns The Fuller’s Beer Company Prospects
Slide 4: Financial Highlights
Financial Highlights • Revenue up 8% to £227.7m (2009: £210.0m) • Adjusted1 PBT up 17% to £26.6m (2009: £22.8m) – Statutory PBT up 86% to £26.8m (2009: £14.4m) • Adjusted1 EPS up 17% to 34.19p (2009: 29.12p) – Basic EPS up 115% to 34.37p (2009: 16.00p) • Total dividend2 up 12% to 11.00p (2009: 9.85p
Slide 5: Corporate Progress
Corporate Progress • An outstanding performance despite the recession • Managed Pubs and Hotels LFL sales up 2.7% • Managed Pubs and Hotels profits up 25% led by acquisition of 11 iconic London pubs during 2009 • Tenanted Inns LFL profits down 1% • Own Beer volumes up 2% • Beer Company profits up 7%
Slide 6: Consistent Strategy
Consistent Strategy Fundamental objective remains 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 • Continuing to expand the business • Investing throug
Slide 7: Adjusted Profits
Adjusted Profits 30 25 26.6 20 22.1 23.0 22.8 £m 15 17.9 10 5 +4% +23% +4% -1% +17% 0 2006 2007 2008 2009 2010 Adjusted profits are profits before tax excluding exceptional items
Slide 8: Adjusted EPS
Adjusted EPS 40 Pence per 40p share 35 30 34.2 25 27.6 29.2 29.1 20 21.9 15 10 5 +6% +26% +6% level +17% 0 2006 2007 2008 2009 2010 Excluding exceptional items 2006 and 2007 adjusted for the five for two share split
Slide 9: Full Year Dividends
Full Year Dividends 12 Pence per 40p share 10 11.0 9.70 9.85 8 9.09 7.90 6 4 2 +7% +15% +7% +2% +12% 0 2006 2007 2008 2009 2010 2006 and 2007 adjusted for the five for two share split
Slide 10: James Douglas, Finance Director
James Douglas Finance Director
Slide 11: Segmental Split
Segmental Split Excluding exceptional items 2010 2009 Segment Revenue £m £m Fuller’s Beer Co. 97.9 91.8 + 7% Managed Pubs and Hotels 137.9 124.0 + 11% Tenanted Inns 26.1 26.0 level Inter segment revenue (34.2) (31.8) + 8% Revenue 227.7 210.0 + 8% Segment Profits Fuller’s Beer Co. 8.9 8.3 + 7% Manage
Slide 12: Statutory Profit Reconciliation
Statutory Profit Reconciliation 2010 2009 £m £m Adjusted profits 26.6 22.8 + 17% Profits on property disposals 1.1 - Impairment of fixed assets (1.0) (6.9) Goodwill impairment (0.2) (0.4) Onerous lease provision - (0.8) Reorganisation costs - (0.3) VAT claims 0.3 - Statutory profit before tax 26.8 1
Slide 13: Generation and use of Cash
Generation and use of Cash 2010 2009 £m £m EBITDA 43.6 40.2 Share based payment 2.1 1.4 Working capital / other 4.5 0.9 Pension (1.1) (0.8) Interest (4.5) (5.9) Tax (7.0) (3.7) Capex excluding pub acquisitions (13.9) (14.0) Cash generated 23.7 18.1 Pub acquisitions (30.2) (10.2) Disposals 2.4 0.5 Di
Slide 14: Borrowings
Borrowings 2010 2009 EBITDA* £43.6m £40.2m Gross borrowings £108.8m £95.1m % fixed / capped 54% 78% Net debt £107.7m £94.2m Net debt / EBITDA* 2.5x 2.3x Interest cover* 5.9x 4.7x Composite cost of debt 4.4% 5.9% * Excluding exceptional items
Slide 15: Analysis of Net Finance Costs
Analysis of Net Finance Costs 2010 2009 Comment £m £m Interest receivable - (0.2) LIBOR and margin will Bank borrowings 2.2 3.6 increase Debentures 2.1 2.1 Fixed rate Preference shares 0.1 0.1 Fixed rate Net interest on pension 0.9 0.3 AA bond rate liabilities Lease discount unwind 0.1 0.3 Notional
Slide 16: New Bank Facilities
New Bank Facilities • £100m for five years to May 2015 – Barclays, Co-op, Mediobanca – No amortisation requirement • Freedom to add funding for acquisitions • Committed unused facilities increased by £18m • £20m fixed, £20m capped for five years • 2010/11 blended interest charge estimated at 4.7% ba
Slide 17: Annual Capital Expenditure
Annual Capital Expenditure 50 44.1 Pub 40 Acquisitions 30.6 £m 30 Fuller’s Inns 21.7 24.2 20 18.5 Beer Company and Central 10 0 2006 2007 2008 2009 2010 We expect capex for 2011 to be £12.0m, excluding pub acquisitions
Slide 18: Simon Emeny, Managing Director, Fuller's Inns
Simon Emeny Managing Director Fuller’s Inns
Slide 19: Fuller's Inns
Fuller’s Inns
Slide 20: Retail Split
Retail Split March March + - 2009 2010 Managed Pubs 156 +8 -1 163 and Hotels Tenanted Inns 203 +1 -1 203 359 +9 -2 366
Slide 21: Managed Pubs and Hotels Key Figures
Managed Pubs and Hotels Key Figures 2010 2009 Revenue £137.9m £124.0m + 11% LFL sales + 2.7% + 3.0% Operating profit* £15.8m £12.6m + 25% EBITDA* £23.7m £20.3m + 17% * Excluding exceptional items
Slide 22: Managed Pubs and Hotels: Our Four Pillars
Managed Pubs and Hotels Our Four Pillars
Slide 23: Recent Managed Pub Acquisitions
Recent Managed Pub Acquisitions
Slide 24: Investment in our Estate
Managed Pubs and Hotels Investment in our Estate Three key requirements direct our investment: • The Manager • The Market • The Design
Slide 25: Managed Pubs and Hotels: Accommodation
Managed Pubs and Hotels Accommodation
Slide 26: Managed Pubs and Hotels LFL Sales
Managed Pubs and Hotels LFL Sales • 5 years of unrivalled consistent growth Fuller’s Industry* 2005/06 + 3.7% + 2.7% 2006/07 + 8.2% + 3.6% 2007/08 + 3.6% - 0.3% 2008/09 + 3.0% + 1.0% 2009/10 + 2.7% + 0.8% * Source: internal weighted average estimates of Greene King, Wetherspoon, Mitchells & Butlers,
Slide 27: Tenanted Inns
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Slide 28: Tenanted Inns Key Figures
Tenanted Inns Key Figures 2010 2009 Revenue £26.1m £26.0m level Operating profit £9.9m £10.2m - 3% LFL profits - 1% - 2% EBITDA £11.5m £11.7m - 2%
Slide 29: Our Tenanted Strategy
Tenanted Inns Our Tenanted Strategy • Over arching values of Quality, Service and Pride are a pre-requisite – Consistent high standards • Cask ale is a key differentiator • Genuine partnership between Fuller’s and the Tenant • Improve Tenant profitability • Dispose of sites which cannot fit our temp
Slide 30: Working with our Tenants
Tenanted Inns Working with our Tenants • Training • Provide incentives for those with the highest standards – Master Cellarman • Support on – Marketing activities – Food training – Drinks portfolio • Excellent recent retention rates
Slide 31: Fuller's Inns Summary
Fuller’s Inns Summary • An excellent performance during a deep recession • Strong Managed LFL sales once again • Recent acquisitions enhance the business substantially • Sector leading performance from Tenanted business • Business really well positioned
Slide 32: Slide 32
Slide 33: John Roberts, The Fuller's Beer Company
John Roberts Managing Director The Fuller’s Beer Company
Slide 34: Key Drivers
Key Drivers • Broad portfolio of award-winning brands • Premium positioning • Total commitment to quality • High profile marketing support • Excellent service • Well-balanced business – On Trade – Off Trade – Export – Wine Division
Slide 35: The Fuller's Beer Company Key Figures
The Fuller’s Beer Company Key Figures 2010 2009 Revenue £97.9m £91.8m + 7% Operating profit* £8.9m £8.3m + 7% EBITDA* £11.0m £10.4m + 6% * Excluding exceptional items
Slide 36: Comparison with UK Market
The Fuller’s Beer Company Comparison with UK Market Fuller’s UK UK Market Volume Volume* Total Ale + 1% - 5% Cask Ale - 1% - 3% On Trade Ale level - 6% Off Trade Ale + 4% level Total Beer level - 3% * Source: BBPA
Slide 37: Beer Volumes
The Fuller’s Beer Company Beer Volumes 2010 2009 Own Beer ‘000 brls ‘000 brls Free On Trade 117.5 120.3 - 2% Fuller’s Inns 40.5 37.8 + 7% Off Trade 36.6 35.1 + 4% Exports 25.4 22.4 + 13% Total Own Beer 220.0 215.6 + 2% Foreign Beer 104.7 103.6 + 1% Total Beer 324.7 319.2 + 2%
Slide 38: Fuller's beer brands
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Slide 39: Seafarers and Bengal Lancer
The Fuller’s Beer Company Seafarers and Bengal Lancer
Slide 40: London Pride
The Fuller’s Beer Company London Pride • The UK’s leading Premium Ale • Continue to increase market share • High profile national advertising • Comprehensive promotions and sponsorship programme – English Golf Union – London Marathon
Slide 41: Organic Honey Dew
The Fuller’s Beer Company Organic Honey Dew • The UK’s leading organic beer • Increased marketing investment • High profile advertising • Major sampling programmes
Slide 42: Hampshire Distribution Centre
The Fuller’s Beer Company Hampshire Distribution Centre
Slide 43: The Fuller's Beer Company Summary
The Fuller’s Beer Company Summary • Own Beer volumes up 2% • Fuller’s Beer Company profits up 7% • Brand range is a key strength • Continuing to increase market share • Ongoing investment – marketing and operations
Slide 44: J.P Morgan
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Slide 45: Prospects
Prospects • An outstanding year • First ten weeks – Managed Pubs and Hotels LFL sales up 3.5% – Own Beer volumes level • Future is uncertain – Taxes up and inflation rising • Long term strategy continues to deliver • Strong balance sheet with good cash generation • Business model is resilient • Well
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Slide 47: Whatever you do, take pride
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Fuller, Smith & Turner — FY2010 Earnings Presentation on 6ix