Slide 1: Interim Results 2018
Interim Results 2018 Ralph Findlay, Chief Executive Officer Andrew Andrea, Chief Financial and Corporate Development Officer
Slide 2: Ralph Findlay, Chief Executive Officer
Ralph Findlay Chief Executive Officer The Leeds Club
Slide 3: Highlights
Marston’s PLC Interim Results 2018 3 HIGHLIGHTS 1. Continued progress in 2018 • Turnover up 20% to £528m • PBT growth of 8%, EPS in line reflecting share issuance • Dividend maintained at 2.7 pence per share • Proforma leverage down and fixed charge cover maintained 2. Pub profit growth in challengi
Slide 4: Clear strategy and growth plans, valuable assets
Marston’s PLC Interim Results 2018 4 CLEAR STRATEGY AND GROWTH PLANS, VALUABLE ASSETS Good track Valuable assets, Clear growth Clear strategy record secure financing plans Increasing profit Pubs £2.2bn estate value 2018 per pub Organic growth 93% freehold Proforma CWBB Like-for-like sales Broad sect
Slide 5: Market dynamics
Marston’s PLC Interim Results 2018 5 MARKET DYNAMICS Consumer outlook Sector supply Economic, Political • Leisure spend anticipated to grow • Slowdown in opening rates • Regulatory and tax cost increases likely • Eating out vs drinking out • Some closures in casual dining • Limited direct interest r
Slide 6: Pub segmentation
Marston’s PLC Interim Results 2018 6 PUB SEGMENTATION Operating profit No. of Average no. Average profit per 2018 £m pubs of pubs pub vs LY% Destination and Premium 34.6 402 393 -4 Taverns 24.5 806 810 +3 Leased 14.1 356 363 +2 Total 73.2 1,564 1,566 +1 2012 Profit Mix 2018 H1 Profit Mix 17% 16% 36%
Slide 7: Destination: offering value for experience
Marston’s PLC Interim Results 2018 7 DESTINATION: OFFERING “VALUE FOR EXPERIENCE” Pub values • A place to socialise and dine • Focus on drinks category management • Traditional pub food • Entertainment, live music Premiumisation Service • Design, ambience • Flexibility • Premium brands • ‘Firebrand’
Slide 8: Accommodation - pub & lodge increasingly attractive
Marston’s PLC Interim Results 2018 8 ACCOMMODATION- PUB & LODGE INCREASINGLY ATTRACTIVE Stand-alone rationale Pub benefits • Good locations, strong demand • Additional reason to visit • Business/leisure mix • Incremental income stream for pub • Opportunity alongside great pubs • Smoother trading pat
Slide 9: Ebbsfleet – our first 100+ room lodge
EBBSFLEET – OUR FIRST 100+ ROOM LODGE
Slide 10: Premium – growth opportunities
Marston’s PLC Interim Results 2018 10 PREMIUM – GROWTH OPPORTUNITIES Great pubs and bars, beautiful buildings
Slide 11: Changes to capital allocation
Marston’s PLC Interim Results 2018 11 CHANGES TO CAPITAL ALLOCATION 1. 2018 plans remain unchanged • 15 pub-restaurants and bars • 6 lodges 2. 2019 plans – moderate reduction in expansion • Reflects caution on consumer backdrop • 10 pubs and bars and 5 lodges • Land bank pipeline pace being maintain
Slide 12: Marston's Beer Co – UK No.1 premium ale brewer
Marston’s PLC Interim Results 2018 12 MARSTON’S BEER CO – UK NO.1 PREMIUM ALE BREWER Local beer, national Award winning beers Sector leaders scale, premium focus and marketing 12,000 distribution points Hobgoblin Gold, gold medal Premium packaged ale at World Beers Awards 24% Wainwright – MA top cas
Slide 13: Marston's Beer Co – licensed and export
Marston’s PLC Interim Results 2018 13 MARSTON’S BEER CO – LICENSED AND EXPORT Licensed Export Estrella Damm • 19 brands sold in 55 countries • Mediterranean lager • 8% of external volumes US Craft • Shipyard – 40% MAT growth • Founders Key target regions: • Canada • US Cider • France • Kingstone Pre
Slide 14: Marston's Beer Co – best in class industry service
Marston’s PLC Interim Results 2018 14 MARSTON’S BEER CO – BEST IN CLASS INDUSTRY SERVICE BREWING PACKAGING LOGISTICS 1.4 million brls capacity Bottling and canning Scale lager brewing Burton Centre of 13 depots in E & W 73% utilised Excellence £8m new canning line Marston’s, Banks’s and 42% of UK PB
Slide 15: Andrew Andrea
Andrew Andrea Chief Financial and Corporate Development Officer Lost & Found, Leeds
Slide 16: Financial summary
Marston’s PLC Interim Results 2018 16 FINANCIAL SUMMARY 2018 YOY Revenue £528m 20% Growth in all trading divisions EBITDA £95m 5% Growth in all trading divisions Operating profit £74m 5% PBT £36m 8% EPS 4.8 pence In-line Reflects equity issuance in May 2017 Dividend 2.7 pence Unchanged Solid PBT gro
Slide 17: Managed and franchise like-for-like performance
Marston’s PLC Interim Results 2018 17 MANAGED AND FRANCHISE LIKE-FOR-LIKE PERFORMANCE YOY margin +0.1 +0.1 +0.1 +0.2 - +0.6 (0.4) +0.2 (0.7) (0.2) % Weather impact (0.2) 2014 2015 2016 2017 2018 H1 Destination and Premium Managed and Franchised Taverns Total Robust long-term LFL sales performance, d
Slide 18: Beer Company
Marston’s PLC Interim Results 2018 18 BEER COMPANY • Core business in growth Turnover £169m • CWBB – strong Estrella Damm growth +79% • Distribution contracts – Punch, Hawthorn, Brakspear • Strong underlying performance Operating profit £13m • CWBB synergies on track – at least £4m +29% • CWBB – cus
Slide 19: Cost guidance
Marston’s PLC Interim Results 2018 19 COST GUIDANCE 2018 • c.85% fixed for 2018 Drink c.2% • c.80% contracted to 2020 • c.70% fixed for 2018 Food c.2% • c.50% contracted to 2020 • Fixed for 2018 Brewing raw materials c.2% • c.85% commodity contracted to 2019/20 Energy inflation c.3% • Increased elec
Slide 20: Cash flow summary
Marston’s PLC Interim Results 2018 20 CASH FLOW SUMMARY 2018 2017 £m £m • Profit growth Operating cash flow 63 60 • H2 working capital opportunity Net interest (43) (43) Pre-investment FCF 20 17 Organic capex (46) (39) • Full year c.£80m; 2019 c.£80m Disposals 26 34 • Full year £45-50m; 2019 c.£30m
Slide 21: Finance structure
Marston’s PLC Interim Results 2018 21 FINANCE STRUCTURE Illustrative 2018 2017 2018 (all new-build leasehold) £m £m £m Securitised (amortisation profile to 2035) 820 791 Bank (£320m facility to 2023) 241 268 Debt excluding property leasing 1,061 1,059 1,059 Property leasing (35-40 year financing) 26
Slide 22: Estate valuation and pension
Marston’s PLC Interim Results 2018 22 ESTATE VALUATION AND PENSION 1. Estate value broadly in line at £2.2bn • Impairment of £32m - £40m recognised in P&L offset by increase in revaluation reserve • Upsides from new-builds and franchised pubs • Reduced values for value end of Destination 2. Septembe
Slide 23: Summary
Marston’s PLC Interim Results 2018 23 SUMMARY 1. Solid H1 performance • Revenue growth across all segments despite poor weather • PBT growth underpins maintained dividend • CWBB performance on target • 15 new-builds and 6 lodges in current financial year 2. NAV 142p per share • Estate valuation conf
Slide 24: Appendices
Appendices
Slide 25: Financial summary – statutory basis
Marston’s PLC Interim Results 2018 25 FINANCIAL SUMMARY – STATUTORY BASIS 2018 2017 Revenue £529m £452m Operating profit £29m £72m PBT £(13)m £37m EPS (2.0) pence 5.2 pence
Slide 26: Segmental profit
Marston’s PLC Interim Results 2018 26 SEGMENTAL PROFIT 2018 £m 2017 £m YOY % Turnover Destination & Premium 210.7 202.6 4.0% Taverns 121.4 118.0 2.9% Leased 26.8 25.8 3.9% Beer Division 169.2 94.4 79.2% Total 528.1 440.8 19.8% EBITDA Destination & Premium 42.9 42.3 1.4% Taverns 28.4 28.2 0.7% Leased
Slide 27: Pub numbers
Marston’s PLC Interim Results 2018 27 PUB NUMBERS Destination and Taverns Leased Total Premium 2017 Closing 397 806 365 1,568 New-build additions/acquisitions 6 - - 6 Transfers - 4 (4) - Disposals (1) (4) (5) (10) H1 2018 Closing 402 806 356 1,564 2017 average numbers 376 829 370 1,575 2018 average
Slide 28: Historical LFL
Marston’s PLC Interim Results 2018 28 HISTORICAL LFL Destination Taverns Total and Premium Total Total Total 52 wks to 04/10/14 3.1% 2.1% 2.8% 52 wks to 03/10/15 1.8% 2.0% 1.9% 16 wks to 23/01/16 3.0% 2.7% 26 wks to 02/04/16 3.0% 3.0% 16 wks to 23/07/16 1.8% 2.5% 42 wks to 23/07/16 2.5% 2.8% 10 wks
Slide 29: Capex, tax and share capital
Marston’s PLC Interim Results 2018 29 CAPEX, TAX AND SHARE CAPITAL Actual Forecast Forecast 2017 2018 2019 New-build capex c.£75m £50m Organic capex c.£80m £80m Total c.£155m £130m Disposals £45-50m £30m Net capex c£110m £100m Tax rate 15.6% c17% Average number of shares in 2018 633.4m Shares in iss
Slide 30: Securitised debt profile
Marston’s PLC Interim Results 2018 30 SECURITISED DEBT PROFILE Principal Final maturity Tranche Type outstanding at Step-up date date 31 March 2018 A1 Floating £50.2m July 2012 2020 A2 Fixed/Floating £214.0m July 2019 2027 A3 Fixed/Floating £200.0m April 2027 2032 A4 Floating £177.2m October 2012 20
Slide 31: Securitisation profile
Marston’s PLC Interim Results 2018 31 SECURITISATION PROFILE 90.0 Max Debt Service 80.0 70.0 A3 step-up A2, B step- 60.0 Principal 50.0 Interest £m 40.0 30.0 20.0 10.0 - '17 '18 '19 '20 '21 '22 '23 '24 '25 '26 '27 '28 '29 '30 '31 '32 '33 '34 '35 Financial year FY2017 FY2018 FY2019 FY2020 FY2021 FY20
Slide 32: CROCCE
Marston’s PLC Interim Results 2018 32 CROCCE CROCCE FY2017** FY2016 FY2015 FY2014 FY2013* FY2012 NON-CURRENT ASSETS: Bal Depn Reval Adj Bal Depn Reval Adj Bal Depn Reval Adj Adj Adj Adj Goodwill 230.3 230.3 227.5 227.5 227.5 227.5 224.2 224.2 224.2 Other intangible assets 67.6 6.8 74.4 37.3 7.5 44.8
Slide 33: www.marstons.co.uk
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