Fuller, Smith & Turner P.l.c. Class A · LSE:FSTA
Fuller, Smith & Turner P.l.c. Class A — H1 2016 Earnings Presentation
32 slides from Fuller, Smith & Turner P.l.c. Class A's earnings presentation, November 2015
Slide 1: Fuller, Smith & Turner PLC Half Year Results
FULLER, SMITH & TURNER PLC HALF YEAR Results for the 26 weeks ended 26 SEPTEMBER 2015
Slide 2: Michael Turner, Chairman
Michael Turner CHAIRMAN
Slide 3: Agenda
AGENDA Highlights Michael Turner Financial Review James Douglas Strategy & operations review Simon Emeny Summary & outlook Simon Emeny
Slide 4: Highlights
HIGHLIGHTS STRONG FIRST HALF Adjusted Managed Adjusted Interim Revenue operating LFL SALES EPS dividend profit H1 2016 £177.7m £21.6m 30.74p 6.90p +5.6% +10% +10% +11% +8% H1 2015 £161.6m £19.6m 27.67p 6.40p
Slide 5: James Douglas, Finance Director
JAMES DOUGLAS FINANCE DIRECTOR
Slide 6: Group Performance
GROUP PERFORMANCE H1 2016 H1 2015 £m £m Revenue 177.7 161.6 +10% Operating costs (153.2) (138.9) +10% Operating profit 24.5 22.7 +8% Net finance costs (2.9) (3.1) -6% Adjusted profit 21.6 19.6 +10% Depreciation and amortisation 8.8 8.0 +10% EBITDA 33.3 30.7 +8% All items exclude exceptional income a
Slide 7: Exceptional Items
EXCEPTIONAL ITEMS H1 2016 H1 2015 £m £m Profit on sale of properties 1.6 0.8 Acquisition costs (0.5) (1.0) Onerous lease provision releases/(charges) 0.2 (0.2) Deemed remuneration on the future purchase of shares in The Stable (1.3) - Asset impairments - (0.5) Pension scheme finance costs (0.4) (0.4
Slide 8: Group Performance
GROUP PERFORMANCE SHARE OF OPERATING PROFIT+ 13.2% The Fuller’s Managed Pubs Beer Company 62.3% & Hotels 24.5% Tenanted Inns FIVE YEAR HISTORY Adjusted 2011 2016 +37% £16.4m £21.6m Half Year Profits* Adjusted 2011 2016 +53% Half Year EPS* 21.30p 30.74p Interim 2011 2016 +45% 5.05p 6.90p Dividend + S
Slide 9: Managed Pubs & Hotels
MANAGED PUBS & HOTELS H1 2016 H1 2015+ £m £m LFL sales +5.6% +6.5% Revenue 121.9 106.4 +15% Operating costs* (104.9) (91.5) +15% Operating profit* 17.0 14.9 +14% Operating margin 13.9% 14.0% Depreciation and amortisation 6.3 5.6 +13% EBITDA 23.3 20.5 +14% * Excluding exceptional items + Revised for
Slide 10: Tenanted Inns
TENANTED INNS H1 2016 H1 2015+ LFL profits + 3% + 5% Average EBITDA per pub + 2% + 4% £m £m Revenue 16.1 16.0 +1% Operating costs* (9.4) (9.3) +1% Operating profit* 6.7 6.7 Level Operating margin 41.6% 41.9% Depreciation and amortisation 0.8 0.8 Level EBITDA 7.5 7.5 Level * Excluding exceptional ite
Slide 11: The Fuller's Beer Company
THE FULLER’S BEER COMPANY H1 2016 H1 2015+ Total beer and cider volumes + 1% + 6% £m £m Revenue 63.0 61.3 +3% Operating costs (59.4) (57.7) +3% Operating profit 3.6 3.6 Level Operating margin 5.7% 5.9% Depreciation and amortisation 1.7 1.6 +6% EBITDA 5.3 5.2 +2% + Revised for changes in transfer pri
Slide 12: Securing great locations for the long term
Securing GREAT locations for the long term • £29.9m expenditure on buying-in three freeholds of leasehold sites • At implied yields above our long term funding cost • Market prices on a stand-alone basis • Protect trading profits in perpetuity • Option value in space not currently occupied by Fuller
Slide 13: Generation & Use of Cash
Generation & Use of Cash H1 2016 £m H1 2015 £m EBITDA 33.3 30.7 Working capital / other adjustments 4.6 4.2 Interest (2.7) (2.8) Tax (4.0) (3.8) Cash available for discretionary spend 31.2 28.3 Capex on existing estate and brewery (10.1) (13.3) Corporate acquisitions - (3.6) Pub acquisitions* (36.7)
Slide 14: Annual Capital Expenditure
Annual Capital Expenditure 80 £76m The Fuller’s Beer Company £68m 70 Fuller’s Inns Pub Acquisitions £58m 60 Pub Development Costs Corporate Acquisitions 50 £40m 40 £31m 30 20 10 0 2012 2013 2014 2015 2016F Capital expenditure for all years includes pub acquisition costs paid in the period, which fro
Slide 15: Borrowing Capacity
BORROWING CAPACITY 250 • Committed facilities Other Net Debt / Cash - £130m across four banks until August 2020 28.5 200 Bank Debt 59.0 64.5 - £50m until August 2019 Available - £20m until August 2016 150 Committed Facilities • 57% of period end gross borrowings fixed or capped 171.5 141.0 100 135.5
Slide 16: Simon Emeny, Chief Executive
Simon Emeny Chief Executive
Slide 17: A Clear Strategic Plan
A CLEAR STRATEGIC PLAN WITH OUR CORE VALUES AT THE CENTRE Long-term, clearly communicated strategy Constantly look to improve Anticipate trends quality and delight to stay ahead of the game customers ED PUBS & H AG OT N EL A Fuller’s Values TED INNS • M S•T • Doing things the right way HE FULLE • Be
Slide 18: Managed Pubs & Hotels
Managed PubS & Hotels Delicious food, premium brands, the best customer service • Excellent like for like 10 LFL Growth Rates sales – again well ahead of the Peach Tracker 8.3% 8 • Focus on people is reaping rewards – training programmes continue to grow 6 5.6% 4.9% • Delicious food from highly enga
Slide 19: Managed Pubs & Hotels: fresh, delicious food
Managed Pubs & Hotels A commitment to fresh, delicious food – unique to our pubs • Continued menu development with named artisan producers for our Only at Fuller’s range • Investment in first-class kitchen equipment, layout and design • Firm commitment to training across our kitchen teams - Developi
Slide 20: Managed Pubs & Hotels: customer service
Managed Pubs & Hotels Taking customer service to new heights • Development programmes in place from day one of a team member’s career - Delivering over 1,000 training days per month -4 00 people in development across the business, all with a higher wage rate in recognition • Leading edge service coa
Slide 21: Managed Pubs & Hotels: great looking pubs
Managed Pubs & Hotels Attracting discerning customers with great looking pubs • Continued investment in stunning refurbishments with interesting design features - Always staying ahead of the competition, keeping pubs fresh and relevant - £7.8m invested during the first half
Slide 22: The Stable
THE STABLE IT’S ALL ABOUT THE CIDER & PIZZA TH E ER • Fresh, local D • ingredients to PI Tasting board create a unique CI ZZ #1 seller combination of flavours E • 60-80 refreshing A TH • Artisan sourdo local ciders per site, ug from the origina h with up to 30 taps l 2009 yeast start • Innovating –
Slide 23: Openings & Pipeline
OPENINGS & PIPELINE TAKING THE STABLE TO A WIDER AUDIENCE Bridport Weymouth Whitechapel Bristol Bath Kew Riverside (relocated) Southampton Poole Birmingham Exeter, Bath Plymouth Winchester Cheltenham plus two sites Newquay Cardiff in legals Falmouth March April May August November December Q4 2015/1
Slide 24: Tenanted Inns
TENANTED INNS Providing a point of differentiation • Working in partnership for long-term success -£ 1.0m of expensed investments and £1.2m of capitalised investments - Sharing of ideas from the managed estate - Access to high quality, online training programmes -E xciting range of premium Fuller’s
Slide 25: The Fuller's Beer Company
THE FULLER’S BEER COMPANY Interesting beers for interested consumers • Exciting times for a dynamic market - Six million adults say they have drunk craft beer in the last six months - New and inspiring subcategories are making beer exciting again - Growth is centered on smaller, lower volume, higher
Slide 26: A premium range to satisfy a broad customer base
THE FULLER’S BEER COMPANY A premium range to satisfy a broad customer base • Exciting new beers for flavour seekers - Frontier volumes have doubled year on year, now our second biggest brand - Canned range opens doors in more craft beer sites - Sierra Nevada range extensions are in demand - New addi
Slide 27: Your favourite beers where you want them
THE FULLER’S BEER COMPANY YOUR FAVOURITE BEERS WHERE YOU WANT THEM
Slide 28: Summary
SUMMARY • A strong first half – Adjusted PBT up 10% to £21.6m – Adjusted EPS up 11% to 30.74p – Dividend up 8% to 6.90p • Good performance achieved again across all divisions • Acquired two new pubs and the freeholds of three high profile existing sites • The Stable progressing ahead of our investme
Slide 29: Current Trading & Outlook
CURRENT TRADING & OUTLOOK • Momentum continuing into second half – Managed LFL sales up 5.8% for 33 weeks – Tenanted LFL profits up 4% for 33 weeks – Total beer & cider volumes up 1% for 33 weeks • Value enhancing acquisitions – The Great Northern Railway Tavern, Hornsey, aquired in October 2015 – T
Slide 30: Appendix
Slide 31: Appendix - Reconciliation to Statutory Profit
Appendix - Reconciliation to Statutory Profit H1 2016 H1 2015 £m £m Adjusted profit 21.6 19.6 10% Exceptional items (0.4) (1.3) Profit before tax 21.2 18.3 16% Tax on adjusted profit (4.4) (4.2) 5% Exceptional tax (0.1) - Profit after tax 16.7 14.1 18% Adjusted EPS 30.74p 27.67p 11% Basic EPS 29.84p
Slide 32: Appendix - Fuller's Inns
Appendix - Fuller’s Inns 28 March Acquired/ 26 Sept Acquired/ 20 Nov Within 2015 developed Disposed 2015 developed 2015 the M25 Managed Pubs & Hotels 188 1 (1) 188 1 189 60% Tenanted Inns 203 1 (2) 202 1 203 29% Total Fuller’s 391 2 (3) 390 2 392 The Stable 7 2 - 9 1 10 TOTAL 398 4 (3) 399 3 402 Man
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