Young & Co.'s Brewery, P.l.c. Class A · LSE:YNGA
Young & Co.'s Brewery, P.l.c. Class A — H1 2012 Earnings Presentation
35 slides from Young & Co.'s Brewery, P.l.c. Class A's earnings presentation, November 2011
Slide 1: Results Presentation
Results Presentation November 2011
Slide 2: Today's agenda
Today’s agenda • Introduction Stephen Goodyear • Financial Review Peter Whitehead • Managed Houses – Young’s Patrick Dardis • Managed Houses – Geronimo Rupert Clevely • Tenancies Stephen Goodyear • Outlook and Prospects Stephen Goodyear
Slide 3: Highlights
Highlights • Encouraging results – Very good trading from existing estate – Benefit from Geronimo acquisition – Strong growth in hotel profits • Continued focus on successful strategy • Estate revaluation results in £174.0m net uplift to £497.4m • 5.0% interim dividend increase (15th consecutive yea
Slide 4: Strategy: Active operational management
Strategy: Active operational management • Pure play differentiated pub company focused on – Premium end of the market – Style, quality and individuality – Service and training – Food growth from skilled chefs and fresh produce – Well invested estate – Distinctive and complementary styles of Young’s
Slide 5: Strategy: Active estate management
Strategy: Active estate management • Investment in existing estate on high returning projects – Development opportunities – Refurbishment – Hotel expansion • Rollout – Young’s – Geronimo – Shopping centres/transport hubs • Acquisitions – Emphasis on London managed pubs – Individual pubs or packages
Slide 6: Financial Review
Results Presentation 2011 r>) . = Section 1 Financial Review Ae bg
Slide 7: Strong results for 26 weeks ended 3 October 2011
Strong results for 26 weeks ended 3 October 2011 +33.6% +21.2% +10.5% +10.7% +5.0% Operating Revenue PBT* EPS* Dividend profit* £90.5m £15.0m £12.5m 18.73p 6.68p * adjusted for exceptional items 4
Slide 8: Adjusted profits on continuing operations
Adjusted profits on continuing operations 2011 2010 £m £m (Loss)/profit before tax (16.1) 10.9 Operating exceptional items 28.6 0.4 Adjusted profit before tax 12.5 11.3 Tax (excluding exceptional items) (3.5) (3.1) Adjusted profit after tax 9.0 8.2 Adjusted basic EPS (pence) 18.73 16.92 5
Slide 9: Group results
Group results 2011 2010 Change £m £m % Managed houses 18.78 15.26 +23.1 Tenanted houses 2.84 2.70 +5.2 Corporate services (6.61) (5.57) -18.7 Finance costs (net) (2.56) (1.12) -128.6 Adjusted profit before tax 12.45 11.27 +10.5 Discontinued item (1.12) 0.99 N/A 6
Slide 10: Like for like sales
Like for like sales Number Sales Change of sites £m % Managed – Young’s 116 61.3 +4.0 Tenanted 92 6.8 - Total 208 68.1 +3.6 Managed – Geronimo* 25 17.7 +12.6 *Geronimo like for like sales are based on their comparatives which were outside Young’s period of ownership 7
Slide 11: Operating performance at pub level
Operating performance at pub level 2011 Change Revenue £m % Managed 63.6 +5.6 Geronimo 19.5 N/A Tenanted 7.2 -1.1 Total 90.3 +33.6 EBITDAR* Managed 20.4 +5.8 Geronimo 6.0 N/A Tenanted 3.7 +1.5 Total 30.1 +31.5 *Earnings before interest, taxes, depreciation, rents payable 8
Slide 12: Strong cash generation and investment
Strong cash generation and investment 2011 2010 £m £m Cash generated from operations 14.8 10.9 Interest, tax and dividends (8.0) (5.7) Free cash flow 6.8 5.2 Disposals 3.6 2.7 Capital expenditure (12.2) (8.2) Increase in net debt (1.8) (0.3) 9
Slide 13: Investment in period
Investment in period Total: £12.2 million (2010: £10.7 million) By division By nature of spend Ma na ged £4.5m Hotel s £0.6m Investment on recent acquisitions £7.3m Geroni mo £6.5m Tena nted £0.6m Investment expenditure on existing estate £4.9m 10
Slide 14: Estate profile of trading pubs
Estate profile of trading pubs April 2011 + - Transfers Oct 2011 Managed 122 1 (1) - 122 Geronimo 27 2 - 1 30 Tenanted 97 - (3) (1) 93 Total 246 3 (4) - 245 Out of the total of 245 pubs, there are 191 freeholds and 13 virtual freeholds (leases with > 40 years to run, with rents that are < £10K per a
Slide 15: Debt structure
Debt structure Longer dated committed facilities: • £30 million long term (March 2023) £50.0 million • £20 million medium term (March 2018) Medium dated committed facilities: • £50 million RCF (Dec 2015) £100.0 million • £50 million term loan (Dec 2013 to 2015) Net debt £124.5 million % of debt fixe
Slide 16: Managed Houses - Young's
Results Presentation &. ’ Section 2 + Managed Houses - Young’s BE wey pe ¥ * (9 SPECIALS Curks chive Doan || pige con, SMOk | } Lacon, duck Liver on | | daa oe we
Slide 17: Premium Young's branded estate
Premium Young’s branded estate • 122 well located and invested pubs and hotels • Strong performance against a mixed backdrop – Revenue up 5.6% (LFL 4.0%) – Operating profit up 4.6% (LFL 1.2%) – Hotels RevPAR up 14.3% at £52.79 • Invested £5.1m in estate Central London 10 City 6 Greater London 13 Sou
Slide 18: Liquor – highlights
Liquor – highlights • Liquor sales 3.4% up on last year • Exploiting enduring popularity of cask ale – Diverse range of Wells & Young’s products – Local Hero range – Young’s Prince of Ales and 1831 Anniversary Ale • Introduction of London craft ales – Meantime and Camden products • American craft bo
Slide 19: Food – highlights
Food – highlights • Food sales 7.8% up on last year • Introduced new menu concepts – Old Tom’s English cheese and ham with wine and craft beers – American / English fusion at the Plough, Clapham Junction • Two new divisional chefs driving quality and value • Matching customers’ needs with menu by oc
Slide 20: Accommodation – highlights
Accommodation – highlights • Niche boutique hotel presence • RevPAR up 14.3% at £52.79 • Instant results from last year’s addition of 23 boutique rooms at the Alma, Wandsworth • 55 other rooms upgraded • New branding and website delivering results • Revenue management system has provided the platfor
Slide 21: Developments
DRINt L +MORE sail P' i GREAT ALES ROL By ‘i
Slide 22: Managed Houses – Geronimo
Section 3. Managed Houses – Geronimo
Slide 23: Contemporary Geronimo brand
Contemporary Geronimo brand • 30 high quality well invested food led pubs – 25 in London – 3 concessions and 1 leasehold at St Pancras – 1 in Surrey • Geronimo brings – Long term growth potential – Distinctive format that complements Young’s respected estate – Expertise in concessions 18
Slide 24: Geronimo fully integrated and trading well
Geronimo fully integrated and trading well • Strong underlying performance – Revenue £19.5m – EBITDA £4.3m – Operating profit £2.8m • Sales/profit momentum continues – Total sales up 24.2%* – LFL sales up 12.6%* * Based on pre Young’s ownership for the 26 weeks to 3 Oct 2010 19
Slide 25: Liquor and food – highlights
Liquor and food – highlights • Liquor sales 28.4% up on last year – Customers trading up across the board – Continue to broaden the ale and lager offer • Food sales 17.2% up on last year – Restaurant quality food at pub price – Growth in all day food • Food accounts for 34.9% of revenue 20
Slide 26: New sites
New sites • Lion & Unicorn, Kentish Town • Cow, Westfield – Stratford City last stop before the Olympics • Transfers from Young’s – Half Moon, the iconic Putney music pub (Sept) – King’s Arms, Chelsea (Oct) 21
Slide 27: London pubs
op a) =) at Zz O a) Zz O — GERGNIM® INNS
Slide 28: Transport hubs
SANH LHOdSNVHL 4% wi ra é Oo z 6 [aad val W
Slide 29: Tenancies
Results Presentation | 101 @ : mame Section G =. Tenancies
Slide 30: Tenanted operating highlights
Tenanted operating highlights • 93 traditional pubs • LFL sales flat in the period • Total sales down 1.1% due to disposals and transfers • Operating profit up 5.2% • Average EBITDAR per pub of £37.3K • £0.6m invested in existing pubs Central London 9 City 2 Greater London 15 South London 7 • Guest
Slide 31: Refocusing around smaller tenanted estate
Refocusing around smaller tenanted estate • Three pubs sold, one transferred to managed estate • Additional disposals in second half • Focus on sites capable of profitable growth, befitting the Young’s brand • Smaller estate will remain an important part of our strategy going forward • If BISC repor
Slide 32: Outlook and Prospects
Section 5. Outlook and Prospects
Slide 33: Outlook and prospects
Outlook and prospects • Positive start to trading in second half – Total sales up 45.1% – Like for like sales up 5.4% – Geronimo like for like 6.8% • London-orientated estate helps insulate us from the worst of the downturn • Healthy pipeline – Oyster Shed, Cannon Street riverside – Wheatsheaf, Boro
Slide 34: Investment summary
Investment summary • Well located: London and Home counties focused pub estate • Managed pub focus: >80% of operating profit at outlet level • Well invested: predominantly freehold backed balance sheet • Strong financial position: Low gearing vs. sector (3.4 times net debt/EBITDA) • Financial track
Slide 35: ast!
ast! ae 4G [YOUNGS]
Young & Co.'s Brewery, P.l.c. — H1 2012 Earnings Presentation on 6ix