Fuller, Smith & Turner P.L.C. Class A · LSE:FSTA
Fuller, Smith & Turner P.L.C. Class A — FY2013 Earnings Presentation
47 slides from Fuller, Smith & Turner P.L.C. Class A's earnings presentation, June 2013
Slide 1: Fuller, Smith and Turner PLC Final Results
Fuller, Smith and Turner PLC Final Results for the 52 weeks ended 30 March 2013
Slide 2: Michael Turner, Chairman
Michael Turner = : ; Chairman g Wiypcuo: Stecrnglh Me %
Slide 3: Agenda
Agenda • Overview • Financial Results • Operations • Prospects
Slide 4: Core Values and Objectives
Core Values and Objectives 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: PLC Awards 2012
PLC Awards 2012 • Fuller’s named Company of the Year at the prestigious PLC Awards in March 2013 • Recognition of our long- term business model and continued share price growth
Slide 6: Financial Highlights
Financial Highlights • Adjusted EPS up 8% to 43.07p • Revenue up 7% to £271.5m • Adjusted PBT up 5% to £31.7m • EBITDA up 7% to £51.2m • Final dividend up 10% to 8.35p – Total dividend up 8% to 13.70p • Net debt / EBITDA at 2.6x on a pro forma basis • Managed Pubs and Hotels LFL sales up 2.1%
Slide 7: Adjusted Profits
Adjusted Profits Five year growth of 38% 35 31.7 29.3 30.3 30 26.6 25 22.8 20 £m 15 10 5 -1% +17% +10% +3% +5% 0 2009 2010 2011 2012 2013 Adjusted profits are profits before tax excluding exceptional items 2011 was a 53 week period
Slide 8: Adjusted EPS
Adjusted EPS Five year growth of 48% 45 43.1 39.8 40 37.4 34.2 Pence per 40p share 35 30 29.1 25 20 15 10 5 level +17% +9% +7% +8% 0 2009 2010 2011 2012 2013 Excluding exceptional items 2011 was a 53 week period
Slide 9: Full Year Dividend
Full Year Dividend Five year growth of 41% 13.70 14 12.65 11.80 12 11.00 Pence per 40p share 9.85 10 8 6 4 2 +2% +12% +7% +7% +8% 0 2009 2010 2011 2012 2013
Slide 10: James Douglas, Finance Director
James Douglas Finance Director
Slide 11: Group Performance
Group Performance 2013 2012 £m £m Revenue 271.5 253.0 +7% Operating costs* (234.5) (218.1) +8% Operating profit* 37.0 34.9 +6% Net finance costs* (5.3) (4.6) +15% Adjusted profit* 31.7 30.3 +5% Depreciation & amortisation 14.2 12.9 +10% EBITDA* 51.2 47.8 +7% * Excluding exceptional items
Slide 12: Reconciliation to Statutory Profit
Reconciliation to Statutory Profit 2013 2012 £m £m Adjusted profit 31.7 30.3 +5% Exceptional items 3.5 (1.5) Profit before tax 35.2 28.8 +22% Tax on adjusted profit (7.7) (7.9) -3% Exceptional tax 1.8 2.8 Profit after tax 29.3 23.7 +24% Adjusted EPS 43.07p 39.82p +8% Basic EPS 52.59p 42.13p +25%
Slide 13: Managed Pubs and Hotels
Managed Pubs and Hotels 2013 2012 LFL sales +2.1% +4.2% Revenue £170.1m £155.7m +9% Operating costs* £150.7m £137.4m +10% Operating profit* £19.4m £18.3m +6% Operating margin 11.4% 11.8% Depreciation & amortisation £9.6m £8.5m +13% EBITDA* £29.0m £26.8m +8% * Excluding exceptional items
Slide 14: Managed Pubs and Hotels Turnover
Managed Pubs and Hotels Turnover Share of Total Turnover 8% LFL growth rates 27% Drinks +0.9% Food +3.9% 65% Accommodation +8.2% Drinks Food TOTAL +2.1% Accommodation • Drinks sales most impacted by the weather • Investment in food team is driving quality and consistency • Accommodation includes one
Slide 15: Margin Evolution
Margin Evolution Managed Pubs and Hotels margin down 34 bp on last year Managed Pubs and Hotels operating margin FY 2012 2012/13 2013/14 Driven by inflationary Need to hold cost growth Operating costs impact of utilities and rates below LFL sales higher than sales growth 73 closure weeks Return to m
Slide 16: Tenanted Inns
Tenanted Inns 2013 2012 LFL profits +1% +2% Average EBITDA per pub +9% +4% Revenue £30.8m £27.5m +12% Operating costs* £18.6m £17.2m +8% Operating profit* £12.2m £10.3m +18% Operating margin 39.6% 37.5% Depreciation £1.6m £1.6m Level EBITDA* £13.8m £11.9m +16% * Excluding exceptional items
Slide 17: The Fuller's Beer Company
The Fuller’s Beer Company 2013 2012 Total Beer volumes Level +2% Revenue £113.6m £109.1m +4% Operating costs £104.9m £100.1m +5% Operating profit £8.7m £9.0m -3% Operating margin 7.7% 8.2% Depreciation £3.0m £2.7m +11% EBITDA £11.7m £11.7m Level
Slide 18: Borrowing Capacity
Borrowing Capacity YE 2013 YE 2012 £m £m • £150m committed across 34.5 37.0 four banks • Freedom to add further funding for acquisitions Available committed facilities • 80% of period end gross 114.7 Bank debt 112.5 borrowings fixed or capped Other net debt • Estimated blended cost of borrowings for
Slide 19: Generation and Use of Cash
Generation and Use of Cash 2013 2012 £m £m EBITDA 51.2 47.8 Working capital / other adjustments (2.4) 4.9 Interest and refinancing costs (5.4) (4.5) Tax (8.1) (8.7) Cash available for discretionary spend 35.3 39.5 Capex on existing estate and brewery (12.7) (17.1) Pub acquisitions – business purchas
Slide 20: Annual Capital Expenditure
Annual Capital Expenditure 80 76.3 Corporate 70 Development costs for 60 new pubs 50 New committed pubs 44.1 £m 40 31.1 31.5 Fuller's Inns 30 24.2 20 Fuller's Beer Company 12.0 and Central 10 0 2009 2010 2011 2012 2013 2014E Capital Expenditure for all years includes pub acquisition costs paid in th
Slide 21: Simon Emeny, Group Managing Director
Simon Emeny Group Managing Director
Slide 22: The Fuller's Vision
The Fuller’s Vision “We will create and operate the most stylish pubs and hotels whilst brewing Britain’s most coveted premium brands for discerning customers both at home and abroad.”
Slide 23: Drivers for Growth
Drivers for Growth Targeted Distinctive Pub & Premium Brand Acquisition & Hotel Experience Portfolio Development
Slide 24: Only at Fuller's
Targeted Distinctive Pub & Premium Brand Hotel Experience Acquisition & Portfolio Development “Only at Fuller’s” Aspirational Unique dishes, Connecting with Engaging service Inspiring design premium brands fresh ingredients customers
Slide 25: Only at Fuller's
“Only at Fuller’s”
Slide 26: Food
Food Bespoke and unique menus characterised by fresh food Core dishes • Only high quality sourcing • Consistent approach “Only at Fuller’s” • Unique beer and food collaborations Fuller’s Executive Chef team on a farm visit Local produce • Flexible supply chain allows creative chefs to deliver blackb
Slide 27: Connecting with Customers
Connecting with Online bookings Customers • Online table bookings doubled in less than a year • 23% of online room bookings made through Fuller’s website Web • Unique visitors up 42% and average dwell time up 24% since launch in May 2012 • One third of visits accessed via mobile devices • Virtual to
Slide 28: Targeted Acquisition & Development
Distinctive Pub & Targeted Premium Brand Acquisition & Hotel Experience Portfolio Development Acquisition Development Heart of the Refurbishment & Transport Hubs Iconic London Pubs Market Town Repositioning
Slide 29: Transport Hubs
Transport Hubs The Parcel Yard, Kings Cross • Trading ahead of expectations • Largest retailer of cask ale in the estate London’s Pride, Terminal 2 • £1.7m development spend • Prominent location with 5,500 The Parcel Yard, Kings Cross square feet, the only airside pub in the new Terminal 2 • 200 cov
Slide 30: New Development Sites
New Development Sites Cam’s Mill (Fareham) & One Over The Ait (Kew Bridge) • Outstanding freehold assets • Combined spend of £3.4m Cam’s Mill, Fareham • Bespoke design and construction • High turnover potential • Food focussed sales mix One Over The Ait, Kew Bridge
Slide 31: Refurbishment & Repositioning Strategy
Refurbishment & Repositioning Strategy Objectives Actions • Update signage for Attract target • Young professionals Eye catching contemporary look demographic • Affluent families branding • Launch branded products (e.g. Brewer Street) • Efficient layout for faster • More covers Remodel service times
Slide 32: Refurbishment & Repositioning
Refurbishment & Repositioning
Slide 33: Tenanted Inns: Supporting Our Tenants
Tenanted Inns Supporting Our Tenants • Service Agreement (Target: 100, Signed up: 123) • Extranet designed through Tenant forums and launched April 2013 • Free Wi-Fi offered to all Tenants (80% signed up within 4 days of offer) • Record level of investment in Tenant training Tom Gavaghan The Andover
Slide 34: Tenanted Inns: Sharing The Rewards
Tenanted Inns Sharing The Rewards • Fuller’s LFL profits up 1%, businesses healthy • All pubs open and trading • Average tenure six and a half years • Increase in Tenants on substantive agreements • Very high standard of applicant Sam Malham and Paschal Comiskey The Forresters, Ealing
Slide 35: Premium Brand Portfolio
Targeted Distinctive Pub & Premium Brand Acquisition & Hotel Experience Portfolio Development Well Invested Leverage Expertise Broaden Portfolio Brands Internationally
Slide 36: Slide 36
Slide 37: New Bottle Design
New Bottle Design • Elegant and distinctive new shape • Striking new label designs with a modern feel • Launched in the Off Trade in May 2013 and Export in June 2013
Slide 38: Exports
Exports Exported volumes ’000 brls 39.8 40 36.0 • 1 in 5 barrels exported 29.5 30 25.4 • 97% volume growth over 22.4 five years 20 • Exported to 68 countries 10 • Focus on growing core 0 markets 2009 2010 2011 2012 2013 • Explore new opportunities • Leveraging investment in brands 1 in 5 barrels exp
Slide 39: New Wave Craft Lager
New Wave Craft Lager Hand-crafted over 42 days, Frontier brings together the best of old world craftsmanship and new world ingredients to deliver a flavourful new wave craft lager • Targets lager drinkers looking for more authenticity and flavour • Fully integrated campaign to support the brand • Se
Slide 40: Specialist Beers
Specialist Beers Veltins • Pilsner lager from a family owned brewery in Germany • Brewed to German purity laws from 1516 Chimay • Authentic Trappist beer, brewed by Trappist monks in Belgium for over 150 years • Chimay Gold Draught - unfiltered, unpasteurised 4.8% keg beer, available outside the Chi
Slide 41: Cornish Orchards Acquisition
Cornish Orchards Acquisition • Acquisition completed 4th June • Cornish Gold, refreshing lightly sparkling cider made with freshly pressed apple juice • Award winning portfolio of quality ciders, apple juice and other soft drinks • £1.4m turnover, £0.4m EBITDA year ended 31st August 2012 • Purchased
Slide 42: Strategic Rationale
Strategic Rationale UK Cider Sales • Diversification opportunity and 10 Annual (Millions HL) a good fit for existing business 8 6 • Attractive drinks segment with 4 consistent growth, low cost of 2 production and favourable duty 0 treatment 1980 1990 2000 2010 • Quality craft cider with genuine UK P
Slide 43: Summary
Summary • A strong year, with good returns from acquisitions and developments • Adjusted PBT up 5% to £31.7m • Adjusted EPS up 8% to 43.07p • Managed Pubs and Hotels operating profits* up 6% • Tenanted Inns operating profits* up 18% • Beer Company operating profits down 3% • New Beer Company strateg
Slide 44: Trading Update
Trading Update • Managed LFL sales up 7.0% for 9 weeks • Tenanted LFL profits down 1% for 9 weeks • Total beer volumes down 5% for 9 weeks
Slide 45: Prospects
Prospects • Simon Emeny appointed as Chief Executive from 1 July • Pipeline of acquisitions and development sites • “Made of London” campaign live • Redesigned 500ml bottle • Frontier, new wave craft lager launched • Acquisition of Cornish Orchards completed
Slide 46: Appendix - Fuller's Inns Estate
Appendix - Fuller’s Inns Estate 2012 Acquired Sold Transferred 2013 Managed Pubs and Hotels 174 2 - 1 177 Tenanted Inns 209 2 (1) (1) 209 TOTAL 383 4 (1) - 386
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Fuller, Smith & Turner P.L.C. — FY2013 Earnings Presentation on 6ix