Fuller, Smith & Turner P.l.c. Class A · LSE:FSTA
Fuller, Smith & Turner P.l.c. Class A — H1 2008 Earnings Presentation
41 slides from Fuller, Smith & Turner P.l.c. Class A's earnings presentation, November 2008
Slide 1: Fuller, Smith and Turner PLC Half Year Results
Fuller, Smith and Turner PLC Half Year Results for the 26 weeks to 27 September 2008
Slide 2: Michael Turner, Chairman
Michael Turner Chairman
Slide 3: Agenda
Agenda Strategy Corporate Progress Key Financial Data Fuller’s Inns The Fuller’s Beer Company Prospects
Slide 4: Consistent Strategy
Consistent Strategy Fundamental objective 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
Slide 5: Corporate Progress
Corporate Progress First Half • Managed LFL sales up 2.3% (invested) • Adjusted earnings per share up 1% • Adjusted profits down 1% • Fuller’s Inns profits down 2% • Own Beer volumes 1% lower • Fuller’s Beer Company profits down 3% • Net debt reduced by £13.6m to £90.1m (2007: £103.7m)
Slide 6: Financial Highlights
Financial Highlights • Revenue up 1% to £94.4m (2007: £93.3m) • Adjusted* PBT down 1% to £12.0m (2007: £12.1m) • PBT down 6% to £12.0m (2007: £12.7m) • EBITDA* level at £20.9m (2007: £21.0m) • Adjusted* EPS up 1% to 15.29p (2007: 15.18p) • Basic EPS down 35% to 13.13p (2007: 20.34p) • Interim divide
Slide 7: Adjusted Half Year Profits
Adjusted Half Year Profits 14 12 12.1 12.0 10 10.9 8 £m 8.0 8.4 6 4 2 +2% +5% +31% +11% -1% 0 2004 2005 2006 2007 2008 Adjusted profits are profits before tax excluding exceptional items
Slide 8: Adjusted Half Year EPS
Adjusted Half Year EPS 18 16 14 15.18 15.29 Pence per share 12 13.42 10 9.47 10.12 8 6 4 2 +3% +7% +33% +13% +1% 0 2004 2005 2006 2007 2008 2004 to 2006 adjusted for the five for two share split
Slide 9: Interim Dividend
Interim Dividend 3 2.80 2.85 2.59 Pence per share 2 2.14 2.25 1 +5% +5% +15% +8% +2% 0 2004 2005 2006 2007 2008 2004 to 2006 adjusted for the five for two share split
Slide 10: James Douglas, Finance Director
James Douglas Finance Director
Slide 11: Segmental Split
Segmental Split H1 2008 H1 2007 Segment Revenue £m £m Fuller’s Inns 74.4 73.5 +1% Fuller’s Beer Company 30.9 30.3 +2% Inter segment revenue (10.9) (10.5) +4% Revenue 94.4 93.3 +1% Segment Profits Fuller’s Inns 13.0 13.3 -2% Fuller’s Beer Company 3.4 3.5 -3% Central costs (1.2) (1.3) -8% Operating pr
Slide 12: Statutory Profit Reconciliation
Statutory Profit Reconciliation H1 2008 H1 2007 £m £m Adjusted profit 12.0 12.1 -1% Profit on property disposals - 0.6 Statutory profit before tax 12.0 12.7 -6% Adjusted earnings per share 15.29p 15.18p +1% Basic earnings per share 13.13p 20.34p -35%* Effective tax rate 29.2% 30.1% * H1 2007 benefit
Slide 13: Cash Flow
Cash Flow H1 2008 H1 2007 £m £m EBITDA 20.9 21.0 Share based payment 0.8 0.8 Working capital / other (0.3) 0.1 Pension (0.5) (8.4) Capex (6.9) (11.2) Disposals 0.2 1.9 Interest and tax (3.1) (5.5) Share buy backs and dividends (5.7) (5.9) Net debt at start of period (95.5) (96.5) Net debt at end of
Slide 14: Annual Capital Expenditure
Annual Capital Expenditure 40 30.6 35 New Pubs 30 21.7 Fuller’s Inns £m 25 18.3 17.5 18.5 20 16.0 Fuller’s Beer 15 Company 10 and Central 5 0 2004 2005 2006 2007 2008 2009E Estimated 2009 expenditure includes £1.9m spend already committed on new pub acquisitions
Slide 15: Fuller's has Plenty of Debt Headroom
Fuller’s has Plenty of Debt Headroom H1 2008 H1 2007 10.0 EBITDA* £20.9m £21.0m 30.0 Gross borrowings £96.7m £105.0m 96.7 Net Debt £90.1m £103.7m Net Debt / EBITDA* 2.2x 2.5x Interest Cover* 4.8x 4.6x £m Headroom on Gross borrowings £30.0m £30.0m committed facilities Undrawn committed facilities Und
Slide 16: Debt Repayment Profile
Debt Repayment Profile £m At 27 September 2008 FY 2008/09 4.1 84% (2007: 84%) of gross borrowings are at FY 2009/10 8.8 fixed or capped rates until 2010 or repayment FY 2010/11 56.4 if earlier 2023 6.0 Main facilities need to be refinanced by 2028 19.8 November 2010 No due date 1.6 Composite cost of
Slide 17: Weathering The Storm
Weathering The Storm Cost inflation pressures £5.5m (excluding duty) Pass on to Duty, £3.5m customers Better buying Raw Materials Revised menus E-commerce Labour planning Payroll Headcount Smart meters Utility Costs New bottling line Brewery cooling Cost saving opportunities £2m
Slide 18: Simon Emeny, Managing Director Fuller's Inns
Simon Emeny Managing Director Fuller’s Inns
Slide 19: Key Drivers
Key Drivers • Quality in everything we do • Outstanding drinks portfolio • Delicious food • Boutique accommodation • Differentiated experience
Slide 20: Fuller's Inns Key Figures
Fuller’s Inns Key Figures H1 2008 H1 2007 Revenue £74.4m £73.5m + 1% Operating Profit £13.0m £13.3m - 2% EBITDA £17.5m £17.5m level
Slide 21: Retail Split
Retail Split March Transfers Additions Disposals Sept 2008 2008 Managed Pubs 157 - - (5) 152 and Hotels Tenanted Pubs 203 - 1 - 204 360 - 1 (5) 356
Slide 22: Managed Pubs and Hotels
me Managed Pubs and Hotels s FUL .. 9 r . - 2 * ce a 4 ar, 2 o SIFULLER's] [46 ad THE CHURCHILL ARMS |
Slide 23: Managed Pubs and Hotels Trading Patterns
Managed Pubs and Hotels Trading Patterns • Revenue up 1% • LFL sales up 2.3% (invested) • Food represents 27% of revenue* (2007: 27%) • Accommodation represents 8% of revenue (2007: 7%) • Profits down 4% * Revenue adjusted to exclude sites where food is franchised out
Slide 24: Boutique Bedroom Accommodation
Boutique Bedroom Accommodation
Slide 25: AC ION os oe nA) Connecting
AC ION os oe nA) Connecting : : 7ou now G i Ly if f r robe it’s free!) 2 QO B Fu x s , 7 ‘ rWO WEEKS, ONE GREAT EVENT 2ND - ISTH NOVEMBER 4] et LOCK Pee f, oly Tuesday 4 a ember . me fa +s. 3 r W a , : yee THE OL) rOM’s : — ULLER y 3 4". : ‘ a] We'd like to thank you : 5 Poaly for visiting The Red L
Slide 26: Tenanted Pubs
Tenanted Pubs
Slide 27: Tenanted Pubs Trading Patterns
Tenanted Pubs Trading Patterns • Revenue level • Average revenue per pub down 1% • LFL sales down 1.9% • Profits level • No transfers from Managed Estate • One pub acquired – Lewes Arms
Slide 28: Supporting our Tenants
Tenanted Pubs Supporting our Tenants • Very few rent concessions • Support on – Marketing activities – Food training – Drinks portfolio • Continued investment in estate
Slide 29: Fuller's Inns Summary
Fuller’s Inns Summary • Continued robust performance • Differentiated experience is vital for customers • Estate is in excellent condition • Consistent sector leading invested LFL sales reflect strategy of the last five years • Helping develop and support our Tenants’ initiatives • Strong business m
Slide 30: John Roberts, Managing Director The Fuller's Beer Company
John Roberts Managing Director The Fuller’s Beer Company
Slide 31: Key Drivers
Key Drivers • Broad portfolio of award-winning brands • Premium positioning • Total commitment to quality • High profile marketing support • Well-balanced business – On Trade – Off Trade – Export – Wine Division
Slide 32: The Fuller's Beer Company Key Figures
The Fuller’s Beer Company Key Figures H1 2008 H1 2007 Revenue £30.9m £30.3m + 2% Operating profit £3.4m £3.5m - 3% EBITDA £4.4m £4.5m - 2%
Slide 33: Beer Volumes
The Fuller’s Beer Company Beer Volumes H1 2008 H1 2007 Own Beer ‘000 brls ‘000 brls Free On Trade 59.4 60.6 - 2% Fuller’s Inns 18.4 18.8 - 2% Off Trade 16.9 17.3 - 2% Exports 11.5 10.7 + 8% Total Own Beer 106.2 107.4 - 1% Foreign Beer 54.8 59.0 - 7% Total Beer 161.0 166.4 - 3%
Slide 34: Comparison with UK Market
The Fuller’s Beer Company Comparison with UK Market H1 2008 H1 2008 Fuller’s UK UK Market Comparison Growth Growth* Total Beer -4% -6% +2 % Total Ale -2% -9% +7 % Off Trade Ale -2% -2% in line Cask Ale -2% -8% +6 % * Source: BBPA
Slide 35: London Pride
The Fuller’s Beer Company London Pride • The UK’s leading Premium Ale • Increased market share • Continued high profile advertising – “Whatever you do, take Pride” • Comprehensive promotions and sponsorship programme
Slide 36: Organic Honey Dew
The Fuller’s Beer Company Organic Honey Dew • The UK’s leading organic beer • Marketing investment doubled • Poster and press advertising • Major On/Off Trade sampling programmes
Slide 37: ENGLISH
& ENGLISH quuon OFFICIAL BEER Bek rie Lia a 8 ) LONDON
Slide 38: The Fuller's Beer Company Summary
The Fuller’s Beer Company Summary • Increased market share • Margins maintained - not chasing volume • Increased marketing investment • Own Beer volumes 1% lower • Foreign Beer volumes 7% lower • Fuller’s Beer Company profits down 3% • Wine Division profits up 12%
Slide 39: The Fuller's Beer Company
a gr) CO = © U - eB) eB) aa) Y) ‘ <= > os eB) om = FULLERS B—|FULLERS|—— Be a Se = 2 = — => - ww Mj So 4 « WZ ad ol F
Slide 40: Prospects
Prospects • A resilient start to a truly challenging year • Managed LFL sales up 2.2% (invested) – for 33 weeks • Strong financial position • Well invested estate • Strong brands • Well-prepared for anticipated storms ahead • Ready to exploit opportunities
Slide 41: Whatever you do, take Pride
WHATEVER YOU DO, TAKE PRIDE.
Fuller, Smith & Turner — H1 2008 Earnings Presentation on 6ix