Fuller, Smith & Turner P.L.C. Class A · LSE:FSTA
Fuller, Smith & Turner P.L.C. Class A — FY2009 Earnings Presentation
48 slides from Fuller, Smith & Turner P.L.C. Class A's earnings presentation, March 2009
Slide 1: Preliminary Results for the 52 weeks ended 28 March 2009
Fuller, Smith and Turner PLC Preliminary Results for the 52 weeks ended 28 March 2009
Slide 2: Michael Turner, Chairman
Michael Turner Chairman
Slide 3: Agenda
Agenda Strategy Financial Highlights Corporate Progress Key Financials Fuller’s Inns The Fuller’s Beer Company Prospects
Slide 4: Consistent Strategy
Consistent Strategy Fundamental objective remains 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 • Investing throug
Slide 5: Financial Highlights
Financial Highlights • Revenue up 3% to £210.0m (2008: £203.1m)1 • Adjusted2 PBT down 1% to £22.8m (2008: £23.0m) • Adjusted2 EPS level at 29.12p (2008: 29.15p) • Final dividend increased to 7.00p (2008: 6.90p) 1 Revenue has been restated to include all excise duty 2 Excluding exceptional items
Slide 6: Corporate Progress
Corporate Progress • A strong performance in difficult times • Managed Pubs and Hotels LFL sales up 3.0% • Fuller’s Inns profits down 5% due to cost pressures • Own Beer volumes level • Beer Company profits up 4% • Five high quality Pub acquisitions made in year • A further seven iconic Pub acquisit
Slide 7: Adjusted Profits
Adjusted Profits 25 20 22.1 23.0 22.8 15 17.3 17.9 £m 10 5 +6% +4% +23% +4% -1% 0 2005 2006 2007 2008 2009 • Adjusted profits are profits before tax excluding exceptional items • 2005 and earlier restated for IFRS
Slide 8: Adjusted EPS
Adjusted EPS 35 Pence per 40p share 30 25 27.6 29.2 29.1 20 21.9 20.7 15 10 5 +8% +6% +26% +6% level 0 2005 2006 2007 2008 2009 • Excluding exceptional items • 2005 to 2007 adjusted for the five for two share split • 2005 and earlier restated for IFRS
Slide 9: Full Year Dividends
Full Year Dividends 10 9.70 9.85 Pence per 40p share 8 9.09 7.90 7.38 6 4 2 +7% +7% +15% +7% +2% 0 2005 2006 2007 2008 2009 • 2005 to 2007 adjusted for the five for two share split
Slide 10: James Douglas, Finance Director
James Douglas Finance Director
Slide 11: Change in Accounting Policy
Change in Accounting Policy • Revenue is now stated including all Excise Duty • Previously we deducted Excise Duty where we were responsible for accounting for it to HMRC • We changed to this policy on adoption of IFRS • New treatment makes comparison of performance easier and aligns statutory and m
Slide 12: Segmental Split
Segmental Split 2009 2008 Segment Revenue £m £m Fuller’s Inns 150.0 146.3 +3% Fuller’s Beer Co. 91.8 87.7 +5% Inter segment revenue (31.8) (30.9) +3% Revenue 210.0 203.1 +3% Segment Profits* Fuller’s Inns* 22.8 23.9 -5% Fuller’s Beer Co.* 8.3 8.0 +4% Central costs* (2.1) (2.5) -16% Operating profits
Slide 13: Statutory Profit Reconciliation
Statutory Profit Reconciliation 2009 2008 £m £m Adjusted profits 22.8 23.0 Profits on property disposals - 5.3 Impairment of fixed assets (6.9) - Goodwill impairment (0.4) - Onerous lease provision (0.8) (2.1) Reorganisation costs (0.3) - Pension adjustment - (2.4) Statutory profit before tax 14.4 2
Slide 14: Generation and use of Cash
Generation and use of Cash 2009 2008 £m £m EBITDA 40.2 40.5 Share based payment 1.4 1.6 Working capital / other 0.9 (2.2) Pension (0.8) (8.5) Interest and tax (9.6) (11.3) Capex excluding Pub Acquisitions (14.0) (14.8) Cash generated 18.1 5.3 Pub Acquisitions (10.2) (3.7) Pub Disposals 0.5 8.2 Divid
Slide 15: Borrowings
Borrowings 2009 2008 EBITDA* £40.2m £40.5m Gross borrowings £95.1m £99.4m Net Debt £94.2m £95.5m Net Debt / EBITDA* 2.3x 2.4x Interest Cover* 4.7x 4.6x * Excluding exceptional items
Slide 16: Debt
Debt • £27.5m of committed facilities were undrawn at year end • Since year end spent £25m acquiring seven iconic Central London pubs • Pub acquisitions increase pro forma net debt / EBITDA ratio to 2.8 from 2.3 • Main facilities expire November 2010 • Existing facilities pricing attractive compared
Slide 17: Debt Repayment Profile
Debt Repayment Profile £m Within one year 8.8 At 28 March 2009 78% FY 2010/11 58.9 (2008: 87%) of gross borrowings are at fixed 2023 6.0 or capped rates 2028 19.8 No due date 1.6 Gross borrowings March 2009 95.1 Composite cost of debt Less cash in hand (0.9) is 5.2% (2008: 6.4%) Net debt March 2009
Slide 18: Analysis of Net Finance Costs
Analysis of Net Finance Costs 2009 2008 Comment £m £m Interest receivable (0.2) (0.1) Bank borrowings 3.6 4.5 70% hedged Debentures 2.1 2.1 Fixed rate Preference shares 0.1 0.1 Fixed rate Net Interest on pension liabilities 0.3 (0.2) AA bond rate Lease discount unwind 0.3 - Notional rate Total net f
Slide 19: Weathering The Storm – an update
Weathering The Storm – an update Increasing costs Pass on to Duty customers Better buying Raw Materials Revised menus E-commerce Pay freeze Payroll Labour planning Headcount Smart meters Utility Costs New bottling line Brewery cooling Cost increase for the year is £7.3m Mitigating actions
Slide 20: Annual Capital Expenditure
Annual Capital Expenditure 50 39.0 New Pubs 40 30.6 Fuller’s Inns £m 30 21.7 24.2 18.5 Beer Company 17.5 20 and Central 10 0 2005 2006 2007 2008 2009 2010 E
Slide 21: Simon Emeny, Managing Director, Fuller's Inns
Simon Emeny Managing Director Fuller’s Inns
Slide 22: Key Drivers
Key Drivers • Our results are driven by sector leading LFL growth • We achieve this by focusing on – Outstanding cask conditioned ales, delicious food, great wines and exemplary service – Innovative retail marketing – Operating a high quality estate – Continuing to invest in the fabric of our proper
Slide 23: Fuller's Inns Key Figures
Fuller’s Inns Key Figures 2009 2008 Revenue £150.0m £146.3m +3% Operating Profit* £22.8m £23.9m -5% EBITDA* £32.0m £32.6m -2% * Excluding exceptional items
Slide 24: Retail Split
Retail Split March March Since 5 June + - 2008 2009 Year end 2009 Managed Pubs and Hotels 157 +4 -5 156 +7 163 Tenanted Pubs 203 +1 -1 203 - 203 360 +5 -6 359 +7 366
Slide 25: Tenanted Pubs
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Slide 26: Tenanted Pubs: Trading Patterns
Tenanted Pubs Trading Patterns • Revenue level • Profits level • Average revenue per pub level • LFL profits 2% lower • No transfers to or from Managed Estate • One pub acquired – Lewes Arms
Slide 27: Tenanted Pubs: Supporting our Tenants
Tenanted Pubs Supporting our Tenants • Continued investment in estate • Master Cellarman • Support on Before investment – Marketing activities – Food training – Drinks portfolio • Few rent concessions After investment
Slide 28: Managed Pubs and Hotels
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Slide 29: Managed Pubs and Hotels: LFL Sales
Managed Pubs and Hotels LFL Sales • The recession has slowed growth rates • We continue to report industry leading LFL sales growth Fuller’s Industry* 2005/06 +3.7% +2.6% 2006/07 +8.2% +3.5% 2007/08 +3.6% -0.4% 2008/09 +3.0% +0.3% * Source: internal weighted average estimates of Greene King, Wethers
Slide 30: Managed Pubs and Hotels: Trading Patterns
Managed Pubs and Hotels Trading Patterns • Revenue up 3% • LFL sales up 3.0% (2008: up 3.6%) • Profits declined by 8% • Energy costs alone increased by £1.0m • Food represents 27% of revenue* (2008: 27%) • Accommodation represents 7% of revenue (2008: 7%) • Wet revenue drove growth led by cask ale •
Slide 31: Boutique Pub Bedrooms
Boutique Pub Bedrooms
Slide 32: Recent Managed Pub Acquisitions
Recent Managed Pub Acquisitions • Three pubs from Mitchells & Butlers in February 2009 • Seven pubs from Punch in April / May 2009 • Average purchase price of £3.3m • Excellent geographic fit • Already trading well
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Slide 34: Fuller's Inns Summary
Fuller’s Inns Summary • A strong performance during a deep recession • LFL sales continuing to lead sector • Recent acquisitions enhance the business • The estate is in excellent condition • Business well positioned
Slide 35: Fuller's are very proud to be the new owners of The Scarsdale
Fuller's are very proud to be the new owners of , The Scarsdale. BREWED JUST 3.3 MILES FROM THE SCARSDALE TAVERN. _ WHATEVER YOU DO, TAKE PRIDE.
Slide 36: John Roberts, The Fuller's Beer Company
John Roberts Managing Director The Fuller’s Beer Company
Slide 37: Key Drivers
Key Drivers • Broad portfolio of award-winning brands • Premium positioning • Total commitment to quality • High profile marketing support • Excellent service • Well-balanced business – On Trade – Off Trade – Export – Wine Division
Slide 38: The Fuller's Beer Company Key Figures
The Fuller’s Beer Company Key Figures 2009 2008 Fuller’s Inns £31.8m £30.9m +3% External customers £60.0m £56.8m +6% Total revenue £91.8m £87.7m +5% Operating profit* £8.3m £8.0m +4% EBITDA* £10.4m £9.9m +5% * Excluding exceptional items
Slide 39: Beer Volumes
The Fuller’s Beer Company Beer Volumes 2009 2008 Own Beer ‘000 brls ‘000 brls Free On Trade 120.3 121.9 -1% Fuller’s Inns 37.8 37.9 level Off Trade 35.1 36.3 -3% Exports 22.4 20.2 +11% Total Own Beer 215.6 216.4 level Foreign Beer 103.6 109.5 -5% Total Beer 319.2 325.9 -2%
Slide 40: Comparison with UK Market
The Fuller’s Beer Company Comparison with UK Market Fuller’s UK UK Market Growth Growth* Total Ale -2% -8% Cask Ale -1% -6% Off Trade Ale -3% -3% Total Beer -3% -7% * Source: BBPA
Slide 41: Organic Honey Dew
The Fuller’s Beer Company Organic Honey Dew • The UK’s leading organic beer • Increased marketing investment • High profile poster and press advertising • Major sampling programmes
Slide 42: London Pride
The Fuller’s Beer Company London Pride • The UK’s leading Premium Ale • Continued to increase market share • High profile national advertising – “Whatever you do, take Pride” • Comprehensive promotions and sponsorship programme – Including English Golf Union and London Marathon
Slide 43: London
LONDON as 2 oer 4 Saha wa err DD ey | “LION DE f it tae) eee All Aljoawelly ! — THE CHILLED, ZESTY BLONDE BEER FROM FULLER'S aan an ne
Slide 44: The Fuller's Beer Company Summary
The Fuller’s Beer Company Summary • Own Beer volumes level • Volumes in growth in second half • Continuing to increase market share • Increased investment – marketing and brewery • Fuller’s Beer Company profits up 4%
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Slide 46: Prospects
Prospects • Strong performance in testing times • Hard work from all the team • Long term strategy delivering • Business model is resilient • Strong balance sheet with good cash generation • First nine weeks LFL sales up 1.8% • Caution over economy • Well placed to meet the challenges ahead
Slide 47: Ingredients: hops, barley, yeast, pride
Ingredients: hops, barley, yeast, pride. WHATEVER YOU DO, TAKE PRIDE.
Slide 48: Whatever you do, take pride
? ay ‘ WWW. DRINKAWARE.CO.UK WHATEVER YOU DO, TAKE PRIDE. WWW FULLERS co.uUK
Fuller, Smith & Turner — FY2009 Earnings Presentation on 6ix