Fuller, Smith & Turner P.l.c. Class A · LSE:FSTA
Fuller, Smith & Turner P.l.c. Class A — H1 2012/13 Earnings Presentation
39 slides from Fuller, Smith & Turner P.l.c. Class A's earnings presentation, November 2012
Slide 1: Fuller, Smith and Turner PLC Half Year Results
Fuller, Smith and Turner PLC Half Year Results for the 26 weeks ended 29 September 2012
Slide 2: Michael Turner, Chairman
Michael Turner Chairman
Slide 3: Agenda
Agenda • Strategy and Corporate Progress • Financial Results • Operations • 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 • Continue to expand the business
Slide 5: Financial Highlights
Financial Highlights • Revenue up 8% to £137.9m • Adjusted PBT up 4% to £17.1m • Adjusted EPS up 8% to 23.14p • EBITDA up 8% to £26.9m • Interim dividend up 6% to 5.35p • Net debt / EBITDA at 2.7x on a pro forma basis
Slide 6: Corporate Progress
Corporate Progress • 4 pub acquisitions completed since April • Managed Pubs and Hotels LFL sales up 1.6% • Managed Pubs and Hotels profits up 5% • Tenanted Inns profits up 19% • Tenanted Inns LFL profits up 1% • Total beer volumes up 1% Profit measures are operating profits excluding exceptional it
Slide 7: Adjusted Half Year Profits
Adjusted Half Year Profits Five year growth of 41% 20 18 16.5 17.1 15.7 16 14.1 14 12.0 12 £m 10 8 6 4 2 -1% +18% +11% +5% +4% 0 2008 2009 2010 2011 2012 Adjusted profits are profits before tax excluding exceptional items
Slide 8: Adjusted Half Year EPS
Adjusted Half Year EPS Five year growth of 52% 25 23.1 21.5 20.0 20 Pence per 40p share 18.0 15.3 15 10 5 +1% +17% +11% +8% +8% 0 2008 2009 2010 2011 2012 Excluding exceptional items
Slide 9: Interim Dividend
Interim Dividend Five year growth of 91% 6 5.35 5.05 5 4.75 4.50 Pence per 40p share 4 3 2.85 2 1 +2% +5%# +6% +6% +6% 0 2008 2009 2010 2011 2012 # 2009 % increase ignores the 1.50p rebasing of the interim dividend
Slide 10: Fuller's Contribution to Government Revenues
Fuller’s Contribution to Government Revenues As % of Year to September 2012 £m revenue Group revenue (VAT incl) for the year 315.2 Taxes paid for the year: Alcohol duty 44.8 VAT 32.4 PAYE and NIC 18.1 Corporation tax 8.1 Business rates 7.8 Stamp duty 1.9 Premise, TV and other licences 0.4 Fuel duty
Slide 11: James Douglas, Finance Director
James Douglas Finance Director
Slide 12: Group Performance
Group Performance H1 2012 H1 2011 £m £m Revenue 137.9 128.2 +8% Operating costs* (118.1) (109.5) +8% Operating profit* 19.8 18.7 +6% Net finance costs* (2.7) (2.2) +23% Adjusted profit* 17.1 16.5 +4% Depreciation & amortisation 7.1 6.3 +13% EBITDA* 26.9 25.0 +8% * Excluding exceptional items
Slide 13: Reconciliation to Statutory Profit
Reconciliation to Statutory Profit H1 2012 H1 2011 £m £m Adjusted profit 17.1 16.5 +4% Exceptional items 1.0 (0.5) Profit before tax 18.1 16.0 +13% Tax on adjusted profit (4.2) (4.4) -5% Exceptional tax 2.0 1.4 Profit after tax 15.9 13.0 +22% Adjusted EPS 23.14p 21.48p +8% Basic EPS 28.52p 23.07p +2
Slide 14: Managed Pubs and Hotels
Managed Pubs and Hotels Key Figures H1 2012 H1 2011 LFL sales +1.6% +3.9% Revenue £86.1m £78.6m +10% Operating costs* £75.2m £68.2m +10% Operating profit* £10.9m £10.4m +5% Operating margin 12.7% 13.2% Depreciation & amortisation £4.8m £4.3m +12% EBITDA* £15.7m £14.7m +7% * Excluding exceptional ite
Slide 15: Operating Margin Bridge
Operating Margin Bridge • Managed Pubs and Hotels operating margin down 0.5% on last half year 14.0 13.5 Managed Pubs and Hotels % 13.0 operating margin 12.5 12.0 H1 2011/12 Payroll % Operating costs Closed periods H1 2012/13 (incl acquisitions) Key factors: • Payroll % has reduced in first half due
Slide 16: Tenanted Inns
Tenanted Inns Key Figures H1 2012 H1 2011 LFL profits +1% +1% Revenue £15.7m £13.7m +15% Operating costs* £9.5m £8.5m +12% Operating profit* £6.2m £5.2m +19% Operating margin 39.5% 38.0% Depreciation £0.8m £0.8m Level EBITDA* £7.0m £6.0m +17% * Excluding exceptional items
Slide 17: Fuller's Beer Company
Fuller’s Beer Company Key Figures H1 2012 H1 2011 Own Beer volumes -2% +2% Foreign Beer volumes +5% level Total Beer volumes +1% +1% Revenue £57.7m £54.9m +5% Operating costs £53.4m £50.3m +6% Operating profit £4.3m £4.6m -7% Operating margin 7.5% 8.4% Depreciation £1.5m £1.2m +25% EBITDA £5.8m £5.8
Slide 18: Generation and Use of Cash
Generation and Use of Cash H1 2012 H1 2011 £m £m EBITDA 26.9 25.0 Non-cash share and option award charges 1.0 1.0 Working capital / other (2.4) (0.2) Pension (0.3) (0.5) Interest and refinancing costs (2.7) (2.1) Tax (3.8) (4.4) Cash available for discretionary spend 18.7 18.8 Capex on existing esta
Slide 19: Borrowing Capacity
Borrowing Capacity H1 2012 YE 2012 H1 2011 £m £m £m • £150m committed across four banks 37.0 34.5 • Freedom to add further funding for acquisitions Available 50.5 Committed Facilities • 80% of period end gross Bank debt 112.3 114.7 borrowings fixed or capped 68.8 Other net • Estimated blended cost d
Slide 20: Annual Capital Expenditure
Annual Capital Expenditure 80 75 70 60 Development costs 50 on acquired pubs 44 £m 40 Committed pub purchases 32 30 24 Fuller's Inns 19 20 12 Fuller's Beer 10 Company and Central 0 2008 2009 2010 2011 2012 2013E 2013E represents the current estimate of capital expenditure for the 52 weeks to 30 Marc
Slide 21: Simon Emeny, Group Managing Director
Simon Emeny Group Managing Director
Slide 22: Fuller's Inns
Fuller’s Inns Managed estate over 5 years Tenanted estate over 5 years No of Managed pubs No of Tenanted pubs Turnover per pub £'000 Turnover per pub £'000 180 520 215 76 74 498 74 175 500 210 72 473 70 170 480 70 459 205 165 460 67 68 442 66 160 440 66 200 64 419 64 155 420 195 62 150 400 60 152 16
Slide 23: Acquisitions Strategy: Execution
Acquisitions Strategy: Execution Selection Objectives Update Criteria FY 2011/12 acquisitions Further Demographics enhance quality of estate London (11 pubs) South East (19 pubs) Property 5 Managed pubs 4 Managed pubs 2 Managed 2 Managed Increase development Sites development sites Opportuni
Slide 24: FY2012 Managed Acquisitions: London
FY2012 Managed Acquisitions London • We have now completed the substantial refurbishments of 3 sites, including: The Hand & Flower, Kensington Olympia • Opportunity: improve bedrooms and function areas • After refurbishment: focus on food, cask ale and wine sales has already seen results • “Staff we
Slide 25: FY2012 Managed Acquisitions: South East
FY2012 Managed Acquisitions South East • 2 of the 4 sites have seen significant investment already, including: The Market Stores, Reigate • Opportunity: great landmark building in heart of the town centre • After refurbishment: now attracting professionals and affluent locals • “Fuller’s have done a
Slide 26: FY2012 Development Sites
FY2012 Development Sites • These sites have all seen significant redevelopment, involving closed weeks, reopening costs and initially lower margins • Recent trading is very positive and growth will continue in H2 Profile Progress Britain’s largest station pub Reopened March 2012 The Parcel Yard, Kin
Slide 27: Acquisitions - Tenanted
Acquisitions - Tenanted • Two freehold properties purchased in September 2012 Grand Central • Great fit geographically for our portfolio – The Grand Central in Brighton and The Windmill in Waterloo The Grand Central, Brighton Windmill • High footfall, city centre locations near transport hubs • Tota
Slide 28: Acquisitions – Managed
Acquisitions – Managed • Two freehold pubs purchased in November 2012 for a total cost of £7.5m Pics • Consolidating our position in Bath alongside The Boater purchased last year The Huntsman, Bath • The Huntsman and The Crystal Palace are both historic, Grade II listed properties in prime locations
Slide 29: Managed Pubs and Hotels: LFL Growth Rates
Managed Pubs and Hotels LFL growth rates 8% 1% 28% Drinks +0.5% Food +2.2% Accommodation +10.8% 63% Drinks TOTAL +1.6% Food Accommodation Other • Food and Accommodation continue to lead growth • Our recent investment in accommodation is showing good returns driven by average room rate growth • Total
Slide 30: Digital Progress
Digital Progress • New pub websites launched 31 May 2012 • Shortlisted for BIMA* award • 154% increase in unique visitors to Fuller’s websites (October 2012 vs 2011) • Covers generated online have doubled on a LFL basis – incremental business • 87% more visitors to hotel pages than a year ago • 23%
Slide 31: Tenanted Inns
Tenanted Inns Philosophy Action • Maintain excellent working • Open Days and brewery tours for new relationships with our Tenants Tenants • Work with Tenants to develop • Fuller’s Wi-Fi extended to Tenants this their offer and drive trade year – pubs can provide free Wi-Fi to their customers • Enhan
Slide 32: Tenanted Inns: Average EBITDA per Pub
Tenanted Inns Average EBITDA per pub £’000 • Average EBITDA per pub +8% 34 33.3 • Margin increase of 1.5% 32 • 17 acquisitions last year 30.8 contribution of £1.0m in H1, 30 28.6 28.5 29.2 in line with expectations 28 26 24 22 -0.4% +2.2% +5.5% +8.3% 20 2008 2009 2010 2011 2012 Four year growth of 1
Slide 33: The Fuller's Beer Company
The Fuller’s Beer Company BEERCO INTRO PICTURE
Slide 34: The Fuller's Beer Company
The Fuller’s Beer Company • London Pride remains the UK’s leading premium cask ale • Fuller’s well positioned to benefit from consumer trend for experimentation as highly flexible, sophisticated brewery • Strong performance of seasonal and ‘super seasonal’ beers which add variety to the bar. Wild Ri
Slide 35: Off Trade
Off Trade • Volumes sold to supermarkets and multiple retailers have increased 13% in the first half • Fuller’s range has a strong presence in major Off Trade outlets • Significant further opportunity in this important channel • Brewery fully invested to further exploit opportunities in Off Trade
Slide 36: Exports
Exports • Export volume growth continues in existing and new markets • Balance of Export market portfolio improving as a result • Significant opportunities still remain in both areas • Strength of ‘brand London’ during 2012 a significant factor in Export performance
Slide 37: Summary
Summary • Robust trading in what was an interesting first six months • Following an exceptional period of investment, our acquisitions are starting to deliver excellent returns • Adjusted profits increased by 4% • Managed Pubs and Hotels profits up 5% with 1.6% LFL sales growth • Tenanted Inns profi
Slide 38: Handover slide
Handover slide
Slide 39: Prospects
Prospects • A strong Group performance • Managed LFL sales up 2.1% for 33 weeks • Total beer volumes level for 33 weeks • Tenanted LFL profits level for 33 weeks • The economic outlook remains uncertain • Business is well placed for the future, with a healthy balance sheet and successful long term a
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