INVESTOR PRESENTATION

Transcription

1 INVESTOR PRESENTATION

2 IMPORTANT DISCLOSURE This presentation contains estimates and forward-looking statements made pursuant to the safe harbour provisions of the Private Securities Litigation Reform Act of Forward-looking statements are based on our current expectations and estimates with respect to current and future events and trends which affect or may affect our business operations. All statements that address future operating, financial or business performance or our strategies or expectations are forward-looking statements. In some cases, you can identify these statements by forward-looking words such as may, might, will, could, would, should, expect, plan, anticipate, intend, seek, believe, estimate, predict, potential, continue, contemplate, possible and other comparable terminology. These statements are subject to many risks, uncertainties and factors relating to our operations and business environment, which may cause our actual results to be materially different from any future results, express or implied, by such statements. Among these factors are (1) our ability to maintain and enhance our brand and reputation; (2) our ability to attract and retain key personnel, including players; (3) the performance and popularity of our first team; (4) our ability to properly manage our growth; (5) our ability to maintain, train and build an effective international sales and marketing infrastructure; (6) the negotiation and pricing of key media contracts; (7) our ability to maintain strong relationship with certain third parties; (8) our ability to deal with competition in Europe and internationally; (9) our ability to adequately protect our intellectual property; and (10) the effectiveness of our digital media strategy. Additional information concerning these and other factors can be found in Manchester United plc s filings with the United States Securities and Exchange Commission. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. It should be remembered that the price of the Class A ordinary shares and any income from them can go down as well as up. We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events and/or otherwise, except to the extent required by law. This presentation contains a discussion of EBITDA and Adjusted EBITDA, which are non-ifrs measures and are not uniformly or legally defined financial measures. EBITDA is defined as profit/(loss) for the period from continuing operations before net finance costs, tax credit/(expense), depreciation, and amortization of players registrations, and Adjusted EBITDA is defined as EBITDA adjusted for profit on disposal of players registrations and operating expenses exceptional items. Adjusted EBITDA is included in this presentation because it is a measure of our operating performance and our management believes that Adjusted EBITDA is useful to investors because it is frequently used by securities analysts, investors and other interested parties in their evaluation of the operating performance of companies in industries similar to ours. We have provided reconciliations of EBITDA and Adjusted EBITDA to the most directly comparable IFRS measures in the Appendix to this presentation. EBITDA and Adjusted EBITDA should not be considered substitutes for comparable measures prepared in accordance with IFRS. EBITDA and Adjusted EBITDA, as determined and measured by us, should also not be compared to similarly titled measures reported by other companies. 2

3 INVESTMENT HIGHLIGHTS Sports content is must have and growing Football is #1 Sport PL is #1 League MU is #1 Team Global popularity equivalent only to Olympics or World Cup Own/control our remaining businesses which are all driven by our global brand 3

4 CONTENT IS KING CONTENT GENERATORS SPORTS CONTENT BUYERS TRADITIONAL VALUE SELL STUDIO DISRUPTORS/OTT 4 Indicates Private Companies

5 VALUE OF SPORTS CONTENT IS RISING Current deals commanded significant premiums % CAGR over previous rights deal Tenor of new contract (yrs) 18.7% 10.3% 12.2% 12.2% 5.7% NFL MLB NBA Premier League Champions League (US Rights) (1) Source: National Football League, Premier League, Major League Baseball, National Basketball Association (1) Based upon press articles

6 PREMIER LEAGUE IS NO.1 LEAGUE - TRULY GLOBAL 85% of the Premier League audiences are driven by international markets 15% 36% 24% 7% 85% 64% FINAL 76% 93% Domestic International 6 Source: Repucom 2016, Futures Sport & Entertainment 2016, Reuters

7 MOST SUCCESSFUL TEAM IN THE MOST POPULAR LEAGUE Premier League Club Trophies Won (since st Season of the Premier League) Year Broadcasting Value (yearly values billion) /18 season FA Cups English League Titles 1 3 Chelsea Arsenal Liverpool Manchester Everton City FAPL FA Cup UCL 1 3 European Cups England Germany Spain Italy France 7 Source: TV Sports Markets, ESPN, Reuters, SportsPro, Forbes

8 LARGEST GLOBAL FAN BASE N. AMERICA 34m EUROPE 90m ASIA 325m S. AMERICA 37m MIDDLE EAST/AFRICA 173m 659 million Manchester United followers worldwide 8 Source: Kantar Sport 2012

9 THE MOST WATCHED CLUB 19 of the all-time top 20 Premier League broadcasts feature Manchester United The Oscars 2018 NBA Finals 2017/18 season Finale 2017 Europa League Final 2016/ m* 42.6m 16.5m 122.7m 9 *26.5m US audience multiplied by estimated global uplift of 76%. Source: Futures Sport & Entertainment, Nielsen

10 156M CONNECTIONS ON SOCIAL MEDIA FACEBOOK TWITTER SINA WEIBO Over Over Over 73.4m 21.0m 9.3m followers followers* followers More followers than the NBA s top 4 teams combined As of October 2018 * All language feeds The No.1 Football Club on Sina Weibo INSTAGRAM LINE YOUTUBE Over Over Over 23.6m 15.4m 1.1m followers followers subscribers Became the biggest Premier League club in 22 days 10 #MUFC most tweeted sports hashtag ever Became the site s biggest football club within 4 months Became the fastest growing sports club channel to ever launch on Youtube

11 OUR BUSINESS

12 BUSINESS OVERVIEW LIVE GAMES VENUE SPONSORSHIP RETAIL, MERCHANDISING, APPAREL AND LICENSING DIGITAL MEDIA 12 OWNED/CONTROLLED

13 MULTIFACETED BUSINESS MODEL MATCHDAY 101 million 40% COMMERCIAL 64 million 25% BROADCASTING 91 million 35% MATCHDAY 110 million 18% BROADCASTING 204 million 35% COMMERCIAL 276 million 47% 256m Revenue 81m EBITDA 590m Revenue 177m EBITDA 13

14 HIGH REVENUE VISIBILITY Commercial 750m kit deal with adidas contracted out to 2025 $559m shirt deal with Chevrolet contracted out to 2021 Training kit deal with Aon contracted out to 2021 Typically deals are 3-5yrs (with no playing performance clauses) 14 Broadcasting FAPL (Domestic & International) contracted out to 2019 with Domestic agreed for next three year cycle commencing 2019 UCL contracted out to 2021 Matchday 63,000 of 76,000 seats are seasonally pre-sold ew shirt2.jpg

15 LIVE GAMES

16 TRADITIONAL MEDIA Increasing consumer and advertiser appetite for premium live content Annual Broadcasting Contract Values Premier League Domestic million per annum Premier League International million per annum Champions League million per annum (1) 1,712 1,950 1,257 1,006 1,038 (2) 1, Source: Deloitte, FAPL, UEFA, TV Sports Markets, Press Reports (1) Amount distributed to clubs participating in the competition (2) Based upon guidance from FAPL. Average over three years

17 VENUE

18 OUR MATCHDAY BUSINESS 74,879 2M >8,000 SEAT STADIUM ANNUAL ATTENDANCE EXECUTIVE CLUB SEATS >220,000 MEMBERSHIPS 99% OCCUPANCY FOR PREMIER LEAGUE GAMES SINCE 1998/1999 Ticket Allocation (in 000s) Season Tickets 53 Executive Clubs (Suites & Box Seats) 8 Away Fans 3 Other (1) 4 Sub-total 70 Matchday VIP 2 Available for Official Members 4 Total Source: European Football Statistics; Manchester United (1) Includes supporter clubs, sponsors, etc.

19 COMMERCIAL

20 SPONSORSHIP - NO.1 MARKETING PLATFORM We enable our partners to amplify the marketing & growth of their businesses Brand Affinity & Association with Success Global Reach & Media Visibility Unique Access to Players & Aon Training Complex/ Old Trafford Marketing Support & Global Activations 20

21 COMMERCIAL million Sponsorship Retail, Merchandising, Apparel & Product Licensing 21

22 SEGMENTATION STRATEGY Annual Value of Shirt Sponsorship ( million) TOURS REGIONALS GLOBALS / / / /21

23 RETAIL, MERCHANDISING, APPAREL & PRODUCT LICENSING

24 RETAIL, MERCHANDISING, APPAREL & PRODUCT LICENSING adidas 75m p.a. to 2025 Owned/Controlled by Manchester United CO-BRANDED PRODUCTS IN-STORE ECOMMERCE MONO BRANDED LICENSING 24

25 DIGITAL MEDIA

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27 OUR DIGITAL MEDIA OPPORTUNITY Bespoke Content Highlights Social Media Platforms New Digital Media App and Site Sponsorship, advertising & venue MUTV App & Connected TV Platforms E-commerce 27

28 COSTS

29 INDUSTRY UPDATE UEFA Financial Fair Play (FFP) - Break-even requirement in force 2013/14 - Clubs should have no overdue payments - Enhanced reporting for clubs with a net spend of greater than 100m in a window Aggregate European top division clubs Operating Profit FFP break-even rules come into effect ( million) 1,400 - Consistency in applied accounting principles Fair market value of sponsorship agreements (382) (112) Source: ECA September 2017

30 PLAYER EXPENDITURE & ACCOUNTING Blend of youth & experience - Approximately one quarter of our first team members from academy - Carried on the balance sheet at zero book value Last 5 years net player capital expenditure ( million) Recent acquisitions - Summer players - January player - Summer players Player registrations Transfer fee booked on balance sheet - Transfer fee amortised over life of contract - Remaining book value amortised over length of new contract when signed 13/14A 14/15A 15/16A 16/17A 17/18A 18/19E 30

31 TOTAL WAGES million 50% 45% 50% 51% 45% Total Wages as % of Total Revenue 31

32 ADJUSTED EBITDA million Europa League Win No European Football 37% 34% 30% 30% 30% Adjusted EBITDA margin 32 Note: Adjusted EBITDA is adjusted for profit on disposal of players registrations and exceptional operating expenses

33 APPENDIX

34 TOTAL REVENUE million CAGR = 6.4% No European Football Matchday Broadcasting Commercial 34 Note: 2015 was impacted from lack of European football

35 THE IMPORTANCE OF COMMERCIAL REVENUES 2016/17 Commercial Revenue 47% 275m 2016/17 Adjusted EBITDA 34% 200m 31% 117m 24% 84m 16/17 Top 7 Average excluding MU 16/17 Top 7 Average excluding MU Commercial Revenue as % of Total Revenue Adjusted EBITDA Margin 35 Source: Company filings

36 BALANCE SHEET & CASH FLOW SUMMARY Strong balance sheet with ample liquidity - Undrawn RCF of 125 million USD Senior Secured Notes of $425 million - Maturity June 2027 at 3.79% Key Balance Sheet Data & Leverage Statistics ( million) YE 2015 YE 2016 YE 2017 YE 2018 Cash & cash equivalents (1) Term Loan facility of $225 million - Maturity June 2025, no amortisation at LIBOR +1.25% % p.a. Total borrowings Net Debt : Adjusted EBITDA 2.1x 1.4x 1.1x 1.4x 36 Note: Secured Term Loan facility margin based on total net leverage ratio at the applicable time Note: Adjusted EBITDA is adjusted for profit on disposal of players registrations and exceptional operating expenses (1) Increase in Total borrowings from 2016 impacted by movement in GBP / USD FX rate. Gross borrowings remained consistent at $650m

37 RECONCILIATION TO ADJUSTED EBITDA Profit/(loss) for the period (1,168) 36,371 39,177 (37,270) Adjustments Net finance costs 35,215 20,017 24,277 18,038 Tax (credit)/expense (2,821) 12,462 17,361 63,367 Depreciation 10,324 10,079 10,228 10,755 Amortization of players registrations 99,687 88, , ,380 EBITDA 141, , , ,270 Adjustments (Profit)/loss on disposal of players registrations (23,649) 9,786 (10,926) (18,119) Exceptional expense/(credit) 2,336 15,135 (4,753) 1,917 Adjusted EBITDA 119, , , ,068 37

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