Marston : Interim results presentation - 26 June 2020

Interim Results 2020

Ralph Findlay, Chief Executive OfficerAndrew Andrea, Chief Financial Officer

Ralph Findlay

Chief Executive Officer

Introduction

• •Material impact from COVID-19; clear recovery action plans

• •Liquidity secured for disruption beyond financial year end

  • •Additional bank facilities in place

  • •Agreement with bondholders on covenant waivers and amendments

• •Transformational value-accretive Beer Company transaction

  • • Creation of Carlsberg Marston's Beer Company

• •Pub estate well placed despite COVID-19 uncertainties

  • •c90% freehold estate, high proportion of pubs have outside trading areas

  • •Broad mix of food-led and wet-led pubs

COVID-19: impact

• •All pubs and 28 lodges* closed since 20 March

  • •Loss of own pub revenues

  • •Loss of drinks sales into national pub groups and independent free trade

  • •Estimated revenue impact c£40m in March

  • •Pre-COVID-19 revenues broadly in line with LY

• •Prioritise cash preservation

  • •93% of Group employees furloughed-99% of pub teams

  • •Temporary pay reductions of at least 20% across the Group

  • •All non-essential spend, including capex, postponed

  • •Case-by-case support for franchisees, tenants and lessees

  • •Suspension of dividends for financial year 2020

*with the exception of two lodges which remained open to house NHS staff/key workers

Disciplined approach to cash preservation

COVID-19: current position

• •Working closely with UKH and BBPA

• •Government support critical

  • •Furlough scheme reducing cash burn by c£2m per week

  • •Business rates relief: c£2.5m per month saving

  • •Deferral of indirect tax payments to 2021

  • •Business grants support to tenants and lessees

• •Working closely with key suppliers and stakeholders

  • •Deferred payment terms agreed through consultation

  • •Constructive dialogue with landlords on leasehold properties

• •Significant increase in off-trade sales

  • •Take Home-very strong trade since April with volumes up 55%

  • •Not sufficient to offset loss of on-trade volumes

Positives: active industry agreement and strong off-trade sales