INVESTOR PRESENTATION - Manchester United
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INVESTOR PRESENTATION
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
1995. 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
INVESTMENT HIGHLIGHTS
Sports content is Football is #1 Sport Global popularity Own/control our
‘must have’ and PL is #1 League equivalent only remaining businesses
growing MU is #1 Team to Olympics or which are all driven by
World Cup our global brand
3
CONTENT IS KING
CONTENT GENERATORS CONTENT BUYERS
SPORTS TRADITIONAL
VALUE
SELL
STUDIO EMERGING
4 Indicates Private Companies
VALUE OF SPORTS CONTENT IS RISING
New deals command significant premium
% CAGR over previous rights deal
Tenor of new contract (yrs)
19.4%
12.2% 12.2%
10.3%
5.7%
NFL MLB NBA Premier League Premier League
(US Rights) (1) (Live UK Rights)
8 8 9 6 3
5 Source: National Football League, Premier League, Major League Baseball,
National Basketball Association
(1) Based upon press articles
FOOTBALL IS THE MOST POPULAR SPORT IN THE WORLD
Which of the following sports do you follow?
100%
79%
70%
53% 53%
23%
Football Basketball Tennis Formula 1 Athletics / Track & field Golf
6 Source: Based on 2012 Kantar survey and answers based on the responses of 54,000 individuals in 39 countries
PREMIER LEAGUE IS NO.1 LEAGUE - TRULY GLOBAL
85% of the Premier League audiences are driven by international markets
15% 7%
24%
36%
64% FINAL
76%
85% 93%
Domestic International
7 Source: Repucom 2016, Futures Sport & Entertainment 2016, Reuters
MOST SUCCESSFUL TEAM IN THE MOST POPULAR LEAGUE
Premier League Club Trophies Won Year Broadcasting Value
(since 1992 – 1st Season of the Premier League) (yearly values £ billion) - 2016/17 season
2.7
12 20 3
FA Cups English European
3 League Titles Cups
5
1.2 1.1 1.1
1
6 0.7
13 8
1 1
5 3 3 2 1
Chelsea Arsenal Liverpool Manchester Everton England Germany Spain Italy France
City
FAPL FA Cup UCL
8 Source: TV Sports Markets, ESPN, Reuters, SportsPro, Forbes
LARGEST GLOBAL FAN BASE
EUROPE
N. AMERICA 90m ASIA
34m 325m
S. AMERICA
MIDDLE EAST/AFRICA
37m 173m
659 million Manchester United followers worldwide
9 Source: Kantar Sport 2012
THE MOST WATCHED CLUB
9 of the ‘all-time top 10’ Premier League broadcasts feature Manchester United
The Oscars Top Regular Season Finale Top match in
2017 match in 2017 2017 2016/17
32.9m 26.0m 16.5m 122.7m
10
Source: Futures Sport & Entertainment, Nielsen147M CONNECTIONS ON SOCIAL MEDIA
FACEBOOK TWITTER SINA WEIBO
Over Over Over
73.7m 19.0m 9.2m
followers followers* followers
More followers than the NBA’s #MUFC most tweeted sports The No.1 Football Club on
top 4 teams combined hashtag ever Sina Weibo
MANUTD.COM INSTAGRAM LINE
Over Over Over
35.8m 20.7m 14.9m
page views followers followers
The world’s most popular Became the biggest Premier League Became the site’s biggest football club
club website club in 22 days within 4 months
As of February 2018
11 * All language feedsOUR BUSINESS
BUSINESS OVERVIEW
LIVE GAMES VENUE SPONSORSHIP RETAIL, MERCHANDISING, HIGHLIGHTS + OTHER
APPAREL AND LICENSING BESPOKE CONTENT
13
OWNED/CONTROLLEDMULTIFACETED BUSINESS MODEL
2006 2017
MATCHDAY
£111 million - 19%
CAGR 5.2%
COMMERCIAL
£47 million COMMERCIAL
MATCHDAY 28% £276 million - 48%
£71 million CAGR 17.4%
43% BROADCASTING
BROADCASTING £194 million - 33%
£47 million CAGR 14.2%
29%
£165m Revenue £581m Revenue
£40m EBITDA £200m EBITDA
14LIVE GAMES
TRADITIONAL MEDIA
Increasing consumer and advertiser appetite for premium live content
Annual Broadcasting Contract Values
Premier League Domestic Premier League International Champions League (1)
£ million per annum £ million per annum € million per annum
1,712
1,257
1,006 1,038 (2) 1,059
865
719
635
569 593
455
237
2008-10 2011-13 2014-16 2017-19 2008-10 2011-13 2014-16 2017-19 2007-09 2010-12 2013-15 2016-18
16 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 yearsVENUE
OUR MATCHDAY BUSINESS
75,669 2M >8,000 180,000
SEAT STADIUM ANNUAL ATTENDANCE EXECUTIVE CLUB SEATS MEMBERSHIPS
99% OCCUPANCY FOR PREMIER LEAGUE GAMES SINCE 1998/1999
Ticket Allocation (in ‘000s)
Season Tickets 55
Executive Clubs (Suites & Box Seats) 8
Away Fans 3
Other (1) 4
Sub-total 70
Matchday VIP 3
Available for Official Members 2
Total 75
18 Source: European Football Statistics; Manchester United
(1) Includes supporter clubs, sponsors, etc.COMMERCIAL
COMMERCIAL GROWTH
£ million
1 9 . 3% 276
1 7=
’13-’ 268
CAGR 11 9
197
189 97 104
10
16
152 32
37
23
39
155 160 163
136
91
2013 2014 2015 2016 2017
Sponsorship Retail, Merchandising, Apparel & Product Licensing Mobile & Content
20SPONSORSHIP - NO.1 MARKETING PLATFORM
We enable our partners to amplify the marketing & growth of their businesses
Brand Affinity & Global Reach & Unique Access to Players & Marketing Support &
Association with Success Media Visibility Aon Training Complex/ Global Activations
Old Trafford
21SEGMENTATION STRATEGY
TOURS Annual Value of Shirt Sponsorship
(£ million)
REGIONALS
GLOBALS 50
40
30
49.2
20
10 19.6
14.1
8.0
0
2000/06 2006/10 2010/14 2014/21
22RETAIL, MERCHANDISING, APPAREL & PRODUCT LICENSING
RETAIL, MERCHANDISING, APPAREL & PRODUCT LICENSING
adidas Owned/Controlled by Manchester United
CO-BRANDED PRODUCTS IN-STORE ECOMMERCE MONO BRANDED
LICENSING
24RECORD BREAKING KIT DEAL WITH ADIDAS
£750 million minimum guarantee - 10 year contract expires 2025
£ million per year
75 *
70 **
62 60 ***
54
30 30
25
12
Manchester United Barcelona Real Madrid Chelsea Bayern Munich Arsenal Tottenham Hotspur Liverpool Manchester City
2015/16 -2024/25 2016/17 -2025/26 2015/16 -2024/25 2017/18 - 2032/33 2015/16 - 2025/26 2014/15 - 2018/19 2017/18 - 2025/26 2015/16 - 2017/18 2013/14 - 2018/19
Largest kit manufacturer or sponsorship deal in sports
*Represents the average payment of the £750 million minimum guarantee over the 10 year term subject to adjustments
**Reported increase for two years from 2016/17 onwards to c€80-85m euros per annum with the deal expected to rise thereafter to €105m per annum
25 ***Chelsea paid £67m to terminate their agreement with Adidas early. Nike have all the retail, ecommerce and licensing in the new deal meaning the like-for-like value is lower than £60m.
Source: press filingsHIGHLIGHTS + OTHER BESPOKE CONTENT
OUR DIGITAL MEDIA OPPORTUNITY
Bespoke Content
Highlights
Social Media
Platforms
New Digital Sponsorship
Media Platform & Advertising
Mobile Apps
E-commerce
27COSTS
INDUSTRY UPDATE
UEFA Financial Fair Play (FFP) Aggregate European top division clubs Operating Profit
(€ million)
- Break-even requirement in force 2013/14
- Clubs should have no overdue payments FFP break-even rules
come into effect
Complemented by FAPL Financial Regulations 799
727
- Break-even test similar to FFP 339
- Short-term cost controls
- £7 million limit on FAPL central funds may be used to (112)
-112
(249)
-249
increase player wages per annum for the 2017 to (336)
-336 (382)
-382
2019 cycle
2009 2010 2011 2012 2013 2014 2015
29 Source: ECA September 2016PLAYER EXPENDITURE & ACCOUNTING
Last 15 years net player capital expenditure (£ million)
• Blend of youth & experience 140
- Approximately one quarter of our first team
members from academy 108
- Carried on the balance sheet at zero book
value 77
140
97 100 95
45
• Recent acquisitions 79
- Summer 2016 – 4 players 43
33
50
36
13 29 27 30
- Summer 2017 – 4 players 12 8 11 11
(3)
-3
(18) -44
(44)
• Player registrations
- Transfer fee booked on balance sheet (50)
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
F
/18
/01
/02
/03
/04
/05
/06
/07
/08
/09
/10
/11
/12
/13
/14
/15
/16
/17
- Transfer fee amortised over life of contract
17
06
16
00
01
02
03
04
05
07
08
09
10
11
12
13
14
15
- Remaining book value amortised over length of
new contract when signed
30TOTAL WAGES
£ million
45%
45%
50%
51%
50%
263
215 233
203
181
2013 2014 2015 2016 2017
Total Wages as % of Total Revenue
31ADJUSTED EBITDA
£ million
34%
37%
No European
Football
30%
30%
29%
192 200
130 120
109
2013 2014 2015 2016 2017
Adjusted EBITDA margin
32 Note: Adjusted EBITDA is adjusted for profit on disposal of players’ registrations and exceptional operating expenses
Note: 2015 was impacted from lack of European footballAPPENDIX
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)
Broadcasting
• FAPL (Domestic & International) contracted out to 2019
• UCL contracted out to 2018 ew shirt2.jpg
Matchday
• 63,000 of 76,000 seats are seasonally pre-sold
34TOTAL REVENUE
£ million
1 3.4%
-’1 7 =
R ’13 581
C A G
No European 515
Football
433
395 276
363 268
189
152 197
194
102 136 140
108
109 108 91 107 111
2013 2014 2015 2016 2017
Matchday Broadcasting Commercial
35 Note: 2015 was impacted from lack of European footballTHE IMPORTANCE OF COMMERCIAL REVENUES
2015/16 Commercial Revenue 2015/16 Adjusted EBITDA
52% 37%
£268m £192m
32% 24%
£99m £66m
15/16 Top 7 15/16 Top 7
Average excluding MU Average excluding MU
Commercial Revenue as % of Total Revenue Adjusted EBITDA Margin
36 Source: Company filings, Swiss RambleBALANCE SHEET & CASH FLOW SUMMARY
• Strong balance sheet with Key Balance Sheet Data & Leverage Statistics (£ million)
ample liquidity
- Undrawn RCF of £125
million YE 2014 YE 2015 YE 2016 YE 2017
(1)
• New USD Senior Secured Notes
of $425 million Cash & cash equivalents 66.4 155.8 229.2 290.3
- Maturity June 2027 at 3.79%
• Amended and extended Term Total borrowings 341.8 411.0 490.1 503.4
Loan facility of $225 million
- Maturity June 2025, no
Net Debt : Adjusted
amortisation at EBITDA
2.1x 2.1x 1.4x 1.1x
LIBOR +1.25% - 1.75% p.a.
37 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 $650mRECONCILIATION TO ADJUSTED EBITDA
£‘000 2014 2015 2016 2017
Profit/(loss) for the period 23,835 (1,168) 36,371 39,177
Adjustments
Net finance costs 27,412 35,215 20,017 24,277
Tax expense/(credit) 16,668 (2,821) 12,462 17,361
Depreciation 8,665 10,324 10,079 10,228
Amortization of players’ registrations 55,290 99,687 88,009 124,434
EBITDA 131,870 141,237 166,938 215,477
Adjustments
(Profit)/loss on disposal of players registrations (6,991) (23,649) 9,786 (10,926)
Operating expenses — exceptional items 5,184 2,336 15,135 (4,753)
Adjusted EBITDA 130,063 119,924 191,859 199,798
38MANCHESTER UNITED DELIVERS:
BRAND ENGAGEMENT
Social Media Promotion - Facebook
• Most successful Deadpool video for 20th
Century Fox
• Launch video 13.1 million views
• 645k likes, 311k of which featured on the
original post
• 152k shares, most-shared post of all time
• 78k comments, 35k of which featured on
the original post
39 Source: Facebook
Total number of likes, shares and comments based on original and secondary postsMANCHESTER UNITED DELIVERS:
BRAND VALUE
Concha y Toro named the World’s Most Admired Wine Brand
• Study by Drinks International
• Concha Y Toro achieved the No.1 ranking a year after
signing the Partnership with Manchester United
• Remained the World’s Admired Wine Brand for
3 consecutive years
• Manchester United specifically named as a reason
40MANCHESTER UNITED DELIVERS:
PROPENSITY TO BUY
New Era - Partnership Launch
• 30 million impressions from digital content
surrounding launch
• 17x increase in daily twitter followers
following partnership launch
• 210% increase in traffic on neweracap.co.uk
during the 1st week of the partnership
• Every 20 seconds a piece of headwear was
purchased in the club megastore on the day
of the Manchester Derby
41 Source: Manchester United Fan Survey Oct-14 – Oct 15. Indexed to 100MANCHESTER UNITED SUMMER SIGNINGS
ZLATAN IBRAHIMOVIĆ VICTOR LINDELÖF ROMELU LUKAKU NEMANJA MATIĆ
• Only player to have won 13 • Made 47 appearances in • Aged 24 and made his senior • 2012/13 Primiera Liga Player
domestic titles in four different 2016/17 for Benfica who won professional debut for Belgium of the Year
leagues – nine in the last 11 the Primiera Liga and two in 2010. Has since earned over
seasons domestic cups 50 caps • Second in the FIFA Puskas
Award in 2012/13
• In 2014, voted the Greatest • Won the European under-21 • In 2016/17, named in the
Swedish Footballer of all Time Championship with Sweden in Professional Footballers • 2014/15 Professional
2015 successfully converting Association Team of the Year, Footballers Association Team
• Top goalscorer for Manchester Sweden’s fifth and last penalty nominated for the six player of the Year
United and nominated for the against Portugal in a penalty shortlist for PFA Player of the Year
PFA Player of the Year in shoot-out and was named in & PFA Young Player of the Year
2016/17 Season the Team of the Tournament
• Holds the club record for the
most goals for Everton (68) over
42 a four season period#POGBACK: RECORD BREAKING
Revolutionary Transfer Social Media Campaign
• Most retweeted MU tweet of all time
• All-time top MU post on Instagram
• Most read story ever on MU websites
• All-time high Google searches for Pogba
• Greater number of interactions than rival clubs’ most popular signing
Pogba vs. Other Clubs’ Signings
Interactions on Instagram
700 635k
350
219k
145k 112k 96k 56k
0
Paul Pogba Luiz Suarez Gonzalo Higuin Gareth Bale Cesc Fabregas Kevin De Bruyne
43 Source: Instagram, Socialbakers
Note: Comparing the most popular signing-day post for each player transferJOSE MOURINHO
• Appointed as Manager in May 2016
• Won 3 trophies in his first Season with Manchester United
- 2 domestic and the Europa League’
• Won a trophy in every calendar year between 2003 and 2012
• 23 trophies, including:
- Two Champions League titles
- Three Premier League titles
- Two Serie A titles
- One Europa League title
- One La Liga title
- Two Portuguese league titles
• Numerous personal accolades, including:
- One FIFA World Coach of the Year award
- Two UEFA Manager of the Year awards
- Three Premier League Manager of the Year awards
44
- Two Serie A Manager of the Year awardsYou can also read
