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
I N V E STM E NT H I G H LI G HTS
Value of content is Football is The most watched Commercial
rising - sport is the the world’s Club with the revenues driven by
“must-have” content No.1 sport biggest fanbase a truly global brand
3
659 M I LLI O N FO LLO W E R S W O R LD W I D E
EUROPE
N. AMERICA 90M
34M ASIA
MIDDLE EAST
325M
25M
S. AMERICA AFRICA
37M 147M
4 Source: Kantar Sport 2012
TH E M O ST WATC H E D C LU B
In 2013/14, Manchester United’s global audience was 3 billion
The 2013 NBC’s Sunday Night Best episode Top match in
American Idol finale Football 2013 opener in 2013 2013/14
14.7m 18.7m 26.2m 82.1m
Manchester United commands more than 51% of the Premier League's entire global TV audience
Matches watched in over 200 countries worldwide
5 Source: EuroData TV worldwide, BBC; Nielsen Media Research
S O C IAL M E D IA FO LLO W E R S W O R LD W I D E
66 MILLION
Facebook followers
Over Over
5.8m 8.7m
8.4 MILLION New York Yankees followers followers
8.0 MILLION Dallas Cowboys
Over Over
5.4m 5.2m
43 MILLION
Monthly manutd.com page views
followers followers
6 As of August 2015
O U R B US I N E SS
B US I N E SS O V E R V I E W
38 Games c.4 Games (1) c.4 Games (1) 10 Games (1)
(19 Home, 19 Away) (c.2 Home, c.2 Away) (c.2 Home, c.2 Away) (5 Home, 5 Away)
Top 17 Clubs remain each season Knock-out competition, Knock-out competition, European competition;
drawn each round drawn each round Top 4 PL teams from previous
season qualify
FOR MFANELO. FOR JASMINE.
FOR YAN YI. FOR NOKUTHULA.
FOR KSHITIJ. FOR AKASH.
VENUE BROADCASTING SPONSORSHIP RETAIL, MERCHANDISING, MOBILE & CONTENT
APPAREL AND LICENSING
8 (1) Number of games assumes Quarter Final exit in each knock-out competition
COMMERCIAL
M U LTI FAC ETE D B US I N E SS M O D E L
MATCHDAY
£108 million - 25%
CAGR 0.2%
MATCHDAY
£107 million COMMERCIAL
42% £61 million
24%
COMMERCIAL
BROADCASTING £189 million - 44%
BROADCASTING £136 million - 31% CAGR 20.8%
£88 million CAGR 7.4%
34%
9 £256m
2008 Revenue
£433m
2014 Revenue
MATC H DAY
O U R MATC H DAY B US I N E SS
75,615 2M 154 >8,000 110,000
SEAT STADIUM ANNUAL ATTENDANCE LUXURY BOXES 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
11 Source: European Football Statistics, 2014; Manchester United
(1) Includes supporter clubs, sponsors, etc.B R OAD CASTI N G
VALU E O F C O NTE NT I S R I S I N G
New deals command significant premium
% change over prior rights deal
187%
Tenor of new contract (yrs)
107%
70% 72%
48%
Olympics Premier League NFL MLB NBA
(Live Domestic Rights)
4 3 8 8 9
Source: International Olympic Committee, Premier League, National Football League, Major League Baseball,
13 National Basketball AssociationP R E M I E R LEAG U E I S TH E B I G G E ST LEAG U E
Year Broadcasting Value Premier League Value EPL Rights USA
(yearly values £ billion) - 2013/14 season (yearly values £ billion) (US$ million)
1.7 250
0.72
x
Current
3.1
Int’l
x
7
0.72 1.71
1.
0.7
0.5 0.5 0.5 0.46 1.01 80
New
0.59 Domestic
England Italy Spain France Germany 2011-13 2014-16 2017-19 2011-13 2014-16
Domestic International
New UCL deal for 2015-2018 and EPL International deal for 2016-2019 still to be announced
14 Source: TV Sport Markets 2013, SportcalTRAD ITI O NAL M E D IA
Increasing consumer and advertiser appetite for premium live content
Annual Broadcasting Contract Values
Premier League Domestic Premier League International Champions League
£ million per annum £ million per annum € million per annum
1,712
1,257
1,059
1,006
865
719
635
569 593
455
237
2008-10 2011-13 2014-16 2017-19 2008-10 2011-13 2014-16 2007-09 2010-12 2013-15 2016-18
15 Source: Deloitte June 2011, FAPL, UEFA, TV Sports Markets 2009 & 2011, press reportsC O M M E R C IAL - S P O N S O R S H I P
C O M M E R C IAL: E N G I N E O F G R O WTH
2014 Commercial Revenues - £189 million
Sponsorship Revenue Growth (£ million)
. 2 %
34
R =
G
SPONSORSHIP CA
£136 million
RMAL 72% 136
£37 million
20%
91
MOBILE 55 63
£16 million 41
8%
Fiscal 2010 Fiscal 2011 Fiscal 2012 Fiscal 2013 Fiscal 2014
17N O.1 MAR KETI N G P LATFO R M
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
18S E G M E NTATI O N STRATE GY
Annual Value of Shirt Sponsorship (£ million)
TOURS
49.2
50
REGIONALS
40
GLOBALS
30
19.6
20
14.1
10 8.0
0
2000/06 2006/10 2010/14 2014/21
19R ETAI L, M E R C HAN D I S I N G, AP PAR E L & P R O D U CT LI C E N S I N G
R E C O R D B R EAKI N G KIT D EAL W ITH AD I DAS
£750 million minimum guarantee - 10 year contract expires 2025
£ million per year
75 *
+ Retail
+ E-commerce
+ Mono brand products
+Soccer schools
30 30
27 26 24 23
12
Manchester United Arsenal Chelsea Barcelona Real Madrid Liverpool Bayern Munich Manchester City
Largest kit manufacturer or sponsorship deal in sports
21 *Represents the average payment of the £750 million minimum guarantee over the 10 year term subject to adjustmentsM O B I LE & C O NTE NT
O U R D I G ITAL M E D IA O P P O RTU N ITY
Content Licensing &
Syndication Subscription Content
& Membership
Social Media
Platforms New Digital
Media Platform Sponsorship
& Advertising
Mobile Apps
E-commerce
23C O STS
WAG E AN D LEAG U E P O S ITI O N
Finishing position season 2013/14 relative to total wage bill in FY14 (£m)
0 Manchester City
£205.0m
Liverpool
2 £144.1m
Chelsea
£191.8m
Arsenal
4 £166.4m
Everton
£69.3m Tottenham Hotspur
6 £105.1m
Manchester United
Southampton £214.8m
8 £63.0m
Stoke City
£60.6m Newcastle United
10 Crystal Palace
£78.3m
£45.8m
Swansea City
12 £63.2m
West Ham United
£63.9m Sunderland
14 £69.5m
Aston Villa
£69.3m
Hull City
16 £43.3m West Bromwich Albion
£65.5m
Norwich City
18 £54.1m
Fulham
£68.5m
Cardiff City
20 £53.2m
0 50 100 150 200 250
Financial strength underpins success – top 4 positions taken by 4 of top 5 teams with highest wage bills
25 Source: Deloitte and Manchester United informationI N D USTRY U P DATE
UEFA Financial Fair Play (FFP)
- Break-even requirement in force 2013/14
- Clubs should have no overdue payments
Complemented by FAPL Financial Regulations
- Break-even test similar to FFP
- Short-term cost controls
- £4 million limit on FAPL central funds may be used to
increase player wages per annum
26P LAYE R E XP E N D ITU R E & AC C O U NTI N G
• Blend of youth & experience Last 15 years net player capital expenditure (£ million)
- Approximately one third of our first team
100
members from academy
- Carried on the balance sheet at zero book 75
value
50
78.9
• Player registrations
25 43.3
49.6
- Transfer fee booked on balance sheet 28.8 32.6
26.5 30.4
36.4
17.8
12.1 10.6 11.4
- Transfer fee amortised over life of contract 0
7.9
(2.6)
-2.6
- Remaining book value amortised over
(44.0)
-44.0
(25)
length of new contract when signed
(50)
• Major refresh of the first team squad with 14 99/00A 01/02A 03/04A 05/06A 07/08A 09/10A 11/12A 13/14A
players coming in including 6 from the
academy and 19 players departing
27BALAN C E S H E ET & CAS H FLO W SU M MARY
• Strong balance sheet with ample liquidity Key Balance Sheet Data & Leverage Statistics (£ million)
- Undrawn RCF of £75 million at June 30, 2014
- RCF to be increased to £125 million
YE 2012 YE 2013 YE 2014
• New USD Senior Secured Notes of $425 million
- Maturity June 2027 at 3.79% Cash & cash equivalents 70.6 94.4 66.4
• Amended and extended Term Loan facility of Total borrowings 436.9 389.2 341.8
$225 million
- Maturity June 2025, no amortisation at Net Debt : Adjusted EBITDA 4.0x 2.7x 2.1x
LIBOR +1.25% - 1.75% p.a.
28 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 expensesLO O KI N G TO TH E FUTU R E
Growth Catalysts
• Global and regional sponsorships
• Retail, e-commerce and licensing opportunity
• Launch of digital media platform
• New Premier League International rights deal for 2017-19
29AP P E N D IX
TOTAL R E V E N U E
£ million
433
= 9.2%
’ 14
‘09-
CAGR 363
331 320 189
278 286
103 152
118
66 77
98 117 136
103 104 102
114 106 111 99 109 108
2009 2010 2011 2012 2013 2014
Matchday Broadcasting Commercial
31C O M M E R C IAL R E V E N U E
£ million
189
% 16
2 3 .5
14 = 152
9 - ’
G R ‘0 37
C A 23
118
103 21 39
17
77 34
66 10 31 136
5
23 26
91
55 63
37 41
2009 2010 2011 2012 2013 2014
Sponsorship Retail, Merchandising, Apparel & Product Licensing New Media & Mobile
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